Knosys Faces Profitability Pressure as Libero X Development Costs Mount

Revenue Growth Amid Strategic Investment

Knosys Limited has reported a modest revenue increase of 4.6% to just over $5 million for the half-year ended 31 December 2025, buoyed by higher licence and support fees alongside a striking 137% jump in project and implementation revenues. This growth underscores the company’s ongoing traction in its core software-as-a-service offerings, including its flagship library management and knowledge management solutions.

Despite this top-line improvement, Knosys recorded a net loss attributable to members of $1.53 million, a substantial widening from the $0.34 million loss in the previous corresponding period. The loss reflects deliberate and significant investment in personnel and cloud infrastructure to advance the development of Libero X, the next-generation library management platform slated for commercial launch in the 2027 financial year.

Libero X and Product Development Drive Costs

The company’s operating expenses rose 22% to $6.9 million, driven by increased spending on the Libero X project, higher advisory and consulting fees, and cloud hosting costs. Non-cash amortisation charges of $358,000 related to intangible assets from prior acquisitions also weighed on the profit and loss statement. Knosys is positioning Libero X as a world-class, AI-powered library management solution targeting public libraries, with a focus on expanding into North American and Germanic markets.

Annual Recurring Revenue (ARR) remained stable at $9.5 million, with gains in the KnowledgeIQ and Libero product lines offsetting customer attrition in the GreenOrbit intranet business. The company’s cash position declined to $1.9 million at the half-year mark, down from $2.8 million at June 2025, reflecting the timing of large annual licence fee receipts and ongoing investment in product development.

New Contracts and Strategic Partnerships

Knosys secured four new customers for its Libero 6 cloud service during the period, including Oberon Council and Fliedner University, while existing clients expanded their subscriptions, particularly for the Libero mobile application. These wins contribute to a high customer retention rate and underpin the company’s steady ARR.

Post-period, Knosys announced a two-year agency agreement with UK-based Oak Engage Limited to introduce Oak’s intranet and employee experience platform to GreenOrbit customers. This partnership allows Knosys to offer an upgraded intranet solution without incurring development costs, with Oak Engage assuming direct customer relationships after the initial period. The financial impact depends on customer migration rates, which remain uncertain.

Outlook and Market Positioning

Looking ahead, Knosys is preparing detailed sales and marketing strategies to support the global rollout of Libero X in FY27. The company’s focus on innovation and regionalisation aims to strengthen its competitive position in the library management software market. While the widened loss highlights the cost of growth, the stable ARR and new contracts provide a foundation for future revenue expansion.