ReadyTech Faces $19.9M Impairment Blow, Challenging Profit Recovery
ReadyTech Holdings Limited reported a 7.1% increase in revenue to $121.8 million for FY25 but swung to a $16.1 million loss after tax, driven by a significant impairment and strategic investments. The company completed the acquisition of CouncilWise Pty Ltd, aiming to strengthen its local government software offerings.
- 7.1% revenue growth to $121.8 million in FY25
- Loss after tax of $16.1 million, reversing prior year profit
- Significant $19.9 million impairment in Government Justice and Procurement segment
- Acquisition of CouncilWise Pty Ltd completed in February 2025
- Subscription revenue up 7.6%, now 84.3% of total revenue
Revenue Growth Amidst Profit Decline
ReadyTech Holdings Limited has reported a solid 7.1% increase in total revenue for the fiscal year ended 30 June 2025, reaching $121.8 million. This growth was underpinned by strong subscription revenue, which rose 7.6% to $102.7 million and now accounts for over 84% of total revenue, highlighting the company's successful SaaS business model.
Loss Driven by Impairment and Investments
Despite the revenue growth, ReadyTech posted a significant loss after tax of $16.1 million, a sharp reversal from the $5.5 million profit recorded in FY24. The loss was primarily driven by a non-cash impairment charge of $19.9 million related to the Government Justice and Procurement segment. Additionally, the company increased its expenses by nearly 10%, reflecting targeted investments in research and development (29.2% of revenue) and sales and marketing (7.6% of revenue) to support future growth.
Strategic Acquisition to Bolster Local Government Offering
In February 2025, ReadyTech completed the acquisition of CouncilWise Pty Ltd, a specialist provider of property and rates software for local councils. This move is expected to enhance ReadyTech’s cloud strategy in the local government sector and strengthen its product portfolio with deep domain expertise. The acquisition consideration was $7.6 million, including cash and shares, with additional contingent payments tied to performance milestones.
Operational Highlights and Future Outlook
ReadyTech’s CEO, Marc Washbourne, highlighted the year as one of transition and foundation, with $15.4 million in committed new business, including its largest-ever Workforce Solutions customer. The company saw strong contract wins in the second half of the year, particularly in education and hospitals, and noted a net revenue retention rate of 102%, indicating successful customer upgrades and expansions.
Looking ahead, ReadyTech plans to accelerate cloud adoption and leverage artificial intelligence capabilities to drive sustainable long-term growth. The company is focused on strengthening its flagship platforms and capturing opportunities in rapidly transforming markets.
Governance and Financial Position
The financial statements were audited by Deloitte Touche Tohmatsu and received an unmodified opinion. ReadyTech’s net tangible assets per share slightly improved to -48.40 cents from -49.73 cents the prior year. The company did not declare any dividends for FY25, consistent with the previous year, as it prioritizes reinvestment and growth.
Bottom Line?
ReadyTech’s FY25 results underscore a pivotal year of investment and restructuring, setting the stage for growth but raising questions on the Government segment’s recovery.
Questions in the middle?
- How will ReadyTech manage the turnaround of its Government Justice and Procurement segment post-impairment?
- What impact will the CouncilWise acquisition have on ReadyTech’s local government market share and profitability?
- How effectively can ReadyTech leverage AI and cloud technologies to accelerate growth in FY26 and beyond?
