Gratifii Faces Going Concern Warning Despite Revenue Surge
Gratifii Limited reported a substantial 82% increase in revenue for FY25, driven by key acquisitions, yet underlying losses widened due to integration and impairment costs. The company faces ongoing challenges despite top-line growth.
- Revenue surged 82.2% to $54.45 million in FY25
- Underlying EBITDA loss increased to $4.04 million
- Net loss after tax widened slightly to $10.95 million
- Acquisitions of Ticketmates Australia and Rapport Group boosted revenue
- Auditors flagged going concern risks amid restructuring and impairments
Revenue Growth Fueled by Strategic Acquisitions
Gratifii Limited’s FY25 results reveal a striking 82.2% jump in revenue to $54.45 million, propelled largely by the acquisitions of Ticketmates Australia Pty Ltd and Rapport Group Limited late in the financial year. These deals expanded Gratifii’s footprint in the loyalty and rewards services sector, with rewards revenue nearly doubling to $45.4 million. The Loyalty Services segment also contributed $9.1 million, although it faced headwinds from macroeconomic pressures and reduced loyalty program spending towards year-end.
Profitability Pressures Amid Integration and One-Off Costs
Despite the revenue surge, Gratifii’s underlying EBITDA loss deepened to $4.04 million from $3.54 million the previous year. This deterioration reflects integration costs related to recent acquisitions, increased technology investments, and a more conservative approach to capitalising expenses. Share-based payments rose significantly to nearly $1 million, further weighing on earnings. The company also recorded a $2.5 million impairment charge following a reassessment of asset recoverability in light of revised growth forecasts.
Net Loss and Balance Sheet Highlights
The net loss after tax widened modestly to $10.95 million, compared to $10.52 million in FY24. Depreciation and amortisation expenses increased by over 50% to $3.6 million, reflecting the impact of acquired intangible assets. Gratifii’s balance sheet shows $6 million in current assets against $13.4 million in current liabilities, including $10.5 million in trade payables and $1.86 million in deferred revenue. The company’s auditors have indicated an emphasis of matter regarding going concern, underscoring ongoing financial risks.
Operational and Market Challenges Ahead
While acquisitions have bolstered Gratifii’s scale, the Loyalty Services division experienced a slowdown due to broader economic conditions, with expectations of further declines in FY26. The gross profit margin contracted to 12.3% from 15%, driven by a higher proportion of lower-margin rewards revenue. Restructuring costs and one-off transaction expenses also contributed to the challenging financial landscape. No dividends were declared or planned for FY26, reflecting the company’s focus on stabilising its operations.
Looking Forward
Gratifii’s FY25 results paint a picture of a company in transition; leveraging acquisitions to drive growth but grappling with the costs and risks of integration and market headwinds. Investors will be watching closely for the completion of the audit and any updates on the company’s going concern status, as well as how effectively Gratifii can convert its expanded revenue base into sustainable profitability.
Bottom Line?
Gratifii’s growth story is tempered by rising losses and financial uncertainty, setting the stage for a critical FY26.
Questions in the middle?
- How will Gratifii manage integration costs and improve EBITDA in FY26?
- What impact will ongoing macroeconomic pressures have on Loyalty Services revenue?
- Will the auditors’ going concern emphasis lead to strategic changes or capital raises?
