X2M Posts $1.7M Q4 Revenue, Secures $5.5M in New Deals
X2M Connect reports improved revenue trends and a strengthened balance sheet after securing $5.5 million in new contracts, positioning the company for growth in FY26. A recent capital raise aims to reduce debt and fund expansion in key markets.
- Q4 revenue of $1.7 million, down 17% but showing improvement
- New contracts worth $5.5 million secured for delivery in 1H FY26
- Balance sheet strengthened with $1.95 million placement
- Adjusted EBITDA loss widened to $1.1 million due to market investments
- Post-quarter $4.9 million Placement and Entitlement Offer launched
Quarterly Performance and Revenue Trends
Australian IoT specialist X2M Connect Limited (ASX, X2M) closed FY25 with a cautiously optimistic quarter. While revenue from continuing operations declined 17% year-on-year to $1.7 million, this represented a marked improvement compared to the previous three quarters. The company’s strategic shift away from low-margin hardware sales towards higher-value SaaS and maintenance revenues is beginning to bear fruit, with gross margins improving to 47%.
Contract Wins Signal Growth Momentum
X2M secured $5.5 million in new contracts scheduled for delivery in the first half of FY26, underpinning a stronger outlook. Key wins include remote water metering contracts in South Korea covering over 21,000 households, a $3 million public safety initiative with the City of Seoul deploying 100,000 smart personal safety devices, and a smart gas meter installation contract across 10,000 UAE apartments through its strategic partner Dicode Smart Connect Electronics. These contracts reflect X2M’s expanding footprint across Asia and the Middle East.
Strategic Partnerships and Product Innovation
In addition to contract wins, X2M is advancing its AI-driven renewable energy platform, Hive.AI by X2M, developed in partnership with Sirius Digitech. This platform targets operational efficiencies and revenue growth for renewable energy companies, initially focusing on Taiwan with plans for broader APAC rollout. The company’s investment in Dicode, acquiring a 7% stake for US$150,000, further cements its presence in the Middle East utilities market and secures long-term use of its proprietary technology.
Financial Position and Capital Raising
Despite an adjusted EBITDA loss widening to $1.1 million, driven by increased market research and strategic investments, X2M has strengthened its balance sheet. A $1.95 million placement completed during the quarter, combined with a post-quarter Placement and Entitlement Offer to raise up to $4.9 million, aims to reduce debt and fund growth initiatives. As of 30 June 2025, cash reserves stood at $1.6 million, with the company estimating around three quarters of funding available at current cash burn rates.
Outlook and Strategic Focus
CEO Mohan Jesudason highlighted the emerging recovery trend and the company’s readiness to capitalize on its robust pipeline. With growing enterprise and government customers now at 84, and nearly half a million connected devices, X2M is well positioned to accelerate growth in smart city infrastructure, renewable energy management, and utility digitization across Asia-Pacific and the Middle East. The upcoming capital raise and strengthened partnerships are expected to support this next phase of expansion.
Bottom Line?
X2M’s recent contract wins and capital raise set the stage for a pivotal growth phase, but execution and market conditions will be key to sustaining momentum.
Questions in the middle?
- How will X2M manage the transition from hardware sales to SaaS revenue streams?
- What impact will the $4.9 million capital raise have on debt reduction and growth investments?
- Can Hive.AI by X2M gain significant traction in the competitive renewable energy AI market?
