ZOO Digital Group plc (LON: ZOO), a world-leading provider of cloud-based localisation and digital media services to the global entertainment industry, announces its unaudited financial results for the six months ended 30 September 2024 (“H1 FY25”).

Summary

Key Financials

• Revenues increased by 29% to $27.6 million (H1 FY24: $21.4 million) as content output continues to recover following the Hollywood writers’ and actors’ strikes of 2023
• Gross profit increased by 386% to $10.1 million (H1 FY24: $2.1 million)
• Adjusted EBITDA* returned to profit, as previously guided, of $1.6 million (H1 FY24: EBITDA loss of $7.1 million)
• Operating loss of $2.5 million (H1 FY24: loss of $10.9 million)
• Cash balance of $4.3 million at period end (H1 FY24: $16.8 million)
• Operating cash inflow in H1 FY25 approximately $1.0 million compared to an outflow of $4.8 million in H2 FY24

Operational Highlights

• Strengthened market position as a highly trusted, global, end-to-end vendor
  • Leading standard of customer satisfaction maintained – retained sales KPI of 97.7%
  • Gold-standard security audit by the Trusted Partner Network for ZOO’s production platforms
• Streamlined the business while protecting production capability to ramp up with recovering demand
  • Salary costs reduced by $4.5 million to $13.5 million (H1 FY24 $18.0 million)
  • Freelancer network grew slightly to 12,112 (H1 FY24: 11,745)
• Targeted global investments in key growth regions for customers
  • Established ZOO Italy with the launch of operations in Milan
  • India production centres fully functional and supporting ZOO’s follow-the-sun strategy

Post Period Events

• Named Netflix Preferred Fulfilment Partner of the year for the Americas for excellence in asset quality and project management at scale, including 100% on-time delivery rate
• Published AI white paper on enhancing the localisation of premium content, ensuring faster delivery times without compromising quality or creative control
• Secured additional debt facility of £2 million giving $5.6 million funding in total

Current Trading and Outlook

• Entertainment industry recovery expected to continue steadily in H2 FY25, gradually improving through calendar 2025
• While H1 FY25 trading was in line with full year expectations, visibility of Q4 orders remains limited
• Ongoing restructuring of cost base to give reduced unit cost of production in H2 FY25 provides strong platform to return to cash breakeven
• Board believes its cash and debt facilities provide the Company with sufficient working capital to meet its operating requirements for the foreseeable future
• Anticipate incremental new revenue opportunities from increased licensing of premium content and accelerated delivery services

*adjusted for share-based payments.

Stuart Green, CEO of ZOO Digital, commented:

“These results demonstrate that ZOO is recovering well from the impact of the Hollywood strikes and aligning with our customers’ evolving content strategies. Taking action to deliver efficiencies, including relocating some operations to India; embracing innovations such as Artificial Intelligence; and the pursuit of opportunities in new regions, have seen ZOO become a more agile and efficient business, ready for the next chapter of our growth story.

“As we approach a new year, investments in scalable technology and global talent have enabled us to expand our service offerings, and partnerships with leading content creators and distributors have strengthened, underscoring our position as a trusted partner in the media and entertainment industry. We remain focused on driving innovation, operational excellence and efficiency in an evolving digital landscape which should position ZOO well to return to cash breakeven as our industry recovers.”

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 (“MAR”). Upon the publication of this announcement, this inside information is now considered to be in the public domain. The persons responsible for making this announcement are CEO Stuart Green and CFO Phillip Blundell.

News in full