ReadCloud Limited (ASX:RCL) services the education sector through the provision of digital learning content, proprietary interactive technology, and support for students and educators. The company delivered a solid June quarter, recording a 35% increase in cash receipts over the previous corresponding period (pcp) to $4.6m and maintaining disciplined cost control at the operating level. Its VET-in-Schools segment continues to grow strongly with a 27% revenue uplift and high gross margins (>90%) to date in FY25. Domestic direct eBooks Solutions’ revenue rose 13% to $4.5m for the first nine months of FY25 (September year-end) and management stated increased interest from international schools could lead to an acceleration in international sales in FY26. This was a positive surprise and is not yet in our forecasts. Management had previously flagged that recent state government policy changes were impacting the industry training business Southern Solutions (SS). As a result, sales and fee revenue were down 24% and in response, management has restructured the workforce, although further detail was not released. The SS revenue downturn is broadly in-line with our previously adjusted forecasts and we await further clarity post the current quarter for information around revenue and cost management going forward. That said, we forecast the SS business will represent only 14% of group revenue in FY25. With $3.0m in cash, no debt and guidance of FY25 revenue between $12.7m-$13.0m, the company stated it is on track to deliver positive underlying EBITDA and operating cash flow for the year. As such, our forecasts remain unchanged as we are comfortable that the two core businesses are performing strongly. Our DCF valuation of $0.33/share is unchanged, representing potential upside of 187% over the current share price.