Novatti Group has achieved positive operating cashflow and EBITDA for the September quarter, driven by strategic revenue reforms and new commercial contracts with major clients.
- Positive operating cashflow of $0.2 million and EBITDA of $0.1 million
- Group margin doubles to 54% following exit of low-margin overseas service
- New contracts secured with tier one Australian telco, global airline, and major NSW university
- Issuing business grows cards issued by 42% in FY25, now EBITDA positive
- AUDD stablecoin becomes first Australian dollar stablecoin listed on Coinbase
Turning the Corner on Cashflow
Novatti Group Limited (ASX – NOV) has reported a significant financial milestone in its September 2025 quarter, posting positive operating cashflow of $0.2 million alongside a positive EBITDA of $0.1 million. This marks a clear inflection point in the company’s multi-year turnaround strategy, signaling that its efforts to streamline operations and improve profitability are bearing fruit.
The company’s available cash increased by $1 million to $3.6 million, providing a stronger liquidity buffer as Novatti continues to execute its growth plans. CEO Mark Healy highlighted the importance of exiting low-margin services, noting that shedding a service with just a 2% margin contribution but $6 million in quarterly revenue helped double the group’s margin to 54%, a substantial leap towards its long-term target of 70%.
Strategic Contract Wins Drive Growth Momentum
Novatti’s pivot back to growth is underscored by several new commercial contracts secured during the quarter. Notably, the company extended its relationship with a tier one Australian telecommunications provider by winning a contract to upgrade prepaid voucher systems. Additionally, Novatti expanded its digital voucher program with a global airline to include third-party voucher distribution, and onboarded a major New South Wales university to facilitate student payments through Asia wallets.
These wins reflect Novatti’s ability to deepen existing client relationships and cross-sell services, particularly within its payments ecosystem. The company also secured a partnership with a marketing firm to provide payment solutions for hospitality and tourism sectors, and landed a significant order for 20,000 cards to support a New Zealand telecom client.
Issuing Business Gains Traction, Acquiring Platform Ready
The Issuing business line has been a standout performer, achieving 42% year-on-year growth in cards issued and sponsored in FY25, alongside a 39% increase in gross transaction value. This segment has transitioned from negative EBITDA in FY23 to positive EBITDA in FY24 and FY25, demonstrating sustainable operational improvement.
Meanwhile, Novatti’s Acquiring business has completed migration of all customers to a new platform, resolving onboarding disruptions experienced in FY25. With the technical groundwork laid, management is now focused on driving sales growth in this segment, aiming to replicate the Issuing business’s recent success and margin expansion.
Digital Finance Innovation – AUDD Stablecoin Listing
Adding to Novatti’s growth narrative is the milestone listing of AUDD, the first Australian Dollar stablecoin, on Coinbase. Novatti holds a 57% interest in AUDC Pty Ltd, the issuer of AUDD, which is gaining traction in digital payments and decentralized finance applications. This exposure positions Novatti to benefit from the expanding digital currency ecosystem, potentially unlocking new revenue streams and market opportunities.
Leadership and Outlook
Interim CFO Hayden Vowell will conclude his fixed-term contract in early November, with the company expressing gratitude for his contributions during a pivotal period. Looking ahead, Novatti remains committed to its turnaround strategy, focusing on margin improvement, revenue growth, and operational efficiency to meet its long-term financial targets.
While the company’s recent results are encouraging, the full impact of its growth initiatives and digital finance ventures will unfold over coming quarters, warranting close attention from investors and analysts alike.
Bottom Line?
Novatti’s positive cashflow and strategic contract wins mark a turning point, but sustained growth hinges on execution in acquiring and digital finance.
Questions in the middle?
- How will Novatti accelerate growth in its Acquiring business following platform migration?
- What impact will AUDD’s adoption on Coinbase have on Novatti’s revenue and valuation?
- Who will succeed interim CFO Hayden Vowell, and how might leadership changes affect strategy?