StepChange Holdings (ASX: STH) has reported StepChange Holdings 1H FY26 Results for the six months ended 31 December 2025, marking its first earnings period since listing on the ASX in July 2025. Revenue grew 19% to $24.36 million, whilst underlying EBITDA increased 50% to $1.95 million on a pro-forma basis, driven by new client wins and expanded service delivery to existing Tier 1 enterprise and government clients.
StepChange posts 50% EBITDA growth in maiden half as listed company
The company’s inaugural reporting period as a publicly listed entity demonstrated operating leverage within its consulting model, with EBITDA growth significantly outpacing revenue expansion. Gross profit reached $3.13 million, representing 17% growth compared with Pro-forma HY25.
Growth was achieved organically through expanded relationships with Tier 1 enterprise clients and new contract wins across energy and government sectors. The consultant base remained around 160 billable consultants during the period, supporting increased delivery capacity whilst maintaining utilisation and margin discipline.
The company closed the half year with a cash balance of $5.6 million, supported by strong operating cash flow. Statutory EBITDA was impacted by non-recurring items including IPO-related costs, share-based payments and transaction expenses, which have been excluded from normalised EBITDA to provide clarity on underlying operating performance.
| Financial Metric | 1H FY26 (Audited) | Pro-forma HY25 | Growth (%) |
|---|---|---|---|
| Revenue | $24.36M | $20.47M | 19% |
| Gross Profit | $3.13M | $2.68M | 17% |
| Underlying EBITDA | $1.95M | $1.30M | 50% |
| Cash Balance | $5.6M | N/A | N/A |
For investors, the first post-IPO results validate the investment thesis presented at listing. EBITDA growth outpacing revenue growth demonstrates operating leverage in the consulting model, with margin expansion occurring as the business scales.
Join thousands of readers who start here
Our best articles, sent straight to your inbox. You can unsubscribe anytime.
What is ERP consulting and why are companies spending on it?
Enterprise Resource Planning (ERP) refers to software systems that manage core business operations across an organisation. These systems integrate critical functions into a single platform, enabling real-time visibility and coordination across the business.
ERP systems typically manage:
- Financial operations: Accounting, budgeting, financial reporting
- Supply chain: Procurement, inventory management, logistics
- Human resources: Payroll, workforce management, talent acquisition
- Operations: Production planning, quality control, project management
StepChange’s role centres on helping organisations modernise legacy ERP systems to cloud-based SAP platforms. This modernisation process involves migrating clients from older on-premise systems to contemporary cloud infrastructure, which provides enhanced functionality, scalability and security.
The broader market trend driving sustained demand is SAP’s planned discontinuation of support for its older ECC system, creating mandatory transition timelines for organisations globally. This structural shift provides multi-year revenue visibility for specialist consulting firms. Unlike discretionary IT spending that can be deferred during economic uncertainty, ERP migrations are often compliance-driven with fixed deadlines, creating more predictable demand patterns for service providers.
Strategic execution builds platform for scale
Since listing in July 2025, management has delivered on key IPO commitments within six months. Strategic initiatives completed during the period position the company for geographic expansion, strengthen leadership capability and provide financial flexibility for inorganic growth opportunities.
US operations and leadership appointments
StepChange established operations in Houston, Texas, targeting energy sector clients in the US market. The geographic expansion represents a material opportunity given the concentration of energy sector headquarters and operations in the region.
The company appointed Stephen Pacecca as Chief Financial Officer and Jamie Morgan as General Manager, strengthening leadership depth as the business scales. These appointments provide additional operational capacity to manage the expanded business following the BroadReach acquisition and support future growth initiatives.
To support potential acquisition opportunities, the company secured a $10 million Westpac acquisition facility. This provides balance sheet flexibility to pursue strategic transactions whilst maintaining operational cash reserves.
BroadReach acquisition expands government footprint
Towards the end of the half year, StepChange completed the acquisition of BroadReach Group Pty Ltd, finalised on 12 January 2026. BroadReach is an established Western Australian ICT advisory firm with strong government relationships and complementary service capabilities.
In FY25, BroadReach generated revenue of approximately $8.96 million and EBITDA of $0.86 million. The acquisition adds approximately 40 senior consultants to the group, immediately taking the total consultant base above 200 and providing delivery capacity for larger contract opportunities.
Strategically, the transaction expands StepChange’s government sector footprint, enhances enterprise architecture and ICT advisory capabilities, and creates immediate cross-sell opportunities across SAP, cloud migration and digital transformation services. The deal was structured with a capital-efficient upfront component and performance-based earn-out, aligning incentives between the parties.
For investors, the acquisition represents disciplined capital allocation during the growth phase. The performance-based structure limits downside risk whilst the expanded consultant base provides capacity to pursue larger government contracts that may have previously been beyond the company’s delivery capability.
The five strategic initiatives completed post-IPO include:
- Established US operations in Houston, Texas
- Secured $10 million Westpac acquisition facility
- Appointed Stephen Pacecca as Chief Financial Officer
- Appointed Jamie Morgan as General Manager
- Completed acquisition of BroadReach Group Pty Ltd
Board announces 10% share buy-back
In conjunction with releasing its 1H FY26 results, StepChange announced it will commence an on-market share buy-back of up to 4,666,031 fully paid ordinary shares. This represents approximately 10% of the smallest number of shares on issue in the last 12 months, in accordance with the ’10/12 limit’ under section 257B(4) of the Corporations Act 2001.
The buy-back reflects the Board’s disciplined capital management approach and confidence in the company’s financial position and long-term outlook. Despite the buy-back programme, the company maintains a cash balance of $5.6 million and has access to a $10 million acquisition facility, preserving financial flexibility for strategic opportunities.
For investors, the buy-back signals management’s view on valuation whilst maintaining firepower for M&A activity. Disciplined capital allocation during a growth phase is a positive governance indicator, particularly when executed alongside strategic expansion initiatives.
Enjoyed this article?
We publish high-impact stories like this a few times a week. No spam.
FY26 guidance reaffirmed
StepChange enters the second half of FY26 with increased scale and capability following the integration of BroadReach, which has taken the consultant base above 200. Demand across SAP migration, cloud transformation and ICT advisory services remains robust, supported by structural ERP transition tailwinds.
The company remains confident in delivering its FY26 forecast revenue of $47.3 million and normalised EBITDA of $4.6 million as outlined in its IPO Prospectus. With 1H revenue of $24.36 million, the company requires approximately $23 million in 2H to meet guidance, representing a modest sequential lift supported by the BroadReach contribution and existing pipeline.
Shane Bransby, Managing Director
“We are pleased to deliver strong organic growth in our first half as a listed company, with revenue up 19% and normalised EBITDA up 50% on a pro-forma basis. The result reflects sustained client demand, disciplined execution and the scalability of our consulting platform. With US operations established, the BroadReach acquisition completed and a strengthened leadership team in place, we enter the second half with increased scale and capability. The Board’s decision to implement an on-market buy-back further reflects our confidence in the underlying strength of the business and our disciplined capital management approach.”
For investors, the guidance reaffirmation following a strong first half provides confidence in management’s ability to forecast earnings. The combination of organic growth momentum, BroadReach integration and structural market tailwinds supports the FY26 outlook, with the second-half revenue requirement representing achievable sequential growth from the first half run rate.
Don’t Miss the Next Tech Breakthrough
Join 20,000+ investors receiving FREE breaking ASX news delivered to your inbox within minutes of release, complete with in-depth analysis. Click the “Free Alerts” button at StockWire X to get real-time alerts on emerging Tech opportunities the moment market-moving announcements drop.