Gentrack cash flow swings to $8.7m outflow as EBITDA falls 39%

The move was driven by contract liabilities collapsing from $20.3m to just $0.025m, effectively eliminating deferred revenue and customer prepayments, alongside trade debtors rising 22.6% to $34.4m as receivable days lengthened from roughly 45.6 to 56.8.

EBITDA (excluding acquisition costs) fell 39% to $7.9m from $13.0m, profit before tax fell 86.2% to $1.3m from $9.1m, and net profit after tax fell a smaller 28.9% to $5.1m from $7.2m. Revenue declined 1.7% to $110.1m as recurring revenue growth was offset by lower non-recurring project revenue.

Two acquisitions were announced in May 2026, adding AI-centric technology; these sit after the balance date and are not reflected in this period's results.

Margin compression in the dominant Utilities segment is the second issue: segment margin fell from 9.0% to 3.4% as segment result dropped from $8.3m to $3.1m on broadly flat revenue ($90.4m versus $92.8m). This indicates the profitability pressure sits inside the core business, not in a peripheral line, and points to cost growth outpacing revenue in the group's largest segment.

Third, a tax distortion is masking the scale of the operating deterioration: the effective tax rate swung to -305.1% from 21.3%, creating a 57.3 percentage point gap between the 86.2% fall in PBT and the 28.9% fall in NPAT. PBT is the cleaner read on underlying performance here, and it shows a materially weaker half than the statutory NPAT line implies.

The prior year's shape suggests the business is typically second-half weighted, with HY25 representing about 48.7% of FY25 revenue, 46.6% of FY25 EBITDA, and 34.4% of FY25 NPAT.

Given HY26 EBITDA is already down 39% and operating cash flow has swung negative, matching prior-year full-year growth would require a substantially stronger second half than the historical weighting implies, and nothing in this release signals that recovery is underway.

However, this improvement is offset by a clear deterioration in cash generation: free cash flow before lease effects swung from +$1.8m to -$9.8m, and free cash flow relative to NPAT was -191.6% versus +24.8% in the prior half, meaning NPAT is no longer backed by comparable cash generation. Cash conversion has deteriorated materially versus the prior half, though the specific current-period ratio is not presented here because it is distorted by the scale of the working-capital movement.

No dividend was declared for the period, consistent with cash preservation during a half in which operating cash flow turned negative and receivables and contract-liability movements consumed cash rather than releasing it.

This briefing cannot assess the financial terms, funding structure, or expected earnings contribution of the two acquisitions announced after the balance date, as none of that detail was disclosed in the supplied materials.