VR1
Vection Technologies LTD
ASX
Quarterly Activities/Appendix 4C Cash Flow Report
Sentiment:
Quarterly Report
27 January 2025 4:33 PM
Vection Technologies reports a milestone operating net cash flow positive result in its historically weakest quarter, alongside a 60% increase in half-on-half revenue.
Better than expected
The company achieved a positive operating net cash flow in a historically weak quarter, which is better than expected.
The company's revenue growth of 60% half-on-half is significantly better than previous periods.
The increase in recurring revenue to 34% is a positive sign of business model improvement.
Summary
- Vection Technologies achieved a positive operating net cash flow in the second quarter of fiscal year 2025, a significant improvement from the previous year.
- The company's pro-forma unaudited revenue for the first half of fiscal year 2025 reached $17.4 million, a 60% increase compared to the first half of fiscal year 2024.
- Recurring revenue saw a substantial increase, making up approximately 34% of the pro-forma unaudited revenue in the first half of fiscal year 2025, compared to about 10% for the full fiscal year 2024.
- Vection secured $31.6 million in revenue for fiscal year 2025, including contributions from The Digital Box (TDB).
- The company's receivables were approximately $12.0 million, including $4.2 million from TDB, at the end of the quarter.
- Pro-forma cash receipts totaled $12.1 million, with $5.6 million coming from TDB.
- Underlying cash and cash equivalents were about $4.0 million at the end of December 2024, including $0.4 million from TDB.
- Vection integrated TDB's AI technology, adding over 3,000 customers and 100 resellers.
- The launch of the AI-based 'Algho' product with Dell resulted in key deals, including $1.6 million with Brexia Med, $0.7 million with KIOSK, and $0.5 million with RCM Italia.
- Vection secured a $3.6 million XR deal for schools, a $1.8 million defence contract, and a $1.6 million distribution agreement with SolidWorld.
- The company completed the acquisition of TDB and appointed Marco Landi, former COO of Apple, as Independent Non-Executive Chair.
Sentiment
Score: 8
Explanation: The document presents a very positive outlook with strong revenue growth, improved cash flow, and strategic acquisitions. The appointment of a high-profile chair further boosts confidence. However, the decrease in cash and the debt position are minor concerns.
Positives
- The company achieved a positive operating net cash flow in a historically weak quarter, indicating improved financial performance.
- There was a significant increase in revenue, with a 60% growth in the first half of fiscal year 2025 compared to the same period last year.
- Recurring revenue has grown substantially, suggesting a more stable and predictable income stream.
- The acquisition of TDB has expanded the company's customer base and enhanced its AI capabilities.
- The company has secured several significant contracts across various sectors, including education, healthcare, and defence.
- The appointment of experienced leaders like Marco Landi strengthens the company's governance and strategic direction.
- The company has a strong pipeline for the second half of fiscal year 2025.
Negatives
- Cash and cash equivalents decreased from $4.4 million to $3.6 million during the quarter, although underlying cash including TDB was ~$4.0m.
- Cash outflows from investing activities totaled ~$1.9 million, primarily for technology development and intellectual property investments.
- The company's debt position remained stable at ~$9.3 million.
Risks
- The company's cash position decreased during the quarter, which could pose a risk if not managed effectively.
- The company has significant debt, which could impact its financial flexibility.
- The company is investing heavily in technology development, which may not always yield the desired results.
- The company is reliant on strategic partnerships, which could be impacted by changes in those relationships.
Future Outlook
Vection is focused on expanding its AI and XR solutions across various sectors, leveraging strategic collaborations, enhancing recurring revenue, and seeking new growth opportunities in the USA, EMEA, and APAC regions. The company is confident in its ability to generate long-term value for shareholders.
Management Comments
- Vection continues to grow and has made significant progress in 2Q25, further cementing our position as an AI and XR technologies leader.
- In the first half of FY25, pro-forma revenue reached $17.4m, with a $4.4 million contribution from The Digital Box (TDB), demonstrating the effectiveness of our strategic acquisition.
- Recurring revenue now constitutes 34% of total revenue, underscoring the scalability and durability of our business model.
- Our commitment to innovation and strategic partnerships continues to confirm the commercial viability of our AI-driven solutions, setting us up for significant growth across various global sectors.
- With a strengthened leadership team, improved operating cash flow, and a clear strategic vision, we can capitalise on emerging opportunities and provide sustainable growth and long-term shareholder value.
Industry Context
This announcement highlights Vection's growing position in the AI and XR technology space, aligning with the increasing demand for digital transformation solutions across various industries. The company's focus on recurring revenue and strategic partnerships reflects broader industry trends towards scalable and sustainable business models.
Comparison to Industry Standards
- Vection's 60% half-on-half revenue growth is strong compared to many established technology companies, although direct comparisons are difficult due to the company's specific focus on AI and XR.
