📚 Objective Corporation Limited (OCL.AX) — Rational Compounder research
Hand-covered research: fundamentals, value vs book, retained-earnings test, earnings trends, cost of capital and fair value — published as written, last updated 2026-09-19.
Author's research notes
| Management Reputation | High |
| Debt Exposure | Low |
| Legal Exposure | Low |
| Inflation Exposure | Low |
| Business Understanding | High |
| Value Prospect | High |
| Progress Prospect | High |
| Wealth Prospect | High |
| Market Sentiment | Fear |
| Risk | Medium |
| Insights | High |
| Stability within Industry | High |
| Ability to Change Pricing | Yes |
| Market Activity | Moderate |
| Public interest? | Medium |
| OK when inverted? | Yes |
| Great company at a fair price? | Yes |
| True earnings? | Yes |
| High fixed charges? | Yes |
| Would hold through a bear market? | Yes |
The Business & Its Moat
Market Reality: Objective Corporation operates in the broader GovTech, Information Governance, Regulatory Technology and Planning & Building software markets, which do not appear to be in a speculative bubble. Demand is being driven by real and increasing government needs including regulatory compliance, information governance, planning approvals, housing delivery, digital transformation and public sector productivity. While the traditional content management market is maturing and facing platform pressure from Microsoft 365 and Copilot, the underlying demand for governance, records management, regulatory workflows and planning systems remains strong because governments still need to meet legal, compliance and operational obligations. OCL's products are therefore solving essential operational problems rather than benefiting from temporary market hype.
The company's products are not flat lined, although growth dynamics differ by segment. Content Solutions remains a profitable recurring revenue franchise but faces increasing Microsoft competition and is likely entering a more mature phase. In contrast, Planning & Building and Regulatory Solutions continue to grow strongly and appear to be at much earlier stages of market penetration. Planning & Building grew ARR by approximately 29-31%, while Regulatory Solutions continues to expand through compliance, enforcement and licensing workflows.
OCL is clearly investigating and expanding into adjacent markets. Over the last decade Tony Walls has progressively transformed the company through acquisitions including Trapeze (planning assessment), Master Business Systems and Alpha 88 (building consent and local government workflows), Itree (RegWorks), Simflofy (federated governance and M365 management) and Isovist (planning intelligence and zoning). These acquisitions expanded OCL from a records management business into a broader GovTech workflow platform covering information governance, planning approvals, building consents, regulatory enforcement and compliance.
The financial community's appraisal of the industry is generally favorable. GovTech software businesses benefit from recurring revenue, long customer relationships, regulatory driven demand and high switching costs. However, investors increasingly distinguish between generic content management software and specialized workflow platforms. The market appears cautious regarding Information Intelligence because of Microsoft's growing capabilities, while remaining positive on Planning & Building and Regulatory Solutions because they address highly specialized workflows where Microsoft is not a direct competitor. OCL itself is generally viewed as a financially strong company with recurring revenue, strong profitability, significant cash reserves, no external borrowings and disciplined capital allocation.
Market sentiment assessment for the industry: Positive. Investors appear concerned about long term pressure on the Information Intelligence segment but increasingly focused on the growth potential of Planning & Building and Regulatory Solutions. The company has demonstrated an ability to identify niche government software markets, acquire specialist competitors, consolidate them into larger platforms and scale them through R&D. The market's key debate is no longer whether OCL can defend traditional content management, but whether its newer workflow businesses can become large enough to drive the next decade of growth. Based on the evidence, OCL is gradually transitioning from a content management company into a diversified GovTech workflow platform with several distinct growth engines.
Challenges: Can Planning & Building and Regulatory Solutions grow fast enough to become larger growth engines before Content Solutions materially slows under Microsoft pressure?
I assessed this question using two approaches: a Bayesian probability model and a heuristic growth model. The first probabilistic model was built using a quantitative framework based on the existing customer base, expansion opportunities through additional modules, the addressable council market across Australia and New Zealand, and the number of new councils required to sustain growth. The second model used a base-rate approach by examining the success rate of comparable GovTech planning and permitting software businesses and then adjusting for factors specific to OCL, including Tony Walls' capital allocation record, successful acquisition history, existing installed base, and the moat built around the Planning & Building platform. Both models converged on a probability of approximately 62%, which increases confidence in the result because two independent methods arrived at a similar conclusion.
From a heuristic perspective, Planning & Building achieved approximately 31% ARR growth in FY25, exceeding the 25% growth hurdle used in the analysis. While past performance does not guarantee future performance, it demonstrates that the business is currently operating above the level required to support the growth thesis. From an investment perspective, the probability appears materially better than a coin flip.
