Infotrust Ltd reported a significant $16.5 million half-year loss driven by a $15.6 million impairment on its Cloud and Communications segment, which it plans to divest for up to $50 million. The move refocuses the company on its core Cyber Security business amid steady revenue growth.
- 9% revenue growth to $31.1 million in H1 FY26
- Underlying EBITDA from continuing operations down 38% to $356,000
- Massive $15.6 million impairment on discontinued Cloud and Communications segment
- Binding agreement to divest Nexgen segment for up to $50 million
- Strategic pivot to focus solely on Cyber Security and managed technology services
Financial Results Highlight Mixed Performance
Infotrust Ltd, a notable player in Australia’s cyber security and managed technology sector, released its half-year results for the period ending 31 December 2025, revealing a complex financial picture. The company reported a 9% increase in revenue to $31.1 million, reflecting steady demand for its cyber security services. However, underlying EBITDA from continuing operations fell sharply by 38% to $356,000, signalling margin pressures and ongoing transformation costs.
The headline figure was a statutory net loss of $16.5 million, a stark increase from the prior year’s $1.65 million loss. This was largely driven by a $15.6 million impairment charge related to its Cloud and Communications segment, branded as Nexgen, which the company has classified as discontinued operations.
Strategic Divestment of Nexgen Segment
In a decisive strategic move, Infotrust announced a binding share sale and purchase agreement to divest 100% of its Nexgen Cloud and Communications business for up to $50 million. The deal includes an upfront payment of $44.1 million and contingent consideration of up to $5.9 million based on Nexgen’s EBITDA performance in FY26 or FY27. Completion remains subject to customary conditions and adjustments.
This divestment marks a clear pivot away from the Cloud and Communications market, which the company no longer views as a strategic priority. The sale proceeds are expected to strengthen Infotrust’s balance sheet, reduce net debt, and provide capital to accelerate growth in its core Cyber Security segment and fund targeted acquisitions.
Focus on Cyber Security and Managed Technology
Post-divestment, Infotrust will consolidate its operations under a single Cyber Security segment, integrating secure managed technology services with specialist cyber security offerings. The Cyber Security division delivered an underlying EBITDA of $2.8 million on $31.3 million revenue for the half-year, maintaining a solid performance despite broader challenges.
The company emphasises its ‘cyber-first’ approach, embedding security across infrastructure, cloud, networks, endpoints, and identity platforms. With over 200 professionals and a 24/7 Australia-based Security Operations Centre, Infotrust serves more than 1,000 customers across government, enterprise, and mid-market sectors.
Risks and Outlook
Infotrust acknowledges several risks that could impact its future performance, including funding pressures, cyber threats, sales execution challenges, labour market competition, and regulatory compliance demands. The company is focused on returning to sustainable positive cash flow and managing residual acquisition obligations without dilutive capital raises.
The divestment of Nexgen is a critical step in Infotrust’s multi-year transformation, enabling sharper strategic focus and resource allocation. Investors will be watching closely how the company leverages the divestment proceeds to accelerate growth, expand its Security Operations Centre, and pursue acquisitions in high-growth cyber security niches.
Bottom Line?
Infotrust’s divestment of Nexgen clears the path for a leaner, cyber-focused growth strategy, but execution risks remain.
Questions in the middle?
- Will Infotrust successfully deploy divestment proceeds to accelerate Cyber Security growth?
- How will the company manage funding and debt covenants amid ongoing transformation?
- What impact will the loss of the Cloud and Communications segment have on customer retention?