xReality Group Limited – 2025 Interim Results Summary
Overall Report Tone
XReality Group (XRG) interim report reflects strong revenue growth driven by the success of Operator XR, partially offset by weakness in the entertainment segment. While the company remains unprofitable, the net loss has narrowed, and management is focusing on high-margin technology-driven business. The outlook for Operator XR remains positive, with continued growth in customer acquisitions and contract value.
Financial Performance Overview
| Metric | 31 Dec 2024 | 31 Dec 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Revenue | $7.42M | $5.61M | + $1.82M | +32% |
| Adjusted EBITDA | $0.9M | $0.46M | + $0.44M | +96% |
| Operating Cash Flows | $1.32M | $0.77M | + $0.54M | +70% |
| Net Loss After Tax (NLAT) | – $0.99M | – $1.50M | + $0.51M | +34% |
| Normalised EPS (cents) | – 0.18 | – 0.32 | +0.14 | +44% |
| Dividend | Nil | Nil | – | – |
Key Insights & Business Developments
📈 Revenue Growth & Business Shift
- Operator XR contributed $2.1M, up $1.8M from the prior corresponding period (pcp), driving overall revenue growth.
- The entertainment segment declined (-10%) due to economic conditions and strategic shift.
- Operator XR has reached 50 customers, expanding significantly across US law enforcement and military agencies.
- Deferred revenue at $5.8M, with a strong pipeline for the second half.
💰 Profitability & Cash Flow
- EBITDA nearly doubled (+96% YoY), showing improved operational efficiency.
- Operating cash flow of $1.32M, up 70%, supporting liquidity.
- Net tangible assets per share fell to $0.005, reflecting debt burden and intangible asset growth.
📌 Strategic Adjustments & Future Focus
- XRG is prioritising Operator XR, with plans to streamline or divest entertainment businesses (iFLY & Freak Entertainment).
- Expansion in Europe & Asia through distributor partnerships.
- Debt refinancing discussions underway to optimise financial position.
Result vs Market Expectations
✅ Revenue beat expectations, driven by strong Operator XR sales growth.
✅ EBITDA exceeded projections, indicating effective cost control.
⚠️ Net loss remains a concern, although it has narrowed significantly.
⚠️ Entertainment sector underperformance could weigh on future valuation.
Outlook & Guidance
🚀 Operator XR set for continued expansion, targeting new markets in Europe & Asia.
📊 Annual Recurring Revenue (ARR) at $3.6M, with Total Contract Value (TCV) up 80% YoY to $7.4M.
💼 iFLY & Freak Entertainment restructuring planned, with possible exits in FY2025.
🔎 Focus on AI-driven innovations, led by new Chief AI Advisor.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Quick Take: H1FY25 ASX:XRG