Rising Costs and CIPO Delays Cloud IPH’s Strong FY25 Earnings

• Revenue up 16.5% to $710.3 million, boosted by Canadian acquisitions
• Statutory NPAT increased 13.2% to $68.8 million
• Underlying EBITDA rose 6.0% to $207.2 million amid cost pressures
• Patent filings in Asia grew 16.5%, supporting future earnings
• Final dividend increased 4% to 36.5 cents per share for FY25

Robust Growth Fueled by Strategic Acquisitions

IPH Limited, a global leader in intellectual property services, has delivered a solid financial performance for the fiscal year ended June 30, 2025. The company’s statutory net profit after tax (NPAT) rose 13.2% to $68.8 million, underpinned by a 16.5% increase in revenue to $710.3 million. This growth was largely driven by the integration of Canadian acquisitions including ROBIC, Ridout & Maybee, and Bereskin & Parr, which collectively contributed significant incremental earnings.

Underlying EBITDA climbed 6.0% to $207.2 million, reflecting the earnings uplift from these acquisitions despite inflationary cost pressures and increased investments in IT and cybersecurity. The company’s cash conversion ratio remained strong at 103%, highlighting efficient cash flow management amid expansion.

Mixed Market Dynamics Across Regions

While IPH achieved organic revenue growth in Australia and New Zealand despite a decline in patent filings, the company faced headwinds from a 7.9% drop in US patent filings, which disproportionately impacted its portfolio. Conversely, Asia showed promising momentum with a 16.5% increase in patent filings, particularly from China, which bodes well for future revenue streams.

In Canada, operational disruptions caused by the Canadian Intellectual Property Office’s system issues delayed revenue recognition in FY25. However, management anticipates a recovery in FY26 as the backlog clears, supported by successful integration and synergy realization from recent acquisitions.

Strategic Initiatives and Cost Management

IPH has initiated a corporate cost reduction program aimed at streamlining operations and improving efficiency. Although only a fraction of the targeted $8-10 million annualized savings was realized in FY25, the program is expected to contribute meaningfully to margins in the coming year. The company also completed a $125 million capital raise to fund acquisitions and maintain financial flexibility, with net debt stable at $356.3 million and leverage within target levels.

Shareholder returns remain a priority, with a final dividend declared at 19.5 cents per share, up 3% from the prior year, bringing total dividends for FY25 to 36.5 cents per share, a 4% increase. The dividend reinvestment plan will be available for the final dividend, underscoring IPH’s commitment to shareholder value.

Looking Ahead – Focus on Organic Growth and Operational Efficiency

CEO Dr Andrew Blattman emphasized the company’s focus on organic growth opportunities in Western Europe, Japan, South Korea, and China, alongside leveraging the integrated Canadian platform. The company aims to capitalize on the growing importance of intellectual property protection amid global market complexities and de-globalization trends.

With a strong balance sheet, a broad global network, and a clear strategy to optimize its member firms, IPH is positioning itself to navigate short-term challenges while capturing medium-term growth in the intellectual property services sector.

Bottom Line?

IPH’s FY25 results set the stage for a pivotal year ahead as it navigates recovery in Canada and capitalizes on Asia’s growth momentum.

Questions in the middle?

• How quickly will Canadian Intellectual Property Office system issues resolve and impact FY26 revenue?
• What is the timeline for realizing full cost savings from the corporate reduction program?
• How will shifts in US patent filings affect IPH’s market share and profitability going forward?