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Highlights
- Financial Turnaround: Achieved $2.9 million positive EBITDA in H1 FY25, compared to a $6.8 million loss in the prior corresponding period (pcp).
- Revenue Growth: Q2 FY25 net revenue up 42% YoY to $28.7 million, with a gross profit margin of 48%.
- FDA Milestone: Completed infant enrollment for the USA Clinical Trial, progressing toward permanent FDA approval by October 2025.
Bubs Australia Limited (ASX:BUB) has announced its unaudited financial results for Q2 FY25 and H1 FY25, marking a significant turnaround with a $2.9 million positive EBITDA, compared to a $6.8 million loss in the prior corresponding period. The company also reported substantial progress in its US FDA regulatory journey, a critical step toward securing permanent access to the US market.
Financial Performance
Bubs delivered group gross revenue of $32.9 million in Q2 FY25, translating to a net revenue of $28.7 million, a 42% year-on-year increase. The company’s gross profit margin improved to 48% in H1 FY25, up from 38% in the prior year. Operating cash flow also shifted dramatically, with a $3.9 million inflow in Q2 FY25 compared to a $13 million outflow in Q2 FY24.
As of December 31, 2024, Bubs reported $17.2 million in total cash and cash equivalents, along with $5 million in undrawn debt facilities. The company reaffirmed its FY25 outlook, targeting $102 million in revenue, a gross margin exceeding 40%, and EBITDA breakeven.
Operational Highlights
Bubs successfully transitioned to a new product packaging format, with 98% of January 2025 sales comprising the updated tins. The company noted that the sellout of older pack formats has been largely completed, allowing for a full focus on marketing and distribution of the new packs.
H1 FY25’s positive EBITDA milestone, ahead of the company’s FY25 breakeven target, was supported by favorable currency movements in the US dollar and operational efficiencies.
FDA Progress and US Market Expansion
Bubs continued to make strides in its US FDA clinical trial, a key component of its regulatory strategy. The trial, designed to meet the FDA's requirements following the 2022 Infant Formula Crisis, has now completed its infant enrollment phase, with 478 participants. The 16-week study remains active as the remaining infants complete their evaluation.
Currently operating under the FDA’s “Enforcement Discretion” regulatory framework, Bubs is one of only eight companies permitted to market infant formula in the US during this transitional period. Permanent FDA approval is expected by October 2025, providing long-term access to one of the world’s largest infant formula markets.
Following the update, BUB's share price increased by whopping 22.5% to 12 cents per share at the time of writing on 22 Jan 2025.
