Xref : Strong quarter tops out $10m sales in the first half, up 96%

ASX Announcement/Press Release: 27th January 2022

Xref Limited (ASX: XF1)

onlyQuarterly Update: Strong quarter tops out $10m sales in the frst half, up 96%.

• Sales - $4.6 million - up 71% on the previous corresponding quarter
• Revenue - $4.3 million - up 65% on the previous corresponding quarter
• Cash Receipts - $4.7 million
• Cash Surplus - $0.2 million

useHuman resources technology company Xref Limited (ASX: XF1), ('Xref' or 'the Company') is pleased to r port another strong trading performance during the second quarter of the Company's 2022 fnancial year (Q2 FY2022). Unaudited results for the quarter show sales of $4.6 million and strong cash receipts at $4.7 million. Revenue also reached $4.3 million, up 65% on the previous corresponding period.

Xref achieved $10 million in sales for H1 FY2022, up 96% on the previous corresponding half. Revenues totalled $8.2 million for H1 FY2022, up 68% on the previous corresponding half.

personalS les & Marketing Performance

T king into account the seasonality inherent in Xref's business, the Company's growth trajectory continued throughout H1 FY2022. The fscal frst half is traditionally the Company's lowest sales period due to seasonal fuctuations in the Australian recruitment sector following the fnancial year-end and the summer holiday season in the Northern hemisphere.

Group sales reached $4.6 million during the quarter, up 71% on the previous corresponding quarter (Q2 FY21). Sales (gross revenue) by RapidID grew by 173% to $1.1m when compared to the previous corresponding quarter (Q2 FY21).

During the pandemic, Xref has been successful in signifcantly increasing the digital acquisition of new clients, reducing reliance on traditional sales team outreach. Xref has improved all marketing metrics relating to efectiveness and lead generation with the continual optimisation of channels and marketing investment, resulting in a 50% reduction in marketing spend compared to pre-pandemic levels and a 362% increase in lead fow, with 1,600 leads captured in Q2 Fy2022. Sales have increased as a result by

For109%. Invoice value, client size, initial adoption and sales cycle periods have all improved as we c ntinue to execute our digital marketing strategy.

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New notable clients introduced during the quarter include: Think Childcare Australia, The University of the Sunshine Coast, Chartered Accountants Australia and New Zealand, Fortescue Metals Group, St Vincent's Health Australia, Rabobank and Downer in Australia and New Zealand; Prison Advice and Care Trust, DHL Global Forwarding, Wolves Football Club in the UK; The University of British Colombia, Trulioo, Vaco, Cornwall Hospital and Evangelical Lutheran Church in North America. Further information

onlyabout these new clients follows as an appendix.

C ient Retention

Clients who joined Xref before FY17 accounted for 13% of sales during Q2 FY22 despite signifcant sales growth since then, demonstrating Xref's ability to retain and grow its share of clients' business over time. Clients joining Xref during FY22 to date represented 16% of total sales during the quarter, demonstrating Xref's ability to also acquire new, high-value clients.

usepersonalGroup Revenue

Xref credits used during the quarter totalled $3.8 million and, together with RapidID's net revenue of $0.5 million, contributed to a record quarterly revenue of $4.3 million. Xref credit usage grew 52% and RapidID's net revenue grew 363% on the previous corresponding period. RapidID's net revenue grew faster than gross revenue as a result of further bulk discounts from 3rd party vendors and therefore a la ger margin was achieved, this will continue with scale.

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* Xref credits are recognised as revenue when used

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

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Christmas Period Recovery Rate

Xref monitors hiring recovery rates and hiring trends to predict the resilience of the industry and forecast activity. Historically, Australian clients do not operate at peak credit usage levels over the six week period from Christmas/New Year through to the Australia Day public holiday at the end of January. However, just fve weeks after the latest Christmas/New Year break, revenue as a result of

onlycredit usage had already achieved 96% recovery, representing a very promising start to the new calendar year in Australia. In the Northern Hemisphere, Christmas and New Year holidays are shorter and, over time, the Group expects its geographic expansion will result in less seasonality in overall usage.

