Reckon Reports 16% Revenue Growth and $4.2m NPAT in H1 2025
Reckon Limited has reported a robust first half of 2025, marked by significant revenue and profit growth fueled by organic expansion and the acquisition of Cashflow Manager. The company’s cloud-based Reckon One product and US-focused Legal Group continue to drive momentum.
- 16% increase in group revenue to $33 million
- 35% growth in net profit after tax (NPAT)
- Acquisition of Cashflow Manager adds 20,000 SME clients
- Legal Group subscription revenue up 18%, led by US market expansion
- Fully franked dividend of 2.5 cents per share declared
Strong Financial Performance
Reckon Limited (ASX – RKN) has unveiled a compelling set of financial results for the first half of 2025, showcasing a 16% rise in revenue to $33 million and a 35% jump in net profit after tax to $4.2 million. These gains reflect both solid organic growth and the strategic acquisition of Cashflow Manager, which has broadened Reckon’s footprint in the small and medium enterprise (SME) market.
The company’s EBITDA also climbed 21% to $14.1 million, underscoring improved operational efficiency and the benefits of its cloud-based product investments. Operating cash flow after capitalised development costs rose to $6.2 million, reinforcing Reckon’s strong cash generation capabilities despite a net debt increase to $4.8 million following the acquisition.
Cloud and Subscription Revenue Drive Growth
The Business Group, Reckon’s core division, delivered an 8% uplift in cloud subscription revenues, reaching $14 million. The proprietary Reckon One platform was a standout performer, with revenue surging 26% year-on-year. Reckon One’s growth is central to the company’s strategy of transitioning legacy customers to modern cloud solutions, a process expected to unfold over multiple years but already showing promising results.
Subscription revenues now account for 94% of the Business Group’s income, highlighting the shift towards recurring revenue streams. The integration of Cashflow Manager has been completed smoothly, contributing $3 million in revenue and adding approximately 20,000 new SME clients to Reckon’s base.
Legal Group Expansion in US and UK Markets
Reckon’s Legal Group, operating under the nQ Zebraworks brand, reported an 18% increase in subscription revenue to $6.6 million, driven by growth in its Billing Workflows products. The group is focused on expanding its presence in the lucrative US and UK legal markets, serving some of the largest law firms globally and capturing a growing share of the addressable market.
With a strong backlog and pipeline, nQ Zebraworks is leveraging its cloud-based billing and document workflow technologies to deepen penetration in these markets. The company’s recent US$4.5 million funding round and ongoing product development investments signal a commitment to scaling this division’s growth trajectory.
Shareholder Returns and Future Outlook
Reckon declared a fully franked dividend of 2.5 cents per share, maintaining its policy of rewarding shareholders with a healthy yield. CEO Sam Allert emphasized the company’s balanced approach of generating stable cash flows from its established business while investing in high-growth opportunities, particularly in cloud innovation and international legal software markets.
Looking ahead, Reckon’s management acknowledges the challenges inherent in migrating legacy customers to Reckon One but remains optimistic about the long-term value creation this transition promises. The company’s strategic acquisitions and focused R&D spending position it well to capitalize on evolving market demands.
Bottom Line?
Reckon’s strong half-year results set the stage for continued growth, but the success of legacy customer migration and international expansion will be key to watch.
Questions in the middle?
- How smoothly will Reckon manage the multi-year transition of legacy customers to Reckon One?
- What impact will the Cashflow Manager acquisition have on Reckon’s long-term profitability?
- Can the Legal Group sustain its growth momentum in the competitive US and UK legal software markets?
