• Largest single order to date of Operator XR systems from Texas DPS for up to $5.7m
• Industry Growth Program grant awarded $2.1m over two years
• Qualified Sales Pipeline increased to $51m (up 40% QoQ)

xReality Group Limited (ASX:XRG) reported a strong Q1 FY26, with the largest single order to date of Operator XR systems from Texas DPS for up to $5.7m, a $2.1m Industry Growth Program grant awarded over two years, and a 40% increase in the qualified sales pipeline to $51m. Cash receipts in Q1 FY26 were $4.0m, driven by Operator XR sales of $2.1m and Entertainment of $1.9m. Total Contract Value for Q1 FY26 was $6.3m, up 269% quarter-on-quarter. Annual Recurring Revenue increased 28% to $6.0m. The company continues to scale its Operator XR business in the US, adding 12 new law enforcement and military customers, and 2 annual subscription renewals in Australia. Operator XR is investing in future product development, including advanced AI integration, a larger fixed facility product, counter drone simulations, and cloud-based content subscription and analytics. The company's Entertainment businesses, iFLY and Freak, have also performed well, with iFLY hosting its most successful national championships to date in August 2025.

Operator XR Annual Recurring Revenue at the end of Q1 FY26 was $6.0m, up 28% quarter-on-quarter. The company expects significant cash inflows in Q2 FY26, including $4.3m from the Texas DPS order, $1.4m from the US DoD project, and $0.5m from the Industry Growth Program grant.

The company continues to see strong business momentum across both its Operator XR and Entertainment divisions. It is investing in future product development to drive further growth, and expects significant cash inflows in Q2 FY26 to support its expansion plans.