DXN (DXN) Q1 2026 earnings summary

Executive summary

• Q1 FY26 revenue was $0.94 million (under AUD 1 million), down nearly 69% year-over-year due to deferrals of three major projects, with revenue expected to recover as these projects resume in Q2 and Q3.

• The company maintains optimism for growth, supported by a strong $11.9 million backlog, a robust pipeline of 75 projects, and a doubled sales team targeting high-growth segments like DCaaS, StructCore, and satellite gateways.

• A new $1.8 million contract with AP Telecom was secured in Q2 FY26, with potential for recurring revenue and maintenance work, and is not yet included in the reported backlog.

• Nearly 100 modular data centres have been delivered, serving a diverse customer base across mining, energy, telco, government, and hyperscalers.

• Expansion in Asia-Pacific is underway, with new sales and engineering hires to drive growth in key regional markets.

Financial highlights

• Q1 FY26 revenue was $0.94 million, mainly due to project delays, not cancellations, and cash receipts for the quarter were $4 million.

• Operating cash flow for Q1 FY26 was negative $428,000, reflecting delayed milestone receipts and supplier payments.

• Cash balance at quarter-end was $2.4 million.

• FY25 revenue was $16.0 million, up from $10.8 million in FY24, but gross margin declined from 54% to 34%.

• FY25 underlying EBITDA was $815,000, with reported EBITDA at $6,000.

Outlook and guidance

• Management expects FY26 revenue growth to be weighted towards the second half, supported by a strong backlog and pipeline.

• Focus on expanding DCaaS offerings and StructCore products to drive recurring revenue and deepen client relationships.

• Geographical expansion into Southeast Asia, including Singapore, Malaysia, and Indonesia, is a key growth driver.

• Anticipates substantial revenue realization from the current pipeline over the next 12 months.