Beonic Advances Toward Profitability with 5.3% Revenue Growth and Margin Expansion

Strong Revenue Growth and Margin Expansion

Beonic Limited (ASX: BEO) reported a solid performance in its Q2 FY2025 update, with recurring revenue climbing 5.3% year-on-year to $4.4 million and annualised recurring revenue (ARR) reaching $17.6 million, up 4.3% from the prior corresponding period. This steady growth in subscription-based income underscores the company’s expanding footprint in the Internet of Things (IoT) solutions market, particularly across airports and retail sectors.

More notably, Beonic achieved a gross margin of 77.4% year-to-date, a substantial improvement from 68.5% in FY2024. This margin expansion reflects the company’s ongoing efforts to enhance operational efficiency and cost discipline, critical steps as it moves closer to profitability and cashflow breakeven, which it forecasts to achieve in the second half of FY2025.

Contract Wins Cement Market Position

During the quarter, Beonic secured several significant new contracts and renewals, reinforcing its position as a global leader in intelligent place management. Key wins include a three-year agreement with JFK International Airport in the US to expand its Passenger Flow Management System using Lidar technology, and deployments across nine venues in LaTrobe City, Australia, enhancing visitor management capabilities.

Additional contracts in Brazil with Cooperativa Veiling Holambra and the JCPM Group, as well as renewals with Heathrow Airport and The Trafford Centre in the UK, demonstrate Beonic’s broad geographic reach and sector diversification. These contracts not only contribute to recurring revenue but also validate the effectiveness of Beonic’s AI-driven platform in improving operational performance and customer experience.

Leadership and Investor Engagement Initiatives

Beonic appointed Marc Thompson as Chief Technology Officer, effective February 10, 2025. Thompson brings valuable experience from his previous role as CTO at NewBook, where he successfully led technology scaling and innovation. His arrival is expected to accelerate Beonic’s product development and technological edge.

Post-quarter, Michael Pearce was appointed Company Secretary in addition to his CFO role, streamlining corporate governance. The company also launched the Beonic Investor Hub, an interactive platform designed to enhance transparency and engagement with shareholders and potential investors, reflecting a commitment to open communication during this growth phase.

Financial Discipline and Outlook

Beonic reported a net cash outflow from operations of $725,000 in Q2, positively impacted by the capitalisation of $632,000 in R&D costs under accounting standards. Staff and administration costs were reduced by $0.5 million compared to the prior year, evidencing effective cost management.

The company’s debt facilities remain fully drawn at approximately AUD 5 million, with no financial covenants attached, providing a stable capital structure as Beonic pursues cashflow breakeven. The management’s outlook remains cautiously optimistic, focusing on converting a qualified deal pipeline valued at $28.7 million and maintaining gross margin improvements.

Beonic’s strategic priorities for the remainder of FY25 include solidifying its leadership in IoT solutions for airports and retail, driving product adoption, and delivering operational excellence to minimize customer churn. These efforts will be critical to sustaining momentum and achieving financial stability.