Adventure tourism specialist Experience Co (ASX: EXP) has served up a strong set of numbers for the second quarter of the 2025 financial year (FY25), showcased by solid revenue growth across both its operating segments and improved earnings stemming from cost optimisation initiatives.
Revenue growth on rising volume
In total, revenue of $37.2 million for the quarter jumped by 14 per cent from the same time last year.
More specifically, the company’s ‘Adventure Experiences’ division saw revenue of $18.5 million lift by 20 per cent year-on-year. The group’s ‘Skydiving’ division also notched up a healthy 8 per cent boost in revenue to reach $18.7 million during the quarter.
Experience Co offers tourists a wide array of adventure experiences across Australia and New Zealand. These include tandem skydiving, tours to the Great Barrier Reef, iconic multi-day wilderness experiences, ziplining, and walking tours through the Daintree Rainforest.
Management noted that most of the company’s business units delivered volume growth during the quarter, when compared to the previous corresponding period. This sheds light on the positive underlying demand for adventure tourism activities despite the industry being impacted by challenging macroeconomic conditions.
Cost optimisation initiatives kick into gear
Experience Co also benefited from its cost optimisation efforts in Q2 FY25, with operating earnings (EBITDA) of $7 million surging by 46 per cent from twelve months prior.
In addition, the group’s performance in the first half of FY25 also saw a healthy improvement from the same time last year.
Management primarily attributed this outcome to rising revenue in the company’s Adventure Experiences division, coupled with a continued focus on volume growth, cost optimisation initiatives, and operating efficiencies.
Revenue for the first half of FY25 came in at $67.9 million, up by 9 per cent from the same time last year. Here, the Adventure Experiences division delivered a 14 per cent increase in revenue from the previous corresponding period, whilst the Skydiving division saw a four per cent uptick.
Meanwhile, EBITDA of $10.7 million in the first half of the fiscal year rocketed by 51 per cent to reach $10.7 million. The business was free cash flow positive for the year-to-date period.
Strong start to calendar year
Moving forward, management drew attention to Experience Co’s operational performance in January so far.
The summer school holiday period and a recovery in inbound traffic to Australia have helped to drive volume, especially in the Skydive division which is projected to top the volumes attained in the previous corresponding period.
Looking further ahead, Experience Co continues to focus on its strategic priorities of optimising earnings, sustaining trading momentum, lifting its portfolio quality, and delivering growth.
Recovery in international tourism
Amongst others, volume levels across the company’s business units are expected to benefit from an ongoing recovery in international tourism to Australia.
In particular, management anticipates improved Chinese visitor numbers to our nation, with the China-Australia aviation capacity already sitting above pre-COVID levels. However, the company projects domestic tourist numbers to remain affected by a subdued macroeconomic environment.