ReadCloud lifts EBITDA by 73% on surging vocational education and eBook revenue

eLearning software solutions provider ReadCloud (ASX: RCL) has reported “exceptional” results for the first half of financial year 2025, with total organic revenue growth of 13% to $9.2 million outpacing operating cost growth of just 1%.

As a result, underlying EBITDA grew 73% to $1.8m and statutory profit increased 214% to $1.32m.

The company’s VET (vocational education and training)-in-schools solution was the standout performer for the period, with revenue increasing by 32% on the previous corresponding period to $3.8m.

VET program

ReadCloudVET offers 50 qualifications across Australian school-based registered training organisations.

The program delivered 733 qualifications during the first half (up 14% on the previous corresponding period) and, after adding 55 new locations this year, now serves 372 schools around the country.

Qualifications per continuing school increased to 2.1 from 1.9 in the previous period, while retention increased to 94% against a gross margin of over 90%.

ReadCloud said 2026 pre-sales and government recognition of the nationwide skills shortages would create favourable conditions for extended growth in the medium term.

Southern Solutions revenue

The revenue for Southern Solutions Training Services increased by 2% to $1.1m, following growth of 50% in the previous year on the back of strong student enrolments.

ReadCloud acquired Southern Solutions in 2022.

Even with the upswing, the company said the timing and extent of government subsidies on a state-by-state basis had impacted Southern Solutions’ revenue profile.

eBook performance

ReadCloud’s eBook revenue grew 2% to $4.23m for the period, driven by a 10% increase in domestic direct sales following the onboarding of seven new school customers.

Management is evaluating opportunities to accelerate the growth of this business unit, including the expansion of distribution channels and geographies to reach more schools.

The ReadCloudVET and eBook businesses — which accounted for 88% of total revenue for the period — remain on track to deliver to the company’s stated baseline growth target of 15% for the full year.

Industry tailwinds

ReadCloud said that multiple tailwinds – including the move to online education, a broad-based recognition of skills shortages and the importance of vocational training – continued to benefit the various large addressable markets in school-based education.

“Engagement with market participants in the international schools sector during May has highlighted significant opportunity for the growth of our eBooks business alongside the continuing momentum in VET-in-schools,” the company said.

“ReadCloud is firmly positioned to capitalise on these opportunities with strong product-to-market fit, consistently positive operating cash flow and a strong balance sheet.”