Key Highlights

  • FY26 Revenue declined 15.6%, while full-year underlying EBITDA was approximately $9.7 million.
  • H2 underlying EBITDA increased to $6.3 million from $3.4 million in H1, as the company reset its operating cost base.
  • A $6.5 million Goodwill impairment contributed to a statutory net loss of $4.02 million for FY26.
  • COSOL secured a $12.8 million five-year Australian rail contract and a multi-year contract with CDPQ Infra's REM network in Montreal.

COSOL Limited (ASX:COS) reported FY26 revenue of $98.6 million, a 15.6% decline from the previous financial year. The lower revenue reflects a difficult period for the technology-enabled asset management and digital consulting provider, although the company said revenue stabilised during the second half.

The more notable change occurred in operating profitability. Full-year underlying EBITDA was approximately $9.7 million, with $6.3 million generated in H2 compared with $3.4 million in H1. Operating margins improved from 28.8% in the first half to 31.2% in the second half following changes to the company's cost base.

The H2 improvement came despite revenue remaining flat over the half, according to the company. COSOL has indicated that the operating reset is intended to provide a platform for revenue expansion during FY27.

Impairment Drives Statutory Loss

COSOL recorded a $6.5 million goodwill Impairment associated with previous acquisitions. The impairment comprised $4.5 million relating to asset management services and $2.5 million relating to Australian consulting, with the figures as disclosed by the company subject to rounding.

Following the impairment charges, COSOL reported a statutory net loss of $4.02 million for FY26. The result contrasts with the improvement in underlying operating profitability and highlights the effect that acquisition-related accounting charges had on the statutory outcome.

The company ended FY26 with $5.3 million in cash and reported cash conversion of 108%. Net Debt was reduced to $20 million.

New Transport Contracts Expand the Order Base

COSOL has secured a five-year contract worth $12.8 million with the consortium developing a major Australian rail project. The initial agreement runs through to the end of construction in 2031 and covers digital asset management services across the operation.

The contract involves providing real-time digital intelligence to project Stakeholders to support operations and maintenance. COSOL also has the option to provide digital maintenance support during the operating phase, with terms expected to be finalised before construction concludes.

In Canada, COSOL has commenced a multi-year engagement with La Caisse to improve digital asset management across the CDPQ Infra REM rail network in Montreal. The work includes development of a digital twin integrating operational data into a real-time dashboard.

Data and Digital Consulting Gains Importance

COSOL's Data and Digital consulting Business recorded a 37.9% margin in H2 FY26, 340 basis points higher than H1. The company is positioning AI-driven Data Analytics and industrial mathematics as part of its approach to securing longer-term contracts with higher margins.

The US business has also become more diversified. IBM, which represented no revenue in FY23, accounted for 25% of revenue in FY26 and is anticipated by COSOL to represent approximately 45% of FY27 revenue.

The increasing contribution from IBM represents a material shift in the composition of the US operation and is part of COSOL's broader effort to develop its digital and data capabilities.

Executive Transition Underway

COSOL announced several executive changes alongside its FY26 results. Managing Director and CEO Scott McGowan stepped down from the CEO position after 10 years and moved into the role of Executive Director Strategy and Solutions.

Chief Operating Officer and CFO Anthony Stokes became interim CEO from 18 August 2026, with the board commencing a search for a permanent CEO. Chairman Geoff Lewis was appointed Executive Chairman during the transition.

The changes coincide with the company's shift in focus toward revenue growth following its cost-base reset. Mr McGowan will continue working on COSOL's solutions strategy, while Mr Stokes will oversee the business during the interim period.

FY27 Focus Shifts Towards Revenue Growth

COSOL enters FY27 with an emphasis on converting recently secured contracts and its sales pipeline into revenue growth. The company has described the Australian rail and Canadian REM engagements as examples of its strategy to apply digital asset management capabilities to large transportation infrastructure projects.

The FY26 results therefore contain contrasting financial trends: revenue declined substantially over the full year, while H2 underlying EBITDA improved and operating margins increased. The statutory result was also affected by the goodwill impairment, while the Balance Sheet showed lower net debt and cash conversion above 100%.

Conclusion

COSOL's FY26 results reflect a transition year in which revenue fell 15.6% to $98.6 million and a $6.5 million goodwill impairment contributed to a $4.02 million statutory net loss. At the operating level, however, H2 underlying EBITDA increased to $6.3 million from $3.4 million in H1, accompanied by an improvement in operating margins. The company has also added new transportation contracts in Australia and Canada and is increasing its exposure to data and digital consulting. With executive responsibilities changing and FY27 focused on converting contracts and pipeline opportunities into revenue, the company's next phase will be measured by whether the H2 profitability improvement can be accompanied by a recovery in top-line growth.