Engage XR Holdings PLC Trading Update (2173X)
December 19 2023 - 2:00AM
UK Regulatory
TIDMEXR
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(TM)'s new ThinkReality(TM) 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 EUR3.6m and EUR3.8m. 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 EUR0.54m to
EUR0.35m as expected. With a focus on ensuring costs are aligned
with revenue growth, the Company expects to report an EBITDA loss
of approximately EUR4.6m and a net cash position at the year-end of
approximately EUR7.3million 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 Tel: +44 (0) 20 7220
(Nominated Adviser & Joint Broker) 0500
Marc Milmo/ Seamus Fricker (Corporate
Finance)
Sunila de Silva / Harriet Ward (ECM)
Shard Capital Partners LLP (Joint Tel: +44 (0) 20 7186
Broker) 9952
Damon Heath / Erik Woolgar
SEC Newgate (Financial Communications) Tel: +44 (0)7540 106
Robin Tozer / Isabelle Smurfit 366
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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