Infomedia’s AI Acquisition and Buyback Raise Execution Questions

Half-Year Financial Highlights

Infomedia Ltd (ASX: IFM), a global leader in automotive data and software solutions, has delivered a resilient financial performance for the half-year ended 31 December 2024. The company reported revenue of $71.2 million, marking a modest 2% increase compared to the prior corresponding period. More notably, net profit attributable to shareholders surged by 63% to $8.3 million, reflecting improved operational efficiencies and a favourable macro environment despite ongoing industry disruptions.

The company’s adjusted net profit after tax (NPATA) rose 11% to $10.5 million, underscoring the underlying strength of its diversified product suite. Recurring revenue grew 3% to $70.7 million, highlighting the stability of Infomedia’s subscription-based business model. The group’s exit Annual Recurring Revenue (ARR) reached $141.4 million, a 1% increase on a constant currency basis, while Annual Recurring Costs (ARC) also rose by 1%, indicating disciplined cost management.

Strategic Investments and Operational Initiatives

Infomedia continued to invest in scaling its business, focusing on leadership enhancements and technology upgrades. Key appointments in the EMEA and Americas regions aim to strengthen regional sales capabilities. The company also expanded its research and development capacity, leveraging offshore resources to maintain margins while accelerating innovation.

Significant progress was made in integrating data platforms, notably the joint data landing between SimplePart and Microcat, which has optimized resource allocation. Ongoing projects include rebuilding the InfoDrive CX technology stack for global scalability, rolling out a customer success program, upgrading enterprise systems, and expanding product offerings into new markets.

Acquisition and Capital Management

In a move to accelerate its AI capabilities, Infomedia announced on 18 February 2025 the acquisition of a 50% stake in Intellegam GmbH, a German company specializing in generative AI solutions for automotive B2B repair data interpretation. The €6.1 million (approximately AUD 10 million) deal is expected to enhance Infomedia’s platform and drive future growth, subject to customary closing conditions and further accounting assessments.

Alongside the acquisition, Infomedia declared a fully franked interim dividend of 2.20 cents per share, reflecting confidence in its cash flow generation. The company also initiated an on-market share buyback program to repurchase up to 18.8 million shares, representing 5% of its issued capital, signaling a commitment to returning value to shareholders and optimizing capital structure.

Outlook and Market Position

Looking ahead, Infomedia expects total revenue for FY25 to range between $142 million and $149 million with stable margins, assuming no significant macroeconomic shifts. The company’s strong balance sheet, with $78 million in cash and no debt, provides ample flexibility to pursue growth initiatives and navigate industry challenges.

Infomedia’s strategic focus on AI integration, regional sales expansion, and technology modernization positions it well to capitalize on evolving automotive industry trends. However, the market will be watching closely how the Intellegam acquisition integrates and contributes to Infomedia’s growth trajectory.