COSOL Posts $7.9m Profit, Eyes Margin Expansion with AI Push in FY26
COSOL Limited reported a $7.9 million net profit for FY25 on record $116.8 million revenue, driven by strong organic growth and a strategic acquisition. The company signals margin expansion and robust earnings growth ahead, fueled by AI and digital transformation investments.
- FY25 revenue up 14.6% to $116.8 million with 10.7% organic growth
- Underlying EBITDA rises 7.2% to $16.8 million at 14.4% margin
- Statutory NPAT declines 7.3% to $7.9 million amid margin pressures
- Toustone acquisition enhances data analytics capabilities
- FY26 guidance targets high single-digit revenue growth and margin expansion
Record Revenue Amid Margin Pressures
COSOL Limited has delivered a solid financial performance for the fiscal year ending June 2025, posting a net profit of $7.9 million on the back of record revenue of $116.8 million. This represents a 14.6% increase in revenue, driven primarily by a robust 10.7% organic growth rate and the first contributions from its December 2024 acquisition of data analytics firm Toustone.
Despite the top-line momentum, earnings growth was somewhat restrained by margin pressures. Statutory EBITDA increased by 5.0% to $15.8 million, while underlying EBITDA rose 7.2% to $16.8 million, maintaining a 14.4% margin. However, statutory net profit after tax (NPAT) declined 7.3%, reflecting the challenges of operating in a high-growth environment.
Strategic Investments and Dividend Adjustments
In response to the margin squeeze, COSOL is recalibrating its capital management strategy. The company declared a final dividend of 1.168 cents per share, bringing the full-year distribution to 2.168 cents, fully franked. Going forward, COSOL plans to reduce its dividend payout ratio from 50% to 40% of NPAT to retain more earnings for investment in artificial intelligence and digital transformation capabilities.
Managing Director Scott McGowan highlighted the company’s focus on leveraging its integrated asset management solutions, particularly through AI and data analytics, to meet growing demand from blue-chip clients. The acquisition of Toustone is central to this strategy, providing advanced predictive analytics and decision intelligence that enhance COSOL’s service offering.
Looking Ahead – Growth and Margin Expansion
Looking forward to FY26, COSOL expects high single-digit revenue growth, largely organic, supplemented by the full-year impact of Toustone. The company anticipates strong double-digit growth in statutory EBITDA and earnings per share, signaling a rebound in profitability.
To support this, COSOL has reorganized its senior executive team, expanding CFO Anthony Stokes’ operational responsibilities to sharpen focus on profitability. Meanwhile, CEO McGowan will concentrate on strategy execution and client solutions, driving the company’s volume-to-value approach that prioritizes higher-margin services and proprietary software sales.
With multiple new multi-year managed service contracts expected to be announced in FY26, COSOL is positioning itself to capitalize on the digital transformation wave sweeping asset-intensive industries such as transport and energy.
Bottom Line?
COSOL’s FY25 results set the stage for a strategic pivot toward margin expansion and AI-driven growth in FY26.
Questions in the middle?
- How effectively will COSOL integrate Toustone’s capabilities across its client base?
- Can margin expansion keep pace with the company’s ambitious revenue growth targets?
- What impact will the adjusted dividend policy have on investor sentiment and capital allocation?
