XPON Reports 8.3% Revenue Growth and $2M Operating Cash Flow in Q1 FY26

Strong Financial Momentum in Q1 FY26

XPON Technologies Group Ltd (ASX – XPN), an AI marketing technology company operating across Australia, New Zealand, and the UK, has reported a solid start to FY26. The company posted an 8.3% increase in group sales revenue quarter-on-quarter, reaching $3.42 million. This growth was driven by new customer acquisitions and expanded services within its existing client base, with recurring revenue making up a substantial 96% of total sales, annualising to $13.2 million.

Importantly, XPON achieved positive operating cash flow for the second consecutive quarter, doubling to $2 million from $0.99 million in the previous period. The company also reported an unaudited positive statutory EBITDA of $0.9 million, signalling improving profitability alongside revenue growth. Gross margins improved by 2 percentage points to 70%, reflecting operational efficiencies and a stronger sales mix.

Integration of Alpha Digital and Product Innovation

The integration of XPON’s recent acquisition, Alpha Digital, is progressing well. The company highlighted cross-sell opportunities and a pipeline of new joint deals combining Alpha Digital’s capabilities with XPON’s Wondaris AI platform. Wondaris, XPON’s AI-driven marketing tool, is being further optimised with targeted vertical offerings tailored to key industries such as banking and financial services, retail, education, and media publishing.

This strategic focus on product-led sales and industry-specific solutions aims to accelerate sales cycles and enhance value for customers, reinforcing XPON’s market position as a leader in AI marketing technology.

Customer Growth and Retention

XPON successfully landed seven new customers during the quarter and expanded relationships with three existing clients. The company maintained a robust monthly customer retention rate of 97.3%, underscoring strong client satisfaction and loyalty. This stable customer base supports XPON’s strategy to build a sustainable recurring revenue model, with recurring revenue already accounting for over 95% of FY26 year-to-date sales.

Capital Management and Debt Repayment

XPON’s cash position strengthened significantly, with a closing cash balance of $4.3 million as at 31 December 2025, up $1.6 million from the previous quarter. The company completed repayment of its HarvestLane loan in January 2026, removing a key debt obligation and simplifying its capital structure. XPON continues to manage working capital prudently to support ongoing growth initiatives and maintain financial stability.

Outlook and Strategic Priorities

Looking ahead, XPON is focused on sustaining positive operating cash flow and EBITDA throughout FY26. The company plans to continue refining its sales strategy towards high-margin, long-term recurring revenue growth, while accelerating AI innovation through Wondaris to enhance customer value. XPON also intends to pursue further M&A opportunities to bolster its market position and shareholder value.

Maintaining a strong corporate culture and employee engagement remains a priority as XPON scales its operations. The company’s progress in integrating Alpha Digital and delivering financial improvements positions it well for the remainder of the financial year.