- The increase in recurring revenue to 34% is a positive sign, as many software and technology companies aim for a high percentage of recurring revenue for stability. Companies like Adobe and Salesforce have high recurring revenue percentages, often above 80%.
- The company's focus on strategic partnerships with companies like Dell and DigiLens is a common strategy in the technology sector to expand market reach and access new technologies. This is similar to how companies like Microsoft and Google partner with hardware manufacturers.
- The acquisition of TDB is a strategic move to enhance AI capabilities, which is a common trend in the tech industry as companies seek to integrate AI into their offerings. This is similar to how companies like IBM and Oracle have acquired AI startups to bolster their AI offerings.
Stakeholder Impact
- Shareholders should be pleased with the strong revenue growth and improved cash flow, which could lead to increased share value.
- Employees may benefit from the company's growth and expansion, potentially leading to new opportunities and job security.
- Customers will likely benefit from the company's enhanced AI and XR solutions, leading to improved products and services.
- Suppliers may see increased business opportunities as the company expands its operations.
- Creditors may view the company's improved financial performance positively, potentially leading to better financing terms.
Next Steps
- Expand AI and XR solutions across enterprise, government, and education sectors.
- Leverage collaborations with Dell Technologies, SolidWorld, and DigiLens to broaden market access.
- Enhance recurring revenue through subscription-based services.
- Seek new growth avenues in the USA, EMEA, and APAC regions.
Key Dates
- 30 September 2024: Cash and cash equivalents were ~$4.4m.
- 31 December 2024: End of the reporting quarter, cash and cash equivalents were ~$3.6m, underlying cash and cash equivalents were ~$4.0m.
- 7 January 2025: Acquisition of The Digital Box S.p.A (TDB) completed.
- 28 January 2025: Date of the ASX release.
Keywords
AI, XR, IntegratedXR, Spatial Computing, Recurring Revenue, Cash Flow, Technology, Digital Transformation, Partnerships, Acquisition, TDB, Algho, Dell
VR1
Vection Technologies LTD
ASX
Sector: Software & Services
Filings with Classifications
Better than expected
29 June 2025 7:19 PM
Defence Contract Award
- The $4.4 million follow-on supply confirms a successful transition from a proof-of-concept pilot to production delivery, indicating strong client satisfaction and product viability.
- The cumulative revenue from this customer has reached approximately $10 million, demonstrating significant and growing engagement with a top-tier defence contractor.
- The planned approximately $21 million in additional contracted options for FY26-FY30 signals substantial future revenue potential and long-term partnership with a key client.
Better than expected
22 June 2025 7:26 PM
Contract Signing Announcement
- The company secured a significant $2.6 million agreement, which substantially exceeds its $500,000 materiality threshold, indicating a strong new contract win.
Better than expected
16 June 2025 6:53 PM
Strategic Partnership Announcement
- The $520,000 agreement exceeds the company's internal materiality threshold of $500,000, indicating a significant contract.
- The partnership targets high-growth markets, with agricultural robotics projected to reach $48 billion by 2030 and precision farming $24 billion by 2030.
- The modular platform architecture allows for cross-sector deployment, expanding the addressable market beyond agriculture.
Better than expected
9 June 2025 8:01 PM
Investor Presentation
- The company reported a 60% increase in 1H25 revenues year-on-year, indicating strong top-line growth.
- Recurring revenue grew by an impressive 204% year-on-year, demonstrating a shift towards a more stable and predictable revenue model.
- Vection achieved positive adjusted EBITDA in 1H25, a significant improvement from a negative EBITDA in the previous fiscal year, signaling enhanced profitability.
Better than expected
9 June 2025 6:37 PM
Product Launch and Strategic Partnership Announcement
- The launch on AWS Marketplace provides a significant strategic partnership and market reach that is better than a standalone product launch.
- The initial contracted annual recurring revenue of $400,000 from early implementations indicates strong immediate commercial traction.
- The solution addresses a large and growing market opportunity, with the global assistive technology market projected to reach $54.9 billion by 2033.
Better than expected
1 June 2025 6:22 PM
Contract Award Announcement
- The A$1 million defence order exceeds the company's A$500,000 materiality threshold, indicating a significant win.
- The order reinforces an ongoing relationship with a strategic customer, suggesting strong client satisfaction and potential for repeat business.
- The client has already indicated additional significant opportunities, pointing to a robust future pipeline.
Better than expected
28 April 2025 7:30 PM
Placement Announcement
- The company raised more capital than initially targeted, indicating strong investor demand.
Better than expected
27 April 2025 8:02 PM
FY25 Q3 Activity Report
- The company reported positive operational cash flow, a significant improvement from previous quarters.
- Recurring revenue increased substantially, indicating a more stable and predictable revenue stream.
- The company's cash position improved, providing greater financial flexibility.