From the opportunity perspective, there are an estimated 40-80 high-value metro councils across Australia and New Zealand that could eventually require software of this type. OCL only needs to win approximately two additional metro councils per year to support the growth assumptions used in the model. OCL already has an installed base of 280+ planning-related council customers, and the model only requires approximately four additional seats or modules per existing council per year to support the growth thesis. This level of expansion does not appear unreasonable given the size of the existing customer base. OCL has spent more than a decade building a specialized Planning & Building ecosystem through acquisitions including Trapeze, Master Business Systems and Isovist. The resulting moat is increasingly based on workflow integration, planning data, customer relationships, and specialized planning expertise. As a result, the company appears reasonably well positioned to offset long-term Microsoft pressure on Content Solutions by growing Planning & Building and Regulatory Solutions into larger contributors to the business over time.
Overall, OCL appears to have assembled the right assets, customer base and strategic positioning to continue the growth trajectory experienced in Planning & Building so far. Based on the assumptions used in the analysis, the probability of success is estimated at approximately 62%, suggesting that Planning & Building has a better than even chance of becoming a major growth engine before any material slowdown in Content Solutions occurs.
Trademark Product / Differentiator: What is the differentiator that gives OCL a statistical advantage?
OCL's advantage appears to be less about a single product and more about its position inside specialised government workflows. The company's Planning & Building and Regulatory Solutions products are deeply integrated into planning approvals, compliance, licensing, consent management, records management and regulatory processes. The moat comes from workflow integration, accumulated domain knowledge, customer relationships, regulatory complexity and switching costs rather than brand power or pure technology alone.
Is the advantage psychological, technological, or operational?
Mostly operational and informational. Unlike Coke or See's Candy, customers do not choose OCL because they love the brand. They choose OCL because the software fits government processes, reduces administrative complexity and becomes embedded in daily operations. The advantage is therefore closer to a workflow moat than a consumer brand moat.
What do we know about the product? The strongest information comes from:
Customer adoption rates, Segment growth rates, Acquisition history, Product descriptions, Long-term customer retention.
The most convincing evidence is not management commentary but the fact that Planning & Building has continued growing strongly and that OCL has successfully expanded through acquisitions such as Trapeze, Itree and Isovist.
Is the company investing in products and technology?
Yes. Much of OCL's growth over the last decade appears to have come from acquiring niche software businesses and then investing in product development and integration. Planning & Building, Regulatory Solutions and Information Intelligence were all strengthened through acquisition strategies that were later expanded internally. This suggests a proven ability to convert R&D and acquisitions into revenue-producing products.
Has previous research and development generated successful products?
The evidence suggests yes. Planning & Building was built through multiple acquisitions and subsequent development. Regulatory Solutions emerged from the Itree acquisition. Simflofy strengthened governance capabilities around Microsoft environments. These appear to have become meaningful contributors to growth rather than failed experiments.
How are production, sales and research? For a software business, production costs are relatively low. The key areas are:
Product development, Customer implementation, Sales execution, Customer expansion.
The company's historical ROIC suggests management has been effective at allocating capital and turning investment into profitable growth.
Was OCL first in its field? Not necessarily first, but it appears to be one of the early and established specialists in several of its government niches. Being first matters less than becoming the preferred solution for customers with complex workflows.
Is OCL a leader in its field?
In several niches, particularly Planning & Building and government information management, OCL appears to be a leading specialist provider. Leadership itself can become a competitive advantage because customers often prefer proven vendors when buying mission-critical government software.
Does the product have a special advantage like Coke or See's Candy? Not in a consumer-brand sense. OCL's equivalent of a brand moat is a workflow moat. Once a council or regulator embeds OCL into planning approvals, compliance processes or records management, replacing it becomes costly, risky and disruptive.
Can OCL maintain good results in the future? The answer appears to depend primarily on Planning & Building. If Planning & Building can continue growing around the mid-20% range while Regulatory Solutions maintains mid-teen growth, then OCL may be able to offset much of the pressure facing Content Solutions. Based on the modelling completed, the future increasingly depends on Planning & Building becoming the dominant growth engine rather than Content Solutions remaining dominant.
Advantage of Scale: Is the production low cost?
Yes. OCL is a software company with very high gross margins and recurring revenue. Once a product is developed, the marginal cost of serving additional customers is relatively low, allowing revenue to scale faster than costs.
Is there an advantage of scale combined with technology?
Yes. OCL benefits from scale in several ways. A larger installed customer base allows development costs to be spread across more customers, increases the amount of regulatory and workflow knowledge embedded in the software, strengthens customer references, and creates more opportunities to cross-sell additional modules such as Build, IsoPlan and Regulatory Solutions. Unlike many large software companies, OCL still appears small enough to remain focused on niche government markets without the bureaucracy often associated with larger technology firms.
What can this company do that others would not be able to do?
