Xponential IPO Listing (XPN) and Company Update

 

Highlights from the December quarter include:

XPON added a record $2.1m in ARR during the quarter with growth continuing to outstrip peers, up 148% YoY, placing it 2nd amongst 25 of the most comparable tech sector peers. XPON is currently trading on an EV/ARR multiple of ~4.1x, a 53.6% discount versus the sector average of 6.3x.

This implies fair value share price of ~34c while displaying the 2nd fastest YoY growth against its peer group.

  • Continued expansion in gross margins, with gross profit up 207% YoY

  • Eight new clients across AU and EU; zero churn

  • Exceptional unit economics demonstrate profitable growth:

    • Revenue retention up 12ppts QoQ to 131% as existing clients utilise more of XPON’s product stack

    • Lifetime Value (LTV) at $776K per customer, representing a CAC payback period of just seven months

Cash balance of $12.8m provides the capacity to continue executing its growth strategy, including additional investments in sales and marketing capabilities

 

Interim FY22 Results

XPN then released an exceptional set of FY22 interim results on Monday, 21 February 2022

1H FY22 vs. 1H FY21 highlights include:

  • Revenue up 213% to $6.2 million

  • Gross profit up 284% to $3.9 million

  • Gross profit margin up 12 ppts to 64%

  • During the half, XPON landed 16 customers and expanded 13 customers including Carsales, SunSuper, Latitude Financial and OFX group

With $12.8 million in cash (Dec 21) and unit economics that demonstrate rapid payback on marketing efforts, XPON is well placed to continue a strong growth trajectory

 

Whilst we are disappointed by the current share price, influenced by external factors currently, we believe Xponential will continue to post excellent results such as the last 2 quarters going forward (removal of 3rd party cookies, the size of the markets they operate in, their relationship with Google and how quickly these markets are growing) which will eventually result in their share price reflect the true value this fast growing, well run company deserves.

 
Brad Stewart