Josh Simons: Why Vinyl's next phase is about profitable scale

Editor's note: This article is adapted from Josh Simons' CEO letter in Vinyl Group's FY26 Annual Report, released on 17 September 2026.

We are building a new kind of media company. It has been a big year for Vinyl.

We completed three acquisitions, strengthened the management team and materially expanded our Adaptive Media offering. The business has grown substantially, while the share price has frustratingly moved in the opposite direction. As a shareholder myself, I experience that disconnect directly.

Vinyl is now a materially stronger business than when we launched the brand in December 2023.

Our strategy is to commercialise the relationship between audiences, creators and brands. To date, that has involved combining premium cultural assets and proprietary technology into a scaled distribution network, with those capabilities productised and sold to advertisers as Adaptive Media. Sustained profitability is the clear priority and the Company's next major milestone.

We acquired Val Morgan Digital, Pedestrian Group and Time Out Australia in the second half of FY26, giving us national audience reach comparable with the leading media organisations in Australia and significantly expanding the scale of the platform.

Revenue grew from $14.4 million in FY25 to $18.8 million in FY26, an increase of 31% driven substantially by organic growth, while net loss after tax improved from $15.9 million to $8.6 million, a 46% improvement.

I've long believed that investors invest in lines, not dots. Less than two years ago, Vinyl was generating under $5 million in annual revenue. Since then, the business has grown to almost four times that scale while losses have been cut nearly in half. The trendline is moving decisively in the right direction.

Since relaunching as Vinyl Group, we have raised approximately $40 million in capital, generated approximately $40 million in aggregate revenue, and are now forecasting approximately $40 million in FY27 revenue alone. Put simply, the revenue we expect to generate this financial year is broadly equivalent to the Company's entire revenue base since relaunch.

It is important to note that the FY26 results include only one partial quarter of Val Morgan Digital and only a negligible contribution from Pedestrian Group and Time Out Australia, which completed in the final weeks and days of the financial year. Their full financial contributions are still to come.

Organic topline growth was weaker than forecast due to softer media activity in a more uncertain economic environment and the impact of our internal restructure on sales momentum. We built audience scale faster than we built the commercial and operating capability required to monetise it. Integration took longer in some areas than we expected, our revenue mix remained more reactive and less recurring than it should be, and the full benefit of several acquisitions arrived too late in the year to materially contribute to FY26. As a result, revenue growth did not translate into profitability as quickly as we intended.

Importantly, the gross profit margin improved from 38.8% in FY25 to 42.1% in FY26, in line with our forecast. With FY27 gross margins targeted above 50%, the larger revenue base should provide a substantially stronger platform for EBITDA and sustainable cash generation.

Delivering on forecast, we recorded our first cash-positive quarter in December 2025 and expect to reach a cash-positive run-rate by the end of the first half of FY27.

Last year we described FY26 as an inflection point. Following the three acquisitions in the second half, that inflection is proving to be a two-year process as integration and scaling have overlapped. We should be clear about that timeline.

That is the central execution challenge now. We have the audience scale. We now need the business scale to catch up.

The market may not yet fully recognise that progress, but our focus is on building a new kind of media company that is profitable at scale and impossible to miss.

Investing in undervalued assets

The strategy was deliberate from the outset: acquire premium cultural assets with real distribution, established audiences, trusted brands and profit potential that could become far more valuable together than independently. Revenue, logos and scale were consequences of that strategy, rather than the objective itself.

Since I commenced as CEO, Vinyl Group has deployed approximately $28 million in acquisition consideration through cash and scrip. Several of the assets we acquired had previously changed hands at significantly higher valuations, cumulatively at least $173 million based on publicly available information.

Clearly, this was about far more than generating hype or newsflow. We were acquiring brands, licences and platforms with undeniable brand equity, including Rolling Stone, Time Out, Pedestrian and Vampr, together with audiences, infrastructure and market positions that would have been difficult, expensive and, in some cases, effectively impossible to build from scratch within the same capital envelope.

Put another way, we assembled our current platform for less than the historical price paid for some of the individual assets now inside it. As we scaled, those opportunities also became more capital efficient. We see this as evidence that the flywheel is starting to work, supported by market dislocation, timing and our willingness to undertake complex integration work to make the pieces fit together.

The tough and messy work of integration

Bringing these businesses together has been hard, noisy and often unglamorous.

We have integrated teams, simplified legal and operating structures, consolidated systems, reduced duplication, rationalised costs and strengthened management capability. In some areas, the complexity and time required to standardise the operating model and build the commercial capability needed to monetise the combined audience effectively took longer than expected.

The businesses are increasingly supported by shared infrastructure across finance, people, technology, data, audience intelligence and commercial operations, while each brand retains its distinct identity, editorial voice and audience relationship.

Our standard is clear thinking, disciplined resource allocation, intellectual honesty and the willingness to change course when the facts change.

Much of this work has not yet come through fully in the reported numbers, but it has created a structurally lower cost base and a clearer pathway to profitability heading into FY27.

Our priority is to maximise the value of the businesses we already own, while remaining open to disciplined, value-accretive opportunities that could materially strengthen the Company or accelerate its results.

Leadership through complexity

Over the past year, I have had to wear many hats: founder, public company CEO, acquisition lead, integration manager, capital markets communicator and long-term strategic custodian. At times, those responsibilities pull in different directions.

We have not executed every decision perfectly. Some initiatives took longer to deliver than expected, some required correction, and some changed as the facts changed. Our responsibility is to identify those issues quickly and act on them.

