COSOL (COS) H2 2025 earnings summary

Executive summary

• FY25 revenue reached AUD 116.8 million, up 15% year-on-year, with 10% organic growth, driven by the Toustone acquisition and expansion of managed services and recurring revenue streams.

• Completed the acquisition of Toustone, enhancing data and AI capabilities, and delivered a first-in-market AI-powered data governance solution for a major mining company.

• Expanded customer base, with 27 customers generating over AUD 1 million annually and 60% of revenue from repeat sources.

• Transitioned major projects to multi-year managed services contracts, increasing annuity revenue predictability.

• Focused on expanding operating margins and delivering double-digit EBITDA growth in FY26 through executive reorganisation and operational emphasis.

Financial highlights

• Underlying EBITDA increased by 7% to AUD 16.8 million (14.4% margin), with underlying NPATA up 3% to AUD 9.9 million.

• Underlying EPS declined from AUD 0.0524 to AUD 0.0478 year-on-year, mainly due to higher amortisation and increased shares.

• Cash conversion improved to 85%, reflecting strong working capital management and a 17.2% increase in net operating cash flow.

• Managed services revenue grew 17.8%, with diversification beyond natural resources.

• Dividend payout ratio reduced from 50% to 40% to support reinvestment and AI investment.

Outlook and guidance

• Targeting high single-digit organic revenue growth and double-digit earnings growth for FY26, with full-year Toustone contribution.

• Focus on expanding wallet share within existing customers and margin expansion rather than net new customer acquisition.

• Continued investment in AI and proprietary digital solutions, with AUD 1.5 million planned for FY26.

• Statutory EBITDA and EPS anticipated to achieve strong double-digit growth in FY26.