ReadyTech Holdings Ltd. (RDY) AI Stock Analysis

• Market Cap: AU$152.60M
• Dividend Yield: N/A
• Average Volume (3M): 123.54K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.57
• Revenue Growth: 7.06%
• EPS Growth: -389.48%
• Country: AU
• Employees: 365
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -1.09
• Shares Outstanding: 123,564,110
• 10 Day Avg. Volume: 281,357
• 30 Day Avg. Volume: 123,536
• PEG Ratio: 0.05
• Price to Book (P/B): 1.97
• Price to Sales (P/S): 2.29
• P/FCF Ratio: 69.17
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: AU$2.89
• Price Target Upside: 17.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 0.04
• Revenue Forecast (FY): AU$127.04M

• Rating: 56 Neutral
• Price Target: AU$1.50 ▼(-39.02% Downside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is driven primarily by mixed fundamentals: strong gross margin and revenue growth are outweighed by a swing to losses, negative ROE, and weakened free cash flow. Technicals further दबि the score due to a pronounced downtrend (below all major DMAs and negative MACD). Valuation is constrained by negative earnings (negative P/E) and no stated dividend yield.

Positive Factors

Very high gross margin

A gross margin near 94% indicates durable SaaS economics with low incremental cost to serve additional customers. This level of margin supports scalable operating leverage: as recurring revenue grows, a larger proportion can fund R&D, customer success and long-term product development.

Recurring SaaS revenue model

A subscription-based model provides predictable, recurring revenue and higher customer lifetime value, enabling durable cash flow visibility and opportunities for upsell/cross-sell of add-ons and services. This structural revenue mix supports mid-term growth planning and retention-focused investments.

Moderate leverage / solid capital structure

A debt-to-equity of ~0.43 indicates conservative use of leverage, preserving financial flexibility. This reduces refinancing and interest risk while allowing management to fund product development, M&A or working capital needs without overburdening the balance sheet over the medium term.

Negative Factors

Negative net margin & ROE

Negative net margin and ROE signal the company is currently destroying shareholder value despite high gross margins. Persistent operating losses weaken retained earnings, limit reinvestment capacity, and require either sustained margin recovery or external financing to support growth over the next several quarters.

Sharp free cash flow decline

A near 78% drop in free cash flow and weak cash conversion (OCF/net income ~0.51) reduce internal funding for product investment and customer success. Over 2-6 months this constrains the company's ability to execute strategic initiatives without relying on external capital or cutting growth-related spend.

Declining operating margins

Falling EBIT/EBITDA margins indicate rising operating costs or weaker operational efficiency. For a software business, sustained margin compression can erode the benefit of high gross margins and requires either cost discipline or higher-margin product uptake to restore durable profitability.

ReadyTech Holdings Ltd. Business Overview & Revenue Model

Company Description

ReadyTech Holdings Limited provides SaaS technology for education and work pathways, workforce solutions, and government and justice markets in Australia. It operates in three segments: Education, Workforce Solutions, and Government and Justice. The Education segment offers cloud-based student and learning management systems for education and training providers to manage the student lifecycle, including student enrolment and course completion. This segment also provides platforms to help state governments to manage vocational education and training programs; software platforms for the pathways and back-to-work sector to manage apprentices and job seekers; and a competency assessment and skills profiling tools to track on-the-job training through a qualification. The Workforce Solutions segment offers payroll software, outsourced payroll services, and human resource management software solutions to mid-sized company to assist with payroll and management of their employees. This segment also provides human resource (HR) administration services, such as employee records, workplace health and safety, and organizational structure, as well as talent management services. The Government and Justice segment offers government and justice case management software as a service solutions to local and state governments, and justice departments; and provides asset management, property, licensing and compliance, finance, HR and payroll, and customer management products. ReadyTech Holdings Limited was founded in 1998 and is headquartered in Pyrmont, Australia.

