Full Year 2026 EML Payments Ltd Earnings Call Transcript
Key Points
- EML Payments Ltd (EMCHF) has largely completed its restructuring program, refreshing 51 senior positions and establishing a global operations center that delivers 35% cost savings.
- The company's new business pipeline remains strong at $109 million in annualized revenue, with approximately $50 million in the final tender or decision phase.
- Renewal performance is solid, with nine of the top 30 contracts renewed in the last 12 months, including three of the top five, reflecting improved operational performance and relationship management.
- The new mobility solution, developed with partner Tendren, is advancing well and is expected to launch commercially by mid-calendar year 2027, targeting a large and growing market.
- The company forecasts pro forma free cash flow of $30 million to $35 million in FY28, as legacy one-off outflows and major Arlo project investments fall away.
- Underlying operating cash flow was strong at $47.8 million, demonstrating solid cash conversion despite a challenging earnings year.
- EML Payments Ltd (EMCHF)'s financial performance in FY26 missed expectations, with underlying EBITDA declining 18% to $48.3 million and revenue down 6%.
- The company experienced slower-than-anticipated onboarding of new customers and softer trading in parts of the northern hemisphere in the second half, impacting revenue pull-through.
- Activation challenges with a key payment infrastructure partner in Australia have persisted and are growing, causing delays in program launches.
- The company's cash balance decreased by $21.6 million during the year, impacted by outflows for legacy matters, including a class action settlement and restructuring costs.
- The timeline for the Arlo platform migration has extended, with non-recurring expenditure forecast at $15.7 million in FY27, delaying the realization of expected overhead savings.
- Europe experienced a 14% revenue decline, with customer revenue down 16%, reflecting the non-recurrence of certain programs and softer trading across two large customers.
Thank you for standing by and welcome to EML Payments Limited full year 2026 results briefing. (Operator Instructions)
I would now like to hand the conference over to Mr. Anthony Hynes, Executive Chairman. Please go ahead.
Thank you, moderator, and good morning, everyone. Welcome to the EML Payments Limited FY26 results tally call. As stated, I'm Anthony Hines, Executive Chairman. It's great to be here with Stuart Will, CFO, to report our results for FY26 and provide an update on EML 2.0 progress.
Following our presentation, we'll open the call to questions. I refer you first to the ASX announcements, which were issued by EML Payments Limited this morning, which form the basis for this call.
If we can move to slide 4, please, moderator. It's been an incredibly busy and important 12 months at EML as we passed the halfway point of EML 2.0, the transformation strategy we presented to the shareholders and the investment committee in November 2024.
As always,
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