Quarterly Update: Strong Sales Growth & Record Revenue

Quarterly Report on New Client Wins and Strong Sales Growth

  • Revenue - $2.6 million - up 13%
  • Sales  - $2.7 million  - up 18.5%
  • Cash Receipts from Sales - $2.9 million - up 19%
  • Cash Expenses - $3 million - down 44% 
  • Cash Balance - $6.7 million

Xref Limited (ASX:XF1), the human resources technology company, today reported a successful second quarter of trading. Group revenue was a record of $2.6 million, sales reached $2.7 million and cash receipts from sales were also strong at $2.9 million for the quarter.

New clients acquired in the quarter contributed 15% of total sales achieved. New clients in Australia included Woolworths, The Department of Education (NSW), DHL Express and Think Childcare. In the United States & Canada new clients included IRET, Cost-U-Less, Compugen Inc and Friendship Public Charter Schools. In Europe ByrneLooby, Luminate and Norwegian Air in Europe were won. Details about these companies can be found in the appendix.

Record Revenue (Credit Usage) 

Xref credits used during the quarter totalled $2.5 million and, together with a RapidID net revenue of $0.1 million, contributed to a record quarterly revenue total of $2.6 million. Xref credit usage grew 13%, exceeding pre-COVID-19 levels and RapidID’s net revenue also grew 58% on the previous corresponding quarter (Q2 FY20).

group revenue growth graph

*  Xref credits are recognised as revenue when used

** RapidID Net Revenue is gross revenue less the cost of 3rd party checks

Xref’s continued focus on organisations within the ‘trust’ economy has continued to underpin revenues and support growth. The recovery of non essential service clients has resulted in growth of 112% since Q4 FY20 demonstrating a strong recovery back to pre-COVID-19 levels.

Credit usage bar graph

Xref credits used via integration partners grew by 42%, to $0.7 million, compared to Q2 FY20 and represented 28% of all credits used during the quarter.

Strong Sales Growth

COVID-19 has accelerated the global demand for remote working and, as a result, employers' desire to improve governance is increasing. Accordingly, organisations are seeking improved ways to perform candidate verification. Our reliance on outbound, direct sales activities is fast being replaced by inbound, marketing-led demand. As a result,  Xref witnessed a rise in inbound leads, in the most part, from channel partner integrations, Xref’s improved global digital strategy and the network effect generated through the numerous sectors and global regions Xref’s services are used in. Xref can acquire clients via its self-serve platform, its in-house enterprise sales teams or via its 30 channel partners.

Group sales reached $2.7 million during the quarter, up 18.5% on the previous corresponding quarter (Q2 FY20). New clients accounted for 15% of sales, while 14% came from Xref’s international offices in Europe and North America and 14% from RapidID.. Sales by Xref North America and RapidID grew by 40% and 206% respectively when compared to the previous corresponding quarter (Q2 FY20).

Q2 sales pie charts

Clients who joined Xref prior to FY17 accounted for 41% of sales during Q2 FY21 despite significant sales growth since then, demonstrating the Xref’s ability to retain and grow clients over time. Sales to new clients that joined within the quarter represented 15% of total sales, demonstrating Xref’s ability to acquire high value new clients. 

Q1 sales mix pie chart

Reduced Cash Outflows 

Since December 2019, Xref has scaled back event costs, travel, development costs, office leases and has reduced headcount from 98 to 60 people. This has driven a material reduction in cash expenses while continuing to support growth in sales. Cash outflows for the December quarter were down 44%, to $2.97 million, from $5.3 million in Q2 FY20. Cash receipts from sales were up by 19% on the prior corresponding quarter. Together with the remaining government COVID-19 subsidy, Xref was able to achieve an operating cash flow surplus of $127,000.

Cash flow bar graph

* Government COVID-19 subsidy payments finished in early October 2021. Total subsidies were: Q4FY20 ($376k) Q1FY21 ($461k) Q2FY21 ($184k)

Due to its strong recovery during Q2 FY21, Xref will no longer be eligible for the  Australian JobKeeper subsidy. The final subsidy of $184,000 was received in early October. Further growth in sales and revenues are expected to move Xref towards cash-flow break-even in H2 FY21.

Since November 2019, Xref’s primary focus has been on preserving cash and reaching cash flow break even. Key initiatives have included:

  • redirecting marketing efforts from sales support to online lead generation has led to a 66% reduction in marketing cost;
  • building efficiencies in the acquisition, onboarding, support and growth of clients has led to a reduction in headcount and in turn a 34% reduction in wages and salaries; and
  • adopting a working from home policy has reduced occupancy costs by 44% currently and a further 24% reduction is expected during H2 FY2021.

Cash on hand at the end of December was $6.73 million.

Product Investment 

Although Xref’s European and North American markets are continuing to be adversely impacted by the effects of COVID-19, Xref is preparing for the growth that is anticipated to come from millions of returning workers globally. Xref is working with some of its largest global clients to expand the current platform to support their future requirements. The enhanced platform will dramatically increase the global addressable market through provision of additional services, allow for 100% digital acquisition of new clients and add a subscription based ARR to the current credit-based model. During the quarter, Xref capitalised a proportion of internal and external development costs related to these platform features. 

