Solution Dynamics (SDL) H1 2026 earnings summary

Executive summary

• Net profit after tax for 1H FY2026 declined 90.9% year-over-year to $0.21 million, with EPS of 1.5 cents, mainly due to a 34.5% drop in revenue from the loss of the largest customer and increased low-margin postage revenue in NZ.

• EBITDA fell 81.4% to $0.69 million, and gross margin compressed to 26.8% from 34.6% year-over-year.

• Successful launch of the nGAGE AI-driven dental communications platform in the UK, with initial customer onboarding and a strong sales pipeline.

• Interim dividend of 2.0 cents per share declared, fully imputed.

Financial highlights

• Revenue dropped 34.5% to $17.09 million compared to 1H FY2025.

• EBITDA margin decreased to 4.0% from 14.2% year-over-year.

• Net cash on hand at 31 December 2025 was $8.36 million, down from $12.41 million a year earlier.

• Cash flow from operations was negative $0.77 million, impacted by working capital changes and equipment upgrades.

• Book value (net assets) decreased 1.1% to $11.13 million.

Outlook and guidance

• FY2026 earnings guidance maintained at $0.1 to $0.6 million.

• Second half expected to be seasonally weaker, with a modest profit anticipated.

• nGAGE platform expected to be a short-term earnings drag in FY2026 as investment continues, but viewed as a long-term value driver.

• Ongoing pressure on NZ earnings due to accelerated customer migration to digital channels and rising postage costs.