Nuix Projects 8-9% ACV Rise to $217M, Cash EBITDA Up to 26%
Nuix projects solid growth in Annualised Contract Value and revenue for the first half of FY25, despite elongated procurement timelines and increased contract complexity.
- Annualised Contract Value expected to rise 8-9% to $215-$217 million
- Statutory Revenue forecasted between $104-$106 million, up 6-8%
- Underlying EBITDA slightly down 1-8%, Cash EBITDA up 7-26%
- Nuix Neo ACV surges 360% to approximately $19 million
- Company targets 11-16% full-year ACV growth in constant currency
Nuix Reports Encouraging 1H25 Financial Outlook
Nuix Limited (ASX: NXL) has provided an update on its expected financial performance for the half year ended 31 December 2024, signaling continued momentum in its core subscription metrics despite some operational headwinds. The company anticipates Annualised Contract Value (ACV) to reach between $215 million and $217 million, representing an 8-9% increase compared to the prior corresponding period (pcp) of December 2023.
This growth in ACV is a critical indicator of Nuix's recurring revenue strength, reflecting the company's ability to secure and expand contracts in its investigative analytics software business. The increase also aligns with Nuix's strategic target of approximately 15% ACV growth in constant currency for the full fiscal year 2025, with current expectations placing full-year growth in the 11-16% range.
Revenue and Profitability: Mixed Signals
Statutory Revenue is forecasted to rise by 6-8% to between $104 million and $106 million for 1H25. The company notes that revenue figures exhibit greater variability than ACV due to the accounting treatment of multi-year deals, which remain broadly consistent in proportion to prior periods.
On the profitability front, Nuix expects Underlying EBITDA to decline modestly by 1-8%, influenced by non-operational legal costs and restructuring expenses. However, Cash EBITDA, which excludes capitalised research and development costs, is projected to increase significantly by 7-26%, underscoring improved cash generation from core operations.
Nuix Neo Drives Exceptional Growth
A standout highlight is the performance of Nuix Neo, the company’s platform offering, which saw its ACV soar approximately 360% year-on-year to about $19 million. The customer base for Nuix Neo expanded from 8 to 46 clients, illustrating strong market adoption and validating the strategic shift from component sales to platform solutions.
However, the company acknowledges that the increasing size and complexity of contracts, coupled with longer procurement cycles, have shifted some anticipated deal closures from the first half to the second half of the fiscal year. This dynamic tempers near-term revenue recognition but is expected to support sustained growth over time.
Cash Position and Strategic Outlook
Nuix ended the half with a healthy cash balance of $30-$31 million and no drawn debt, maintaining its underlying cash flow positive status for the period. The company continues to fund software development from free cash flow and aims to remain underlying cash flow positive for the full year 2025.
Looking ahead, Nuix remains focused on balancing revenue growth with operating cost discipline, excluding non-operational legal expenses. The company’s strategic initiatives, including technology and product development efficiencies, are expected to drive longer-term value despite near-term restructuring costs.
Nuix is scheduled to release its full half year results on 24 February 2025, which will provide further clarity on its financial trajectory and operational execution.
Bottom Line?
Nuix’s robust ACV growth and platform adoption signal promising momentum, but elongated sales cycles warrant close investor scrutiny.
Questions in the middle?
- How will the shift to larger, more complex contracts impact Nuix’s revenue recognition in 2H25?
- What is the outlook for non-operational legal costs and their effect on future profitability?
- Can Nuix sustain its rapid Nuix Neo platform growth amid competitive pressures?
