ReadyTech (RDY) H2 2026 earnings summary

Executive summary

• FY26 results were within revised guidance, with revenue at $125.0 million (up 2.6% year-over-year), but cash margin reached a low point due to peak enterprise investment and elevated churn in mature products.

• Major milestones included the Victorian TAFE common platform contract win, validating the enterprise strategy, and the launch of the Orqestra AI-native platform.

• AI transformation accelerated, increasing engineering velocity by 3-4x and automating 85% of support responses, with cost management programs delivering $6.5 million in annualised savings.

• Challenges included elevated churn in mature products, delayed revenue from enterprise implementations, and a remediated cyber incident in VETtrak.

Financial highlights

• Total revenue: $125.0 million (up 2.6% year-over-year), within revised guidance; subscription revenue: $103.8 million (up 1.1%), representing 83% of total revenue.

• Underlying EBITDA: $35.0 million (margin 28.1%, down from 32.5%); underlying cash EBITDA: $15.8 million (margin 12.6%, down from 16.0%), at the lower end of guidance.

• Cash conversion improved to 108% (FY25: 85%); adjusted net debt reduced to $32.5 million with $27.5 million cash on hand; net debt/EBITDA at 1.01x.

• Recurring revenue comprised 83% of total revenue.

Outlook and guidance

• FY27 revenue guidance is $128–132 million, with underlying cash EBITDA margin expected at 15–17%.

• Further margin improvement anticipated into FY28 as cost actions and optimisation benefits annualise.

• Growth underpinned by a stronger enterprise pipeline, flagship product momentum, and improved cost/R&D base.