How Is EML Payments Driving Growth with a $90 Million Program Pipeline?
EML Payments has affirmed its FY26 underlying EBITDA guidance of A$58-63 million following a solid Q1 trading update, underpinned by a growing new program pipeline and operational efficiencies.
- Q1 FY26 trading aligns with guidance, showing 1% growth in gross dollar volume
- Underlying EBITDA up 16% year-on-year in Q1 despite client program losses
- New program pipeline expanded to $78.8 million, nearing $90 million target
- Interest yield moderates due to central bank rate cuts but remains on forecast
- Efficiency initiatives expected to reduce overheads in second half of FY26
Steady Start to FY26
EML Payments Limited (ASX, EML) has kicked off FY26 with a trading performance that meets its internal forecasts, providing reassurance to investors amid a dynamic payments landscape. The company reported a modest 1% increase in gross dollar volume (GDV) for the first quarter compared to the same period last year, reflecting steady transactional activity across its global footprint.
Underlying EBITDA for Q1 rose 16% year-on-year to A$6.8 million, despite a notable 42% decline compared to the prior corresponding period, largely attributed to the wind-down of certain client programs. This mix of growth and attrition underscores the transitional phase EML is navigating as it reshapes its portfolio.
Pipeline Momentum and Strategic Initiatives
One of the standout highlights is the expansion of EML’s new program pipeline, which has grown to A$78.8 million, inching closer to the company’s ambitious $90 million target set for December 2025. The company has already secured $14.7 million in annualised revenue from new program launches, with approximately $8 million currently active and the remainder progressing through implementation.
EML’s focus on accelerating time-to-launch for these programs indicates a strategic emphasis on operational efficiency and revenue growth. Complementing this is the establishment of a Global Operations Centre in Sofia, which is expected to streamline processes and reduce costs.
Navigating Interest Yield and Cost Controls
Interest revenue showed a slight decline, reflecting the impact of central bank rate reductions over the past year. However, the yield remains within forecasted parameters, suggesting effective management of interest-bearing assets. Meanwhile, overhead expenses are tracking flat year-on-year, with efficiency programs on course to deliver lower costs in the second half of FY26.
Notably, Q1 FY25 benefited from temporarily lower employee costs due to leadership transitions, which partly explains the year-on-year overhead variance. The current leadership team, described as high-calibre, appears to be stabilising the cost base while driving growth initiatives.
Looking Back and Forward
Reflecting on FY25, EML reported an underlying EBITDA of A$58.6 million and a statutory net loss after tax of A$53 million, highlighting ongoing investment in transformation and growth. The company’s strategic partnership with Visa PISMO and deployment of Project Arlo’s minimum viable product in Europe signal a commitment to innovation and global expansion.
With the FY26 EBITDA guidance reaffirmed at A$58-63 million, EML is signalling confidence in its operational execution and market positioning. The coming months will be critical as the company works to convert its robust pipeline into revenue and further optimise its cost structure.
Bottom Line?
EML’s steady Q1 and solid pipeline set the stage for a pivotal year of growth and efficiency gains.
Questions in the middle?
- How quickly can EML convert its new program pipeline into active revenue streams?
- What impact will central bank rate changes have on EML’s interest revenue moving forward?
- Can the efficiency programs deliver the anticipated overhead reductions in H2 FY26?
