Novatti Posts 5% Revenue Rise and Positive EBITDA on AU/NZ Payments Surge
Novatti Group Limited delivered a 5% quarter-on-quarter revenue increase to $7.6 million in Q4 FY26, driven by its Payments AU/NZ segment's strong 8% revenue and 26% margin growth. The company achieved positive EBITDA of $0.3 million, boosted by a 95% jump in Payments AU/NZ EBITDA to $0.9 million.
- Q4 FY26 group revenue up 5% to $7.6 million
- Payments AU/NZ revenue grows 8% to $3.9 million with 26% margin increase
- Group EBITDA turns positive at $0.3 million
- Gross Transaction Value rises 16.3% QoQ to $975 million
- Operating cash flow impacted by historic liability settlements
Payments AU/NZ Drives Revenue and Profit Gains
Novatti Group Limited (ASX:NOV) has closed FY26 with a solid quarter, posting $7.6 million in group revenue, a 5% increase from the prior quarter. The standout performer was the Payments AU/NZ segment, which delivered $3.9 million in revenue, up 8% quarter-on-quarter, alongside a 26% surge in gross margin to $1.9 million. This translated into a near doubling of segment EBITDA to $0.9 million, reflecting growing transaction volumes and higher-margin product traction.
The company’s gross transaction value (GTV) in the region climbed 16.3% to $975 million, underscoring the momentum behind Novatti’s core payments infrastructure. CEO Mark Healy highlighted the sustained growth in transaction volumes across both Issuing and Acquiring platforms, which now represent the largest contributors to the group’s revenue, gross margin, and EBITDA.
Profitability Improves Amid Strategic Repositioning
Novatti reported positive group EBITDA of $0.3 million for Q4 FY26, a $0.4 million improvement from the previous quarter. This marks a significant turnaround as the company continues to pivot towards higher-margin, infrastructure-focused payments services in Australia and New Zealand. While group gross margin slightly dipped to 50% from 51% in the prior quarter, it remains nearly double the 26% margin recorded in Q4 FY25, reflecting the benefits of strategic revenue reforms implemented over the past year.
Operating cash flow was negative $1.8 million due to deliberate payments of historic liabilities, including tax debts, aimed at strengthening the company’s working capital position and vendor relationships. Excluding these one-off outflows, normalized operating cash flow was positive $0.3 million. Novatti ended the quarter with $3.0 million in cash, supplemented by $1.2 million received post-quarter from the sale of 1.5 million shares in AUDC Pty Ltd, the stablecoin issuer it incubated.
Customer Onboarding and Product Investment Accelerate
New client onboarding and integration continued to progress, with several significant customers moving towards live transaction processing. Notable partnerships include Vivi Money for Visa debit card issuance, a major Australian airport retailer adopting Novatti’s payment acceptance services, and an Asian fintech subsidiary distributing card-present and eCommerce solutions.
The University of New South Wales (UNSW) remains a flagship case study, having generated over $60 million in GTV and $0.9 million in revenue since launching Novatti’s Alipay payment acceptance platform in October 2025. This success points to a scalable model that Novatti aims to replicate across other tertiary institutions and acquiring customers.
Regulatory Changes Prompt Product Enhancements
Novatti is navigating regulatory shifts including the Reserve Bank of Australia’s review of merchant card payment costs, which is expected to have minimal direct impact on its acquiring business but has sparked interest in non-bank payment alternatives. The company is expanding its real-time Account to Account (A2A) payment offerings to provide merchants with low-cost options beyond traditional card payments.
AML/CTF regulatory updates have necessitated product modifications for Novatti’s Asia Wallets service, temporarily suspending Billpay services for overseas payers until upgrades are completed. The company is working closely with BPAY Scheme guidance expected in August to restore and broaden Billpay services, targeting a wider international student market.
Stablecoin Stake Monetisation Supports Growth
In a strategic move, Novatti sold part of its AUDC stake for $1.2 million in July, retaining a substantial holding of 18.5 million shares. Proceeds are earmarked to fund expansion initiatives in the Payments AU/NZ business, including acquiring and digital payment capabilities. AUDC itself is advancing its APAC presence with plans for a New Zealand dollar stablecoin and corridors in Hong Kong, Singapore, and the Philippines, aligning with Novatti’s integration ambitions for international payments efficiency.
Bottom Line?
Novatti’s Q4 results reflect a payments infrastructure business gaining traction in Australia and New Zealand, but watch how regulatory compliance and successful client onboarding shape FY27 growth.
Questions in the middle?
- How will Novatti’s product upgrades in response to AML/CTF regulations affect revenue timing?
- Can the Payments AU/NZ segment sustain its rapid margin expansion as transaction volumes grow?
- What impact will the partial AUDC stake sale have on Novatti’s balance sheet and investment strategy?
