Thank you. Good morning, everyone. Thanks for being ready to join our FY 2025 Results Call. I'm Marc Washbourne, Co-Founder and CEO of ReadyTech , and I'm joined here today by Nimesh Shah, ReadyTech's CFO. In today's call, we are pleased to provide you with highlights from our FY 2025 results, as well as an update on our growth plans, progress on our pipeline, our flagship products, and the outlook for FY 2026. On slide two of our results presentation, which is available on the ASX, ReadyTech is a leader in next-generation mission-critical software crafted specifically for the human-led sectors of education, workforce, government, and justice. Our vertical SaaS approach is centered on knowing our customers deeply, targeting perfect product fit, and owning the core system of record.
This year, we are proud to have supported over 2 million students, apprentices, and job seekers, processed $7 billion in council property rates, $28 billion in payroll, and supported over a million justice cases in the U.K. alone. Moving to slide three, FY 2025 was a transitional year for ReadyTech for our enterprise strategy. While our performance reflected some challenges, we delivered solid new business and operational outcomes, as well as addressed our key local government issue, and that together positioned us for stronger growth ahead. We achieved total revenue of $121.8 million, representing a 7.1% increase on the prior corresponding period. ReadyTech secured $15.4 million in new business during FY 2025, with activity weighted heavily to the second half. Importantly, we achieved a particularly strong Q4 exit, underscoring growing momentum in our flagship products and providing a solid platform for accelerating enterprise adoption in FY 2026.
That included a rebound in local government in H2, with $2 million in confirmed new wins in Q4 alone. The enterprise momentum is underlined by the growth pipeline expanding to $33.1 million, up from $31.8 million in FY 2024. Average revenue per new customer increased 36% on FY 2024, with an average deal value of $167,000, highlighting the strong progress of our enterprise customer strategy. We also launched seven AI initiatives across our markets. This included ReadyTech 's first agent technology, each of these designed to enhance product capability and deepen customer value. These initiatives are not only advancing innovation for our clients, they're also expected to deliver meaningful incremental revenue and operating leverage over time. Slide four summarizes some of the key highlights in FY 2025. Again, we built real momentum in FY 2025, securing $15.4 million in contract wins across our flagship products and our enterprise strategy.
To reiterate, performance was weighted to the second half and capped off by a particularly strong Q4 exit that gives us confidence heading into FY 2026. In workforce solutions, we delivered a record year with $5.4 million in new business, driven by Ready Workforce. That included our largest single contract win to date, worth over $1 million in first-year value, and our first wins in the exciting new workforce verticals of education and hospitals. In education and work pathways, we secured $6.6 million in confirmed enterprise wins. That included multiple breakthrough contracts in higher education, opening up a large new and exciting market, along with continued traction in TAFE, where we have a number of active processes underway.
In local government, as I said, we saw a clear rebound in momentum with $2 million in contract wins and upgrades in Q4 alone to complement new wins and further traction in the justice segment. Together, these results highlight the strengths of our flagship products, the pipeline unlocking, and the momentum we're carrying into FY 2026. Moving on to slide five and some further highlights. Following a softer period and a blocker to growth, as we reported in H1, local government growth is now rebounding with our end-to-end cloud platform now positioned for acceleration in customer upgrade activity. The strategic acquisition of the CouncilWise Property and Rating Engine has been well integrated and strongly validated, with $2 million of new and upgrade wins in Q4, FY 2025, and a robust pipeline moving into FY 2026.
Our end-to-end Ready Community Go lives are providing critical proof points and customer referenceability, demonstrating the benefits of our cloud upgrade experience. We've also strengthened leadership in this segment, including the appointment of a new leader of this division, bringing long-term local government expertise and strong growth credentials. All of this supports the unlocking of our long-term cloud upgrade strategy with a fit-for-purpose enterprise ERP that is ready to deliver to the sector. Lastly, in terms of key highlights, innovation is accelerating at pace, with AI and new product launches offering a new frontier of customer value. As I mentioned, we've launched seven new AI initiatives in FY 2025 that included our very first agent technology. We expect to see a lot more in FY 2026, representing a powerful new layer of monetization across our platforms.
Among these AI releases were Talent IQ for Workforce, Planner Assist for Local Government, and AI Recognition of Prior Learning for Education, all addressing well-known pain points, delivering smarter workflows and productivity gains for our customers. On top of this, with next-generation HR and learning modules launched in FY 2025, generating over $700,000 in H2 alone, and with a promising pipeline across both workforce and government, we're building real momentum in product-led growth. Onto slide six. With this momentum into FY 2026, we'll sharpen our strategic focus further on flagship products and AI, aligning highly targeted incremental investments of $2.5 million in the year to drive enterprise growth, incremental revenue opportunities, and target long-term margin expansion. We're backing further uplifts in product fit, sales and marketing capability, AI innovation, while also running an operational efficiency program to optimize ReadyTech performance.
