Connexion Mobility Posts 6% Revenue Growth and 68% Profit Surge in Q2 FY25

Robust Financial Momentum

Connexion Mobility Ltd (ASX: CXZ) has delivered a compelling quarterly update for Q2 FY25, showcasing steady growth across key financial metrics. Revenue climbed 6% quarter-on-quarter to $2.8 million, marking the company’s ninth consecutive quarter of revenue expansion. Gross profit followed suit with a 3% increase to $1.93 million, while net profit before tax surged 68% to $0.96 million. This translated into a 71% uplift in diluted earnings per share to 0.077 US cents, underscoring improved profitability and operational leverage.

These results reflect Connexion’s successful execution of its SaaS-based mobility platform strategy, primarily servicing US automotive OEMs and franchised dealerships. The company’s subscription revenue streams continue to gain traction, supported by both OnTRAC and Connexion platforms, which manage courtesy transportation activities such as loaner cars, shuttles, and ridehail services.

Subscription Growth and Product Expansion

Subscription-based SaaS revenue reached $2.09 million, marking the eleventh consecutive quarterly increase since Q3 FY22. This growth is complemented by a 5% rise in fixed-dollar SaaS revenue, linked to ongoing product enhancements and maintenance services. Service revenue also grew 15% quarter-on-quarter, reflecting one-off customisation projects.

Notably, Connexion’s Marketplace subscriptions, launched in H2 FY24, are gaining momentum with a steady increase in both paid and trial users. The OnDemand platform, developed in partnership with Uber for Business, progressed from pilot to general launch, ending the quarter with 30 active subscriptions. These developments highlight the company’s strategic focus on deepening user engagement and leveraging proprietary features to drive marketplace sales.

Strategic Focus and Customer Diversification

Connexion is actively pursuing revenue diversification through multiple channels: expanding relationships within existing OEM customers, entering new OEM accounts, and broadening dealership partnerships. The company reported a near doubling (96%) of Customer Diversification Annualised Monthly Recurring Revenue (AMRR) compared to June 2024, indicating reduced dependency on the General Motors Courtesy Transportation Program.

While growth spend on research and development decreased by 7.4%, sales and marketing investments rose by 6.6%, reflecting a tactical shift towards commercialisation and customer acquisition. Connexion’s disciplined capital management includes ongoing share buybacks, with 22.2 million shares repurchased during the quarter at an average price of A$0.026, enhancing intrinsic shareholder value.

Cash Flow and Currency Impact

Operating cash flow declined 62% to $0.17 million, a point of caution amid strong earnings growth. The company attributes this partly to foreign exchange movements, with the AUD:USD rate falling 11% over the quarter, negatively impacting the USD value of AUD-denominated balance sheet items. However, Connexion anticipates a sustained positive effect on operating cash flow over time due to currency dynamics.

Net cash and investments decreased by $0.63 million to $4.5 million, maintaining a solid liquidity position to fund ongoing growth initiatives.

Looking Ahead

Connexion’s mission to be the essential link between fleet owners and the future of mobility remains firmly on track. With meaningful commercialisation of its loaner product and ongoing development of shuttle and ridehail solutions, the company is well-positioned to capture further market share. Its strategy to deepen customer relationships and expand its user base across OEMs and dealerships sets the stage for sustained SaaS revenue growth.

As Connexion continues to invest in product innovation and user engagement, the market will be watching closely to see how these efforts translate into accelerated subscription uptake and improved cash flow dynamics in coming quarters.