Gratifii Faces Going Concern Warning Despite Acquisition-Fueled Growth

Revenue Growth Fueled by Strategic Acquisitions

Gratifii Limited (ASX: GTI) has reported a solid 22% increase in revenue for the half-year ended 31 December 2025, reaching $29.3 million. This growth was largely driven by the full half-year contribution from its acquisitions of Club Connect and Rapport Group Limited, which expanded the company’s footprint across multiple sectors including retail, hospitality, and financial services.

Despite this top-line improvement, the company’s Loyalty Services revenue declined by 39%, impacted by macroeconomic headwinds and the closure of certain programs, notably in the Gold Coast tourism sector. Rewards revenue, however, grew 38%, reflecting the successful integration of acquired platforms.

Losses Narrow but Integration Costs Weigh on Profitability

Gratifii recorded a net loss before tax of $2.1 million, an improvement from the $3.8 million loss in the prior corresponding period. Underlying EBITDA, however, showed a slight increase in loss to $1.26 million, primarily due to elevated technology and personnel costs associated with integrating the Club Connect platform and migrating customers onto the unified Gratifii Connect system.

The company expects these integration expenses to subside following the completion of the Gratifii Connect platform in February 2026, which management believes will unlock operational efficiencies and cost synergies.

Capital Raise and Acquisition Pipeline Signal Growth Ambitions

In late December 2025, Gratifii successfully raised $2.5 million through an institutional placement to support its growth initiatives. The company is actively progressing the acquisitions of Mosh Social Media Limited and a perpetual licence for the FuturePass digital wallet, aiming to broaden its digital engagement offerings.

These strategic moves align with Gratifii’s vision to enhance revenue quality and margin profiles, positioning the business for sustainable long-term growth.

Client Contract Changes and Outlook

Notably, RACV, a significant client contributing approximately $8.2 million in revenue during the half-year, has given notice to terminate its services agreement effective May 2026. While this represents a loss of revenue at a modest margin, Gratifii’s board and management remain confident that the impact will be mitigated through operating expense reductions and new sales opportunities, particularly via the Marketplacer platform.

The company’s focus remains on completing integration efforts, realising cost savings, and capitalising on a robust sales pipeline in both loyalty and rewards segments.

Financial Position and Going Concern Considerations

Gratifii’s balance sheet shows net assets of $7.8 million but a net current liabilities position of $6.3 million as at 31 December 2025. The auditor issued an unqualified review report but included an emphasis of matter regarding going concern, reflecting uncertainties tied to the company’s ability to raise additional capital and execute its strategic plans.

The directors have prepared cash flow forecasts and remain confident in securing further funding and achieving operational improvements to sustain the business.