XMReality (XMR) Q3 2024 earnings summary

Executive summary

• Operating expenses (excluding one-offs and depreciation) reduced by 44% year-over-year in Q3 2024, driving a 54% improvement in EBITDA compared to Q3 2023.

• Product usage more than doubled year-over-year, with new customer acquisition and increased engagement among existing clients.

• Major organizational changes, including a new CEO and a shift to a hybrid go-to-market model, were implemented to accelerate the path to profitability.

Financial highlights

• Q3 2024 net sales: 4,153 TSEK, down 14% year-over-year; nine-month net sales: 12,949 TSEK, down from 14,911 TSEK.

• Q3 EBITDA: -1,969 TSEK (improved from -4,398 TSEK); nine-month EBITDA: -11,190 TSEK (improved from -17,357 TSEK).

• Q3 cash flow: -1,111 TSEK (vs. -10,630 TSEK in Q3 2023); nine-month cash flow: 1,209 TSEK (vs. -3,724 TSEK).

• Annual recurring revenue (ARR) at Q3: 15,909 TSEK (new calculation method); order intake down 29% year-over-year.

• Gross margin remained high at 99% in Q3 2024.

Outlook and guidance

• Positive cash flow now targeted for spring 2025 (rolling 12 months), with positive EBITDA expected in Q1 2025.

• Effects of cost reductions and organizational changes expected to be fully visible by spring 2025.

• Continued churn and contraction expected in parts of 2025, especially among legacy COVID-era contracts.