Bravura’s turnaround gains more traction

Bravura (ASX: BVS) is starting to make this turnaround look easy. After a remarkable result for the first half of the 2025 financial year, the financial services software business has shown its continued ability to grow high-quality recurring revenue, once again upgraded guidance and locked in the return of more cash to shareholders.

We last wrote about the importance of Bravura growing its mission-critical recurring software revenue in the December 2024 quarterly report. At the results release last week it was pleasing to see that despite overall revenue staying flat for the half year, recurring revenue rose 7%. It now makes up more than 60% of total revenue.

Bravura has been steadily shifting toward a more predictable, higher-quality revenue and earnings base. The more of this revenue Bravura can lock in, the more valuable the business becomes.

Within the result we also saw a further 3% upgrade to revenue expectations, flowing through to a 14% improvement in cash earnings before interest, tax, depreciations and amortisation. Sales into the Australian digital advice business, alongside UK clients’ increasing demand, drove the upgrade in revenue. Favourable foreign exchange rates helped too. In the context of what has already been achieved on revenue and costs, second half expectations from management look imminently achievable, if not outright conservative.

And Bravura’s improving financials are putting cash back in shareholders’ pockets. After dishing out a $0.163 capital return in January, Bravura was back with an $0.089 special dividend funded by the sale of a software license to large customer Fidelity. A regular dividend will also be paid. The business retains $32m of cash, and no debt, after these payouts.

So far, this improvement has been achieved without winning much new work. The next leg in Bravura’s growth may well come from deploying its leading products into large new customers.

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