OCL appears able to combine specialised government expertise, acquisitions and software development into integrated workflow platforms. Competitors may be able to build software, and governments may be able to build internal systems, but replicating decades of planning, compliance, records management and regulatory knowledge embedded across multiple products is considerably more difficult. OCL can also leverage an existing network of council and government customers to introduce new products at a lower cost than a new entrant would face.
Specialised Within Its Ecosystem: Yes, OCL appears highly specialised within its ecosystem and has built a strong reputation in government information management, planning and regulatory software over several decades. The company exhibits some characteristics of a predator, not through aggressive market domination, but through its ability to identify niche government software businesses, acquire them at reasonable prices, integrate them successfully and then expand their reach through its existing customer base. The evidence from Trapeze, Itree, Simflofy and Isovist suggests management has repeatedly performed "cancer surgery" by acquiring, improving and growing businesses without damaging the core operation. Current issues such as Microsoft pressure on Content Solutions and the Defence contract loss appear to be headwinds rather than signs of fundamental deterioration. The core business remains intact, recurring revenue remains strong, customer relationships remain entrenched, and newer growth engines such as Planning & Building and Regulatory Solutions continue to expand. Consequently, the current challenges appear more consistent with temporary pressure on growth rather than a permanent impairment of the company's competitive position.
Circle of Competence: OCL appears to be operating largely within its circle of competence. Over the last decade, management has consistently acquired and developed businesses adjacent to its existing expertise in government software, regulatory workflows, records management, planning and compliance systems. Acquisitions such as Trapeze, Itree, Simflofy and Isovist all strengthened capabilities in markets OCL already understood rather than expanding into unrelated industries. This reduces capital misallocation risk because management is deploying capital into areas where it possesses domain knowledge, customer relationships and operational experience. The company's historical ROIC and successful integration of acquisitions suggest that capital allocation has generally remained within its circle of competence. The greatest risk would be if OCL started pursuing acquisitions or product development outside government workflow software, but there is little evidence of that so far.
Big Wave to Ride: OCL may be riding several reinforcing waves simultaneously rather than relying on a single growth driver. The first wave is government digitisation, where agencies, regulators and councils continue replacing manual and fragmented processes with specialised software. The second wave is increasing regulatory complexity, which raises the value of Regulatory Solutions and Information Governance platforms. The third wave is Planning & Building, which benefits from housing shortages, urban development and the need for faster planning approvals. The fourth wave is OCL's acquisition and capital allocation strategy, which has repeatedly converted niche software businesses into meaningful growth engines. Unlike a commodity business, OCL's growth is not determined by supply and demand imbalances but by customer adoption, workflow integration and software penetration. The company has a long operating history dating back more than three decades and has demonstrated an ability to adapt, acquire and expand into adjacent niches over time. The most important variable being maximised appears to be Planning & Building adoption, while the added success factors are recurring revenue, switching costs, cross-selling opportunities, government digitisation, and management's strong capital allocation record. If these factors continue reinforcing one another, OCL could benefit from a Lollapalooza-style effect where several independent drivers contribute to growth simultaneously.
Source of Income: Objective's main source of income is recurring subscription revenue from enterprise software sold to government and regulated organisations. The company also earns income from software licences, maintenance and support contracts, implementation services, cloud hosting, and consulting activities. The large recurring revenue base provides stable and predictable cash flows.
Small & Promising, or Large & Ordinary: Small and promising
Risk & Inversion
Inversion Angle: The moat is trust + switching costs. This is what we need to assess for investment. To assess how this moat can be destroyed I have prepared the inversion questions below:
Why will customers leave? Customers are unlikely to leave in large numbers because OCL's moat is built around trusted information management, governance and deeply embedded records rather than simply software functionality. The Defence example suggests that even when a customer is unwilling to renew support arrangements, it may still choose to continue operating the platform because the underlying data, workflows and governance processes remain critical. Government agencies already trust providers such as Microsoft, but trust alone does not appear sufficient to justify migration. The cost, risk and operational complexity of moving decades of records, compliance controls and workflows remain significant barriers. In my view, the more realistic risk is not customer loss but growth compression. As Microsoft 365, Purview and Copilot increasingly own the productivity, search and user-interaction layers, OCL may capture a smaller share of future IT spending while retaining the underlying repository and governance functions. Based on the framework developed above, this could reduce long-term growth from approximately 14.6% to around 11% as a base case, while leaving customer retention largely intact.
How does AI reduce switching costs? AI reduces switching costs by attacking the most painful parts of migration rather than the data itself. Traditionally, moving away from OCL requires organisations to map metadata, recreate workflows, rebuild integrations, transfer permissions, validate compliance rules, retrain users and test thousands of business processes. AI has the potential to automate many of these activities by analysing the existing environment, generating equivalent workflows in a new platform, classifying and mapping records, rebuilding integrations and assisting user training. If successful, agencies would no longer need to manually recreate years of configuration and institutional knowledge. However, AI does not eliminate the need to preserve records, audit trails, governance obligations and legal compliance requirements. As a result, I do not believe AI will cause customers to leave OCL directly. The more realistic risk is that AI lowers the friction and cost of migration enough that agencies become more willing to evaluate alternatives in the future, thereby weakening OCL's switching-cost moat over time.
