Bubs Australia (BUB) H1 2025 earnings summary

Executive summary

• Achieved first-ever half-year net profit after tax of $3.6 million, reversing a $7.7 million loss year-over-year, with EBITDA turning positive at $0.5 million from a $7 million loss.

• Revenue grew 23% year-over-year to $48.5 million, driven by strong growth in the USA, China, and Rest of World markets.

• Gross margin improved to 50%, exceeding the 40% target, reflecting premium brand positioning, high-margin products, and improved inventory management.

• Net cash used in operating activities reduced to $0.5 million from $12.2 million year-over-year, with cash reserves of $17.2 million and $5 million in undrawn debt facilities.

• Significant progress made toward sustainable free cash flow and profitability, with positive developments in key markets.

Financial highlights

• Revenue: $48.5 million (+23% YoY); USA $23.2 million (+28%), China $10.2 million (+45%), Rest of World $4.6 million (+85%), Australia $10.5 million (down 10% YoY, but core portfolio up 16%).

• Gross margin: 50% for the half, up from 49% YoY.

• Operating expenses to revenue ratio decreased to 52% from 68% YoY.

• Brand marketing investment increased to 16% of revenue to support new global branding.

• Basic and diluted EPS: $0.004 (vs. $(0.010) YoY).

Outlook and guidance

• FY25 revenue guidance reaffirmed at $102 million, up 28% YoY, with gross margin forecast upgraded from 40% to 45%.

• Expects to be EBITDA positive before share-based payments and cash flow positive in Q4 FY25.

• FDA clinical study submission by June 2025, with permanent US market access expected by October 2025.

• Continued growth expected in China via O2O and CBEC channels; Canada market entry expected in FY26.

• Management targets breakeven before share-based payments in FY25.