Novatti Achieves Positive Cash EBITDA Milestone with Record $13.4m Revenue in Q3 FY25

A Significant Turnaround Milestone

Novatti Group Limited (ASX:NOV) has marked a pivotal moment in its turnaround strategy by delivering positive normalised cash EBITDA of $100,000 for the March 2025 quarter (Q3 FY25). This achievement underscores the effectiveness of the company’s restructuring efforts initiated in early FY24 and signals a shift towards sustainable profitability.

CEO Mark Healy highlighted that this milestone reflects Novatti’s commitment to executing its turnaround plan and sets a foundation for continued financial improvement. The company aims to maintain positive cash EBITDA into Q4 FY25, reinforcing confidence in its operational trajectory.

Record Revenue and Margin Expansion

Q3 FY25 saw Novatti generate a record $13.4 million in revenue, representing an 18% increase year-on-year. This growth was achieved despite a 30% reduction in quarterly operational expenses over the same period, illustrating the company’s successful cost containment and operational leverage.

Notably, the Payments AU/NZ segment delivered its strongest ever quarterly gross margin of 52%, up 6 percentage points from the prior quarter. This progress moves Novatti closer to its ambitious three-year target of exceeding 70% gross margins, supported by ongoing internal initiatives to unlock further efficiencies.

Strategic Brand Refresh and Commercial Focus

During the quarter, Novatti launched a comprehensive brand refresh aimed at clarifying its value proposition in the Australian and New Zealand markets. Early results indicate the refresh is generating new inbound leads, particularly in higher-margin services such as card issuing.

This repositioning also empowers the sales team to pursue larger-scale commercial opportunities. Recent wins include a multi-year contract renewal with a tier-one Australian telecommunications company and an expanded voucher payment solution for a major Asia-based global airline. These contracts exemplify Novatti’s growing capability to secure significant commercial deals backed by its integrated service offerings.

Balance Sheet Strengthening and Cash Position

Novatti reduced its net operating cash use by $1.4 million quarter-on-quarter to $2.2 million, reflecting improved operational cash flow and ongoing removal of legacy liabilities. The company ended Q3 FY25 with $3.9 million in available cash, positioning it to support its pivot back to growth.

Alongside financial improvements, Novatti continues to simplify its business portfolio by actively engaging with potential buyers for non-core assets. This strategic pruning aims to sharpen focus on core fintech payments capabilities and enhance long-term financial and margin outcomes.

Stablecoin Business Progress and Regulatory Engagement

Novatti’s majority-owned stablecoin subsidiary, AUDC Pty Ltd, advanced its AUDD stablecoin infrastructure by going live on the Hedera network and securing strategic partnerships, including with XDC Networks and Fireblocks. These developments support AUDD’s role in trade finance and on-chain financial infrastructure.

The stablecoin business is also actively preparing for regulatory compliance, including an Australian Financial Services Licence (AFSL) application in anticipation of Treasury’s forthcoming stablecoin framework. Engagement with ASIC and participation in industry consultations on AML/CTF reforms further demonstrate Novatti’s commitment to regulatory alignment.

Looking Ahead

While Novatti’s Q3 FY25 results highlight systematic execution of its turnaround strategy and improved financial health, the company acknowledges that further work remains to streamline operations and accelerate growth. The combination of stronger margins, record revenue, and strategic commercial wins sets a promising stage for the quarters ahead.