Government Risks Temper Atturra’s Strong Earnings Growth Outlook
Atturra Limited reports a robust first half of FY25 with revenue growth nearing 28%, driven by recent acquisitions and expanding service offerings, while updating full-year guidance amid cautious government sector risks.
- H1 FY25 revenue expected between $140m-$142m, up 26-28%
- Underlying EBITDA projected at $13.2m-$13.8m, a 19-24% increase
- Full-year FY25 revenue guidance raised to $305m-$320m
- EBITDA guidance adjusted to $31m-$34m due to project timing and government risks
- Strong client uptake of new Atturra Cloud Platform for Boomi
Strong Half-Year Performance
Atturra Limited (ASX: ATA) has delivered a compelling start to FY25, announcing unaudited revenue for the half year ended 31 December 2024 in the range of $140 million to $142 million. This represents an impressive 26% to 28% increase compared to the prior corresponding period's $111.1 million. Underlying EBITDA is also expected to rise significantly, between 19% and 24%, reaching $13.2 million to $13.8 million, while EBIT is forecasted to grow by 23% to 28%, landing between $6.5 million and $6.8 million.
Updated Full-Year Guidance Amid Strategic Growth
Building on this momentum, Atturra has updated its full-year FY25 guidance to reflect the impact of recent acquisitions, Plan B, Chrome Consulting, and ComActivity, as well as ongoing strategic investments. Revenue is now anticipated to fall between $305 million and $320 million, with underlying EBITDA guidance adjusted to $31 million to $34 million. The EBITDA range was revised due to three main factors: an extended timeline for revenue recognition on a major acquired project, unforecast risks in Federal Government contracts estimated at $1.0 million to $1.5 million EBIT impact, and increased bidding costs for three significant multi-year contracts.
Navigating Government Sector Risks
While the company’s core business segments continue to show strong demand, the Federal Government sector presents some headwinds. Atturra’s exposure to government cost-cutting measures and the uncertainty surrounding the upcoming Federal election cycle introduces a risk of up to $1.5 million in EBIT. CEO Stephen Kowal acknowledged these challenges but emphasized the company’s proactive approach in managing these risks while investing in promising long-term opportunities.
Innovation and Client Growth
Atturra’s innovation pipeline is gaining traction, particularly with its hosted Atturra Cloud Platform for Boomi. From just two clients reported in November 2024, the platform has rapidly expanded to 11 clients, signaling strong market acceptance of this new offering. This growth aligns with Atturra’s ambition to become Australia’s leading sovereign end-to-end IT solutions provider, leveraging partnerships with global technology leaders and a diversified client base across government, utilities, education, defence, and financial services.
Looking Ahead
With three major customer pursuits underway, involving over $1 million in investment over the next eight months, Atturra is positioning itself for sustained growth beyond FY25. The company’s upcoming half-year results release on 26 February 2025 and the subsequent CEO webinar will provide further clarity on execution and outlook.
Bottom Line?
Atturra’s strong H1 momentum and strategic investments set the stage for growth, but government sector risks warrant close investor attention.
Questions in the middle?
- How will the extended timeline on the major acquired project affect FY26 earnings?
- What is the likelihood and potential impact of winning the three strategic multi-year contracts?
- How will ongoing Federal Government cost-cutting and election uncertainty influence future contract renewals?