Qoria Delivers 25% Revenue Growth and 68% EBITDA Surge in Half-Year Results

Qoria delivers 25% revenue growth and 68% EBITDA uplift in H1 FY26

Qoria has reported its Qoria FY26 Half Year Results (ASX: QOR) for the six months ended 31 December 2025, posting revenue of $69m (up 25% on the prior corresponding period) alongside underlying EBITDA of $10.3m (up 68%). Free cash flow increased 51% to $9.2m, whilst gross margins remained above 90%. The company maintained full-year guidance on Annual Recurring Revenue (ARR) growth, adjusted cash flow, and adjusted EBITDA margin.

The digital safety platform provider has kept fixed costs disciplined, with a compound annual growth rate of just 4% over two years, far below the 20%+ growth in ARR. Management confirmed cost efficiencies of approximately $4m per annum are being actioned this quarter.

What is Annual Recurring Revenue and why it matters for software companies

Annual Recurring Revenue (ARR) represents the value of subscription contracts normalised to a one-year period. For software businesses operating on subscription models, ARR provides visibility into future revenue streams, unlike one-off sales where income is unpredictable. Schools and families using Qoria’s platforms pay annual subscriptions, generating recurring income that compounds as the customer base expands.

Investors track ARR growth rates alongside reported revenue because ARR acts as a leading indicator. Strong ARR growth typically precedes corresponding increases in statutory revenue by one or two quarters. For Qoria, underlying ARR growth of approximately 25% (with the Qustodio segment exceeding 30% annualised) signals robust demand and customer retention, key predictors of future reported performance.

Qustodio emerges as the growth engine with 34% annualised ARR expansion

The Qustodio consumer parental controls segment delivered the standout performance in H1 FY26, with ARR reaching US$21.1m (up 26% on pcp) and an annualised growth rate of 34% for the current financial year. The segment benefits from immediate payback economics, as Qustodio bills annually upfront, achieving effective month-zero payback on customer acquisition costs.

Net subscriber additions accelerated across each half-year period, with modest increases in marketing investment driving disproportionate returns. The segment added subscribers at an increasing rate, supported by product enhancements including AI threat detection and search alerts delivered during FY25.

Consumer parental controls represent Qoria’s highest-margin, fastest-growing segment with attractive unit economics. The combination of annual upfront billing, low churn, and scalable customer acquisition positions Qustodio as the primary growth driver for the consolidated group.

K12 maintains scale with record pipeline

Qoria’s K12 education segment demonstrated continued momentum across all geographic markets, with the weighted pipeline reaching $13.6m (up 29% pcp). Platform penetration now covers 20% of US students, 40% of UK students, and more than 32,000 schools globally. The company protects over 30 million children (up 29% year-on-year) and serves 9 million parents.

Geographic ARR performance remained solid:

1. US K12: US$41.9m ARR (up 27% pcp)
2. UK K12: £23.6m ARR (up 5.5% pcp)
3. ANZ K12: A$7.0m ARR (up 7.3% pcp)

Cross-sell success delivered approximately 25% growth through additional product adoption during FY25. Schools increasingly deployed multiple products from Qoria’s platform, including filtering, monitoring, wellbeing analytics, and classroom management tools. The record pipeline suggests this cross-sell momentum will continue into the second half and beyond.

Transformational Aura merger creates US$3 billion digital safety platform

Qoria has entered into a binding merger implementation deed with Aura, under which Aura will acquire 100% of Qoria’s shares via a scheme of arrangement expected to complete in June 2026. Qoria shareholders will receive 1 ASX-listed CDI (CHESS Depository Interest) for every approximately 17.2 ordinary Qoria shares, representing 35% ownership of the combined entity on a fully diluted basis pre-equity placement.

The merger includes a US$75m (~A$109m) equity placement into Aura at completion, with binding commitments received from Aura backers. The placement is priced at approximately A$12.38 per CDI, implying a price per Qoria share of A$0.72 and a pre-money valuation of approximately A$3.0 billion. Post-placement, Qoria shareholders are expected to hold approximately 33.8% of the merged group.

Merger Terms Summary

Pre-money valuation: ~A$3.0 billion
Exchange ratio: 1 CDI per ~17.2 QOR shares
Qoria ownership: 35% pre-placement, 33.8% post-placement
Equity placement: US$75m (~A$109m)
Implied QOR share price: A$0.72

Key conditions include shareholder approval at a scheme meeting, regulatory approvals, Court approval, no material adverse change (defined as greater than 15% reduction in annualised revenue), and receipt of the US$75m equity placement. A reimbursement fee of A$10m applies each way in specified circumstances. Major Aura holders have agreed to voluntary escrow until Aura publishes financial results for the year ending 31 December 2026.

The strategic rationale centres on family safety expansion, with Qoria gaining access to Aura’s adult and family protection capabilities whilst Aura gains the complementary K12 channel. The combined platform addresses digital protection across the entire lifecycle, with opportunities to increase average revenue per user by approximately 4x through cross-sell into family and adult segments.

Cost discipline underpins margin expansion

Qoria’s fixed cost base grew at a compound annual growth rate of just 4% over the past two years, only slightly above inflation across operational markets (Australia, New Zealand, Spain, US, UK). This disciplined approach compares favourably to ARR, revenue, and gross margin growth, all of which exceeded 20% over the same period.

Management is actioning cost efficiencies of approximately $4m per annum this quarter, with H2 FY26 costs expected to remain in line with H1 (subject to foreign exchange movements). Underlying EBITDA margin, adjusted for foreign exchange movements, reached 16.5% for the half, with the company on track for full-year guidance of approximately 20% EBITDA margin on a constant currency basis.

The difference between reported and cash EBITDA is primarily capitalised research and development costs, which totalled $13.2m for the half. This indicates the company is approaching positive cash EBITDA, with foreign exchange volatility representing the main near-term variable.

Operating leverage remains intact, with costs growing at inflation whilst revenue and margins expand significantly faster. This structural advantage positions Qoria to deliver accelerating profitability as the revenue base scales.

Balance sheet positions company for merger completion

Qoria closed the half with $21.2m in cash and available funding of $21.2m, against net debt of -$32.6m. All debt remains long-term, with the AshGrove facility maturing in June 2028. Cash receipts increased 20% pcp to $79.1m (net of reseller commissions), whilst free cash flow reached $9.2m (up 51% pcp).

The company expects to be free cash flow positive for the full financial year on a constant currency basis (excluding interest and abnormal items). The clean balance sheet provides flexibility throughout the merger process, whilst organic cash generation reduces reliance on external funding.

The balance sheet structure supports both ongoing operations and the capital requirements associated with merger completion, with no near-term refinancing risk.

Key dates and what to watch

Investors should monitor the following calendar milestones:

• March 2026: Investor update on Aura merger progress and key UK selling period
• April 2026: March quarter 4C report and key US selling period
• June 2026: Expected merger completion (subject to conditions)
• July 2026: June quarter 4C report (as AXQ)

Foreign exchange impacts continue to affect reported figures, with the strengthening Australian dollar creating a negative impact of approximately $5.5m on exit ARR in H1 FY26. The company’s guidance reiteration on ARR growth, adjusted cash flow, and adjusted EBITDA margin signals management confidence in the underlying business trajectory despite currency headwinds.

The merger with Aura represents a transformational event for Qoria shareholders, creating a scaled digital safety platform with expanded market access and cross-sell opportunities. In the interim, the combination of accelerating Qustodio growth, disciplined cost management, and a record K12 pipeline positions Qoria FY26 Half Year Results (ASX: QOR) for continued operational momentum.

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