• Strong quarterly performance, positioning for full year targets
• Positive operating cash flow and Statutory EBITDA
• Successful new customer acquisitions and service expansion

XPON Technologies Group Ltd (ASX:XPN), an AI marketing technology company, released its quarterly activity report and Appendix 4C cash flow statement for the three-month period ended 31 December 2025. The Group delivered a strong quarterly performance, positioning it well to deliver its full year financial targets, with the second consecutive quarter of positive operating cash flow, increasing to $2 million from $0.99 million in the previous period, and secured $0.9 million in positive Statutory EBITDA (unaudited) this quarter. The integration of Alpha Digital is progressing positively, with cross-sell deals and new joint Alpha + Wondaris deals in the pipeline. Group sales revenue increased 8.3% quarter-on-quarter to $3.42 million, primarily driven by successful new customer acquisitions and the expansion of services within the existing client base. Recurring sales revenue accounted for $3.3 million (96%) of the quarter's total, annualising to $13.2 million. Gross margin improved to 70%, up 2 percentage points compared to the previous quarter. The company successfully landed 7 new customers and expanded relationships with 3 existing customers while maintaining a robust monthly customer retention rate of 97.3%. The Wondaris product-led sales motion is being further optimised with key vertical offerings developed that are focused on targeted industry segments. The Group also maintained a strong cash balance of $4.3 million as at 31 December 2025, representing a $1.6 million increase over the previous quarter.

The Company expects to continue operating cash flow and EBITDA (unaudited) positive on an underlying basis in FY26.

The Company has clear priorities for the remainder of FY26, including continuing to monitor and optimise the recalibration of the sales strategy towards high-margin long-term recurring revenue growth, capitalising on its leading market position by accelerating AI innovation with Wondaris, simplifying the product-led sales motion with key vertical industry offerings, continuing momentum on its M&A strategy, and strengthening its balance sheet and financial stability.