De.mem delivers record EBITDA and 27th consecutive quarter of growth
De.mem Limited has reported its De.mem Full Year Results for calendar year 2025, marking the first full year of positive Adjusted EBITDA at $1.6 million, a substantial turnaround from a loss of $60,000 in CY2024. The water treatment technology company achieved its 27th consecutive quarter of cash receipts growth versus prior corresponding periods, with record annual cash receipts of $32.3 million (up from $28.4 million in CY2024). The company also turned cashflow positive, reporting operating cashflow of $318,000 for CY2025 compared to an outflow of $1.9 million in CY2022.
The results represent a structural inflection point for the business, with management describing the cash generation as “structurally positioned for further growth” following continued investment in integration activities and organic growth initiatives. Cash on hand increased from $3.6 million at 31 December 2024 to $3.9 million at 31 December 2025.
De.mem’s long-term compound annual growth rate (CAGR) in cash receipts over 6.75 years stands at approximately 24%, underpinned by a business model in which more than 90% of revenues are recurring.
| Metric | CY2022 | CY2023 | CY2024 | CY2025 |
|---|---|---|---|---|
| Cash Receipts | $19.7M | $24.8M | $28.4M | $32.3M |
| Operating Cashflow | -$1.9M | -$1.4M | $115K | $318K |
| Adjusted EBITDA | Not stated | Not stated | -$60K | $1.6M |
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What is decentralised water treatment and why does it matter?
Decentralised water treatment refers to localised systems that treat water at or near the point of use, rather than relying on large centralised infrastructure. De.mem’s proprietary hollow fibre membrane technology uses a microporous structure in which pore size determines which contaminants are removed, including bacteria, viruses, and solids.
The company’s flagship Graphene Oxide (GO) enhanced membrane can treat up to 20% more water compared to conventional membranes. This higher throughput enables smaller equipment footprints, lower energy consumption (typically operating under 1-2 bar pressure), and reduced chemical usage. The membranes can be operated in a simple, one-stage process with minimal fouling and a straightforward backwash cleaning process.
De.mem operates across two market segments: industrial water treatment (combining equipment, chemicals, consumables, and operations & maintenance services) and residential water treatment (small standardised filtration systems incorporating GO-enhanced membranes). The company addresses an addressable market of A$2.3 billion domestically and US$39 billion globally by 2026 in industrial applications, plus a residential market projected at US$50.9 billion by 2033.
The business model generates more than 90% recurring revenues through services contracts, chemical supplies, and ongoing maintenance, providing earnings visibility and reducing customer acquisition costs over time. De.mem reported a gross margin of 43% in CY2025.
Core Chemicals acquisition adds gold sector exposure
On 1 November 2025, De.mem acquired Core Chemicals for $2.68 million, structured as 85% cash and 15% De.mem shares in two tranches subject to milestones. Core Chemicals supplies process chemicals and services to gold mining customers to maximise gold extraction and recovery from the refining waste stream.
Prior to acquisition, Core Chemicals generated approximately $4 million in revenues and approximately $730,000 in pre-tax profit per annum. The acquisition was priced at a revenue multiple of approximately 0.7x and an EBITDA multiple of approximately 3.7x, both below De.mem’s historical acquisition averages of 0.8x revenue and 5.0x EBITDA respectively.
The acquisition provides leverage to the gold sector without direct commodity price risk, as De.mem supplies chemicals to miners rather than producing gold itself. With 142 Australian gold mines not currently clients and average revenue per gold mining client of $250,000, the growth runway is material. De.mem had 15 gold mining clients prior to the acquisition, while Core Chemicals services 18 gold mines in Western Australia alone with average revenue per customer of $222,000 per annum.
Acquisition Pricing
Core Chemicals was acquired at 0.7x revenue multiple and 3.7x EBITDA multiple, both below De.mem’s historical averages and representing a potentially accretive transaction that is already exceeding initial performance expectations.
Management has stated that Core Chemicals’ initial performance since acquisition is exceeding expectations, with a full-year contribution expected in CY2026 results.
Track record of bolt-on acquisitions
Between 2019 and 2022, De.mem increased revenues by an average of approximately 93% across four acquired businesses (Capic, Pumptech, Geutec, and Stevco). In CY2025, the company increased revenues by approximately 42% from two businesses acquired in 2024 (Border Pumpworks and Auswater Systems) compared to their pre-acquisition average.
Individual acquisition revenue growth rates include Capic (172%), Geutec (100%), Pumptech (48%), and Stevco (22%). The demonstrated ability to integrate and grow acquired businesses de-risks the Core Chemicals thesis and supports confidence in management’s execution capability.
CY2026 outlook underpinned by recurring revenues and multiple growth drivers
De.mem has outlined multiple growth drivers for CY2026:
- Full-year contribution from Core Chemicals acquisition (only two months reflected in CY2025 results)
- Contribution from two German projects representing approximately $1 million combined revenue
- Domestic water product rollout following WaterMark certification expected in early 2026
- Ongoing double-digit organic growth momentum across the existing business
The company’s baseline is supported by more than 90% recurring revenues, which management describes as providing a stable foundation for growth. The 43% gross margin reported in CY2025 provides scope for operating leverage as the business scales.
De.mem services blue-chip clients including Rio Tinto, AGL, Pilbara Minerals, Coca-Cola, Alcoa, and Inghams across multiple segments (mining & resources, food & beverage, and industrial). The company maintains a national Australian footprint with key regional presence in Kalgoorlie (Western Australia) and Albury-Wodonga (regional Victoria/New South Wales).
Valuation context
De.mem’s market capitalisation stood at approximately $31 million as at 24 February 2026 (last price 10 cents per share), trading at approximately 1.0x last-twelve-months cash receipts. The company describes this as a significant discount relative to global comparable companies and acquisition multiples in the sector.
The share price has traded mostly in line with the ASX Small Ordinaries index over the past six months, with a 52-week range of 8 to 12.5 cents. With approximately 293 million ordinary shares on issue and cash on hand of approximately $4.0 million at 31 December 2025, the company maintains a solid balance sheet position.
| Metric | Value |
|---|---|
| Market Capitalisation | ~$31M |
| Last Price (24 Feb 2026) | 10 cents |
| 52-Week High/Low | 12.5 / 8 cents |
| LTM Cash Receipts Multiple | ~1.0x |
| Cash on Hand (31 Dec 2025) | ~$4.0M |
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Investment highlights at a glance
De.mem Full Year Results present several key investment considerations for investors evaluating the utilities sector:
- 27 consecutive quarters of cash receipts growth versus prior corresponding periods
- First full year of positive EBITDA ($1.6 million) and operating cashflow ($318,000)
- More than 90% recurring revenues with 43% gross margin
- Core Chemicals acquisition adds gold sector leverage at attractive multiples (0.7x revenue, 3.7x EBITDA)
- Blue-chip client base including Rio Tinto, AGL, Pilbara Minerals, Coca-Cola, and Alcoa
- Trading at approximately 1.0x cash receipts with $4.0 million cash on hand
- Demonstrated ability to grow acquired businesses by average 93% (2019-2022 acquisitions)
- Multiple CY2026 growth drivers including full-year Core Chemicals contribution and German projects
The shift to positive EBITDA and operating cashflow marks a structural inflection point, suggesting the business model is now self-sustaining and positioned for scaled growth without requiring additional capital raises to fund operations.
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