Spacetalk Reports 17% Revenue Growth and EBITDA Losses Narrowed by 96%

Strong Financial Momentum

Spacetalk Ltd (ASX:SPA) has delivered a compelling update for the third quarter of fiscal 2025, continuing its transformation from a loss-making hardware vendor into a cash-generating, software-driven subscription business. The company reported a 17% increase in revenue to $15.4 million year-to-date, alongside a 20% rise in gross profit, underscoring the growing strength of its recurring revenue streams.

Paying subscribers for Spacetalk Mobile, the company’s mobile virtual network operator service, surged 47% to 42,500 users, reflecting strong customer retention and expansion. This subscriber growth is a key driver behind the company’s improving financial profile, with EBITDA losses narrowing dramatically by 96% to just $0.1 million in the first half of 2025.

Strategic Shift to Subscription and Software

Under CEO Simon Crowther, who joined in early 2023, Spacetalk has pivoted from primarily selling kids’ wearable devices to building a comprehensive family safety ecosystem. This includes hardware-supported software subscriptions and mobile plans that connect families across multiple life stages. The company is actively selling in 11 international markets, leveraging digital channels like Shopify and Amazon to scale rapidly yet efficiently.

A major upcoming catalyst is the planned release of Spacetalk App 2.0 in the first quarter of fiscal 2026. This new software platform promises to significantly enhance the user experience and expand recurring subscription revenue beyond hardware sales, aligning with the company’s goal of reaching $20-25 million in annual recurring revenue (ARR) by 2026.

Operational Efficiency and Market Expansion

Spacetalk’s financial discipline is evident in its 23% reduction in net operating expenses and a 31% improvement in device gross profit margins, now at 30%. The company has also successfully refinanced its $5 million loan facility, easing near-term repayment obligations and freeing up $0.75 million in liquidity to fund growth initiatives.

Geographically, Spacetalk is expanding its footprint with ecommerce-led market entries in the US, UK, Canada, Singapore, New Zealand, Germany, and Sweden. The company is also developing new hardware variants tailored for North America and seniors, alongside pioneering predictive analytics products for elder care, which could open valuable new market segments.

Looking Ahead

Spacetalk’s transition to a subscription-first model and its focus on family safety technology position it well for sustainable growth. The company’s ability to integrate hardware, software, and mobile services into a cohesive ecosystem is a differentiator in a competitive market. However, execution risks remain, particularly around the rollout of new software and international expansion amid evolving market dynamics.