EML Payments Limited reported a 9% revenue increase and 13% rise in underlying EBITDA for FY25, while advancing its EML2.0 transformation and Project Arlo technology platform. Despite a net loss impacted by a shareholder class action provision, the company’s renewed client pipeline and strategic restructuring signal a pivotal phase ahead.
- FY25 revenue up 9% to $220.9 million
- Underlying EBITDA increased 13% to $58.6 million
- Cash balance improved 46% to $59.3 million
- EML2.0 transformation and Project Arlo on track for Q1 FY26 deployment
- Provision of $40.9 million for shareholder class action impacts net loss
Financial Performance Highlights
EML Payments Limited (ASX – EML) has delivered a solid financial performance for the fiscal year ended 30 June 2025, with total revenue rising 9% year-on-year to $220.9 million. Underlying EBITDA improved by 13% to $58.6 million, positioning the company near the top of its guidance range. This growth was driven by a combination of customer revenue and a notable 28% increase in interest income, reflecting effective yield improvement strategies amid a rising interest rate environment.
The company’s cash position strengthened significantly, with a 46% increase to $59.3 million, bolstered by operational cash flows and proceeds from the divestment of its Sentenial business. Borrowings were reduced to $54.1 million, reflecting prudent balance sheet management and an extension of debt facilities.
Strategic Transformation and Operational Progress
EML is in the midst of executing its EML2.0 transformation strategy, which aims to reposition the company as a customer-focused, innovative payments provider with sustainable double-digit growth. The first phase, focused on laying strong foundations, has seen a comprehensive leadership refresh, a new global operating model, and the rebuilding of commercial and product development teams.
Project Arlo, a critical initiative to deploy a single global technology platform in partnership with Visa PISMO, is progressing on schedule with a minimum viable product (MVP) deployment expected in the first quarter of FY26. This platform is anticipated to drive operational efficiencies and enable product expansion, particularly in mobility, travel, and embedded finance verticals.
Client Engagement and Pipeline Growth
Client retention and new business development have been key priorities, with eight of the top 30 clients renewing contracts during the year, including two of the top five. The new business pipeline has expanded to $66 million, reflecting successful contract wins and program implementations across EML’s global footprint. The company’s commercial teams have been restructured with regional leadership to support these growth initiatives and synergy benefits.
Challenges and Provisions
Despite operational progress, EML reported a net loss after tax of $53.4 million, significantly impacted by a $40.9 million provision related to a shareholder class action settlement awaiting court approval. The company continues to contest the allegations but has prudently recognised the provision in its financial statements. No dividends were declared for FY25, reflecting the company’s focus on reinvestment and balance sheet strengthening.
Goodwill impairment testing showed no new impairments, and the company maintains a robust risk management framework addressing operational, financial, compliance, and strategic risks. The balance sheet reflects increased segregated funds and bond investments, supporting stored value liabilities.
Looking Ahead
EML’s FY26 guidance projects underlying EBITDA between $58 million and $63 million, with a focus on completing restructuring efforts and preparing for the acceleration phase of EML2.0. The company aims to leverage Project Arlo and product innovation to drive growth and improve earnings per share over the medium term.
Executive Chairman Anthony Hynes expressed confidence in the leadership team’s ability to execute the transformation and create sustainable shareholder value, while acknowledging the work still ahead. The company’s strategic and operational momentum, combined with a strengthened financial position, sets the stage for a critical period of delivery and growth.
Bottom Line?
EML Payments’ FY25 results underscore a pivotal transformation phase, balancing growth with legal headwinds as Project Arlo’s rollout approaches.
Questions in the middle?
- How will the shareholder class action settlement impact EML’s financials and shareholder confidence once court approval is sought?
- What are the key milestones and risks associated with the upcoming deployment of Project Arlo in Q1 FY26?
- How effectively can EML convert its growing $66 million pipeline into sustainable revenue and EBITDA growth?