REG - Engage XR Holdings - Trading Update

ENGAGE XR HoldingsAnnouncement

19/12/2023 07:00

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RNS Number : 2173X  Engage XR Holdings PLC  19 December 2023

19 December 2023

 

ENGAGE XR Holdings Plc

 

("ENGAGE XR" or the "Group" or the "Company")

 

Trading Update

 

ENGAGE XR Holdings Plc (AIM: EXR), a leading spatial computing and metaverse
technology company, has today issued an update on trading for the 12 months
ending 31 December 2023.

 

The year has seen much change as the company has sought to expand its ENGAGE
recurring revenue proposition. Good progress has been made with ENGAGE Link,
with over 15,000 licensed enterprise and education customers using the
platform. The Group also delivered a 5,400 user K-12 education license deal
signed with a US state as a pilot programme and the year saw the growth of two
other educational clients, Optima Domi Academy and Victory XR, all of which
are large six figure deals that contributed to overall 2023 revenue.
Furthermore, the Group also signed a six figure contract with one of the
world's largest banks who used the ENGAGE platform to deliver an employee
onboarding event. The Group's sales pipeline continued to grow steadily during
H2 2023 and the Company continues to see encouraging demand for its
technology, especially within education, training and development verticals.

However, the Company now expects some contracts that it was hoping to sign in
the current financial year now likely to be recognised in FY24. Furthermore,
following the launch of Lenovo™'s new ThinkReality™ VRX all-in-one virtual
reality (VR) headset in June 2023 the Group now expects the benefits of its
Lenovo hardware partnership to be seen in Q1 FY24 rather than Q4 FY23 with a
relaunch of the device with ENGAGE AI features coming up at CES on January
19th 2024.

The Board now expects that total Group revenue for the year ending 31 December
2023 will be between €3.6m and €3.8m. ENGAGE revenues are expected to
represent over 90% of Group revenue with recurring revenues from ENGAGE
expected to represent c65% of Group revenues. The Groups other non-ENGAGE
related revenue (Apollo 11, Titanic VR, Shuttle Commander) continues to fall
from €0.54m to €0.35m as expected. With a focus on ensuring costs are
aligned with revenue growth, the Company expects to report an EBITDA loss of
approximately €4.6m and a net cash position at the year-end of approximately
€7.3million giving us adequate funding to reach break-even in the short to
medium term.

 

David Whelan, CEO, ENGAGE XR, said: "2023 has been a very valuable year for
gathering data on the true value proposition of ENGAGE to our customer base.
We are seeing a move away from our historic offering of one-off remote events
with a focus on driving our recurring revenue model with encouraging progress
being made in the education, training and development verticals. In a marked
change in 2023 education, training and development revenue now comprise a
bigger percentage of overall Group revenue compared to enterprise revenue
whereas in 2022 enterprise revenue was almost double that of education,
training and development.

 

Big contract wins in the US have really showed that education based customers
are willing to invest heavily in ENGAGE and see their return on investment as
less time to train employees and better educational outcomes overall. We
continue to focus on these sectors as core opportunities for the group and are
hopeful that our pipeline in these verticals will deliver good contract wins
during FY 2024.

 

A key goal for the Group is to become cash flow positive and we have made
excellent strides by keeping costs under control. We are going to finish the
year with a strong cash balance and, based on the opportunities before us, we
can see a clear path to profitability.

 

We are working hand in hand with Lenovo and will be releasing ENGAGE finally
on their VRX headset at CES in January with additional AI features and
abilities. We fully expect the Lenovo partnership to bear fruit in 2024. This
along with the Apple Vision Pro and the rumoured lower cost Meta device coming
out during 2024 places ENGAGE in a strong position to capitalise on renewed
interest in spatial computing / metaverse as a whole.

 

Up to now ENGAGE has been the build anything you wish platform in a similar
way to Wordpress for website development. We have had a broad and varied user
base over the past three years which has enabled us to see what works and more
importantly what doesn't. We now have a clear and visible customer base who
are growing with us and this is where our focus will be for 2024 and beyond.
2023 has indeed being challenging but extremely informative and now it is time
to capitalise on the opportunity before us to generate meaningful revenues and
expand our customer base. "

 

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 & Joint Broker)        Tel: +44 (0) 20 7220 0500

 Marc Milmo/ Seamus Fricker (Corporate Finance)

 Sunila de Silva / Harriet Ward (ECM)

  
 Shard Capital Partners LLP (Joint Broker)                                   Tel: +44 (0) 20 7186 9952

 Damon Heath / Erik Woolgar

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

 Robin Tozer / Isabelle Smurfit                                              engage@secnewgate.co.uk

 

 

About ENGAGE XR

ENGAGE XR Holdings plc (AIM: EXR) is an extended reality (XR) technology
company focused on becoming a leading global provider of virtual
communications solutions through its new fully featured corporate metaverse,
ENGAGE Link.

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)

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