SOCO’s Return to Profit: Can It Sustain Growth Amid Market Challenges?

A Return to Profitability

SOCO Corporation Ltd (ASX – SOC) marked a significant turning point in its FY25 financial year, reporting a return to profitability with a net profit after tax and before amortisation (NPATA) of $0.55 million. This follows a period of losses in prior years and reflects a 3.6% increase in revenue to $21.3 million. The company attributes this positive momentum to a growing client base and enhanced sales and marketing efforts.

Underlying EBITDA also improved to $0.21 million, signaling healthier operational margins. SOCO’s CEO, Sebastian Rizzo, highlighted that FY25 laid the foundations for scalable growth through disciplined delivery and strategic investments, positioning the company for sustainable expansion.

Strategic Priorities for FY26

Looking ahead, SOCO has outlined a clear strategic direction focused on three pillars – growth enablers, services and clients, and execution and delivery. Key initiatives include growing recurring revenue streams from managed services, expanding strategic partnerships, and completing the company-wide ERP implementation to enhance operational efficiency.

The company is also investing in its workforce and leadership, emphasizing continuous learning and certifications to maintain a competitive technical edge, particularly in emerging areas such as cybersecurity and artificial intelligence offerings.

Market Position and Client Diversification

SOCO’s client base expanded to 131 active clients, with non-federal government revenue comprising 64.4% of total income, reflecting a diversified portfolio. The company’s sales pipeline remains healthy, supported by a targeted go-to-market strategy that prioritizes key verticals including defence industry suppliers and government accounts.

Engagement with industry associations and key opinion leaders forms a core part of SOCO’s approach to stimulate demand and influence compliance and investment trends within its target markets.

Governance and Shareholder Support

At the recent Annual General Meeting, shareholders overwhelmingly supported key resolutions, including the adoption of the remuneration report and the re-election of director Tom Stianos. The renewal of proportional takeover provisions was also approved, underscoring shareholder confidence in the company’s governance framework.

Notably, a spill resolution was decisively rejected, indicating strong backing for the current board and management team as SOCO navigates its growth trajectory.

Outlook

While market conditions remain mixed, SOCO’s disciplined focus on execution, client diversification, and capability investment positions it well to capitalize on emerging opportunities. The company’s emphasis on operational excellence and scalable growth models will be critical to sustaining profitability and delivering shareholder value in the coming years.