BSA Boosts Q2 Revenue and EBITDA, Raises FY25 Guidance on Contract Extension
BSA Limited reported a robust Q2 FY2025 with revenue up 10.7% and EBITDA surging 31.5%, underpinned by a key contract extension with nbn. The company has upgraded its full-year EBITDA guidance, signaling confidence in sustained profitability.
- Q2 FY2025 revenue increased 10.7% to $71.4 million
- EBITDA rose 31.5% to $7.5 million with margin improvement to 10.5%
- Net cash position strengthened to $2.2 million with $16.5 million undrawn facilities
- Extension of nbn Unified Field Operations Services Contract through September 2025
- FY2025 EBITDA guidance raised to $26 million - $28 million
Strong Quarterly Performance
BSA Limited has delivered a solid financial performance for the second quarter of FY2025, reporting revenue of $71.4 million, marking a 10.7% increase compared to the prior corresponding period. This growth reflects improved volumes and a favourable work mix, particularly in fixed line platforms, which remain core to BSA's service offerings.
More notably, EBITDA surged 31.5% to $7.5 million, lifting the EBITDA margin to 10.5% from the previous year’s 8.3%. This margin expansion underscores the company’s ongoing focus on operational efficiencies and profitability enhancement.
Balance Sheet and Cash Flow Strength
BSA’s financial position has also improved, with a net cash balance of $2.2 million as at 31 December 2024, a significant turnaround from net debt of $3.0 million at the end of the prior quarter. The company holds $16.5 million in undrawn banking facilities, providing ample liquidity to support ongoing operations and growth initiatives.
Operating cash flow was positive at $4.3 million for the quarter, reflecting the improved earnings quality and cash conversion. The company’s ability to generate cash while reducing borrowings highlights disciplined financial management amid a competitive telecommunications services environment.
Contract Extension and Market Position
Strategically, BSA secured an extension of its Unified Field Operations Services Contract with nbn until 30 September 2025, with an option for a further 12-month extension. This contract extension not only provides revenue visibility but also reinforces BSA’s position as a trusted service provider within Australia’s critical telecommunications infrastructure sector.
Additionally, BSA is actively participating in the tender for the new nbn field services contract in partnership with UGL, signaling potential for further contract wins and revenue growth beyond the current agreement.
Upgraded Guidance Reflects Confidence
Reflecting the strong quarterly results and greater clarity on contract timelines, BSA has raised its full-year EBITDA guidance to a range of $26 million to $28 million, up from the previous $24 million to $27 million. This upgrade signals management’s confidence in sustaining the current profitability run-rate, subject to client volumes.
Joint CEOs Arno Becker and Richard Bartley emphasized the company’s commitment to delivering exceptional client services and improving margins, highlighting the positive momentum heading into the second half of FY2025.
Looking Ahead
BSA is set to release its half-year FY2025 results on 20 February 2025, accompanied by an investor briefing. Market participants will be keen to assess whether the company can maintain its operational efficiencies and capitalize on contract opportunities to drive further growth.
Bottom Line?
BSA’s Q2 momentum and contract extension set the stage for a potentially stronger FY2025, but execution on new tenders will be critical.
Questions in the middle?
- How will the outcome of the new nbn field services contract tender impact BSA’s future revenue?
- Can BSA sustain or further improve EBITDA margins amid competitive pressures?
- What are the risks to client volumes that could affect the upgraded FY2025 guidance?
