REG - Engage XR Holdings - Pre-Close Trading Update

ENGAGE XR HoldingsAnnouncement

06/01/2025 07:00

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RNS Number : 1348S  Engage XR Holdings PLC  06 January 2025

6 January 2025

 

ENGAGE XR Holdings Plc

("ENGAGE XR" or the "Group")

 

Pre-Close Trading Update

 

ENGAGE XR Holdings Plc, a leading Metaverse / Spatial Computing technology
company, announces the following update on trading for the 12 months ending 31
December 2024. The Company expects to publish its financial results for the
year ending 31 December 2024 in May 2025.

 

Financial Highlights:

 

 ●    The Group expects to report revenue of c.€3.4m (2023: €3.7m), below market
      expectations due to delays in finalisation of some larger contracts in the
      Middle East and the continued delayed deployment of the previously announced
      contract with a Middle Eastern client to the first half of FY25.
 ●    Recurring revenues increased to 70% (2023: 63%) of total revenue
 ●    The Group expects to report an EBITDA loss of c.€4.0m (2023: loss of
      €4.0m), broadly in line with market expectations as management focussed on
      operational efficiencies and strong cost control
 ●    Cash balance at 31 December 2024 of €3.6m (31 December 2023: €7.9m).

 

In FY24, ENGAGE XR secured a number of important contracts in the education
and training sector, including a significant seven-figure contract with a
large Middle Eastern client via the Group's partnership with PwC. Client
approval was finalised later than expected, but has now been completed, and
full deployment is expected to begin in the first half of FY25. This means the
remaining revenue associated with the contract of €0.4m not recognised in
FY24, is expected to be fully recognised in FY25.

 

A significant contract was also expected to be finalised pre year end in the
Middle East which would have led to the Group's revenue target being
comfortably achieved but unfortunately this has been delayed into Q1 FY25.
While this delay resulted in the Group's headline revenue being behind market
expectations, the Group's EBITDA and Cash are broadly in-line.

 

Looking ahead, the Group anticipates significant growth opportunities through
working with partners in the Middle East throughout 2025 and beyond in both
education and training verticals. The Group's strong pipeline is evidence of
the progress being made with partners in the Middle East and in the USA. This
momentum gives the Group the confidence to drive meaningful progress,
delivering results that benefit not just ENGAGE XR but also its partners and
stakeholders. Furthermore, given the strength of the pipeline, the Board
remains confident in its strategic objective to become cash flow break even
during FY25.

 

During FY24, the Group continued to focus on the education and training
verticals which has seen the continued reduction in revenues from clients that
used the Group's technology for remote collaboration and one-off events, which
had been popular during the pandemic. One of the benefits of this strategic
decision is a more predictable revenue stream which has meant Annual Recurring
Revenue (ARR) is above 70% for the first time (2023: 63%).

 

Other successes in the education and training verticals, include:

 

 ●    Extending the Group's relationship with world-leading private education
      provider. InspiredED
      (https://www.inspirededu.com/news/inspired-education-expands-virtual-reality-and-metaverse-pilot)
      , which signed a mid-six-figure contract for the delivery of education
      licenses to a small percentage of its 80k students globally. This represented
      growth of ten times in contracted revenue on the ENGAGE platform as InspiredED
      (https://www.inspirededu.com/news/inspired-education-expands-virtual-reality-and-metaverse-pilot)
      expanded its immersive learning initiatives worldwide.
 ●    The US-based, Education Experience Company, OptimaED increasing the number of
      licenses it used from 950 to 2,500, with further growth projected in 2025.
 ●    The Group's training partnership with Bank of America continues to thrive and
      they are a key platform partner on the ENGAGE platform.

 

David Whelan CEO, ENGAGE XR, said: "While it is disappointing that the delay
in our new Middle East contract hit revenue recognisable in 2024, given the
strength of the pipeline, we expect 2025 to be a strong year and remain
confident in delivering our strategic objective of cashflow break even in
FY25. The Education and Training sectors will be the primary drivers of
growth. Meta released the Quest 3S headset late last year which is a
high-quality but affordable device ideal for education and training. We are
working with Meta and its partners on creating an education offering to
eclipse others in the sector and we expect to compete strongly on pricing and
services. We start 2025 with a strong client base, supported by our strategy
of securing 2- to 3-year contracts with many of our partners in the education
and training sectors. This ensures a stable foundation for continued growth
and innovation."

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is
disclosed in accordance with the company's obligations under Article 17 of
MAR.

 

For further information, please contact:

 

 ENGAGE XR Holdings Plc                                              Tel: +353 87 665 6708

 David Whelan, CEO                                                   info@engagexr.co

 Séamus Larrissey, CFO

 Sandra Whelan, COO

 Cavendish Capital Markets Limited (Nominated Adviser & Broker)      Tel: +44 (0) 20 7220 0500

 Marc Milmo / Seamus Fricker (Corporate finance)

 Sunila de Silva (ECM)

 SEC Newgate (Financial Communications)                              Tel: +44 (0)7540 106 366

 Robin Tozer / Tom Carnegie / Naz Zandi                              engage@secnewgate.co.uk

 

 

About ENGAGE XR

ENGAGE XR Holdings plc (AIM: EXR) is a leading Metaverse / Spatial Computing
technology company focused on becoming a leading global provider of virtual
communications solutions through its new fully featured corporate metaverse,
ENGAGE Link. A demonstration can be viewed here: ENGAGE The Spatial Computing
Platform for Enterprise (https://youtu.be/2OHtimtFY3M?si=qe-lcxvau1sPjbk8)

 

The Company also has a proprietary software platform, ENGAGE. ENGAGE provides
users with a platform for creating, sharing, and delivering VR content for
education, training, and online events through its three solutions: Virtual
Campus, Virtual Office, and Virtual Events.

For further information, please visit: www.engagexrholdings.com (LinkedIn:
@Engage XR Holdings plc Twitter: @engage_xr)

 

Forward-Looking Statements

Certain statements made in this announcement are forward-looking statements.
These forward-looking statements are not historical facts but rather are based
on the Group's current expectations, estimates, and projections about its
industry; its beliefs; and assumptions. Words such as 'anticipates,'
'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar
expressions are intended to identify forward-looking statements. These
statements are not guarantees of future performance and are subject to known
and unknown risks, uncertainties, and other factors, some of which are beyond
the Group's control, are difficult to predict, and could cause actual results
to differ materially from those expressed or forecasted in the forward-looking
statements.

The Group cautions security holders and prospective security holders not to
place undue reliance on these forward-looking statements, which reflect the
view of the Group only as of the date of this announcement. The
forward-looking statements made in this announcement relate only to events as
of the date on which the statements are made. The Group will not undertake any
obligation to release publicly any revisions or updates to these
forward-looking statements to reflect events, circumstances, or unanticipated
events occurring after the date of this announcement except as required by law
or by any appropriate regulatory authority.

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