How the Company Makes Money

ReadyTech generates revenue primarily through the sale of its software solutions and services to educational institutions and training providers. The company's revenue model is based on subscription fees for its software platforms, which provide ongoing access to its technology and support services. Key revenue streams include licensing fees from its learning management systems and student management software, as well as implementation and training services that accompany these platforms. Additionally, ReadyTech may benefit from strategic partnerships with educational organizations and technology providers that enhance its offerings and expand its market reach, contributing to its overall earnings.

ReadyTech Holdings Ltd. Financial Statement Overview

Summary

Revenue growth and a very strong gross margin (93.73%) are positives, but 2025 profitability deteriorated (net margin -13.25%, ROE -11.41%) and free cash flow fell sharply (-77.99%), pulling the score down despite moderate leverage (debt-to-equity 0.43).

Income Statement

ReadyTech Holdings Ltd. has shown consistent revenue growth over the years, with a recent growth rate of 3.78% in 2025. However, the company experienced a significant decline in profitability, as indicated by a negative net profit margin of -13.25% in 2025, compared to a positive margin in previous years. The gross profit margin remains strong at 93.73%, but the EBIT and EBITDA margins have decreased, reflecting operational challenges.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.43, indicating a balanced approach to leverage. However, the return on equity has turned negative at -11.41% in 2025, suggesting inefficiencies in generating returns from shareholders' equity. The equity ratio remains stable, reflecting a solid capital structure.

Cash Flow

ReadyTech's cash flow performance has been mixed, with a significant decline in free cash flow growth by -77.99% in 2025. The operating cash flow to net income ratio is 0.51, indicating some challenges in converting income into cash. The free cash flow to net income ratio has also decreased, reflecting reduced cash generation efficiency.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	125.13M	121.84M	113.80M	103.31M	78.28M	50.03M
Gross Profit	21.55M	114.19M	41.92M	18.31M	17.55M	11.79M
EBITDA	34.54M	14.93M	32.31M	26.63M	26.75M	14.70M
Net Income	1.23M	-16.14M	5.46M	4.97M	8.79M	2.15M
Balance Sheet
Total Assets	246.30M	250.38M	261.43M	259.28M	185.97M	169.59M
Cash, Cash Equivalents and Short-Term Investments	12.35M	19.70M	21.87M	20.62M	9.20M	11.99M
Total Debt	62.48M	60.48M	47.06M	52.11M	37.34M	33.57M
Total Liabilities	107.53M	108.88M	110.22M	131.03M	87.80M	94.49M
Stockholders Equity	138.77M	141.50M	151.21M	128.25M	98.17M	75.10M
Cash Flow
Free Cash Flow	18.85M	4.03M	13.26M	8.10M	4.39M	13.36M
Operating Cash Flow	18.94M	24.06M	31.59M	27.81M	17.00M	19.50M
Investing Cash Flow	-28.16M	-38.54M	-23.67M	-27.78M	-21.29M	-48.84M
Financing Cash Flow	10.26M	12.31M	-6.67M	11.39M	1.49M	32.12M

ReadyTech Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:RDY, the sentiment is Negative. The current price of 2.46 is above the 20-day moving average (MA) of 1.70, above the 50-day MA of 2.17, and above the 200-day MA of 2.26, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 26.29 is Positive, neither overbought nor oversold. The STOCH value of 8.12 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:RDY.

ReadyTech Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
EOL	58 Neutral	€454.13M	34.06	10.18%	0.43%	17.12%	311.38%
RDY	56 Neutral	AU$152.60M	-55.98	-11.03%	―	7.06%	-389.48%
AMX	48 Neutral	AU$28.50M	-3.90	-31.01%	―	-3.43%	-40.65%
YOJ	43 Neutral	AU$106.64M	-12.17	-140.76%	―	-41.24%	75.68%

ReadyTech Holdings Ltd. Corporate Events

ReadyTech underscores scale and AI compliance in 1H FY26 update

ReadyTech has highlighted the scale and critical nature of its software platforms in its 1H FY26 update, emphasising their role across education, workforce management, and public sector operations. The company underscored its broad market penetration, with substantial coverage of Australian apprentices, local councils, and payroll processing, positioning its technology as essential infrastructure for human-centred services.

