EBITDA up 188% but OCF fell 52% and net cash buffer erased

EBITDA rose 188% to NZ$7.2m (from NZ$2.5m), the loss before tax narrowed 63.6% to NZ$3.6m and NPAT improved 72.4% to a NZ$2.4m loss. Revenue, however, was essentially flat at NZ$69.6m (-0.1%) — below Annolyse's historical baseline of 0.2%-55.2% growth (3-period mean 22.0%).

Cash moved the other way. Operating cash flow fell 51.6% to NZ$3.0m, and cash conversion (OCF/EBITDA) dropped to 41.7% from 248.0% in the prior half. Cash and equivalents halved to NZ$20.0m from NZ$37.1m, and with gross borrowings of NZ$20.1m the company moved from a NZ$18.2m net cash position to roughly net-flat (net debt NZ$0.1m). Post-lease free cash flow was NZ$-8.5m, with capex of NZ$9.4m absorbing 13.5% of revenue.

Cinema dominated mix at 79.6% of revenue (vs 68.2% prior), with disclosed gross margin lifting to 31.0% from 16.6%.

EBITDA was up 188% but OCF fell 51.6%, and FCF was NZ$-8.5m. This matters because management's stated "free cash flow positive in Q4 2024" milestone now requires a sharper turn in the cash trajectory than in reported EBITDA, with no headline guidance to anchor the bridge.

2. Revenue is below the historical baseline. Top line is flat against a 3-period mean of 22.0% growth, so EBITDA expansion is being delivered by Cinema margin (+14pp) and cost discipline rather than volume. This matters because once the cost lever is fully pulled, durable operating leverage requires recurring-revenue growth to resume.

3. The net cash buffer has effectively disappeared. Cash fell NZ$17.1m while borrowings rose, taking net debt/EBITDA to 0.01x — above Annolyse's historical baseline of -7.28x to -0.31x, where Vista has consistently held net cash. This matters because the financial runway to deliver Q4 2024 FCF-positive operations is now materially tighter than in any recent half.

Annolyse's H2 shape baseline (HY23/FY23) shows the second half historically generates the larger share of revenue (~51%) and EBITDA (~81%), so a higher H2 EBITDA print is consistent with seasonality. However, the implied HY23 second-half OCF was only NZ$2.8m, so hitting Q4 FCF-positive requires both a meaningful step-up in H2 OCF and a moderation in software capex from the NZ$9.2m run-rate booked in HY24.

The release supports the direction of travel on profitability but does not quantify the cash bridge, which is where the residual uncertainty sits.

Cinema gross margin of 31.0% on disclosed segment data and a 188% EBITDA lift point to operational gains from the 2023 transformation. The effective tax rate of 25.0% is above the historical baseline of 7.7%-23.8%, so PBT growth of 63.6% is the cleaner operating read than the 72.4% NPAT figure — the gap is tax distortion, not improving economics.

Quality is weaker on cash. OCF of NZ$3.0m did not cover NZ$9.4m of capex, so reported earnings are not self-funding. Debtor days fell to 67.2 (below the historical range of 67.8-187.8 days) and trade debtors dropped 15.2% to NZ$25.7m, so receivables are not the source of the OCF shortfall — the gap appears to sit in payables, contract liabilities or higher cash operating outflows that the release does not reconcile. Until that bridge is shown, the strength of the EBITDA print should not be read as proof of underlying cash quality.

This briefing cannot assess management's specific Q4 2024 cash bridge because forward-work, deferred revenue and Vista Cloud transition pacing data are not supplied.