Transcription of The Stock Network Interview with Change Financial (ASX:CCA), CEO Tony Sheehan
Lel Smits: Change Financial has delivered a landmark FY26 result, achieving its maiden four-year profit and beating upgraded revenue and EBITDA guidance. Revenue grew 21% while underlying EBITDA surged 17 times and the company’s Vertex and Pass platform continues to scale rapidly across Australia and New Zealand. Change is positioning itself as a capital efficient challenger in the payments infrastructure space and I’m joined today by its CEO Tony Sheenan to discuss the milestone result, the scaling of the Pass platform and also the next phase of growth.
Tony, welcome to the Stock Network.
Tony Sheehan: Thanks for having me, Lel.
Lel Smits: Now, Change has just delivered its first full year profit.
Congratulations. What has driven this shift and what does it signal about the underlying strength of the business model? Yeah, thanks, Lele. It’s been a FY26 big year for us, that’s for sure.
I think if we look at that profitability, it’s really been driven through a combination of revenue growth and a stable fixed cost base. So, we’ve more than doubled the revenue of the business over the last three years, delivering a three-year CAGR of 28% whilst the fixed cost base has remained pretty stable. So, the key driver of that revenue growth has been our card processing and issuing operations in Australia and New Zealand.
So, payments is a scale game and we’re continuing to scale which is driving margin improvement. We’ve seen this on our card processing and issuing platform where our margins improved 600 basis points in FY26 with further margin expansion expected coming forward. So, we’ve taken a huge amount of work over the last few years to build a scalable business.
So, we’re really well set to continue to drive that profitable growth going forward. Excellent. And in terms of scaling the PaaS platform, Vitex and PaaS Revenue is now the largest contributor to group revenue.
Lel Smits: What’s behind this momentum really and also how sustainable do you think the growth is as more clients come on board?
Tony Sheehan: So, the success we’ve really had on our PaaS platform is started in New Zealand. So, that was where we had our early success when we launched the platform about three years ago. We’re now the largest issuer of debit cards in the country outside of the major banks.
And that success that we’ve had really is a result of a couple of key factors there. Firstly, it’s our product. So, we’re providing institutional grade technology which is used by two of the largest banks in the Philippines.
They run over 45 million cards on our platform. We’re taking that institutional grade technology and really providing it to smaller financial institutions and fintechs. So, we also own our technology which means we can respond quickly and innovate quickly based on what our customers need and want.
The second part is really around our service. So, we provide a really great service to our clients which they value. We’ve got very small volumes in Australia but we’re starting to gain some traction in this market.
So, the addressable market in Australia, as you would expect, much larger than it is in New Zealand. So, we see a really good opportunity here to continue to drive that growth and really replicate the success we’ve had in New Zealand into the Australian market. And in terms of the next phase of growth with four new clients being on board at another foreign final contracting, also gross margins expected to expand further, where do you see those biggest opportunities coming from to accelerate growth in FY27 and also beyond? Yeah, so the biggest opportunity, Lele, is really our card processing industry in Australia.
So, as I mentioned, we want to replicate the success we’ve had to date in New Zealand in the far larger Australian market. So, we’ve barely scratched the surface here in Australia. We’re super excited about the opportunity ahead of us here.
The other key opportunity is our payment testing solution which is called PaySim. So, PaySim, very functionally rich product used by about 140 major banks and fintechs globally. We’re in the middle of our modernisation project which will significantly improve the look and feel of the product.
So, we’ve just released our phase one to pilot customers as we continue to roll out our modernisation project over the coming months. We’ve got less than half a percent of the estimated global addressable market here. So, again, really excited around pushing out the PaySim sales on the back of the modernisation project which we’re doing.
Lel Smits: Tony, thank you for the update on Change Financial. Congratulations again on those maiden four-year profits.
Tony Sheehan: Thanks, Lel. Thanks for having me.
Ends