The immersive technology market size continues generating traction with the market projected to reach US$159.94 billion in 2024, according to market research. In the coming years, it will continue increasing at a rapid rate to reach US$638.69 billion in 2028, representing a compound annual growth rate of 42.5 per cent.
Broadly speaking, immersive technologies connect users through visual and auditory information and most commonly include virtual and augmented reality.
Companies like Xcyte Digital Corp. (TSXV:XCYT) are revolutionizing the industry by providing a comprehensive solution for all event technology and managed services for immersive and virtual events.
In the last few months, the company has seen an upward trend in its revenue and continues to expand through a range of acquisitions. With 2024 nearing its end and 2025 in sight, Xcyte Digital just might be one company investors will want to watch.
To discuss its recent highlights, The Market Online caught up with Randy Selman, director and chief executive officer (CEO) of Xcyte Digital.
TMO: The company reported its Q3 Fiscal 2024 revenue for its June quarter. How was the company able to achieve nearly 130 per cent quarter-over-quarter revenue growth to US$463K for the quarter?
RS: The primary reason for the revenue increase during the quarter was attributable to our A+ Conferencing acquisition. Recall, we purchased the assets of A+ on April 3rd, 2024. In 2023, A+ generated US$1.4 million of revenue and normalized EBITDA of US$207K. As a result, A+ contributed approximately US$250K of revenues to our Q3 revenue.
TMO: Acquisitions have also been at the forefront of the company’s growth. How will these acquisitions contribute to Xcyte’s revenue growth in its next quarterly results?
RS: Our Q4 Fiscal 2024, which ended September 30th, 2024, will include contributions from our Webinar.net acquisition in addition to A+. We closed the Webinar.net acquisition on July 10th, 2024. In 2023, Webinar generated revenue of US$2.8 million and EBITDA of US$600K. We will report our Q4 financial results in January 2025. Due to the timing of these two acquisitions, in Q4 we expect to report significant quarter-over-quarter revenue growth relative to our Q3 revenue of over US$460K.
TMO: Do you anticipate additional acquisitions to contribute to Xcyte Digital’s revenue growth in 2025 and beyond?
RS: We operate in a fragmented industry, which provides us a great roll-up opportunity. In addition, many companies and myself have experienced success in rolling up synergistic targets. We have identified several more acquisitions that are expected to be completed in the near term, as well as others in the coming calendar year. We expect to benefit from executing on several roll-up opportunities.
TMO: Xcyte Digital also revealed the launch of its pioneering artificial intelligence (AI) powered technology, Intellibots, in October. How do Xcyte’s product offerings differ from the company’s peers in the space?
RS: Xcyte is the first company to offer a multi-platform subscription service backed by an entire ecosystem of partners, platforms and ancillary technologies, including AI. This approach enables us to provide a wide range of event technologies to meet the requirements of almost any client. Clients can choose from a robust set of technology platforms that cater to physical, hybrid, virtual and immersive events. Embellishing these event technologies, we have incorporated the latest in AI-driven event management and social interaction to deliver truly next-level solutions for our clients.
TMO: What milestones can investors watch for in the next couple of years?
RS: Look for several more acquisitions. Our “Xperience” multi-platform subscription service, which was launched in May 2024, should be scaled further over 2025 and beyond. These growth drivers combined should deliver financial results that will potentially qualify Xcyte to meet the requirements in order to up-list to a senior exchange.
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(Top image, generated by AI: Adobe Stock)