ZOO Digital Group (AIM:ZOO) on Tuesday reported revenue of $23.6m for the six months ended 30 September, up from $22.4m a year earlier, marking a return to growth alongside a sharp improvement in profitability.
The AIM-listed tech-enabled localisation and digital media services provider, which supplies dubbing, subtitling and related localisation work to studios and streaming platforms, said adjusted EBITDA rose to $3.6m from $2m in the prior-year period, with the accompanying financial tables showing an increase of 86.8%.
Operating profit came in at $1.5m, reversing a $1.2m operating loss in H1 FY26, while pre-tax profit reached $1.3m against a $1.4m loss a year earlier. Cash EBITDA, a measure the company says more closely tracks underlying cash flow, rose to $1.9m from $0.6m.
Gross margin held at 43%, down slightly from 45% a year earlier, as a leaner cost base and growth in higher-margin localisation work offset a decline in media services.
Revenue by division showed a sharp mix shift: localisation revenue increased 46% to $16.7m, driven predominantly by older catalogue content being licensed into new territories, while media services revenue fell 37% to $6.9m due to structural changes at the Group's largest customer, against a strong prior-year comparator.
Customer concentration eased markedly, with the largest customer representing 26% of revenue, down from 55% in H1 FY26, while total sales excluding that customer rose 72%.
Gross cash stood at $3.4m at period end, against $3.3m a year earlier, with $1.9m drawn under the Group's US invoice financing facility, which was expanded to $5m from $3m during FY26; the separate £2m UK facility remained unutilised. Current liabilities were $14.2m, down from $14.6m.
"ZOO has returned to growth with improved profitability and cash generation," said chief executive Stuart Green, pointing to "increased demand for faster delivery in more languages as well as new content formats that are expanding the media localisation market."
The Group's Fast Track service, covering live and near-live content as well as accelerated standard projects such as its "7-Day Dub" offering, accounted for 38% of revenue in the period, up from 4% in FY26, following its launch flagged at the FY26 results in July.
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The framework agreements signed with two major studio customers in the second half of FY26 delivered significant orders during the half, the company said, and new business tender activity reached its highest level since before the 2023 Hollywood strikes.
Looking ahead, the board said current trading remains positive and is continuing the trend seen in the first half, and it is confident of delivering a return to full-year revenue growth and profit progression in line with market expectations, which it cited as FY27 revenue of $43.5m, adjusted EBITDA of $4.1m and gross cash of $2.1m.
The company cautioned that H1 benefited from one-off catalogue projects it does not assume will repeat in the second half, and that it continues to have limited revenue visibility, remaining focused on disciplined execution and cash generation.