Xref (ASX: XF1) has announced a significant turnaround in its FY26 Q3 results, reporting a substantial increase in annual recurring revenue (ARR) and positive EBITDA, signalling strong platform adoption and cost efficiencies.
Xref’s ARR for the new platform grew by a robust 54% year-on-year, reaching $10.6m, an indication of strong momentum in the company’s shift towards its updated hire-to-retire platform.
The new platform now constitutes a significant 97% of total sales in Q3, a considerable jump from 66% in the prior comparable period that highlights the successful transition away from legacy offerings.
Commercial momentum also improved, with leadflow increasing by 159% year-on-year, new opportunities rising by 63% compared to the prior comparable period, and the new pipeline expanding by 89% to $1.7m.
Cost-Cutting Helps Turn EBITDA Positive
Xref reported a positive EBITDA of $0.3m for FY26 Q3, an impressive 1,146% increase compared to the previous corresponding period that marks the company's return to profitability.
Operational expenses were diligently managed, seeing a 28% reduction to $4.6m during the quarter.
Management has projected a further decrease in Q4 operational expenses, expecting them to be $3.8m.
Additional annual savings of $700,000 are anticipated from discontinuing the Lahore development team extension, alongside improved Software as a Service (SaaS) procurement.
This underscores the company’s commitment to cost efficiencies.
Platform Adoption and Integrations Accelerate
Platform adoption continues to strengthen, with total active users growing by 72% year-on-year to 5,734, demonstrating increasing engagement with Xref’s hire-to-retire ecosystem.
Engagement growth was particularly strong in key survey features, with Pulse Surveys seeing a 326% increase in engagement and Exit Surveys recording a 366% rise.
These tools provide valuable employer intelligence throughout the employee lifecycle.
Strategic integrations with Teamtailor and HiBob were announced on 18 March, aiming to accelerate global adoption.
These partnerships target a combined ecosystem of 13,500 enterprise companies and 200,000 active recruiters.
Cash Position and Receivables
Cash receipts from customers for FY26 Q3 stood at $4.4m, representing a 10.3% decrease year-on-year.
Despite this, the company maintained a solid cash balance of $2.0m as of 31 March 2026.
Accounts receivable totalled $1.8m at the end of the quarter, with a healthy $1.5m aged less than 30 days a sign of efficient invoicing and collection processes.
Xref's latest results indicate a significant positive shift, with strong ARR growth and a turnaround to profitability driven by increasing adoption of its new platform and rigorous cost management.
The company's strategic integrations and product enhancements position it for continued momentum in the hire-to-retire market.
