Halo Technologies narrowed its half-year loss by 51% to $3 million, driven by a 43% improvement in underlying EBITDA through significant cost reductions. The company launched a $6.75 million convertible notes offer amid ongoing going concern uncertainty.
- Half-year net loss reduced 51% to $2.98 million
- Underlying EBITDA loss improved 43% to $3.46 million
- Operating revenue down 13%, brokerage revenue hit by Iran war volatility
- Convertible notes raise $4.5 million of $6.75 million target
- Going concern material uncertainty remains despite cost savings and strategic initiatives
Significant Loss Reduction Driven by Cost Discipline
Halo Technologies Holdings Ltd (ASX:HAL) reported a half-year net loss after tax of $2.98 million for the six months ended 30 June 2026, marking a 51% improvement compared to a $6.06 million loss in the prior corresponding period. The underlying EBITDA loss narrowed 43% to $3.46 million, reflecting a $2.61 million improvement largely attributed to aggressive cost-cutting measures.
The company’s operating revenue declined 13% to $6.77 million, with brokerage revenue falling 18% to $5.01 million. This downturn was primarily linked to market volatility triggered by the outbreak of the Iran war in late February 2026. Subscription revenue, however, grew 4% to $1.76 million, now representing 26% of total operating revenue, underscoring the resilience of Halo’s recurring income streams.
Cost Reductions Focused on Employee and Trading Expenses
Total expenses dropped 20% to $11.05 million, driven by a 39% reduction in employee benefits expense to $2.07 million, mainly from the UK operations transitioning to a capital-light, technology-only B2B model. Trading costs also fell 24% to $4.54 million, alongside lower legal, professional, and marketing expenses. These savings were partly offset by a $0.19 million increase in information technology and system expenses and a $0.15 million rise in finance costs.
Net cash used in operating activities improved significantly, shrinking 62% to $1.42 million from $3.76 million in the prior period. Cash and cash equivalents stood at $2.65 million at the end of June 2026.
Capital Raise and Going Concern Uncertainty
Halo Technologies initiated a capital raising via a $6.75 million convertible notes offer in July 2026, securing $4.5 million in subscriptions by the reporting date. The convertible notes carry 12% annual interest and are convertible into shares subject to specified share price conditions. The short-term loan outstanding at 30 June was fully repaid in July 2026.
Despite these positive steps, the company’s balance sheet remains in net liabilities of $8.06 million, and the auditors flagged a material uncertainty regarding Halo’s ability to continue as a going concern. The directors cited ongoing negotiations with prospective enterprise customers, AI-driven cost-saving initiatives, and a historical ability to raise capital as grounds for optimism about the company’s future viability.
Strategic Growth Initiatives and Product Expansion
Halo continues to expand its Managed Funds capability, offering access to a near-complete universe of Australian managed funds alongside global equities and ETFs through a single integrated platform. This expansion broadens the company’s addressable market, particularly targeting financial planners and wealth advisers.
The company is also developing an AI-enabled analytical framework to support future research subscription products, aiming to transform broad financial information into structured insights. Meanwhile, strategic partnerships with financial institutions and dealer groups in Australia and the Asia-Pacific region remain a key focus to drive scalable, capital-efficient growth.
Leadership and Share-Based Incentives
Following the appointment of Peter Oxlade as CEO, Halo granted 35 million performance rights to him as part of a remuneration and retention package. The non-cash share-based payment expense related to these rights amounted to $195,000 for the half-year, included in the statutory loss but excluded from underlying EBITDA.
The performance rights vest subject to share price hurdles and continued service, aligning management incentives with shareholder value creation.
Bottom Line?
Halo Technologies’ improved earnings and cost discipline offer a more stable footing, but the company’s survival hinges on successful capital raising and commercial deals yet to be sealed.
Questions in the middle?
- Will Halo’s ongoing capital raising close fully and on what terms?
- Can the company convert advanced commercial discussions into binding contracts soon?
- How effective will AI initiatives be in delivering sustainable cost savings?