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Product Investment

Xref is working with some of its largest global clients to expand the current platform and develop the Xref Marketplace to support their future requirements. The enhanced platform will dramatically increase Xref's global addressable market through the provision of additional services, allow for an

entirely digital new client acquisition process and add a subscription-based ARR to the current
cr	dit-based model. During the quarter, Xref capitalised a proportion of internal and external
d	velopment costs related to these new platform features. Further information about these revenue

streams follows as an appendix.
personal	Xref Revenue Streams

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Xref Marketplace Q2 FY2022

Revenue Stream	Revenue	Growth
Additional Checks	$488,000	364%
(Incl. Rapid ID)
Xref via Wholesale	$70,000	100%
Xref via API	$1,200,000	71%

Xref Platform Q2 FY2022

Revenue Stream	Revenue	Growth
Reference Checks	$2,600,000	45%
Pulse Checks	In Development
Exit Surveys	Launched Q2 2021

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Cash Collections, OPEX and COGS

Cash collections were $4.7m in the quarter, up 62% on Q2 FY2021. OPEX increased 16% with the addition of further headcount and increases in wages and salaries. OPEX remains 40% lower than pre-pandemic levels and is expected to remain relatively fat. COGS of $1.1m during the quarter included commissions paid to sales staf in Xref and the associated cost of 3rd party checks via RapidID. It is expected that as

onlyXref grows its subscription base and RapidID attracts volume discounts, COGS will reduce.

use Cash Surplus

personalThe cash fow surplus for the current quarter was $0.2 million (excluding $1 million received from the exercise of warrants) and cash at the bank on 31st December 2021 was $10.5 million. Cash surplus for

H1 FY2022 is $1.4 million compared to a $1.2 million defcit in H1 last year. Xref has now achieved three consecutive quarters of positive cash fow and has traded proftably for the full 2021 calendar year (unaudited).

Business Update: Investor Call - 27th January

Following the release of its Quarterly Activities Report and Appendix 4C for the December quarter, Chief Executive Ofcer, Lee-Martin Seymour, will host an investor call to discuss Xref's Q2 FY2022 performance on Thursday, 27th January 2022 at 11:00 am AEDT. The number for Australian investors is 1800 093 431 and for international investors is [phone]. The conference ID is 31533185#. For a full list of toll-free international dial-in numbers for all regions please click HERE.

Management Comments:

Executive Director / CEO Lee-MartinSeymour said: "We are starting to see historical Australian Forseasonal fuctuations reduced by stronger demand in the sector and the growth of both RapidID and ur overseas operations. While only halfway complete, we have already built a strong foundation for FY2022. Both new business demand and current client usage during the holiday season has been unprecedented and suggests that our Q3 and Q4 FY2022 performance will be strong. In tandem, we are preparing to launch products to grow the marketplace and platform subscriptions. It is a very

exciting period in our growth journey."

Chairman / Tom Stianos said: "These results demonstrate Xref's continued ability to maintain proftable whilst investing in growth. We have a clear growth strategy and we can now execute this faster with our improved platform and operating metrics. With Xref's frst half performance exceeding expectations as the market demand powered strong growth in sales, we are now re-evaluating our goals."

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Appendix 4C item 6 explanatory note

As required by listing rule 4.7C.3, the amount of $175,000 shown at item 6 within this quarter's 4C is payment of directors fees and salaries to executive directors, plus statutory entitlements.

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For further information:
Xref Limited	Media & Investor Enquiries
Lee-Martin Seymour	The Capital Network
Founder, CEO, Director	Julia Maguire
E:[e-mail]	E:[e-mail]
M: [phone]	M: [phone]
Authorised by the Board: Xref Limited (ASX : XF1)
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About Xref

Xref is a reference checking and identity verifcation platform that empowers organisations worldwide to make great people decisions.

Xref's fully automated online reference checking platform allows employers to request one or multiple personalreferences in minutes and receive fast, honest feedback within 24 hours. Xref also enables employers

to know who a candidate really is with RapidID, Xref's biometric identity verifcation solution.

Xref is the reference checking platform of choice globally. The company understands the talent and human resources markets and is currently working with some of the largest organisations in the world t develop new products that will provide unique employment insights.

In the future, Xref plans to extend its platform across the full hire to retire journey, dramatically increasing its addressable market and allowing organisations to reap the benefts of Xref across their businesses.

To learn more, please visit:

Website: xref.com

Investor Centre and Presentation: xf1.com

Twitter: @xf1

ForEmail: [e-mail]

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

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