EML Payments reported a 6% revenue decline and an 18% drop in underlying EBITDA for FY26, completing a major restructuring and advancing its Arlo technology platform. The company projects FY27 EBITDA between $50 million and $54 million, with a strong new program pipeline and strategic investments underpinning growth.
- FY26 revenue down 6% to $206.8 million
- Underlying EBITDA declined 18% to $48.3 million
- Completed EML2.0 restructuring and leadership refresh
- FY27 EBITDA guidance set at $50-$54 million
- New program pipeline valued at $109 million
FY26 Financial Results Reveal Revenue and Earnings Pressure
EML Payments Limited (ASX:EML) closed FY26 with revenue of $206.8 million, down 6% from the previous year, and an underlying EBITDA of $48.3 million, an 18% decline. The company attributed the revenue shortfall primarily to onboarding delays linked to clients and network intermediaries, alongside softer trading in northern hemisphere gift, incentive, and UK government programs in the second half. Interest income also fell 11% due to lower global central bank rates, further weighing on results.
The statutory net loss after tax narrowed to $19.7 million from $53.4 million in FY25, reflecting some progress despite ongoing challenges. Cash reserves stood at $37.8 million, down 36%, impacted by legacy class action settlements and restructuring payments. Borrowings increased 65% to $89.3 million, largely to fund these legacy costs and strategic investments.
Transformation Milestones and Leadership Overhaul
FY26 marked the completion of EML’s extensive EML2.0 transformation program, which included a global operating model overhaul and a refresh of 51 senior management roles to strengthen execution capabilities. Executive Chairman Anthony Hynes highlighted that while financial performance lagged expectations, the company is "a much stronger business today," with a clear path to free cash flow generation by FY28.
Notably, Adam Olding was appointed Group CEO in March 2026, consolidating leadership across regions and functions to drive the next phase of growth. Stuart Will took over as CFO in December 2025, bringing over 15 years of fintech and payments experience. These leadership changes aim to accelerate commercial execution and technology deployment.
Project Arlo and Strategic Product Innovation
Central to EML’s future growth is Project Arlo, a new global technology platform designed to replace three legacy systems with a scalable, unified infrastructure. A pilot deployment in the UK is underway with client testing in progress. The company expects annual cost savings of at least $12 million upon full rollout, with non-recurring implementation costs forecast at approximately $15.7 million in FY27, tapering off in subsequent years.
In parallel, EML invested $7 million for a 28% stake in Tendren Pty Ltd (formerly Mobilata International), a technology partner developing a digital-first open-loop mobility payment solution. This venture targets the replacement of legacy fuel cards with a modern global platform, with a commercial launch planned for mid-2027. The partnership underscores EML’s ambition to expand into new verticals beyond its core prepaid payment services.
Segment Performance and Pipeline Development
Regionally, Europe saw a 14% revenue decline to $111.2 million, impacted by non-recurring customer run-offs and lower interest income, though key client renewals remained strong. Asia Pacific delivered 8% revenue growth to $56.5 million, driven by salary packaging and workforce verticals, offsetting interest income declines. North America’s revenue dipped 2% to $39 million, with foreign exchange headwinds and exited customers partially offset by portfolio growth.
EML’s new program pipeline expanded to $109 million, with about $50 million in tender or final decision stages. The company reported a 74% conversion rate of contracts to revenue within 60 days, reflecting improved commercial momentum. However, onboarding delays and some contract resizing remain challenges to quicker revenue realisation.
Financial Outlook and Investor Considerations
EML projects FY27 underlying EBITDA between $50 million and $54 million, anticipating improved revenue conversion, client renewals, and interest yield recovery of approximately 20 basis points. Net overheads are expected to stabilise around $110 million, reflecting ongoing efficiency gains and investments in commercial and product capabilities.
Looking further ahead, the company forecasts proforma free cash flow of $30 million to $35 million in FY28, as major transformation and legacy remediation costs subside. The successful deployment of Arlo and commercial traction in new verticals like mobility will be key to sustaining growth and restoring shareholder value.
No dividends were declared for FY26, consistent with the company’s focus on reinvestment and balance sheet strengthening.
Bottom Line?
EML Payments stands at a pivotal juncture, with its FY26 results underscoring the challenges of transformation execution and market dynamics. The FY27 EBITDA guidance and robust pipeline provide a cautiously optimistic outlook, but investors should watch closely how Arlo’s rollout and new product initiatives translate into revenue and cash flow.
Questions in the middle?
- Will EML’s Arlo platform deployment accelerate revenue conversion as planned in FY27?
- How will the strategic partnership with Tendren influence EML’s entry into the mobility payments market?
- What impact will legacy remediation provisions and stored value account shortfall investigations have on future earnings?