ReadyTech Holdings Limited (ASX:RDY) is in focus. Software companies seldom describe their own performance as being at a low point, yet that is how ReadyTech characterised FY2026 when it reported in late August. Revenue grew 2.6 per cent, margins compressed and underlying net profit fell to almost nothing. The company paired that with FY2027 guidance pointing to recovery and a cost programme already under way. With a Market Capitalisation near A$185 million as at 11 September 2026, ReadyTech is a technology name where the distance between reported result and stated outlook is the story.

Latest Development

ReadyTech lodged its FY2026 full-year investor presentation with the ASX on 26 August 2026, covering the twelve months to 30 June 2026. Revenue reached A$125.0 million, up 2.6 per cent on A$121.8 million in FY2025. Subscription revenue rose 1.1 per cent to A$103.8 million, and Recurring Revenue represented 83 per cent of the total.

Profitability moved the other way. Underlying EBITDA fell to A$35.0 million from A$39.5 million, trimming the Margin to 28.1 per cent from 32.5 per cent. Underlying cash EBITDA dropped to A$15.8 million, and underlying net profit after tax came in at A$0.2 million against A$8.7 million a year earlier.

Company Overview

ReadyTech supplies software-as-a-service to the education, employment services, workforce management, government and justice sectors. Listed on the ASX in April 2019 and headquartered in Sydney, it reports through three segments: Education and Work Pathways, Workforce, and Government and Justice.

Pemba Capital Partners holds 32.35 per cent of the register, ahead of Microequities Asset Management on 14.15 per cent and Investors Mutual on 5.13 per cent.

Financial and Operational Position

Segment outcomes in FY2026 were uneven. Education and Work Pathways produced A$43.1 million of revenue at a 44.0 per cent EBITDA margin. Government and Justice was marginally the largest by revenue at A$43.8 million but weakest on margin at 22.9 per cent. Workforce contributed A$38.1 million at 31.5 per cent.

Cash generation held up. Operating Cash Flow of A$24.6 million compared with A$24.0 million, and cash conversion improved to 108 per cent from 85 per cent. Net Debt eased to A$32.5 million from A$36.3 million, leaving gearing at 1.01 times EBITDA. No Dividend was declared.

The company also pointed to a state-wide platform agreement covering 11 Victorian TAFE institutes, compound growth of 25.4 per cent in its Ready Workforce product alongside 46 new customers, and the launch of Orqestra, an artificial-intelligence platform reported with 33 live integrations.

What Investors May Watch Next

Management guided FY2027 revenue to A$128 million to A$132 million and an underlying cash EBITDA margin of 15 to 17 per cent, against 12.6 per cent delivered in FY2026. A further A$3.3 million of annualised cost reductions is planned, with more benefit expected to annualise into FY2028.

The 2026 Annual General Meeting was called on 8 September 2026. Delivery on the Victorian TAFE rollout, the churn trend in mature products and progress in local government are the markers against which the guided recovery can be tested.

Risks

Churn is the clearest pressure point, with mature products accounting for 67 per cent of dollar churn in FY2026. Delivery difficulties in local government delayed an upgrade pathway, and the company completed remediation of a cyber incident affecting VETtrak.

Guidance assumes cost savings land while growth reaccelerates, and those can move independently. Government and education buyers run long procurement cycles, and a register where one holder controls roughly a third of the stock carries its own overhang.

Conclusion

ReadyTech enters September 2026 having gone backwards on nearly every profit measure while telling the market the trough is behind it. A recurring revenue base, strong cash conversion and manageable net debt give it room to work through the reset, though FY2027 guidance leaves limited allowance for slippage. Whether this technology stock holds a place on watchlists may depend on early evidence that churn is easing and that promised savings are reaching the cash line.