Highlights

  • Reckon reported group revenue of A$31.9 million, down 3% on the prior corresponding period and 1% lower in constant currency.
  • EBITDA increased 1% to A$14.2 million and was 6% higher after adjusting for currency movements and a government stimulus receipt recognised in HY25.
  • Net profit after tax rose 6% to A$4.5 million and increased 18% on the adjusted comparison.
  • Reckon One revenue advanced 23% to A$5.4 million, while its average revenue per subscription increased 19%.
  • Billing Workflows subscription revenue grew 97%, with sales covering approximately 6,400 attorneys.
  • Net debt declined from A$5.4 million at 31 December 2025 to A$1.5 million, despite payment of the final A$1.25 million Cashflow Manager acquisition instalment.
  • The company declared a fully franked dividend of 2.5 cents per share, payable on 31 August 2026.

Reckon Limited (ASX:RKN) has reported continued expansion across its Reckon One accounting platform and the Legal Group’s Billing Workflows product while maintaining its elevated earnings base from FY25. The software company delivered higher net profit after tax during the first half and reduced net debt as it continued moving legacy customers towards cloud-based products.

Reckon shares were trading 9.09% higher at AUD 0.48 during the afternoon session on 4 August 2026. Despite the intraday increase, the stock remained 7.69% lower over the past year. The share-price information is separate from the company’s operational update and Reckon did not attribute the market movement to any specific factor in its announcement.

Reckon Operates Across Business and Legal Software

Reckon is an Australian-listed software provider serving start-ups, sole traders, small and medium-sized businesses, accountants, bookkeepers and legal professionals. Its operations are divided between the Business Group and the Legal Group.

The Business Group supplies accounting, payroll and personal wealth management software in Australia and New Zealand. Its products include Reckon One, Reckon Mobile, Reckon Accounts Hosted, Reckon Accounts Business, Reckon Accounts Personal and Cashflow Manager.

The Legal Group operates under the Zebraworks brand and focuses on document and billing workflow products for law firms, government legal departments and corporate legal teams. Its offering includes server-based Document Workflows products and cloud-based Billing Workflows solutions such as BillingQ, DataQ and PayQ.

Reckon’s current strategy centres on increasing adoption of its proprietary cloud products while managing the migration of customers from established desktop and legacy platforms.

Half-Year Earnings Base Remains Largely Stable

Reckon generated group revenue of A$31.9 million during the half, representing a 3% decline from the prior corresponding period. On a constant-currency basis, revenue was 1% lower.

The headline revenue movement reflected several factors, including foreign exchange changes and the accounting impact of migrating Business Group customers from legacy products to Reckon One.

Group EBITDA reached A$14.2 million, increasing 1% compared with the previous corresponding period. When currency movements and the government stimulus payment recognised in HY25 were excluded, EBITDA was 6% higher.

Net profit after tax increased 6% to A$4.5 million. On the company’s adjusted basis, NPAT was 18% above the comparable period.

The result allowed Reckon to retain much of the revenue and EBITDA base established during FY25 while continuing to invest in cloud-based development across both operating divisions.

Cloud Migration Changes Revenue Timing

The migration of legacy customers to Reckon One continued during the half, but the shift affected the timing of revenue recognition.

Reckon explained that its legacy and cloud products use different licensing, hosting and support arrangements. As customers transition to Reckon One, part of the associated revenue is deferred rather than recognised immediately.

This resulted in an adverse deferred revenue movement of A$0.6 million between HY25 and HY26.

The accounting effect contributed to the reported reduction in Business Group and group revenue even as Reckon One continued to expand.

Management is therefore assessing the transition not only through total divisional revenue but also through cloud-subscription growth, average revenue per subscription and the proportion of customers moving onto Reckon One.

Reckon One Delivers 23% Revenue Growth

Reckon One remained the main growth contributor within the Business Group.

Revenue from the cloud accounting platform increased 23% to A$5.4 million, compared with A$4.4 million in HY25. Average revenue per subscription rose 19% over the same period.

Reckon One now represents approximately 22% of the company’s subscription revenue base.

Total cloud-based subscription revenue across the Business Group increased 2% to A$14.4 million, with Reckon One accounting for all of the growth.

The broader Business Group generated first-half revenue of A$25.4 million, compared with A$26.1 million in HY25. Subscription products contributed 93% of divisional revenue, including revenue from cloud-based and desktop offerings.

