RMA Global finds early traction in cost reset as EBITDA turns positive

Cost cuts lift RMA Global into positive EBITDA

RMA Global Limited (ASX:RMY), trading as Renowned, has returned to positive underlying EBITDA even as the property market softened and customer cash receipts fell sharply. Underlying EBITDA reached A$0.12 million in Q1 FY27, up from A$0.04 million in the prior corresponding quarter and A$0.10 million in Q4 FY26.

The improvement came mainly from tighter cost control rather than stronger revenue. The company said actions completed by 29 October had removed more than A$1.50 million in annualised costs, with the full benefit expected to flow through in coming quarters and further savings still to be executed. That cost reset sits alongside the September leadership reset, which installed Benjamin Balk as chief executive and Ashley Farrugia as chair as part of a transformation program.

Revenue and customer receipts remain under pressure

Cash receipts from customers fell 16% year on year to A$5.15 million and were down 9% from the previous quarter. Renowned attributed the weaker result to softer property-market conditions, with Promoter sales and renewal timing affected.

Group revenue declined 6% to A$5.24 million from A$5.57 million, although subscription revenue was broadly steady and core US subscriptions rose about 10% year on year. Promoter, described as a lower-margin product, accounted for much of the decline and is now being revamped. Gross profit was A$3.81 million at a 73% margin, compared with A$3.89 million at a 70% margin a year earlier.

Australia generated A$2.94 million of quarterly revenue, ahead of the United States at A$1.72 million and New Zealand at A$0.58 million. The regional figures show where the group is making progress, but they do not yet offset the pressure on the broader revenue base.

Cash runway narrows as transformation spending continues

Net cash used in operating activities was A$0.61 million for the quarter, or A$0.46 million excluding A$0.15 million of one-off termination payments. After A$0.01 million of investing outflows and A$0.08 million in lease-related financing payments, cash fell from A$2.35 million to A$1.66 million.

The Appendix 4C estimates 2.7 quarters of funding based on the reported operating cash outflow, with no unused financing facilities listed. That calculation is a snapshot rather than a forecast, and the company’s stated cost savings could change the burn rate if they are delivered. The immediate test is whether positive underlying EBITDA converts into improving operating cash flow while Renowned continues investing in product and transformation.

Curated Social earn-out adds cash and dilution

Renowned has agreed to settle the Curated Social earn-out for US$0.98 million, below the maximum US$1.5 million. The transaction follows the earlier Curated Social integration, which formed part of the company’s US expansion and rebrand strategy.

About half of the settlement, approximately A$0.70 million, will be paid in cash, including an initial US$0.15 million payment and monthly instalments through October 2027. The other half will be settled through the issue of 21.97 million shares at a deemed A$0.031 per share, representing about 3% of shares on issue. No earn-out payments were made during the quarter.

AI and product execution become the next test

Chairman Ashley Farrugia said the board had given Balk and his team a mandate centred on accountability, faster execution, profitability and greater use of AI. Management said AI was being used to improve internal efficiency, help customers increase discoverability and embed new capabilities in Renowned’s products across Australia, New Zealand and the United States.

Those ambitions now have a narrow financial backdrop. The company must show that the cost reductions are recurring, the Promoter revamp can arrest product weakness and the US subscription gains can continue, while cash reserves absorb the settlement and other operating demands. The next quarterly cash flow report should provide the clearest evidence of whether the reset is improving the business or merely buying time.