Is ReadyTech Holdings an Australian company?

Yes, RDY is based in Pyrmont, NSW.

Does ReadyTech Holdings pay a dividend?

No, the company uses its funds to grow its business for the foreseeable future.

Is ReadyTech Holdings a BUY right now?

No, we think TechnologyOne is a better buy right now.

ReadyTech (ASX:RDY): Its growth is shrinking and stock is sinking! How can it turn around?

Nick Sundich, March 11, 2026

It is tough enough to be a tech stock right now, but even more painful to be a company like ReadyTech (ASX:RDY) which is not seeing a plunging share price just because of interest rates, but because it is seeing growth slow. And the most recent results that investors hated were not just a one off, but one of several results in a row where growth was shrinking and the company withdrew FY27 targets altogether.

It is all well and good for investors to just sit and wait until the RBA cuts rates, but that’ll do little good if growth momentum does not pick up.

What are the Best ASX Technology Stocks to invest in right now?

Check our buy/sell tips

Who is ReadyTech?

ReadyTech provides SaaS technology in Australia and 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 manage vocational education and training programs.

The Workforce Solutions segment offers payroll software, outsourced payroll services and human resource management software solutions to assist employers with payroll and management of their employees in mid-sized companies.

The Government and Justice segment offers government and justice case management SaaS solutions to local and state governments as well as justice departments. It also provides asset management, property, licensing and compliance, finance, HR and payroll, and customer management products.

ReadyTech was founded in 1998 and listed on the ASX in 2019 at $1.50 per share. It spent much of its listed life above that price but is below that now.

COVID-19 has increased the demand for digital transformation – and the growth is not over

Organisations in all three segments of ReadyTech’s business – Education, Workforce and Government – are experiencing a growing and ongoing migration to cloud and SaaS. This digital transformation across all industries is nothing new, but what is news that this transformation has been accelerating in the wake of COVID-19 shutdowns as demand soared for technology-driven initiatives to enable remote work, distance learning, new customer experiences and new online sales channels.

But it is only just getting started. Goldman Sachs has estimated that transition from on-premise systems to Cloud software is just 20% completed. It also estimated that annual revenues are US$235bn compared to enterprise IT revenues of US$1.4tn and the Cloud could easily grab that and even more from non-digital spending.

ReadyTech boasted that it was well-positioned to benefit from the opportunities created by the accelerated digital transformation. The company is investing more than 30% of its revenue in research and development activities to align its products with different customers, including larger enterprises, where it can open up new market opportunities for its businesses. It has also engaged in M&A activity to make itself a ‘one-stop shop’ for its clients.

Ever since its FY24 results, it has been all downhill

FY24, the 12 months to June 30 2024, may seem an eternity ago, but we need to go back there to get the full picture of where the company is. ReadyTech recorded $113.8m in revenue ($95.4m of which was subscription revenue), a figure up 10% from the year before. The company boasted 22 major enterprise contract wins across all segments worth $12.5m. Average revenue per new customer was $119.1k.

ReadyTech’s underlying EBITDA was $38.8m, up 11.5% and representing a 34% margin. Its profit was $5.5m, up 9%. The company has advised shareholders to expect organic revenue growth to be in the low to mid double digits and a 34-35% EBITDA margin. It told investors it was aiming to achieve over $170m in organic revenue in ‘the medium term’ and a cash EBITDA margin of over 20%.

Fast forward to its FY25 results and there were some good signs. Revenue grew 7% to $121.8m, of which 84.3% was recurring revenue. It purported to have signed $15.4m worth of enterprise contracts and the average revenue per customer was $166.9k. For FY26, the company told investors to expect $132-135m revenue and for $150-153m in FY27. Good growth, so why the fuss? Well, the company previously promised investors >$170m. So, yeah. Its NPAT was in the red by $16.1m, albeit with the majority attributable to $21.8m worth of impairments.

6 months later, in its 1H26, the company made $61.6m revenue which was growth but barely 6%. This lead the company to update its FY26 revenue guidance to $125-127m and withdraw FY27 targets. Its ‘Cash EBITDA margin’ (promised to be >20% in FY27) was guided to be in the low mid-teens. The company’s bottom line was negative – in one sense it was only be $1.4m although there were no impairments to blame this time.

Is the company’s reputation damaged beyond repair?

Not beyond repair, but it is damaged. For any company pulling forward guidance, especially multiple times tends to shake investor confidence. And this is particularly true for a SaaS stock when recurring revenue is meant to give forward credibility. It creates a credibility gap: if management previously implied a stronger trajectory, investors now question whether earlier expectations were overly optimistic.

The operational explanation from the company is fairly mundane. Sales into government, education and enterprise clients are taking longer than expected, and the implementation process is complex. These are large customers with procurement processes that can stretch for months or years. When deals slip a quarter or two, revenue recognition slips with them. In the short term that creates the kind of volatility that public markets dislike.

Another issue is portfolio transition. ReadyTech has been trying to move customers from older products toward a smaller set of “flagship” platforms such as its workforce and education solutions. Mature products are seeing churn or slower growth, while newer products are still scaling. That means the company is essentially replacing legacy revenue streams while investing heavily in R&D—around 30 % of revenue over recent years. During that transition margins compress and growth can stall, which is exactly what the market has been seeing.

What about AI?

All companies need to talk about AI, otherwise they risk losing investor sentiment. Some may argue the company is being sold off as investors fear nothing is being done. We wouldn’t go so far as to say that (i.e. that RDY will go the way of Blockbuster or Kodak) but we do think investors are sceptical that new AI features promoted will translate into meaningful revenue growth quickly enough.

The company has leaned heavily into AI as part of its strategy, launching tools like its recruitment assistant and a new AI layer called Orqestra. Management is positioning AI as an advantage because ReadyTech operates in regulated niches—education, workforce compliance and government workflows—where domain-specific data and rules matter. In theory that makes AI an enhancement to its software rather than a substitute.

But back to the heart of the matter: Why did the company downgrade its revenue target if it was so confident in them. It was one thing to downgrade profit guidance (had there been any) due to one-off investments, and also to talk about ‘high conviction’ opportunities, but investors want to see AI initiatives that will make a substantial difference to the top and bottom lines, or at least that companies are confident will make a difference.

ReadyTech’s valuation is attractive, but you might be better off buying TNE

There are 7 analysts covering the stock and their mean target price is $2.13, which is a fair premium to the $1.20 level it retreated to after its results. In FY26, they call for $125.6m revenue, $36.1m EBITDA and roughly flat bottom line. For FY27, a return to growth with $136.5m revenue, $1m EBITDA and $0.06 EPS which would be a ~$7.4m NPAT. These put the company at just 4.9x EV/EBITDA, 12.1x P/E and 0.51x PEG which may scream buy to some investors.

Keep in mind it has been less than 4 years since attempts were made from Pacific Equity Partners to take it over at $4.50 per share ($308m at the time) and it was declined for undervaluing the company. Microequities Asset Management was key to it and it declared to the AFR that ‘ReadyTech is a TechnologyOne in the making’. For comparison’s sake, TechnologyOne (ASX:TNE) then had a $10bn market cap and is now $13.2bn. Meanwhile, RDY is below $300m, it has barely budged.

Now, it did take TNE about a decade to reach the levels it is at today – implying that ReadyTech has some way and time to go before reaching anywhere remotely near this valuation. But we think we need to see some margin growth before that happens. TNE’s most recent post-tax margin was 23%. Margin improvement will be key and the company’s AI offerings could help in this regard. But competition and regaining investors’ trust will be tough.