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Connexion Mobility Ltd (ASX:CXZ) has announced the successful completion of its acquisition of Hallam Road Automotive, a leading automotive service and repair centre in Melbourne's South-East, alongside reporting a robust 12% revenue growth for the quarter ending 30 June 2026. The mobility software firm achieved revenues of USD $3.4 million and an 89% rise in diluted earnings per share to 0.098 US cents in Q4 FY26. This acquisition signifies a strategic shift, creating Connexion Automotive as a new operational platform complementing its core software business.
Key Highlights
- Connexion Mobility Ltd (CXZ) completed the Hallam Road Automotive acquisition, a Melbourne-based automotive service and repair centre, during Q4 FY26.
- Q4 revenue rose 12% quarter-on-quarter to USD $3.4 million, with gross profit increasing 9% to USD $2.0 million.
- Diluted EPS jumped 89% to 0.098 US cents, while net profit before tax climbed 83% to USD $1.1 million.
- Operating cash flow improved by 54% to USD $0.9 million, although net cash and investments declined 36% to USD $3.8 million due to the acquisition.
- GM Canada continued customisation work during the quarter, with GM US extending its agreement for an additional seven months under the same commercial terms.
- Connexion Software added 27 net-new dealership subscriptions in Q4, marking a return to product sales growth.
Strategic Shift: Launching Connexion Automotive as a Second Business Platform
Through the acquisition of Hallam Road Automotive, announced to the ASX on 22 May 2026, Connexion Mobility has redefined its corporate structure. This transaction establishes Connexion Automotive as a second significant operating platform alongside its core Connexion Software business. Hallam Road Automotive represents the inaugural operating business within this new division, marking Connexion's entry into the automotive service and repair market.
The acquisition aligns with Connexion's mission to be the "Connexion" between Fleet Owners and the Future of Mobility. According to company updates, HRA fulfilled all initial criteria for an attractive platform company: well-established operations, capable management, a balanced growth and profitability profile, diverse revenue streams, and Australian Dollar-denominated earnings. Connexion plans to add value to HRA while continuing organic and inorganic growth initiatives. One month of HRA revenue was included in Q4 FY26 results.
Revenue and Profit Growth Fueled by Software Subscriptions and OEM Programs
Connexion Mobility's Q4 FY26 financials demonstrate strong performance across its software operations. Revenue increased 12% quarter-on-quarter to USD $3.4 million, driven by growth in Connexion subscriptions, fleet-size-linked income, steady feature-enhancement revenue, a full quarter from GM Canada's Enhanced Exposure Program, and an R&D tax credit for FY25. Gross profit rose 9% to USD $2.0 million, reflecting enhanced operational leverage.
Net profit before tax surged 83% to USD $1.1 million, outpacing revenue growth and indicating improved cost control and efficiency. Diluted EPS rose 89% to 0.098 US cents, mirroring profit gains and capital structure. Operating cash flow increased 54% to USD $0.9 million, underscoring strong cash conversion despite capital deployed for the HRA acquisition.
GM Canada Customisation and GM US Contract Extension Strengthen OEM Ties
During Q4 FY26, Connexion advanced its collaboration with General Motors in North America through ongoing customisation and contract extension. GM Canada customised Connexion's platform to support its Enhanced Exposure Program (EEP), analogous to GM US's Courtesy Transportation Program (CTP). This follows previous GM US customisations, demonstrating Connexion's platform meets complex OEM requirements across regions.
GM US extended its agreement with Connexion for seven months during the quarter under existing commercial terms, allowing time for contract renewal. Connexion expressed satisfaction with continued endorsements from both GM US and GM Canada, indicating a stable and deepening relationship with one of the world's largest automotive manufacturers.
Ongoing Product Development and Marketplace Expansion in Q4
Connexion's engineering team maintained active development across multiple products in Q4 FY26, including Paid Rental, Group Reporting & Analytics, Continuous Improvement, Payments, License & Insurance Verification, AI Support, AI Chat, GM Canada customisations, User Analytics, and other initiatives. This extensive pipeline highlights the company's commitment to platform enhancement and responsiveness to key OEM customer needs.
