ReadCloud Reports 13% Revenue Rise and $1.32M Profit in 1H25
ReadCloud Limited has reported a robust half-year performance with revenues up 13% and statutory profit soaring 214%, driven by significant growth in its Vocational Education & Training segment.
- 13% increase in consolidated revenue to $9.16 million
- 214% surge in statutory profit after tax to $1.32 million
- 32% growth in VET-in-schools revenue to $3.84 million
- 73% rise in underlying EBITDA to $1.80 million
- Operating expenses controlled with only 1% increase year-on-year
Strong Financial Momentum
ReadCloud Limited has delivered an impressive half-year financial report for the period ending 31 March 2025, showcasing a 13% uplift in revenues to $9.16 million and a remarkable 214% increase in statutory profit after tax, which reached $1.32 million. Underlying EBITDA also rose sharply by 73% to $1.80 million, underscoring the company’s operational efficiency and growth trajectory.
Driving Growth: Vocational Education & Training
The standout contributor to this performance was ReadCloud’s Vocational Education & Training (VET) segment, particularly the VET-in-schools business, which saw revenue climb 32% to $3.84 million. This segment benefits from strong customer retention rates of 94% and an 11% increase in qualifications delivered per school. The company’s premium offerings and expanding customer base have translated into higher average customer value and sustained gross margins above 90%.
Operational Discipline and Cash Position
Despite the revenue growth, ReadCloud managed to keep operating expenses almost flat, increasing by just 1% compared to the prior corresponding period. This disciplined cost control has unlocked operating leverage, contributing to the significant jump in profitability. The company remains debt-free and cash positive, with $3.54 million in cash reserves as of 31 March 2025, and generated $1.91 million in operating cash flow during the half-year.
Challenges and Strategic Outlook
While the company’s Southern Solutions Training Services segment experienced modest revenue growth of 2%, it faces headwinds from recent government policy changes in New South Wales and Victoria, expected to negatively impact second-half revenue. Nonetheless, ReadCloud maintains confidence in meeting its full-year revenue growth target of 15%, buoyed by strong momentum in its core VET-in-schools and eBook Solutions businesses. The company is actively evaluating strategic options to invigorate its eBook Solutions segment, including expanding distribution channels and increasing sales efforts both domestically and internationally.
Market Position and Future Prospects
ReadCloud’s integrated digital education platforms and vocational training offerings position it well to capitalize on ongoing trends such as the migration to online learning and the growing recognition of vocational skills shortages. The company’s strong customer retention and expanding market footprint suggest a solid foundation for continued growth, though investors will be watching closely how it navigates policy shifts and executes on its strategic initiatives.
Bottom Line?
ReadCloud’s strong half-year results set a promising stage, but upcoming policy impacts and strategic moves will test its growth resilience.
Questions in the middle?
- How will government policy changes in NSW and Victoria affect Southern Solutions’ revenue in 2H25?
- What specific strategic options is ReadCloud considering to boost growth in its eBook Solutions business?
- Can ReadCloud sustain its high gross margins and customer retention amid increasing competition in digital education?
