How Did Bubs Achieve a 29% Revenue Surge and Return to Profitability in FY25?
Bubs Australia Limited reports a strong FY25 with 29% revenue growth to $102.5 million, positive EBITDA turnaround, and sustained cash flow improvements. The company also advances its US market ambitions with a key FDA submission underway.
- FY25 revenue up 29% to $102.5 million
- EBITDA swings to positive $5.5m-$6m from prior year loss
- Operating cash flow positive at $5.0 million for FY25
- Strong growth in US, China, Australia, and Rest of World markets
- New Infant Formula Submission lodged with US FDA, awaiting approval
Robust Revenue Growth and Profitability Turnaround
Bubs Australia Limited (ASX, BUB) has delivered a compelling financial performance for the full year ending June 2025, reporting net revenue of $102.5 million, a 29% increase over the previous year’s $79.7 million. This growth was accompanied by a significant turnaround in earnings before interest, tax, depreciation, and amortisation (EBITDA), swinging from a $19.8 million loss in FY24 to a positive range of $5.5 million to $6 million in FY25. The fourth quarter alone saw EBITDA rise to $4.31 million, compared to a $9.9 million loss in the same period last year.
Improved Margins and Cash Flow Discipline
While gross profit margins slightly contracted to 47.2% for the full year from 48.6% in FY24, the company’s focus on cost control and operational efficiencies has yielded positive operating cash flow of $5.0 million for FY25. This marks the third consecutive quarter of positive cash flow, underscoring Bubs’ improved working capital management and cost-out initiatives. The company ended the quarter with $17.4 million in cash reserves and an additional $10 million in undrawn debt facilities, providing a solid liquidity buffer.
Geographic Market Highlights
The US market was the standout performer, delivering 52% year-over-year revenue growth to $53 million, driven by Bubs’ strategic focus on the premium infant milk formula segment. China also contributed strongly with 22% growth, boosted by cross-border e-commerce sales and expansion into over 1,200 stores in the online-to-offline retail channel. Australia’s underlying revenue grew 8%, maintaining Bubs’ dominance in the growing goat milk infant formula category. Additionally, the Rest of World segment, including Vietnam and Japan, posted a robust 44% revenue increase.
Regulatory Progress and Future Outlook
In a key regulatory development, Bubs lodged its New Infant Formula Submission (NIFS) with the US Food and Drug Administration (FDA) in June 2025. The company anticipates formal notification granting permanent access to the US market by the end of the calendar year, a milestone that could unlock further growth opportunities. CFO Naomi Verloop highlighted the company’s disciplined approach to costs and working capital as pivotal to achieving sustained profitability and cash flow positivity.
Strategic Positioning and Investor Considerations
Bubs’ financial turnaround and geographic diversification position it well to capitalize on the growing global demand for premium infant nutrition products. However, the slight dip in gross margins and reliance on regulatory approvals underscore the importance of monitoring operational efficiencies and FDA outcomes closely. The company’s strong cash position and available debt facilities provide flexibility to support ongoing growth initiatives and market expansion.
Bottom Line?
Bubs’ FY25 results mark a clear inflection point, but the market will keenly watch FDA approval and margin trends as the company scales.
Questions in the middle?
- Will FDA approval for the New Infant Formula Submission arrive on schedule and what conditions might it entail?
- Can Bubs sustain or improve its gross profit margins amid rising costs and competitive pressures?
- How will Bubs leverage its strong cash position and debt facilities to accelerate growth in key markets?
