Sparks

ZOO Digital’s FY25 results indicate the business is now in significantly better shape, despite operating within a streaming industry that remains in flux. The 22% revenue uplift to $49.6m is encouraging, though difficult to benchmark against a steady-state run rate given the atypical post-strike demand patterns. Streamers’ shift toward licensed content to reduce churn has suppressed demand for dubbing, historically ZOO’s largest revenue stream, but has simultaneously driven growth across other service lines.

The transition to a leaner, more flexible operating model, supported by offshore expansion and AI adoption, positions the company well to capture margin as volumes recover. Notably, the 22% growth has been delivered alongside $8.4m in annualised cost savings in FY25, with a further $2.5m expected in FY26, giving an encouraging signal for future operational leverage.

While the EV/Sales ratio of <0.5x reflects recent challenges and balance sheet constraints, it also underscores the potential for operational leverage as demand normalises.

Ultimately,  recovery will depend on whether growth in newer services and stronger client retention can offset sector softness.