NEXION Group reported a robust 30% increase in cash receipts for Q2 FY25, driven by strong sales growth and new satellite sector contracts. The company is actively expanding its footprint in Southeast Asia while funding ongoing M&A activities through convertible notes.
- 30% increase in cash receipts to $1.22 million in Q2 FY25
- Total unaudited revenue of $1.40 million for the quarter
- Expansion into Southeast Asia and new satellite sector business wins
- Raised $250,000 via convertible notes to support M&A efforts
- Received $283,000 R&D tax credit for FY24 innovation activities
Strong Quarterly Performance
NEXION Group Ltd (ASX: NNG) has delivered a solid quarterly result for the period ending 31 December 2024, with cash receipts climbing 30% to $1.22 million compared to the previous quarter. This uptick reflects the company’s successful sales and presales restructuring efforts, which have begun to bear fruit in both revenue growth and improved EBITDA.
The company reported total unaudited revenue of $1.40 million for the quarter, including other income of $329,000, bringing the first half FY25 total to $2.28 million. This performance underscores growing market demand for NEXION’s innovative SD-Internet solutions tailored for enterprise Starlink deployments, a key driver behind the revenue surge.
Strategic Expansion into Southeast Asia
Building on its momentum, NEXION is accelerating its expansion into the Southeast Asian market, a region ripe with opportunity for satellite communications and hybrid-cloud infrastructure. The company’s innovative Starlink solutions have secured new business wins in this sector, positioning NEXION as a rising player in the APAC technology landscape.
To support this growth trajectory, NEXION is expanding its sales team across the region and preparing to launch new products aimed at further accelerating revenue in the second half of FY25. This strategic focus on Southeast Asia aligns with broader industry trends favoring satellite-enabled connectivity and cloud integration.
Funding and Financial Position
During the quarter, NEXION issued 2.5 million convertible notes at $0.10 each, raising $250,000 to fund ongoing mergers and acquisitions activities. These unsecured notes mature in May 2026 and carry a 10% annual interest rate, with repayment options including cash or conversion into equity subject to shareholder approval.
The company also benefited from a $283,000 R&D tax credit for innovation work completed in FY24, bolstering its financial position. Operating expenditures included $677,000 in product manufacturing and operating costs and $245,000 in staff costs, reflecting continued investment in growth and operational capacity.
Outlook and Market Implications
NEXION’s positive cash flow from operating activities and available funding position the company to sustain its expansion and product development initiatives. The successful restructuring of sales and presales teams, combined with strategic capital raising, suggests a company gearing up for accelerated growth in a competitive satellite communications market.
However, the ultimate impact of the proposed acquisition announced in 2024 remains a key variable. Investors will be watching closely for updates on this material transaction and how it integrates with NEXION’s broader growth strategy.
Bottom Line?
NEXION’s Southeast Asia push and strong revenue growth set the stage for a pivotal year ahead.
Questions in the middle?
- How will the proposed acquisition impact NEXION’s growth and financials?
- What new products is NEXION planning to launch in the second half of FY25?
- Can NEXION sustain its sales momentum amid competitive pressures in satellite communications?