De.mem Extends Growth Streak With Record $842,000 Operating Cash Flow

Operating Cash Flow Reaches Record Level

De.mem Limited (ASX:DEM) has produced its strongest quarterly operating cash flow in company history, turning $842,000 positive in the September quarter after $424,000 in June and $504,000 in March. The result takes operating cash flow for the first nine months of 2026 to $1.77 million, although the filing reports cash receipts and cash flow rather than statutory revenue or profit.

Customer cash receipts reached approximately $10.1 million, up 29% from the corresponding quarter a year earlier and the company’s second-highest quarterly result. That extended De.mem’s growth streak to 30 consecutive quarters, with more than 90% of receipts described as recurring. Nine-month receipts were approximately $30.1 million, 28% above the prior corresponding period.

Recurring Revenue Model Supports Cash Position

The cash result continues the operating turnaround highlighted in De.mem’s positive cash flow turnaround, which reported positive operating cash flow in the first half of 2026. De.mem said the latest figures were achieved while continuing to fund membrane development, product development and integration activities, including approximately $180,000 spent on its Singapore subsidiary’s membrane and product work during the quarter.

Cash and cash equivalents rose to approximately $4.8 million at 30 September, from $4.3 million three months earlier and $4.0 million at the end of December 2025. The company also reported $438,000 drawn under an unsecured shareholder loan, repayable over five years and not convertible into shares. The improved cash balance therefore sits alongside a modest disclosed financing obligation, rather than representing a debt-free position.

Mining Contracts Add to Western Australian Momentum

De.mem said its Western Australian operations generated approximately 47% of group cash receipts during the quarter. The segment includes Core Chemicals, acquired in November 2025, alongside De.mem-Capic and Auswater Systems. Core Chemicals supplies specialty chemicals to gold mining customers, and De.mem said it had added new clients since the acquisition while pursuing further cross-selling across the enlarged customer base.

The company signed a framework agreement to supply antiscalants to an Australian mining customer, estimated at approximately $800,000 over the next 12 months from the December 2026 quarter. The agreement can be terminated at convenience, so the stated value should not be treated as guaranteed revenue. De.mem also received equipment orders worth approximately $350,000 from an Australian mining customer and $380,000 from an industrial customer through its German subsidiary, with both expected to be delivered in calendar 2027.

WaterMark Certification Remains a Commercial Milestone

De.mem is still working towards WaterMark certification for its graphene oxide-enhanced ultrafiltration membrane, which it expects in the coming months. The company says certification would enable the products to be launched into Australian drinking-water applications. It already holds US NSF certification for the membrane technology and has distribution partnerships covering North America and several Asian markets, but the filing does not quantify domestic product sales or provide a launch date.

Management has maintained a positive calendar 2026 outlook, supported by the 28% nine-month cash-receipts growth, positive operating cash flow, recurring receipts and new contracts. The next hard tests are less about another upbeat target than about conversion: whether the antiscalant agreement begins as expected, whether the 2027 equipment orders are delivered, and whether Core Chemicals’ customer additions translate into sustained group cash generation.