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SciDev Navigates 1H FY26 Headwinds with Recurring Revenue Focus and Revised Guidance

• 1H FY26 revenue down 4% to $47.9m, underlying EBITDA down to $1.1m.

• Recurring revenue share increased to 54%, while cost reduction initiatives are underway.

• Revised FY26 guidance to $100-110m; 2H FY26 expected to improve, driven by new contracts and strategic shifts.

SciDev (ASX: SDV) has released its first half FY26 results, revealing a revenue dip and revised FY26 guidance.

The company is highlighting strategic shifts towards recurring revenue and proactive cost reductions.

SciDev reported a 4% year on year revenue fall to $47.9 million in the first half of FY26, down from $49.9 million in the first half of FY25.

Underlying EBITDA for the period significantly decreased to $1.1 million, compared to $3.4 million in the prior corresponding period.

The company posted a net loss after tax of $2.14 million, with basic and diluted earnings per share both recorded at -1.13 cents.

Recurring Revenue Grows, Costs Targeted

A positive trend emerged in recurring revenue, which increased to 54% of total revenue, up from 48% in the first half of FY25.

This signals a strategic move towards a more stable income base.

However, the gross margin percentage saw a decline to 28%, down from 33%, primarily influenced by the Energy Services product mix and ongoing investments in international water technologies.

SciDev is implementing cost control measures, reducing selling, general, and administrative (SG&A) costs by $0.7 million year on year.

The company is targeting annualised fixed cost reductions of approximately $1.3 million by the end of FY26.

Segment Performance and Strategic Shifts

The Energy Services segment experienced headwinds, notably from a key US customer’s frac schedule changes, which impacted EBITDA by $3.6 million.

In contrast, Process Chemistry delivered a record revenue of $14.5 million for the half, achieving an underlying EBITDA of $1.1 million.

Water Technologies in the APAC region also returned to profitability, with an EBITDA of $0.2 million.

SciDev is actively restructuring its International Water Technologies division, transitioning to a channel partner model.

This strategic shift is expected to yield cost savings of up to $3 million annually from the second half of FY26.

Revised Outlook and Future Growth Drivers

Looking ahead, SciDev has revised its FY26 revenue guidance to between $100 million and $110 million.

Management anticipates that second half FY26 EBITDA will improve, surpassing that of second half FY25, driven by ongoing cost actions and existing pipeline opportunities.

The company also projects stronger FY27 growth, buoyed by the $19.5 million Rum Jungle contract, of which $1 million revenue was recognised in the first half of FY26, and other developments within its project pipeline.

The Rum Jungle project is scheduled for completion in September 2026.

Source: SmallCaps