StepChange’s Growth Hinges on BroadReach Integration and Market Expansion Risks
StepChange Holdings has reported robust organic growth with a 19% revenue increase in its first half as an ASX-listed company, complemented by a strategic acquisition expanding its government sector presence.
- 19% organic revenue growth to $24.36 million in HY26
- 50% increase in normalised EBITDA to $1.95 million
- Completed acquisition of BroadReach Group, enhancing government footprint
- Strong cash position of $5.5 million supports growth and M&A plans
- Growth driven by new contracts and deeper Tier 1 and government client engagements
Strong Start as a Listed Entity
StepChange Holdings Limited (ASX – STH) has delivered an impressive performance in the half year ended 31 December 2025, marking its first reporting period since listing on the ASX in July 2025. The company posted a 19% increase in revenue to $24.36 million, driven entirely by organic growth. This growth underscores the strong demand for StepChange’s specialised ERP consulting services, particularly within Tier 1 and government sectors.
Alongside revenue gains, StepChange achieved a 17% rise in gross profit to $3.13 million and a 50% jump in normalised EBITDA to $1.95 million. These figures reflect disciplined cost management and operational momentum, despite the usual one-off expenses associated with becoming a publicly listed company and completing acquisitions.
Strategic Acquisition Expands Government Reach
Shortly after the reporting period, StepChange completed the acquisition of BroadReach Group Pty Ltd, a well-established ICT advisory firm based in Western Australia. BroadReach brings nearly $9 million in annual revenue and a strong foothold in government contracts, significantly broadening StepChange’s service offerings and client base.
This acquisition not only diversifies StepChange’s revenue streams but also opens immediate cross-selling opportunities in migration, advisory, and digital transformation services. The move aligns with StepChange’s strategy to deepen its government sector engagement and leverage its expanded scale for further growth.
Financial Position and Outlook
StepChange’s cash balance of $5.5 million at the end of December 2025 provides a solid foundation to pursue its growth ambitions, including further mergers and acquisitions. Managing Director Shane Bransby highlighted the company’s confidence entering the second half of FY26, citing the establishment of US operations and the addition of senior leadership expertise as key enablers.
While the reported results are unaudited and compared against pro-forma figures, they offer a promising glimpse into StepChange’s trajectory as a newly listed entity. The company plans to release its audited HY26 financial report later this month, which will provide further clarity on its financial health and operational progress.
Overall, StepChange’s HY26 results and strategic moves position it well to capitalise on the growing demand for ERP transformation services, particularly in sectors where digital modernisation remains a priority.
Bottom Line?
StepChange’s strong HY26 performance and strategic acquisition set the stage for accelerated growth, but investors will watch closely for integration success and audited results.
Questions in the middle?
- How will the BroadReach acquisition impact StepChange’s earnings and margins in the coming quarters?
- What synergies and cross-selling opportunities will StepChange realise from its expanded government footprint?
- How sustainable is the current organic growth amid evolving market conditions and competitive pressures?
