Pinned straw:
Henslow Defence Conference presentation (19/6/25)
We have a market update via the presentation to the Henslow Defence Conference provided to the market today. Held in Canberra but online from 1pm free to register (Henslow Defence & Security Conference 2025 - ONLINE Tickets | TryBooking Australia), the presentation is very investor focused, rather than product, which is interesting, but good for investors.
Key take aways and points of interest:
Sales Update
Enterprise: As at 15 June 65 customers (up 11 QTD Vs 12 last Qtr), ARR is $4.6m up from $4.2m Q3, TCV $10.7m up from $9.2m Q3. So nice and solid growth similar to last quarter per below for the XR Operator business.
Entertainment: No clear update other than iFLY continues to contribute to cash flow and profit and the FREAK business is being exited based on lease terms, so it looks like a shut down, so we can expect some wind up costs. An exit of iFLY at some later date is with their corporate advisors, but no ETA.
Business Model
Slide 11 shown below provides the clearest view on the revenue and cash flow generation paths they are currently operating on. In general cash is up front as previously advised, but we now have a clearer view on how ARR and TCV is calculated.
International Markets
Not a lot of detail – distributor network is engaged. I am very interested to start seeing revenue in this space!
DoD Contract
Cash receipts have only been A$1.5m to date, so we can expect around A$4.1m over FY26 as milestone payments are back loaded.
They are now about halfway through, it seems to be going well and may lead to expansion – but we will wait for more conclusive information around this. Currently it’s another lotto ticket.
Conference starts at 1pm, I don’t know the format but hope to catch it but it will depend when they present.
Disc: I own RL+SM
Wayne’s presentation Henslow Defence Conference
I watched the XRG and prior presentations at today’s event, if I find links of recordings I will share or hope someone else can, I would like to re-watch.
Wayne gave a very easy to listen to history of the companies genesis for those who are new. In short, started as franchisee for skydive wind tunnels (iFLY) and expanded in Australia and overseas only to hit legal issues. Scaled back to just 2 sites and pivoted into out of home entertainment (FREAK) where they learnt about VR and then evolved to using it as a training aid for Defence and Police, which is now the way forward and core business that’s just taking off.
For those who have seen the SM interview, you get more of they same straight shooting and genuine talk about the company and it’s aspirations. There is passion for the business and product but a complete lack of hype which I can’t help but like.
Wayne noted that they have no churn to date, but didn’t make a big thing of it by saying that it’s early and if it was still the case in a year that would be a good thing.
A little more information on the international distributors, they effectively buy a kit for a bond and use it to present at conferences in their respective countries. No agreement details provided but Wayne expect sales to come through this calendar year.
Regarding the exit of the Entertainment business, Wayne noted it was worth 18m balance sheet value (iFly assets) and they were looking for offers and hoped to pay off their debt and have 5m+ capital from the exit.
There was a question on the DoD agreement and Kim Hopwood (Director) who manages the agreement spoke, there was a lot he couldn’t say due to the confidentiality of the agreement, but he did explain the group they are dealing with covers all arms of the US armed forces as an umbrella. So they are starting at the top and as such have an opportunity to supply the IP they are developing across all US armed forces. The DoD offers a much bigger opportunity than law enforcement and is yet to start – provided it goes well.
Todays 22% price spike is not a surprise based on the presentation and audience questions and comments.
As an aside, below is a link from the presentation hosts that covers XRG and many other SM favorites some may find useful: