Bubs Australia Limited (ASX: BUB) Reports Strong Q2 FY25 Results
Financial Performance
Bubs Australia Limited (ASX: BUB) announced a turnaround with positive EBITDA of $2.9 million for the first half of FY25, compared to a loss of $6.8 million in the previous year. The company reported an operating cash inflow of $3.9 million for Q2, a significant improvement from the $13 million outflow a year earlier. Total cash and cash equivalents stood at $17.2 million as of December 31, 2024, with an additional $5 million in undrawn debt facilities.
Revenue Growth
Bubs achieved Q2 FY25 gross revenue of $32.9 million, reflecting a 42% increase from $20.2 million in the prior corresponding period. The gross profit margin improved to 48% in H1 FY25, up from 38% previously. The company is on track to meet its FY25 revenue guidance of $102 million and aims for a gross margin greater than 40%.
Market Expansion
In its regional performance, Bubs reported a 26% increase in gross revenue from the USA, reaching $17.2 million. China saw a 68% rise, with gross revenue of $7.1 million, while Australian revenue grew 32% to $6.3 million. The company is also preparing to enter the Canadian market in FY26.
FDA Clinical Trial Update
Bubs is progressing in its clinical trial in the USA aimed at obtaining permanent regulatory approval. As of Q2 FY25, the company completed patient enrolment, with 478 infants participating in the trial. CEO Reg Weine stated, “This represents an important milestone for Bubs in its journey to obtain permanent market access for the USA.”
Operational Outlook
The operational capacity at their manufacturing facility is currently at 84%. The company noted potential fluctuations in cash flow in Q3 due to working capital investments, but anticipates being cash flow positive in Q4 FY25.
Motley Fool contributor Kiarra Jackson has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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