Highlights

  • Objective Corporation (ASX:OCL) reported FY26 revenue of $134.7 million, up 9%, and NPAT of $37.2 million, up 5%.
  • Adjusted EBITDA rose 11% to $51.5 million, while annualised recurring revenue eased 2% to $117.3 million.
  • Total FY26 dividends were 26 cents per share, compared with 22 cents in FY25, with cash of $92.7 million and no borrowings.
  • The company has set an FY27 Adjusted EBITDA target of $40 million or more as it invests in go-to-market.

Objective Corporation Ltd develops information management, planning and building, and regulatory software used largely by government and public sector organisations.

Company Business

Objective operates through three business lines. Information Intelligence covers content and information governance products, including Objective Connect for secure external collaboration. Planning and Building provides digital tools for development applications and building consents, and Regulatory Solutions supports regulators with case management and compliance workflows. All of the company's software revenue is contracted on a subscription basis, and recurring revenue made up 87% of total customer revenue in FY26. The company has also been building AI features under its Objective Intelligence platform, including AI assistants for regulators covering case summaries, public forms and advice and guidance, AI-powered application vetting in Objective Build in New Zealand, private retrieval-augmented generation for government customers and Microsoft Copilot integration.

Recent Development

Objective Corporation (ASX:OCL) released its FY26 results in late August 2026. Alongside the numbers, the company outlined its FY27 priorities: investing in go-to-market resources to pursue larger and more complex government problems, maintaining capacity for acquisitions supported by its cash flow and balance sheet, continuing product development, and refining time-to-value and cost discipline. During the year, Objective made net payments of NZ$4.0 million for Isovist, and it began buying back shares, spending $7.1 million on buybacks in FY26.

The company also introduced usage-based and value-based pricing models linked to its AI capabilities, reflecting a shift in how it plans to charge for new functionality. Over the past seven years, the company reported a SaaS revenue compound annual growth rate of 27%, and its research and development spending has continued at around 30% of software revenue. The FY27 outlook marks a deliberate step-up in sales investment, with management positioning the company to compete for larger and more complex GovTech projects across its core markets while keeping capacity for further acquisitions.

Financial Performance and Sector Context

For the year ended June 30, 2026, revenue rose 9% to $134.7 million from $123.5 million. Adjusted EBITDA increased 11% to $51.5 million, representing a margin of about 39%. NPAT was $37.2 million, up 5%, and earnings per share rose 5% to 38.9 cents. SaaS revenue grew 22% and subscription revenue grew 13%. Operating cash flow was $49.3 million, compared with $46.3 million in the prior year.

By business line, Information Intelligence revenue grew 5% to $87.9 million, Planning and Building rose 41% to $18.5 million and Regulatory Solutions increased 7% to $25.3 million. Annualised recurring revenue fell 2% to $117.3 million from $120.2 million, and was $114.1 million after adjusting for currency and discontinued items. Information Intelligence ARR declined 5% to $81.0 million, which the company attributed to higher than expected churn in Objective Connect where customers required SharePoint connectors; those connectors have since been released. Regulatory Solutions ARR was reduced by $3.1 million due to the discontinuation of the NHVR contract, although segment ARR still rose 4% to $17.6 million. Planning and Building ARR grew 3% to $18.7 million.

Research and development investment was $33.8 million, equal to 30% of software revenue, of which $17.4 million was capitalised. Cash at June 30, 2026, was $92.7 million, down 7% after dividends and buybacks, and the company had no borrowings. Total FY26 dividends declared were 26 cents per share, up from 22 cents.

Risks to Consider

The FY27 Adjusted EBITDA target of $40 million or more sits below the FY26 result, reflecting increased investment in go-to-market resources. The decline in ARR highlights exposure to customer churn and contract discontinuations, as seen in Objective Connect and the NHVR contract. A large share of revenue comes from government customers, whose procurement timelines and budgets can shift. Acquisitions, currency movements across Australia, New Zealand and the United Kingdom, and the commercial uptake of new AI pricing models may also affect results for ASX:OCL.

What to Watch Next

Investors may monitor whether ARR returns to growth as the SharePoint connectors reduce churn in Objective Connect, the progress of larger GovTech deals targeted by the expanded sales effort, and further adoption of AI assistants and new pricing models. Updates on acquisitions, the share buyback and dividend policy are also relevant. The annual general meeting later in the year may provide additional commentary on trading conditions and FY27 progress against the Adjusted EBITDA target.

Key Insights

Objective Corporation (ASX:OCL) increased revenue, Adjusted EBITDA and NPAT in FY26 while maintaining a debt-free balance sheet and lifting dividends. However, ARR edged lower due to churn in Information Intelligence and a contract discontinuation in Regulatory Solutions. The company has guided to lower FY27 Adjusted EBITDA as it reinvests in sales capability and AI products for its public sector customer base. Progress on ARR will be a key measure of whether that investment is gaining traction.