What happens if Tony Walls steps down tomorrow? The immediate risk is probably not to customers, but to investor confidence and capital allocation. Tony Walls is the founder, largest shareholder and has led Objective for decades. The business appears highly institutionalized, with long-standing government customers, recurring revenue and established products, so a sudden departure is unlikely to cause customers to leave or contracts to disappear overnight. However, investors would likely question whether the next generation of management can allocate capital as effectively, maintain the company culture, execute acquisitions as successfully and preserve long-term government relationships. The most likely outcome would be a reduction in the market's valuation multiple rather than an immediate deterioration in operating performance. The key question is not whether OCL survives without Tony Walls, but whether OCL can continue compounding at the same rate without its founder directing strategy and capital allocation. In addition to this there is no clear succession planning identified for him in the future. This increases the risk associated with this company.
It passes the inversion test but just with some margin. M365 is going to shave growth and this will stagnate growth. However, they have a clear easy to read strategy to recover the revenue lost to M365 with a clear strategy in planning and building followed by regulatory solutions. Tony Walls seems to be a great capital allocator with a high chance of success allocating capital. I think there is going to be a short term impact in the share price as planning and building does the heavy lifting to recover the terrain lost by content to M365. Planning and building are almost untouched by AI due to the specialized software requirements for this segment.
Breakeven Price: 82M with a 34% Buffer
No Brainer Question: Will Planning & Building become large enough within the next 5 years that Microsoft pressure on Content Solutions becomes immaterial? Based on the modelling completed so far, this appears to be a realistic outcome. Under a scenario where Content Solutions gradually slows from 12% growth to 9%, Regulatory Solutions slows modestly from 17% to 16%, and Planning & Building slows from 31% to 25% as it scales, Planning & Building overtakes Content Solutions as the largest contributor to incremental growth around FY29-FY31.
These assumptions appear reasonable rather than aggressive. Content Solutions still grows despite Microsoft pressure, Regulatory Solutions remains supported by specialized regulatory workflows, and Planning & Building benefits from a large installed customer base, cross-sell opportunities, and a remaining pool of high-value councils that could adopt the platform.
Perhaps the most interesting result is that none of the scenarios tested produced a company growth rate below approximately 14%. The reason is that the reduction in growth within Content Solutions is increasingly offset by the growing contribution from Planning & Building and Regulatory Solutions. By the end of the projection period, Planning & Building contributes more incremental growth than Content Solutions despite starting as a much smaller segment.
This does not prove the outcome will occur, and the model remains highly sensitive to the assumption that Planning & Building can continue growing at approximately 25% as it scales. However, based on the available evidence, it appears more likely that Microsoft becomes a headwind to growth rather than an existential threat to OCL's long-term prospects. The central question gradually shifts from Microsoft's impact on Content Solutions to whether Planning & Building can execute strongly enough to become OCL's primary growth engine.
1 Foot Fence, Big Reward the Other Side: OCL is probably not a textbook 1-foot fence, but it may be a 2-3 foot fence that the market is currently pricing as a 6-7 foot fence. If Planning & Building can sustain growth in the mid-20% range, the risk reward appears favourable because the investment thesis depends on only a few measurable assumptions, while the potential upside if those assumptions prove correct appears significantly larger than the downside if they prove only partially right.
Probability & Decision Trees: Bull Case (20%) → Planning & Building sustains ~25%+ growth (60% probability), Regulatory Solutions maintains ~14-17% growth (70% probability), and Content Solutions remains resilient at ~8-10% growth despite Microsoft pressure (55% probability) → Combined outcome probability ≈ 20% → OCL successfully transitions into a diversified GovTech compounder, Planning & Building becomes a major business segment, and the market materially re-rates the stock.
Base Case (55%) → Planning & Building grows at ~15-25% (90% probability), Regulatory Solutions remains healthy in the low-to-mid teens (95% probability), and Content Solutions slows but remains a viable growth business at ~5-10% growth (90% probability) → Combined outcome probability ≈ 55% → OCL continues delivering attractive double-digit growth and the investment thesis broadly succeeds, although without a dramatic re-rating.
Bear Case (25%) → Planning & Building slows materially below expectations (<15% growth) (10% probability), Microsoft pressure exceeds expectations causing Content Solutions to grow below 5% (10% probability), and Regulatory Solutions slows into single-digit growth (25% probability) → Combined outcome probability ≈ 25% → OCL becomes a lower-growth software business and valuation upside becomes significantly more limited.