The Marketplace, launched in H2 FY24, continued steady month-on-month subscription growth during the quarter. Serving both as a revenue source and a showcase for R&D efforts targeting OEM customers, the Marketplace focuses on features valued by OEMs and large dealer groups, such as Toll Management. This targeted product strategy reflects disciplined engineering resource allocation toward high-value segments.
Dealership Subscription Growth Returns After Flat Period
Following a period of stagnant dealership sales, Connexion achieved net-new dealership subscription growth in Q4 FY26, adding 27 new subscriptions compared to 13 in Q3—a 108% increase signaling renewed momentum in direct dealership sales. This growth was anticipated in prior updates.
Despite minimal field team allocation to product sales in Q4, with resources focused on OEM-driven initiatives, the return to dealership growth indicates underlying platform demand. Connexion pursues revenue diversification via four channels: deepening OEM commercial relationships, expanding within OEM departments, initiating new OEM partnerships, and strengthening dealership ties. The dealership growth despite limited sales resources underscores platform appeal in this segment.
Expansion of Commercial Partnerships and Integration Efforts
Connexion reported ongoing growth in product subscriptions and user acceptance testing across key commercial partnerships in Q4 FY26, including Tollaid, OnDemand, UVeye, Stripe, and Modives. These integrations enhance platform functionality by enabling direct access to third-party services, positioning Connexion as a central hub in automotive retail and fleet management ecosystems.
These partnerships offer strategic benefits: extending platform features without in-house development, improving customer retention through expanded value, and generating additional revenue via marketplace subscriptions and licensing. Connexion's focus on selecting, building, and distributing new products through its Marketplace reflects a scalable, partner-driven growth model that optimizes engineering resources and broadens use cases.
Net Cash and Investments Decline Due to Hallam Road Acquisition Funding
Connexion's Net Cash & Investments fell 36% to USD $3.8 million in Q4 FY26, reflecting capital deployed for the Hallam Road Automotive acquisition. The portfolio includes cash minus debt, managed funds, and a minority equity stake in Covertrue Group. The company did not disclose acquisition price or financing details.
Despite this decline, management affirmed that strategic and financial goals remain fully funded, indicating sufficient capital to support operations and pursue further M&A opportunities. The company plans to reinvest in operating businesses where returns justify capital deployment and will continue evaluating acquisition targets that fit its platform strategy. Balancing capital use for acquisitions with financial flexibility will be key for investors to watch.
Strategic Justification for Hallam Road Automotive Acquisition and Platform Synergies
Connexion outlined a strategic rationale emphasizing vertical integration: becoming a better software supplier by operating automotive services and a better operator by supplying software. This approach fosters competitive advantages through operational insight and domain expertise flowing between Connexion Software and Connexion Automotive. Understanding service operations internally enables development of more relevant solutions for both internal and external customers.
The acquisition supports Connexion's priority to enhance long-term shareholder value through earnings size, sustainability, and diversification. By acquiring a profitable automotive service centre, Connexion diversifies revenue beyond software subscriptions, reduces reliance on individual OEMs, and gains Australian Dollar-denominated earnings, aligning with its FX risk management goals. HRA's balanced growth, profitability, and diverse revenue streams support organic and inorganic expansion, reflecting management confidence in its medium- to long-term prospects.
Forward Strategy and Capital Deployment Focus
Connexion management detailed a forward strategy based on three pillars: expanding the software platform via deeper OEM relationships, establishing Connexion Automotive as a gold standard for customer experience, and deploying capital to maximize shareholder value. Through Connexion Software, the company aims to be the unified platform for moving people, parts, and vehicles by investing in R&D and strengthening customer ties to enhance platform usage and revenue.
Connexion Automotive seeks to set service industry standards amid aging demographics and rapid technological change, leveraging the synergy between software and service operations. Financially, the company targets growth in earnings size, sustainability, and diversification. With internal reinvestment funded, Connexion will continue sourcing and assessing M&A opportunities to build a diversified, integrated automotive services business capturing value across the retail and service ecosystem.
