X2M Connect Posts $4.9M Revenue, Narrows EBITDA Loss by 10% in 1H FY26

Strong Financial Momentum

X2M Connect Limited (ASX, X2M) has delivered a compelling performance in the first half of FY26, reporting revenue growth of 45% to $4.9 million compared to the prior corresponding period. This surge reflects the successful execution of strategic initiatives focused on higher-margin software and maintenance services, alongside new product sales. Gross profit also rose by 35% to $2.1 million, underscoring improved operational efficiency.

Despite still operating at an adjusted EBITDA loss of $1.2 million, the company has trimmed this loss by 10%, signalling progress towards profitability. Operating costs increased modestly by 12%, well below revenue growth, aided by disciplined cost management and only minor one-off product replacement expenses. Notably, net cash from operating activities turned positive at $0.1 million, a significant improvement from the previous year's outflows.

Expanding Market Footprint in Asia

Operationally, X2M has made strong inroads in key Asia-Pacific markets. In South Korea, the company secured multiple municipal water digitisation contracts, expanding remote water meter monitoring to thousands of households, including ongoing work with the City of Seoul’s ambitious digitisation program. This market remains under-penetrated, offering substantial long-term growth potential.

Further afield, X2M entered the Japanese water digitisation market through a partnership with Azbil Kimmon, targeting an initial deployment of 5,000 water meters with potential expansion to 50,000 over two years. This move taps into a vast market of approximately 60 million water connections, representing a significant SaaS revenue opportunity.

Additionally, X2M deployed 30,000 units of its HelpMe smart personal safety device under a 100,000-unit contract in Seoul, marking a promising new application of its IoT technology in smart city initiatives. The company is also advancing its remote gas monitoring platform rollout in the Middle East, broadening its addressable market across utilities and building efficiency sectors.

Balance Sheet Strength and Outlook

X2M has made notable progress in strengthening its balance sheet, reducing net debt from $5.5 million to just $0.2 million within six months. This deleveraging effort enhances financial flexibility as the company scales its operations.

Looking ahead, CEO Mohan Jesudason expressed confidence in continued revenue growth and a substantial reduction in adjusted EBITDA losses for the full year. With approximately $4 million in contracted revenue yet to be recognised in FY26, X2M is well positioned to capitalise on government digitisation initiatives and expand its footprint in under-penetrated markets.