ReadCloud Doubles Earnings on Booming School eLearning Sales
ReadCloud Limited's FY25 results reveal a robust earnings surge driven by significant growth in Australian school-focused businesses, with underlying EBITDA more than doubling. The company signals continued momentum into FY26 amid strategic business reviews.
- 109% increase in underlying EBITDA to $0.8 million
- 26% growth in VET-in-Schools revenue to $5.7 million
- 17% rise in direct eBook sales to Australian schools
- Positive cashflow with $1.9 million cash at year-end
- Southern Solutions business under strategic review
Strong Earnings Momentum in FY25
ReadCloud Limited has reported audited financial results for FY25 that confirm the strong earnings momentum previously indicated in its October trading update. The company’s underlying EBITDA surged by 109% to $0.8 million, underpinned by a 5% increase in total revenue to $12.9 million. This growth was primarily driven by the company’s Australian school-facing businesses, notably its Vocational Education and Training (VET)-in-Schools program and direct eBook sales.
Growth Engines – VET-in-Schools and eBook Sales
The VET-in-Schools segment experienced a remarkable 26% organic revenue increase to $5.7 million, including a 29% rise in core school partnering fees. Meanwhile, direct eBook sales to Australian schools grew by 17%, reflecting strong adoption of ReadCloud’s eLearning platform. These segments benefit from high customer retention and scalable unit economics, which have contributed to improved profitability and cash generation.
Operational Discipline and Cashflow Improvement
Despite a modest 4% increase in operating expenses, ReadCloud maintained disciplined cost control, enabling gross profit to rise 11% to $7.3 million. The company turned cashflow positive, ending FY25 with $1.9 million in cash, a 34% increase from the previous year. This financial stability positions ReadCloud well for sustained growth and investment in its core school-facing operations.
Outlook and Strategic Focus for FY26
Looking ahead, ReadCloud anticipates continued organic revenue growth and strengthened customer retention for the 2026 school year. The company has already secured over 40 new school customers for its ReadCloudVET offering. However, ReadCloud is reviewing its smaller Southern Solutions business, which faces revenue headwinds, to determine its future role within the group. This strategic focus underscores the company’s commitment to prioritising its most profitable and scalable operations.
Positioning for Sustainable Growth
ReadCloud’s FY25 results highlight a company gaining traction in the competitive eLearning and vocational training market. By leveraging technology that enhances engagement and accessibility for students and educators, ReadCloud is carving out a strong niche. The coming year will test the company’s ability to maintain this momentum while navigating the challenges posed by its smaller business units.
Bottom Line?
ReadCloud’s FY25 performance sets a promising stage, but the Southern Solutions review could reshape its growth trajectory.
Questions in the middle?
- How will the Southern Solutions review impact ReadCloud’s overall business strategy?
- Can ReadCloud sustain or accelerate its strong revenue growth in the competitive eLearning market?
- What are the key drivers behind customer retention improvements for FY26?
