Highlights

  • Unaudited Revenue reached A$16.8 million in the Sep-2026 quarter, up 34% on the prior corresponding period.
  • Underlying EBITDA rose 44% to A$1.40 million, while gross Margin improved to 15.2% from 14.3%.
  • Net Debt stood at A$1.21 million after a Westpac Facility funded A$6.6 million in deferred Acquisition payments.
  • The internal AI Method Library expanded to 130 methods, with 14 consultants certified under its AI programme.

Stepchange Holdings Ltd (ASX:STH) has carried the momentum of its first full year as a listed company into FY27, reporting a 34% lift in unaudited revenue to A$16.8 million for the quarter ended 30 September 2026. Underlying EBITDA grew faster, rising 44% to A$1.40 million, as the BroadReach Group acquisition contributed alongside organic growth in the existing consultancy.

StepChange is an SAP and digital transformation consultancy serving Tier 1 enterprise and government clients in Australia, with capabilities in SAP migration, cloud transformation, ICT advisory and enterprise architecture.

Margins Improve as BroadReach Adds Scale

Gross margin increased to 15.2% in Q1 FY27 from 14.3% across FY26. BroadReach, acquired in January 2026, brings enterprise architecture, ICT strategy and government consulting, and the combined group now employs more than 200 consultants and specialists with an average of 15 to 20 years' experience.

The quarter's result built on FY26 to 30 June 2026, when revenue rose 31% to A$55.6 million against pro-forma FY25 and underlying EBITDA climbed 57% to A$5.01 million, ahead of the forecast in its IPO prospectus. After one-off listing and acquisition costs, statutory EBITDA was A$3.52 million and the statutory net result was a loss of A$563,000. StepChange listed on the ASX in July 2025.

Acquisition Payments Move the Balance Sheet to Net Debt

Cash at bank fell to A$3.79 million at 30 September 2026 from A$5.2 million at 30 June. StepChange partly drew a A$10 million Westpac acquisition facility to fund A$6.6 million covering the final StepChange and initial BroadReach deferred consideration payments, leaving net debt of A$1.21 million.

AI Methods and US Expansion Gather Pace

The company is building AI-led delivery into its consulting work. Its AI Method Library grew to 130 methods during the quarter, up from more than 100 across 40 Business functions in FY26, and has been rolled out to all staff. Fifty consultants are registered for the AI programme, and 14 are certified to the required industry standard. In one FY26 case study, the approach turned a 200-page cyber security business case into a project scope in under four hours, compared with three to five days previously.

StepChange also set up US operations to serve multinational clients, and management reports that the American business is starting to win its own work, although no US revenue has been disclosed.

Second-Half Weighting Frames FY27 Expectations

StepChange has not provided numerical FY27 guidance. Its priorities remain a full-year contribution from BroadReach, organic growth across StepChange Consultants and margin improvement. Management expects growth into Q2 and the second half, when the revenue and EBITDA split has traditionally improved, and is targeting multi-year managed services tenders in quality engineering. Shareholders will meet in Perth on 17 November 2026. Shares were unchanged at A$0.125 on 2 November 2026, giving a Market Capitalisation of A$20.55 million, and were down 16.67% over 12 months.