Capital raise
27 April 2025 7:43 PM
Trading Halt Request
- Vection Technologies is planning a capital raising.
- The capital raising is to support the expansion of its AI business.
- The capital raising is to support the development of new markets.
Better than expected
27 February 2025 9:41 PM
Half-year report
- The company's revenue increased by 14.9% compared to the previous period.
- The loss after tax decreased by 58.7% compared to the previous period.
- Underlying EBITDA turned positive, indicating improved operational efficiency.
Better than expected
27 February 2025 9:41 PM
Half Year Results
- The company's revenue increased by 15% compared to the previous period.
- The company reduced its total debt by $5.4 million.
- Earnings per share improved by 63%.
Capital raise
27 February 2025 9:41 PM
Half-year report
- In FY25 Vection announced the proposed acquisition of The Digital Box ('TDB'), a generative AI specialist, in tandem with a $2m equity raising (ASX: 29 August 2024).
- On 5 September 2024, the Company issued 200,000,000 of ordinary fully paid shares at $0.10 ($2m placement as per announced of 29 August 2024).
Better than expected
27 January 2025 4:33 PM
Quarterly Report
- The company achieved a positive operating net cash flow in a historically weak quarter, which is better than expected.
- The company's revenue growth of 60% half-on-half is significantly better than previous periods.
- The increase in recurring revenue to 34% is a positive sign of business model improvement.
Better than expected
21 January 2025 4:22 PM
Sales Announcement
- The company has exceeded its materiality threshold of $0.5m in revenue with these new sales.
Capital raise
16 January 2025 4:23 PM
Merger Announcement
- Vection issued approximately 143 million new shares as part of the initial consideration for the acquisition.
- Up to 52 million further shares may be issued subject to TDB meeting agreed sales, EBITDA, and balance sheet objectives one year post-acquisition.
Better than expected
8 December 2024 5:35 PM
Contract Wins Announcement
- Vection Technologies secured new contracts exceeding $500,000, surpassing their defined materiality threshold.
Capital raise
28 November 2024 4:19 PM
Annual General Meeting Results
- Resolution 4 approved the issuance of shares to Mr. Jacopo Merli.
Better than expected
24 November 2024 4:19 PM
Corporate Presentation
- Q1 FY25 revenue exceeded expectations with a 32% year-on-year increase, driven by strong demand for Vection's AI and XR solutions.
Better than expected
14 November 2024 6:17 PM
Contract Announcement
- The $0.5 million contract exceeds expectations, demonstrating strong market demand for Vection's AI solutions and validating the strategic acquisition of TDB.
Better than expected
31 October 2024 6:15 PM
Contract Announcement
- The $1.6 million contract significantly exceeds Vection's announcement materiality threshold, indicating better-than-expected results.
Capital raise
28 October 2024 3:35 AM
Extraordinary General Meeting Results
- Share issuances related to the TDB acquisition.
- Issuance of shares to Exchange Capital Advisory Pty Ltd.
- Issuance of free attaching options.
- Issuance of broker options.
Better than expected
20 October 2024 6:57 PM
Partnership Announcement
- The $0.5 million sale of the 'Algho' platform to Dell exceeded expectations, demonstrating strong market demand and the platform's commercial viability.
Better than expected
9 October 2024 8:30 PM
Distribution Agreement Announcement
- The \$3.6 million deal exceeds the company's materiality threshold of \$500,000, indicating a positive outcome.
Delay expected
1 October 2024 5:02 AM
Trading Update
- There was a delay in lodging the annual report for the year ended June 30, 2024, which resulted in a suspension of trading.
Worse than expected
30 September 2024 6:21 PM
Annual Report
- Despite a 30% increase in revenue, Vection Technologies still reported a net loss after tax, indicating that expenses outweighed the revenue growth.
Better than expected
30 September 2024 6:21 PM
Financial Results
- Vection Technologies exceeded expectations with 30% year-on-year revenue growth and a 34% increase in EBITDA.
Capital raise
30 September 2024 6:21 PM
Annual Report
- A $2 million placement of ordinary shares at $0.10 was issued on September 5, 2024.
- Up to circa 55 million Vection shares will be issued if TDB achieves sales and EBITDA objectives and balance sheet valuation targets one year post-acquisition.
Worse than expected
30 September 2024 6:20 PM
Financial Results Correction
- The revised financial results show a significantly larger loss than initially reported, primarily due to adjustments in revenue recognition, share-based payments, and asset valuations.
Better than expected
30 July 2024 6:25 PM
FY24 Q4 Activity Report and Appendix 4C
- The company's cash receipts for Q4 FY24 were better than the prior corresponding period, increasing by 15%.
Better than expected
28 April 2024 7:54 PM
Quarterly Report
- The company's revenue, cash receipts, and contracted revenue all showed significant growth compared to previous periods, indicating better-than-expected performance.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.