AI-Media Technologies (ASX:AIM) Grows ARR 50% Even as Total Revenue Falls 7% in FY26

Sonal Goyal

27 August 2026 10:22 AM AEST

AI-Media Technologies (ASX:AIM) Grows ARR 50% Even as Total Revenue Falls 7% in FY26

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Key Highlights

Annual Recurring Revenue (ARR) increased 50% on FY25 to $36.0 million, achieved at an 85% gross margin.
Total revenue declined 7% to $60.2 million, reflecting a planned reduction in legacy Services revenue and lower Hardware revenue.
Adjusted EBITDA was $2.1 million for the year, while full-year EBITDA recorded a loss of $0.3 million.
Group gross Margin improved by 4 percentage points, rising from 69% to 73% year-on-year.

AI-Media Technologies Limited (ASX:AIM), a provider of AI-driven captioning, transcription and translation services, reported its results for the financial year ended 30 June 2026 (FY26), highlighting a 50% increase in Annual Recurring Revenue (ARR) to $36.0 million, achieved at an 85% gross margin and in line with guidance. SaaS revenue rose 42% to $34.1 million, while Technology revenue increased 9% to $44.8 million, now representing 74% of Group revenue compared with 63% in FY25.

Despite the growth in recurring and technology revenue streams, total Group revenue declined 7% to $60.2 million, a result the company attributed to the planned reduction in legacy Services revenue and lower Hardware revenue. Services revenue reduced to 26% of Group revenue as the company continued its transition away from lower-margin legacy service activities toward its recurring technology platform.

Margin Improvement and Earnings Performance

Group gross margin improved by 4 percentage points, from 69% in FY25 to 73% in FY26, reflecting the increasing weight of higher-margin technology and SaaS revenue within the overall Business mix. Adjusted EBITDA, which excludes share-based payments and restructuring costs, was $2.1 million for the full year, an improvement of $2.4 million on the first half, moving from a $0.4 million loss in 1H26 to $2.5 million in 2H26.

On a statutory basis, full-year EBITDA was a loss of $0.3 million. Operating Cash Flow for the year was $2.4 million, and the company ended the period with $15.9 million in cash and no external debt. AI-Media also reported that it retained all of its top 20 customers for a fifth consecutive year and expanded its footprint to 46 countries, adding 9 new markets during FY26.

Platform Investment and Product Development

During FY26, AI-Media continued investing in extending its LEXI platform beyond its established live captioning and translation offering. The company launched its next-generation UHD592 and AIX-1 encoder platforms, progressed LEXI Voice into commercial deployments, and continued development and early commercialisation of LEXI Recorded and LEXI Audio Description. The business also expanded the channels through which customers can access LEXI, including hardware, software, cloud and third-party workflows such as LEXI Direct.

Management described its approach to AI models as model-agnostic, allowing the company to incorporate best-fit models while differentiating on workflow integration, security, reliability and customer outcomes. The Board indicated that any increased investment in newer products would remain dependent on demonstrated customer adoption, paid usage, retention and commercial economics.

FY27 Commercial Priorities

AI-Media enters FY27 with what management described as a substantially higher recurring revenue base, a broader technology platform, an installed global infrastructure footprint and a debt-free balance sheet. The company outlined four principal commercial priorities across its Broadcast, Government and Enterprise markets in AMER, EMEA and APAC regions: continuing to scale the established LEXI Text and translation franchise, converting the installed encoder base to next-generation AI-native platforms, commercialising LEXI Voice by converting early deployments into recurring revenue, and establishing commercial traction across the broader LEXI product suite.

CEO Tony Abrahams said the result increasingly demonstrated the quality of the business being built, noting that Technology revenue now represents 74% of Group revenue. Chair John Martin said the headline revenue and EBITDA result reflected the continuing reduction in legacy Services revenue, hardware timing and increased product investment, while stating that the underlying quality of the business had improved materially. Guidance on FY27 ARR is expected to be provided at the Annual General Meeting scheduled for 30 September 2026.

Conclusion

AI-Media's FY26 results reflect a business in transition, with total revenue declining as the company deliberately winds down lower-margin legacy Services and Hardware activity in favour of a recurring, technology-led model. The 50% increase in ARR, improved gross margins and continued customer retention point to progress in this shift, while the swing from a first-half EBITDA loss to a positive second half suggests the transition is beginning to translate into improved underlying profitability heading into FY27.

FAQs

Q: Did AI-Media's total revenue grow in FY26?

A: No, total revenue declined 7% to $60.2 million, reflecting a planned reduction in legacy Services revenue and lower Hardware revenue.

Q: How much did AI-Media's Annual Recurring Revenue grow?

A: ARR increased 50% on FY25 to $36.0 million, achieved at an 85% gross margin, in line with the company's guidance.

Q: What was AI-Media's EBITDA result for FY26?

A: Adjusted EBITDA was $2.1 million for the full year, while statutory full-year EBITDA recorded a loss of $0.3 million.

Q: What is AI-Media's cash position?

A: The company held year-end cash of $15.9 million with no external debt as at 30 June 2026.

Q: What are AI-Media's priorities for FY27?

A: The company's four commercial priorities are scaling LEXI Text and translation, converting its installed encoder base to next-generation platforms, commercialising LEXI Voice, and establishing traction across its broader LEXI product suite.

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