De.mem has delivered De.Mem Record Full Year Results for CY 2025, marking the company’s first full calendar year of positive adjusted EBITDA. Revenue reached $29.9m (up 20% on the prior corresponding period), cash receipts climbed to $32.3m (up 14%), gross margins expanded to 43% (from 41% in CY 2024), and adjusted EBITDA turned positive at $1.6m (versus -$60k in CY 2024). The water and wastewater treatment company also generated $318k in positive operating cash flow and closed the year with $4.0m in cash and term deposits, underpinned by more than 90% recurring revenues. (ASX: DEM)
| Metric | CY 2024 | CY 2025 | Change | Investment Significance |
|---|---|---|---|---|
| Revenue | $24.9m | $29.9m | +20% | Accelerating top-line growth demonstrates market traction |
| Cash Receipts | $28.4m | $32.3m | +14% | Strong cash conversion supports reinvestment capacity |
| Gross Margins | 41% | 43% | +2pp | Expanding margins on growing revenue demonstrates scalability |
| Adjusted EBITDA | -$60k | $1.6m | $1.66m improvement | First full-year profitability validates business model maturity |
| Operating Cash Flow | $115k | $318k | +177% | Self-funding capacity reduces reliance on capital markets |
27 consecutive quarters of growth underpin De.mem’s momentum
De.mem has delivered 27 consecutive quarters of cash receipts growth versus the prior corresponding period, reflecting a 24% compound annual growth rate in cash receipts since 2019. The sustained trajectory positions the company among the most consistent growth performers in the ASX utilities sector. More than 90% of revenues are now recurring in nature, providing high cash flow visibility and reducing earnings volatility.
The combination of a recurring revenue model and margin expansion has enabled De.mem to achieve operational maturity without sacrificing growth. The company continues to invest in its Singapore membrane R&D operations and residential filtration product launch, both of which are included in the CY 2025 result while supporting future revenue potential.
- 27 consecutive quarters of cash receipts growth versus prior corresponding period
- 24% compound annual growth rate in cash receipts over the past 6.75 years
- More than 90% recurring revenues providing predictable cash flows
Margin expansion continues eight-year trajectory
De.mem’s gross margins have progressed from 18% in CY 2017 to 43% in CY 2025, an increase of 25 percentage points over eight years. The CY 2025 result of 43% represents a 2 percentage point improvement on the 41% reported in CY 2024. The margin expansion reflects a higher recurring revenue mix, operating leverage across the platform, and integration benefits from prior acquisitions. Expanding margins on growing revenue demonstrate the scalability of the business model and support the path to sustainable profitability.
Join thousands of readers who start here
Our best articles, sent straight to your inbox. You can unsubscribe anytime.
What are recurring revenues and why do they matter for investors?
Recurring revenue refers to the predictable portion of a company’s income that is expected to continue in future periods. In water treatment, recurring revenues typically come from long-term service contracts, consumables supply agreements, and operational management arrangements that renew automatically or have high retention rates.
Unlike project-based revenue (which requires winning new contracts repeatedly), recurring revenue provides visibility over future cash flows. This reduces the risk of sudden earnings volatility and lowers customer acquisition costs, as existing clients generate ongoing income without additional sales effort. For investors, recurring revenue businesses typically command higher valuation multiples because earnings are more predictable and the cash flow profile is more stable.
De.mem’s transition to more than 90% recurring revenues de-risks the earnings profile and provides management with confidence in forecasting future performance. The water treatment services sector lends itself to recurring contracts because clients require continuous operational support, consumables replenishment, and regulatory compliance, all of which generate predictable income streams with high lifetime value.
Core Chemicals acquisition expands gold mining exposure
The acquisition of Core Chemicals Pty Ltd, completed on 1 November 2025, provides leverage to the gold mining sector through the supply of process chemicals that maximise gold extraction and recovery from refining waste streams. Core Chemicals generated approximately $4m in revenue pre-acquisition and services 18 gold mines in Western Australia. Combined with De.mem’s existing 15 gold mining clients, the group now services 33 gold mining operations.