Critical Decision Node → Can Planning & Building scale into a major business segment while maintaining strong growth? → High Success Probability (60%) → Planning & Building sustains ~25%+ growth and becomes OCL's primary growth engine. → Moderate Success Probability (30%) → Planning & Building grows at 15-20% and still contributes meaningfully to growth. → Failure Probability (10%) → Planning & Building fails to scale sufficiently and Content Solutions remains the dominant driver of outcomes.
Overall Investment Decision → Buy OCL depending on position with respect to intrinsic value → Probability-weighted outcome appears favourable because there is an estimated 75% probability (Bull + Base Case) that OCL remains a double-digit growth company, compared with a 25% probability (Bear Case) that growth slows enough to materially impair the investment thesis. The evidence discussed so far suggests the greatest uncertainty is not Microsoft, but the long-term scalability of Planning & Building.
Psychology & Munger Tendencies
Sauerkraut Effect: OCL may be experiencing a Sauerkraut Effect, where the market remains focused on Microsoft and Defence-related concerns while gradually overlooking the growing importance of Planning & Building and Regulatory Solutions. As these segments continue to deliver results and attract greater attention from analysts, institutions and investors, market perception may eventually shift from viewing OCL as a content management business under threat to viewing it as a diversified GovTech platform with multiple growth engines.
Lollapalooza Effect: OCL may exhibit a Lollapalooza Effect if Planning & Building growth, Regulatory growth, customer expansion, acquisition synergies, and improving investor perception all occur simultaneously, creating an outcome that is disproportionately better than any single factor would suggest.
Ideology Affected: OCL appears largely unaffected by political ideology because its software supports core government, regulatory and council operations that must function regardless of which political party is in power. While political priorities may influence the timing or funding of projects, the underlying need for records management, compliance, regulatory administration and planning systems remains. If political ideology has any impact, it is more likely to be a long-term tailwind as governments continue pursuing digitisation, efficiency and improved service delivery rather than a material risk to the business. The more relevant ideological risk is technology ideology—specifically the belief that broad platforms such as Microsoft can replace specialised government software. OCL's long-term success depends on governments continuing to recognise that planning, regulatory and governance workflows require specialised solutions. Encouragingly, Planning & Building and Regulatory Solutions appear to solve highly specific problems that are difficult for general-purpose platforms to replicate effectively, which may provide some protection against shifts toward platform standardisation.
Multidisciplinary Approach: Software Engineering: Develops and maintains the core platforms used by governments, councils and regulators, determining product quality, integrations, scalability and customer retention.
Government Administration: OCL operates almost entirely within government workflows, making procurement processes, councils, agencies and government decision-making critical to understanding the business.
Regulatory and Legal Systems: Planning & Building and Regulatory Solutions are built around legislation, approvals, compliance and enforcement processes, increasing their value as regulatory complexity grows.
Capital Allocation: A key discipline in understanding OCL, as acquisitions such as Trapeze, Itree, Simflofy and Isovist have been successfully transformed into meaningful growth drivers through management's capital allocation decisions.
Competitive Strategy: OCL competes through specialised workflows rather than broad software categories, with its moat arising from workflow integration, switching costs, customer relationships and domain expertise.
Economics: Recurring revenue, high gross margins and switching costs create attractive business economics, with customer retention and expansion often more important than new customer acquisition.
Psychology: Government buyers tend to be risk-averse, and OCL benefits from reputation, references, proven implementations and the reluctance of customers to switch critical systems.
Data and Information Science: OCL's products manage large volumes of planning, compliance, governance and regulatory information, with accumulated historical data increasing customer dependence on the platform.
Urban Planning and Development: Understanding planning systems, housing shortages, development activity and urban growth is essential to evaluating the Planning & Building segment.
Organisational Behaviour: OCL software becomes embedded in everyday workflows, creating organisational inertia that makes replacement disruptive and costly.
Technology Adoption: Helps explain both Microsoft's threat and OCL's opportunity, with the key question being whether governments prefer broad platforms or specialised solutions for mission-critical workflows.
OCL is not simply a software company. It sits at the intersection of technology, government administration, regulation, planning, psychology, economics and capital allocation. The strongest multidisciplinary insight is that OCL's competitive advantage appears to come less from the software itself and more from its deep integration into government workflows, specialised knowledge, switching costs, customer relationships and management's long-term capital allocation decisions.
First Principles: First-principles analysis suggests the investment thesis is surprisingly simple: if Planning & Building becomes a major growth engine while Regulatory Solutions continues expanding, Microsoft's impact on Content Solutions becomes a manageable headwind rather than a thesis-breaking event. The mathematics, inversion analysis, multidisciplinary assessment and potential Lollapalooza effects all point to the same variable—Planning & Building execution—as the most important determinant of future returns.
