Xref Limited’s half-year results reveal a strategic pivot to its SaaS Employer Intelligence Platform, delivering strong ARR growth despite an overall revenue dip and widening net loss.
- Total revenue down 6.5% to $10.16 million
- Net loss widens to $660,059 from $435,739
- New platform ARR grows 27% to $9.2 million, now 54% of total ARR
- Positive EBITDA of $1.33 million achieved
- Client acquisitions more than double, driven by AI-enhanced platform
Strategic Shift Amid Revenue Pressure
Xref Limited’s interim financial results for the half-year ended 31 December 2025 highlight a company in transition. While total revenue declined by 6.5% to $10.16 million, largely due to falling sales from legacy platforms, the business is making significant strides with its new SaaS Employer Intelligence Platform. This platform now accounts for 54% of the company’s annual recurring revenue (ARR), growing 27% year-on-year to $9.2 million.
The company’s net loss after tax widened to $660,059, up from $435,739 in the previous corresponding period. However, the headline loss masks operational improvements, with EBITDA reaching a positive $1.33 million, reflecting enhanced efficiency and cost control measures.
Growth Fueled by AI and Platform Consolidation
Xref’s new platform is at the core of its growth story. The company reported a 54% increase in organisations adopting the new platform, now serving 843 clients. Engagement features such as Pulse and Exit Surveys saw adoption surge by 165%, while self-service tools launched in late 2024 have been embraced by 97% of clients. AI integration has played a pivotal role, with AI-generated code comprising 57% of deployed development and an AI Agent resolving 7,000 support cases, cutting manual workload by 25%.
Client acquisition more than doubled, with 124 new customers joining the platform, each contributing an average annual subscription value of $6,300. The Trust Marketplace, a newer segment offering background checks, grew from 10 to 50 organisations using the service, with check volumes rising sharply.
Legacy Platforms and Revenue Dynamics
Despite the promising growth of the new platform, legacy products continue to weigh on overall revenue. Revenues from the legacy referencing platform fell 34.5%, and the legacy ID platform declined 27.3%. The company is deliberately shifting away from transactional, seasonal revenues toward multi-year SaaS contracts, aiming for more predictable and compounding revenue streams.
This strategic policy also influenced cash receipts, which decreased 16.9% to $9.7 million due to restrictions on early renewals for clients exceeding subscription caps. While this deferred some revenue in the short term, management expects larger renewal values in future periods as contracts extend.
Financial Position and Operational Efficiency
Xref ended the half-year with a cash balance of $2.76 million and reduced borrowings to $6.9 million. The company met all debt covenants and negotiated eased cash covenant terms with its lender, Element SaaS Finance LLC, providing greater flexibility in managing working capital.
Operating expenses fell 14%, driven by a 13% reduction in wages and salaries through headcount reductions and AI-driven efficiencies. Revenue per employee increased 50% to $260,000, underscoring improved productivity.
Leadership and Outlook
The company appointed Kamille Dietrich as Company Secretary in February 2026, following the retirement of a long-serving predecessor. Leadership remains focused on migrating remaining legacy clients to the new platform, deepening product adoption, and accelerating client acquisition to drive sustainable growth.
While the company reports net liabilities of $5.07 million, directors affirm the going concern assumption, supported by contract terms that limit refund risks and a strong operational cash flow outlook. The transition to a SaaS model, underpinned by AI and platform consolidation, positions Xref for a more resilient future despite near-term challenges.
Bottom Line?
Xref’s pivot to a SaaS-driven model is gaining traction, but the path to profitability hinges on completing legacy client migration and sustaining new platform momentum.
Questions in the middle?
- How quickly can Xref fully migrate legacy clients to the new platform without further revenue disruption?
- What impact will deferred revenue policies have on cash flow and renewal timing in FY27?
- Can AI-driven efficiencies continue to reduce costs while supporting accelerated client growth?