Tech company Xref gets set for take-off after ‘defining quarter’ of growth in Q1
Special Report: This HR tech platform has begun reaping the rewards of its global expansion strategy, as quarterly cash receipts hit a record high.
As Q1 reporting season gets into full swing, Xref (ASX:XF1) had some positive news for the market as it reported strong growth in earnings momentum.
Xref’s quarterly cash receipts of $3.53m – a 31 per cent increase on the previous quarter – came off the back of record credit sales in the three months to the end of June.
The company reported new credit sales of $2.46m, which was also its best-ever showing in Q1 – typically the quietest period in the Australian recruitment sector following the end of the June financial year.
Xref’s Q1 milestone in cash receipts was driven by record-high credit usage of $2.24m, following on from its big June sales quarter.
The result provided confirmation that Xref is executing well on its credit-based business model, where clients purchase credits up front — effectively an option to use the platform — in return for a cash payment. When reference checks are requested, the credits are consumed.
In return, they get access to Xref’s secure, automated platform which provides a high-speed HR solution around employee reference checks, ID verification and performance feedback.
“This has been a truly defining quarter for us,” CEO Lee-Martin Seymour said.
“We have seen the company grow and evolve in all aspects – with team growth, direct sales growth, platform expansion and indirect revenue generation, through partnerships and acquisition.”
In addition to the positive sales metrics, Xref also announced strong growth in new clients and the successful introduction of its Xref Lite product – a fast-access, self-service version of the core offering that’s ideal for customer onboarding.
New clients added in the quarter included Tourism Australia, Schneider Electric and Texas A&M University.
The Texas A&M contract followed “an extensive tender process and multi-vendor trial period”, Xref said.
“Given the power and security of the Xref platform, the company was able to demonstrate its ability and capacity to meet Texas A&M University’s strict technical and compliance requirements.”
As it gains a stronger footprint in the huge US market, Xref has hired new staff on the ground and continues to strengthen its local distribution partnerships.
More broadly, Xref’s employment numbers are representative of a company that has hit its critical platform targets and now has a unique opportunity to scale up.
Across the group, staff numbers in sales and marketing management roles increased by 30 per cent in Q1 to 30 executives – coinciding with the launch of Xref Lite.
The company said those sales teams are now “100 per cent targeted on identifying enterprise customers in all regions, while small business and trial clients can self-serve using Xref Lite”.
“Accelerated growth and profitable scale is now most definitely in our grasp and we are very excited about the opportunity that lies ahead,” Seymour said.’