Release Date: February 17, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Infomedia Ltd (ASX:IFM) reported a 2% growth in total revenue for the first half of 2025, despite a significant customer churn.
• The company maintained stable margins and achieved a 7% growth in cash EBITDA.
• Infomedia Ltd (ASX:IFM) declared a fully franked dividend of $0.022 per share and announced a share buyback program of up to 5% of issued share capital.
• The acquisition of a 50% stake in Intellegam, a generative AI startup, is expected to enhance Infomedia's product offerings and create new market opportunities.
• The company has a robust balance sheet with $78 million in cash and zero debt, allowing for strategic investments and shareholder returns.

Negative Points

• Infomedia Ltd (ASX:IFM) experienced a churn event with a large customer, impacting annual revenue by approximately $4 million.
• The integration of DMS in the Americas is paused due to a cyber incident at a partner, delaying growth in the region.
• The rebuild of the InfoDrive CX tech stack has temporarily paused its growth, affecting sales performance.
• The automotive industry's disruption, including OEM consolidation and changing tariffs, poses short-term challenges for contract signings.
• The effective tax rate increased to 27%, driven by higher UK tax rates and reduced R&D tax credits in Australia.

Q & A Highlights

• Warning! GuruFocus has detected 2 Warning Sign with ASX:IFM.

Q: How do you see the US tariffs impacting Infomedia's business? Will higher prices lead to lower volumes of new car sales, and could this affect existing revenues? A: Jens Monsees, CEO, explained that dealerships are likely to focus more on after-sales services like parts and repairs, which are profitable areas where Infomedia operates. As the average age of vehicles increases, there is more opportunity for Infomedia's after-sales solutions. Additionally, dealerships and OEMs are striving for more digital and efficient operations, which aligns with Infomedia's offerings.

Q: Can you provide an update on the DMS integrations in the US and their importance for growth? A: Jens Monsees noted that the integration of Superservice with DMS is paused due to a data breach at a partner company. The bidirectional integration is crucial for realizing the full value of Infomedia's products, and they are awaiting a secure gateway from their partner to resume integration.

Q: Is the scale phase still set for the beginning of FY26, or has it been delayed? A: Jens Monsees clarified that the strengthen phase will continue into FY26, and the transition to the scale phase is not a sudden change but a gradual process. The company is still focused on delivering its strategy during the strengthen phase.

Q: Can you talk about the pipeline of opportunities within InfoDrive? A: Jens Monsees highlighted a significant contract with Isuzu Trucks, which opens new revenue streams in the light vehicle space. The focus is on making service and parts operations efficient, and the company is confident in delivering this project by the end of FY25.

Q: What are the building blocks to bridge the revenue gap in the second half of FY25, considering the SimplePart customer churn? A: Chantell Revie, CFO, mentioned price increases on contract renewals, increased Superservice revenue in APAC, and new SimplePart revenue in EMEA as factors that will contribute to maintaining or exceeding first-half revenue levels despite the churn.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.