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Highlights
- ReadCloud reports 73% EBITDA growth in H1 FY25
- VET-in-schools revenue rises 32%, boosting total earnings
- eBook segment shows stable growth and expansion potential
ReadCloud (ASX:RCL), an education-focused software solutions company, has reported a notable performance for the first half of FY25, with strong momentum across its core segments. The company saw its total organic revenue rise by 13% year-on-year to $9.2 million, while controlling operating costs, which increased by just 1% during the same period.
This efficient cost management translated into significant earnings growth. Underlying EBITDA surged by 73% to $1.8 million, while statutory profit more than tripled with a 214% increase, reaching $1.32 million. Much of this growth was driven by robust results in the vocational education and training (VET) segment.
ReadCloudVET, the company's VET-in-schools solution, stood out with a 32% increase in revenue, contributing $3.8 million for the half. The program now offers 50 qualifications through Australian school-based registered training organisations. During the first half, 733 qualifications were delivered — a 14% increase compared to the previous corresponding period. ReadCloud added 55 new school locations this year, bringing its national footprint to 372 schools.
The average number of qualifications per continuing school improved from 1.9 to 2.1, while the program’s retention rate reached an impressive 94%, supported by a strong gross margin of over 90%. ReadCloud anticipates favourable conditions ahead, with government recognition of skills shortages and strong pre-sales for 2026 supporting the company’s medium-term growth strategy.
Southern Solutions, acquired by ReadCloud in 2022, recorded revenue growth of 2% to $1.1 million. While the segment had previously grown 50% in the past year, its current performance was slightly tempered by variations in government subsidies across states.
Meanwhile, ReadCloud’s eBook segment grew by 2% to $4.23 million. This was primarily driven by a 10% rise in direct domestic sales following the addition of seven new school customers. Management is actively exploring new distribution channels and regional markets to boost this division’s future performance.
Together, the VET and eBook divisions contributed 88% of total revenue. These results position ReadCloud well to meet its 15% annual growth target. With consistent operating cash flow and a healthy balance sheet, the company is also strategically placed within the evolving ASX 300 landscape.
As education continues to digitise and the need for vocational training rises, ReadCloud remains aligned with broader market trends. For investors exploring stable income-generating opportunities, ReadCloud’s positioning within the education sector complements interest in ASX dividend stocks, known for their long-term potential and consistent returns.
