ReadyTech (RDY) H1 2025 earnings summary

Executive summary

• Revenue for H1 FY2025 increased 6.6% year-over-year to AUD 58.3 million, with recurring revenue at 85.6% and strong enterprise contract wins across segments.

• Underlying EBITDA rose 4.6% to AUD 18.2 million (margin 31.2%), while underlying cash EBITDA increased 10.2% to AUD 8.6 million (margin 14.7%).

• Net loss after tax was AUD 18.7 million, mainly due to a non-cash impairment of AUD 19.9 million in the Government & Justice segment.

• Major contract wins in Workforce Solutions, Education (first university win), and Justice, plus the acquisition of CouncilWise to accelerate Local Government growth.

• Ongoing investment in R&D (29% of revenue) and AI-driven product innovation to support future growth.

Financial highlights

• H1 FY2025 revenue: AUD 58.3 million (+6.6% YoY); recurring revenue at 85.6%.

• Underlying EBITDA: AUD 18.2 million (margin 31.2%), underlying cash EBITDA: AUD 8.6 million (margin 14.7%).

• Net revenue retention at 102%; annualised R&D investment at 29% of revenue.

• Non-cash impairment of AUD 19.9 million in Government & Justice segment.

• Cash and cash equivalents at period end were AUD 11.3 million; net leverage ratio: 0.86x.

Outlook and guidance

• FY2025 revenue growth expected at high single digits; low double digits for all segments except Local Government.

• Underlying EBITDA margin (ex-LTIP) targeted at 33–34%; cash EBITDA margin at 17.5–18.5%.

• Medium-term (FY2027) revenue target: AUD 160–170 million, with cash EBITDA margin above 20%.

• Management expects continued growth in H2, driven by a strong contract pipeline and recent acquisitions.

• Margin expansion and operating leverage anticipated in 2H FY25 and beyond, supported by enterprise pipeline and cloud adoption.