Objective Corporation Limited

The Business

Objective Corporation sells document management, regulatory and planning software to government agencies across Australia, New Zealand and the UK. The business runs three divisions: Information Intelligence (content and records management, roughly two-thirds of revenue), Regulatory Solutions (compliance workflows for agencies like transport and environment regulators), and Planning & Building, the newest and fastest-growing arm. Unlike horizontal software vendors, OCL builds specifically for government compliance and audit requirements, which is both its differentiator and, increasingly, its vulnerability as Microsoft pushes standardised platforms into the same buyers.

Recent Performance

FY26 revenue grew 9.6% to $131.6 million, itself building on a stronger prior base, with EBITDA margins peaking near 39%. That momentum has since reversed. A 26-year Defence contract worth $8.3 million in annual recurring revenue was lost to a platform consolidation decision, and a further $3.2 million contract (NHVR) was discontinued. Combined, these losses are expected to drive FY27 revenue down and EBITDA down materially against guided levels, a swing management has already flagged to the market.

Outlook

We expect FY27 to mark the trough, with revenue recovering over the following two years as Planning & Building's Build AU rollout scales and go-to-market investment starts converting. EBITDA margin should also recover from the FY27 trough, though we expect it to remain below the FY26 peak. The key swing factor is whether Information Intelligence stabilises or continues bleeding share to platform competitors.

Key Risks

Legacy content management revenue continues to erode as Microsoft's SharePoint bundling offers agencies a credible substitute for OCL's core product. Founder Tony Walls controls 65% of shares with no disclosed succession plan, a governance gap that most shareholders are not currently pricing. A capitalised development balance growing 49% year-on-year, while amortisation lags, raises the prospect of an impairment if a product cycle or platform bet underperforms.

What to Watch

The thesis-defining event is the H1 FY27 result in February 2027, which will show whether quarterly annual recurring revenue growth has turned positive or continues declining.

• Feb 2027 H1 FY27 results, ARR trajectory — the clearest signal yet on whether the Defence and NHVR losses are being replaced.
• Q1-Q2 FY27 Build AU customer announcements — five or more council wins would validate the growth thesis behind Planning & Building.

Company Description

Objective Corporation is a vertical software provider built exclusively for government and regulated industries. Information Intelligence, its content and records management platform, generates roughly two-thirds of revenue and serves as the historical core, including the now-lost Defence relationship. Regulatory Solutions, around 19% of revenue, handles compliance workflows for agencies such as transport regulators. Planning & Building, the smallest but fastest-growing division at 14% of FY26 revenue ($18.5 million), sells permit and planning software to local councils across Australia and New Zealand. All three divisions run on a subscription model with government customers on multi-year contracts.

Where the Growth Is

Planning & Building is the standout, growing 41% in FY26 as Build AU gains traction with Australian councils following an established New Zealand rollout. Growth is decelerating toward high single digits as the base scales, which is normal and not a red flag. Council adoption accelerating to ten or more customers by FY29 would make this the single most important variable for the bull case.

Competitive Position

OCL's advantage rests on switching costs rather than technology superiority. More than 2,000 government customers have embedded OCL's workflows into daily operations, often over decades, and net retention outside the lost Defence contract sits around 95%. That advantage looks stable rather than widening: government buyers increasingly favour platform standardisation over best-of-breed software, and Microsoft's SharePoint bundling now offers a credible, cheaper alternative for generic content management. The Defence loss after 26 years illustrates the risk directly, a procurement decision rather than a product failure, but a warning that switching costs are not permanent when a horizontal platform is "good enough."

Management & Capital Discipline

Founder Tony Walls owns 65% of the company, an alignment level rarely seen on the ASX. Capital allocation has been conservative: a 65-75% dividend payout ratio, modest buybacks, and small bolt-on acquisitions such as the $3 million Isovist deal, with no evidence of empire-building. Management has hit guidance in the vast majority of recent periods, including the FY27 EBITDA guidance that matches our own trough estimate. The honest gap: despite total founder dependency, no succession plan has been disclosed, a governance blind spot most shareholders are not pricing.

Financial Position

OCL holds $83 million of net cash and carries no external debt, against total lease liabilities of just $9.6 million. This balance sheet can absorb the FY27 earnings decline, fund the current dividend, and still leave capacity for acquisitions without raising capital. There is no financial health concern here; the risk in this stock is entirely about growth and valuation, not solvency.