Vinyl Group Posts $4.9M Revenue, Slashes Operating Cash Outflows by 41%

Record Revenue and Cash Flow Improvements

Vinyl Group Ltd (ASX – VNL), Australia’s only ASX-listed music company, has delivered a standout first quarter for FY26, reporting record revenue of $4.9 million; a 37% increase from the previous quarter. This growth was driven by strong sales in both its Publishing and Platforms divisions, with cash receipts from customers more than doubling year-on-year to $4.024 million.

Alongside revenue growth, Vinyl achieved a significant reduction in operating cash outflows, down 41% year-on-year to $1.414 million. When adjusting for one-off restructuring costs of $579,000 related to redundancies and salaries, the underlying cash outflow shrinks further to $835,000, marking a 65% year-on-year decrease. This disciplined cost control reflects the company’s strategic focus on streamlining its fixed cost base to accelerate the path to profitability.

Strategic Equity Conversion and Acquisition Moves

Vinyl finalized a binding equity conversion agreement with Songtradr, converting the remaining balance of its Neighbouring Rights Advance liability into equity. This move, subject to shareholder approval at the upcoming AGM, will strengthen Vinyl’s balance sheet by extinguishing historical liabilities and preserve cash. Additionally, the agreement includes the acquisition of the Vinyl.com domain name, a valuable e-commerce asset that enhances the company’s digital footprint.

Vinyl also secured a $1.5 million line of credit with Songtradr, drawing down $750,000 as of September 30, 2025, providing additional liquidity as the company navigates its seasonal peak and growth initiatives.

Innovations and Growth Strategy

Vinyl continues to innovate at the intersection of media and technology, leveraging proprietary platforms such as Serenade, Vampr Collabs, and Project Automait. These initiatives aim to connect artists with digital and physical formats, facilitate creative collaborations, and automate routine tasks to enhance content quality and output.

The company’s growth strategy focuses on expanding media assets, integrating programmatic advertising, and scaling content production with AI to increase output tenfold by the end of FY26. On the Platforms side, Vinyl is working to reduce customer acquisition costs and broaden its e-commerce offerings, driving product-led growth.

Outlook and Market Position

Vinyl is on track to report an EBITDA-positive quarter in Q2 FY26, supported by strong seasonal sales and ongoing structural cost reductions. The company targets approximately $25 million in revenue for FY26, reflecting 25% organic growth. CEO Josh Simons highlighted the team’s focus on disciplined cost management and the compelling value proposition Vinyl offers advertisers targeting youth culture and music audiences.

With a working capital surplus of $2.334 million and a reduced fixed cost base, Vinyl is well-positioned to demonstrate the sustainability of its business model before embarking on global expansion. The company’s vertical acquisition strategy, exemplified by Funkified Entertainment’s expected earn-out achievement, further validates its approach to enhancing margins and integrating complementary businesses.