Spectur Edges Closer to Profitability with Q2 Revenue and Cash Flow Gains

Spectur’s Financial Momentum Builds

Spectur Limited (ASX: SP3) has reported a solid performance for the second quarter of fiscal year 2025, demonstrating incremental revenue growth alongside positive operating cash flow. The company’s consolidated revenue for Q2 FY25 reached $2.234 million, a modest increase from $2.228 million in the prior quarter and a 6% rise compared to the same period last year. This steady upward trajectory reflects Spectur’s ongoing transition from a growth-centric model to one focused on sustainable profitability.

Recurring revenue, a key metric for subscription-based and service-oriented businesses, showed particularly strong growth. At $1.581 million, it was up 6% from the previous quarter and 17% year-on-year. This increase was partly driven by the reclassification of Guard Services revenue into recurring income, underscoring the stabilisation and growing significance of this revenue stream.

Cash Flow and Cost Management

Importantly, Spectur generated $287,000 in net operating cash flow during the quarter, marking a positive turnaround from prior periods. The company’s consolidated cash reserves stood at $869,000 at the end of December 2024, providing a buffer as it continues to execute its strategic initiatives. While receipts from customers declined slightly due to the absence of significant advance payments, overall revenue growth and disciplined cost control helped maintain cash flow positivity.

Cost reduction efforts have been a focal point, with the company implementing staff restructures, property lease rationalisations, and software license optimisations. These measures, combined with productivity improvements and a simpler, more stable core technology platform, are expected to yield full payroll savings by March 2025 and further operational cost benefits by the end of the financial year.

Looking Ahead: Profitability on the Horizon

Interim CEO Anthony Schmidt highlighted that Spectur anticipates moving into consistent profitability by Q3 FY25. This marks the culmination of a longer-than-expected strategic transition away from growth at all costs toward a more balanced approach emphasizing profit and positive cash flow. With a leaner cost base and recurring revenue growth, the company aims to generate positive EBITDA results based on current sales orders and revenue run rates.

In addition, any additional revenue growth in the second half of FY25 is expected to contribute directly to improved gross margins and bottom-line performance. The repayment of the Radium Capital R&D loan during the quarter has also eliminated structural debt, further strengthening the company’s financial position.

Spectur’s portfolio of solar-powered, IoT-enabled security and environmental monitoring solutions continues to serve a diverse customer base across Australia and New Zealand. With nearly 3,000 camera systems deployed and over 600 active customers, the company is well positioned to leverage its technology and cloud platforms for future growth.

While the company’s progress is encouraging, the full impact of cost savings and revenue growth will be closely watched by investors as Spectur navigates the remainder of FY25.