X2M CONNECT LTD (X2M) - Scaling Smart Utilities With AI

What if the backbone of smarter cities isn’t a shiny app, but a quiet layer that connects every meter, sensor and inverter into one brain? We sit down with X2M Connect CEO Mohan Jesudason to unpack how a device‑agnostic platform gathers data at scale, feeds AI, and then reaches back to control critical infrastructure without human intervention. From leak detection and automated billing to balancing renewable energy and boosting public safety, the story is about outcomes, not dashboards.

We dive into X2M’s expansion into Japan’s ageing water market, partnering with a leading local meter manufacturer to turn vast installed bases into high‑margin SaaS revenue. With more than 90% gross margins on recurring fees per device, even a small slice of Japan’s roughly 60 million meters becomes meaningful. Mohan shares how Korea’s utility market, where X2M is the incumbent, continues to accelerate through repeat orders and a broader product lineup, while channels strengthen in Australia, the UAE, and Taiwan’s renewable‑energy AI segment.

Financially, the company reports a 65% year‑on‑year Q2 revenue lift to $2.8 million, positive operating cash for the quarter, and a bolstered balance sheet aided by an R&D rebate and a $3 million capital raise. That capital is earmarked for growth and debt reduction as the business moves deeper into “horizon three” — scaling from a small enterprise to a substantial, cash‑generating operation. We also spotlight “Help Me,” a coin‑sized public safety device now rolling out in Seoul. Press it, and CCTV operators, police, and nominated contacts receive instant location and alerts, showing how smart city infrastructure can deliver real‑world safety in seconds.

Across 12 to 24 months, the focus is clear: harvest value from 88 enterprise and government customers, penetrate new markets, and scale three core products — utility monitoring, public safety, and hybrid AI for renewables. If data is the new infrastructure, the platforms that move it fast and act on it reliably will define the next decade of urban life. Enjoy the conversation, and if it resonates, follow the show, share this episode with a colleague, and leave a quick review to help others discover it.

Transcript

Andrew Musgrave

Welcome again to ASX Briefs, the podcast where we bring you insights from leaders of ASX listed companies. And today I'm joined again by Mohan Jesudason, the Chief Executive Officer at X2M Connect Limited. X2M is an Australian Internet of Things technology company delivering AI-powered solutions that enhance productivity, reduce costs, and improve public safety for utility and government customers. 
 
 Mohan, thanks for joining me again and welcome back to the podcast.

Mohan Jesudason

Good to touch base again.

Andrew Musgrave

Okay, now Mohan, it's been quite a while since we last spoke, but for investors that may be new to the X2M story, can you give us an overview of how your platform connects critical utility infrastructure, and the role AI plays in your current product families?

Mohan Jesudason

We're a technology company. Our business is connecting, in our case, sensors and meters and solar panels and inverters onto our platform. Our speciality is that we can connect any device onto the platform. We can take control of them, and we can have them control all each other without human intervention. And a lot of these meters and sensors and inverters, they come today with the ability to communicate, much like a mobile phone. And where they can, we can put it onto our platform, just like when you get a new phone, you put a sim in & off you go. Where they can't, then we have a little chip that we can integrate into that endpoint, you know. Let's say into integrate into a water meter, and then we can collect data from it and then go back and control it. And you know, and it's very simple, very straightforward. We're connecting you know many, many devices every hour in our company now. It's role in AI. Now, as your listeners would know, AI comes in many, many different forms. In the renewable energy, utility, public safety space, actually everywhere, AI relies on data. And the unsung heroes in the space are those platforms that can collect data efficiently and cheaply and dispatch them quickly and then go back and control end instances efficiently. And that's what we do. So, you know, so we're benefiting from the explosion in demand for data because we collect data from sensors and meters and inverters and solar panels uh very cheaply, very quickly, and we can go back and control those inverters and meters without any human intervention, and we can do that, in our view, better than most.

Andrew Musgrave

Okay, and today you've announced a capital raise of three million dollars. So, can you walk us through the purpose of this and the how the company will use these funds?

