RooLife Group (ASX: RLG) has reported a strong Q2 FY2026 with revenue reaching $3.25 million, driven by significant momentum in its China-based RLG Coffee vertical.
The company also maintained a lean cost base and a healthy liquidity position with a runway exceeding four quarters.
RLG Coffee Drives Q2 Revenue Surge
RooLife's RLG Coffee vertical demonstrated significant momentum during the second quarter of the 2026 financial year. The business generated $1 million in sales in November 2025 alone, followed by an impressive $2 million in December 2025.
RLG Coffee operates across multiple key channels in China, including major e-commerce platforms like JD.com, Tmall, and Douyin, alongside general trade channels and offline cafes.
This strong performance from the coffee segment contributed significantly to the group's total revenue of $3.25 million for Q2 FY2026.
Lean Costs and Strong Liquidity
Despite the revenue growth, RooLife Group maintained a disciplined approach to its cost base. The net operating cash outflow for the quarter was $0.496 million, with product manufacturing and operating costs recorded at $2.038 million, staff costs at $0.291 million, and administration costs at $0.217 million.
The company ended the quarter on 31 December 2025 with cash and cash equivalents of $1.811 million.
Total available funding, including unused financing facilities of $250,000, stood at $2.061 million.
This robust liquidity position provides RooLife Group with an estimated funding runway of approximately 4.16 quarters, supporting ongoing operations and growth initiatives.
Strategic Pivot from Annual Report
The strong Q2 results align with RooLife Group's broader strategic pivot, as outlined in its FY2025 Annual Report. This shift involves moving away from legacy digital marketing services towards higher-margin e-commerce verticals and owned-brand products.
Key to this strategy was the divestment of its Australian digital marketing unit, CHOOSE Digital, which was completed after the FY2025 year end.
Further initiatives included expanding the company's TikTok marketplace activity, with a UK store launch in April 2025 and a US launch planned, as well as entering the Indian market via JioMart.
China Coffee Deal Provides Visibility
The impressive performance of RLG Coffee builds on a significant foundational agreement. In September 2025, RooLife secured a two-year supply and procurement agreement with Zhongshan Runlian valued at a minimum of RMB300 million, equivalent to approximately A$64 million.
This agreement covers a broad range of RLG Coffee products, including coffee beans, beverages, dairy, packaged foods, and coffee and food service equipment.
This substantial contract provides significant revenue visibility and supports the coffee vertical's scaling potential and anticipated margin expansion within China's growing coffee market.
Outlook on Growth and Cost Management
RooLife Group's Q2 FY2026 results highlight strong revenue growth, primarily from its RLG Coffee business in China, coupled with disciplined cost management and a sustained liquidity position.
The company is progressing its strategic pivot towards higher-margin verticals, leveraging significant supply agreements to build future revenue streams, though execution risks in scaling new ventures remain.
Management anticipates continued execution in Q3 FY2026, acknowledging typical February seasonality in China, and remains focused on channel expansion and margin scaling while maintaining disciplined costs.
