Infotrust Ltd (ASX: ITS) reported a 9.8% rise in FY26 revenue to $64.1 million, powered by a strategic pivot to cyber security. The company exited its Cloud segment, repaid all bank debt, and acquired Catalyst Cyber to boost federal market presence, positioning for profitable growth in FY27.
- 9.8% revenue growth to $64.1 million in FY26
- Underlying EBITDA down 20.3% to $2.7 million due to growth investments
- NexGen divestment raised $44.8 million, enabling full bank debt repayment
- Catalyst Cyber acquisition expands federal cyber security footprint
- Positive operating cash flow and $18.3 million cash balance with no debt
Revenue Growth Amid Strategic Transformation
Infotrust Ltd (ASX:ITS) closed FY26 with a 9.8% increase in continuing operations revenue, reaching $64.1 million. This growth came despite the company divesting its Cloud and Communications segment, NexGen, and investing heavily in building its cyber security capabilities. The revenue uplift was broad-based, with no single practice dominating the increase, reflecting a balanced portfolio expansion during a year of significant structural change.
The company’s gross margin rose 6.6% to $46.9 million, though margin percentage slipped 2.2 points to 73.2%, influenced by service mix shifts in Cyber Security. Digital Resilience and Forensic IT practices notably turned profitable in the second half, offsetting some of the margin pressure seen earlier in the year.
Underlying EBITDA Reflects Deliberate Growth Investment
Underlying EBITDA fell 20.3% to $2.7 million, a deliberate consequence of investing ahead of revenue in cyber security capacity. The company absorbed a full year of standalone corporate costs and integration expenses related to the Catalyst Cyber acquisition, which contributed earnings from its first quarter post-completion. Statutory EBITDA improved by $1.6 million compared to the prior year, reflecting operational progress despite the investment phase.
Infotrust’s CEO Paul Timmins and CFO David Clanchy highlighted that this earnings step-back was strategic, positioning the company for stronger returns in FY27 as the investments mature and revenue scales.
Balance Sheet Strengthened by NexGen Divestment and Debt Repayment
The divestment of NexGen for $44.8 million in net proceeds was a pivotal event, enabling Infotrust to repay its entire $27 million bank debt facility and nearly triple its cash reserves to $18.3 million. This shift leaves the company debt-free with a robust cash position to fund organic growth and selective acquisitions.
Net assets declined to $78.2 million, reflecting non-cash impacts from the NexGen disposal and related goodwill impairments. However, working capital improved, supported by a growing base of annuity billings, which signals a maturing recurring revenue model. The balance sheet now reflects a cyber-first business focus, with intangible assets concentrated on the Catalyst acquisition and core cyber capabilities.
Catalyst Acquisition Accelerates Federal Market Expansion
Infotrust completed the acquisition of Canberra-based Catalyst Cyber in FY26, enhancing its foothold in federal government and regulated markets. Catalyst contributed $2.1 million in revenue and $0.52 million in profit after tax from ten weeks of ownership. The deal includes earn-out provisions tied to future performance, underscoring Infotrust’s confidence in Catalyst’s growth trajectory.
This acquisition complements Infotrust’s sovereign cyber security strategy, which emphasises trusted local expertise amid tightening regulation and rising board-level cyber governance. The company has positioned itself as an Australian-owned and ASX-listed leader delivering sovereign capability across cyber security and digital resilience services.
FY27 Outlook Targets Profitable Growth and Recurring Revenue
Looking ahead, Infotrust has set an FY27 underlying EBITDA guidance exceeding $6 million, more than doubling FY26’s result. The company plans to grow its core business while scaling six high-growth practices, including AI Assurance & Governance, Secure Innovation Platform, Identity Security, and cloud security services for Microsoft and AWS.
Infotrust aims to compound recurring revenue through managed detection and response, security operations centres, and digital resilience retainers, moving away from project-based income. Operational leverage is expected to improve as a unified operating model gains traction, supporting margin expansion.
Selective, earnings-accretive acquisitions will continue to accelerate the cyber-first strategy, particularly in sovereign and federal sectors. The company’s strengthened balance sheet and proven leadership team provide a solid foundation for this next phase of growth.
Bottom Line?
Infotrust’s FY26 results reflect a strategic reset with disciplined investment and a clean balance sheet, setting the stage for meaningful profitability and growth acceleration in FY27 and beyond.
Questions in the middle?
- Will Infotrust’s investments in cyber security capacity translate into sustained margin expansion in FY27?
- How will the integration and performance of Catalyst Cyber influence Infotrust’s penetration of federal markets?
- Can the company maintain its debt-free status while pursuing selective acquisitions to scale growth?