• Martech Revenue of $2.1m, up 2% QoQ
• Gross profit of $1.6m, up 6% QoQ and gross margin of 74%, up 3ppts QoQ
• Annualised Recurring Revenue of $7.3m, down 8% QoQ
• Cash balance of $5.5m as at 31 December 2024 including a quarterly cash surplus of $2.1m
• Significant customer wins with 5 new customers landed and expanding relationships with 5 existing customers

XPON Technologies Group Ltd (ASX:XPN), an AI marketing technology company, released its quarterly activity report and Appendix 4C quarterly cash flow statement for the three-month period ended 31 December 2024. Key highlights include Martech Revenue of $2.1m, up 2% quarter-on-quarter (QoQ), with 93% of revenue recurring. Gross profit increased 6% QoQ to $1.6m, with gross margin improving 3 percentage points to 74%. Annualised Recurring Revenue (ARR) declined 8% QoQ to $7.3m due to seasonally lower variable usage fees and revenue churn from existing Google licences, although new customer wins and expansions are expected to offset this in the coming quarters. The company maintained a robust monthly customer retention rate of 98.9% and secured 5 new customers while expanding relationships with 5 existing customers. XPON reported a cash balance of $5.5m as at 31 December 2024, including a quarterly cash surplus of $2.1m. The company is actively managing its capital and has extended its convertible note until August 2025 to strengthen its financial position. XPON's priorities for FY25 include continuing to optimize its sales strategy, driving AI innovation, focusing on sustainable profitability, and exploring strategic partnerships and M&A opportunities.

The company expects to achieve cash flow breakeven on an annualised basis by the end of FY25, despite the impact of proactive repayment of aged accounts payable which may affect the full year FY25 cash flow break even point. Revenue, gross margin, and EBITDA forecasts remain unchanged.

XPON has clear priorities for FY25, including continuing to monitor and optimize its sales strategy, capitalizing on its leading market position by driving AI innovation, focusing on sustainable profitability, progressing strategic partnerships and M&A opportunities, ensuring a strong corporate culture and high employee engagement, and managing its cost profile in line with business performance.