Mohan Jesudason

The purpose is we announced late last year that we'd enter the water market in Japan. Water is our sweet spot to, you know, it's 90% of our revenues. So, this is monitoring of water meters, detecting leaks, automating billing and public safety aspects that go with it. You know, Korea is our key market there.  Japan, the water infrastructure is aging. And they've got something like 60 million water meters in Japan. And uh and we've entered that market in partnership with one of the largest meter manufacturers in that country. And we're the technology and software provider for them. And it's a very lucrative market. We've been in Japan monitoring gas meters now for five or six years. It's a natural extension of what we do, and of course, it's always very good when your existing customer wants to take the technology and expand it into other vertical markets. Just a small market share of the Japanese meter market ends up being a very, very profitable piece of business for us. It's all SaaS, software based, it's all recurring revenues, its high margin, over 90% gross margin business. So, every gas meter, every water meter and gas meter that our customer puts onto our platform, we get a monthly SaaS fee from, and it costs us very, very little to do that. And of course it ends up being very profitable you know, and Japan is a profitable market for us.

Andrew Musgrave

Okay, and you've reported a strong second quarter of FY26 with revenues reaching $2.8 million, up 65% on the previous corresponding period. So, what were the primary drivers behind this acceleration, particularly in the South Korean market?

Mohan Jesudason

Yeah, so when I took on running this company and the and its predecessor, well, almost 12 years ago, we had a three-year program, a three-horizon program, Andrew. Horizon one was to build a platform and commercialize it. Horizon two was to go on a land grab and lock in as many government and enterprise customers onto our platform. We've got about 88 of them, and they've got large consumer bases. We're now in Horizon three where we accelerate the business where take it to the next level. And what you're seeing is that playing out right now. So, most of our grades came out of Korea, not exclusively, every market grew and grew strongly. We over the last 12 months, we've broadened our product range, we've reduced the cost of our hardware, we've you know improved our margins, we've expanded our channels to market, we've strengthened our brands. You know, we're in Korea, we're the incumbent supplier. In the UAE, we're dealing with some of the largest building manufacturers in Japan, we're dealing with the largest meter manufacturer there. In Taiwan, you know, we're making really good headway in renewable energy AI applications. And what we're seeing is an extensive pipeline getting converted and a large customer base giving us lots of repeat orders. Our existing customer group have made the strategic decision to digitize their business. Most of them are utilities, water and gas utilities. And they are every week giving us orders for new product. And you know, about 30% of our revenues now are just repeat orders from existing customers. So, you know, it's part of a strategic program. We've told the market that we've already got about four million dollars of revenues contracted for this year. So, the first six months was 4.9 million, and at the end of January we said that, and we've got another 4 million already contracted to come on. So, really pleasing performance, it's being management one I want really good product, wrong channels, strong channels to market, a strong brand, good pricing, and we're expecting that momentum to continue on.

Andrew Musgrave

Okay, and you've also commenced the deployment of your Help Me public safety device in Seoul with an initial order of 100,000 devices. So, can you tell us about the potential for this vertical beyond the capital city?

Mohan Jesudason

Yeah, look, this is a really, really neat offering. So, you know, we how does this fit in what we're doing? What we do is actually we're providing technology for that whole smart city ecosystem. Help Me is a little widget. It's about the size of a 20 cent coin, about four times the width of it, and you're out somewhere and you're not feeling safe, you put pressure on that, and that immediately goes to the city's CCTV operator and the police to say, I'm in the middle of Seoul, I'm out from a nightclub, it's one o'clock in the morning, and I'm not feeling safe. And the CCTV camera operator focuses on you, tracks you, sends an alert to the police, and we take the mobile network and the CCTV network, and we give them an accurate location of where you are. And we also tell five other people that you might nominate that gee, I'm in trouble, and can it come get me? And here's where I am. Seoul have announced they're going to roll out a million of these. The first mandate was for 100,000 of them. We said we won that mandate. That product and application, you know, I can't think of too many markets you wouldn't want to take it into. Certainly, the Australian market is one that we will look at very closely to bring it here. We know we've got a law-and-order problem here. There are many, many devices, Andrew, that that that you can use to send off your mobile phone or your Apple phone to say, actually, I need some help, or other people with a gizmo around their neck, you know, that can monitor their movements. There's relatively little that sends an immediate notice to the police or to emergency services that says, I'm here and I'm in trouble and I need help now. And as you can imagine, you know, if we've got what we what are what I call young people on the move, you know, 16, 16, 17 to 21, 22-year-olds, it's you know, the worry zone for any parent. You know, uh, you know, where are my kids? Are they okay now? And etc., etc. And what this device does is it gives you peace of mind. And it's, I think, a much-needed public infrastructure.

