Bubs Australia Posts $102.5m Revenue and $5.17m Profit in FY25
Bubs Australia Limited reports a striking turnaround in FY25 with revenue up 29% to $102.5 million and net profit soaring 124% to $5.17 million, driven by strong US and China growth. The company awaits permanent FDA approval, a pivotal factor for its future trajectory.
- Revenue climbs 29% to $102.5 million
- Net profit after tax jumps 124% to $5.17 million
- US market revenue grows 52%, China up 22%
- Underlying EBITDA turns positive at $0.56 million
- FDA permanent approval expected by end 2025
Strong Financial Rebound
Bubs Australia Limited has delivered a remarkable financial turnaround in the fiscal year ended June 30, 2025. The company reported revenue of $102.5 million, a 29% increase from the previous year, while net profit after tax surged 124% to $5.17 million, reversing a loss of $21 million in FY24. This performance marks a significant milestone for the infant formula and nutritional products company, signaling renewed investor confidence and operational momentum.
Market Growth Drivers
The growth was primarily fueled by the United States, Bubs’ strongest market, where revenue jumped 52% to $53.1 million. This was achieved by capitalizing on the expanding premium and goat infant milk formula segments. China also contributed robustly with a 22% revenue increase to $21.1 million, supported by strong cross-border e-commerce sales and expansion into over-the-counter retail channels. The Rest of World markets, including Japan and Vietnam, saw a 44% rise in revenue, while Australian sales experienced a slight decline.
Operational Efficiency and Profitability
Bubs maintained a stable gross margin of 47.8%, slightly down from 48.6% the prior year, reflecting effective inventory management that reduced provisions significantly. Operating expenses as a percentage of revenue fell sharply from 73% to 44%, aided by legal settlements and cost optimization efforts. Underlying EBITDA swung from a loss of $20.3 million in FY24 to a positive $0.56 million in FY25, underscoring improved operational discipline and profitability.
Regulatory and Financial Position
A critical factor underpinning Bubs’ outlook is its current discretionary approval to operate in the US market granted by the Food and Drug Administration (FDA), with permanent approval anticipated by the end of 2025. The company’s going concern assumption hinges on securing this approval or an extension thereof. Financially, Bubs strengthened its position with $17.4 million in cash and $37 million in net current assets at year-end, alongside an extended $10 million bank facility through August 2026.
Leadership and Legal Developments
Leadership changes marked the year with the departure of CEO Reg Weine in July 2025 and the appointment of Joe Coote as his successor. The company also benefited from a $3 million credit recovery following legal arbitration awards against former customers, though further recoveries remain uncertain. No dividends were declared, reflecting a focus on reinvestment and balance sheet strengthening.
Looking Ahead
Bubs Australia is poised to build on its momentum, focusing on expanding its premium infant formula offerings, particularly in the US and China, while managing costs and navigating regulatory hurdles. The company’s ability to secure permanent FDA approval and sustain growth in key markets will be decisive for its next phase of development.
Bottom Line?
Bubs’ FY25 turnaround sets the stage, but FDA approval remains the critical gatekeeper for sustained growth.
Questions in the middle?
- Will Bubs secure permanent FDA approval by the end of 2025 as planned?
- How will the new CEO Joe Coote influence strategic priorities and execution?
- What is the outlook for legal recoveries from arbitration awards and their impact on cash flow?