hipages Group (ASX: HPG) reported a 66% surge in free cash flow to $9.4 million for the fiscal year ended June 30, 2026, alongside a 9% increase in total revenue to $90.6 million. The company attributed the cash flow growth to higher recurring revenue, which now accounts for 98% of total revenue, up from 97% in the prior year.
EBITDA rose 17% to $22.9 million, expanding the margin by 1.7 percentage points to 25.3%. Statutory net profit after tax reached $15.0 million, compared with $2.4 million in FY25, driven in part by an $8.9 million tax benefit from recognizing deferred tax assets. Pro-forma NPAT was $6.1 million. Cash and funds on deposit increased to $34.2 million from $26.9 million a year earlier.
The company serviced 60,400 businesses at year-end, a 10% increase year-over-year, including 4,500 added through the acquisition of VIZ Insurance. Subscription-based customers totaled 36,400, with average revenue per user rising 9% to $2,475. New Zealand operations saw ARPU jump 26% to $1,501, while revenue per serviced business in Australia increased 5.9% to $1,714.
AI-driven tools such as Smart Quotes and an Estimates feature contributed to a 144% higher likelihood of job conversions, according to internal data. The Smart Quotes tool generates professional quotes in seconds from voice notes or brief inputs, while the Estimates tool provides instant SMS pricing for smaller jobs. A follow-up questions feature suggests clarifying questions based on job descriptions to improve customer engagement.
Technology development spending totaled $20.7 million, or 23% of revenue, down from 27% in FY23, with 70% of true development costs capitalized. The company’s total addressable market expanded from $1.2 billion in 2021 to $1.8 billion currently.
For FY27, hipages guided for total revenue growth of 9–11%, with EBITDA margins targeted at 25–27%. Free cash flow is projected between $11 million and $13 million. The shares rose 4.9% to $0.86 following the results, though the stock remains below its 52-week high of $1.50. The board authorized an on-market share buyback of up to 13 million shares, with approximately 400,000 repurchased to date.
