X2M posts good Q1 Growth - 27 Oct 2021

The good news continues for X2M Connect (ASX:X2M), the Australian IoT technology company breaking through on utilities in the APAC region. Following on from the company’s recent successful ASX listing, X2M can announce their Quarterly Activity Statement highlights included:

• Q1 revenues at $1.6m up 75% on PCP
• Receipts from customers for the quarter were $1.4 million.
• Connected devices at 30 September were 152,203 up 101% on PCP
• Enterprise/government customers increased by 11 on PCP delivering 42% year on year growth
• Q1 revenues plus contracted revenue is already $5.2m when total revenue for FY2021 was $5.7m

Focusing on the Enterprise and Government utility sector in the APAC region the company has a particular focus on customers with large consumer bases. Current customers deliver a total addressable market of approximately 25m households as candidates to be converted on to the X2M IoT platform over time.

Product rollout and new business in the first quarter have delivered 75% revenue growth on pcp and set the base for a strong FY2022 sales performance. New sales in the quarter included Okcheon, Yangsan and Goseong in South Korea, Far EasTone and ETC in Taiwan, and LianQing in China.  On 18 October, X2M confirmed winning two tenders with Korea Water Resources (K Water) valued at $1.49m.

Several smaller contracts have been secured in Japan and Australia for IoT platform customization and service subscription fees.

The company will continue to explore new market opportunities including an evaluation of new geographies and adjacent verticals. X2M has secured an order in the energy and renewables sector and are very well positioned in their core markets with an attractive product offering. The market continues strong adoption of Utility IoT, and X2M’s strong sales momentum is expected to continue.

Receipts from customers in the quarter were $1.4 million and net operating cash outflows were $2.2 million, which includes $2 million payments for product manufacturing and operating costs. Given the lead time required to manufacture devices, payments were made to manufacturers in advance of customer receipts to ensure prompt delivery and deployment. Net cash from financing activities was $8.4 million following the $8 million IPO and issue and conversion of $0.5 million in convertible notes prior to the IPO. Total cash in hand on 30 September 2021 was $7.8 million.