XMReality Interim report, Group overview July

The third quarter saw a strong increase in order intake, 82 percent compared to the same period last year. The total order intake from January to September has also increased, as a result of the strong customer growth, and is up 34 percent compared to last year. Net sales increased by 8 percent for the quarter and by 7 percent for the first nine months compared to the same period last year. The company continues its work to reduce costs and for the period they were 14 percent lower than the previous year. To reach the communicated goal of becoming cash flow positive by the end of 2024, the company will further reduce costs and streamline the organization. In connection with this, the company is also revising its target for ARR growth.

The Quarter July - September 2023, The Group

Net Sales amounted to SEK 4,850 thousand (4,482)
Costs totaled SEK -13,125 thousand (-15,311)
The operating loss before taxes was SEK -5,922 thousand (-7,895)
Cash flow was SEK -10,630 thousand (-10,973) and the equity/assets ratio at the end of the period was 34.9 (52.1) percent

The order intake during the quarter was higher than the corresponding level in Q3 2022 and increased by 82 percent to SEK 4,289 (2,357) thousand, the order intake also includes some orders that cover two years. Net sales increased by 8 percent to SEK 4,850 (4,482) thousand compared to the previous year. The annual recurring revenue (ARR) was largely unchanged and amounted to SEK 17,857 (18,252) thousand compared to Q2 2023. The absolute majority of the revenue is still recurring software subscriptions. The gross margin remained high at 96 (97) percent for the quarter. The order backlog, order intake that remains to be recognized as net sales, decreased to SEK 9,648 (10,139) thousand compared to Q2 2023.

The period January - September 2023, The Group

Net Sales amounted to SEK 14,911 thousand (13,907)
Costs totaled SEK -44,708 thousand (-50,335)
The operating loss before taxes was SEK -21,929 thousand (-28,079)
Cash flow was SEK -3,724 thousand (-32,363)

The company is now also revising its goals and profitability will be prioritized over growth. XMReality's financial goal to start generating positive cash flow by the end of 2024 at the latest therefore remains. However, the company sees that the previously communicated goal of reaching an ARR of SEK 75,000 thousand with an associated EBITDA of 15 percent in 2025 needs to be revised. With the prevailing macroeconomic uncertainty, the company has chosen to prioritize the goal of reaching a positive cash flow in 2024 and an EBITDA of 15 percent in 2025. In order to reach the goal of positive cash flow, the company will significantly reduce cost, which most likely will affect the ARR-growth and shift the timing to reach SEK 75,000 thousand into 2026.

Notable events during the period

Lars Sandlund was appointed new CSO for XMReality AB starting October 2^nd 2023.
The company has launched advanced functionality for administration and rollout in large global companies, to support growth among large customers. In addition, additional features for users have been launched, such as the ability for a guide to zoom on live video in web calls. The latter was launched on the same day that Apple for the first time ever released technical support on the iPhone to enable zooming in web apps.
XMReality signed an annual subscription agreement with Yaskawa Nordic, which is part of Yaskawa Electric Corporation. They will use XMReality to strengthen service and support to their customer base.
XMReality Inc. signed annual subscription agreements with several companies. Among others, Miller Electric, Güntner US, Guernsey Holdings LLC and JLS Automation group.

Notable events after the period

XMReality announces strong client growth and ongoing consolidation talks. So far this year, the company has taken on board more than twice as many customers as for the full year 2022, partly as a result of positive sales in the US.

Link to the report website: https://www.xmreality.com/en/investors/reports-and-analyzes

The information in this release is such that XMReality AB (publ) is required to make public in accordance with the Market Abuse Regulation issued by the EU. The information was released by the below mentioned contact person for publication on Thursday, October 26, 2023, 08:30 CEST.

The company’s Certified Adviser is Redeye AB
www.redeye.se

About XMReality Remote Guidance™
XMReality Remote Guidance is an AR-enabled knowledge sharing tool that lets you communicate with gestures, speech, chat and pointers with someone at a completely different place. It includes:

A unique hands-overlay technology that lets you guide someone else’s hands—as if you were there.
A web portal to manage teams and users, and to measure usage
Integration through client-side API’s (Application Programming Interfaces)

About XMReality
XMReality AB (publ) develops and sells solutions that revolutionize knowledge transfer through so-called Augmented Reality (AR). The company is a market leader in remote guidance where you guide a person on site via AR to solve problems or prevent them from occurring. The product is used globally in more than 60 countries. Nestlé, Electrolux, Sidel, Heineken and Saab are examples of the more than 135 customers. XMReality is based in Linköping and in the U.S. and is listed on the Nasdaq First North Growth Market (ticker: XMR). For more information, visit: www.xmreality.com