Zoo Digital (2ZD) Q4 2026 Earnings Report

The call presents a constructive strategic and operational turnaround: the company has cut costs, maintained industry-leading quality, integrated AI and new delivery models (Fast Track, follow-the-sun), moved back to EBITDA profitability and modest positive cash generation, and is seeing early signs of revenue recovery and winning RFPs. However, FY'26 revenue declined 15% due to subdued dubbing demand, largest-customer concentration remains high (44%), cash generation is still small ($0.4M cash EBITDA), and visibility/valuation remain constrained. On balance the positive operational progress, margin expansion and new service momentum outweigh the remaining challenges.

Management guided to a return to revenue growth and profit progression in FY '27 after a strong Q1; FY '26 was in line with expectations with revenue down 15% to $42.0m, EBITDA up to $4.0m (from $1.1m), cash EBITDA recovering to +$0.4m (from -$2.7m), gross margin rising to just under 42% (from 36%), and Fast Track contributing ~$2.5m (~10% of run‑rate). They highlighted customer concentration falling to 44% (from 61%), trade and other payables reduced from $18m to < $13m, $1.4m drawn of an $8m invoice financing facility, R&D capitalised of $1.7m (up from $1.5m), and headcount cut ~17%; management expects further margin improvement from AI, scalable follow‑the‑sun operations and to capture market share as streaming demand normalizes.