Key Highlights

  • FY26 underlying EBITDA of $1.3 million from continuing operations, exceeding guidance of $1 million-plus (compared to the prior year)
  • Record $11.6 million in FY26 cash receipts from school customers, up 6% on the prior corresponding period
  • ReadCloudVET partnering fees grew 14% to $5.3 million, with student numbers exceeding 17,000 and 775 courses running across participating schools
  • Cash position of $1.9 million with no Debt at quarter end; 37 new schools confirmed to commence VET programmes in 2027

ReadCloud Limited (ASX:RCL), an Australian educational technology company, has delivered preliminary FY26 results that exceeded its financial guidance, underpinned by record cash collections from school customers and accelerating growth in its vocational education and Training (VET) division.

For the financial year ended 30 September 2026, ReadCloud reported underlying EBITDA from continuing operations of $1.3 million, surpassing its guidance of $1 million-plus. Sales and fee Revenue from continuing operations reached $11.2 million, approximately 4% above the FY25 figure of $10.7 million. Cash receipts from school customers set a new record at $11.6 million for the full year, up 6% on the prior corresponding period.

These results were reported alongside the company's Appendix 4C quarterly Cash Flow report for the quarter ended 30 September 2026. ReadCloud delivers nationally recognised VET programmes to Australian secondary schools and supplies digital textbooks to schools in Australia and internationally. The Business operates two primary divisions: ReadCloudVET and eBooks.

ReadCloudVET Division Drives Growth

The ReadCloudVET division was the standout performer for FY26. Cash receipts from VET-in-Schools customers reached $6.2 million, up 11% on the prior corresponding period, closely aligned with core partnering (auspicing) revenue growth of 14%. This growth was driven by several factors acting in combination: a school retention rate above the 90% target for 2026, an increase in the average number of courses taken per retained school, the addition of 55 new schools for the 2026 calendar year, and a record 775 courses running across ReadCloudVET schools — a 6% increase on 2025. Student numbers exceeded 17,000 for the first time.

Looking into FY27, the early selling season metrics are encouraging. As of the reporting date, 37 new schools are confirmed to commence VET programmes in 2027, ahead of the 35 confirmed at the same point in the prior selling season. A further 13 prospective schools are in advanced discussions and 47 are in early-stage engagement. Qualification renewal progress is running at approximately 50% completion, broadly in line with the prior year, with school retention expected to remain above 90%.

eBooks Division Holding Steady

The eBooks division generated cash receipts of $5.3 million in FY26, broadly in line with FY25. Sales and fee revenue was $4.9 million, down 3%. Five new schools commenced eBooks delivery during 2026, and school customer retention was 89%. Revenue from new and retained schools did not fully offset losses from departing schools during the year, and lower-margin reseller channel revenue was broadly flat. International revenue grew 40% from a low base, reaching $73,000.

The company has invested in the eBooks sales function, appointing an experienced salesperson in Queensland. Early indicators for 2027 show three new domestic schools already secured and negotiations underway with additional prospects in Queensland and Western Australia.

Exit from Industry Training Completed

A notable feature of the FY26 result is the completion of the exit from Southern Solutions Training Services, the company's industry training division, which ceased operations during FY26. Discontinued operations generated $0.9 million in cash receipts, down from $2.0 million in FY25, reflecting the deliberate wind-down. Exit-related costs contributed to a slightly negative group Operating Cash Flow when including discontinued operations, though continuing operations generated positive cash flow of $0.4 million.

Sector Context

Australia's VET sector has been undergoing a period of expansion, with federal and state government policy initiatives supporting vocational pathways for secondary school students. The integration of VET delivery within secondary schools — known as VET in Schools — has become an increasingly important part of the curriculum landscape. ReadCloud operates as a registered training organisation (RTO) auspicing partner, enabling schools without RTO status to deliver nationally accredited qualifications. This structural role provides a degree of revenue stickiness not typically available to pure technology or content businesses.

Risks

The ReadCloudVET model depends on schools electing to offer VET programmes each year, and schools that discontinue delivery typically cite shortages of qualified VET teachers or insufficient student enrolments. The eBooks division faces ongoing competitive pressure from both digital and physical alternatives, with revenue growth constrained by school budget cycles and retention dynamics. With a cash position of $1.9 million and no debt, the company has limited financial buffer if trading conditions deteriorate.

What to Watch Next

The formal 1H27 financial results will follow the preliminary reporting cycle. Key metrics to monitor include ReadCloudVET new school conversions from the 37 confirmed, 13 advanced and 47 early-stage pipeline, as well as qualification renewal rates. Progress in the eBooks division — particularly Queensland and Western Australian school additions — will indicate whether the divisional sales Investment is translating into pipeline growth.