XPON Technologies Group Ltd (ASX:XPN) Announces H1 FY25 Results
Financial Performance
XPON Technologies reported revenue of $4.2 million in H1 FY25, aligning with previous guidance. The gross margin was 73%, a 2 percentage point decrease year-over-year. Statutory EBITDA improved by $4.5 million to a loss of $0.4 million compared to a loss of $4.9 million in H1 FY24. The company achieved $0.9 million in additional annualised cost savings.
Operational Achievements
During the first half of FY25, XPON landed seven new customers and expanded contracts with twelve existing customers, maintaining a strong monthly customer retention rate of 98.9%. Ninety-three percent of the revenue was recurring, supported by a robust pipeline expected to drive further expansion in the second half of the year. The company also won the Australian 2024 AI Award for “AI Innovation – Media & Communication Services.”
Strategic Outlook
XPON extended its convertible note until 26 August 2025 to strengthen its financial position. The company is targeting cash flow break-even on an annualised basis by the end of FY25, despite potential impacts from repaying aged accounts payable. Priorities for the financial year include optimising the sales strategy towards high-margin recurring revenue, driving AI innovation with Wondaris, leveraging the relationship with Google for pipeline generation, exploring strategic partnerships and M&A opportunities, maintaining a strong corporate culture, and managing the cost profile in line with business performance.
Executive Comments
Founder and Group CEO, Matt Forman, stated, “We are pleased to see the business is tracking strongly against our strategic roadmap with the sales recalibration delivering much higher levels of recurring revenue (93% in H1) and a strong pipeline of customers landed in H1 expected to move into expansion deals during H2. Our team has successfully undergone a comprehensive process redesign aimed at simplifying and optimising our workflows. Combining these simplified workflows with state-of-the-art AI automation we are delivering ʻmore for less’ and achieved c$0.9m in additional annualised cost savings. These enhancements not only position us strongly for future profitability but also significantly uplift our overall capabilities and scalability, positioning us to deliver even greater value for customers and shareholders. We are proactively taking advantage of a stronger cash position and recent customer wins to optimise our balance sheet. Combined with vigilant working capital management and a sharp focus on cost control, the large improvement in Adjusted EBITDA clearly demonstrates our progress and commitment towards profitability and achieving cash flow breakeven on an annualised basis by the end of FY25. Our technical capability, AI expertise and value proposition for customers was again validated with the Australian 2024 AI Award in the category of “AI Innovation – Media & Communication Services.”
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