DXN Raises $6.5M, Cuts Debt, and Boosts Q2 Revenue to $4.8M
DXN Limited reported a robust 58.1% revenue increase to $4.8 million in Q2 FY25, underpinned by strategic capital raising and new product innovation targeting AI infrastructure. The company is advancing key mining and telecom projects while streamlining operations to support its ambitious $16 million revenue guidance for FY25.
- Q2 FY25 revenue up 58.1% to $4.8 million
- Successful $6.5 million capital raise and partial debt repayment
- Launch of new HPC AI Module at Pacific Telecom Conference
- Progress on major projects including Stanmore Coal and Pilbara Ports
- Exit from Sydney Data Centre lease unlocking $1.4 million annual savings
Strong Revenue Growth and Capital Strategy
DXN Limited has delivered a striking 58.1% increase in revenue for the December 2024 quarter, reaching $4.8 million compared to $3.0 million in the prior quarter. This growth reflects the company’s successful execution of its modular data centre projects and a well-timed $6.5 million capital raise. The capital injection has been strategically deployed to upgrade key assets, reduce debt, and bolster working capital, positioning DXN for sustained expansion.
Despite a negative operating cash flow of $2.6 million, primarily due to project payment timing, DXN maintains a healthy cash balance of $5.1 million. The company’s management emphasizes that these cash flow fluctuations are typical in project-based businesses and do not signal operational distress.
Innovation with HPC AI Module Launch
In January 2025, DXN unveiled its new High-Performance Computing (HPC) AI Module at the Pacific Telecom Conference, a move that underscores its commitment to meeting the burgeoning demand for AI infrastructure. This modular solution integrates advanced cooling, scalable design, and built-in power backup, reflecting DXN’s agility in adapting to evolving market needs. Early feedback from over 40 customer meetings at the conference was positive, suggesting strong market interest.
Advancing Key Projects and Market Focus
Operationally, DXN has made significant progress on several fronts. Installation commenced at the Stanmore Coal site following successful factory acceptance testing, while work on the Pilbara Ports project is underway with expected delivery by March 2025. These projects reinforce DXN’s growing foothold in the mining sector, one of its three core growth areas alongside Cable Landing Stations and Edge Data Centres.
The company’s strategic exit from its Sydney Data Centre lease has unlocked approximately $1.4 million in annual cash savings, enabling a sharper focus on high-growth segments. DXN’s market research estimates a $1.1 billion cumulative opportunity across its targeted sectors in the Asia Pacific region through 2029, with substantial annual market potentials in subsea cable infrastructure, mining operations, and edge computing.
Outlook and Strategic Positioning
DXN’s momentum continues into Q3 FY25, highlighted by a $0.6 million contract with BwebwerikiNET Limited in Kiribati, funded by the Asian Development Bank. This contract further cements DXN’s leadership in the Pacific Islands region and expands its project pipeline to approximately $1.8 million year-to-date.
Managing Director Shalini Lagrutta emphasized the company’s nimbleness and customer-centric approach, stating that DXN’s modular solutions are uniquely positioned to deliver speed, scalability, and resilience. The company remains confident in achieving its FY25 revenue target of $16 million, driven by robust demand and innovative product offerings.
Bottom Line?
DXN’s blend of strategic capital management, project execution, and innovation sets the stage for accelerated growth in a rapidly evolving data centre market.
Questions in the middle?
- How will the new HPC AI Module impact DXN’s competitive positioning and revenue mix?
- What are the timelines and margins expected from the Stanmore Coal and Pilbara Ports projects?
- How sustainable is DXN’s cash flow given the project-based payment cycles and current debt structure?
