Serko Limited Analysis

Overview

Serko is a story of travel technology innovation. Founders Darrin Grafton and Bob Shaw started the Serko journey with Interactive Technologies Limited in 1994. ITL was a technology company designed to help travel agents solve a number of thorny mid-office and back office system challenges.

As the Internet took off and irrevocably changed the way users searched and booked travel, the business changed direction in order to ride the wave and in 2000 Serko was born. Since then the company has gone from strength to strength and with an unwavering commitment to simplifying and improving the travel experience, has gone on to become Australasia's preferred OBT.

Performance

The following information was extracted from Serko Limited's annual report, released on 20 May 2025:

Serko delivers 27% total income growth

Pre-acquisition business is cash-generative, supporting growth

Serko Limited (NZX & ASX: SKO) today reports its audited results for the twelve months to 31 March 2025 (FY25) with total income up 27% to $90.5 million, continuing its track record of high growth.

The result was driven by continued demand and growth in Booking.com for Business, with completed room nights and active customers both increasing 29%. The result also included a solid performance by Serko’s Australasian business and $4.8 million of income from the acquisition of GetThere on 7 January 2025.

Serko Chief Executive and Co-Founder Darrin Grafton said: “Serko is pursuing new growth, supported by targeted investment in its platform and North American expansion. We are in a strong position to do this, with continued income growth, cost discipline and an increase in our capability, including in data and AI.

“Our pre-acquisition business generated positive Free Cash Flow for FY25 of $7.4 million, an improvement of $14.5 million3. We expect the cash-generative strength of our pre-acquisition business to continue building, providing a solid foundation as we scale.” Financial summary “Increased total income and our operational efficiency delivered positive EBITDAFI of $2.8 million for the year, a $4.3m improvement. Total spend-to-income ratio fell from 118% to 102%. “Our net loss after tax was $22 million, an increase of $6.1 million, reflecting one-off costs and a noncash accounting impairment. “Free Cash Flow showed a $5.2 million improvement, narrowing the net outflow to $1.9 million.

Financial summary

“Increased total income and our operational efficiency delivered positive EBITDAFI of $2.8 million for the year, a $4.3m improvement. Total spend-to-income ratio fell from 118% to 102%. “Our net loss after tax was $22 million, an increase of $6.1 million, reflecting one-off costs and a noncash accounting impairment. “Free Cash Flow showed a $5.2 million improvement, narrowing the net outflow to $1.9 million.