X2M Connect's 1H24 performance and key highlights

X2M Connect Limited (ASX: $X2M) has released its Quarterly Activity Report and Appendix 4C for the period ended 31 December 2023, reporting 2Q24 revenues of $3.4 million, down 34% on the prior corresponding period (pcp). The company achieved positive cash flows from operating activities for 2Q24 of $0.7 million, marking an 81% increase on pcp. Additionally, the number of connected devices at 31 December 2023 increased by 44% on pcp, reaching 520,417.

Executive commentary on 1H24 performance and outlook

X2M CEO Mohan Jesudason expressed satisfaction with the company's 2Q24 and 1H24 performance, particularly in light of the exceptional performance in the prior year. Jesudason highlighted the focus on higher margin sales, which drove gross margin improvement, and the well-controlled operating expenditure that led to reduced cash burn.

Summary of X2M Connect's 1H24 performance and outlook

X2M Connect Limited (ASX: $X2M) reported a decline in 2Q24 revenues compared to the pcp, attributed to a record quarter in the pcp and a strategic shift towards higher margin sales. However, the company achieved positive cash flows from operating activities for 2Q24, marking an 81% increase on pcp, and reduced the 1H24 operating cash burn by 57% compared to the pcp. The number of connected devices at 31 December 2023 increased by 44% on pcp, reflecting the company's continued growth in this key area. X2M's focus on the Enterprise and Government utility sector in the APAC region has resulted in a 26% increase in enterprise/government customers, with a large addressable market estimated to be in excess of $500m in potential revenues. The company's Annualised Recurring Revenue (ARR) for December 2023 was reported at $1.7 million. X2M's financials showed net cash flows from operating activities improved by 81% on the pcp, and the total cash at 31 December 2023 was $2.9 million. The company's CEO expressed confidence in the performance and highlighted the focus on higher margin sales and well-controlled operating expenditure that led to reduced cash burn.