How Felix’s Nexvia Deal Sparked a 47% ARR Jump in Q2 FY26

Strong Revenue Growth and Strategic Acquisition

Felix Group Holdings Ltd (ASX – FLX) has delivered a compelling performance in the second quarter of fiscal year 2026, reporting a 47% year-on-year increase in total group annual recurring revenue (ARR) to $12.2 million. This surge is largely attributed to the recent acquisition of Nexvia, completed in October 2025, which has already begun to enhance Felix’s long-term growth trajectory.

The integration of Nexvia, a complementary procurement platform, is progressing steadily. Nexvia itself achieved a record ARR of $3.4 million in Q2, marking a 13% increase on the prior corresponding period. Early revenue synergies are emerging as Felix transitions existing Vendor Marketplace customers onto the Nexvia platform, validating the strategic rationale behind the acquisition.

Enterprise Segment Expansion and Vendor Marketplace Growth

Felix’s enterprise ARR grew 11% to $7.1 million, supported by the addition of two new enterprise customers and an expansion deal. Notably, the company secured a three-year contract with the Middle Eastern division of a global construction and infrastructure contractor, underscoring Felix’s international expansion ambitions. Additional contracts with Australian energy provider Pacific Energy and rail infrastructure group Martinus further diversified the customer base.

Meanwhile, the Vendor Marketplace continues to scale, reaching 126,000 vendors; a 9% increase from the previous year. This growth highlights the expanding opportunity to monetise Felix’s vendor network, particularly through the Nexvia platform, which targets subcontractors within the marketplace.

Innovation Through AI and Platform Enhancements

Felix is investing in AI-driven product development to unlock greater value from its historical enterprise data. Initial efforts focus on integrating generative and predictive AI into the Request for Quotation (RFQ) process, aiming to streamline tender evaluations and risk assessments. These enhancements are expected to reduce procurement cycle times significantly and will be rolled out progressively.

Additional platform improvements include the launch of Felix Dashboards, which provide procurement teams with real-time visual insights into vendor management, compliance, and sustainability metrics. Integration with ERP systems like Pronto Xi and enhanced API capabilities further strengthen Felix’s ecosystem and automation potential.

Corporate Leadership and Financial Position

The quarter also saw important leadership transitions. CEO and co-founder Mike Davis stepped down post-AGM, with CFO James Frayne appointed as interim CEO. The board welcomed Dominic O’Hanlon as the new chairman, bringing extensive experience in technology and governance. These changes signal a new chapter for Felix as it scales its operations.

Financially, Felix remains well capitalised with $7.2 million in cash at quarter-end, despite a net operating cash outflow of $2.4 million driven by one-off costs related to the acquisition and capital raising. The company’s balance sheet strength provides flexibility to pursue organic growth and integration initiatives.