Halo Reports $6.06M Half-Year Loss on 19% Revenue Drop, EBITDA Loss Widens

Financial Performance and Revenue Challenges

Halo Technologies Holdings Ltd has reported a half-year loss after tax of $6.06 million for the period ending 30 June 2025, an improvement from the $8.04 million loss recorded in the same period last year. Despite this narrowing loss, the company’s revenue fell by 19% to $7.99 million, primarily due to volatility in advisor numbers among its business-to-business clients and broader market disruptions triggered by geopolitical tensions, notably the trade war initiated by US tariffs in April 2025.

The decline in brokerage revenue and subscription income reflects the challenging environment for equity research and portfolio management services, the core of Halo’s operations. The company’s underlying EBITDA loss, which excludes non-cash items and significant adjustments, widened by 33% to $6.07 million, driven by increased headcount costs, higher IT expenses related to its UK operations, and elevated finance costs linked to convertible notes.

Auditor’s Qualified Opinion and Asset Impairment Concerns

Adding to the financial pressures, Halo Technologies received a modified auditor’s review report from BDO Audit Pty Ltd. The auditors raised concerns over the recoverability of the company’s intangible assets, which are carried at $5.01 million on the balance sheet. They estimate that these assets are overstated by approximately $2.86 million due to the absence of an impairment charge, suggesting that the company’s net loss before tax is understated by the same amount.

This qualification highlights a significant accounting risk and may prompt further scrutiny from investors and regulators. The auditors also noted material uncertainty regarding Halo’s ability to continue as a going concern, given its ongoing losses and cash outflows, although the directors remain confident in the company’s prospects and capital-raising plans.

Capital Raising and Strategic Outlook

In response to these challenges, Halo Technologies is pursuing a pro rata renounceable rights issue to raise up to $11 million, partially underwritten by Lodge Corporate Pty Limited. The company expects to complete this capital raising by 30 September 2025. This infusion of funds is intended to strengthen the balance sheet, support ongoing operations, and fund growth initiatives, including the introduction of platform fees aimed at generating new revenue streams.

Halo’s management emphasizes its confidence in the business model and the competitive positioning of its equity research and portfolio management platforms in both Australia and the United Kingdom. However, the success of the rights issue and the company’s ability to manage costs and improve profitability will be critical to restoring investor confidence.

Looking Ahead

While the half-year results show some improvement in losses, the combination of declining revenue, increased operating costs, and auditor concerns over asset valuations presents a complex picture. The upcoming capital raise will be a key test of Halo Technologies’ ability to navigate these headwinds and deliver sustainable growth in a volatile market environment.