Reckon (RKN) H1 2025 earnings summary

Executive summary

• Delivered $33M in revenue, $14.1M EBITDA, and $4.2M NPAT for HY25, reflecting strong operational performance, organic growth, and the Cashflow Manager acquisition.

• Business Group's cloud-based product Reckon One revenue up 26%; Legal Group subscription revenue up 18% year-over-year.

• Maintains a clean balance sheet with $4.8M net debt and a $25M bank facility as of 30 June 2025.

• Declared a fully franked annual dividend of 2.5 cents per share, to be paid in September 2025.

• Integration of Cashflow Manager completed, contributing positively to results.

Financial highlights

• Revenue increased 16% year-over-year to $33M; EBITDA up 21% to $14.1M; NPAT up 35% to $4.2M.

• Operating cash flow rose to $13.9M from $11.3M in HY24; after development costs, improved to $6.2M from $4.3M.

• Subscription revenue comprises 94% of SME/Business segment and 95% of Legal segment.

• Development investment totaled $8M for the half year; $7.7M invested in cloud-based product development.

• Net debt increased to $4.8M from $2.9M at December 2024, reflecting the acquisition.

Outlook and guidance

• Ongoing investment in cloud product development and scaling, with a focus on transitioning clients to Reckon One.

• Board anticipates paying one fully franked dividend annually following the half year.

• Plans to support and upgrade Cashflow Manager clients to Reckon One over coming years.

• Solid backlog and pipeline for Legal Group expected to support continued growth in 2HY25.