Delivery Capacity Limits Pose Risks as Vista Group Pursues Aggressive Cloud Expansion

Strong Half-Year Performance

Vista Group International Limited (NZX & ASX, VGL) has unveiled a compelling set of half-year results for the six months ended 30 June 2025, underscoring its growing influence in cinema technology and SaaS solutions. Total revenue climbed 11% to NZ$77.0 million, buoyed by an 11% increase in recurring revenue and a notable 24% surge in SaaS revenue. The company’s EBITDA rose sharply by 39% to NZ$10.0 million, lifting the margin to 13% from 10% a year earlier, signaling improved operating leverage amid sustained client demand.

Accelerating Vista Cloud Adoption

Central to Vista Group’s growth story is the rapid adoption of its Vista Cloud platform, particularly the Operational Excellence capability. At the end of June, 747 client sites were live on the platform, with management targeting over 1,600 sites by the end of 2025. This acceleration is driven by strong client signings, including major cinema operators such as Odeon Cinemas Group (309 sites) and Village Cinemas Australia (20 sites), both committing to Vista Cloud’s Operational Excellence. The company is actively scaling its technology and delivery teams to meet this demand, acknowledging that current onboarding capacity is being stretched.

Strategic Expansion with Embedded Payments

In a strategic move to broaden its total addressable market and deepen client engagement, Vista Group has launched an Embedded Payments pilot with select clients in the second half of 2025. This initiative is expected to generate an additional NZ$15 million in annualised recurring revenue (ARR) at full deployment, contributing to an upgraded 100% Platform ARR aspiration of NZ$315 million. Embedded Payments promises to reduce payment processing costs for exhibitors and improve cash flow, particularly benefiting smaller cinema operators.

Financial Health and Outlook

Vista Group’s financial position remains solid, with operating cash flow surging to NZ$14.1 million, a 370% increase over the prior half. The company has maintained free cash flow positivity for the second consecutive half, reflecting disciplined capital management alongside investment in growth. Vista Group reaffirmed its full-year revenue guidance of NZ$167 million, likely at the lower end of the range, and expects an EBITDA margin between 16-18%. The ARR is now projected to exceed NZ$175 million in 2026, with the potential for further upside as client transitions progress.

Industry Tailwinds Support Growth

The company’s outlook is underpinned by a robust film slate and positive box office trends, with the domestic box office forecast revised to US$9.4 billion for 2025. High-profile releases such as "Avatar, Fire and Ash," "Wicked, For Good," and "Jurassic World, Rebirth" are expected to sustain momentum into the second half of the year, supporting Vista Group’s client revenues and platform usage.

Looking Ahead

Vista Group’s commitment to innovation is evident in its delivery of over 42 new features this year, enhancing operational efficiency and the moviegoer experience. The company’s strategic focus on technology adoption, including AI tooling and expanded delivery capacity, aims to fast-track its 100% Platform ambitions. While the company remains free cash flow positive, it prioritises meeting client demand, even if it means increased investment in resources.