Our confidence in enterprise is underpinned by a $33.1 million high-conviction opportunity pipeline and an accelerating level of procurement activity as customers replace legacy systems. In terms of AI, the world is changing fast. Agent technology is accelerating and very relevant to our markets. We need to move with pace, and we're seeing many incremental revenue streams emerging as AI-embedded solutions scale through our customer base. This will represent a crossover year in terms of investment. With high release velocity and game-changing productivity opportunities, we are well positioned for AI to support our wider plans to unlock both top-line growth and operating leverage in FY 2026 and beyond. I'll now hand over to our CFO, Nimesh Shah, to take you through ReadyTech's financial performance in some more detail.
Thanks, Marc, and good morning, everyone. Let's turn to slide eight. As on slide eight, the financial overview slide. As Marc mentioned, ReadyTech delivered revenue growth of 7.1% on a PCB basis. This was driven by enterprise contract wins and successful upsell across our verticals, though, and as mentioned at the first half results, impacted by product delays in the government segment. Recurring revenue remains strong at 84%, with net revenue retention at 1% or 2% for 2025, reflects progress across most segments but offset by delay in upgrading customers to flagship products, again in the first half of 2025. Underlying EBITDA excluding non-recurring costs increased to $39.5 million, with underlying cash EBITDA margin of 16% to $19.5 million. Moving to slide nine on cash run balance sheet, net debt to EBITDA remains conservative at 0.95x, with $24 million in cash to support growth initiatives.
During the period, ReadyTech made payments to acquisitions and earnouts of $14 million in cash upon achievement of their respective milestones. We saw underlying EBITDA to cash flow conversion during the year of 85%. Conversion would have exceeded 90%, but for the delayed timing of some collections that came in FY 2026, quarter one. On slide 10, it's segment highlights. Education and work pathways remain our largest segment on the back of continued growth in higher ed and continued success with TAFE. The vertical grew revenue by 7.5%, and EBITDA margin remained very strong at 43.7%. Workforce solutions revenue grew by 12.5% in 2025, driven by new contract wins, including our first million-dollar customer in this vertical, and the success with upselling additional modules to existing customer base. Over the same period, EBITDA margin remained steady at 36.5%.
Justice revenue grew at 9.5% on a PCB basis, driven by new customer wins and upgrades. As mentioned earlier, the government segment was impacted by product delays, which have now been addressed in the second half. As a result, margins were impacted down by 227 bps from 29.4% in 2024. Now I'll hand over to Marc.
Thanks, Nimesh. On to slides 11 and 12. Our growth strategy is anchored in our four flagship products, where we see the strongest enterprise momentum. These platforms give us access to high-value contracts in customers with substantial tech budgets, where we are supported by growing customer references and reputation. We're targeting large defensible markets undergoing digital transformation, where we see AI adoption accelerating. In these markets, we're building strong moats with best-in-class market-leading products. As I said, we're well- positioned to optimize the AI revolution. With scalable, configurable platforms and a vertical SaaS model, this will allow us to lift net revenue retention, expand margins over time, and set up ReadyTech for accelerated enterprise growth in FY 2026 and beyond. I'll now take you through the progress across those four flagship products. First, on to slide 13 and education.
Our Ready Student platform is positioned to accelerate multiple enterprise growth engines across the key markets of TAFE, universities, and private higher education. Our first university breakthrough and further higher ed wins, alongside active TAFE processes, reflect a major market ripe for change as institutions replace legacy systems. Our proven delivery capability and our growing customer advocacy strengthen this momentum, while regulatory reform is also driving urgency for customers alongside digitization pressures. While our immediate AI focus is on AI Recognition of Prior Learning to solve a sector-wide key pain point, we see a major opportunity in AI as a trusted vendor to enhance sector productivity and student success. Moving on to slide 14 in workforce solutions. As we said, FY 2025 was a record year for new business, highlighted by our largest ever contract at over $1 million and $5.4 million in new business for the flagship product Ready Workforce.
