As artificial intelligence (AI) becomes central to most industries, AI marketing tech company Xpon Technologies (ASX: XPN) is ensuring it finds its place in the spotlight. To do so, the Company – which integrates data and AI to automate marketing processes – has onboarded new board members and clients. 

In Q3 FY24, Xpon’s MarTech revenue increased 5% on PCP, reaching $2.4 million. During this quarter, it acquired three new customers and expanded services for ten existing ones. Overall, Xpon achieved a gross margin of 75%, which is 2 percentage points higher than last year, largely due to a more profitable mix of MarTech revenue. 

However, compared to Q2 FY24, the margin decreased by 4 percentage points. That is primarily because a larger portion of its revenue came from projects with lower margins.

In the same period, Xpon saw a few resignations following the divestment of its UK CX business, the recent capital raise announced on February 26, 2024, and the cost reduction program it implemented. Non-Executive Chair Phil Aris and Non-Executive Directors Tim Ebbeck and Jodie Leonard resigned effective immediately.

To replace them, two new directors, Mark Simari and Jamie Olsen, joined the board.

Managing Director and Group CEO, Matt Forman, said, “Mark and Jamie join XPON at a time when we are building on our market position as leaders in marketing technology with industry leading AI capability. Their collective expertise in corporate strategy, M&A and technology will be invaluable as we explore new avenues for growth and innovation.

“I am excited about the future and confident that their leadership will help guide XPON towards achieving our strategic goals and deliver shareholder value.”

Martech revenue is nearing its all-time high, and the Company has reduced $5.8 million in annualised costs through past initiatives. As of March 31, 2024, the Annual Recurring Revenue (ARR) stood at $7.4 million, showing a Compound Annual Growth Rate (CAGR) of 39% over the past three years. 

AI is changing marketing, and its impact is expected to grow rapidly. XPON stands to benefit from this trend as AI tools drive efficiency through automation. The Company’s credibility in AI is cemented since it received the Advanced Data & AI Excellence award from Google Marketing Platform in December 2023. 

Plus, XPON’s ongoing efforts to modularise its Wondaris platform for prebuilt AI applications enable customers and agencies to swiftly deploy tools to meet growing AI demands. 

Forman added, “The strength in our core Martech business is underpinned by the disruption that AI is driving in the marketing industry and comes at an opportune time for XPON as our experience in harnessing and deploying data and AI places us at the forefront to facilitate this transformation.”

Going ahead, the Company’s priorities for the rest of the financial year are clear. It plans to leverage its AI marketing technology abilities and continue using Wondaris modules to drive sales and customer value. 

Additionally, it aims to drive organic revenue growth and profitability by leveraging its Google relationship for pipeline generation. Finally, it is exploring strategic M&A opportunities. 

As it undertakes this, it will continue to monitor and manage cost, aligning expenses with business performance to achieve cash flow breakeven in FY25.