Novatti posts AUD $2.0 million EBITDA after restructure

Novatti reported EBITDA of AUD $2.0 million for the year and a net loss from operations of AUD $0.2 million, marking a sharp improvement from the previous year.

EBITDA improved by AUD $6.5 million year on year from a loss of AUD $4.4 million, while the operating loss narrowed by AUD $6.4 million from AUD $6.6 million. Underlying EBITDA was negative AUD $2.7 million, an improvement of AUD $4.4 million.

Group revenue was AUD $29.9 million after Novatti exited revenue streams it described as non-core and low-margin. Gross margin rose to 51% from 30% a year earlier, reflecting the changed business mix.

The shift followed a restructuring programme that began in FY24 and accelerated in FY25. That work included simplifying the group, focusing on its Payments AU/NZ operations, upgrading technology platforms, and withdrawing from activities deemed low margin or higher risk.

Its Payments AU/NZ division was the largest contributor to revenue, gross margin, and direct EBITDA during the year. Revenue from the unit rose 15% year on year to AUD $13.8 million, gross margin increased 23% to AUD $6.3 million, and direct EBITDA reached AUD $2.3 million.

Novatti also highlighted changes across the business during the year, including the sale of Emersion Systems for AUD $0.5 million, the migration of acquiring customers to a new platform, and a renewed sales push in issuing and acquiring. It also directed capital toward higher-margin payments infrastructure.

The update suggests the strongest operational momentum came from the company's domestic and New Zealand payments activities. Novatti said issuing responded well to its sales approach, while the replatforming of the acquiring business created a base for further customer wins.

One example was the University of New South Wales, which signed with Novatti for Alipay integration in August 2025 and went live for payment acceptance in November 2025. By July 2026, the integration had generated more than AUD $60 million in gross transaction value and more than AUD $0.9 million in revenue, according to the company.

Several other customers were moving through implementation across retail, eCommerce, education, and healthcare, though Novatti did not disclose names or contract values.

Cash position

Novatti ended the year with AUD $3.1 million in cash. That was later supplemented by AUD $1.2 million from the sale of 1,500,000 shares in AUDC, which settled after the reporting period.

The share sale represented a partial realisation of value from AUDC, while Novatti retained 18,500,000 shares. The cash from the disposal was not reflected in the year-end balance sheet.

A note accompanying the results said EBITDA included gains recognised from the deconsolidation of AUDC after Novatti lost control of the business in September 2025. It also said an error in its FY25 Appendix 4E relating to a gain on extinguishment of liability had been corrected in the FY26 figures.

The rise in gross margin will be closely watched by investors because it points to the effect of Novatti's attempt to improve revenue quality rather than simply expand the top line. Revenue fell below levels associated with a broader business mix, but the company indicated that removing lower-margin activity had improved earnings and operating performance.

Management linked the result to a strategy centred on simplification, customer focus, and tighter financial discipline. The numbers suggest this approach has brought Novatti close to break-even at the operating line, with reported EBITDA now positive.

Commenting on the results, Novatti Chief Executive Officer Mark Healy said: "FY26 has been a defining year for Novatti. Having completed the fundamental work required to simplify and refocus the Group, we have now demonstrated the earnings benefit of those decisions through a material improvement in profitability.

"The $6.4 million improvement from operations and $6.5 million improvement in EBITDA demonstrate that Novatti is a fundamentally stronger business.

"We have streamlined the revenue base, upgraded our technology platform around the needs of customers, and refocused the business on payments infrastructure where we see significant opportunities for scalable revenue, margin, and earnings growth led by the Payments Acceptance and Card Issuing business lines.

"The momentum we saw through the second half of FY26, particularly across Payments AU/NZ, gives us confidence that the business is entering FY27 with a stronger foundation and a clear pathway to further growth."