ReadCloud Achieves Record $10.7M School Cash Receipts with 13% Growth in VET Division for FY26

7 min read | July 28, 2026 09:15 AM AEST | By Mukul

ReadCloud Achieves Record $10.7M School Cash Receipts with 13% Growth in VET Division for FY26

Key Points

ReadCloud Limited (ASX:RCL) provides digital textbooks and vocational training courses to Australian schools
Year-to-date school cash receipts reached a record $10.7 million, marking 6 percent growth year-over-year
ReadCloudVET division generated $5.7 million in cash receipts, a 13 percent increase, with 775 courses offered and over 16,400 students enrolled
FY26 sales and fee revenue guidance remains $11.2 million to $11.5 million; company targeting over $1 million uEBITDA from continuing operations
Cash balance of $2.6 million with zero debt; completed exit from Southern Solutions industry training business
Confirmed 15 new schools for ReadCloudVET in 2027 and 24 schools in advanced negotiations; eBooks division actively securing new customers for 2027

ReadCloud Reports Record $10.7 Million in School Cash Receipts Driven by Core Divisions

For the nine months ending 30 June 2026, ReadCloud Limited achieved record year-to-date cash receipts of $10.7 million from school customers, up 6 percent compared to the prior year. This growth underscores the company’s strategic emphasis on its two primary school-facing segments: ReadCloudVET, which offers vocational training courses to secondary schools, and the eBooks division, which supplies digital textbooks to Australian and international schools. The record performance follows a strong March quarter, reflecting consistent progress in customer acquisition and retention.

ReadCloud’s expanding school client base and deeper engagement contributed significantly to this result. The eBooks division onboarded five new schools during FY26 while maintaining an 89 percent customer retention rate, highlighting the platform’s critical role in school operations and generating high-quality recurring revenue. This combination of new customer wins and strong retention demonstrates the entrenched value of ReadCloud’s solutions within the education sector, where integration complexity creates durable customer relationships.

ReadCloudVET Division Grows 13% with Record Student Enrolments and Course Offerings

The ReadCloudVET division recorded $5.7 million in year-to-date cash receipts, a 13 percent increase compared to the prior corresponding period. This growth aligns with a 14 percent rise in core partnering (auspicing) revenue on an unaudited basis. Key drivers included a school retention rate exceeding 90 percent in 2026, an increased average number of courses per retained school, and the addition of 55 new schools during FY26. The division reached a milestone of 775 courses offered, a 6 percent increase over 2025, with student enrolments surpassing 16,400—both record highs.

The commercial pipeline for the critical 2027 selling season, starting in Term 3 of 2026, has strengthened since the half-year results announcement. ReadCloudVET secured 15 new schools confirmed for 2027 (up from 10 previously), with 24 schools in advanced discussions and 39 in early engagement. To support growth, two key sales hires were made in June targeting priority regions. Additionally, the division expanded its product range by adding two new vocational qualifications for 2027 based on market demand and course popularity, positioning it to meet broader school needs.

eBooks Division Sustains Strong Retention Amid Slight Revenue Decline and Market Expansion

The eBooks division posted $5.0 million in year-to-date cash receipts, down 2 percent year-over-year, partly due to a higher trade receivables balance at 30 June 2026 and a similar decline in unaudited sales and fee revenue. Despite this, customer engagement remains strong, with five new schools added in 2026 and an 89 percent retention rate. This reflects the platform’s strategic importance and the strength of recurring revenues.

Looking ahead to the 2027 school selling season, the eBooks division is building momentum through targeted market initiatives. Two new schools have been secured for 2027 direct sales, with two schools trialing the platform and approximately 20 more in discussions. Market engagement efforts include participation in the Queensland Secondary Principals Association conference, regional presentations in Central Queensland, and planned email, workshop, and school visit campaigns during Term 3. The division also expanded its sales team by hiring an experienced Queensland-based consultant to bolster presence in key markets.