Tendencies - Market/Product 1: 4) Doubt avoidance tendency
Tendencies - Market/Product 2: 5) Inconsistency avoidance tendency
Tendencies - Company 1: 1) Reward and Punishment Superresponse
Tendencies - Company 2: 24) Lollapalooza tendency
The Investment Case
Why Is This a Good Investment?: OCL appears to be a good investment because it satisfies the requirements of basic mathematics, common sense, human psychology and business quality simultaneously. The mathematics suggest the company can continue compounding at attractive rates even under conservative assumptions, while recurring revenue, high switching costs and strong historical ROIC support the economics. Common sense suggests governments will continue needing records management, planning and regulatory software regardless of political cycles. Basic human behaviour works in OCL's favour because government customers are risk-averse, prefer proven vendors, resist changing embedded systems and require strong rational justifications for purchases. Compared with many software businesses, OCL's advantage lies in its deep integration into critical government workflows, specialised domain expertise and management's demonstrated ability to allocate capital into adjacent niches successfully. The investment thesis ultimately rests on a small number of understandable variables, primarily the growth of Planning & Building and Regulatory Solutions, making future outcomes more predictable than many other technology investments.
Buffett Tenets: Objective scores highly against Buffett's investment tenets. The business is understandable, generates strong returns on equity, has attractive profit margins, operates in markets with favourable long-term prospects, and is managed by a team that has demonstrated rational capital allocation through R&D investment and disciplined acquisitions. While it lacks the absolute moat of companies Buffett traditionally prefers, the combination of recurring revenue, high switching costs, strong ROE, and long-term growth makes Objective one of the stronger Buffett-style opportunities within the Australian technology sector. It ticks the box of all the tenets.
Stock vs Bond Comparison: Yes, OCL is likely to provide a better long-term return than a bond. While a bond offers greater certainty and lower risk, OCL provides a growing stream of earnings, recurring revenue, strong ROE (~35%), and favourable long-term growth prospects. Therefore, investors willing to accept moderate business risk are likely to achieve superior returns through OCL compared with holding a government bond over the long run.
Which Famous Investors Hold This?: OCL scores highly on shareholder quality. The company is founder-led, with Tony Walls owning approximately 65% of shares, creating strong alignment between management and shareholders. In addition, ownership by respected institutions including AustralianSuper, Vanguard, Dimensional Fund Advisors, AFIC, AMCIL, Mirrabooka and Norges Bank provides independent validation of the company's quality and long-term investment merits.
Chart Analysis: Yes. As per the Trading View app.
Speculation / Investment Type: Analyst's Investment/Growth Investment
Popular?: Intermediate
Any share buybacks?: OCL has historically announced buyback programs and has actually repurchased shares, but the execution has been much smaller than the maximum amount authorised. In the 2023–24 program, OCL repurchased 207,601 shares (approximately 0.22% of shares outstanding) for about A$2.5 million. In January 2026, the company authorised a buyback of up to 9.59 million shares (10% of shares on issue), but by May 2026 had repurchased only 580,705 shares, or roughly 0.61% of the company. Importantly, I could not find any management explanation for why execution was so much lower than the authorised amount. This suggests buybacks are used as a capital allocation option rather than a firm commitment to reduce the share count. Meanwhile, dilution appears modest, with outstanding employee options and rights representing approximately 2.3% potential dilution, and there is little evidence of major equity raisings to fund acquisitions or growth. Overall, OCL's capital allocation has been concentrated on acquisitions and R&D rather than aggressive share repurchases, so I would view the buybacks as a positive signal but not a major part of the investment thesis. Executing the full 10% buyback will take Tony ownership to 72%
Forecasted earnings possible/plausible/probable?: Objective's forecasted earnings are possible because industry conditions support continued growth, plausible because the calculations are consistent with historical revenue and profit trends, and probable because the underlying assumptions—recurring revenue growth, customer retention, and continued digital transformation spending—are reasonably likely to occur.
Financial Diligence
Have You Checked the Taxes?: Yes, I've checked the tax, equity, and R&D disclosures, and overall they make sense. OCL appears to pay a fairly normal level of tax for an Australian software company, the employee equity schemes are conservatively structured with only about 2.3% potential dilution, and there is no sign of aggressive share-based compensation or tax engineering. The company received a $4.0 million R&D tax credit in FY25, which looks reasonable given it invested $31 million in R&D, while the main accounting judgment is the capitalisation of $15.7 million of software development costs that increased the net development asset to $25.5 million. That accounting treatment is standard under software accounting rules and was specifically reviewed by the auditors as a key audit matter. My conclusion is that there are no obvious tax red flags, although, as with most software companies, the capitalised development costs are the area worth monitoring because they have the biggest impact on reported earnings. Overall tax paid in last FY is 13%.
