Xref (XF1) H2 2024 earnings summary

Executive summary

• Completed major transformation, shifting from reference checking to a full 'Hire to Retire' HR SaaS platform, including Xref Engage and Trust Marketplace.

• Migrated 906 clients to SaaS contracts, with SaaS now over 60% of revenue, decoupling from recruitment cycles.

• Voice Project acquisition fully integrated, driving cross-sell and ARR growth; ARR nearly tripled to $15m year-over-year.

• Cost reductions (25% headcount cut, office consolidation) led to positive EBITDA and cash flow in H2FY24.

• Initiated a strategic review after acquisition interest from private equity; process ongoing.

Financial highlights

• FY24 revenue: $19.86m, down 3% from $20.40m in FY23 despite lower recruitment activity.

• Net loss after tax: $5.68m (vs. $3.36m loss in FY23); EBITDA loss: $1.79m (vs. $1.42m loss in FY23).

• H2FY24 net loss after tax reduced to $1.6m from $4.08m in H1; H2 EBITDA turned positive at ~$0.3m.

• Cash at 30 June 2024: $4.6m; net cash used in operations: $0.7m (vs. $0.5m generated in FY23).

• Voice Project contributed $4.5m to sales; cost of sales fell 22% to $2.53m; OPEX up 18% to $20.06m.

Outlook and guidance

• Focus on further SaaS migration, cross-selling Engage and Trust Marketplace, and expanding API integrations.

• Expense management and efficiency remain priorities; product development to enhance self-service and integrations.

• Well positioned for growth as market recovers, leveraging scalable tech and broader addressable market.