Key Highlights

  • Statutory Revenue fell 16% to $57.6 million, with Pro forma Revenue down 12% to $65.8 million, reflecting a softer renewals book and lower second-half new business.
  • EBITDA moved to a loss of $2.1 million, from a profit of $15.9 million in FY25, impacted by lower revenue, higher Credit losses and foreign exchange losses.
  • Net Profit After Tax was $1.2 million, down 91% on FY25's $13.4 million.
  • A final fully Franked Dividend of $0.05 per share was declared, up 150% on FY25's $0.02, comprising an ordinary and a special dividend.

Integrated Research Ltd (ASX:IRI) share price was trading at $0.32, up 10.17% or $0.030 on the day, as at 27 August 2026, 12:19pm AEST, as the observability software provider released its FY26 full year results. Statutory revenue was $57.6 million, down 16% on FY25's $68.3 million. Pro forma Revenue, which restates term licence fee revenue onto a recurring subscription basis rather than upfront, was $65.8 million, down 12% on FY25's $74.3 million, reflecting an 11% reduction in term-based revenues and a 20% reduction in other revenues, mainly services.

The company said FY26 revenue performance was impacted primarily by a softer-value renewals book, which is subject to year-on-year variability. While the improvement in new Business contribution achieved in the first half was encouraging, this was not sustained through the second half, as several new business opportunities were deferred into FY27, reflecting a more cautious enterprise market including slower procurement cycles arising from AI-led disruption and continued contraction in average contract term.

EBITDA Swings to Loss on Credit Provision and FX

EBITDA was a loss of $2.1 million, compared with a profit of $15.9 million in FY25. The company said this reflected lower revenue, an increase in credit losses and foreign exchange losses. Net Profit After Tax was $1.2 million, down 91% on FY25's $13.4 million. FY26 saw a 29% increase in product and technology expense as the company invested in building new products, though cost management discipline elsewhere delivered a 2% reduction in total expenses before the impact of a $5.0 million credit loss provision.

The $5.0 million credit loss provision includes a first-half expense of $3.8 million relating to a single client, which the company said is unrelated to software performance. The increase in this provision, together with adverse foreign exchange movements, impacted year-on-year statutory earnings.

Cash Position Strengthens, Supporting Higher Dividend

The company's cash position increased 27% from 30 June 2025 to $51.7 million. This strengthened Balance Sheet allowed for an increase in the FY26 final fully franked dividend to $0.05 per share, comprising an ordinary dividend of $0.03 per share, up from $0.02 in FY25, and a Special Dividend of $0.02 per share, representing a 150% increase on the FY25 dividend of $0.02.

The company said its cash balance provides a foundation for continued Investment in product innovation and execution of its product-led growth strategy, even as reported Earnings for the year declined significantly.

Product-Led Growth Strategy and AI Investment

During FY26, the company progressed its product-led growth strategy, including the release of Iris, a new AI-powered product integrated into its Prognosis platform, and the Beta launch of IR Labs' first product, an AI platform that automates software quality assurance. These new product releases allow for a utilisation-based revenue model, targeted at delivering a return to sustainable growth over the medium to long term. The company also completed implementation of its High Value Payments solution with a Top 10 US bank during the year.

CEO and Managing Director Ian Lowe said FY26 was a pivotal year for the company, with critical foundations built around innovation, product delivery and client engagement, while first releases of new AI-powered products were undertaken. He said these releases simultaneously introduce a new utilisation-based revenue model, an important element of the company's product-led growth strategy, though he acknowledged FY26 was also a challenging year as reflected in the results.

FY27 Focus on Product Commercialisation

For FY27, the company said it will focus on ongoing product investment to build additional new products, noting that this investment will impact profit performance over the short to medium term. The company also plans closer client engagement in support of new product development, alongside continued focus on sales and new product commercialisation to minimise churn and secure growing contribution from new client, expansion and SaaS revenues.

The company noted that its FY27 renewals book is weighted to the second half. Mr Lowe said accelerated monetisation of new products, in parallel with expanded client-led innovation, is a critical focus for FY27, with the company's position as a trusted provider to some of the world's largest organisations providing the platform from which to continue pursuing product-led growth.

Conclusion

Integrated Research's FY26 results reflect a challenging year on headline financial metrics, with revenue declining 16% and EBITDA swinging to a loss, driven by a softer renewals book, deferred new business and an elevated credit loss provision. Despite these pressures, the company's cash position strengthened and its dividend rose sharply, while new AI-powered product releases under its product-led growth strategy, including Iris and the beta launch of IR Labs, position the business for a potential return to sustainable growth, contingent on the FY27 second-half-weighted renewals book and the pace of new product commercialisation.