EML Payments (ASX: EML) has slashed its FY26 underlying EBITDA guidance by approximately 20%, citing delayed program go-lives and weaker-than-forecast trading in its northern hemisphere businesses.
The new forecast ranges from $47 million to $50 million, a notable decrease from the previous guidance of $58 million to $60 million.
This significant revision is primarily attributed to two factors.
Firstly, program implementations are now expected to go live later than previously assumed, a delay that will reduce their revenue contribution in FY26.
Secondly, EML noted weaker-than-forecast trading in its northern hemisphere businesses during Q3, reflecting weaker consumer demand and broader macro uncertainty in those regions that the company expects will continue through Q4.
Operational Headwinds Impact
EML stated that the implementation delays are timing-related, rather than lost opportunities.
The company is working with partners to bring these programs to market efficiently.
The weaker northern hemisphere trading particularly reflects weaker consumer demand and macroeconomic uncertainty.
This has pressured the company's outlook for the remainder of the financial year.
Despite these revenue headwinds, EML confirmed that its operating expenses continue to track in line with forecasts and remain well managed.
Key strategic initiatives, including Project Arlo and the development of a global mobility solution, also remain on track.
Previous Performance and Strategy
This latest guidance downgrade follows a challenging first half for EML.
In 1HFY26, the company reported a 6% decline in revenue and a 16% drop in underlying EBITDA compared to the prior corresponding period, resulting in a statutory net profit after tax loss of $4 million.
During the 1HFY26 results announcement in February 2026, EML had already tightened its FY26 underlying EBITDA guidance to $58-60 million from an earlier range of $58-64 million.
This was primarily due to slower onboarding of new customers and delays in implementation timelines.
The company is currently progressing with its EML 2.0 restructuring, an initiative aimed at deploying a single global technology platform.
This restructure is expected to be completed by 30 June 2026.
Regulatory and Leadership Landscape
On the regulatory front, subsidiary EML Payment Solutions Limited (EPSL) is navigating its application for an APRA ADI licence in Australia.
As an interim measure, APRA and the RBA require EPSL to obtain an ADI guarantee for its stored value liabilities by 30 April 2026.
The cost and precise structure of this required guarantee are still being determined by EML, and the company continues to engage with regulatory bodies to meet these requirements.
In leadership news, Adam Olding was appointed Global CEO effective 30 March 2026.
His role consolidates executive accountability across regions and is crucial for leading the EML2.0 transformation and deployment of the Arlo global technology platform.
