Engage XR reports better-than-expected FY losses

Extended reality technology group Engage XR reported a better-than-expected full-year underlying loss on Monday as revenues came in right in the middle of its guidance range.

Engage XR said total group revenues were €3.7m in 2023, with recurring revenues representing 63% of total revenues. The AIM-listed group also stated its EBITDA loss will be "better than previously reported" at €4.5m, while its net cash position at year-end was also higher than previously announced at €7.9m, following the receipt of an R&D tax credit earlier than anticipated.

At year-end, Engage XR had 15,000 enterprise or education licensed users, up from 10,000 a year earlier, and an average contract value across the group of €25,000, up from €21,000.

Engage XR noted that 2023 "was a challenging year", with a number of enterprise customers either closing not to renew contracts or renewing at lower levels than in 2022. However, it said it has made "an encouraging start" to FY24, having completed the signing of "significant contracts" that had been delayed in FY23, including its first seven-figure contract with a large Middle East-based company, as well as extending its relationship with a leading American bank.

Looking ahead, Engage said the pipeline for the year "continues to be encouraging" and anticipates that the current financial year will see increasing growth in the education, training, and development verticals.

"Overall, the board is confident that FY24 should demonstrate a return to revenue growth for the group. In addition, the board looks forward to the current financial year being the year that starts to demonstrate the benefits of the partnership arrangement entered into with Lenovo in 2022," said Engage XR.

As of 1100

GMT, Engage XR shares were down 3.85% at 2.50p.

Reporting by Iain Gilbert at Shareccast.com