$1.2 billion quarterly GTV as Novatti revenue falls to $6.9 million

AU/NZ transaction value reaches $1.2 billion

Novatti Group Limited (ASX:NOV) has crossed a significant activity milestone, with AU/NZ quarterly gross transaction value reaching $1.2 billion in the September quarter. The figure rose 22.6% from $975 million in Q4 FY26 and 47.7% from $810 million a year earlier, passing $1 billion for the first time since the company’s 2025 restructure.

The increase was driven primarily by key accounts in card issuing BIN sponsorship and cross-border payments. It extends the momentum reported in the previous quarter’s GTV growth, when quarterly GTV reached $975 million. Novatti said new customers are moving through implementation, while opportunities are emerging in Asian wallet acceptance, multi-currency card issuing and wholesale distribution.

Revenue falls as international BPAY payments pause

The activity growth did not translate into higher group revenue. Revenue fell 6% quarter on quarter to $6.9 million, while Cash EBITDA slipped to negative $0.1 million from positive $0.3 million in the June quarter. Group gross margin declined to 51%, compared with 56% previously, reflecting changes in product mix and several one-off revenue items recorded in the prior quarter.

Novatti attributed the weaker result to regulatory changes affecting international bill payment services, as well as the mix between card issuing and acquiring. The company paused international BPAY payments and is targeting a relaunch in early calendar 2027, potentially alongside expansion into another major Asian country. Direct acceptance of Asian wallets for merchant acquiring continues to operate.

The regulatory changes have also created a possible sales opening. Novatti said inbound enquiries for alternative payment acceptance products increased after the Reserve Bank of Australia’s card surcharging changes took effect on 1 October 2026, as merchants consider ways to avoid absorbing traditional card-processing fees. That interest remains a lead indicator rather than evidence of booked revenue.

Pipeline expands while cash remains tightly measured

Novatti is investing in sales, marketing, product development and artificial intelligence as it tries to convert a larger opportunity set into live customers. Disclosed prospects include a payment services provider with more than $4 billion in annual GTV that has completed Asian wallet integration, a hardware manufacturer seeking terminal certification, and a foreign exchange business considering a multi-currency card issuing facility.

Existing-client activity includes pre-launch testing of agentic payments through an embedded AI assistant and a new wholesale acceptance channel. In education, embedded payments at the University of New South Wales have now surpassed $100 million in cumulative GTV, building on the UNSW payments integration, which had generated $33.6 million of transactions by April 2026.

Operating cash outflow improved to $1.0 million from the previous quarter, although Novatti said cash use continued to include payments addressing historic working-capital liabilities. Excluding remediation of historic debts, normalised operating cash use was $0.2 million. Closing cash stood at $3.315 million, with the Appendix 4C indicating 3.31 quarters of funding at the quarter’s reported operating cash-outflow rate and no unused finance facilities.

Convertible notes add a near-term funding question

Novatti also reported that its $3.118 million convertible note balance is due to mature on 22 December 2026. The notes carry a 10% annual coupon and can convert into shares at the lower of $0.06 or the next equity-raising price, subject to a $0.04 floor. The company’s Appendix 4C also records $1.77 million of loan facilities, all drawn.

Separately, Novatti received proceeds from the previously agreed sale of 1.5 million AUDC shares and retains 18.5 million shares in AUDC Pty Ltd, issuer of the AUDD stablecoin. AUDD’s cumulative on-chain payment volume has exceeded A$2 billion across nine blockchain networks, with approximately A$12 million in segregated Australian-dollar reserves at quarter end. The transaction builds on Novatti’s partial AUDC share sale, which generated proceeds while leaving the company with a substantial holding.

The quarter therefore presents two competing readings. Transaction activity is scaling, and regulatory change may be feeding fresh demand into merchant acquiring. But revenue, margin and Cash EBITDA moved backwards, while the cash balance and December note maturity leave limited room for execution to falter. The next meaningful test is whether the BPAY relaunch and disclosed sales opportunities produce cash-generating revenue before funding arrangements become more urgent.