Earning Forecast: Bear 13%, Base 14.7%, Bull 16%
If a Private Business, How Would I Measure It?: If I looked at OCL as a private business, I'd focus on whether it is generating increasing amounts of cash from a highly sticky customer base while maintaining high returns on capital. On that basis, OCL scores well: FY2025 EBITDA was A$46.5m and operating cash flow was A$46.3m, implying almost 100% cash conversion, which is exceptional for a software business. ARR grew to A$120.2m, EBITDA margin was 39%, and ARR growth was 15%, giving a Rule of 40 score of 54, well above the 40% benchmark. Management reinvests heavily into R&D (A$31.2m, or 30% of software revenue) while maintaining strong profitability, suggesting attractive returns on capital. The main concern is concentration risk, with Content Solutions still representing about 71% of ARR, although Planning & Building and Regulatory Solutions are growing much faster and gradually reducing that dependence. As a private owner, the variables I'd watch most closely are ROIC, free-cash-flow conversion, ARR growth, customer retention, and the revenue mix shift away from Content Solutions rather than the share price or quarterly market sentiment.
Management & Context
CEO Time With Company: Founder
How Old Is the Business?: 38 Years
Competitors Analysis 2: OCL consists of three main segments: content solutions, regulatory solutions and planning and building. The main competitors for content solutions are OpenText, for regulatory solutions are Civica and Canalix, and for planning and building are Technology One and Civica as well. OCL's star products for content solutions are Objective Nexus and Objective Connect. This segment is primarily data management at a government level which requires efficiency in quality and quantity. This data management is mainly record keeping and organisation of the data. The main products from Open Text for content solutions are Open Text Content Management and Extended ECM and Open Text Core Share and Core Collaboration. According to my research, Objective Nexus and Objective ECM account for close to 55% of the revenue, Objective Connect for 10%, Objective RegWorks for 16% and Objective Pathway for 6%. These products will be the main objective of this research as they will tell me how well positioned they are against their competitors. The answer to the question below will provide good guidance on whether OCL has competitive advantage.
*Can OCL sustainably grow its market share, maintain its moat, and compound shareholder value faster than competitors through superior products, customer outcomes, regulatory capabilities, switching costs, and execution?
OCL's main revenue for content solutions comes from ANZ (87%) and UK (11%). The main products accountable for most of the revenue in this segment are Objective Nexus, Objective ECM and Objective Connect. This software is pretty much sophisticated records management and information governance software. They organise data, create workspaces, manage document lifecycles, and follow workflows. They allow governments and regulated organisations to organise, control, secure and share their information with a clear auditable trail, helping avoid confusion while meeting compliance, governance and record-keeping requirements. Objective Connect also allows agencies to securely collaborate and exchange documents with external parties such as developers, consultants, contractors and citizens. Their main clients are the government ANZ and UK for content solutions. OCL's content solutions market share in ANZ is 40% and Open Text is 35%. The Content Solutions segment appears to be a high-quality, recurring revenue business with strong visibility, but the opportunity for significant market-share expansion may be limited because most government agencies already have an incumbent records and information management platform. Content Solutions ARR is 12% which could pin down the future growth to that number with little opportunity to increase as the client footprint is unlikely to grow much from where it is at the moment. The Defence Department cancellation of renewal while keeping an old version of the software instead of moving to another competitor, rather than triggering a stock decline it should have triggered, a stock raise proves the moat is strong and durable. There is a high chance that they will come back to the negotiating table. Using Bayesian theorem the probability shoots up to 60% due to the strong prior probability of contract renewal. I can conclude that the content section of the company will grow with a constant ARR of 12% due to strong moat, past history and my own calculation. This matches what OCL has published. However, I can also conclude that the incorporation of M365 can attack OCL's moat and reduce the growth of this segment by 2%.
Regulatory Solutions' main competitors are Civica and Canalix but they actually don't seem to have a direct competitor for this software in Australia. This software is purpose-built to adapt to specific regulatory requirements, therefore it makes the software encroach in the government institutions. This is actually a stronger moat than content solutions as once set up for local regulation it becomes almost irreplaceable. They seem to be competing against internal custom systems, which is interesting as it will include the inefficiencies associated with government organisations. The other competitors are not producing similar software. This segment started in 2020. An annual growth estimated for this segment is 16% even taking into account the lowest new customer base of this segment. The competitor is pretty much competition-less as it seems to be own-build systems from government entities.
Planning and Building is similar to the others; however, there aren't real competitors in this segment which means greater challenges. They have been investing heavily in this segment with the purchase of a few companies that have strengthened the moat. The moat is the inclusion of full vertical integration of all the planning and building segments from loading of applications to final approval.
They seem to be making a key move which is protecting Content Solutions' moat with the working together strategy and the acquisition Simflofy, which is a clear recognition of M365 competition and good corrective measure.
