How EPX’s 17% Revenue Surge Fuels Its Industrial Expansion Ambitions
EPX Limited reported a robust 17% increase in revenue for FY2025, driven by a surge in recurring revenue and strategic expansion into industrial sectors following the Coda Cloud acquisition.
- 17% statutory revenue growth to $15.3 million
- 23% increase in recurring revenue, now 98% of total revenue
- 56% reduction in underlying EBITDA loss to ($0.6 million)
- Launch of EDGE Industrial platform and entry into transport vertical
- Improved operating cash flow to $1.4 million
Strong Revenue Growth and Recurring Revenue Focus
EPX Limited (ASX, EPX) has delivered a solid financial performance for the fiscal year ending June 30, 2025, posting a 17% increase in statutory revenue to $15.3 million. This growth was underpinned by a 23% rise in recurring revenue, which now constitutes an impressive 98% of total revenue, up from 94% the previous year. The company’s strategic pivot towards a recurring revenue model reflects its commitment to sustainable, predictable income streams, a critical factor for technology firms in the energy efficiency sector.
Operational Efficiency and EBITDA Improvement
Despite still reporting an underlying EBITDA loss of $0.6 million, EPX has halved this deficit compared to the prior year, marking a 56% improvement. This progress is attributed to disciplined operational efficiencies and a strong conversion rate of revenue growth into EBITDA gains; 36% in FY25 alone. Since initiating its turnaround strategy in FY23, the company has converted over 70% of revenue growth into EBITDA improvement, signaling a positive trajectory towards profitability.
Strategic Acquisition and New Market Entry
A key highlight of the year was the acquisition of Coda Cloud technology and assets, which facilitated the launch of EPX’s EDGE Industrial platform and entry into the transport vertical. This move broadens EPX’s addressable market beyond commercial, hotel, and retail office sectors to include industrial sites, aligning with major real estate investment trusts’ (REITs) asset portfolios. The acquisition, completed for a modest $0.2 million consideration, has already secured $0.5 million in annual revenue, underscoring the strategic value of this expansion.
Investment in Growth and Infrastructure
Operating expenses rose 15% to $17.1 million, driven by targeted investments in new hires across product development, marketing, and sales, as well as IT infrastructure enhancements including cybersecurity upgrades. These expenditures are designed to support EPX’s growth ambitions and improve operational resilience. Notably, the company also incurred acquisition-related costs and restructuring expenses to better align teams with customer needs in key markets such as the UK and Australia.
Cash Flow and Outlook
EPX improved its operating cash flow to $1.4 million, a significant turnaround from a negative $0.2 million in the previous year, reflecting effective cash management alongside revenue growth. Looking ahead to FY26, the company plans to deepen its penetration in core verticals while leveraging the EDGE Industrial platform to capture additional market share. Strengthening sales and marketing efforts will be pivotal to achieving these goals.
Bottom Line?
EPX’s FY25 results mark a clear step forward in its transformation, but the path to sustained profitability will depend on scaling new verticals and managing growth investments.
Questions in the middle?
- How quickly can EDGE Industrial gain traction in the competitive industrial and transport sectors?
- Will the increased operating expenses translate into proportional revenue growth in FY26?
- How will EPX manage potential risks related to international receivables, particularly in the UAE?
