EBITDA up 38.9% on 10.6% revenue growth; operating cash flow quintupled to...

What changed

Revenue grew 10.6% to $77.0m, while EBITDA rose 38.9% to $10.0m, evidencing clear operating leverage. The pre-tax loss narrowed to $1.3m from $3.6m (a 63.9% improvement), but NPAT only narrowed to $1.5m from $2.4m because the prior-period tax benefit of $0.9m shrank to $0.1m — PBT is the cleaner operating read. Operating cash flow jumped to $14.1m from $3.0m. Cash rose to $21.9m and gross borrowings eased to $18.8m, shifting the group from near-breakeven debt to a $3.1m net cash position. Cinema generated 78.6% of revenue (down from 79.6%), with Film's share edging up to 21.4%.

What matters

• Operating leverage is real but narrow. EBITDA grew roughly 3.7x revenue growth, and EBITDA margin expanded to approximately 13.0% from 10.3%. However, Cinema contribution margin fell to about 28.4% from 30.9%, meaning group margin expansion was carried by Film (margin up to 40.6% from 38.7%) and below-segment-line cost absorption, not by the dominant segment.
• Balance sheet direction is decisively positive. Net cash of $3.1m versus roughly breakeven prior, equity up to $142.7m, and borrowings down $1.3m remove any near-term funding pressure and support management's commentary about "accelerating to meet client demand".
• No quantified guidance or long-term margin target figure is supplied in the release excerpts, despite commentary referencing an upgrade to long-term EBITDA margin aspirations — readers should calibrate expectations to disclosed run-rate rather than stated aspiration.

Expectations

No stated financial target or forward-work metric is provided. The FY24 shape shows HY24 contributed only 46.4% of full-year revenue and 33.3% of full-year EBITDA, so the business is structurally second-half weighted. If that seasonality holds, HY25's $77.0m revenue and $10.0m EBITDA imply materially higher second-half outcomes than FY24. Annualising HY25 revenue gives $154.0m, modestly above FY24's $150.0m record — a reasonable floor rather than a ceiling if the second-half skew repeats. There is no disclosed backlog, ARR, or forward-work figure in the supplied materials to underwrite that assumption.

Quality of result

The EBITDA uplift looks substantively operational, not one-off — no non-recurring items are disclosed — but two cautions apply. First, operating cash flow of $14.1m sits at 141% of EBITDA (versus 41.7% in HY24), an unusually favourable conversion ratio that suggests working-capital timing (customer collection phasing, deferred revenue, or payables) contributed alongside underlying cash earnings. Second, receivables rose to $31.2m from $25.7m, pushing receivable days to 73.7 from 67.2 — that is a directional deterioration in collection pace, even as cash came through on other lines. Free cash flow is referenced by management as positive for the second consecutive half, but no HY25 FCF amount, capex figure, or reconciliation is provided, which limits assessment of durability. HY24 disclosed $9.2m of capital outflows against $3.0m OCF, implying pre-lease FCF of -$6.2m for HY24; the HY25 equivalent is not quantified.

Unresolved

• What was the HY25 capex figure and reconciled free cash flow amount, given FCF-positivity is now headlined twice but not quantified?
• What drove the 250 bps compression in Cinema contribution margin despite cloud-transition momentum, and is it mix, transition costs, or price?
• Why did receivable days extend by 6.5 days, and does this reflect larger enterprise contracts, slower enterprise paying behaviour, or period-end timing?
• What is the quantified long-term EBITDA margin aspiration management references, and over what horizon?
• What proportion of revenue is now recurring/SaaS versus perpetual licence, given cloud transitions are the stated growth driver but no mix disclosure was supplied?

This briefing cannot assess underlying cloud ARR, customer transition pace, or competitive win/loss dynamics because those operational metrics are not included in the supplied materials.

Key metrics

Segment breakdown

Analytical metrics

This analysis was generated using Annolyse, an AI-powered tool that analyses NZX company announcements. The analysis is based on available company filings and standard Annolyse calculations. This is general information only and does not constitute financial advice. The analysis may contain errors. Always read the original company filings and consult a licensed financial adviser before making investment decisions.