ENGAGE XR Holdings Plc (AIM: EXR; Euronext Growth: EXR), a leading metaverse technology company, has today issued an update on trading for the 12 months ending 31 December 2022.

As reported at the Group's interim results in September, ENGAGE XR expected a positive end to the second half of the financial year due to the strength of its new business pipeline and the new services coming on stream following the launch of its fully featured corporate metaverse, ENGAGE Link in November. The Group increased its sales, marketing, and support teams to handle this expected demand.

Whilst performance over the full year has been positive with good growth in ENGAGE revenues there has been a slower than expected conversion of the Group's pipeline at the end of the second half of the year as customers have delayed making contract decisions in these challenging global economic conditions.

While interest remains strong in ENGAGE, the Board expects that the Group will be behind current market consensus expectations for 2022 in terms of revenue and EBITDA loss. The Board currently expects to report Group revenues for the year to 31 December 2022 of between €3.5m and €4.0m with an EBITDA loss of between €5.6m and €5.9m reflecting the increased headcount in the Group. ENGAGE revenues are expected to have increased by at least 70% year on year and now represent approximately 86% of the Group's revenues.

The Group expects the net cash position to be approximately €1.9 million as at 31 December 2022 (2021: €7.8m). The Board is evaluating the options available to it to eliminate discretionary spending and deliver cost savings while ensuring that the Group remains well-positioned to capitalise on the encouraging pipeline of opportunities for FY2023.

The Group will provide a further trading update in January 2023 following the end of the financial year to 31 December 2022.

David Whelan, CEO, ENGAGE XR, said: "ENGAGE platform revenues for 2022 have grown in excess of 70%. They continue to grow but at a slower rate than originally projected for the final quarter of this year. Our products are highly sought after by some of the world's leading companies, including KPMG, KIA, HTC, Meta and Stanford University to name but a few. However, the purchasing cycle has lengthened significantly during the final quarter of the year.

"While we are taking steps to cut costs and preserve our balance sheet, we are pleased our pipeline remains encouraging. This together with the positive response to the launch of ENGAGE Link, gives us optimism in the long-term prospects of the Group.

"We have been focused on building world-leading partnerships with companies and organisations rather than closing multiple smaller short-term deals during 2022. This focus on larger-scale opportunities that have taken longer to close has caused us to miss our overall revenue target for this year.

"The Group is currently working with 22 Fortune 500 companies and has a robust and growing pipeline already in place for 2023. The Board remains confident about the Group's growth opportunities in the next year and beyond.  This confidence is based on our ENGAGE platform revenues growing in excess of 70% during 2022 and our average deal size increasing more than 17% year on year. Despite the unique cost pressures this year, we have built a product that is selling, and our business model is working.

"Our ambition remains to become the enterprise platform of choice for metaverse applications, and we have seen increasing revenue from many of our current clients year on year. It is still early days however the core idea and functionality of our platform is starting to shine through, and we remain confident in our ability to deliver long term shareholder value."

Richard Cooper, Chairman, ENGAGE XR, said: "The Board remains highly supportive of the executive management team after their successes this year, and we back the difficult but appropriate actions to trim the cost base."

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

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About ENGAGE XR

ENGAGE XR Holdings plc (AIM: EXR; Euronext Growth: EXR) is metaverse technology company focused on becoming a leading global provider of virtual communications solutions through its new fully featured corporate metaverse, ENGAGE Link.

The Company also has a proprietary software platform, ENGAGE. ENGAGE provides users with a platform for creating, sharing, and delivering VR content for education, training, and online events through its three solutions: Virtual Campus, Virtual Office, and Virtual Events. 

EXR is listed on AIM in London and on the Euronext Growth Market in Dublin, a market operated by Euronext Dublin. 

For further information, please visit: www.engagexrholdings.com (LinkedIn: @Engage XR Holdings plc Twitter: @engage_xr)