How SOCO Corporation Turned Around to Profit with 3.6% Revenue Growth in FY25

Financial Turnaround and Revenue Growth

SOCO Corporation Ltd has reported a return to profitability for the fiscal year ended 30 June 2025, posting a net profit after tax (NPAT) of $68,275, a significant turnaround from the prior year’s loss of $486,170. The company’s revenue grew by 3.6% to $21.29 million, driven by improved project delivery and an expanding client base.

Underlying EBITDA, a key indicator of operational performance, swung to a positive $208,718 from a loss of $33,239 in the previous year, reflecting tighter cost control and enhanced utilisation rates. Gross margin also improved modestly to 24.2%, up from 23.5%, underscoring the benefits of disciplined delivery and operational efficiency.

Operational Initiatives and Strategic Leadership

SOCO’s management undertook several key initiatives during the year, including right-sizing the workforce to better align with demand and margin objectives. Strategic leadership hires were made to bolster delivery and commercial capabilities, while systems upgrades enhanced forecasting, margin control, and reporting accuracy.

These efforts contributed to a growing active client base, which expanded to 131, with non-federal government revenue increasing to 64.4% from 58.6% the previous year. The company also navigated challenges such as procurement delays and federal government pre-election caution, which impacted second-half revenue composition.

Acquisition and Contingent Consideration Adjustments

In November 2023, SOCO completed the acquisition of Axsym Technology Pty Ltd, aiming to expand its service offerings and market footprint. However, the contingent earnout tied to Axsym’s EBITDA targets for FY25 was not met, leading to a fair value adjustment that reduced the contingent consideration liability to zero by year-end. The company’s directors also assessed that the FY26 EBITDA target is unlikely to be met, signaling ongoing integration and performance challenges.

Financial Position and Capital Management

SOCO ended the year with a strengthened balance sheet, reporting net tangible assets per share of 0.37 cents, up from 0.11 cents. The company maintained a positive cash position of $1.1 million and retained access to an unused $1.5 million debt facility expiring in December 2026, providing financial flexibility for future growth initiatives.

No dividends were declared or paid during the year, reflecting a cautious approach to capital allocation amid ongoing business transformation. The company remains focused on its core IT consultancy business, specialising in Microsoft cloud solutions, business applications, and integration projects.

Governance and Remuneration

SOCO’s board, led by Chair Thomas Stianos, continues to emphasize strong corporate governance and alignment of executive remuneration with shareholder interests. The remuneration report details a mix of fixed and performance-based incentives, including share-based payments and performance rights tied to future earnings milestones, underscoring a commitment to long-term value creation.

The company’s financial statements were audited by RSM Australia Partners, who issued an unmodified opinion, affirming the integrity of the reported results.