Novatti’s Growth Pivot Risks Short-Term Cash EBITDA Dip

A Return to Growth

Novatti Group Limited (ASX – NOV) has marked a significant milestone in its turnaround journey with a record quarterly revenue of $14.3 million in Q4 FY25, representing a 9.1% increase from the previous quarter and a 22% rise year-on-year. This performance underscores the company’s strategic pivot back to growth following a period of intensive streamlining and restructuring.

CEO Mark Healy highlighted that the company’s focus has shifted from cost-cutting to investing in scalable, higher-margin opportunities. The recent brand refresh and accelerated sales efforts have translated into several new commercial deals, including expanding card issuing services into New Zealand and enabling international tuition payments for a major New South Wales university.

Operational Efficiency and Strategic Exits

Novatti’s operational discipline is evident in the 48% reduction in cash used in operations during the second half of FY25 compared to the first half. This improvement reflects the benefits of previous cost reduction programs and the company’s ongoing efforts to simplify its business portfolio. Notably, Novatti completed the exit of its Emersion unit from the US market and closed several European and Malaysian entities deemed non-core to its international payments services.

These moves are part of a broader strategy to shed high-cost, low-margin business lines, such as the wholesale Cross Border services, aligning the company’s revenue base with its ambitious three-year target of achieving over 70% margins.

Technology Upgrade and Leadership Renewal

Central to Novatti’s growth ambitions is the ongoing upgrade of its payment platform, including integration with a global tier-one processor. This upgrade aims to enhance customer experience, expand product capabilities, and unlock larger-scale, higher-margin commercial opportunities. The migration of existing customers to the new platform is expected to complete in Q1 FY26, with positive impacts anticipated thereafter.

Supporting this strategic shift, Novatti appointed Hayden Vowell as its new CFO. Vowell brings 15 years of experience in high-growth technology and software sectors, most recently from Culture Amp, a global SaaS leader. His arrival signals a strengthening of the company’s financial leadership as it transitions from restructuring to growth.

Stablecoin Business Progress and Capital Position

Novatti’s majority-owned stablecoin business, AUDC Pty Ltd, has advanced its infrastructure and regulatory compliance, including establishing a formal trust structure and resuming transactional activity. These developments position AUDC for a planned Series A capital raise in FY26, aiming to scale commercial activity further.

At quarter-end, Novatti held $2.5 million in cash and maintained convertible notes and unsecured loans totaling approximately $3.3 million. While Q4 saw a slight dip to a negative cash EBITDA of $0.2 million, management views this as a temporary effect of the growth pivot, with positive cash EBITDA targeted in the near term.

Looking Ahead

Novatti’s Q4 FY25 results reflect a company in transition, streamlined, focused, and investing in technology and talent to capture larger, more profitable opportunities. The coming quarters will be critical to validate the benefits of the platform upgrade and new commercial deals, as well as to monitor the stablecoin business’s capital raise and regulatory progress.