ENGAGE XR Holdings Plc (AIM: EXR), a leading provider of immersive communications technology, announces its audited results for the year ended 31 December 2024.

Financial Highlights:

• Total revenue of €3.4 million (2023: €3.7 million), reflecting an 8% decline due to delayed contract closures (expected in 2025) and reduced one-off enterprise activity.
• Education revenue grew to €1.3 million (2023: €1.1 million), driven by strong renewals and expansion from key partners including OptimaED (USA) and InspiredED (UK).
• Gross margin of 86% (2023: 90%).
• EBITDA loss narrowed slightly to €3.9 million (2023: €4.0 million), reflecting disciplined cost control.
• Cash position of €3.6 million at 31 December 2024 (2023: €7.9 million), with no debt.

Operational Highlights:

• Continued pivot to education and training: Education and corporate training now represent over 50% of revenue YTD 2025, up from 38% in FY24.
• Partnership with OptimaED has shown significant growth, increasing its licenses sixfold from 500 at the start of 2023 to over 3,000 licenses currently, with plans to double again this year.  
• Delivered the Group’s largest ever contract with major client in Middle East in partnership with PwC. Renewed contracts with Bank of America, KPMG, and PWC.
• “School of AI” initiative now live enabling immersive, AI-powered learning experiences. Thousands of students engage daily.

Current trading and Outlook:

• The first five months of the current financial year has seen the Company make good progress in broadening its opportunities, but the Company is still being impacted by delays in the pipeline converting into signed contracts.
• Operating cost base reduced significantly in Q2 2025 with monthly run-rate of costs now approx.€0.2 million.
• Expect progress in the sales pipeline throughout 2025 and 2026 as Group works closely with Meta, Lenovo and a host of global resellers who already have a large potential client base to sell to.

David Whelan, CEO of ENGAGE XR, commented: “2024 was a year of transition and strategic change. While headline revenue declined, our pivot to education and training is delivering tangible results. With strong partnerships, a growing reseller network, and a leaner cost base, we are well positioned to scale recurring revenue and deliver long-term value.”

For further information, please contact:

About ENGAGE XR

ENGAGE XR Holdings plc (AIM: EXR) has developed ENGAGE, an immersive training, education and collaboration platform, offering cutting-edge VR/AR tools and environments that elevate employee training and student outcomes. Trusted by enterprise and educational clients worldwide, ENGAGE leverages the transformative power of spatial computing to revolutionize onboarding, sales meetings, product demos and a host of other vital business operations.

For further information, please visit: https://engagevr.io/

CHAIRMAN’S STATEMENT

This has been a year of significant challenge and transformation for Engage XR as we navigated macroeconomic volatility and adapted to changes in enterprise demand.

2024 Performance and Strategic Progress

Revenue declined by 8% to €3.4 million, with 2024 seeing continued reduction in enterprise spending and renewals and reduced one-off event activity. Furthermore, a significant contract was also expected to be finalised pre year end in the Middle East which would have led to the Group's revenue target being comfortably achieved but unfortunately this has been delayed into H2 FY25. While this delay resulted in the Group's headline revenue being behind market expectations, the Group's EBITDA and Cash are broadly in-line for FY24. While enterprise revenue declined due in part to post-pandemic workplace shifts as more people returned to the office, we believe churn has stabilised. However, the revenue decline masks a pivotal shift in the business mix. Revenue from the education and corporate training sectors rose 60%, driven by partnerships with institutions such as PWC in the Middle East and leading private education organisations in the US and UK. This aligns with our strategic pivot toward sectors offering sustainable, recurring revenues and measurable ROI. Our presence in the Middle East and expanding AI-led education offerings will drive revenue in the future.

Gross margin held firm at 86% (2023: 90%), and cost discipline reduced our EBITDA loss slightly to €3.9 million (2023: €4.0m). We closed the year with €3.6 million in cash and remain debt-free, giving us the flexibility to invest in future growth.

Outlook and Board Confidence

During the first five months of the current financial year, the Company has made solid progress in expanding its pipeline of opportunities in the Middle East and in North America. However, it continues to be impacted by delays in converting pipeline prospects into signed contracts. As a result, revenues in the period were below the corresponding period in FY24. In response, the Board has implemented measures to better align the Company’s cost base with its current revenue profile. These measures will ensure the Company has the cash to ensure it can capitalise on the opportunities in progress.

