Change Financial’s PaaS platform passes 172,000 cards as cash flow turns positive

PaaS growth offsets weaker project revenue

Change Financial Limited (ASX:CCA) is becoming a more recurring-revenue business, even as its headline quarterly revenue eased. The payments technology company reported A$6.3 million of Q1 FY27 revenue for the three months ended 30 September, down 3% on the prior corresponding period on a constant-currency basis, while record PaaS revenue rose to A$3.2 million.

The mix shift is the important part of the result. Recurring revenue accounted for about 81% of quarterly income, up from 70% a year earlier, with PaaS revenue increasing 26% on a constant-currency basis. That growth was partly offset by a 38% fall in licence and professional services revenue to A$1.2 million, reflecting project timing and a comparatively strong Q1 FY26.

Change’s PaaS platform, Vertexon, ended the quarter with more than 172,000 active revenue-generating cards, up 92% year on year and 15% from the previous quarter. Transactions processed and gross transaction value increased 33% and 34% respectively on the prior corresponding period. The momentum extends the trajectory reported in the FY26 PaaS expansion, when active cards had already surpassed 150,000.

Six contracted clients move towards launch

Change signed two new PaaS clients during the quarter and said both had entered onboarding. One is a New Zealand fintech backed by a lending group with more than 30 years of market experience; its digital lending and payments product is targeting about 40,000 prepaid cards. Change will act as issuer and processor.

The second is a global digital asset and wealth management platform launching a card programme in Australia, with Change acting as BIN sponsor. Alongside the two new wins, six contracted clients are being onboarded, with card programmes expected to launch during FY27. Four additional PaaS clients remain in the final contracting phase.

The company also has approximately A$3.9 million of fully scoped professional services projects under consideration by clients. That pipeline could provide a source of project revenue in coming quarters, although it remains dependent on conversion into signed contracts and delivery. Change said commercial attention in Q2 would centre on larger Australian card-issuing opportunities, the four late-stage PaaS contracts and the professional services pipeline.

Positive cash flow arrives as margins build

Net cash flow from operating activities was positive at A$0.3 million in Q1 FY27. Cash receipts from customers reached A$6.5 million, while operating cash payments excluding tax and interest were A$6.3 million. Underlying EBITDA was A$0.7 million, down 38% on the prior corresponding period in constant-currency terms, with the decline attributed to the unusually high one-off revenue contribution in Q1 FY26, lower capitalised software development costs and currency movements.

PaaS gross margin increased to 36% during the quarter, against a medium-term target of 40% to 45%. Change finished September with A$4.2 million in cash and no debt facilities. A further A$2.1 million was held in cash-backed security guarantees supporting settlement and other payment obligations; those funds remain an asset of the company but are excluded from reported cash holdings while pledged for security.

Management reaffirmed its expectation of being net cash flow positive for FY27, although that guidance excludes funds that may need to be committed to PaaS security deposits or future strategic initiatives. The next test is whether the six contracted programmes reach launch, the four late-stage contracts convert, and PaaS margin continues moving towards its stated target without a renewed surge in working-capital requirements.