Our deep vertical focus is clearly winning across the stand-up economy, industries like agriculture, hotels and accommodation, and retail. We've expanded those with two new verticals with wins in education and hospitals in the second half. With true cloud and mobile-first employee experience replacing legacy systems, we're driving automation, compliance, and assurance. AI releases like Talent IQ are enhancing productivity and outcomes in workforce management, strengthening our competitive edge and building on the momentum into FY 2026 and beyond. Moving now to slides 15 and 16. In local government, as mentioned, we have now addressed the segment bottleneck that we reported in H1 by integrating the CouncilWise Property and Rating Engine. Since then, we have already delivered over $2 million in new and upgrade contracts in Q4 FY 2025. With this unblocked, end-to-end Ready Community go-lives are providing critical customer proof points and powerful references for cloud migration.
Further confidence on the next phase is strengthened with the hiring of Brett Barningham to drive the segment forward, who has deep sector expertise and a track record of growth. ReadyTech already serves more than 280 councils across Australia. Many of these use one or more modules or the whole ERP, positioning us to strengthen upgrades and expand over time. The sector tailwinds are significant as councils digitize services to meet community expectations and move from legacy systems to the cloud. With proven ERP capability and validated customer outcomes, we are well placed to capture the next wave of transformation by winning new enterprise customers and driving cloud upgrades at scale across local government. Moving now to slide 17 and justice, the Ready Case flagship product. We're seeing solid growth as the sector accelerates digital transformation. Legacy technology and rising demand for citizen-centric services are driving a powerful upgrade cycle.
Our proven case management platform with successful U.K. delivery and growing referenceability is driving momentum across courts, tribunals, commissions, and prosecutors. Following two strong new customer wins in FY 2025, the pipeline reflects continued momentum, including an immediate opportunity that we have high conviction to sign in H1 FY 2026. In FY 2025, we reached an AI tipping point, and we are expanding strategic investments in AI to both elevate our products and transform internal productivity. Our dedicated AI squad delivered seven initiatives in FY 2025, including RPL for education, Talent IQ for workforce, and AI agents for payroll and case management. Planner Assist is detailed on the next slide 19. It's a great example of how AI can be used to transform our product suite and deliver tangible value to customers, with significant opportunity to tap into new revenue opportunities as AI scales through our customer base.
Internally, AI is embedded across the software development lifecycle, quality assurance, and customer support, with growing efficiency benefits being realized to help us both move fast and improve operating leverage. Looking ahead on slide 20, our outlook statement. As I have outlined, ReadyTech enters FY 2026 with strong momentum. FY 2026 revenue is projected to be in the range of $132 million- $135 million, with FY 2027 revenue at between $150 million- $153 million. Revenue growth is underpinned by $10.5 million of confirmed wins in H2 FY 2025 and a high-conviction pipeline of $33.1 million for FY 2026. Cash margin is projected to be mid-teens for FY 2026, including the targeted incremental investment of $2.5 million and expanding to late teens in FY 2027. Thank you again for joining the call today. One final thing I'd like to say, a very big thank you and acknowledge today our CFO, Nimesh Shah.
This will be his last results with the company, and we can update today that an announcement on our new CFO will be released shortly. I'm very excited about partnering with a new leader to help take the company to the next horizons of growth. Thank you, and very happy to open up now for questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Today's first question comes from Cameron Halkett with Wilsons Advisory. Please go ahead.
Thank you. Morning, Marc. Morning, Nimesh. First, let's just perhaps echo Marc's comments from me as well. Nimesh, thanks for everything over the years. A pleasure. I'll direct just one question to you, please, my locator time slot here. Where the guidance for revenue is concerned at $132 million- $135 million for FY 2026, can you just help us, I suppose, with the bridge from results for this year with respect to the pipeline that has been secured recently, that revenue retention, and perhaps new business wins, any of the updates you can provide on perhaps how the year has started? Thank you.
Yeah, thanks, Sam. Thanks, Cam, and thanks for the comments. I look on the bridge for 2026. I think it's worth noting we have ended quarter four strongly. You know, $10.4 million has come in quarter four and a large percentage of the $13.5 million of shortlisted and preferred pipeline that converted. On the bridge, if you look at just the component parts of that, you know, we expect our net revenue retention at this stage to be 103% or up by 100 basis points. You put that on the subscription revenue. We expect about 50% of the wins that we won in the second half of that $10.4 million to be recognized as a step up in 2026.
What that then leaves us is about, give and take, $4 million- $5 million of revenue to be achieved for the guidance midpoint of the 2026 guidance on the back of $33 million of pipeline. At this stage, you know, we are looking at secured growth of around that mid to early 90% for 2026, and you know, we want to continue to convert this attractive pipeline.
