EML Payments Limited

For H1 FY26, EML reported revenue of $108.4 million, down 6% on the prior corresponding period, customer revenue (excluding float interest income) of $79.4 million, down 4%, interest income of $29 million, down 11%, and underlying EBITDA of $28 million, down 16%. Group net overheads were $53.1 million, and cash decreased by $11.5 million over the half. In Europe, revenue declined 12% to $60.1 million while GDV rose 5% to $3.4 billion; in Asia-Pacific, customer revenue increased 10% and GDV rose 13%; in North America, customer revenue rose 1% while GDV fell 6%. Management narrowed full-year guidance to $58 million-$60 million from $58 million-$64 million due to slower-than-expected onboarding; it also said it aims to grow the sales pipeline to circa $125 million by year-end. Interest income exited the half at a 2.8% yield on float, with float balances up 5% to $2.6 billion, and the bond portfolio yielded 3.9% with 2.5 years average duration.

Anthony Hynes framed FY26 as the final year of restructuring, saying EML is laying the foundation for sustainable double-digit growth and that the company is on track with significant work completed in H1. He emphasized three priorities: a global operating model, rebuilding the commercial engine, and rolling out a single technology platform via Project Arlo. His tone was upbeat but disciplined: he acknowledged onboarding delays and a tightened guidance range, yet said the company feels “pretty good” about FY27 and reaffirmed FY28 aspirational targets as still standing.

Stuart Will focused on the drivers behind the half’s results: lower central bank rates, customer terminations from prior periods, and a managed cost base. He said net overheads of $53.1 million were consistent with the comparative period, Arlo product costs expensed in the period were $4.5 million and excluded from underlying EBITDA, and operating cash flow excluding one-offs was $22.2 million, implying 79% EBITDA-to-cash conversion. He also detailed the cash bridge: cash fell $11.5 million, reflecting a $40.9 million provisional class action settlement payment, $13.3 million repayment to the PCSIL liquidator, $4.4 million of capex mainly on Arlo, funded by a $44 million debt drawdown; he said the next half includes further Arlo capex and a final PCSIL repayment of about AUD 6.6 million.

Analysts focused on why the second quarter looked stronger than the first, whether the narrowed guidance reflects a temporary onboarding lag, and how to think about pipeline conversion through the rest of the year. Management said revenue should improve as a number of U.S. prospects are onboarded over the next 60 days, but noted that not every quarter will show the same cost efficiency gains because savings are being reinvested into commercial growth. On pipeline conversion, Stuart Will said recent conversion was just over 50% and “better than we thought it might,” but likely to moderate as the sample size grows; management also said more than a quarter of the pipeline is already in vendor selection or negotiation, and that North America’s strength reflects a strong team rather than a deliberate region-specific push.