Integrated Research Limited reported an 18% revenue decline and a 51% drop in net profit for FY25, while unveiling a strategic pivot towards AI-driven product innovation and cloud services.
- Revenue down 18% to A$68.3 million
- Net profit falls 51% to A$13.4 million
- Launch of Prognosis as a Service and AI-powered products
- Strong cash position with 27% increase to A$40.6 million
- New CEO Ian Lowe appointed in October 2024
Financial Performance Overview
Integrated Research Limited (ASX, IRI), a global provider of performance management software for critical payment and communication systems, has released its audited results for the fiscal year ended 30 June 2025. The company reported a significant 18% decline in revenue to A$68.3 million and a 51% drop in net profit to A$13.4 million compared to the previous year. This downturn was largely attributed to a softer renewal book and delays in new business, particularly in the Americas and European markets.
Despite the revenue and profit contraction, Integrated Research managed to reduce expenses by 5% to A$54.9 million and boost its cash reserves by 27% to A$40.6 million, underscoring robust cash conversion and disciplined cost management.
Geographic and Product Segment Challenges
The Americas region, which contributes the bulk of revenue, saw a 19% decline to US$30.9 million, impacted by delayed contract renewals and new business slippage. Europe experienced a sharper 43% revenue drop, prompting the company to initiate a strategic review of its operations there. Asia Pacific revenues were relatively stable, down just 2%, buoyed by a large new Collaborate contract despite underperformance in other segments.
Product-wise, the Collaborate suite declined 6%, Infrastructure and Transact segments each fell 28%, reflecting the overall softness in renewals and market transitions. Notably, the company launched Prognosis as a Service late in FY25, a cloud-hosted offering designed to reduce client deployment complexity and align with enterprise cloud adoption trends.
Strategic Pivot to Product-Led Growth and AI Innovation
FY25 marked a transition year for Integrated Research, with a clear pivot towards a product-led growth strategy. Central to this is the leveraging of artificial intelligence (AI) and machine learning (ML) to extract new value from the rich data sets generated by its Prognosis platform. The company established IR Labs, a dedicated innovation team focused on AI/ML-powered product development, with the first AI-enabled products slated for launch in the first half of FY26.
Alongside AI initiatives, the company introduced variable and consumption-based pricing models to better capture organic revenue growth. The successful signing of a top 10 US bank for its new High Value Payments product and the launch of Prognosis Elevate, a hosted service, signal early traction in this strategic shift.
Leadership and Governance Updates
Integrated Research underwent executive changes during the year, with Ian Lowe appointed CEO and Managing Director in October 2024, succeeding John Ruthven. Lowe brings 25 years of technology leadership experience and has been instrumental in refocusing the company on product innovation and growth execution. The Board remains chaired by Peter Lloyd, with a strong governance framework and active oversight of remuneration and innovation committees.
Shareholder Returns and Outlook
The company declared a fully franked final dividend of 2.0 cents per share, consistent with the prior year, reflecting a commitment to shareholder returns despite the challenging year. With a clean balance sheet and strong cash position, Integrated Research is positioned to invest in its AI-driven product roadmap and sales capabilities to navigate competitive pressures and market uncertainties.
However, risks remain from evolving customer requirements, competitive AI advancements by rivals, inflationary cost pressures, and geopolitical developments, particularly in the US. The company’s FY26 priorities focus on building new AI-enabled products, growing new business revenue, and strengthening sales execution.
Bottom Line?
Integrated Research’s FY25 results underscore the challenges of a transitioning tech landscape, but its AI-focused pivot and strong cash reserves set the stage for a critical growth phase ahead.
Questions in the middle?
- Will the new AI-powered products deliver the revenue growth needed to reverse recent declines?
- How effectively can Integrated Research expand its footprint in the Americas and Europe amid market uncertainties?
- What impact will competitive AI innovations have on Integrated Research’s market share and pricing power?