This article first appeared on GuruFocus .
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Revenue Growth:Increased by 17% to $76 million.
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Revenue Run Rate:Currently at $164.2 million.
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Free Cash Flow Per Share:Grew by 10%.
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EBITDA Growth:Underlying EBITDA increased by 15.2% to $21 million.
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EBITDA Margin:Australian operating business at 31.3%; Group operating business at 27.6%.
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NPATA Growth:Increased by 12.8% to $5.6 million.
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Return on Equity:Group at 38.1%; Parent at 32.6%.
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Net Debt:Increased by $18.6 million to $77.1 million.
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Cash Conversion:High at 101.1% for the half.
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Acquisitions:Completed 6 acquisitions contributing to revenue growth.
Release Date: February 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue growth of 17% and a revenue run rate increase of 22%, indicating strong financial performance.
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Expansion into new international markets, including Ireland, India, Hong Kong, and the Philippines, enhancing global presence.
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Successful implementation of a programmatic acquisition strategy, with six acquisitions completed in the last six months.
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Strong cash flow and balance sheet metrics, with a cash conversion rate of 101.1% and a return on equity of 38.1%.
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Continued investment in internal software development and AI tools to differentiate services and improve operational efficiency.
Negative Points
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Share price has decreased by 49.51% over the last 12 months, reflecting broader market sell-off.
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Increased net debt to $77.1 million, primarily due to funding acquisitions, raising concerns about leverage.
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Slowdown in reported revenue growth from 24% to 17%, attributed to timing of acquisitions.
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Additional investments impacting NPATA and EBITDA margins, with returns on these investments yet to be fully realized.
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Challenges in expanding the acquisitions team due to high salary expectations, potentially limiting growth opportunities.
Q & A Highlights
Q: What has changed in the last 6 months that impacts the decision between investing capital in acquisitions versus buybacks? A: Brett Kelly, CEO, stated that nothing has changed except the share price. Acquisitions remain the first and best place to invest, and the company does not focus on short-term share price movements.
Q: Can you explain the slowdown in revenue growth from 24% to 17%? A: Kenneth Ko, CFO, explained that the timing of acquisitions affected the reported growth. The run rate revenue increased by 22%, but the acquisitions completed late in the year contributed less to the half-year results.
Q: Can you provide an update on the AI joint venture mentioned in October 2024? A: Brett Kelly noted that the company decided against joint ventures due to unfavorable terms and instead focused on internal software development. They believe this approach better recognizes their contributions and aligns with their strategic goals.
Q: How would you describe the current M&A pipeline? Has the market softened? A: Brett Kelly stated that the M&A pipeline remains very strong, with no negative impact from the share price. The pipeline continues to improve, driven by firms seeking value-added partnerships or retirement.
Q: When should investors expect returns on substantial additional investments impacting NPATA and EBITDA margins? A: Brett Kelly mentioned that while overall growth can delay margin improvements, the company is comfortable with current margins and expects them to remain strong as they continue to integrate new firms.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