Final combined growth is 14.6% which matches exactly what management has published for future growth if we assume past performance as representation of the future. If we assume a full impact of M365 with a singular absorption of this by the growth then it will become 11%. However, the growth will reach a lower value of 13.5% with the strategy OCL has put in place. The strategy consists of working with M365, M365 does the client facing and OCL governs the data in the meantime. Planning and Building backed up by critical acquisitions keeps double digit growth followed by Regulatory Solutions.
OCL clearly has a competitive advantage over its peers in all segments with content solutions being really eroded by M365.
Employees: Objective demonstrates a strong commitment to its employees through development opportunities, global software development centres, and equity-based incentive programs. While employee satisfaction cannot be independently verified from the annual reports alone, management promotes a flexible workplace culture and continued investment in staff. Employee remuneration appears competitive, supported by salaries, superannuation, and share-based rewards, helping the company attract and retain skilled technology professionals.
Objective appears to be a good employer with strong employee development opportunities, a positive workplace culture, and favourable work-life balance. Glassdoor reviews are particularly strong, with a rating of approximately 4.3/5 and 91% employee recommendation. However, compensation appears to be adequate rather than exceptional, as employee reviews suggest pay and benefits are weaker than the company's culture and development opportunities. Overall, employee satisfaction is positive and should support Objective's ability to attract and retain skilled software engineers.
Fundamentals
| Earning Yield | 6.7% |
| Price to Sales ratio | 4.20x |
| Total Current Assets | $104,750,000 |
| Inventory | $0.00 |
| Working Capital | $34,531,000 |
| Tangible Asset Value | $28,892,000 |
| Market Cap/Tangible Asset Value | 19.13x |
| Income Tax Expense | $7,265,000 |
| % Income Paid on Taxes | 17.6% |
| Book Value Per Share | $1.15 |
| 1.5xBV | $1.72 |
| Interest Coverage | 81.29x |
| Working Capital to Debt | 5.15x |
| EV To Free Cash Flow | 9.63x |
| Net Income Ratio | 28.3% |
| Free Cash Flow Yield | 8.8% |
| Intangibles To Total Assets | 40.6% |
| Price to Equity Ratio | 5.05x |
| Return on Tangible Assets | 31.6% |
| ROE | 33.7% |
| Operating Income Ratio | 31.9% |
| PFCF Ratio | 11.34x |
| ROIC | 26.8% |
| Debt to Assets | 4.8% |
| Quick Ratio | 1.49x |
| Current Ratio | 1.49x |
| Debt to Equity | 0.09x |
| Covariance (SP500) | 6,498.92 |
| Correlation (SP500) | 0.71x |
Value vs Book
| Share Price | $5.78 |
| 52 Week High | $21.00 |
| 52 Week Low | $4.75 |
| Free Cash Flow (TTM) | $48,754,000 |
| IV/BV | 15.47x |
Retained Earnings
| Share Price | $5.78 |
| 52 Week High | $21.00 |
| 52 Week Low | $4.75 |
| Market Cap (TTM) | $552,644,874 |
| EPS (TTM) | $0.39 |
| Dividend (TTM) | $0.26 |
| Ratio P/(E-D) | 78.11x |
| Dividend Yield (TTM) | 4.5% |
| Retained Earnings (TTM) | $0.13 |
| 10Y Retained Earnings (From Last FY) | $0.82 |
Earnings Trends
| 10y Average Earnings | $0.17 |
| 4y Average Earnings | $0.28 |
| Max Earnings | $0.39 |
| Min Earnings | $0.06 |
| 10y EPS Variance | 1.0% |
| 10y EPS SD | $0.10 |
| 4y EPS SD | $0.07 |
| 10y AVG+SD | 0.27x |
| 4y AVG+SD | 0.35x |
| Average 10 Year Growth | 22.0% |
| 10Y Growth (3Y AVG) | 369.6% |
| PE Ratio Average | 41.49x |
| PE Ratio Average 3 Years | 16.06x |
| ETP% Vs AA Bond | 6.2% |
| AVG PE 3Y*PTB Ratio | 81.05 |
Cost of Capital
| Market Cap (TTM) | $552,644,874 |
| Enterprise Value (TTM) | $469,564,874 |
| Long Term Debt (TTM) | $6,710,000 |
| Interest Expense (TTM) | $516,000 |
| ROIC (TTM) | 33.0% |
| Income Before Tax (TTM) | $44,150,000 |
| WACC | 10.2% |
| Total Investments (TTM) | $0.00 |
Fair Value
| Factor of Safety Buffet | 2.89x |
| Forecast EPS 1y | $0.44 |
| Forecast EPS 5y | $0.73 |
| EPS 5y Growth | 88.4% |
| Average P/E | 41.49x |
| Discount Rate | 9.0% |
| Owner Earnings Growth Rate | 13.5% |
| Share Price 10Y | $7.46 |
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