Engage XR Holdings PLC on Tuesday reported a ‘challenging’ year and predicted decreased revenue for 2023, but said it is moving closer to achieving profitability.
Engage XR shares were trading 27% lower at 2.05 pence each in London on Tuesday morning.
The Waterford, Ireland-based virtual reality software and technology group said its sales pipeline has seen continued steady growth during the second half of 2023 and it ‘continues to see encouraging demand for its technology, especially within education, training and development verticals’.
Chief Executive Officer David Whelan, meanwhile, commented: ‘Big contract wins in the US have really showed that education-based customers are willing to invest heavily in Engage and see their return on investment as less time to train employees and better educational outcomes overall.
‘We continue to focus on these sectors as core opportunities for the group and are hopeful that our pipeline in these verticals will deliver good contract wins during [2024].’
However, Engage XR also said that ‘some’ contracts are now likely to be recognised in 2024, despite its hopes of signing them in the current year.
Engage XR also expects to realise the benefits of a hardware partnership, for Lenovo’s new ThinkReality VRX virtual reality headset, in the first quarter of 2024 instead of in the current quarter.
Engage XR said it now expects between €3.6 million and €3.8 million in revenue for 2023, down from €3.9 million in 2022. It added that other non-Engage revenue ‘continues to fall...as expected’ to €350,000 from €540,000.
More positively, Engage XR anticipates a loss before interest, tax, depreciation and amortisation of approximately €4.6 million, narrowed from an €5.8 million loss the year before. It also expects to have net cash of around €7.3 million at December 31, up from €2.2 million at the same time one year prior.
Engage XR attributed this guidance to its focus on ensuring costs were ‘aligned with revenue growth’, and said the cash position gives it ‘adequate funding to reach break-even in the short to medium term’.
‘A key goal for the group is to become cash flow positive and we have made excellent strides by keeping costs under control,’ Whelan explained. ‘We are going to finish the year with a strong cash balance and, based on the opportunities before us, we can see a clear path to profitability.’
He continued: ‘2023 has indeed being challenging but extremely informative and now it is time to capitalise on the opportunity before us to generate meaningful revenues and expand our customer base.’
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