IODM Limited reported a solid Q3 FY25 with cash receipts up 18%, driven by strong UK Education segment growth and new revenue share agreements in North America.
- Q3 FY25 cash receipts increased 18% to A$755k year-on-year
- UK Education segment revenue rose 84%, boosting overall growth
- Minimum monthly revenue payment threshold in UK increased 50% to A$1.8m annualized
- Formalized revenue share agreements signed for US and Canada markets
- Australian operations showing positive sales momentum post-restructure
Strong Quarterly Performance Amid Global Expansion
IODM Limited (ASX: IOD) has delivered a robust third quarter for fiscal year 2025, reporting cash receipts of A$755,000, an 18% increase compared to the same period last year. This growth was accompanied by a 25% reduction in net operating cash outflow, reflecting improved operational efficiency. Year-to-date cash receipts reached A$1.955 million, marking a 26% rise over the prior corresponding period.
UK Education Segment Drives Momentum
The standout contributor to IODM’s quarterly performance was its UK Education segment, which posted an 84% increase in cash receipts to A$571,000. This segment not only expanded its client base by implementing IODM Connect at two additional universities but also deepened engagement with existing clients by onboarding two more university divisions. These developments underpin the segment’s strong revenue growth and market penetration.
Significantly, the UK Education business triggered a migration to a higher minimum monthly revenue payment threshold of GBP 75,000, equivalent to an annualized A$1.8 million, a 50% increase from the previous threshold. This milestone signals growing confidence and commitment from partner institutions.
Further bolstering the UK market presence, IODM hosted its inaugural UK Education Forum in London, attracting 25 university finance officers. The event has generated heightened interest and expanded the implementation pipeline, with a follow-up forum scheduled in Birmingham for early June.
North American Agreements Formalized, Pipeline Building
IODM also made strategic progress in North America by formalizing revenue share agreements with Convera for both the United States and Canada. Under these agreements, IODM will receive 20% of revenue from existing Convera clients and 30% from new clients adopting the IODM Connect platform. The company has already begun engaging educational institutions in these regions, with proposals submitted and positive traction reported. The North American team aims to replicate the UK’s success by converting these proposals into formal agreements and onboarding new clients in the coming quarters.
Australian Operations Gain Traction Post-Restructure
Following a recent restructure and personnel changes, IODM’s Australian sales team is gaining momentum. The pipeline now includes several household enterprises, with contract signings anticipated in Q4 that could meaningfully uplift domestic revenue. This development suggests a turning point for the company’s home market operations.
Financial Position and Outlook
IODM ended the quarter with A$356,000 in cash and cash equivalents, supported by prudent capital management. The company acknowledges that its near-term funding runway is limited but remains confident in its operational cash flow improvements and pipeline conversion prospects. CEO Mark Reilly emphasized the company’s focus on steady onboarding and expanding its global footprint, highlighting the platform’s strong market acceptance and commercial results exceeding expectations.
Bottom Line?
IODM’s Q3 momentum, led by UK growth and North American deal formalizations, sets the stage for a pivotal Q4.
Questions in the middle?
- How quickly will North American proposals convert into signed contracts and revenue?
- What impact will the upcoming UK Education Forum in Birmingham have on the sales pipeline?
- Can Australian operations sustain their positive momentum and deliver meaningful revenue growth in Q4?