Atturra Maintains Earnings Guidance Despite Revenue Falling Short

Atturra (ASX: ATA) expects FY26 underlying EBITDA of between $30 million and $30.5m, keeping earnings within guidance despite lower-than-expected revenue.

Unaudited FY26 revenue is expected to reach between $348m and $352m, below the previous $364m to $374m range after several June deals used contract structures that required product sales to be recognised as agent rather than principal.

The accounting treatment reduced reported revenue without affecting profitability, while second-half operating cash flow of $22m to $23m marked a return to normal positive cash generation.

Atturra also expects a one-off non-cash goodwill impairment of between $20m and $25m, subject to audit, primarily relating to historical acquisitions serving government and defence customers.

The company plans to continue on-market share buy-backs when the board considers them appropriate, while monitoring trading conditions, investment performance, and the progression of major deals ahead of its audited results scheduled for 26 August.

Cash Conversion Rebounds

Full-year operating cash flow is expected to be about $9m after the stronger second-half result delivered improved cash conversion.

FY26 uEBITDA includes an adjustment for about $1.7m of second-half restructuring charges, with Atturra expecting the benefits of that activity to contribute during FY27.

The anticipated impairment reflects reduced government spending on discretionary projects and external consulting services, particularly in the Canberra market, alongside Atturra’s current market capitalisation.

The accounting adjustment will not affect current or future cash flow, underlying operating performance or long-term growth, with expansion across data, enterprise resource planning (ERP), and managed services offsetting softer government consulting conditions.

Strong Organic Growth

Atturra expects strong organic revenue growth in FY27, along with EBIT and uEBITDA growth, as it shifts its focus towards organic expansion following the integration of several businesses over the past two years.

The earnings profile is expected to be materially weighted to the second half as planned spending, strategic initiatives, and progressing opportunities begin contributing after a heavier first-half investment period.

AI investment will increase by a further $3m during FY27, creating an estimated $2m first-half earnings impact that Atturra expects growth to offset in the second half.

The group has increased sales and management investment in its ERP and related business services by more than $1.5m, primarily supporting a forecast for its SAP business to grow by more than 50% between FY26 and FY27.

Accelerated Scholarion Investment

Atturra expects FY27 investment in Scholarion to exceed $4m as it responds to strong demand for the education technology platform.

After capitalisation, Scholarion is forecast to record a loss of about $2.4m in FY27, mostly in the first half, before reaching break-even in financial year 2028 and generating meaningful profit from financial year 2029.

“The technology services market is changing quickly, and Atturra is investing in the areas where we see the strongest long-term opportunities,” chief executive officer Stephen Kowal said.

“AI, Data, ERP, and Scholarion are strategically important growth platforms for the business, and we believe the investments we are making now will strengthen our competitive position and support sustainable earnings growth over the medium term.”