How Knosys Is Betting on AI to Disrupt Global Library Tech Markets
Knosys Limited reported steady FY25 revenue growth and secured major contract renewals, while investing heavily in AI-driven library technology that positions it for global expansion.
- FY25 revenue and annual recurring revenue up 2% to $9.8 million
- Contract extensions with ANZ Bank, Singtel, Optus, and Healthdirect Australia
- Operating expenses rose 19% due to increased investment in next-gen LibraryTech
- Net loss after tax of $1.5 million reflecting strategic product development
- Libero Library App and Libero 6 upgrades launched with positive customer feedback
Steady Revenue Amid Strategic Investment
Knosys Limited (ASX, KNO) has delivered a modest 2% increase in total revenue for the financial year ended June 30, 2025, reaching $9.8 million. This growth was mirrored in its Annual Recurring Revenue (ARR), underscoring a stable and loyal customer base. The company’s ability to maintain revenue stability is largely attributed to contract renewals with heavyweight clients such as ANZ Bank, Singtel, Optus, and Healthdirect Australia.
However, this steady top-line performance came alongside a strategic decision to ramp up investment in next-generation library technology solutions. Operating expenses rose by 19%, primarily driven by increased headcount and product development costs. This investment phase resulted in a net loss after tax of $1.5 million, a reversal from the prior year’s modest profit, but one that management had anticipated as part of its growth strategy.
Product Innovation and Market Positioning
Knosys has made significant strides in product innovation with the launch of the Libero Library App and major upgrades to its Libero 6 Library Management System. These releases have been well received by customers in Australia and Germany, enhancing user engagement through mobile access and improved functionality such as advanced search algorithms and flexible booking systems.
Looking ahead, the company is focusing on the development of Libero X, an AI-enhanced library solution expected to debut commercially in late FY26. This product aims to leverage open-source AI to deliver automation and personalization, targeting public libraries initially. The company’s vision is to disrupt the global Library Management System market, which is forecast to grow to USD 2.65 billion by 2027, by emphasizing open architecture, mobility, and AI capabilities.
Global Expansion and Future Outlook
Knosys is preparing for an international market launch of Libero X in FY27, with a particular focus on the US and Canadian markets where it has identified unmet needs. The company is also expanding vendor support within its existing app to interoperate with other library management systems, broadening its potential customer base.
While the increased investment has pressured near-term profitability and cash flow, Knosys ended FY25 with a cash balance of $2.8 million, which improved to $4.2 million by the end of July 2025. This financial position provides a runway to support ongoing product development and marketing efforts as the company positions itself to become a Tier 1 player in the global library technology sector within the next three years.
Bottom Line?
Knosys’ FY25 results reflect a deliberate pivot towards innovation and global growth, setting the stage for a critical product launch and market expansion in the coming years.
Questions in the middle?
- Will Knosys secure a long-term contract with ANZ Bank beyond the interim agreement?
- How will the market respond to the Libero X AI-enhanced library solution upon launch?
- Can Knosys sustain its investment pace while moving towards profitability?