Andrew Musgrave

Okay, and now just expanding on the financials, the company generated $1.7 million in net cash from operating activities during the second quarter of FY26. So, how is this performance, along with the $1.4 million R&D rebate, strengthened your balance sheet as you enter the second half of the year?

Mohan Jesudason

So, what you would have seen in our balance sheet over the last 18 months or so is a significant reduction in in our debt levels. So, you know, we've taken our debt levels from the high six-million-dollar mark down to about two million dollars. That has been an overhang, you know, I think uh on our share price. And we were keen to extinguish that. So, the aggregation of a capital raise we did last year and customer orders and getting you know prepayments on those customer orders provides us with capital for working capital and allows us to reduce our debt as well. And on that you know, as I said, we've just completed yesterday a cap raise. We were seeking three million dollars to fund growth, a new entry into the Japan water market, entry into the or upscaling the Australian market. And together with our R&D rebate, we will pay down you know most of the remaining debt that we've that we've got. So, you know, which puts the company in a really healthy position.

Andrew Musgrave

Okay, now your enterprise and government customer base grew by 10% to reach 88 clients this quarter. So, how much of your future growth is coming from new market entry compared to deepening penetration with existing large municipal customers?

Mohan Jesudason

Look, it's both. In fact, there's three levers that we pull in, and I call it about the end, right? So, we have 88 customers, as you said. They represent an addressable market for us of $600 million in excess of $600 million of upfront revenues, and about $40 million per annum recurring revenues. And our job, primary job is to harvest that base. That that's organic growth. Alongside that, the step up is going to come from penetrating deeper into the new markets that we're in. So, Japan water, Australia, the UAE would be examples of that. We're looking at India, we're looking at the US, and so deeper penetration of new markets. And we've got three really strong products that we've developed. But you know, one is in water electricity gas meter monitoring, the other is in healthy that we're talking about before, and the third is hybrid AI, which is data aggregation for AI application in the renewable energy space, and it's scaling up those products as well. So, they're the three beaches that you've got they've got for future growth, and they're traveling well.

Andrew Musgrave

Okay, Mohan. Now just to wrap things up, with approximately four million in contracted revenue yet to be recognized this year, what can shareholders look out for over the next 12 to 18 months and where do you see the company at that point in time?

Mohan Jesudason

Yeah, so a really good question. And Andrew, we stopped short of putting public forecasts out there. But let me say this to my earlier point. We're in horizon three of our journey. So, you know that that I said before, we had a three-phase model. Horizon three is about turning this from a small business to a substantial business. And so if you're looking at 12, 18, 24 months, you should expect to see good solid revenue growth, you should expect to see EBITDA losses continue to come down, you should expect to see cash burn coming down, and ultimately in this phase of our journey, we are looking to have a scale-up business, delivering profits, being  delivering cash flows and delivering cash. And that's our goal. And your readers know that that's not a risk-free ambition to have because not everything's under your control. But with I think that we've got really good, strong, solid building blocks in place. We've got product that works, we've got a brand that's known, we've got momentum in the business, we've got a large customer base to leverage from and give us reference points. And I'm really excited about the  next couple of years.

Andrew Musgrave

Okay, Mohan. Well, it's been great to have you back on the podcast today. So, thanks for your time, and we look forward to further updates from X2M in the upcoming months.

Mohan Jesudason

Andrew thanks for the opportunity.

Andrew Musgrave

That concludes this episode of ASX Briefs. Don't forget to subscribe, and we look forward to catching you on our next episode.