Change Financial Posts Maiden US$0.6M Profit as Revenue Surges 29% to US$9.3M
Change Financial delivers maiden profit as revenue surges 29%
Change Financial (ASX: CCA) has reported a maiden half-year net profit of US$0.6m (A$0.9m) for H1 FY26, marking a significant inflection point for the fintech business. The result follows US$9.3m (A$13.3m) in revenue, up 29% on the prior corresponding period, with Underlying EBITDA of US$1.8m (A$2.6m) compared to a loss of US$0.5m (A$0.7m) in H1 FY25.
The Change Financial maiden profit result demonstrates the company’s payments-as-a-service platform is achieving operating leverage, with 70% of revenue now flowing from recurring streams. This shift toward predictable income, combined with disciplined cost management, has enabled the company to convert strong top-line growth into bottom-line profitability for the first time.
For investors, the maiden profit signals that the business model is working. The combination of revenue acceleration, stable operating costs, and expanding recurring revenue provides a foundation for sustained profitability as transaction volumes continue to scale.
When big ASX news breaks, our subscribers know first
What is a PaaS fintech model and why does scale matter?
Payments-as-a-service (PaaS) refers to the infrastructure that enables banks and fintechs to issue and process payment cards without building their own systems. Change Financial provides the Vertexon platform, which integrates with clients’ core systems to deliver card programmes including digital wallets and buy-now-pay-later services.
The PaaS model exhibits strong operating leverage. Fixed costs such as technology development, hosting, and staff remain relatively stable as transaction volumes grow. Variable costs, primarily scheme and connectivity fees paid to card networks, increase with volumes but at a lower rate than revenue growth, allowing margins to expand.
Change’s H1 FY26 results illustrate this dynamic in action. Operating expenses (excluding share-based payments) decreased 5% compared to the prior period, while revenue climbed 29%. Excluding the exited US operations, operating costs increased just 5% against the 29% revenue rise, confirming the stable cost base can support material revenue expansion.
As the platform processes more transactions, each incremental dollar of revenue contributes margin with minimal additional cost. This scalability is central to the investment thesis for PaaS businesses.
Vertexon platform growth accelerates with 66% increase in active cards
Change Financial now manages 110,000+ active cards on its PaaS platform, representing 66% growth compared to the prior corresponding period. The company has become the largest non-bank issuer of debit cards in New Zealand, processing at a run-rate of NZ$1bn+ annually.
The card growth was driven by the onboarding of a New Zealand personal wealth management platform client in late H1 and an existing fintech client expanding its cardholder base. Two additional contracted PaaS clients are currently being onboarded, which management has identified as a key driver of future revenue.
The PaaS margin (excluding US operations) expanded from 26% in FY25 to 30% in H1 FY26, in line with management expectations. Margins are projected to continue expanding as volumes scale, particularly when Australian PaaS volumes increase. Client onboarding activities attract scheme project and certification costs that temporarily impact margins, but the relative effect diminishes as revenue scales.
| Metric | H1 FY25 | H1 FY26 | Growth |
|---|---|---|---|
| Active Cards | 66,000+ | 110,000+ | +66% |
| PaaS Margin (ex. US) | 26% | 30% | +4pp |
| Annual Processing Run-Rate | Not disclosed | NZ$1bn+ | – |
Card numbers serve as a lead indicator for transaction revenue. The 66% increase signals the platform is gaining traction, and the pipeline of clients being onboarded provides visibility for continued growth through H2 FY26 and beyond.
Revenue mix shows recurring income strength
Revenue composition shifted materially toward predictable streams during H1 FY26:
- PaaS Revenue: US$3.7m (up from US$2.9m in the prior period)
- Support & Maintenance: US$2.8m (up from US$2.7m in the prior period)
- Licence & Professional Services: US$2.7m (up from US$1.5m in the prior period)
Approximately 70% of H1 FY26 revenue was derived from recurring income streams (PaaS transaction fees and support and maintenance), with 30% from project and licence income. This compares to 56% recurring revenue in H1 FY24 and 78% in H1 FY25. The slight decline from the prior year reflects strong one-off licence and professional services sales during the period, which contributed materially to the record revenue result.
The shift toward recurring revenue provides earnings predictability and supports higher valuation multiples over time. As PaaS volumes continue to scale, the recurring base is expected to expand further, reducing reliance on project-based income.
Cost discipline drives operating leverage inflection
Operating expenses (excluding share-based payments) decreased 5% compared to the prior corresponding period despite 29% revenue growth. The cost reduction was primarily attributable to the exit of US operations, which management completed in the prior financial year.
Excluding the US operations, operating expenses increased a modest 5% year-on-year, demonstrating tight cost controls and a stable fixed cost base capable of supporting material revenue expansion. Employee expenses declined 7%, technology and hosting costs fell 12%, and other expenses decreased 30%.