Strengthening Reseller Partnerships and International Expansion Efforts

ReadCloud is enhancing its eBooks distribution through deeper collaboration with reseller partners, providing ongoing sales training and co-marketing activities to boost market reach. Multiple training sessions have been conducted with reseller teams, with more planned. The company is also pursuing new reseller relationships to expand sales coverage in key education markets.

Internationally, ReadCloud is growing its school sales pipeline after its second year at the Council of International British Schools (COBIS) conference in London, where lead generation exceeded prior results. Follow-up activities include targeted campaigns and platform demos. The company is working closely with foundation international customer King’s InterHigh to promote adoption and sales growth through parent and student engagement content. The international pipeline includes quoting for one online school and one international school as ReadCloud pursues further overseas expansion.

Completion of Southern Solutions Exit Allows Focus on Core School Businesses

ReadCloud has finalized its planned exit from the Southern Solutions industry training division, which has ceased all training delivery. The strategic decision to exit was driven by government funding volatility causing low revenue visibility and limited operational control. As of the reporting date, no students remain in the Southern Solutions system, and all trainers and staff have concluded employment. Payments for training delivered in Victoria and South Australia have been received, with approximately $0.4 million expected in the current quarter.

This exit enables ReadCloud to focus capital, management, and sales resources on its core school-facing businesses, which exhibit strong retention and growth. Year-to-date cash receipts from discontinued operations totaled $0.4 million, down 71 percent from $1.5 million in the prior period, reflecting the planned wind-down. The exit positions the company to concentrate on higher-growth, higher-margin opportunities within ReadCloudVET and eBooks, both demonstrating strong operating momentum and customer satisfaction.

Robust Cash Position and FY26 Earnings Guidance Reflect Financial Strength

As of 30 June 2026, ReadCloud held $2.6 million in cash with no debt, providing financial flexibility to support growth initiatives across ReadCloudVET and eBooks. The company is on track to generate over $1 million uEBITDA from continuing operations in FY26, marking a significant financial inflection point driven by operating leverage in its school-focused businesses.

For FY26, ReadCloud forecasts sales and fee revenue from continuing operations between $11.2 million and $11.5 million, up 4.7 to 7.5 percent from $10.7 million in FY25. This guidance reflects confidence in ongoing strong trading conditions and pipeline development, with achievement of the upper range dependent on new school acquisitions and course expansion rates in 2027.

Positive Operating Cash Flow Maintained Amid Exit Costs as Operations Streamline

Operating cash flow from the schools division totaled $1.3 million year-to-date, down 4 percent from $1.4 million in the prior period, due to full allocation of shared services and corporate costs with none apportioned to the exited Southern Solutions division. Despite this, continuing operations sustained positive operating cash flow, demonstrating the cash-generating strength of the school-facing businesses. Group operating cash flow was $0.6 million, down 40 percent from $1.0 million, reflecting exit-related costs.

The completion of the Southern Solutions exit eliminates ongoing cash losses from the industry training business and enables a leaner, more focused operation centered on profitable school divisions. Maintaining positive operating cash flow despite exit costs highlights the resilience of ReadCloud’s core business model and the value of recurring revenues. Future operating cash flow is expected to improve as exit-related expenses cease.

Sales Team Growth and Product Enhancements Signal Market Confidence

ReadCloud expanded sales teams in both ReadCloudVET and eBooks divisions during the period. The VET division hired two sales personnel in June targeting priority regions, while the eBooks division added an experienced Queensland-based sales consultant to strengthen regional market presence. These hires reflect confidence in market opportunities and the ability to convert pipeline prospects into contracts.

Product development also advanced with the addition of two new vocational qualifications for 2027 in the ReadCloudVET division, responding to market demand and course popularity. These enhancements aim to increase the average number of courses per retained school. Combined with sales expansion and targeted market programs, ReadCloud is well positioned to capitalize on its growing pipeline and further penetrate the school market for vocational training and digital textbooks.

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