RPMGlobal’s Divestment and Currency Risks Cloud Strong Software Growth

Strong Software Sales Growth

RPMGlobal Holdings Limited (ASX, RUL) has revealed a robust performance in its software sales for the financial year 2025, with Total Contracted Value (TCV) reaching $100.8 million. This marks a significant 30.9% increase compared to the previous year’s $77 million, underscoring the company’s successful pivot towards subscription-based software licensing.

The surge was primarily driven by subscription license sales, which climbed 33.6% to $100.7 million, while perpetual license sales declined sharply to just $0.1 million from $1.3 million the prior year. This shift aligns with RPMGlobal’s strategic preference for subscription models, which provide more predictable and stable revenue streams over multiple years.

Recurring Revenue and Backlog Strengthen

As of 1 July 2025, RPMGlobal’s Annually Recurring Revenue (ARR) stood at $69.1 million, comprising $62.8 million in subscription fees and $6.3 million in maintenance fees. The company noted that currency fluctuations, particularly the recent depreciation of the US dollar against the Australian dollar, have a short-term impact on ARR valuations since most subscriptions are transacted in USD.

Additionally, the company’s pre-contracted, non-cancellable software revenue backlog has grown 24.2% year-on-year to $200 million. This backlog represents contracted revenue that will be recognised in future periods, providing a solid foundation for sustained revenue growth.

Impact of Advisory Business Divestment

In April 2025, RPMGlobal completed the divestment of its Advisory business to SLR, a move that has prompted the company to withhold updated guidance on Group Revenue, Operating EBITDA, and Profit Before Tax until the audited full-year results are finalised. The Advisory division’s contribution will be reflected on a part-year statutory basis, adding complexity to the financial outlook.

RPMGlobal expects to release its audited FY2025 results in late August 2025, which will provide a clearer picture of the company’s overall financial health and profitability following this strategic restructuring.

Looking Ahead

RPMGlobal’s strong subscription sales growth and expanding revenue backlog highlight the company’s successful transition to a recurring revenue model, which is increasingly favoured in the software industry for its stability and predictability. However, currency volatility and the recent divestment introduce variables that investors will be watching closely in the coming months.