ReadCloud Doubles EBITDA on Strong VET and eBook Sales Growth
ReadCloud Limited reports a 109% surge in underlying EBITDA to $757k for FY25, driven by robust growth in VET-in-Schools fees and domestic eBook sales, alongside positive cash flow improvements.
- 109% increase in underlying EBITDA to $757k
- 29% growth in VET-in-Schools partnering fees to $5.3m
- 17% rise in Australian domestic eBook sales to $4.6m
- 5% overall revenue growth to $12.9m
- Positive cash flow of $489k and $1.9m cash balance
Strong Earnings Momentum in FY25
ReadCloud Limited (ASX – RCL), a provider of eLearning solutions to Australian schools and the vocational education sector, has delivered a solid set of preliminary FY25 results. The company reported a 109% increase in underlying EBITDA to $757,000, reflecting sustained earnings momentum and disciplined cost management. Consolidated revenue rose 5% to $12.9 million, underpinned by growth in key segments.
Growth Driven by VET-in-Schools and eBooks
The standout performers were ReadCloud’s VET-in-Schools partnering fees, which grew 29% to $5.3 million, and Australian domestic direct eBook sales, up 17% to $4.6 million. These segments benefited from strong customer engagement and strategic investments in marketing and school outreach, including conferences in Australia, the UK, and Indonesia. This growth helped lift the group’s gross profit from $6.6 million in FY24 to $7.3 million in FY25.
Challenges in Industry Training and International Sales
However, not all areas performed equally well. Revenue from Southern Solutions, the company’s industry training arm, declined 28% to $1.9 million, continuing a trend noted in earlier reports. International eBook sales also fell sharply by 77% to $55,000. ReadCloud has responded by restructuring its eBooks team and transitioning leadership of international sales to better position for FY26.
Cash Flow and Financial Position
ReadCloud achieved its first positive cash flow, reporting $489,000 for FY25, a $767,000 improvement year-on-year. The company ended the September quarter with $1.9 million in cash, up 34% from the prior year, and remains debt free. Operating expenses increased modestly by 4%, driven mainly by higher advertising and travel costs aimed at supporting future sales growth.
Outlook and Strategic Focus
Management is focused on maintaining growth momentum and unlocking operating leverage through disciplined execution. Customer retention and value metrics are being closely monitored to ensure gains from organic growth are captured. The company anticipates another strong year of revenue growth in FY26, particularly in VET-in-Schools and domestic eBook sales, which should further improve profitability and cash flow.
Bottom Line?
ReadCloud’s FY25 results mark a turning point with doubled EBITDA and positive cash flow, but challenges in industry training and international sales remain key areas to watch.
Questions in the middle?
- How will ReadCloud address the ongoing revenue volatility in Southern Solutions?
- What impact will the restructuring of the eBooks team have on international sales recovery?
- Can the company sustain its marketing investments while improving profitability in FY26?
