X2M Connect (ASX:X2M) – Solid operating leverage demonstrated in 1H23
Solid operating leverage demonstrated in 1H23 X2M Connect (ASX:X2M), which is focused on digitising the utilities sector across APAC with its proprietary technology, has reported a 23% reduction in RaaS-adjusted EBITDA losses for H1 FY23 on the back of operating leverage from 96% sales growth, 135% gross profit growth and just a 14% increase in operating costs. We expect margins to move higher medium-term as higher-margin platform revenue increases as a percentage of the mix from just 6% in H1 FY23 to a forecast 29% by FY27. We have made modest near term adjustments, predominantly for the timing of the Australian Smart Community Solution. Our DCF-derived valuation remains unchanged at $0.27/share, against a reference price of $0.09/share at last close.
Select the link to read the full article by Research as a Service (RaaS): RaaS Update Report 8 March