Experience Co Q3 2025 slides: EBITDA grows 10% despite flat revenue

Introduction & Market Context

Experience Co Limited (ASX:EXP) released its Q3 2025 trading update on May 12, highlighting operational efficiency improvements that drove earnings growth despite revenue challenges. The adventure tourism operator, currently trading at A$0.099 per share, has seen its stock price remain near the 52-week low of A$0.091, despite showing signs of business improvement.

The company, which operates skydiving facilities across Australia and New Zealand alongside various adventure tourism experiences, continues to benefit from the gradual recovery of inbound tourism while navigating weather-related disruptions that impacted certain segments during the quarter.

Quarterly Performance Highlights

Experience Co reported flat sales revenue of A$35.0 million for Q3 2025 compared to the prior comparable period (PCP), while achieving a 10% increase in underlying EBITDA to A$5.3 million. This performance demonstrates the company’s ability to enhance profitability through operational efficiencies despite revenue challenges.

As shown in the following financial overview, year-to-date (YTD) performance remains strong with sales revenue up 6% to A$103.0 million and underlying EBITDA increasing by 33% to A$16.0 million compared to the same period last year:

The company noted that while January performance was strong, February and March faced challenging trading conditions due to significant weather events that particularly affected the Lunar New Year trading period. Despite these challenges, improved operating efficiencies in the Skydiving segment helped support overall business performance.

Detailed Financial Analysis

The Skydiving segment, which represents approximately 57% of quarterly revenue, delivered a solid performance with revenue increasing by 6% to A$20.1 million in Q3 2025. Year-to-date revenue for this segment reached A$50.3 million, representing a 5% increase over the prior year.

The following chart illustrates the passenger volume trends across the company’s skydiving operations in Australia and New Zealand:

New Zealand operations were particularly strong with volume growth of 18% compared to the prior year. While overall Skydive Australia volumes decreased by 3%, this was primarily due to sites in care and maintenance (C&M). Operating sites in Australia actually grew by 5%, demonstrating underlying strength in the core business.

The company also reported a slight increase in average revenue per customer and improved site operating margins within the Skydiving segment, reflecting successful yield management and operational efficiency initiatives.

In contrast, the Adventure Experiences segment faced more significant challenges during the quarter, with revenue declining by 7% to A$14.9 million compared to Q3 2024. However, year-to-date performance remains positive with revenue up 7% to A$52.7 million.

The following chart shows passenger volume trends for the Reef Unlimited and Treetops Adventure businesses:

Weather conditions significantly impacted the Reef Unlimited business, with volumes down 17% and revenue declining 10% compared to the prior year. Treetops Adventure also experienced a 7% volume decrease, though revenue still grew by 6%, indicating successful pricing strategies and potentially a shift toward higher-value experiences.

Forward-Looking Statements & April Trading

Experience Co provided an encouraging update on April trading, reporting profitable performance across all business units with unaudited underlying EBITDA of A$3.1 million compared to A$1.6 million in the prior year. This represents a significant improvement and brings the year-to-date underlying EBITDA to A$19.0 million, up from A$13.6 million in the prior year.

The following April trading update highlights improved conditions across all segments:

Skydiving operations in both Australia and New Zealand reported volumes ahead of the prior year, benefiting from favorable weather conditions. Reef Unlimited volumes improved toward the end of April, with stronger volumes anticipated in the second half of May. The company also noted that a new Reef Unlimited vessel commenced operations, which should support capacity growth going forward.

Management expressed encouragement regarding demand returning to Skydive Australia and emphasized their focus on being "holiday ready" and generating free cash flow. This suggests a strategic emphasis on operational readiness for peak tourism periods while maintaining financial discipline.

Competitive Industry Position

Experience Co maintains a diverse portfolio of adventure tourism brands across Australia and New Zealand, positioning it as a significant player in the adventure tourism market. The company’s brand portfolio spans skydiving operations, reef experiences, adventure parks, and luxury wilderness experiences.

The breadth of the company’s offerings is illustrated by its brand portfolio:

This diversification provides some resilience against localized challenges, though weather-dependent operations remain vulnerable to seasonal variations. The company’s continued investment in new assets, such as the new Reef Unlimited vessel, demonstrates a commitment to maintaining competitive positioning in key markets.

As tourism continues to recover post-pandemic, Experience Co appears well-positioned to benefit from increasing domestic and international visitor numbers, particularly in adventure tourism segments that appeal to younger demographics and experience-seeking travelers.

Full presentation:

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