US Tariffs Delay TZ Sales, But SaaS Growth and Innovation Offer Hope

Quarterly Financial Performance Amid Tariff Challenges

TZ Limited (ASX: TZL) released its Q3 FY2025 Appendix 4C and accompanying business update, revealing a net cash outflow of $1.03 million from operating activities. This shortfall was primarily driven by significant supply chain disruptions in the US market, where new import tariffs triggered port congestion and shipment delays of up to 6–8 weeks. As a result, US sales operated at just 60% of budgeted targets, impacting the company’s overall revenue and profitability for the fiscal year.

Despite these headwinds, TZ’s other international markets performed ahead of budget, though collectively they were unable to fully offset the US shortfall. The company has not yet quantified the full impact of these tariff-related disruptions on its FY2025 consolidated revenue and profitability but has committed to updating the market as more information becomes available.

Strategic Acquisition to Strengthen SaaS and Recurring Revenue

A key highlight of the quarter was TZ’s acquisition of Keyvision Holdings Pty Ltd, a move designed to bolster its SaaS offerings and recurring revenue streams. Funded by a new $4 million secured debt facility, the acquisition expands cross-selling opportunities across TZ’s global operations and is already contributing to a forecasted 20% year-on-year growth in recurring annuity revenue.

The acquisition also enabled a partial repayment of the First Samuel debenture, reducing the outstanding balance to $1.5 million, reflecting prudent financial management despite the challenging environment.

Operational Efficiency and Cost Control

Operating expenditure remained well-controlled, running 10% below budget despite one-off legal and transactional costs related to the acquisition and refinancing activities. Administration and corporate costs increased to $704,000 from $520,000 in the prior quarter, mainly due to fees associated with establishing the new debt facility.

Staff costs and product manufacturing expenses were also carefully managed, supporting the company’s efforts to maintain financial discipline during a period of external uncertainty.

Innovative Smart Locker Technology Gains Recognition

On the innovation front, TZ’s wholly owned Singapore subsidiary, TZI Singapore Pte Limited, won the Building Services & Facilities category at the SBR International Business Awards 2025. The award recognises the transformative impact of TZ’s Smart Locker technology, deployed in partnership with real estate giant CapitaLand across flagship properties such as CapitaSpring, Rochester Commons, and Geneo.

This cloud-controlled, edge-operated locker system integrates multiple digital authentication methods, including facial recognition and QR code access, enhancing security and tenant experience. The collaboration is exploring AI enhancements to enable predictive maintenance, personalised user experiences, and advanced data analytics, positioning TZ at the forefront of smart workplace solutions.

Outlook: Rebound and Growth in FY2026

Looking ahead, TZ remains confident in a stronger performance in the final quarter of FY2025 and into FY2026. The company anticipates a rebound in US sales supported by a robust pipeline, alongside growing demand for its data centre cabinet security products amid global data centre expansion.

Keyvision’s ongoing project wins with major property developers are expected to drive recurring subscription revenue to approximately $1.6 million per annum within the next 12 months. Provided these trends continue, FY2026 is shaping up to be a year of significant growth for TZ.