Atturra has released its financial results for the half year ended 31st December 2025 (H1 FY26), with revenue increasing to $181 million (up 28% from the prior corresponding period), but profit falling, driven by opex expenditure in the year.
The company's revenue composition is now made up of 73% 'predictable revenue', split across 26% recurring revenue and 47% long-term client revenue.
Underlying EBITDA was $7.3 million, down 46% from H1 FY25, while underlying NPATA was just shy of $2.1 million, down from $8.6 million in H1 FY25.
That drop in EBITDA was attributed by Atturra CEO Stephen Kowal primarily to "a single factor", that of a disputed contract termination in the half.
"We had a contract end weirdly, and we had a heap of work in progress (WIP) predominantly sitting in that contract," he told techpartner.news.
"That EBITDA reduction is directly linked to that; that's why it's a one off [reduction] and then it's [going to be] back to normal [for H2 FY26]."
Atturra said that there will be a change in policies internally to reduce future exposure, as well as WIP capped at $2 million without board approval.
Prioritising becoming an AI-first company
One near-term priority outlined by Attura in its results was becoming an 'AI-first company'.
Kowal said that this translates to taking existing internal uses of the technology - such as AI being used in production operations for managed services or being used in finance tooling - and expanding that to train everyone in the company on AI.
"We're going to start with all the executives and the GMs, but it's going to filter down to the people you probably think don't need it, because it is going to disrupt everything eventually, so we want to be ahead of that curve internally," he explained.
"We're challenging all our staff on how they can incorporate at least one piece of AI into their daily work and [how] to do that from a productivity point of view. We want to grow at a lot faster rate than our head count, and for us to do that efficiently and deliver good service, we need everyone to be skilled and fluent in AI.
"Does that mean we may have moments of inefficiency? Probably. Does it mean we end up with a more loyal, passionate workforce who are going to drive AI to be successful? Absolutely.
Kowal emphasised that the greater use of AI internally isn't something that the company is introducing in order to shrink staff numbers - "that's not our style", he said - with the Atturra CEO also noting that when "some companies do massive cuts, they end up with a workforce who's scared of AI".
"We're not faced with 'I can take 100 staff and turn it into one'; I've got a case where I've got 100 staff and I can get 30% better productivity [by them using AI]," he said.
M&A pipeline "not as full as it has been"
Since the start of 2025, the company has made a total of four acquisitions - Sydney-based manufacturing ERP specialist ComActivity; US-based cloud integration, customisation and services firm Kitepipe; Brisbane-based SAP partner DalRae Solutions; and Melbourne-based Blue Connections, expanding the scale and capability of its managed services business, particularly in end-user computing.
Despite this, Kowal said that the pipeline for mergers and acquisitions is not as full currently as it has been historically.
"We’ve always got organisations in the funnel, but there's probably less now than there was a year ago, but we'll keep acquiring," he said.
Priority areas for inorganic growth identified by the company comprise of managed services, AI, cyber, cloud and data, with a secondary focus on enterprise systems.
"We're on the hunt to do some inorganic growth in ServiceNow if we can find the right fit," he told techpartner.news.
"We’ve got our [ServiceNow] practice that's emerging, but if we could accelerate that by bringing in the right sort of company, we will do that."
Sovereign positioning paying off
Kowal has long talked up the benefits of being a 'sovereign' partner, telling techpartner.news in 2024 that he is passionate about Australia having a "homegrown, strong services business".
“The government spends billions of dollars on multinationals, which I think can be invested in Australian organisations. I want to take that share of the pie, I want to keep growing, and I want to be that choice for enterprise-sized organisations to choose an Australian IT services partner," he said at the time.
Interviewed when the company's H1 FY25 results were released, he explained that Atturra’s focus on building a local Australian capability has been “really successful” in market.
“We've proved that you can do the majority on-shore delivery, build the capability up here and deliver really reliable projects,” he said.
Now, a year later, he says that the emphasis the company places on being 'sovereign' is resonating "quite strongly" with a "big cross-segment of clients".
"I think that might even get stronger, not weaker. The word sovereign comes up from the buy side a lot more often this month than it did six months ago," he stated.
"Maybe some of the geopolitical issues [has] raised people's thoughts to ‘[sovereign] is just as cost and effective [or] actually cheaper, it’s got the security, it's here in Australia, there’s no governance issues’; I think that's really resonated."
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