Why Infomedia Ltd Could Be the Next Big Winner on the ASX

In today’s fast-changing digital landscape, technology is no longer just an enabler—it’s the engine driving transformation across entire industries. Few sectors illustrate this shift better than automotive, where data, software, and connectivity are reshaping how vehicles are sold, serviced, and managed.

Standing at the heart of this transformation is Infomedia Ltd (ASX: IFM)—a global leader in automotive Software as a Service (SaaS) and Data as a Service (DaaS). The company might not grab daily headlines like flashy tech start-ups, but its steady innovation, global reach, and financial strength make it a potential hidden gem on the ASX.

Here’s why Infomedia could be the next big winner for long-term investors.

Driving Growth in the Automotive Ecosystem

Infomedia develops digital platforms that help automotive manufacturers, dealerships, and service centres streamline operations. Its core offerings—covering parts management, service quoting, and customer lifecycle software—are used by over 250,000 industry professionals across 186 countries and more than 50 global car brands.

In simple terms, Infomedia powers the digital backbone of the automotive aftermarket. From helping a dealership identify the right part faster, to enabling predictive maintenance through data analytics, IFM’s tools are now mission-critical for modern vehicle operations.

What makes this business model powerful is its recurring, subscription-based revenue. Roughly 99% of Infomedia’s total revenue comes from SaaS and DaaS subscriptions, giving it a highly predictable and resilient cash flow. Once integrated into dealership systems, Infomedia’s software becomes deeply embedded—making customer churn low and retention rates high.

This “sticky” model allows the company to consistently grow while maintaining strong profit margins. For investors, that means dependable performance even when the broader market faces turbulence.

Solid Financial Performance with Strong Cash Flow

Infomedia’s latest financial results underscore just how solid its fundamentals are. For the financial year ended June 2025, the company delivered total revenue of $146.5 million, a 4% year-over-year increase despite challenging macroeconomic conditions.

Importantly, recurring revenue reached $145.4 million, showing that nearly all of its income comes from repeat customers rather than one-off contracts. This demonstrates a mature and stable business model with excellent visibility into future earnings.

Profitability also moved in the right direction. Underlying cash EBITDA rose 7% to $35.2 million, with margins improving by 1 percentage point to 24%. The improvement reflects management’s disciplined cost control and growing operational leverage as the business scales.

The bottom line was equally impressive. Net profit after tax (NPAT) climbed 32% to $16.7 million, and earnings per share (EPS) surged 31% to 4.44 cents. For shareholders, that’s not just healthy growth—it’s proof that Infomedia is converting top-line expansion into real, sustainable value.

With a strong balance sheet, consistent cash generation, and minimal debt, Infomedia is well-positioned to fund new innovations and global expansion without overleveraging.

Strategic Positioning for Future Growth

Infomedia’s growth story doesn’t rely solely on financial prudence—it’s also about smart, forward-looking strategy.

The company is heavily investing in AI-driven analytics and automation tools designed to improve forecasting accuracy, optimize parts inventory, and enhance customer experience. By integrating artificial intelligence and machine learning into its platforms, Infomedia enables dealerships and manufacturers to make data-informed decisions faster and more accurately than ever before.

Additionally, the company is deepening its presence in emerging markets, tapping into regions with fast-growing vehicle populations and rising demand for digital dealership solutions. Expansion into markets across Asia, the Middle East, and Latin America could provide significant new revenue streams in the coming years.

Infomedia is also uniquely positioned to benefit from several long-term industry trends:

• Electric Vehicle (EV) growth – requiring advanced service and parts management software.
• Connected cars – creating new data-driven service opportunities.
• Digitization of after-sales services – as dealerships and workshops move away from manual systems to integrated cloud platforms.

By aligning with these global megatrends, Infomedia is not just adapting—it’s helping shape the future of how the automotive industry operates.

Attractive Dividend and Yield Support

Unlike many fast-growing tech companies that reinvest every dollar back into expansion, Infomedia strikes a balance between growth and shareholder returns.

The company offers fully franked dividends, with an annual payout of around $0.042 per share, representing a payout ratio of roughly 72%. This gives income-focused investors a reliable yield while still leaving room for reinvestment into future initiatives.

For investors looking for growth with income stability, Infomedia’s dividend track record provides an additional layer of confidence.

Resilience Amid Industry Headwinds

The global automotive industry has faced its fair share of challenges—supply chain disruptions, fluctuating raw material costs, and changing consumer behavior among them. But unlike manufacturers or car retailers, Infomedia’s business model is largely insulated from these short-term shocks.

Its revenue depends on digital subscriptions, not car production volumes. So even when vehicle sales slow, dealerships and manufacturers still need IFM’s software to run their daily operations.

This resilience was evident during the pandemic and continued through recent macroeconomic headwinds. By maintaining strong recurring revenue, Infomedia proved its ability to weather downturns better than many traditional automotive companies.

Innovation and Acquisition Potential

Infomedia’s future growth potential may also come from strategic acquisitions and partnerships. In recent years, the company has successfully integrated complementary technologies that expand its capabilities.

As the automotive industry becomes more digital and data-centric, Infomedia could attract strategic interest from larger global tech or data companies looking to gain a foothold in the automotive software space. Such partnerships or acquisitions could unlock additional shareholder value.

Final Thoughts: Infomedia as a Long-Term ASX Growth Opportunity

Infomedia Ltd (ASX: IFM) combines all the right ingredients for a long-term ASX success story—recurring revenue, global exposure, strong margins, consistent earnings growth, and shareholder-friendly dividends.

Its positioning at the centre of the global automotive ecosystem gives it a durable competitive advantage, while its push into AI and data analytics offers significant upside for years to come.

For investors seeking a blend of growth, resilience, and innovation, Infomedia stands out as one of the most promising mid-cap technology plays on the ASX.

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