However, the trajectory is clear and the progress is real.

We have acquired valuable assets at disciplined prices, expanded the Company's reach, reduced cash burn, strengthened the team and moved Vinyl closer to sustainable profitability.

Despite that progress, the share price has remained under pressure. A material contributor has been persistent selling by multiple existing holders, including vendors of acquisitions completed in FY25, combined with insufficient new buying demand to absorb that supply in a relatively illiquid stock. Much of that selling activity preceded the release of our FY26 financial results, which is relevant context when assessing the relationship between business performance and market value.

As CEO, I am required to continually ask whether my time, and the Company's resources, are being directed toward the activities that create the greatest long-term value for shareholders. I remain as ambitious for this business as I was when we began the transformation, and equally clear-eyed about what still needs to be proved.

My responsibility is to match the conviction that assembled this platform with the discipline, patience and focus required to realise its value.

Why brands matter more than ever

Media remains a fundamental pillar of society and culture, and while its formats will continue to evolve from legacy media to social platforms and now Adaptive Media, the value of trusted brands, scaled distribution and meaningful audience relationships will endure. Vinyl has assembled a significant position in that ecosystem at a fraction of the cost and time it would take to build from scratch.

In an AI-driven media environment, trusted brands, genuine audience relationships and cultural credibility are once again becoming more valuable.

Whilst AI can generate content, you cannot prompt a brand or instantly create trust, cultural memory, brand permission or authentic audience relationships. Those qualities take years to establish. Vinyl had the opportunity to acquire assets with these characteristics, integrate them and give them a clearer role inside a larger platform.

That trust must be protected by preserving each brand's individual identity and editorial integrity while providing stronger technology, data, distribution and commercial support.

At the same time, we continue to make significant gains in efficiency by using AI behind the scenes. Across the Group, we are integrating AI, data, commerce and proprietary Platforms capabilities into Publishing to improve workflows, audience intelligence, campaign delivery, distribution and monetisation without requiring the cost base to grow at the same rate, and all the while maintaining rigorous human oversight.

Adaptive Media is the productised expression of that model, bringing content, capability, data, technology, commerce and distribution together into integrated products and campaigns that connect brands with culture and improve revenue yield across our audience.

For commercial and strategic partners, Vinyl now offers a scaled platform across Australian culture, media and music technology that would be difficult, costly and time-consuming to replicate.

Audience scale and business scale: The opportunity

Our diversified commercial engine spans major Adaptive Media brand campaigns, recurring subscriptions and e-commerce.

Early indicators show an average B2B Adaptive Media campaign value of approximately $50,000, an average B2C subscription value of approximately $60, and an average e-commerce order value of approximately $120.

Across our controlled social media handles we now have more than 31 million followers, including approximately 23 million across Meta platforms, where our content generated more than 430 million views in the most recent month alone. For context, at the time of our last annual report, total monthly views across all platforms had reached approximately 116 million. Separately, Vinyl Media's Ipsos Iris-verified Australian online audience increased from approximately 26% through the end of CY25 to now over 50% following the acquisitions of Val Morgan Digital, Pedestrian Group and Time Out Australia.

Importantly, the relative cost of acquiring that additional reach has declined with each transaction.

Vinyl has now achieved meaningful national audience scale. We now need to build the business scale to match that audience scale.

Today, the Group generates approximately $2 in annual revenue for each member of that Australian online audience. Based on industry analogues and the performance of major peers, we believe a more mature platform should be capable of generating closer to $20 over time.

That gap represents the significant commercial opportunity in front of us.

We do not need to increase our audience tenfold to materially grow the business. We need to create more value from the audience already assembled through larger campaigns, deeper recurring customer relationships, stronger commerce conversion, events, data and new technology-enabled products.

In other words, higher-quality revenues.

Our audience is a distribution layer that can support advertising, branded content, subscriptions, commerce, events and technology products across the portfolio. We are now focused on increasing revenue per audience member without requiring costs to grow at the same rate.

The priority

Our unmistakable priority is profitability.

Profitability is now the clearest test of whether the strategy is working.

The work of the past two years has given Vinyl the audience, brands, infrastructure and commercial engine required to become a sustainably profitable company.

We have demonstrated that we can acquire valuable assets, grow audience reach and materially increase revenue.

We are now focused on generating sustainable positive EBITDA and positive cash flow.

We believe doing so is also the most important potential catalyst for a market re-rating.

We will demand clearer returns from every part of the portfolio and resist growth that does not improve the quality, profitability or strategic position of the Company.

The next phase

Our near-term focus in FY27 is on three core strategic initiatives: completing our integration work so the Company operates on shared infrastructure across the front and back end; increasing the mix of higher-margin, recurring revenue; and improving audience monetisation as the network compounds and creates greater value across the ecosystem.

These initiatives should drive organic revenue growth, higher revenue per audience member, improved gross margins, disciplined cost control and sustainable positive operating cash flow.

Our job is to deliver results with the resources we have, stay honest about what is working and what is not, and match the ambition that built this platform with the discipline and patience required to make it sustainably profitable.

Finally, I want to thank the Vinyl team for the energy, resilience and ambition they have brought to an unusually demanding year.

The opportunity ahead is clear.

We have built the audience scale.

The priority now is profitable business scale.

Josh Simons is Chief Executive Officer of Vinyl Group (ASX: VNL). This article is adapted from his CEO letter in the company's FY26 Annual Report.