Highlights

  • FY26 Revenue rose 2.6% to A$125.0 million, landing within revised guidance of A$125 million to A$127 million.
  • Underlying EBITDA fell to A$35.0 million from A$39.5 million as the Margin narrowed to 28.1%.
  • The company has removed 62 roles and realised A$6.5 million in annualised savings since January 2026.
  • Management targets an underlying cash EBITDA margin of 15% to 17% in FY27, up from 12.6%.

ReadyTech Holdings Ltd (ASX:RDY) is counting on cost savings and a major TAFE contract to lift margins after a subdued FY26. The education, workforce and government software provider reported revenue of A$125.0 million for the year to 30 June 2026, up 2.6%, and has guided FY27 revenue of A$128 million to A$132 million, alongside an underlying cash EBITDA margin of 15% to 17%.

Margins Narrow Despite Modest Revenue Growth

Subscription revenue edged up 1.1% to A$103.8 million, while services revenue for implementation, Training and consulting rose 11.0% to A$21.2 million. Recurring Revenue made up 83% of the total. Underlying EBITDA declined to A$35.0 million, and underlying net profit after tax fell to A$0.2 million from A$8.7 million. Underlying NPATA was A$7.5 million. The underlying measures exclude A$3.7 million of integration, restructuring and cyber incident costs and A$1.8 million of technology advancement costs.

Underlying cash EBITDA was A$15.8 million, a 12.6% margin, consistent with guidance for a low-teens result. Mature products accounted for 67% of dollar churn, with elevated churn in managed Payroll services and SME education.

Segment Performance Diverges

Workforce was the standout, with revenue up 10.4% to A$38.1 million and 46 new logos added. Government and Justice revenue was flat at A$43.8 million, while Education and Work Pathways slipped 0.9% to A$43.1 million but delivered the highest segment EBITDA margin of 44.0%. Workforce segment EBITDA was A$12.0 million and Government and Justice contributed A$10.0 million. Group segment EBITDA, before Lease payments and corporate costs, was A$41.0 million, a 32.8% margin.

Flagship subscription revenue grew at a compound annual rate of 13.2%, led by Ready Workforce at 25.4% and Ready Student at 21.8%. Enterprise contracts and major upgrades signed in FY26 totalled A$18.0 million, comprising A$8.7 million of first-year subscription revenue and A$9.3 million of services.

Victorian TAFE Win and AI Platform Progress

In June 2026, ReadyTech was named student management system provider for the Victorian TAFE Network, with its Ready Student common platform agreement covering 11 TAFE institutes and four dual-sector providers. Its Orqestra AI platform had 33 live integrations and more than 5,000 executed tasks and holds ISO 42001 certification.

FY27 Outlook and Capital Position

Since January 2026, ReadyTech has removed 62 roles and realised A$6.5 million in annualised savings. It expects a further A$3.3 million of annualised savings in FY27 and further cash margin improvement in FY28. Cash rose to A$27.5 million at 30 June 2026 against bank Debt of A$60.0 million, leaving adjusted net debt of A$32.5 million, and cash conversion improved to 108%. Interest Cover was 8.83 times. Management has said it intends to return excess capital to shareholders but has not set an amount.

The Annual General Meeting is scheduled for 18 November 2026. Shares were priced at A$1.38 on 2 November 2026, up 1.47% on the day, giving a Market Capitalisation of A$170.52 million.