Viva Leisure (ASX:VVA) Shares Eye Cash Flow Strength After Profit Jump

Viva Leisure walked into these results with a gently rising share price, up about 7% over the past week and 3% over the past month, and a reputation as a growth story still priced on a modest 12x P/E. The headline today is that the earnings release largely backed that reputation up. Revenue reached A$237.1m and underlying net profit after tax came in at A$18.9m.

For a fitness network that lives and dies on utilisation and cash flow, the real punchline is profit. Statutory net profit after tax of A$12.8m now sits behind the market reaction, and investors will decide whether that is enough to justify the recent strength in the Viva Leisure share price.

Love Viva Leisure's A$18.9m underlying profit but unsure whether its A$12.8m statutory profit stacks up against other opportunities in your portfolio? Check out list of solid balance sheet and fundamentals stocks (21 results).

FY 2026 Earnings Summary

• Revenue FY 2026 vs FY 2025: A$237.1m vs. A$211.3m (up 12.2%)
• Net Income FY 2026 vs FY 2025: A$12.8m vs. A$5.2m (up about 2.4x, very large increase)
• Basic EPS FY 2026 vs FY 2025: A$0.1313 per share vs. A$0.0524 per share (up about 2.5x, very large increase)
• Net Profit Margin FY 2026 vs FY 2025: 5.4% vs. 2.5% (margin improved)

Prefer clear visuals instead of wading through another wall of earnings tables and ratios? Get a full picture of Viva Leisure with an at a glance view of its valuation in the company report for Viva Leisure.

Viva Leisure bull thesis meets key operating tests

Bulls argue Viva Leisure is shifting from pure club rollouts toward a higher quality, cash generative platform with growing software and services. The FY26 print gives that view some support. Management intentionally slowed greenfield openings and still reached A$237.1m revenue with adjusted EBITDA of A$112.3m while lifting adjusted free cash flow to A$35.1m and funding A$31.3m of growth investment from operations. Net leverage moved from 2.04x to 1.77x against a 2.5x covenant, and the company launched a buyback and first dividend, which together point to better balance sheet flexibility. On the business mix angle, capital light lines are gaining traction. Payments & Technology external revenue reached A$7.1m and A$20.2m including intersegment, while Meridium Global produced pre elimination EBITDA of A$13.4m, up from A$3.7m. That progress backs the two business narrative rather than just a gym rollup story.

Bear case on leverage, churn and tech execution

The bear narrative focuses on leverage, fragile organic growth masked by club churn, and execution risk on technology and M&A. FY26 does soften some of those worries but does not remove them. Net leverage now sits at 1.77x with undrawn facilities and all growth funded from operating cash flow, which helps the balance sheet risk argument. Membership and utilisation look healthy, with about 694,000 members, corporate members above 278,000 and portfolio utilisation above 80%. That contradicts the idea that planned closures are hiding weak demand. However, the plan to reaccelerate more than 20 corporate openings a year and push franchise and Zoo Fit refurbishments raises a fresh execution hurdle. Meridium Global’s EBITDA step up from A$3.7m to A$13.4m is encouraging, yet the strategic review and desire for external partners show the software and payments thesis is still mid build, not fully proven.

Meridium’s jump in EBITDA and Viva Leisure’s plan to ramp openings both rely on smooth integration, reliable utilisation and disciplined debt service. Review the risk analysis for Viva Leisure which shows 1 important warning sign to see whether that single warning on interest cover is just the start of a deeper risk profile.

Stay Ahead With Viva Leisure

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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