We continue to develop opportunities through our strategic partnerships with Lenovo, Meta and other key partners in the Education and Corporate Training space, with contributions expected by year-end. The launch of our School of AI initiative and forthcoming AI-based enterprise training tools reinforces our position at the intersection of immersive technology and scalable learning. The Board is confident that this focus will drive long-term, recurring revenue growth and value creation.

Looking forwards, the Board continues to see significant growth opportunities for the Group through working with partners in the Middle East throughout the remainder of 2025 and beyond in both education and training verticals. The Group's strong pipeline is evidence of the progress being made with partners in the Middle East and in the USA. This pipeline gives the Board the continued confidence in the market opportunity for the Group and delivering results that benefit not just ENGAGE XR but also its partners and stakeholders. The key focus for the Board is to capitalise on the strength of the pipeline by converting more of its opportunities into contracts with the Board remaining confident in its strategic objective to become cash flow breakeven which it now expects to occur in FY26.

Board Governance and Acknowledgments

We were pleased to welcome Marc Metis to the Board as a Non-Executive Director in May 2024. As permitted by the shareholder agreement, Marc joined the Board as the representative of HTC which owns 11.96% of the total issued share capital of ENGAGE XR. Marc replaced Praveen Gupta who retired from HTC. Marc brings extensive global experience in immersive tech and strategic growth, including leadership roles at HTC.

I joined the Board as the Group's new non-Executive Chairman on 1 July 2024, replacing Richard Cooper, who had led the Board since the Group's IPO. Richard remains on the board as Senior Independent Director, Chair of the Audit Committee, and on the Remuneration Committee. Non-executive director, Kenny Jacobs, replaced Richard as Chair of the Remuneration Committee.

I thank my fellow Directors for their guidance and the management team for their resilience and execution. To our shareholders, thank you for your continued confidence and support as we advance our vision for Engage XR.

Karthik Manimozhi
Non-Executive Chairman
3 June 2025

CHIEF EXECUTIVE’S REVIEW

Overview

2024 has been a challenging year. While revenue declined, our revenue mix shows that our one-off project-based enterprise revenue streams were being replaced by recurring educational sector license-based revenue streams.  We have signed up with several global resellers in partnership with Meta and Lenovo to go head-to-head with the market leaders in the immersive hardware and software education space.

ENGAGE was originally founded with a focus on the education sector and operated under the name Immersive VR Education. The company rebranded during the COVID lockdowns to better reflect the growing split between enterprise and education revenue, as we saw increased demand from corporations supporting remote teams. However, towards the end of 2023 and into the first half of 2024, I made the strategic decision to refocus the company on education and training services. This was driven by consistently strong renewal rates in that area, in contrast to declining demand in other segments of the business, such as one-off event services and remote collaboration post pandemic. 

This is a key reason we have partnered with Meta and Lenovo, who are working together as a strategic collective, to sell Meta Quest 3 and 3S headsets into the education and enterprise space, via resellers such as TD Synnex, SHI, Insight, Mace Virtual Labs and others. Since the start of the year, we have secured distribution agreements in preparation for the busy mid-summer to mid-autumn educational buying season.

Middle East Growth

Last year, we announced a significant initial agreement with a major client in the Middle East, secured through our partners at PwC. I’m proud to share that, following some delays, we have successfully delivered the project creating a fully immersive learning environment for professional students. Client acceptance was received earlier this month, and we hope to see strong future growth in licenses once results from the first student cohort are available.

Education Partners

During 2024, many of our key educational partners not only renewed their agreements with us but a number also expanded their user bases. Two standout partnerships delivered in the year were with Florida-based OptimaED and UK-based InspiredED, both of which have renewed and increased their license commitments.

Our partnership with OptimaED has shown significant growth, increasing its licenses sixfold from 500 at the start of 2023 to over 3,000 licenses currently, with plans to double again this year.  OptimaED has developed over 200 educational modules on ENGAGE tailored to the United States curriculum. While their primary focus has been the homeschool market, they have begun expanding into traditional brick-and-mortar schools. This summer, ENGAGE and OptimaED are teaming up to offer bundled pricing options for resellers.

The AI Effect

Over the past year, one of the most significant trends in the enterprise landscape has been the rapid acceleration of AI adoption, particularly in roles traditionally filled by human workers. This has been especially evident across major tech companies we’ve historically supported through onboarding and professional development services. As AI becomes more prevalent, the tech industry has experienced widespread layoffs, directly affecting enterprise investment in the XR space.

