MedAdvisor’s 3Q FY25 Revenue Halves to $12.3M; Cost Cuts Deliver $4.5M Savings

Quarterly Financial Performance

MedAdvisor Limited (ASX: MDR), a global leader in pharmacy-driven patient engagement solutions, has reported a significant decline in its third quarter results for FY25. Operating revenue dropped sharply to $12.3 million, down 49.2% from $24.2 million in the same quarter last year. The gross profit halved to $7.4 million, with the group gross margin slipping to 60.2% from 63.2% in 3Q FY24.

The US segment bore the brunt of the downturn, with revenue plunging 61.8% to $7.1 million, reflecting ongoing budgetary pressures from key pharmaceutical clients, particularly in vaccine and general medication categories. Meanwhile, the Australia and New Zealand (ANZ) region saw a more modest revenue decline of 8.9% to $5.1 million, impacted by fewer health programs and a slight reduction in SaaS revenue.

Strategic Response and Cost Optimisation

In response to these challenges, MedAdvisor has accelerated its Transformation 360° initiative, targeting $4.5 million in annualised cost savings across both business units. The company has also initiated a restructuring of its US commercial operations to better align with evolving market dynamics and to position for future growth.

CEO Rick Ratliff acknowledged the softness in the US market but highlighted encouraging signs in pipeline conversions, which are tracking ahead of the prior year with over 90% of the lower end of full-year guidance already contracted. The company expects vaccine-related revenues to improve in the fourth quarter, alongside specialty medication programs.

Capital Raising and Board Changes

To support its strategic initiatives, MedAdvisor completed a $5 million equity placement in early April 2025, backed by existing institutional shareholders and board members. A Share Purchase Plan is also underway to extend participation to existing shareholders. Additionally, Kate Hill was appointed interim Chair following the resignation of Linda Jenkinson, signaling a refreshed leadership focus during this transformative period.

Outlook and Strategic Review

MedAdvisor reaffirmed its FY25 guidance, targeting revenue between $93 million and $99 million and an EBITDA loss ranging from $2.6 million to $5.5 million. Key priorities for the final quarter include completing the US commercial restructuring, rolling out new software modules to support expanded pharmacy capabilities in ANZ, and launching the next-generation THRiV patient engagement platform in the US by 2Q FY26.

The ongoing strategic review process has generated multiple proposals for both the US and ANZ businesses, validating management’s view that the company remains materially undervalued. While no final decisions have been made, the review is expected to conclude around 30 June 2025, with potential corporate initiatives aimed at bridging the valuation gap and maximizing shareholder value.

Positioning for FY26 Growth

Looking ahead, MedAdvisor is optimistic about FY26, anticipating approximately 15% revenue growth driven by increased customer diversification in the US and higher fees in ANZ. The company also expects meaningful margin expansion as cost optimisation efforts take hold and new product offerings gain traction. This outlook underscores MedAdvisor’s commitment to building a scalable, resilient business amid a challenging healthcare landscape.