Integrated Research Limited reported a $1.5 million loss for H1 FY26, impacted by credit loss provisions, while advancing its AI-driven product strategy with the launch of IRIS and Elevate.
- Half-year loss after tax of $1.5 million, down from $4.6 million profit prior year
- Revenue declined 2% to $28.3 million, affected by lower renewals and increased credit loss provisions
- New business contract value rose 10%, with 28% growth in licence fee revenue from new clients
- Launched IRIS, the company’s first AI-powered product, and Prognosis-as-a-service offering Elevate
- Operating expenses increased 15%, mainly due to a $4.8 million credit loss provision linked to a single client
Financial Performance Overview
Integrated Research Limited (ASX: IRI) has reported a challenging first half for the 2026 financial year, posting a net loss after tax of $1.5 million compared to a $4.6 million profit in the prior corresponding period. Revenue slipped slightly by 2% to $28.3 million, reflecting a softer renewals book and a significant increase in credit loss provisions.
The company’s total contract value (TCV) from new business grew by 10% to $8.3 million, with licence fee revenue from new clients up 28%, signalling healthy demand for its offerings despite broader headwinds.
Credit Loss Provisions and Expense Pressures
A key factor weighing on profitability was a $4.8 million increase in provisioning for expected credit losses, primarily related to a single client flagged for credit risk. This provision, unrelated to software performance, contributed to a 15% rise in operating expenses to $31.7 million. The company emphasised ongoing credit risk management but did not disclose further details on the client or resolution prospects.
Strategic Product Innovation and Growth Initiatives
Integrated Research continued to execute its product-led growth strategy, launching IRIS, its first AI-powered natural language interface designed to enhance real-time infrastructure and communications monitoring. Alongside IRIS, the company introduced Elevate, a cloud-based Prognosis-as-a-service platform, expanding flexible access to its core intelligence solutions.
Additionally, the rollout of a new High Value Payments product was completed with a top 10 US bank, with further engagements underway with other major global financial institutions. Development of a standalone AI product through IR Labs is progressing, underpinning the company’s medium-term innovation pipeline.
Regional and Segment Performance
Geographically, revenue growth was recorded in the Americas and Europe, with the Americas segment increasing sales by 5% in USD terms and Europe by 17% in GBP. However, the Asia Pacific region saw a 29% decline, impacted by a strong prior period comparison. Segment-wise, Infrastructure revenues grew 16%, offsetting declines in Collaborate and Professional Services.
Cash Flow and Dividend Outlook
Despite the loss, cash flow from operations improved markedly to $5.5 million, supported by strong customer collections and disciplined cost management. The company ended the half with $43.6 million in cash, up from $40.6 million at the previous year-end. The board elected not to declare an interim dividend, signalling a cautious stance pending full-year results.
Integrated Research’s half-year results reflect a transitional phase balancing near-term financial pressures with strategic investments in AI and cloud innovation. The company’s ability to convert new business momentum into sustained profitability will be closely watched by investors.
Bottom Line?
Integrated Research’s H1 loss underscores credit risks but its AI-driven product launches could reshape growth prospects.
Questions in the middle?
- How will the company manage and resolve the credit risk associated with the flagged client?
- What early market feedback has IRIS received, and how soon might it contribute materially to revenue?
- Will the company reinstate dividends after the full-year results, given the current cautious approach?