The business also pointed to its AI governance credentials, noting ISO 42001 compliance achieved in January 2026, which may strengthen trust among institutional clients and regulators. This combination of deep domain expertise, extensive user reach, and formal AI compliance suggests ReadyTech is reinforcing its standing as a key provider of vertical software to community-focused sectors.

The most recent analyst rating on (AU:RDY) stock is a Hold with a A$1.50 price target. To see the full list of analyst forecasts on ReadyTech Holdings Ltd. stock, see the AU:RDY Stock Forecast page.

ReadyTech flags contract wins, AI push as it lifts first-half revenue

ReadyTech reported first-half FY26 revenue of $61.6 million, up 5.6% year on year, with subscription revenue rising to $51.8 million and recurring income comprising 84% of total sales. Growth was led by enterprise flagship products, notably Ready Workforce, while mature segments faced churn and extended sales cycles, prompting a refreshed corporate strategy under the banner “Clearer, Faster, Stronger.”

Key contract wins included a 10-year government deal with Skills Tasmania and a major justice-sector mandate from Victoria’s Workplace Injury Commission, reinforcing the group’s position in regulated public-sector markets. The company continues to invest heavily in product development and AI capabilities, including embedded hiring tools and the new Orqestra intelligence layer, while updating FY26 revenue guidance to $125–127 million and prioritising disciplined monetisation and robust AI governance to support more resilient growth.

The most recent analyst rating on (AU:RDY) stock is a Hold with a A$1.50 price target. To see the full list of analyst forecasts on ReadyTech Holdings Ltd. stock, see the AU:RDY Stock Forecast page.

ReadyTech Sets Date for 1H FY26 Results and Investor Briefing

ReadyTech Holdings Ltd has scheduled the release of its financial results for the six months ended 31 December 2025 on 26 February 2026, accompanied by an investor and analyst briefing hosted by its CEO and CFO. The timing and structured communication of these half-year results underscore the company’s efforts to maintain transparency with the market and engage closely with investors as it executes its growth strategy across its targeted public and workforce-facing SaaS verticals.

The most recent analyst rating on (AU:RDY) stock is a Buy with a A$2.60 price target. To see the full list of analyst forecasts on ReadyTech Holdings Ltd. stock, see the AU:RDY Stock Forecast page.

ReadyTech Announces Change in Company Secretary

ReadyTech Holdings Limited announced a change in its company secretary position, with William Hundy resigning and Andrew Palfreyman from Confidant Partners taking over the role. This transition is effective as of December 16, 2025, and signifies a strategic move for ReadyTech in maintaining robust communication with the ASX, potentially impacting its operational efficiency and stakeholder relations.

The most recent analyst rating on (AU:RDY) stock is a Buy with a A$2.60 price target. To see the full list of analyst forecasts on ReadyTech Holdings Ltd. stock, see the AU:RDY Stock Forecast page.

ReadyTech Holdings Announces Director’s Interest Change

ReadyTech Holdings Ltd. announced a change in the director’s interest, with Marc Washbourne acquiring 256,831 performance rights as approved by shareholders. This adjustment in director’s securities holdings reflects the company’s ongoing governance and shareholder engagement, potentially impacting stakeholder perceptions and the company’s strategic direction.

The most recent analyst rating on (AU:RDY) stock is a Buy with a A$2.60 price target. To see the full list of analyst forecasts on ReadyTech Holdings Ltd. stock, see the AU:RDY Stock Forecast page.

ReadyTech Issues Performance Rights to Employees

ReadyTech Holdings Ltd. announced the issuance of 1,631,383 performance rights under an employee incentive scheme, which are not intended to be quoted on the ASX. This move is part of the company’s strategy to incentivize employees, potentially enhancing workforce motivation and aligning employee interests with company performance.

The most recent analyst rating on (AU:RDY) stock is a Buy with a A$2.60 price target. To see the full list of analyst forecasts on ReadyTech Holdings Ltd. stock, see the AU:RDY Stock Forecast page.