8common Limited reported a 7% rise in SaaS revenue to $1.2 million in Q3 FY26, backed by fresh government contracts and cost cuts. The fintech is on track to deliver full year EBITDA positive and maintain solid operational cash flow.
- SaaS revenue up 7% to $1.2 million with 73% gross margin
- New government contracts with Aged Care Quality and Safety Commission and National Environmental Protection Agency
- Operational costs down 12%, driven by 41% cut in admin and corporate expenses
- User base grows to 195,000 with ARPU rising to $25.03
- Cash position stable at $0.1 million, supported by extended $1.5 million loan facility
Government Contracts Drive Revenue Growth
Fintech firm 8common (ASX:8CO) has secured multi-year deals with the Aged Care Quality and Safety Commission and the National Environmental Protection Agency, injecting fresh momentum into its SaaS revenue. The Commission’s contract alone is valued at $1 million over two years, while the EPA’s $200,000 deal spans 18 months as it transitions from a shared service to its own instance. These wins build on 8common’s deepening footprint in the Australian government sector, where it now supports approximately 24,000 active users across various entities.
Revenue and Margins Show Positive Trends Amid Cost Cuts
For the quarter ended March 2026, 8common reported SaaS and transaction revenue of $1.2 million, a 7% increase from the prior corresponding period, with gross SaaS margins averaging a healthy 73%. Total revenue dipped slightly by 3% to $1.45 million, reflecting some variability outside the core SaaS stream. Meanwhile, the company trimmed total operational costs by 12%, thanks largely to a 41% reduction in administration and corporate expenses, underscoring ongoing efforts to stabilise its cost base.
This cost discipline contributed to a 74.5% improvement in EBITDA, narrowing losses to $54,000 for the quarter and positioning 8common on track to close FY26 EBITDA positive. Operational cash flow mirrored this progress, with a net inflow of $8,000 despite a modest cash balance of $0.1 million. The company’s liquidity is bolstered by a $1.5 million loan facility from Executive Chairman Nic Lim, extended to May 2027, with $300,000 drawn at quarter end and repayments accelerating post-quarter.
User Growth and Contract Extensions Signal Stability
8common’s user base expanded to 195,000, up 4.8% year-on-year, with average revenue per user rising to $25.03. The company also secured contract renewals with The Treasury (one year) and the Audit Office of NSW (three years), reinforcing its strong retention in government accounts. The onboarding of the Australian Institute of Marine Science further diversified its client portfolio.
These developments follow a period of positive EBITDA and SaaS growth earlier in FY26, supported by significant cost reductions and key contract renewals, as highlighted in the company’s positive EBITDA and SaaS growth report. The steady increase in SaaS revenue over a three-year compound annual growth rate of 15% reflects 8common’s growing market penetration and operational execution.
Cash Flow and Funding Position
Cash receipts from operations remained robust at $1.43 million for the quarter, sustaining the company’s near break-even cash flow. Despite the low cash balance, 8common’s extended loan facility provides a financial buffer, with $1.2 million still available if needed. The facility’s 6% interest rate and unsecured status highlight the reliance on internal funding sources rather than external capital markets.
CardHero, 8common’s prepaid card fund distribution platform, contributed $125,000 in revenue and remains cashflow positive, adding a complementary revenue stream to the core Expense8 expense management software.
Bottom Line?
8common’s blend of government contract wins, cost control, and SaaS growth sets a foundation for full year EBITDA positivity, but its tight cash position warrants close monitoring of operational cash flow in coming quarters.
Questions in the middle?
- Can 8common sustain its SaaS revenue growth amid competitive pressures in government fintech?
- How will the company manage liquidity risks given its low cash reserves despite the loan facility?
- What impact will the new government contracts have on revenue visibility and margin expansion beyond FY26?