Atturra Delivers 28% Revenue Surge to $181M Amid Strategic Transformation

Atturra delivers 28% revenue surge to $181 million amid strategic transformation

Atturra Limited (ASX: ATA) has reported Atturra H1 FY26 Results showcasing $181 million in revenue for the half-year ended 31 December 2025, representing 28% growth on the prior corresponding period. The result reflects a period of deliberate investment in growth capabilities, with underlying EBITDA of $7.3 million (down 46% on pcp) reflecting near-term profitability pressure from strategic spending. Gross margin held steady at 32%, indicating pricing power remains intact despite the investment phase.

The company’s business quality is evidenced by a 73% predictable revenue base, combining 26% recurring revenue and 47% long-term client revenue. Atturra’s workforce expanded to over 1,300 staff, including more than 350 security-cleared personnel. The H1 result follows the company’s historical earnings seasonality pattern, with the second half typically delivering the majority of full-year profitability.

1. Revenue: $181m (+28% pcp)
2. Underlying EBITDA: $7.3m (-46% pcp)
3. Predictable Revenue: 73%

Investment significance: Revenue momentum validates Atturra’s market positioning, while gross margin stability indicates pricing power is intact despite the investment phase.

What is predictable revenue and why does it matter?

Predictable revenue represents the combination of recurring contracts and long-term client engagements that provide earnings visibility. For Atturra H1 FY26 Results, this metric reached 73%, substantially reducing volatility compared to purely project-based IT services businesses. Recurring revenue streams (26%) come from ongoing service agreements, while long-term client revenue (47%) reflects established relationships with multi-year engagement histories.

This composition provides investors with confidence in forecasting future performance and offers downside protection during market uncertainty. A high predictable revenue base means the company is less dependent on winning new contracts each quarter to maintain earnings, creating a more stable financial profile for shareholders.

Investment significance: High predictable revenue reduces dependence on winning new contracts each quarter, providing a more stable earnings profile.

Understanding the H1 investment phase

The 46% decline in underlying EBITDA to $7.3 million was driven by deliberate operating expenditure investments, including buildout of a central sales team, integration costs of $1.6 million, and restructuring expenses of $2.0 million. M&A retention payments added $0.6 million to the half’s cost base. Despite these pressures, gross margin remained stable at 32%, indicating the core business economics are structurally sound.

A disputed contract termination provided a one-off impact during H1. Management has since implemented internal policy changes capping work-in-progress exposure at $2 million without board approval, designed to prevent similar exposures in future periods.

Investment significance: The profitability decline is attributable to identifiable, largely non-recurring items rather than structural margin erosion.

Growth engines powering Atturra’s expansion

Three proprietary intellectual property offerings are driving differentiated growth for Atturra. Scholarion, the company’s student information system for K-12 education, now serves 6 clients with over 50 prospects in the pipeline. Two new schools were signed in H1 FY26, with Haileybury added in January 2026. The Atturra Cloud Platform for Boomi has reached 52 clients globally, signing 17 new clients in H1. The broader Atturra Cloud Platform serves over 200 clients and is tracking towards 30%+ growth for the full year.

The acquisition of Blue Connections during H1 expanded Atturra’s managed services scale and end-user computing capability. The Melbourne-based business integration is progressing, with most systems migrations scheduled for completion by March 2026, though a warehouse component will extend Blue Connections’ full integration into FY27. Forecast integration costs for FY26 total $1.8 million, covering restructuring, rebranding, and systems consolidation.

Investment significance: Proprietary IP creates recurring revenue streams and competitive differentiation versus pure labour-hire IT services.

AI positioning as a strategic priority

The Australian AI market is forecast to exceed $15 billion in FY27, representing a doubling from current levels. Atturra is positioning to capture this structural growth tailwind through AI advisory services, data modernisation, and end-to-end digital transformation capability. The company has adopted an AI-first approach internally and is experiencing strong demand for AI advisory services across its client base.

Strategic partnerships with Boomi and Microsoft underpin Atturra’s AI delivery capability. The company’s core growth areas (AI, Cyber, Cloud, and Data) align with the fastest-growing segments of enterprise IT spending. Management highlighted that Atturra is one of very few companies capable of delivering end-to-end digital transformation including AI, supported by its deep industry expertise across government, defence, utilities, financial services, manufacturing, and education sectors.

Investment significance: Atturra is positioning to capture a structural growth tailwind in enterprise AI spending.

Full-year guidance reaffirmed at $364-374 million revenue and $30-31 million EBITDA

Management reaffirmed Atturra H1 FY26 Results guidance for FY26, targeting revenue of $364-374 million and underlying EBITDA of $30-31 million. The guidance implies H2 underlying EBITDA of $23-24 million, representing a substantial sequential uplift from H1’s $7.3 million. This recovery reflects the company’s historical earnings split pattern, with prior years typically showing H1/H2 EBITDA distributions of approximately 30/70 or 40/60.

The H2 recovery is underpinned by return to normal operations following resolution of the disputed contract issue, completion of the central sales team buildout, and normalisation of integration and restructuring costs. The guidance positions FY26 as a transitional year before earnings normalisation in subsequent periods.

Investment significance: The guidance implies a material H2 recovery and positions FY26 as a transitional year before earnings normalisation.

Balance sheet and cash position

Cash and equivalents stood at $58.6 million as at 31 December 2025, down from $91.6 million at 30 June 2025. Cash deployment during H1 included $17.3 million on acquisitions and earnout payments, $13.4 million operating cash outflow (reflecting the investment phase and working capital movements), and $6.1 million on share buybacks for employee incentive schemes.

Borrowings increased to $27.6 million from drawdowns on existing facilities to fund acquisitions. Net tangible assets stood at $16.6 million. The balance sheet is positioned to support continued M&A activity, with debt capacity remaining available for further acquisitions in priority areas.

• Cash: $58.6m (down from $91.6m at June 2025)
• Acquisition investment: $17.3m (acquisitions and earnouts)
• Operating cash outflow: $13.4m
• Share buyback: $6.1m
• Borrowings: $27.6m

Investment significance: Cash deployment reflects strategic capital allocation rather than operational weakness; debt capacity remains available for further acquisitions.

Strategic outlook and investment priorities

Atturra’s three-pillar strategy centres on an AI-first approach, accelerated investment in proprietary IP, and focus on EPS-accretive growth. The company is investing in additional sales and solutioning capabilities to achieve above-market growth in AI, Cyber, Cloud, and Data. Priority acquisition areas include Managed Services, AI, Cyber, Cloud, and Data, with secondary focus on enterprise systems such as ServiceNow.

Management positioned Atturra as one of few companies capable of delivering end-to-end digital transformation including AI, supported by strategic partnerships, deep industry expertise, and award-winning technology delivery capability. The company’s sovereign positioning in Australian Defence (with over 350 security-cleared personnel) and presence across Federal and State Government provide structural advantages in high-security, mission-critical IT services.

Investment significance: Management is prioritising EPS-accretive growth while investing in structural growth markets.

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