Celebrating 10 Years of Building Trust

Staff Christmas photo, 10 year anniversary frame
 Sydney, Australia Xref Team during 10 year celebrations. 


Xref celebrated its 10 year anniversary during the quarter, including five years as a private start-up and five years as a publicly listed entity. In December Xref recognised the hard work of its team and made a record number of promotions across the global business to help lead the company in the future. More about the Xref journey to date can be found here

Most Highly Rated Reference Checking Platform - Globally

During the quarter, Xref was named a leader by G2 quadrant as the highest-rated solution and easiest to use. With a 4.7 star rating on G2, Capterra and Google, Xref is ideally placed to be found and trusted by new clients globally. 

 Xref G2 Winter 2021 awards

Business Update:  Investor Call - 19th January

Chief Executive Officer, Lee-Martin Seymour, will host an investor call to discuss Xref’s Q2 FY21 results on Tuesday, 19th January 2021 at 11:00 am AEST. The number for Australian investors is 1800 093 431 and for international investors is +61 2 8047 9393. The conference ID is 48770657#.

Management Comments: 

 Lee headshot

Executive director / CEO Lee-Martin Seymour said: “The results this quarter are testament to the sheer determination and hard work of the whole Xref team during the past 12 months. Achieving an operating surplus while growing our sales is achievement enough but adding integrations, new client wins and platform development is exceptional. We celebrated our 10 year anniversary in December and have started 2021 in our strongest position to date. We are now lean and keenly focused on bringing new products to market at a time when the opportunity is expanding.”

 Tim headshot

Executive director / CSO Tim Griffiths said: The strategic decisions we made years ago have helped Xref combat pressures brought about by COVID-19 in 2020 and have positioned us well for the opportunities it has created. Our platform features, credit model, integration strategy and global reach have held up well against one of the biggest disruptions to the global economy. A particular highlight has been the growth and success of RapidID, this quarter we have seen a material contribution in both sales and net revenue.”

 Brad headshot

Brad Rosser / Chairman said: ”Staying focused on the core business has seen the Xref management team navigate the pandemic well. As the world returns to the new normal, Xref can take full advantage of its ability to scale without additional cost to achieve positive operating cash flow.

Appendix 4C item 6 explanatory note

As required by listing rule 4.7C.3 the amount of $222k shown at item 6 within this quarters 4C is payment of directors fees & salaries to executive directors plus statutory entitlements.

Investor and media enquiries:

Presentation: xf1.com  

Investor Centre: xref.com/investor-centre

Twitter: @xf1

Email: investors@xf1.com

Authorised by the Board: Xref Limited (ASX : XF1)

Xref Limited, Suite 17, 13 Hickson Road, Dawes Point, Sydney NSW 2000 Australia 

Key points table

Appendix – New Clients 

Australia and New Zealand

The Department of Education (NSW) - Early childhood, primary school, secondary school, vocational, adult, migrant and higher education in the state of New South Wales, Australia.

DHL Express - Founded in 1969, DHL is the world’s leading logistics company. Employing 380,000 people in over 220 countries and territories.

Think Childcare in Australia - provides fair value childcare with the benefits of corporate ownership in the rapid growth and consolidation phase of the childcare sector in Australia. It employs more than 2,000 people across 78 Australian childcare centres.

Woolworths - Woolworths is an Australian chain of supermarkets and grocery stores owned by Woolworths Group. Founded in 1924 with 225,000 employees across 1,024 locations.

United States and Canada

IRET - IRET is a real estate company focused on the ownership, management, acquisition, redevelopment, and development of apartment communities. As of March 31, 2020, it owned interests in 70 apartment communities consisting of 12,135 homes.

Cost-U-Less - Cost-U-Less operates warehouse stores, offering discount food and general merchandise products to island communities in the South Pacific and the Caribbean.

Compugen Inc. - Compugen is a system integrator offering IT infrastructure products and services to medium- and large-sized corporations and government organisations. As of July 2020, Compugen employed 1,400 staff across Canada and the United States in 11 offices. 

Friendship Public Charter Schools - Friendship Public Charter School was founded in 1998 with a vision to provide families on the east side of Washington, DC with an opportunity for quality education. Today, Friendship Public Charter School has 11 campuses and serves more than 4,200 students.


ByrneLooby - Founded in 1998, ByrneLooby is an international firm providing world-class engineering solutions for unique and challenging construction projects.

Luminate - Established in 2018, Luminate is a global philanthropic organisation with the goal of empowering people and institutions to work together to build just and fair societies. To date, Luminate’s global work has supported 296 organisations, in 17 countries with more than $378 million in funding. 

Norwegian Air - is a Norwegian low-cost airline and Norway's largest airline. It is the fourth largest low-cost carrier in Europe and employs more than 10,000 people. 

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