There are an estimated 142 additional gold mines in Australia not currently serviced by either business. With average revenue per gold mine exceeding $220k per annum, the addressable market represents a significant growth opportunity. Only two months of Core Chemicals contribution were included in CY 2025 results, with a full-year contribution expected to provide a visible earnings catalyst in CY 2026.
Core Chemicals strategic contributions:
- Complementary chemical product suite enhances cross-sell opportunities
- Geographic expansion into Eastern states and Pacific region (currently only operates in Western Australia)
- Platform leverage through De.mem’s existing client base in Tasmania, Queensland, and Papua New Guinea
- Access to 142 additional gold mines in Australia not currently serviced
De.mem has demonstrated a strong acquisition track record, with 93% average revenue growth across four acquisitions completed between 2019 and 2022. The Core Chemicals acquisition provides a platform to replicate this performance through both organic growth and geographic expansion.
Domestic water filtration positions De.mem for global growth
De.mem’s proprietary Graphene Oxide enhanced membrane technology positions the company to service the global home water filtration market, which was estimated at US$20.3 billion in 2024 and is projected to reach US$50.9 billion by 2033, representing a compound annual growth rate of 11.2% from 2025 to 2033. The Asia-Pacific region accounts for the largest market share globally.
Following NSF certification of the Graphene Oxide enhanced membrane in 2024, De.mem progressed commercialisation during CY 2025 through a distribution partnership with Firmbase (covering China, Indonesia, and Japan), initial sales into China and Indonesia, and ongoing North American distribution via Purafy Clean Technologies in Kingston, Ontario, Canada. The company initiated the Australian WaterMark certification process in June 2025, with completion expected in early CY 2026 to enable launch into Australian drinking water applications.
The third-party sales distribution model is designed to drive significant operating leverage with minimal capital contribution, maximising earnings growth while maintaining the company’s capital-light business model. Domestic water filtration represents a high-margin, scalable revenue stream with substantial global market potential.
Enjoyed this article?
We publish high-impact stories like this a few times a week. No spam.
CY 2026 outlook points to continued records
Management has guided to continued positive EBITDA and operating cash flow performance in CY 2026, with the company on track to deliver record cash receipts. The outlook is supported by multiple visible catalysts and the continuation of structural growth drivers that delivered the CY 2025 result.
Seven growth drivers supporting CY 2026 guidance:
- 27 consecutive quarters of cash receipts growth momentum
- 90% recurring cash receipts providing high cash flow visibility
- 24% compound annual growth rate in cash receipts over 6.75 years
- Full-year contribution from Core Chemicals acquisition (only two months included in CY 2025)
- Contribution from two recently awarded German projects (approximately $1m combined revenue)
- Operating leverage from ongoing margin progression
- Domestic water product rollout following Australian WaterMark certification (expected early CY 2026)
CEO frames 2025 as an inflection point
Andreas Kroell, Chief Executive Officer
“2025 represents an inflection point for De.mem. We have delivered record revenue, record margins, and our first full year of positive EBITDA. Our recurring revenue base exceeds 90%, margins continue to expand, and operating leverage is becoming evident across the platform.”
Kroell reinforced management’s confidence in the CY 2026 outlook, stating the company is well positioned to continue compounding earnings and achieve new records in 2026. The combination of a full-year Core Chemicals contribution, domestic water market progression, and the structural advantages of a 90% recurring revenue base underpin the earnings momentum heading into the new calendar year.
Want the Next Utilities Breakout in Your Inbox?
Join 20,000+ investors getting FREE breaking ASX news delivered within minutes of release, complete with in-depth analysis. Click the “Free Alerts” button at StockWire X to start receiving alerts the moment market-moving utilities news breaks across industrials, infrastructure, and essential services sectors.