VR1
Vection Technologies LTD
ASX
Vection Reports 1H FY25 Results
Sentiment:
Half Year Results
27 February 2025 9:41 PM
Vection Technologies reports solid revenue growth of 15% to $12.6 million and a significant reduction in total debt for the first half of FY25, while integrating AI capabilities through the acquisition of The Digital Box.
Better than expected
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%.
Summary
- Vection Technologies Ltd (ASX:VR1, OTC:VCTNY) announced its financial results for the six months ended December 31, 2024.
- The company achieved revenue of $12.6 million, a 15% increase compared to the previous corresponding period (pcp).
- Total debt was reduced by $5.4 million compared to 2024.
- Earnings per share improved to $(0.29), a 63% increase compared to the pcp of $(0.8).
- Including the acquisition of The Digital Box (TDB), pro-forma revenue for 1H FY25 was $16.3 million.
- Pro-forma recurring revenue accounted for 34% of the 1H FY25 revenue.
- The company reported a closing cash balance of $3.1 million and net assets of $8.7 million as of December 31, 2024.
- Vection reported a positive Normalised EBITDA of $55k, demonstrating significant improvement from 1H FY24.
- The company secured several significant contracts, including a $3.6 million XR contract with Cometa and a $1.6 million deal with Brexia Med.
- Vection partnered with Dell to launch its AI Algho platform across EMEA.
Sentiment
Score: 7
Explanation: The report highlights positive revenue growth, debt reduction, and strategic partnerships, but the ongoing EBITDA loss tempers the overall sentiment. The integration of AI and expansion into new markets are promising, but profitability remains a key challenge.
Positives
- Revenue increased by 15% to $12.6 million in 1H FY25.
- Total debt was reduced by $5.4 million.
- Earnings per share improved by 63% to $(0.29).
- The acquisition of The Digital Box (TDB) contributed to a pro-forma revenue of $16.3 million.
- Recurring revenue streams are growing, representing 34% of total revenue.
- The company secured significant contracts and partnerships, including deals with Cometa, Brexia Med, Dell, and KIOSK Embedded Systems.
- Vection reported a positive Normalised EBITDA of $55k, demonstrating significant improvement from 1H FY24.
- The company appointed Marco Landi (former Apple President) as Independent Non-Executive Chair and Cameron Petricevic as Independent Non-Executive Director.
Negatives
- The company reported an EBITDA loss of $(2.3) million.
- The company reported a pro-forma EBITDA loss of $(2.1) million.
- Earnings per share are still negative at $(0.29).
Risks
- The company is still reporting an EBITDA loss, indicating ongoing challenges with profitability.
- The company has debt of $10.0 million, comprising of $6.4 million secured Invoice financing and $3.6 million of bank loans.
- Other financial liabilities totalling $5.6 million correspond to the monetary value of the performance share-based issuance related to the acquisition of Inversion.
Future Outlook
Vection plans to continue scaling its AI-driven and XR solutions through subscription-based models, focusing on healthcare, defence, retail, and manufacturing. The company anticipates organic revenue growth in the second half of FY25 and a cost reduction program to deliver shareholder value.
Management Comments
- Gianmarco Biagi, Vections Managing Director, commented that there was a robust improvement in company performance, with sales growth, a significant improvement in EBITDA and a reduction in debt, highlighting accelerating the path to profitability.
- Vection continued to build on its vision of bridging the physical and digital worlds through immersive, AI-driven solutions.
- The company's primary focus during this half-year was on integrating generative AI capabilities following the proposed acquisition of The Digital Box (TDB) and expanding into new market segments with strategic partners such as Dell Technologies, KIOSK Embedded Systems, and SolidWorld.
Industry Context
Vection's focus on integrated XR solutions, incorporating AI and spatial computing, aligns with the growing demand for immersive and data-rich experiences across various industries. The partnerships with major players like Dell and the expansion into healthcare, defence, retail, and manufacturing reflect a strategic approach to capitalize on emerging market trends.
Comparison to Industry Standards
- It is difficult to compare Vection's results to global benchmarks without specific competitor data.
- However, the company's focus on XR and AI aligns with industry trends seen in companies like Unity Technologies and NVIDIA, which are investing heavily in these areas.
- Vection's partnerships with Dell and other major players suggest a strategy to compete with larger companies by offering specialized solutions.
Stakeholder Impact
- Shareholders should see increased value due to revenue growth and strategic partnerships.
- Employees may benefit from the company's expansion and new opportunities.
- Customers can expect enhanced solutions through AI integration and XR capabilities.
- Suppliers may see increased demand due to the company's growth.
- Creditors should be reassured by the debt reduction.
Next Steps
- Continue scaling AI-driven and XR solutions through subscription-based models.
- Focus on healthcare, defence, retail, and manufacturing sectors.
- Leverage strategic alliances with Dell, Synergy, and DigiLens.
- Implement a cost reduction program.
- Deliver organic revenue growth in the second half of FY25.
Key Dates
- September 5 2023: Acquisition of Inversion
- August 29 2024: Acquisition of The Digital Box (TDB) and capital raise of $2m
- October 10 2024: Secured a $3.6m XR contract with Cometa (education)
- October 21 2024: Partnered with Dell, winning an initial $0.5m Algho AI sale
- November 1 2024: Secured a $1.6m deal with Brexia Med (healthcare)
- November 15 2024: Partnered with Dell, winning an additional $0.5m Algho Appliance order
- November 20 2024: Signed a $0.7m contract with KIOSK Embedded Systems
- December 9 2024: Began working with Natuzzi and Nestl to deliver XR solutions
- December 17 2024: Launched a clinical pilot at Massachusetts General Hospital
- December 20 2024: Finalised a $1.6m distribution agreement with SolidWorld
- December 31 2024: End of financial period
- January 6 2025: Secured a $1.8m defence contract with a repeat customer
- January 13 2025: Partnered with Synergy in Bulgaria
- January 20 2025: Announced Board changes
- January 22 2025: Integrated with DigiLens Inc.
- February 12 2025: Closed multi-year deals with Assicurazioni Generali (up to $575k)
- February 17 2025: Closed multi-year deals with TotalPlay ($0.7m)
- February 20 2025: Closed multi-year deals with EnginSoft (A$0.6m)
- February 24 2025: Closed multi-year deals with Augmentalix ($0.6m SaaS)
- February 28 2025: Date of ASX Release
Keywords
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.
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 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%.
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 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.
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 6:21 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.
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.