Hansen Technologies provides mission-critical billing software to utilities and telecommunications companies in over 80 countries. At A$5.15 vs fair value A$6.08, the stock is undervalued by 18%. The key driver is a $31 million structural cost-out from the powercloud acquisition — a transformation that has permanently lifted margins and appears not yet fully priced into the shares.

Quality investors will find the most to like here. Hansen's 95%+ customer retention, 75%+ recurring revenue base, and ROIC 5.5 percentage points above its cost of capital form the foundation of a durable earnings stream. The founder-led management team has a proven track record of executing acquisitions and delivering on guidance — characteristics that quality-focused investors typically pay a premium for. Here, they are available at a discount.

Hansen Technologies writes and maintains the billing software that utilities and telecommunications companies rely on to invoice their customers. It operates in two segments — Energy & Utilities and Communications & Media — serving clients across more than 80 countries through multi-year contracts underpinned by 95%+ customer retention.

Recent performance has been strong. FY25 revenue reached $393 million, up 11%, with underlying EBITDA margins expanding to 28.5% — the highest in the company's history. The swing factor was a $31 million structural cost-out from the powercloud integration, a German energy billing platform acquired in 2022. That saving was permanent. Combined with offshore delivery scaling across India, Vietnam, and Argentina, it has durably reset the cost structure.

The investment case rests on three foundations: margins that have structurally improved and are now being sustained; 5–7% organic revenue growth anchored by energy transition and 5G tailwinds; and a valuation that has not kept pace with either development. Hansen trades at 11x EV/EBITDA versus a peer median of 15x, despite scoring above average on every comparable quality measure.

At A$5.15 vs fair value A$6.08, the stock is undervalued by 18%.

What happened?

FY25 delivered revenue of $393 million, up 11%, with underlying EBITDA of $112 million at a 28.5% margin — a company record. The powercloud integration was the swing factor: $31 million in permanent cost savings flowed through the P&L while revenue held firm. Communications & Media outpaced Energy & Utilities, growing 15% on the back of the Digitalk acquisition and continued 5G billing upgrades.

Key Metrics

What's next?

FY26 is the proof-of-concept year for the margin thesis. Management has guided for 30% underlying EBITDA margins — a target that, if confirmed at the August 2026 full-year result, would add approximately $0.50 per share to fair value. The recently acquired Digitalk will contribute its first full year of earnings, expanding Hansen's footprint across the Balkans and Nordic markets. Revenue growth is expected to moderate from 11% to 8% as M&A contributions normalise, with the organic rate settling into the 5–7% guided range. Beyond FY26, named wins in US renewable energy billing and a potential Nordic expansion represent optionality not yet included in the base case, estimated to be worth a further $0.30–$0.50 per share if they proceed.

What could go wrong?

The central risk is margin reversion. Management's 30% EBITDA target has not been tested over a full financial year. If the FY26 revenue mix shifts away from high-margin licence fees — a genuine possibility following FY25's elevated licence activity — underlying margins could settle at 26% rather than 29%. That outcome would reduce fair value by approximately $1.20 per share, eliminating the current discount entirely.

The second watch item is Kraken Technologies, a UK cloud-native energy billing platform. It remains unproven at Tier 1 enterprise scale, but a breakthrough would directly challenge Hansen's Energy & Utilities segment, which generates 56% of revenue. Our model assigns a 20% probability to this scenario, with an $0.80 per share impact on fair value.

Currency moves are the persistent wildcard. Approximately 40% of revenue is earned offshore, and the AUD has already strengthened 10.6% over the past year — a headwind that reduces reported earnings without any operational deterioration on Hansen's part.