Integrated Research’s Increased Credit Losses and Softer Renewals Signal Financial Risks
Integrated Research has reported a softer first half of FY26 with an anticipated EBITDA loss driven by increased credit losses and investments in new products, despite multiple product launches.
- Anticipated EBITDA loss between $3m and $8m for 1H FY26
- Total Contract Value and revenue down approximately 4% compared to prior year
- Significant increase in allowance for expected credit losses
- Execution of product-led growth strategy with multiple new product launches
- New customer growth yet to offset softer renewals
Integrated Research’s Challenging Half-Year Performance
Integrated Research (ASX, IRI), a global provider of observability solutions for critical IT ecosystems, has released a trading update for the half year ended 31 December 2025, revealing a challenging start to FY26. The company anticipates an EBITDA loss ranging from $3 million to $8 million, a sharp reversal from the $4.6 million EBITDA reported in the same period last year.
This downturn is primarily attributed to a softer renewals book and a significant increase in expected credit losses, which have weighed heavily on the company’s financials. Despite these headwinds, Integrated Research continues to invest aggressively in its product-led growth strategy, launching multiple new products during the period.
Revenue and Contract Value Trends
The company’s Total Contract Value (TCV) and statutory revenue are both expected to decline by approximately 4% compared to the prior corresponding period, with TCV forecasted between $23 million and $28 million and revenue between $25 million and $30.5 million. This decline reflects softer renewals that have yet to be fully offset by new customer acquisitions, highlighting the transitional phase Integrated Research is navigating.
While the company’s renewed focus on product innovation is promising, the immediate financial impact has been a drag on profitability. The increased allowance for expected credit losses further compounds the pressure, signaling heightened risk in the company’s receivables or customer base.
Looking Ahead to the AGM and Beyond
Integrated Research plans to provide more detailed financial disclosures and strategic commentary at its upcoming Annual General Meeting on 24 November 2025. Investors will be keen to hear management’s outlook on how the new product launches will translate into revenue growth and whether the company can stabilize its renewal rates.
The company’s commitment to a hybrid cloud platform and deep domain expertise remains a core strength, but the near-term financial results underscore the challenges of balancing innovation investment with operational performance.
Bottom Line?
Integrated Research’s FY26 first half results mark a pivotal moment as it balances growth ambitions with financial headwinds.
Questions in the middle?
- How quickly will new product launches translate into sustainable revenue growth?
- What factors are driving the significant increase in expected credit losses?
- Can Integrated Research reverse the decline in renewals and improve customer retention?
