StepChange Delivers 19% Revenue Growth and 50% EBITDA Jump in ASX Debut Period

StepChange delivers 19% revenue growth and 50% EBITDA jump in first half as listed entity

StepChange Holdings has reported $24.4 million in revenue (up 19%) and $1.95 million in underlying EBITDA (up 50%) for the half year ending 31 December 2025, marking its first results period as an ASX-listed entity. The SAP consulting and cloud migration specialist achieved this growth entirely through organic expansion with Tier 1 enterprise clients, whilst completing the strategic acquisition of BroadReach Group during the period.

The StepChange Holdings Half Year Results, released on 26 February 2026, demonstrated the company’s ability to scale profitably whilst maintaining gross margins at 12.8% (down only 0.3% on the prior corresponding period). The company closed the period with $5.6 million cash at bank and a headcount of approximately 161 consultants, excluding the newly acquired BroadReach team.

What does StepChange do?

StepChange operates as an SAP consulting specialist focused on cloud migration and digital transformation projects. The company’s core business centres on helping large Australian organisations transition from SAP’s legacy ECC on-premise software to the cloud-based S/4HANA platform. SAP is phasing out support for its older ECC system by 2027, a deadline that requires approximately 250 Australian organisations to migrate to modern cloud-based systems.

This creates a multi-year structural demand tailwind for specialist SAP partners like StepChange. The company differentiates itself from larger generalist consulting firms and staffing agencies through deep SAP expertise, long-term Tier 1 client relationships (averaging 12 years with its top five clients), and its “SmartTeams” delivery model that promises agile project scaling without inflated partner fees.

StepChange’s client base spans energy, mining and government sectors, with particular strength in Western Australia. The company provides services across SAP implementation, cloud migration, enterprise architecture and ICT advisory.

BroadReach acquisition adds 40 consultants and WA government presence

The company completed its acquisition of BroadReach Group during the half, adding approximately 40 senior ICT advisory consultants to the business. BroadReach generated $8.96 million in revenue and $0.86 million in normalised EBITDA during FY25, positioning StepChange to acquire the business at a maximum multiple of approximately 4.6x EBITDA.

The acquisition strengthens StepChange’s enterprise architecture and strategy capability whilst expanding its footprint in the Western Australian Government sector. Management highlighted significant cross-sell opportunities across digital transformation, cloud migration, ICT roadmap development and business analysis services. The transaction was structured with a capital-efficient, performance-based earn-out arrangement deferred across FY26 and FY27.

Following the integration, StepChange’s consultant base has grown to over 200, with BroadReach contributing to results from January 2026 onwards. The company secured a $10 million acquisition facility from Westpac to support selective, accretive M&A opportunities in the fragmented SAP partner market.

Balance sheet supports further growth

The company closed the period with $5.6 million cash at bank and the newly established $10 million Westpac acquisition facility, providing capacity for further consolidation in the fragmented Australian SAP consulting market. The deferred BroadReach earn-out has been structured across FY26 and FY27, with $5.7 million recorded as deferred consideration on the balance sheet. This capital structure allows management to pursue selective acquisitions without immediate dilutive capital raises.

Management reaffirms FY26 forecast of $47.3m revenue and $4.56m EBITDA

StepChange has reaffirmed its full-year FY26 forecast outlined in its July 2025 IPO Prospectus, targeting $47.3 million in revenue and $4.56 million in normalised EBITDA. Management stated the company remains on track to deliver these targets as it enters the second half with increased scale and capability following the BroadReach integration.

The company highlighted several catalysts for the second half, including BroadReach’s contribution from January 2026, continued demand across SAP implementation and cloud migration services, early momentum from US client engagements in Houston, and the strategic shift towards outcome-based projects to improve margins. The consultant base of over 200 following the BroadReach integration positions the company to service larger enterprise mandates.

AI strategy positions StepChange for margin expansion

StepChange has outlined a “Human First AI Consultant” strategy designed to augment consultant productivity rather than replace human expertise. The company reported that AI-augmented consultants achieved 40% higher quality scores compared to control group peers (according to Harvard Business School research from 2024), completed tasks 25% faster with equivalent or better output, and analysed 50x more data sources per engagement versus manual methods.

Key productivity benefits from AI augmentation include:

• 40% higher quality scores for AI-augmented consultants
• 25% faster task completion speed
• 50x more data sources analysed per engagement
• 80% reduction in first draft revision cycles

Management positioned this capability as a potential margin lever over time. The company reported that lean teams of three to five consultants augmented by AI can now deliver engagements that previously required 10 to 15 consultants. As AI infrastructure compounds across client mandates, cost per insight falls whilst knowledge assets build a proprietary competitive moat unavailable to human-only consulting firms.

What to watch next

Investors monitoring StepChange’s execution should track several key catalysts and operational metrics:

1. Integration progress and BroadReach contribution to H2 results. The acquisition only began contributing from January 2026, so second half results will provide the first material indication of synergy realisation and revenue uplift.

2. New contract wins across energy, government and enterprise sectors. StepChange’s revenue growth has been entirely organic to date, driven by expansion with existing Tier 1 clients and new logo wins.

3. Progress on US client engagements in Houston. The company established US operations during the half, with early momentum reported from client engagements. This represents a geographic expansion opportunity beyond the core Australian market.

4. Further M&A activity using the $10 million Westpac facility. Management highlighted the SAP partner sub-sector as highly fragmented (over 24,000 companies globally) with no dominant market share in Australia. The team has proven expertise scaling IT services businesses and is actively evaluating consolidation opportunities.

5. Margin trajectory as outcome-based projects replace rate-card constrained work. Gross margin was broadly stable at 12.8% in the first half, impacted by rate-card constraints. Management flagged a strategic shift towards outcome-based projects in the second half, combined with contractor mix optimisation, as levers for margin expansion.

The StepChange Holdings Half Year Results indicate solid execution in the company’s first reporting period as a listed entity, with organic growth, a strategic acquisition completed, and balance sheet capacity to pursue further opportunities in the fragmented SAP consulting market.

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