The security roll-up, is it a buy?

Earnings Update IMB Q1 2026

Short recap

• Company name: Intelligent Monitoring Group

• Ticker: IMB

• Current market cap: $238M (AUD)

Remember the thesis

Intelligent Monitoring Group (IMB.ASX) is a security roll-up in Australia that aims to get nationwide coverage to attract larger customers with higher margins. When we say security, we say cameras and security systems. The business model is mainly recurring revenues, as once the security system is installed, the customer pays for the monitoring.

IMB has grown through acquisitions, fueled by debt and an equity raise.

We bet that IMB succeeds in its mission, keeps taking market share from “traditional security methods”. Valuation of this company wasn’t that easy due to all the acquisitions. The future statements will be cleaner and might induce a rerating in the stock. The refinancing in 2025 will severely cut the interest payments and creates a stronger balance sheet for the company.

The last quarter of 2025 was the first clean quarter from a cash flow perspective.

• Consult the original write-up here.

• Consult the previous quarterly update here.

Let’s get deep into the weeds and see what happened this last quarter.

What was in this quarter?

Don't buy and hold, buy and monitor

The good (strengthens thesis)

This is what is in line with the original thesis

Strong pipeline growth from the ADT acquisiton which rose to A$45.2m, up +23.5% from A$36.6m at FY25 release, implying commercial momentum. If converted, this supports revenue and margin leverage in FY26.

Increased cash buffer: Cash at 30 Sept was $15.51m (and reported cash at 30 Oct $16.2m after the BNP acquisition) and stronger balance sheet since the refinancing.

Management guidance intent and tailwinds: Management reiterated they will give FY26 EBITDA guidance at the AGM on the 10th of November and expect it to be in line with market expectations. Management also points to ADT Guard/ live video monitoring as a growing revenue driver with early, positive indicators (36 criminal apprehensions cited as early proof points).

The bad (yellow flag)

Here we list news or things that do not undermine the thesis directly, but could be the start of something if they can continue. Management has to have an action plan for these

While the operational cash in Q4 2025 was a record the OCF for Q1 2026 was a mere $0.5M (in line with the results of Q1 in 2025).

How to explain this?

• Seasonal: Q1 is historically the weakest quarter. Work and installation continue during the summer, but orders, especially from enterprises, come in towards the end of the year (Q2). This seems to be confirmed by the historical data, but we will check during the next quarter

• Working capital: IMB reports a $3.2m adverse working-capital effect in Q1. $0.7m of that is a short-term impact from the WAPL acquisition.

• One-Off business change costs amounting to about $0.65M

The ugly (red flag)

These are increased risks to the thesis. There has to be a solid explanation. A red flag might reduce the holding window.

• The only red flag at the time is this uncertainty surrounding the NOLS. It’s not a thesis breaker, but this management team has experience. This should be a clear yes or no to the markets.

So overall, the top line in Q1 2026 looks better than Q1 2025. But even though finance costs are lower, other costs compensated so that there was no real improvement in the operational cash flows.

As I mentioned in the portfolio update, management is very bullish towards the future. I don’t mind bullish stances, as long as fundamentals confirm it.

As they say in hollywood: “Show, don’t tell.”

So how does this all impact the quality and valuation of this company, and is this company a BUY or not?