OK, very clear. I suppose where the revised 2027 expectation for revenue is concerned, that implies a bit of a growth acceleration on FY 2026, which is already somewhat of a bounce-back year. What I suppose underpins the further acceleration in 2027 is that some of the AI products you kind of alluded to, Marc, or something else?
Yeah, partly, Cam. I think you see, as you step through 2025 to 2026, 2027, there's incremental acceleration between the years. I think if you look through to FY 2027, first of all, I'll just talk about, first of all, NRR. This year, we had 102. We expect that to grow to 104, 105. That's partly through increased focus on our CSM teams and investment in them to help with upsell. It's also unlocking the cloud upgrades in local government, which I mentioned. At this stage, and we're being conservative, there will be some incremental revenue as the AI products scale through this very large customer base. On top of that, to move to those high growth rates of low to mid double digits, there's obviously an expectation of that continuation of pipeline. We need to do around $20 million a year in new business.
We did $10.5 million in the last half, so we feel that's achievable.
OK. The best way to think about those AI products is just kind of like an incremental module, you know, let's say circa $100,000, $200,000 incremental per customer. That's sort of what you're generally kind of targeting, and that's how we should think about it, how it comes into NRR.
Yeah, I think there's a combination here of existing modules that will be significantly enhanced. Planner Assist is a good example of that, where we think there is an augmented price. We are building, there'll be brand new technologies in this, some white space as well. AI Recognition of Prior Learning is a really good example of that. It's a very manual process at the moment. There we see new incremental opportunities and, as you outlined, ability for modules in that sort of range of revenue.
Yep, OK. Thank you. I'll let someone else have a go.
Thanks, Cam.
Thanks, Cam.
Thank you. Our next question comes from [Christian Lincoln with Jarden]. Please go ahead.
Thank you for taking my questions. First question, we understand that you've recently hired people from Technology One. What kind of capabilities would they bring across?
Yeah, there's been some hires from competitors over the last couple of years. It's been a range. There's been a sales capability, a marketing capability, and our new leader of the segment is also from a competitor as well. I think we really feel that deep domain expertise in local government is highly valued, and that's what we've been investing in over the last couple of years.
Thank you. One more question. In the second half, 2025, local government revenue was flattish year on year. How have you talked to rebounds and wins in quarter four? Was there any elevated churn in the second half? What drove this? Can you talk to the nature of these wins and growth in Q1 to 2026?
Yeah, churn is tracking very close to historical rates. There's certainly no significant uplift there. I would say in terms of the growth, it really was centered around this ability to upgrade clients to the wider suite. We reported in H1, early H2, that we had a bottleneck with one of the key modules, which is property and rating. It's now been resolved. That came through the acquisition of CouncilWise. It's been integrated successfully, and the upgrade pipeline is now clear, and the pathway is clear. That really was the key reason that we saw those $2 million in new wins and upgrades. We saw around five upgrades committed in Q4 and a strong pipeline of those. That's really the growth driver now, and that's been unblocked.
OK, thank you for taking my questions.
Very welcome.
Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Our next question today comes from Wei Sim with Jefferies. Please go ahead.
Hi, Marc. Hi, Nimesh. We're just looking through some of these government tender websites, and we saw one for the Victorian Disability Work Commission. I'm not sure if this is too specific, but can you just talk? Is that a contract that we've lost? Can you talk a bit about what happened there if that was the case?
You're ahead of me on that one, Wei?
OK, all right. No worries. Maybe we can take that offline.
I'm really happy to take it offline. Normally sail across every opportunity, but.
Yeah.
Wei, safe to say, if it's in our end market, it will be night. We'll probably take it offline, yeah.
OK, understood. In terms of the new CFO joining, we put out these revised targets. I was just wanting to understand, have they had any kind of input into the outlook guidance? When should we be expecting the announcement of this new CFO? Thank you.
No, I'd say, first of all, that there's no input on that from the new CFO. I'm absolutely sure, of course, that if he had known as an incoming CFO, he would have undertaken substantial diligence on us. I think you should expect the announcement within weeks, Wei. I would guide you that the announcement is imminent.
All right. Those were the key questions for me. Thank you. The outlook looks great. Looking forward to it. Cheers.
Thank you.
Thanks, Wei.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Washbourne for closing remarks.
Thank you so much. Thanks for tuning in today. We look forward to seeing many of you on our upcoming Investor Roadshow when we can step through results in more detail. Thanks again for joining us.
Thank you. That does conclude our topics for today. Thank you for participating. You may now disconnect.