Key Highlights
We’re pleased to announce another strong quarter for xReality Group (XRG), with growth across both enterprise and consumer business units. Driven by strategic contract wins, high-profile collaborations, and a clear investment in innovation, Q3 FY25 reinforces XRG’s position as a leader in simulation technology and immersive entertainment. Key highlights include:
- $3.4 million in cash receipts for Q3 FY25, bringing YTD total to $13.0 million
- 12 new Operator XR contracts signed in the U.S., adding $1.8 million to Total Contract Value
- Annual Recurring Revenue (ARR) increased 17% QoQ to $4.2 million
- AI Advisory Board launched, led by former ANZ and iFlix executive Ash Crick
- Operator XR strategic collaboration with ALERRT announced
- Entertainment division delivered $1.9 million in Q3 cash receipts, up 16% YoY
Operational Update by Business Sector
Operator XR – Enterprise Software and Technology
Operator XR continued with significant milestones this quarter with 12 new law enforcement agencies across the U.S. adopting the platform and one contract renewal, adding $1.8 million in Total Contract Value (TCV). This surge in demand lifted Annual Recurring Revenue (ARR) to $4.2 million, representing a 17% increase quarter-on-quarter and reinforcing Operator XR’s position as a trusted and rapidly scaling solution.
This momentum was gained through Operator XR’s presence at SHOT Show in Las Vegas, the largest law enforcement and military trade show of the year. At the event, the team showcased the new OP-2 XR system through live demonstrations, capturing the attention of federal and state agencies, military personnel, and global defence representatives. This exposure led to the appointment of new distribution partners in Europe and the Middle East, marking another step in the company’s international growth.
The company’s U.S. project with the Department of Defense remains on track, passing the 7-month mark of a 20-month timeline, while the active Operator XR sales pipeline now comprises 280 qualified opportunities valued at $29.3 million.
Pushing the boundaries of innovation, the company launched a dedicated AI Advisory Board chaired by Ash Crick, a seasoned technology leader from iFlix and ANZ Bank. This initiative will embed AI across the Operator XR ecosystem—automating instructor inputs, improving training return on investment, and unlocking new simulation capabilities. Crick’s leadership is expected to fast-track the integration of AI features that will differentiate Operator XR in the defence and law enforcement markets.
In a further demonstration of leadership in the training space, Operator XR has aligned with the ALERRT Centre (Advanced Law Enforcement Rapid Response Training), the FBI’s official standard for active shooter response training. The newly signed two-year collaboration will focus on using Operator XR in high-stress law enforcement environments. With ALERRT’s reach of over 300,000 first responders trained and more than $180 million in public funding, this collaboration represents a huge validation of the platform’s potential to shape the future of police and tactical training in the U.S.
Entertainment Sector – iFLY Indoor Skydiving & FREAK Entertainment
While Operator XR continues to push the boundaries of immersive training, XRG’s Entertainment Division remains a dependable revenue driver.
In Q3 FY25, the division delivered $1.9 million in cash receipts, driven by strong post-holiday demand and consistent retail traffic at the iFLY venues. These experiences continue to resonate with thrill-seekers and families alike, cementing their role as go-to destinations for high-energy, memorable fun.
Corporate Activity
Q3 also marked the completion of a significant debt restructure, reducing total company debt by 48%. The restructure included the conversion of $4.6 million in subordinated debt into equity (approved at EGM on 30 April 2025) and the execution of a new $6 million senior facility with Causeway Asset Management.
Whilst operating cash flow was negative $0.3 million for the quarter, due to timing of new contracts, XRG ended the quarter with $1.03 million in cash, a healthy position as it continues to scale in key international markets.