The high subscription contribution provides the division with a largely recurring revenue base, although the shift between products can affect the timing of reported income.

Legacy Customer Transition Moves Into Full Swing

Reckon said the transition of its legacy customers to the Reckon One codebase is now fully underway.

Sales and customer-support teams focused on moving existing customers onto the cloud platform and selling additional products across the established customer base.

Management indicated that the implementation and adoption of artificial intelligence had reduced product-development timelines. This allowed Reckon to bring Reckon One closer to the functional requirements of most legacy-product users earlier than previously expected.

Achieving greater functional alignment is important to the migration strategy because customers may be less willing to move from existing software until the cloud alternative supports the features required for their businesses.

Reckon did not disclose the number of customers migrated during the period or provide a timetable for completing the transition. However, the A$0.6 million deferred revenue effect demonstrates that migration activity had reached a level capable of influencing group revenue recognition.

Business Group Maintains A$14 Million EBITDA

The Business Group recorded stable EBITDA of A$14.0 million during the half.

Its EBITDA margin was 55% before development costs and 34% after accounting for those investments.

Development expenditure within the division remained relatively steady at A$5.3 million, compared with A$5.0 million in the prior corresponding period.

The company continued investing in the cloud platform despite the short-term revenue-recognition impact of customer migrations.

Reckon sees continued product investment as necessary to improve Reckon One, close remaining functional gaps and support adoption among customers currently using its older software products.

The company is also working with Amazon Web Services through its artificial intelligence initiatives and enablement programs. The collaboration is intended to help Reckon develop and introduce AI-powered capabilities within Business Group products.

AI Positioned as a Revenue Opportunity

Reckon stated that it views artificial intelligence as a potential source of revenue growth rather than primarily as a cost-reduction tool.

The company plans to use AI to support product innovation, improve customer outcomes and potentially accelerate sales across both operating divisions.

Within the Legal Group, Reckon introduced DataQ AI during FY25 as its first AI-enabled product.

DataQ operates as a business-intelligence product within the Zebraworks platform. The wider Legal Group portfolio also includes BillingQ for billing workflows and PayQ for online payments.

In the Business Group, Reckon is working to introduce additional AI-powered features with support from Amazon Web Services.

The announcement did not provide revenue generated by DataQ AI, spending allocated specifically to artificial intelligence or a timetable for new AI-product launches.

Billing Workflows Subscription Revenue Rises 97%

The Legal Group’s Billing Workflows product recorded a 97% increase in subscription revenue during the half.

Total Legal Group subscription revenue increased 4% to A$6.2 million, up from A$5.9 million in the prior corresponding period. Subscription income represented 94% of the division’s revenue.

Overall Legal Group revenue increased 5% in constant currency compared with HY25.

Annual recurring revenue from Billing Workflows rose 5% on a constant-currency basis to A$1.4 million.

The difference between the 97% subscription revenue increase and the 5% annual recurring revenue growth reflects the different measures and reporting periods used by the company. The announcement did not provide further reconciliation between the two figures.

Billing Workflows is being marketed in the US legal software sector, where Reckon is seeking to increase adoption among law firms and integrate its technology with established financial-management systems.

Attorney Coverage Expands During the Half

Billing Workflows sales covered approximately 6,400 attorneys by HY26, up from around 4,800 attorneys in HY25.

Of that total, approximately 3,000 attorneys had the product installed by the end of the period, compared with 1,900 a year earlier.

Management estimated the current US serviceable addressable market for Billing Workflows at approximately 175,000 attorneys. That estimate has increased from 77,000 at FY25.

The enlarged market estimate reflects additional integration opportunities and the wider group of legal professionals that Reckon believes its products can serve.

Zebraworks currently provides services to 12 of the world’s top 20 law firms and approximately 40% of the AmLaw 200 in the United States.

These existing relationships give the Legal Group access to large legal organisations, although the announcement did not quantify the revenue contributed by its largest customers.

New US Sales Team Builds Pipeline

A new Legal Group sales team became active during the half, with management reporting that its influence was becoming apparent by the end of the period.

Reckon said the Billing Workflows pipeline continued to grow as the team pursued opportunities in the US market.

The company is targeting additional integrations with established legal financial-management systems. Existing integrations include ProLaw, Elite 3E and Aderant.

Connecting Billing Workflows with widely used systems may broaden the number of law firms able to adopt the product without replacing their underlying financial software.

