xReality Group Limited (ASX:XRG) (xReality) is pleased to present xReality Group Limited’s 2024 Annual General Meeting.
2024 Financial Performance
In FY24 the company achieved a total income of $10.24m plus deferred revenue of $4.48m which is considerably more than previous years. The company achieved $4.1m in total contract value through Operator XR, however the revenue from these sales will be recognised over a 36-month period as Annual Recurring Revenue. Given the timing of most of the Operator XR sales in FY24, only $691k is included as recognised revenue this financial year. The remainder is reflected on the balance sheet as deferred revenue which has increased by 138% from $1.89m to $4.48m.
Delivering on Strategy and Outperforming Expectations
XRG’s achievements in FY24, particularly in validating and expanding the Operator XR software products, underscore a pivotal year of strategic execution and market penetration. The company not only met but also surpassed its strategic milestones, demonstrating effective growth management and the appeal of its innovative solutions in global markets. This success has set a strong precedent for continued growth and innovation throughout FY25 and beyond.
Enterprise Sector
Throughout FY24, xReality Group Limited made substantial strides in expanding its customer base for the Operator XR platform. The year saw a marked increase in the number of new customers, from 3 at the end of June 2023 to 39 currently, particularly in the U.S. and Australian markets.
FY24 proved Operator XR product market fit and validated Operator XR as the go- forward growth platform for XRG, as proven by:
The Speed and quality of top tier customer acquisition, typified by the contract win with $5.6m US Department of Defense. The Board are highly encouraged by this, noting XRG has overcome generally longer defence sales cycle times and a contract win against incumbent US competitors. Material, multi-year contract commitments from top tier customers spanning federal and state levels in the USA and ANZ, including the FBI, LA SWAT and other key US agencies . Rapid expansion in the US has been boosted through customer word-of- mouth, demonstratring a compelling product proposition, whilst maintaining product growth and penetratrion in ANZ market. We now serve 25 State Police and County Sherriffs departments in the US. Operator XR has attracted significant internal XRG investment priority and management focus, and quickly generated cashflows to sustain continued and increasing investment. FY25 strong demand outlook and existing pipeline for the USA and Rest of the World, including additional top tier national prospects. Outlook to profitability for the Operator XR business in FY25 is encouraging, after ongoing product and sales investment, as pipeline opportunities continue to convert.The significant growth, market penetration, and commercial success of Operator XR warrants increasing focus and priority within XRG, as management and Board seek to capitalise on this major opportunity to create substantial value for shareholders.
Entertainment Sector
The Entertainment Segment of the business comprises Indoor Skydiving and Freak Entertainment. Positive Cashflow from this sector played an important role in the expansion of the rest of the company. Both iFLY and FREAK Entertainment performed steadily in a soft retail market. The iFLY facilities in Western Sydney and Surfers Paradise provided $7.3m cash receipts throughout the year with the four FREAK Entertainment facilities located in NSW and QLD contributing a combined further $1.3m in cash.
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