BATM H1 2025: revenue up, margins better, and a cleaner, more focused business
BATM Advanced Communications has posted a tidy first half. Revenue from continuing operations rose to $60.4m (H1 2024: $58.9m) with gross margin up 100bps to 32.7%. Under the hood, the three core divisions – Networks, Cyber and Diagnostics – all improved gross margins, while Networks and Diagnostics returned to growth.
Adjusted metrics eased year on year as BATM invested in go-to-market and benefited less from one-off income than last year. The Group was near breakeven on continuing operations but reported a loss for the period due to discontinued operations tied to the sale of non-core assets.
| Key numbers (continuing ops) | H1 2025 | H1 2024 |
|---|---|---|
| Revenue | $60.4m | $58.9m |
| Gross margin | 32.7% | 31.7% |
| Adjusted EBITDA | $4.0m | $5.7m |
| Adjusted operating profit | $2.0m | $3.6m |
| Adjusted PBT | $1.6m | $3.0m |
| Reported PBT | $0.6m | $2.2m |
| EPS (continuing) | 0.13¢ | 0.32¢ |
| Cash & short-term investments (30 Jun) | $27.0m | not disclosed |
Definitions: adjusted results exclude amortisation, share-based payments and exceptional corporate costs. Basis points (bps) are hundredths of a percent, so 100bps equals 1 percentage point.
Strategic refocus: three disposals and a clearer core
Management is doing what it said it would. BATM sold three non-core businesses during the period: Celitron (eco-med, Hungary), Zer Laboratories (third-party pre-natal test administrator, Israel), and Progenetics (third-party oncological test administrator, Israel). Progenetics went for a total consideration of $2m for BATM’s 51% holding. The Group has received c. $383k in cash for Celitron and Zer Laboratories, with some deferred consideration also noted.
Why it matters: trimming non-core assets should reduce overhead, simplify execution, and allow reinvestment into Networks, Cyber and Diagnostics. The disposals did create a $4.3m loss from discontinued operations, largely non-cash translation reserve effects, which is painful on the income statement but cleans the slate.
Division breakdown: where growth is coming from
BATM Networks – X-series traction and Edgility momentum
Networks revenue rose 11% to $6.6m, and was up 156% sequentially versus H2 2024. Gross margin improved to 44.4% (H1 2024: 43.4%) thanks to lower production costs and new product mix. The adjusted operating loss narrowed to $1.1m (H1 2024: $1.3m) despite higher sales investment.
The product story is improving. Four new carrier ethernet X-series products launched and won an order from a Tier 1 communications service provider in Mexico. BATM also signed new channel partners globally and launched a customer partner portal that is already creating opportunities.
Edgility – the edge virtualisation and management platform – notched two notable updates. Telebras in Brazil selected Edgility and is currently running a proof of concept, and rollout continues under last year’s three-year agreement with a Tier 1 in Mexico, which included orders worth over $2.4m to be delivered across the term. BATM is also deepening collaboration with a global emergency connectivity partner to expand internationally.
My take: Networks is back on the front foot. Orders, channels and a cleaner cost base are the right ingredients. It is not profitable yet, but the direction of travel is encouraging.
BATM Cyber – first commercial encryption units shipped
Cyber revenue was $5.1m (H1 2024: $8.3m), reflecting a tough comparison against exceptional government orders last year. Importantly, gross margin jumped to 52.6% (H1 2024: 40.4%), and the division stayed profitable with $1.0m adjusted operating profit (H1 2024: $2.5m). On a sequential basis, revenue was up 6% versus H2 2024.
The key milestone was shipping the first units of BATM’s customised encryption platform to a strategic Partner for pilots and proofs of concept across commercial markets and critical national infrastructure. The platform is described as quantum key distribution ready, which should future-proof it for next-generation security needs. BATM also received a new $1.5m development order from its long-standing government customer, later increased to $2.1m by period end.
My take: lower revenue year on year was flagged, but margin expansion and the first commercial shipments are what matter. If pilots convert, this could be a multi-year growth leg.
BATM Diagnostics – reagent-led model boosts growth and margins
Diagnostics delivered 21% revenue growth to $20.6m, with gross margin up to 30.2% (H1 2024: 27.9%). Adjusted operating profit rose to $1.0m (H1 2024: $0.3m). The division’s pivot to focus on reagents – the higher margin, repeat-purchase consumables – is working. Instruments are being placed on leases or lower-margin sales tied to multi-year reagent agreements.
Commercially, BATM entered Italy with its MDXlab real-time PCR system, winning several projects that include multi-year reagent and consumable agreements. ADOR Diagnostics, the associate developing the NATlab platform, remains in pre-clinical validation and is seeking partners for the next phase.
My take: this division is starting to look like a healthier consumables business. Reagent attachment drives recurring revenue and better gross margins.
Costs, cash and balance sheet
Group gross profit rose to $19.8m (H1 2024: $18.7m). Operating expenses increased, reflecting the sales push and R&D investment: sales and marketing $10.2m (H1 2024: $9.3m), G&A $6.9m (H1 2024: $6.3m), R&D $2.5m (H1 2024: $2.3m). Other operating income was $0.7m versus $2.0m last year, when a revaluation boosted income.
Cash and short-term investments were $27.0m at 30 June 2025 (31 December 2024: $31.6m). Net cash used in continuing operations improved to $2.7m from $4.1m, largely due to working capital movements.
Balance sheet remains solid with total equity of $99.4m and low financial debt relative to cash. That gives BATM room to continue its refocus and to be selective with M&A.
Outlook: guidance points to growth in FY 2025
Management says momentum has continued into H2 and guides to year-on-year growth in revenue and adjusted EBITDA for FY 2025. Networks is expected to deliver strong growth, Cyber to be slightly lower than FY 2024 due to last year’s exceptional government orders, and Diagnostics to keep building both proprietary and third-party sales.
BATM will keep pruning non-core operations and is exploring M&A to add capability in core areas. That means headline revenue may be influenced by disposals, but the quality of earnings should improve.
What could move the shares next
- Pilot conversions for the commercial encryption platform and new orders via the strategic Partner.
- Order flow and channel sell-through for X-series and Edgility, especially in Latin America.
- Diagnostics reagent run-rate and further MDXlab wins, particularly multi-year agreements.
- Additional disposals of non-core assets and any bolt-on M&A in core divisions.
- Cash discipline and progress towards sustained operating profitability in Networks.
Josh’s view: a cleaner ship with improving engines
This is a solid interim set that shows the strategy is taking hold. Networks and Diagnostics are growing with better margins, and Cyber hit a major product milestone despite lapping a tough comparator. The non-core exits tidy up the structure, even if the accounting loss on discontinued operations makes the headline number look soft.
Risks remain – notably execution on commercial cyber pilots, the path to profitability in Networks, and the timing of further disposals. But with $27.0m of cash and a sharper focus, BATM looks better placed to compound from here. If you want to dig deeper, the company is hosting an investor webinar on 21 August 2025 at 1.00pm BST – you can register here: https://forms.gle/8FNaWeZrvnUUyivm9.
