Rewardle’s Revenue Climbs 2.8% but FY24 Loss Widens to $3.44M on Rising Costs

Financial Performance and Challenges

Rewardle Holdings Limited has released its preliminary final report for the year ended 30 June 2024, revealing a mixed financial picture. The company saw revenues rise modestly by 2.8% to $9.68 million, reflecting steady demand for its proprietary Business to Business to Consumer (B2B2C) software platform. However, this top-line growth was overshadowed by a significant net loss of $3.44 million, a sharp reversal from the $3.7 million profit recorded in the previous year.

The loss was primarily driven by a 103% increase in total expenses, which ballooned by $6.3 million. Notably, $4.1 million of this increase stemmed from Rewardle’s share of losses in its associate company, CloudHolter Pty Ltd, a MedTech firm developing AI-powered ECG diagnostic software. Operating and employment expenses also rose substantially, fueled by higher consultant and contractor fees to support expanded activities.

Strategic Investments and Expansion

During FY24, Rewardle deepened its strategic partnership with CloudHolter, increasing its equity stake from 39.7% to 49.9%. CloudHolter’s innovative AI software aims to revolutionize heart rhythm diagnostics by offering faster, cheaper, and more accurate analysis than traditional manual methods. Rewardle’s investment reflects confidence in CloudHolter’s growth potential and its ability to generate significant returns as the technology matures and gains global traction.

In addition to health tech, Rewardle expanded into complementary sectors through acquisitions. It acquired controlling interests in Pepperleaf.com.au Pty Ltd, a Melbourne-based meal kit delivery service, and Sub11 Pty Ltd, a fintech publisher and investor engagement consultancy. These moves align with Rewardle’s strategy to build a diverse portfolio leveraging its B2B2C platform, integrating grocery delivery services alongside fintech capabilities such as micro-investing through the UpStreet Investors Fund.

Operational and Regulatory Considerations

Despite these growth initiatives, Rewardle faces operational headwinds. The company’s net current liabilities exceeded current assets by over $6 million, prompting auditors to highlight material uncertainty regarding its ability to continue as a going concern. Rewardle’s securities remain suspended pending the lodgement of outstanding financial reports, adding regulatory pressure and market uncertainty.

The company’s management remains optimistic, citing positive cash flow forecasts and ongoing revenue from strategic partnerships. Rewardle is actively working with auditors to complete its financial statements and aims to resolve the suspension to restore market confidence.

Looking Ahead

Rewardle’s FY24 results underscore the challenges of scaling a technology-driven business while investing heavily in innovation and new markets. The success of CloudHolter’s AI diagnostic platform and the integration of new acquisitions will be critical to turning around profitability. Investors will be watching closely for progress on financial reporting, regulatory compliance, and operational execution as the company navigates this pivotal phase.