This shift has led to a decreased demand for ENGAGE XR’s independent studio development team, which had focused on delivering custom onboarding experiences and enterprise events. In response, we’ve streamlined the team and implemented a series of cost-saving measures across the organisation. At the same time, we are integrating AI-driven processes to maintain consistent service delivery.

While enterprise clients once relied heavily on us for content creation, most of our educational partners now use the platform’s built-in tools to develop their own content. This is precisely the goal these tools were designed to support. To scale effectively, it’s essential to empower clients to become self-sufficient. We are now reaching a pivotal point in this transition, as we shift our focus toward Annual Recurring Revenue from license sales.

AI Integration in the Platform

Last year, we introduced the School of AI within the platform, an initiative that enables students to engage with virtual representations of historical figures and create personalised AI tutors. This feature has been well received and is now being used by thousands of students daily. With the United States government mandating AI education in schools, we see this as a major driver of future sales. We are expanding our AI capabilities in collaboration with Meta, integrating them into our broader reseller offerings.

Current trading and outlook

The first five months of the current financial year has seen the Company make good progress in broadening its opportunities but with the company still being impacted by delays in the pipeline converting into signed contracts.  As noted above, we have exciting opportunities in the education space, especially in the Middle East but the delivery of revenues from these opportunities still require work, from both the Company and our customers.  The delivery of the pipeline will prove crucial to the Company as the Board seeks to meet its expectations for the year. The Board has taken measures to ensure that the Company’s cost base is more aligned to the current revenue profile of the Group.

Conclusion

2024 was a challenging year for enterprise sales, however we still landed our largest ever deal in the Middle East and renewed contracts with Bank of America, KPMG, and PWC. We continue to work with several US based insurance companies building out onboarding experiences for their clients.   

The refocus on education and professional training has taken several months and we expect progress in the sales pipeline throughout 2025 and 2026 as we work closely with Meta, Lenovo and a host of global resellers who already have a large potential client base to sell to.

David Whelan
Chief Executive Officer
3 June 2025

Revenue was down 8% on the prior year from €3.7 million to €3.4 million, driven by a delay in closing some significant contracts in the final quarter of the year which are expected to close in 2025.  ENGAGE platform revenue was down 3% on the prior year from €3.3 million to €3.2 million.

ENGAGE revenue from education customers was €1.3 million up from €1.1 million in FY23. This was bolstered by significant growth of two long term partners of the company, OptimaED in the USA and InspiredED in the United Kingdom.

ENGAGE revenue from Professional Services declined to €0.7 million from €1.1 million driven by a reduction in one off VR events supported by the ENGAGE Event team while ENGAGE revenue from Enterprise customers increased from €1.0 million to €1.2 million, bolstered by the significant education/training related deal signed in partnership with PWC in Saudi Arabia in early 2024.

ENGAGE revenue declined in the North American market with 35% of total ENGAGE revenue being generated in North America (2023: 60%). This is due to a shift in focus towards the Middle East where significant opportunities have appeared which the Company is seeking to capitalise on. Revenue from the Middle East was 28% of total ENGAGE revenue (2023: 0%).

EBITDA loss was €3.9 million compared to a loss of €4.0 million in the prior year and loss before tax was €4.0 million compared to a loss in 2024 of €4.1 million. This reduced EBITDA loss is primarily driven by reductions in headcount and a disciplined approach to cost control across the Group, offsetting the reduction in revenue in the period. 

Operating cashflows resulted in a net outflow of €4.3 million for the period.  Following recently undertaken cost reductions in Q2 2025, the current run-rate of staff costs and other ongoing costs is expected to be approximately €0.2 million per month for the remainder of 2025 into 2026. 

At the balance sheet date, trade and other receivables were €1.8 million, ahead of trade and other payables at €0.7 million. Trade receivables represented an average of 57 debtor days (2023: 59 days).  

The Group’s cash position on 31 December 2024 was €3.6 million (2023: €7.9 million) with no debt.  

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 31 December 2024

COMPANY STATEMENT OF FINANCIAL POSITION

at 31 December 2024

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the Year Ended 31 December 2024

COMPANY STATEMENT OF CHANGES IN EQUITY

for the Year Ended 31 December 2024

CONSOLIDATED STATEMENT OF CASH FLOWS

for the Year Ended 31 December 2024

COMPANY STATEMENT OF CASH FLOWS

for the Year Ended 31 December 2024