Company Interview / X2M powering to profitability by South Korea's smart cities

Key points:

Revenue surges and positive cash flow highlight operational success at X2M Connect (ASX:X2M)South Korea remains key, with further expansion into Australia, Japan, and UAE plannedAI-enabling solutions drive smart city transformation, including public safety devices in SeoulFocus on product simplification and deeper market penetration set to enhance margins and profitability

X2M Connect (ASX:X2M) has reported a robust performance for the half-year, according to chief executive Mohan Jesudason. Revenue growth reached 25% in Q1 and 65% in Q2, with gross margin up 63%. Operating expenses have been contained, and the business recorded positive cash flow, while materially reducing debt on its balance sheet. South Korea remains the cornerstone of operations, accounting for over 90% of business and serving as the incumbent operator for around 54–55 municipalities and cities. Jesudason highlights X2M Connect’s strategy of securing shareholder alignment by ensuring key personnel are shareholders, contributing to retention and performance.

The company positions itself as an enabler of artificial intelligence, supporting the smart city ecosystem across functions such as renewable energy management, street lighting, and public safety. Notably, X2M Connect launched a public safety device for Seoul, aiming to roll out one million units after securing a mandate for the first 100,000. Jesudason says the business model targets deep penetration with current enterprise and government customers, representing a significant addressable market and recurring revenues.

Geographic expansion is underway, with moves into Australia, Japan, UAE, and early state work in India and the US. Jesudason foresees margin improvements via ongoing product simplification, scaling, and leveraging existing channels, aiming for profitable, scalable global operations within five years.

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