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XOX Networks Berhad Q3 FY2025: Navigating Challenges with Strategic Shifts
Greetings, fellow investors and market watchers! Today, we’re diving deep into the latest financial performance of XOX Networks Berhad, a company that has been actively shaping its path in the event management, digital media, and financial solutions sectors. Their Third Quarter Report for the financial year ending 31 March 2025 (Q3 FY2025) has just been released, and it offers a mixed bag of results, highlighting both the ongoing challenges and the strategic adjustments the company is making.
While the quarter saw a dip in revenue compared to the immediate preceding quarter and the same period last year, the cumulative nine-month revenue shows a positive year-on-year growth. More importantly, a significant improvement in cash flow from operations points towards a healthier underlying operational efficiency. Let’s unpack the numbers and understand what’s truly driving XOX Networks’ performance and what their future holds.
Unpacking the Core Numbers: A Closer Look at Performance
XOX Networks Berhad’s Q3 FY2025 results present a nuanced picture. While quarterly revenue saw a decline, the cumulative performance for the first nine months of the financial year tells a story of overall growth. Let’s break down the key figures:
Quarterly Performance: Q3 FY2025 vs. Q3 FY2024
Comparing the current quarter with the same period last year, we observe a contraction in top-line revenue, primarily due to fewer projects in their event management segment. However, the increase in loss after taxation is notable, mainly driven by a tax expense incurred this quarter.
Q3 FY2025 (31 March 2025)
Revenue: RM1.94 million
Loss after Taxation: RM(1.37) million
Basic Loss per Share: (0.12) sen
Q3 FY2024 (31 March 2024)
Revenue: RM2.53 million
Loss after Taxation: RM(1.06) million
Basic Loss per Share: (0.09) sen
This translates to a 23% decrease in revenue and a 29% increase in loss after taxation compared to the same quarter last year. The tax expense incurred in Q3 FY2025 played a significant role in widening the loss.
Quarterly Performance: Q3 FY2025 vs. Q2 FY2025
A sequential comparison with the immediate preceding quarter (Q2 FY2025) also shows a decline, again primarily attributed to the event management segment’s lower revenue contribution.
Q3 FY2025 (31 March 2025)
Revenue: RM1.94 million
Loss after Taxation: RM(1.37) million
Q2 FY2025 (31 December 2024)
Revenue: RM3.67 million
Loss after Taxation: RM(0.97) million
Revenue decreased by 47%, and loss after taxation increased by 42% quarter-on-quarter. The report highlights a decrease in other income as a contributing factor to the higher loss this quarter.
Cumulative 9-Month Performance: FY2025 vs. FY2024
Despite the quarterly fluctuations, the cumulative performance for the first nine months of the financial year shows a positive trend in revenue, though losses have also deepened.
Cumulative Revenue Growth
For the nine months ended 31 March 2025, XOX Networks recorded a revenue of RM9.11 million, a robust 16% increase from RM7.83 million in the corresponding period last year. This indicates that while the latest quarter faced headwinds, the overall year-to-date sales have been stronger.
Cumulative Loss after Taxation
However, the cumulative loss after taxation for the nine months widened to RM(4.38) million, a 71% increase from RM(2.57) million in the previous year. This suggests that while the company is generating more revenue year-on-year, it’s also incurring higher costs or facing other financial pressures that are impacting its bottom line.
Segmental Performance: A Shifting Landscape
The company operates primarily across three segments: Event Management, Digital & Media Management, and Financial Solutions. The report provides a breakdown of external sales revenue for Q3 FY2025:
| Segment | Revenue (RM’000) – Q3 FY2025 | Revenue (RM’000) – Q3 FY2024 |
|---|---|---|
| Event Management | 838 | 2,056 |
| Digital & Media Management | 696 | 39 |
| Financial Solutions | 400 | 427 |
| Others | 3 | 6 |
| Total Consolidated | 1,937 | 2,528 |
The significant drop in revenue for the Event Management segment (from RM2.06 million to RM0.84 million) is the primary reason for the overall quarterly revenue decline. Conversely, the Digital & Media Management segment saw a remarkable increase in revenue, from RM39k to RM696k, showcasing strong growth in this area. Financial Solutions remained relatively stable.
Financial Health: A Glimmer of Hope in Cash Flow
While the profit and loss statement shows deepening losses, the cash flow statement reveals a positive development for XOX Networks.
Improved Operating Cash Flow
One of the most encouraging signs is the company’s ability to generate positive cash flow from operating activities. For the cumulative nine months, XOX Networks generated RM272,000 in net cash from operations, a significant turnaround from the RM(5.90) million cash used in operations during the same period last year. This indicates improved operational efficiency and better management of working capital, which is crucial for long-term sustainability.
Balance Sheet Snapshot
As of 31 March 2025, total assets stood at RM41.48 million, down from RM54.33 million on 30 June 2024. Total liabilities also saw a substantial reduction to RM3.07 million from RM11.54 million, largely due to a decrease in contract liabilities. This reduction in liabilities improves the company’s financial structure, even as total equity decreased to RM38.42 million from RM42.79 million.
Navigating the Future: Risks and Strategic Directions
XOX Networks is acutely aware of the dynamic landscape it operates in, especially within the event industry. The report outlines several ongoing challenges, particularly concerning concert management:
- Sustainable Business Model: A continuous challenge in sourcing sustainable business models, securing funding, and rebuilding audience trust in the post-pandemic era.
- Artist Availability & Competition: Scheduling conflicts and changing touring preferences of artists can significantly impact concert lineups, pricing, and intensify competition among promoters for top talent.
- Evolving Regulations: The need to comply with constantly evolving health and safety protocols, as well as tax requirements, adds layers of complexity and cost.
- Environmental Footprint: Increasing pressure to adopt sustainable practices and reduce environmental impact through investments in eco-friendly technologies and waste reduction at events.
In response to these challenges, XOX Networks is adopting a proactive strategy. The company plans to shift its focus towards:
- Owning Event Intellectual Property (IP): Organizing more events where they own the intellectual property associated with the event concept, brand, and content. This could provide a more stable and recurring revenue stream.
- Exploring Corporate Events: Expanding into corporate events such as product launches and client appreciation events, which may offer more predictable demand compared to large-scale public concerts.
- Innovating Digital & Media and Financial Solutions: Continuing to expand and innovate in its Digital & Media Management and Financial Solutions segments. The strong growth in Digital & Media Management this quarter underscores the potential of these diversified business units to contribute significantly to the Group’s future.
These strategic shifts aim to mitigate risks in the volatile concert industry and capitalize on growth opportunities in other promising segments.
Summary and
XOX Networks Berhad’s Q3 FY2025 report reflects a company in transition, actively adapting to market realities. While the quarterly revenue dip and widening losses are a concern, the positive cumulative revenue growth for the nine-month period and, more importantly, the significant turnaround in operating cash flow are encouraging. The substantial reduction in total liabilities also points to improved financial management.
The company’s strategic pivot towards owning event IP and focusing on corporate events, alongside continued innovation in digital media and financial solutions, seems a sensible approach to build resilience and foster long-term growth. This diversified strategy aims to reduce reliance on the more volatile concert industry. Investors should closely monitor the execution of these strategies and the performance of the growing Digital & Media Management segment.
However, it is important to acknowledge the following key points:
- The Event Management segment continues to face significant challenges, impacting quarterly revenue.
- Despite cumulative revenue growth, the company’s losses have deepened year-on-year, indicating ongoing profitability challenges.
- No dividend has been proposed for the financial year under review, reflecting the company’s current focus on internal investments and financial stability.
