Spacetalk (ASX: SPA) has executed a non-binding Memorandum of Understanding (MOU) with TPG Telecom (ASX: TPG) to distribute its Family Safety software, marking a significant step in its strategic pivot towards a software-led, telco-embedded model aiming for substantial recurring revenue growth.
The agreement will see** Spacetalk** distribute its Family Safety software to Vodafone's postpaid customers, part of an effort to expand the company's reach through a major telecommunications partner.
The MOU targets binding commercial, legal, and technical terms by Q3 FY26. Spacetalk's Family Safety platform was initially launched in November 2025.
At this stage, the financial impact of the deal cannot be quantified by Spacetalk.
Software Platform Pivot Strategy
This MOU represents a strategic shift for Spacetalk from a hardware-led to a software-led, telco-embedded platform model.
The company aims to leverage this model for substantial recurring revenue growth.
Spacetalk has stated a target of $20-25 million in Annual Recurring Revenue (ARR) by CY2026. This target is a key indicator of its shift to a subscription-based model.
Spacetalk's platform has seen strong uptake, with over 500,000 downloads since its launch. It also boasts high app ratings, including 4.4 in Australia and between 4.8–4.9 in the UK and Canada.
Previous Strategic and Financial Context
In FY25, Spacetalk reported a total income of $20.1 million. Annual Recurring Revenue (ARR) stood at $12.1 million, representing a 25% increase year-on-year, with recurring revenue comprising 57% of total revenue.
The company underwent a strategic transformation to a Software as a Service (SaaS) model, focusing on recurring revenue and cost control. Despite these efforts, Spacetalk reported an annual net loss for the period.
Recent context includes the launch of a new subscription-based Spacetalk App and Freedom Platform in November 2025. Furthermore, Spacetalk received an $877k Research and Development tax refund in November 2025, providing non-dilutive capital.
ARR Growth and Future Outlook
Spacetalk's previous ARR was $12.1 million at FY25, with a stated target to grow this to $20-25 million by CY2026.
The company noted a developing international telco pipeline beyond Vodafone, indicating potential for further global expansion.
This strategic shift is designed to improve customer engagement, retention, and average revenue per user (ARPU).
The MOU with TPG Telecom is a key step in Spacetalk's strategic pivot to a software-led, recurring revenue model, aligning with its ambitious ARR targets.
While non-binding and with unquantified financial impact, it validates the company's strategy and taps into a significant telco distribution channel.
Successful execution and conversion to binding agreements will be crucial for realising this growth potential.
