Hansen Technologies Ltd (HSN) shares fell 18.1% to AUD 3.48 on Tuesday after the company reported FY26 financial results and provided a cautious outlook for FY27, driven by an executive transition and planned spending increases.
The company posted underlying EBITDA of AUD 120 million for the fiscal year ended June 30, 2026, a 7% increase from FY25. Underlying EBITDA margin expanded to 31%, exceeding the initial 30% target and rising to 32.7% in the second half. Operating revenue reached EUR 387 million, with foreign exchange pressure and a EUR 15 million decline in license revenue partially offsetting growth. Operating cash flow surged 52% year-on-year to AUD 110 million, marking the strongest cash generation in the company’s history. Underlying NPATA rose 15.9% over the same period.
Cost reductions totaling AUD 20 million were achieved through AI efficiencies, restructuring, and cost controls, representing about 7% of the operating cost base. Recurring revenue grew at a 14% compound annual rate since FY22, while contracted revenue increased from EUR 250 million to EUR 325 million. The company maintained a dividend of AUD 0.05 per share, 80% franked, and reported a free cash flow yield of 13%. Headcount stood at 1,450 employees.
Management highlighted a shift in business model, with CEO Andrew Hansen noting the transition from seat-based or meter-based charging to consumption-based pricing. Hansen also emphasized a strengthened M&A pipeline and described the balance sheet as "unbelievable." The company serves 80 million energy customers and 360 million communications customers across 80 countries through its NOVA RAG AI-based platform.
The outlook for FY27 reflects a transitional year. Recurring revenue is expected to grow 6% to 8% to EUR 245 million–EUR 250 million, while license revenue is projected to decline to 4%–6% of group turnover, down from 9.1% in FY26. EBITDA margin is forecast to fall to "26% plus" from 31% in FY26. Incremental spending is planned at AUD 6 million–AUD 8 million on sales and marketing and AUD 8 million–AUD 10 million on AI enablement, staffing, vendor costs, and token expenses. Cash flow conversion is expected at 70%–80%, with the company projected to turn net cash positive within 60 days.
The executive transition includes Andrew Hansen moving to Executive Chair, with Stuart MacDonald set to join as CEO on November 19. Richard English remains CFO, while David Trude will retire as Chair after the AGM following 15 years of service. The company’s P/E ratio stands at 12.6, supported by a "GREAT" financial health rating from InvestingPro.
