Key Highlights

  • Operating revenue declined 1.5% to $386.5 million, reflecting lower licence fees, revenue mix changes and foreign exchange headwinds.
  • Support & Maintenance revenue increased 13.4% to $230.3 million, while underlying EBITDA rose 7.2% to $119.6 million.
  • Operating cash flow increased 52% to $110.4 million, while underlying NPAT rose 22.5% to $48.5 million.
  • FY27 is expected to be an Investment and transition year, with revenue broadly stable and Underlying EBITDA Margin expected to exceed 26%.

Hansen Technologies Limited (ASX:HSN) reported mixed revenue performance but higher earnings, Recurring Revenue and cash generation for FY26, as the software provider navigated lower licence revenue, foreign exchange pressures and cautious customer decision-making. Operating Revenue fell 1.5% to $386.5 million from $392.5 million, while Support & Maintenance revenue increased 13.4% to $230.3 million.

Recurring Revenue Supports Earnings Quality

The decline in total operating revenue was primarily associated with revenue mix, lower licence fees and foreign exchange headwinds. However, the increase in Support & Maintenance revenue provided a larger recurring component to the group's revenue base.

Underlying EBITDA increased 7.2% to $119.6 million from $111.7 million. The corresponding margin expanded to 31.0%, compared with 28.5% in FY25, representing an increase of 2.5 percentage points.

Cash EBITDA rose 13.7% to $106.2 million from $93.4 million. The increase in profitability occurred despite the decline in reported operating revenue, with cost management and productivity initiatives contributing to the higher margins.

Profit and Cash Flow Increase

Underlying NPAT increased 22.5% to $48.5 million, compared with $39.6 million in FY25. Underlying NPATA rose 15.9% to $65.9 million from $56.9 million, while underlying NPATA-based Earnings Per Share increased 15.8% to 32.3 cents.

Operating cash flow increased 52% to $110.4 million from $72.6 million. Hansen reported a cash conversion ratio of 0.9 times, while its Leverage Ratio stood at 0.1 times at the end of FY26.

The company repaid $63.5 million of borrowings during the year. Hansen said it expects to reach a net cash position during the second quarter of FY27.

Communications & Media Delivers Revenue Growth

The Communications & Media segment benefited from the Acquisition and integration of Digitalk, which contributed approximately $11 million of revenue during FY26.

Segment operating revenue increased 7.5% to $184.2 million, with an underlying EBITDA margin of 57.6%. Hansen also reported renewals and expansions involving Telefónica Germany, DishHome Nepal and MultiChoice, alongside the introduction of its AI-powered Catalog Agent.

The Digitalk contribution partly offset the impact of a one-off licence fee from Virgin Media O2 that was recorded in the previous year.

Energy & Utilities Revenue Declines

Energy & Utilities recorded a more difficult year. Operating revenue fell 8.5% to $202.3 million, with customer caution and delayed decision-making affecting activity in some markets.

Germany underperformed expectations, with a slower smart-meter rollout delaying opportunities and some customer churn affecting short-term activity. Hansen nevertheless reported customer wins, renewals and SaaS deployments across other markets, including ERTH Holdings, City of New Bern, Charlotte County Utilities, Aurora Energy and ENGIE.

The segment's underlying EBITDA margin was 34.9%.

AI Development and Acquisition Strategy

Hansen continued investing in artificial intelligence across its products and internal operations. A central development has been NOVA RAG, an enterprise knowledge platform designed to structure and connect Hansen's product, customer and industry information for use in AI applications.

The company is moving from establishing AI capabilities toward deploying and commercialising AI solutions. Its stated areas of focus include product development, customer support, operational efficiency and potential new commercial applications.

M&A remains part of Hansen's growth strategy, with the company focusing on software businesses with recurring revenue, established customer bases and identifiable intellectual property. The Digitalk acquisition was completed and integrated during FY26.

FY27 to Be an Investment and Transition Year

Hansen expects FY27 revenue to be broadly stable as the Business transitions from upfront licence revenue toward recurring consumption-based revenue. Foreign exchange headwinds are also expected to continue.

Support & Maintenance revenue is forecast to grow approximately 6% to 8%. Underlying EBITDA margin is expected to exceed 26%, below the 31.0% achieved in FY26 as the company manages a lower contribution from licence revenue while continuing to invest in AI capabilities, product development and customer initiatives.

Hansen expects revenue growth in FY28, with the Underlying EBITDA margin targeted to return to above 30%.

Dividend

The Board declared a final Dividend of 5.0 cents per share, partially franked at 4.0 cents per share. The Record Date is 25 August 2026 and the payment date is 18 September 2026.

The Dividend reinvestment Plan will operate without a discount, with the election cut-off date set for 26 August 2026.

Conclusion

Hansen Technologies' FY26 results combined a 1.5% decline in operating revenue with higher recurring Support & Maintenance revenue, earnings and cash generation. Underlying EBITDA margin increased to 31.0%, while Operating Cash Flow rose 52%. Energy & Utilities revenue was a notable weakness, particularly in Germany, while Communications & Media recorded growth supported partly by Digitalk. FY27 is expected to involve lower revenue contribution from licences, continued AI investment and a reduction in EBITDA margin before the company targets renewed revenue growth and a return to a 30%-plus margin in FY28.