The Legal Group continued investing in both its teams and products during the half. Capitalised development costs were A$2.4 million, compared with A$2.7 million in the prior corresponding period.

Legal Group EBITDA Moves Higher

The Legal Group recorded EBITDA of A$1.5 million, representing an increase of 10% from A$1.4 million in the prior corresponding period.

On the company’s adjusted basis, divisional EBITDA increased 111%.

The adjusted comparison removes currency movements and the A$0.5 million final COVID-related stimulus receipt recognised in HY25.

This adjustment is relevant because the prior-period government payment was not part of the division’s recurring operating performance.

The increase indicates that the Legal Group improved earnings while continuing to invest in product development, integrations and its US sales capabilities.

Reckon believes the division has addressed only a limited portion of the available US legal market, leaving further scope to pursue law firms and legal departments through Zebraworks.

Cloud Product Investment Reaches A$7.7 Million

Across its two divisions, Reckon invested A$7.7 million in cloud-based product development during the half.

The Business Group accounted for A$5.3 million of development costs, while the Legal Group recorded A$2.4 million.

Management said product-development investment remained stable compared with HY25.

The spending supports Reckon One’s migration readiness, Billing Workflows integrations and the introduction of additional technology capabilities, including AI-enabled features.

These investments are capitalised, meaning their treatment differs from normal operating expenses and affects the interpretation of divisional margins and cash flow.

Reckon reported operating cash flow after capitalised development costs of A$5.6 million, compared with A$6.2 million in HY25.

The reduction was attributed to higher tax payments during the half rather than a decline in reported EBITDA.

Net Debt Falls Despite Acquisition Payment

Reckon reduced net debt to A$1.5 million by the end of the half, compared with A$5.4 million at 31 December 2025.

The A$3.9 million reduction occurred despite the company paying the final A$1.25 million instalment associated with the acquisition of Cashflow Manager in January 2026.

Management attributed the lower debt position to continued operating cash generation.

The reduction provides the company with a less leveraged balance sheet while it continues funding cloud-product development and paying shareholder dividends.

The announcement did not disclose gross cash or total borrowings separately, but the net debt figure captures the difference between the company’s cash and interest-bearing debt.

Fully Franked Dividend Declared

The board declared a fully franked dividend of 2.5 cents per share.

The dividend is scheduled to be paid on 31 August 2026.

Reckon said it intends to continue paying one dividend annually following the half-year reporting period.

Management also reiterated its objective of maintaining a relatively high dividend yield based on the prevailing share price, although future dividends remain dependent on board decisions and the company’s financial position.

The announcement did not provide the dividend’s record date, total cash cost or payout ratio.

The dividend accompanies the company’s lower net debt position and higher reported NPAT for the period.

What the Half-Year Update Shows

Reckon’s result reflects a business balancing established software products with a continuing transition towards cloud-based platforms.

Headline group revenue declined modestly, partly because of foreign exchange movements and the deferred revenue impact created by customer migrations.

At the same time, Reckon One revenue increased 23%, its average revenue per subscription rose 19% and Billing Workflows subscription revenue expanded 97%.

EBITDA remained close to the prior period on a reported basis, while NPAT increased and net debt declined.

The company continues to allocate capital towards development rather than reducing investment to increase near-term cash generation.

Execution will depend on moving more legacy customers onto Reckon One, expanding Billing Workflows installations and converting the Legal Group’s developing US sales pipeline into subscription revenue.

Conclusion

Reckon delivered group revenue of A$31.9 million, EBITDA of A$14.2 million and NPAT of A$4.5 million during the half.

Revenue was 3% lower on a reported basis and 1% lower in constant currency, while EBITDA rose 1% and NPAT increased 6%. Adjusting for currency effects and the prior-period government stimulus receipt, EBITDA and NPAT increased 6% and 18%, respectively.

Reckon One remained a central growth area, with revenue increasing 23% to A$5.4 million and average revenue per subscription advancing 19%. Billing Workflows subscription revenue rose 97%, supported by an expanding number of attorneys covered by sales and installations.

The company invested A$7.7 million across its cloud products, generated A$5.6 million of operating cash flow after capitalised development expenditure and reduced net debt to A$1.5 million.

Reckon also declared a fully franked dividend of 2.5 cents per share as it continued executing its cloud transition across the Business and Legal Groups.