Connexion Mobility Ltd reported a 10% revenue increase to US$12.3 million for FY26, driven by its software platform expansion and the acquisition of Hallam Road Automotive. Profit after tax dipped slightly by 1%, while the company continued aggressive share buybacks to enhance shareholder value.
- 10% revenue growth to US$12.3 million
- 1% decrease in profit after tax to US$2.45 million
- Acquisition of Hallam Road Automotive adds new automotive service division
- 27.28% stake acquired in Covertrue Group, contributing to earnings
- 115.3 million shares repurchased, reducing share count
Revenue Growth Amid Slight Profit Dip
Connexion Mobility Ltd (ASX:CXZ) closed FY26 with revenues climbing 10% to US$12.3 million, a milestone reflecting its expanding footprint in automotive software and services. However, profit after tax edged down 1% to US$2.45 million, highlighting ongoing cost pressures despite top-line gains. The net tangible assets per share fell to 0.71 cents from 0.91 cents, a factor partly influenced by the company’s active share buyback program.
Strategic Acquisition Bolsters Automotive Services
In a significant strategic move, Connexion acquired Hallam Road Automotive in May 2026, marking its entry into the automotive service and repair sector. The A$5 million deal, funded through cash reserves and a A$2.5 million loan facility with National Australia Bank, immediately added a new revenue stream and was accretive to earnings per share by an estimated 25–35%. This acquisition not only diversifies Connexion’s earnings but also reduces exposure to foreign exchange volatility by adding reliable AUD-denominated income.
Software Platform Expansion and GM Canada Partnership
The company’s core software division continued to perform strongly, particularly through its OnTRAC platform servicing North American automotive OEMs and dealerships. Connexion secured an exclusive contract with General Motors Canada for its Enhanced Exposure Program, which drove a 302% quarter-on-quarter increase in customer diversification monthly recurring revenue in Q3. GM US also extended its partnership with Connexion for seven months, maintaining steady revenue from its largest customer, which accounted for 92% of total revenue in FY26.
Investment in Covertrue Group Enhances Earnings
Connexion expanded its capital allocation strategy by acquiring a 27.28% stake in Covertrue Group Pty Ltd in September 2025. This associate company, owner of Liberty Signs, contributed US$134,035 to Connexion’s profit in FY26. The investment is accounted for using the equity method, reflecting Connexion’s significant influence without control.
Share Buybacks and Capital Management
The company remained committed to enhancing shareholder value through disciplined capital management. Over FY26, Connexion repurchased 115.3 million shares on-market, adding to a total of approximately 352 million shares bought back since inception at an average price of A$0.022. This aggressive buyback program has materially reduced the share count, supporting earnings per share growth despite flat net profits.
Risks and Outlook
Connexion’s revenue concentration risk remains high, with a single customer accounting for 92% of sales, down slightly from 99% the previous year. The company cautions that any loss or reduction in business from this customer would materially impact financial results. The newly acquired automotive division and diversified investments provide some buffer, but the risk is notable. Looking ahead, Connexion plans to deepen SaaS product capabilities, optimize automotive operations, and pursue accretive M&A opportunities within its risk appetite.
Bottom Line?
Connexion’s FY26 results reflect solid revenue growth and strategic diversification, but its heavy reliance on one customer and recent acquisition integration will be key factors to monitor.
Questions in the middle?
- How will Connexion manage its customer concentration risk given 92% revenue dependency on one client?
- What operational synergies and earnings contributions can be expected from Hallam Road Automotive in FY27?
- Will continued share buybacks sustain EPS growth if net profits remain flat or decline?