Key Highlights

  • Unaudited revenue for the quarter was $16.8 million, up 34% on the prior corresponding period.
  • Underlying EBITDA rose 44% to $1.40 million, a non-IFRS measure.
  • The increases reflect organic growth and the contribution of the Broadreach Group, acquired in January 2026.
  • The AI Method Library has expanded to 130 industry methods, with 14 of 50 registered consultants certified.

StepChange Holdings Limited (ASX:STH) released its quarterly update for the three months ended 30 September 2026 on 20 October 2026. The company reported unaudited revenue of $16.8 million and underlying EBITDA of $1.40 million, and described developments in its AI and cyber security capabilities and its United States operations.

Quarterly financial results

Unaudited revenue for the first quarter of FY27 was $16.8 million, up 34% on the prior corresponding period. Underlying EBITDA increased 44% to $1.40 million. The company attributed both increases to organic growth across the existing business and to the contribution of the Broadreach Group, which was acquired in January 2026. All figures are unaudited, and underlying EBITDA is a non-IFRS measure.

AI Method Library and certification

StepChange launched its AI Method Library internally to all staff during the quarter as part of an ongoing certification and community program. The library has grown from more than 100 methods across 40 business functions, reported at the FY26 result, to 130 methods. Each method is structured to recognised project, programme, portfolio, architecture and change management standards. The program is designed to lift AI literacy across the consulting team and to give consultants a common, repeatable method set for client engagements. Currently, 50 consultants are registered for the AI program and 14 have already been certified to the required industry standard. The company views the combination of certified practitioners and a standards-based method library as a point of difference in its market.

Cyber security and client engagement

The company continued to develop its AI and cyber security offering as part of a broader strategy to give clients structured, repeatable and scalable technology solutions. It reported positive client engagement with the expanded offering, although the update did not quantify revenue from these services separately.

United States operations

StepChange continued to progress its United States operations, with increasing business development activity and opportunities to expand its service offering in the US market. The update describes the activity as ongoing engagement rather than contracted revenue, and no US revenue figure was disclosed.

Bidding focus

In the short to medium term, the company is focused on bidding for multi-year managed services requests for proposal within its Quality Engineering capability. The release does not state the number or value of bids in progress or any expected timing for award decisions.

Margins and balance sheet

Gross margin for the quarter increased to 15.2% from 14.3% in FY26, which the company attributes to utilisation, contractor mix and a move toward outcome-based delivery. Cash at bank was $3.79 million at 30 September 2026, compared with $5.2 million at 30 June 2026. The company used its $10 million Westpac acquisition facility to partly fund $6.6 million of final StepChange and initial Broadreach deferred consideration, leaving net debt of $1.21 million.

Priorities and workforce

FY27 priorities are unchanged from the full-year result: a full-year contribution from Broadreach, organic growth across StepChange consultants and margin improvement. The company has more than 200 consultants and specialists, and notes that the split of revenue and EBITDA has traditionally improved in the second half. Its annual general meeting is scheduled for 17 November.

Summary of the update

The update records higher revenue and underlying EBITDA for the quarter, an expanded AI Method Library with a minority of registered consultants certified so far, continued US business development and a bidding focus on multi-year managed services.