Funkified Set to Exceed $500K EBIT Earn-Out with $1.7M in New Contracts

Funkified’s Strong Momentum Validates Vinyl’s Strategy

Vinyl Group Ltd (ASX, VNL) has announced that its events and brand activation subsidiary, Funkified Entertainment, is on track to meet its earn-out target for the 2025 calendar year. This milestone not only highlights Funkified’s robust performance but also serves as a tangible validation of Vinyl’s vertical acquisition strategy; acquiring complementary businesses that enhance overall group margins when integrated.

Funkified, which became part of Vinyl Group in December 2024, has quickly demonstrated its value as an in-house events arm and brand activation agency. Founded in 2009, the company has built a reputation for delivering high-quality experiential marketing campaigns, white-labeling for some of Australia’s largest advertising and creative agencies.

Key Contracts Driving Growth

The subsidiary’s strong trajectory is underpinned by two significant contracts secured for 2025. First, Funkified renewed its sponsorship partnership for the prestigious Ashes Test Cricket Series, valued at $743,000 in revenue. This renewal underscores the company’s ability to maintain long-term client trust in high-profile sporting events.

Second, Funkified inked a new agreement with an international automotive client for launch events scheduled across November and December 2025, with a minimum committed revenue of $1 million. Both contracts are expected to meet or exceed the gross margin targets set under the earn-out agreement, with revenue recognition aligned to project completion within the calendar year.

Financial Outlook and Integration Success

Funkified’s unaudited 2024 financials showed revenues of $4.03 million and an EBITDA of $430,000. With the new contracts, the company anticipates surpassing $4.5 million in revenue and comfortably exceeding the $500,000 EBIT earn-out target for 2025. The earn-out payment will be issued in Vinyl Group shares, subject to escrow and valued at the 15-day volume weighted average price prior to issuance.

Vinyl Group CEO Josh Simons emphasized the strategic importance of the acquisition, stating that bringing Funkified’s events expertise in-house strengthens the group’s live entertainment offering and improves margins. He highlighted that the integration and cultural alignment between the companies have translated into scalable financial performance.

Funkified Managing Director Gus Stephenson praised his team’s execution, noting that record divisional profitability was achieved ahead of schedule through a combination of new partnerships and sustained client relationships. He credited the company’s culture, creativity, and consistency as key drivers of success within the Vinyl Group family.

Looking Ahead

As Vinyl Group approaches the end of 2025, the focus will be on the successful delivery of these major contracts and the subsequent recognition of revenue and earnings. The outcome will provide a clearer picture of the financial benefits of Vinyl’s vertical acquisition strategy and its potential to drive further growth in the competitive media and entertainment sector.