Xref books 60 new clients in June quarter as momentum accelerates
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Special Report: Xref’s Q2 trading update showed sales continue to climb as per-unit acquisition costs decline.
HR tech platform Xref (ASX:XF1) has reported a strong trading update for the June quarter, booking $2.7m in sales and new cash receipts of $2.4m.
The result provided further validation that the company is executing on its strategic vision to build scale and simultaneously drive down customer acquisition costs.
And it also demonstrated Xref’s ability to maintain momentum through the height of the COVID-19 crisis.
As an example of the pivot in demand, more than 60 per cent of Xref’s $2.7m in quarterly sales came from clients in industries classified as essential services.
Through the disruption, Xref was still able to onboard 60 new clients to its platform across global markets, as the company’s growth model continues to scale.
New customer wins included the NSW Public Service Commission and Zip Co in Australia, Land Information New Zealand, the Norwegian Tax Administration in Norway and the Telegraph Media Group in the UK.
The company also noted how the pandemic has illustrated the value-add of its market-leading online reference check platform.
COVID-19 has “accelerated global demand for remote working and as a result, employers’ desire to improve governance is increasing and they are seeking improved ways to perform candidate verification”, Xref said.
And importantly, Xref is driving that growth through organic channels created via its own Xref Lite onboarding platform as well as strategic partnerships and acquisitions.
Those strategies have been carried out in line with a pivot away from less cost-effective direct marketing strategies.
The net result is that growth continues to scale with more profitable per-unit economics, as the cost of acquiring each new customer declines.
Xref’s leaner, more flexible business model saw cash outflows decline to just $2.8m in the June quarter, down from more than $5m in Q2 FY20.
Company CEO Lee-Martin Seymour said the positive momentum is a by-product of the management team’s maintained its focused to “reduce costs, grow sales and achieve break-even”.
“Despite the disruptions of COVID0-19 we have a robust growth strategy for FY21 and are excited about the coming year,” Seymour said.