COSOL (COS) investor relations material

Executive summary

• FY25 revenue reached $116.8M, up 15% year-over-year, with 10% organic growth and the acquisition of Two Stone/Toustone enhancing data and AI capabilities, though its initial revenue contribution was below expectations due to longer sales cycles.

• Managed services revenue grew 17.8%, with significant expansion in customers generating over $1M annually and most new clients outside natural resources, supporting diversification.

• Asset Management as a Service (AMaaS) model drove predictable, recurring revenue, with 60% of revenue from repeat sources and 27 clients exceeding $1M annual spend.

• Strategic focus shifted from new customer acquisition to expanding wallet share and margin improvement among existing clients.

• Delivered first AI-powered data governance solution for a major mining client.

Financial highlights

• Underlying EBITDA grew 7% to $16.8M, with margin compression due to pricing pressure and higher delivery costs in advisory services.

• Underlying NPATA increased 3% year-over-year to $9.9M, while underlying EPS declined from 5.24 to 4.78, mainly due to increased amortization from acquisitions.

• Cash conversion improved to 85% of EBITDA, and net working capital as a percentage of revenue decreased, freeing up cash for investment.

• Product-led services accounted for $27.9M (43% gross margin), managed services $29.2M (45% margin), and advisory/professional services $59.7M (20% margin).

• Gross margin declined to 31.8% from 33.6% due to revenue mix; underlying EBITDA margin was 14.4%, down from 15.4%.

Outlook and guidance

• FY26 targets single-digit organic revenue growth and double-digit EBITDA growth, with additional revenue from the full-year contribution of Two Stone/Toustone.

• Focus on expanding operating margins, recurring revenue contracts, and continued investment in AI and digital solutions.

• Dividend payout ratio reduced from 50% to 40% to support ongoing investment in high-margin, non-linear revenue streams.