Biome Australia Ltd (ASX: BIO)
Biome Australia Ltd (ASX: BIO) delivered another strong quarter in Q2 FY25, reporting positive EBITDA of $234k, a 92% improvement from Q1 ($122k). This marks the fourth consecutive quarter of positive EBITDA, reflecting the company’s effective cost management and operational discipline. Quarterly sales revenue reached an all-time high of $4.61m, exceeding forecasts by $101k and achieving a 41% year-over-year (YoY) increase. Cash receipts from customers also rose 41% YoY to $4.34m, with gross margins maintained above 60%. The company anticipates reporting its first net profit in H1 FY25, supported by strategic execution under the Vision 27 plan. Vision 27 targets cumulative sales of $85m over FY25–27, requiring a compound annual growth rate (CAGR) of ~45%. Currently, Biome is achieving a three-year CAGR of 70.5%, underscoring its ability to meet and potentially exceed these growth targets.
Operational highlights for the quarter include a $107k net operating cash inflow, ending with $2.59m in cash on hand. Inventory levels rose to $3.1m (wholesale value of $7.75m), up $700k from Q1, in preparation for the typically stronger second half of the financial year. Expenses were carefully managed, with sales, advertising, and marketing costs reduced by $187k to $315k, while payments for inventory and fulfilment rose $202k to $2.28m. Administration and staff costs were stable at $1.466m, and research and development spending increased marginally to $99k. Strategic progress included advancing the development of Biome’s proprietary probiotic strain, Lactobacillus Plantarum BMB18. The company completed the transfer payment for the strain, expending $136k, and successfully lodged it with Germany’s DSMZ culture bank. This development enhances Biome’s innovative product offerings and supports its long-term growth objectives.
Despite December being a seasonally slow month, Biome achieved an annualized sales run rate of $18.4m, highlighting its resilience and growth momentum. With the release of Vision 27 and a strong focus on operational efficiency and measured investments, Biome is well-positioned for continued growth in the second half of FY25, which is typically its strongest trading period. Biome’s sustained profitability and strategic execution reflect its commitment to delivering long-term value for shareholders, reinforcing confidence in achieving its ambitious Vision 27 goals.
Pentanet Limited (ASX: 5GG)
Pentanet Limited (ASX: 5GG) achieved positive EBITDA for H1 FY25, marking a $1 million improvement from Q1 to Q2. Consolidated revenue increased 7% year-on-year (YoY) to $11.1 million and saw a 6% quarter-on-quarter (QoQ) rise to $5.7 million. The company’s gross profit also grew by 6% YoY to $5.2 million, with a stronger 17% QoQ growth to $2.8 million. Pentanet’s 5G business showed notable progress, with 709 subscribers, a 17% increase from the previous quarter. The 5G rollout is on track to double coverage by the end of FY25, setting the stage for broader subscriber growth and a competitive network offering. The company’s strategic focus on expanding coverage has resulted in a decrease in churn from 1.3% to 1.2%, with on-net churn dropping to 1.1%.
In the gaming segment, Pentanet’s GeForce NOW platform delivered a strong performance, with revenue up 27% QoQ and 50% YoY, driven by both membership growth and price adjustments. The company's strategy of transitioning from a freemium model to paid services is paying off, with the user base maturing and higher monetization. The cloud gaming platform also benefited from increased average revenue per user (ARPU), which rose 23% QoQ to $17. Additionally, operational efficiencies have improved gross profit margins, with GeForce NOW’s margin expanding by 51 percentage points to 66%.
The company's financial position has improved, with operating cash flow turning positive at $0.9 million in Q2 FY25, compared to a negative $0.6 million in Q1. This improvement was driven by the EBITDA growth and cost management efforts, including renegotiating supplier contracts. Net cash for H1 FY25 increased by $0.2 million, bringing the closing balance to $2.2 million at the end of December 2024. The progress in both the telecommunications and gaming segments, coupled with strategic cost optimization, positions Pentanet for sustainable growth in the coming quarters.
Source: Company’s Report
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