Management has also integrated artificial intelligence tools to drive further operational efficiencies. While AI has been embedded in the fraud management suite for several years, Change is now accelerating AI rollout across its Vertexon and PaySim platforms. Expected benefits include shorter development cycles, increased team capacity, faster product delivery timelines, and margin expansion.
Tony Sheehan, Chief Executive Officer
“The record revenue result coupled with a stable fixed cost base and US cost outs delivered a strong Underlying EBITDA and maiden net profit for the period. The financial pull through demonstrates the operating leverage we are now starting to achieve in the business.”
This inflection point is precisely what investors monitor in scaling businesses. Revenue growth outpacing cost growth confirms the business model economics are working and the company is moving toward self-sustaining profitability.
Balance sheet and cash position
Change Financial held US$2.6m (A$3.7m) in cash at 31 December 2025, with an additional US$1.4m (A$2.0m) held in cash-backed security guarantees. The company carries no debt.
Security guarantees increased by US$0.5m (A$0.7m) during the period to support growing PaaS volumes. These guarantees are required by Change’s scheme and processing partners to provide security for settlement and other payment obligations relating to card processing and transactions.
Operating cashflow was neutral in H1 FY26, which is typical for the company’s seasonal pattern. H1 historically represents a higher cash usage period relative to H2, and management expects operating cashflow to improve significantly in the second half. The clean balance sheet with no debt and a cash position supporting operations removes near-term dilution concerns for investors.
FY26 guidance upgraded with positive cashflow expected
Change Financial upgraded its full-year guidance in January 2026 following the strong start to the year. The company now expects FY26 revenue of between US$17.5m (A$25.0m) and US$18.5m (A$26.4m), with Underlying EBITDA guidance of US$3.1m (A$4.4m) to US$3.8m (A$5.4m).
The upgraded EBITDA guidance represents a 15% increase at the midpoint compared to previous expectations. Management also confirmed the company expects to be net cash flow positive for full-year FY26 (excluding funds required for security deposits or strategic initiatives).
| Metric | Low End | High End |
|---|---|---|
| FY26 Revenue | US$17.5m (A$25.0m) | US$18.5m (A$26.4m) |
| FY26 Underlying EBITDA | US$3.1m (A$4.4m) | US$3.8m (A$5.4m) |
| Net Cashflow | Positive (full year) | |
Management remains focused on building the sales pipeline and winning new deals, particularly in Oceania and Southeast Asia. The company is prioritising replicating its New Zealand success in the larger Australian market through securing additional PaaS clients.
Tony Sheehan, Chief Executive Officer
“Given the strong start to the year, it was very pleasing to update our revenue and Underlying EBITDA expectations for FY26. As we continue to grow and evolve as a business, we are very well positioned to drive profitable revenue growth going forward.”
The mid-year guidance upgrade signals management confidence in H2 execution. The expectation of positive cashflow means the business can self-fund growth without requiring capital raises, a material shift for a company that has historically been in investment mode.
New client wins and partner expansion
Change Financial signed a new Vertexon PaaS fintech client during H1 FY26, focused on improving financial inclusion and payment choice for customers across the South Pacific region. The client will use Vertexon to process in-region payments, with Change and the client working to finalise agreements for expansion into Australia and New Zealand.
The company also secured three new PaySim partners during the period to accelerate entry into high-growth international markets through a “one-to-many” sales approach. Additionally, Change entered into a BIN Sponsorship strategic partnership with a global payment processor, which will support the processor’s existing clients entering the Australian market.
Pipeline expansion across multiple geographies and product lines provides multiple growth levers beyond organic volume growth from existing clients. The contracted pipeline of professional services work remains strong entering H2 FY26, supporting continued revenue visibility.
The next major ASX story will hit our subscribers first
Closing
Change Financial’s H1 FY26 results represent a watershed moment for the business. The maiden half-year profit of US$0.6m, combined with 29% revenue growth and a 70% recurring revenue base, demonstrates the company has reached an inflection point where operating leverage is translating to bottom-line results.
The company’s position as the largest non-bank debit card issuer in New Zealand, processing over NZ$1bn annually, provides a proven template for expansion into the larger Australian market. With upgraded guidance, positive cashflow expectations, and AI integration positioned to drive further margin expansion, Change Financial has shifted from investment phase to sustainable, profitable growth.
The pipeline of clients being onboarded, combined with the stable cost base supporting revenue expansion, positions the business to deliver on management’s upgraded expectations while building a foundation for multi-year growth.
Want the Next Fintech Breakout in Your Inbox?
Join 20,000+ investors receiving FREE breaking ASX news within minutes of release, complete with in-depth analysis. Get alerts on emerging fintech opportunities, maiden profit announcements, and sector-moving updates before the market reacts. Click the “Free Alerts” button at Big News Blast to start receiving real-time coverage the moment news breaks.