Kinatico Ltd (ASX:KYP) is a ‘Know Your People’ regtech company providing workforce compliance monitoring and management technology and services. The company has reported Q3 revenue of $8.5m, up 5% on the previous corresponding period (pcp) and driven by a 27% uplift in higher-margin SaaS (Software-as-a-Service) revenue which now accounts for more than 60% of total revenue (61% in Q3). EBITDA for the quarter increased 30% to $1.3m. SaaS revenue is now tracking at $20.6m on an annualised basis, up 27% on Q3 FY25 and more than double the annualised run rate at the end of Q3 FY24. Transactional revenue for the quarter declined faster than we had anticipated, falling 30% to $3.3m, with the company noting that the global fuel crisis was creating headwinds for companies hiring, the key source for transactional revenue. Kinatico also noted that while it sees enterprise buying demand increasing, with the qualified pipeline up 20% to $12m from Q2 FY26, the software sales cycle had increased by up to 25% to 134 days, delaying decisions. Despite the longer sales cycle, Kinatico says its confident it will benefit from the regulatory tsunami for anti-money laundering (AML) and Payday Super coming from July 1, 2026. The company also highlighted it was extending its AI platform to recognition for any credential with virtual verification officers augmented with human oversight. This will likely extend the reach of the Kinatico Compliance (KC) platform into jurisdictions not previously imagined. We have adjusted our FY26 forecasts to reflect the lower transactional revenue, but higher SaaS revenue, resulting in a 1% downgrade to our FY26 revenue forecast. However, the operating leverage delivered by higher SaaS revenue means that we have retained our forecast for $5.8m in underlying FY26 EBITDA and $1.9m for underlying NPAT for FY26. Our FY27 and FY28 forecasts have lifted to reflect higher SaaS revenue in those years, but lower transactional, with the higher SaaS revenue delivering operating leverage. Our DCF valuation remains unchanged at $0.45/share, although we have increased our beta to 1.3 from 1.23 to reflect higher risk in the economic environment, resulting in the WACC increasing to 13.0% from 12.5%. A +/-10% sensitivity analysis on our base-case forecasts yields a valuation range of $0.29-$0.67/share.