HighCom (HCL) H2 2025 earnings summary

Executive summary

• Achieved a significant turnaround in FY25, returning to positive EBITDA of $0.2 million after a large loss in FY24, driven by cost reductions, inventory optimization, and recommissioning of the XTclave production line.

• Revenue grew 6% year-over-year to $48.1 million, with both Armor and Technology segments contributing.

• Major investment in XTclave and a full business review have positioned the company for growth and margin improvement in FY26.

• Cost controls, inventory reduction of over $3 million, and a new executive team contributed to operational stabilization.

• Both business units now generate positive EBITDA, covering corporate costs.

Financial highlights

• EBITDA increased by $9.8 million to $0.2 million, marking a return to profitability.

• Revenue rose to $48.1 million, up 6% year-over-year; gross profit was $11.0 million, down $2.4 million from FY24.

• Cash balance at year-end was $5.8 million, with no debt and $3.8 million in available debt facilities.

• Gross margin declined to 23% from 30% due to discounted sales and clearing impaired inventory.

• Employee costs reduced by $1.7 million and operating expenses by $2.7 million.

Outlook and guidance

• Anticipates increased gross margins in FY26 as new XTclave products launch and impaired inventory is cleared.

• Expects revenue and EBITDA growth in FY26 without materially increasing operating costs.

• Defense sector outlook remains strong due to global geopolitical instability and rising defense spending.

• Short-term challenges in Q1 FY26 due to US government funding delays.

• Armor and Technology businesses are positioned for growth, with new product development underway.