)
Sydney-based defence simulation company xReality Group (ASX: XRG) has reported accelerating momentum in its Operator XR training platform, posting third-quarter cash receipts of $5.6 million - up 62 per cent on the prior corresponding period.
The latest update helped xReality Group swing to positive net operating cashflow of $1.3 million for the quarter ending 31 March 2026.
Operator XR, the company's immersive simulation platform used by law enforcement and military customers, now accounts for about 70 per cent of total company receipts as the group pivots its business away from the leisure market.
XRG grew its customer base to 104 worldwide during the quarter, with 95 of those in the United States, adding 15 new customers in the three-month period.
The company, which also operates the iFLY Indoor Skydiving Our indoor skydiving facilities in Sydney and Gold Coast, specialises in building and operating immersive XR (extended reality) products and experiences with the portfolio including physical and digital simulation used across the enterprise, defence and consumer markets.
The March-quarter result marks a $1.64 million improvement in net operating cashflow compared with the same quarter last year, with year-to-date receipts reaching $17 million, up 31 per cent on the prior corresponding period.
Annual recurring revenue reached $7 million, up 67 per cent on the prior corresponding period, while year-to-date total contract value climbed to $10.1 million, up 24 per cent quarter-on-quarter.
The company's sales pipeline stood at $74.4 million at quarter's end, a 15 per cent increase on the previous quarter.
A key milestone for the quarter was XRG securing its first Mixed Reality product sale with the US Department of Defense, in a project valued at $5.6 million.
The contract positions the company within the broader global police and military simulation training market, which industry research firm Business Research Insights values at US$14.92 billion ($23.3 billion) in 2026 and projects will reach US$22.1 billion by 2035.
XRG's half-year results to 31 December 2025 underscored the latest growth trajectory, with revenue of $10.4 million up 41 per cent on the prior corresponding period,
EBITDA of $2.6 million up 190 per cent, and a profit after tax of $733,205 compared with a loss of $992,338 in the prior corresponding period.
XRG invested $1.7 million in extended reality product development during the latest quarter and hired 11 new staff, predominantly engineers, to support growing demand.
The company also opened a satellite office in Melbourne to complement its existing operations.
On the balance sheet, XRG closed the quarter with $2.7 million in cash.
XRG continues to wind down its legacy FREAK entertainment venues while reviewing strategic options for its iFLY indoor skydiving business, as it sharpens its focus on the higher-margin defence and law enforcement simulation vertical.
)
