Viva Leisure has delivered record revenue and profitability in the first half of FY2025, driven by robust membership growth and technology integration, reaffirming its strategic focus on operational efficiency and cash flow generation.
- Revenue up 25.2% to $99 million, EBITDA up 26.2% to $21 million
- Membership base surges 71.9% to over 593,000 members
- Network expands to 476 locations with 118 more secured globally
- Technology and payments revenue grows 124%, driven by Viva Pay and The Hub
- Company commits to share buy-back and capital management initiatives
Record-Breaking Financial Performance
Viva Leisure Limited (ASX: VVA) has reported a stellar first half for FY2025, posting record revenue of $99 million, a 25.2% increase over the prior corresponding period. EBITDA rose 26.2% to $21 million, with margins improving slightly despite a challenging cost environment. Net profit after tax (pre-AASB16) also climbed 15.2% to $5.5 million, underscoring the company’s ability to convert top-line growth into solid profitability.
The company’s adjusted free cash flow jumped 22% to $15.9 million, bolstering its already strong balance sheet, which holds $18.1 million in cash. This financial strength provides a solid foundation for Viva Leisure’s ongoing expansion and operational leverage.
Membership and Network Expansion Drive Growth
Membership growth was a standout feature, with total members exceeding 593,000, a remarkable 71.9% increase year-on-year. Corporate memberships alone surpassed 238,565, reflecting the success of Viva’s diversified membership strategy. The network now operates 476 locations worldwide, with an additional 118 secured sites poised to open, bringing the total footprint to 594 locations.
Viva Leisure’s franchise brands, including Plus Fitness, Boutique Fitness Studios, and World Gym Australia, continue to expand internationally, securing new markets in Singapore, Hong Kong, the Philippines, and the UK. This global footprint diversification is a key pillar of the company’s growth strategy.
Technology Integration Fuels High-Margin Revenue
The technology and payments segment delivered explosive growth, with revenue surging 124% to $6.4 million. This was largely driven by the expansion of Viva Pay, which now processes over $300 million in annual transaction volume, and the rollout of The Hub, Viva’s proprietary gym access and payment system. These innovations not only enhance operational efficiency but also create new high-margin revenue streams.
Looking ahead, Viva Leisure plans to launch a series of unified access apps in the second half of FY2025, aiming to unify its network and unlock further growth opportunities. The company’s growing vending machine and digital signage networks also contribute to its diversified revenue base.
Strategic Focus Shifts to Optimisation and Cash Flow
CEO Harry Konstantinou highlighted a strategic pivot for the next 12 months, focusing on optimising the value of the existing network rather than aggressively opening new sites. This shift aims to prioritise free cash flow generation and maximise returns from the established portfolio, leveraging the scale and technology infrastructure built to date.
Viva Leisure reaffirmed its Q4 FY2025 forecast, expecting quarterly revenue to exceed $56 million and EBITDA to surpass $12.5 million. The company also continues its on-market share buy-back program, having repurchased $1.9 million worth of shares in the half, and is exploring additional capital management initiatives supported by anticipated free cash flow growth.
Outlook and Market Position
Viva Leisure’s consistent half-on-half growth and scalable business model position it well within the competitive health and fitness sector. Its diversified revenue streams, expanding global footprint, and technology-driven approach provide multiple levers for sustainable growth. However, the company’s success will depend on its ability to execute on optimisation strategies and maintain momentum amid evolving market dynamics.
Bottom Line?
As Viva Leisure shifts focus to optimising its vast network and cash flow, investors will watch closely to see if this strategic pivot sustains its impressive growth trajectory.
Questions in the middle?
- How will Viva Leisure balance network optimisation with future expansion plans?
- What impact will the rollout of unified access apps have on member engagement and revenue?
- Can Viva sustain its high-margin technology growth amid increasing competition?