• 7 new customers landed, 12 existing customers expanded with 98.9% monthly retention
• Revenue of $4.2m, 93% recurring, with 2 ppt decrease in gross margin to 73%
• Statutory EBITDA loss improved by $4.5m YoY to $0.4m loss

XPON Technologies Group Ltd (ASX:XPN), an AI marketing technology company, has released its Appendix 4D and half yearly report for the six-month period ended 31 December 2024 (H1 FY25). The company landed 7 new customers and expanded 12 existing customers during the half, with a strong monthly customer retention rate of 98.9%. Revenue was $4.2m, with 93% of revenue being recurring, although this represented a 7% decrease year-over-year (YoY) as the sales strategy was recalibrated. Gross margin was 73%, slightly down by 2 percentage points YoY. The company reported an improvement in Statutory EBITDA, with a $4.5m YoY reduction in the loss to $0.4m. This was driven by ongoing cost management and process optimization, which delivered around $0.9m in additional annualized cost savings. XPON also won the Australian 2024 AI Award in the category of 'AI Innovation - Media & Communication Services'. The company has extended its convertible note until August 2025 to strengthen its financial position, and while proactive repayment of aged accounts payable may impact full-year FY25 cash flow breakeven, it is targeting cash flow breakeven on an annualized basis by the end of FY25.

The company's priorities for the rest of the financial year include: continuing to optimize the sales strategy towards high-margin, long-term recurring revenue growth; driving AI innovation to accelerate sales cycles and enhance customer value; focusing on sustainable profitability by leveraging its relationship with Google and growing its recurring customer base; progressing strategic partnerships and M&A opportunities; ensuring a strong corporate culture and high employee engagement; and continuing to monitor and manage its cost profile in line with business performance.