Objective (OCL) H1 2025 earnings summary

Executive summary

• Revenue for H1 FY25 reached $61.3 million, up 6% year-over-year, with annualized recurring revenue (ARR) up 10% to $107 million and net profit after tax at $17 million, up 4% year-over-year.

• Adjusted EBITDA rose 6% to $23.3 million, and cash increased 26% to $84.3 million, with no external borrowings.

• 84% of revenue was recurring, the highest ever, driven by the transition to subscription software and SaaS, with SaaS CAGR at 29%.

• Interim unfranked dividend of 9.0 cents per share declared, payable 17 March 2025.

• Strategic focus on SaaS and subscription revenue, with strong ARR growth and margins, and major customer wins in North America and the UK.

Financial highlights

• Adjusted EBITDA margin exceeded 39%, with gross margin at 94% and operating margin at 32%.

• R&D investment for H1 was $15.1 million, representing 30% of software revenue, with cumulative R&D since listing set to surpass $300 million by June 30.

• Cash conversion ratio (operating cash flow/EBITDA) was 54%, with operating cash flow at $12.6 million.

• Earnings per share rose to 17.9 cents, and net tangible assets per share increased to 37.9 cents.

• No large, one-off deals impacted results, with growth spread across business lines.

Outlook and guidance

• Management targets 15% ARR growth for FY2025, with H1 growth at 10% and strong early H2 momentum.

• Confident in achieving full-year ARR growth target, with no reliance on a few large deals.

• Expecting organic growth to accelerate in H2, especially in Planning and Building as NZ market conditions improve.

• Major acceleration for 360 product line anticipated in FY26 and beyond.

• M&A remains a focus, but organic growth is prioritized; smaller, strategic acquisitions possible.