Beonic Triples EBITDA Margin as Moroccan Airports Rollout Hits Key Milestone

EBITDA Margin Surges Amid Operational Efficiency

Beonic Limited (ASX:BEO) has delivered a striking improvement in profitability for the nine months ending March 2026, with its year-to-date EBITDA margin tripling to 15.8% from 4.8% in the prior corresponding period. This leap to $2.8 million EBITDA on $17.5 million revenue reflects a disciplined cost structure and a sustained focus on high-quality recurring revenue streams. Gross margins also inched higher to 77.7%, underscoring operational leverage within the business model.

The company’s CEO, Billy Tucker, emphasised the significance of this margin expansion as a demonstration of Beonic's operating leverage, alongside the retirement of a $4.65 million AUD debt facility that matured earlier in the year. This debt retirement materially de-risked the balance sheet, positioning the company for a more sustainable future.

Moroccan Airports Rollout on Schedule, Driving Future Revenue

Central to Beonic’s growth narrative is the ongoing rollout of its passenger flow management solutions across seven Moroccan airports. The project is progressing on schedule, with deployment completed at three airports and underway at the remaining four. Full delivery is expected by 30 June 2026, after which the contract will begin contributing its full operating revenue, estimated at AUD 2.0 million in annual recurring revenue (ARR). The entire rollout is anticipated to generate incremental billings of approximately AUD 7.0 million, subject to currency fluctuations.

This rollout forms a key part of Beonic’s mid-term ARR improvement strategy, complementing a qualified sales pipeline valued at AUD 38 million. The pipeline is expected to underpin ARR growth and support conversion into profitability in FY27. The Moroccan Airports project builds on the initial contract secured last year, which was a significant milestone for the company’s expansion in the EMEA region and aligns with the company’s ambition to strengthen its global footprint. The steady progress of this rollout follows earlier capital raises and debt repayments that enabled Beonic to accelerate its project delivery and innovation efforts, as reported in previous quarters Moroccan Airport Deal and Moroccan Airports Project.

Revenue Growth and Currency Headwinds

Beonic’s total revenue for Q3 FY26 rose 13% year-on-year to AUD 6.3 million, with year-to-date revenue up 8.4% to AUD 17.5 million. However, recurring revenue and ARR showed a decline of around 10%, impacted notably by the strengthening Australian dollar against the US dollar, British pound, and euro. Nearly half of the quarter’s collections were in foreign currencies, which translated into a reported ARR of AUD 16.2 million, down 8.8% from the prior year. On a constant currency basis, ARR would have been approximately AUD 16.7 million.

The quarter also reflected churn from two international customers disclosed earlier in the half-year report, a factor that management is addressing through contract renewals and new wins. The company secured $1.5 million in contract wins and expansions during the quarter, spanning key airports like Charlotte Douglas International and Austin-Bergstrom in the US, as well as retail and infrastructure clients across the Asia-Pacific region. Notable renewals included Miami International Airport and Verizon in the US, and multiple APAC venues, reinforcing Beonic’s retention strength.

Capital Structure and Cash Flow Management

January 2026 marked the full repayment of Beonic’s USD 3.1 million (AUD 4.7 million) debt facility, eliminating a significant interest burden. To maintain liquidity, the company arranged a $1 million unsecured short-term loan from two directors and one executive, carrying a 15% annual interest rate and repayable within the year. This facility reflects market terms for unsecured loans of this size and was approved by independent board members.

Operating cash flow for Q3 showed a modest outflow of $125,000, though year-to-date operating activities generated a positive cash inflow of $705,000, a marked improvement from the prior year’s $2.5 million outflow. Investment in R&D continued, with $693,000 spent on intellectual property development during the quarter. The company’s cash reserves stood at $988,000 at quarter end, with total debt facilities of $5.3 million including convertible notes and the new director-led loan.

Outlook Focused on Growth and Profitability

Looking forward, Beonic expects the Moroccan Airports contract to transition from delivery to full revenue contribution by the end of June 2026, boosting recurring revenue against a largely fixed cost base. The company targets an exit ARR range of $17.5 million to $18.0 million for FY26, which management views as a platform for re-acceleration rather than a plateau.

Key growth drivers include conversion of the $38 million qualified pipeline and continued margin discipline to convert incremental ARR into EBITDA at high marginal rates. Beonic is also pushing product innovation, notably with its Beonic Vision solution that leverages existing camera networks for visitor analytics without compromising privacy. This product is gaining traction in airports and retail venues, aiming to deepen customer engagement and competitive advantage.

With a sharpened focus on profitability and cash flow positivity, Beonic’s strategy balances growth with financial stability, maintaining a lean cost structure while scaling revenue operations. The company’s ability to navigate currency headwinds, sustain contract renewals, and deliver on the Moroccan Airports project will be critical to sustaining momentum.