Shares in Irish firm Engage VR slide as revenues disappoint

Delays in contracts in the Middle East led to the company underperforming on revenue expectations. 

Irish virtual reality software company Engage VR has said it expects its revenue for its 2024 financial year to fall below expectations due to delays in the finalisation of some larger contracts in the Middle East.

In a pre-close trading update published on Monday, the company said it expects to report revenue of €3.4m during 2024 — down from €3.7m in 2023. Shares in the company fell 8% following the trading update.

The company said this was due to “delays in finalisation of some larger contracts in the Middle East” and the “continued delayed deployment of the previously announced contract with a Middle Eastern client to the first half of 2025”.

During 2024, Engage Vr secured a number of contracts in the education and training sector “including a significant seven-figure contract with a large Middle Eastern client via the Group's partnership with PwC”.

“Client approval was finalised later than expected, but has now been completed, and full deployment is expected to begin in the first half of 2025. This means the remaining revenue associated with the contract of €0.4m not recognised in FY24, is expected to be fully recognised in 2025,” Engage VR said.

A significant contract was also expected to be finalised pre year end in the Middle East which would have led to the Group's revenue target being comfortably achieved but unfortunately this has been delayed into quarter one of this year.

The company said it expects to report a loss after various deductions of €4m “broadly in line with with market expectations as management focussed on operational efficiencies and strong cost control”. 

As of the end of December, its cash balance was €3.6m — down from €7.9m 12 months prior.

Outlook

Chief executive of Engage VR David Whelan said despite the contract delays, “we expect 2025 to be a strong year and remain confident in delivering our strategic objective of cash flow break even” this year.

“The education and training sectors will be the primary drivers of growth. Meta released the Quest 3S headset late last year which is a high-quality but affordable device ideal for education and training,” he added.

In its outlook, the company said it “anticipates significant growth opportunities through working with partners in the Middle East throughout 2025 and beyond in both education and training verticals”.

Engage VR said that it intends to publish its financial results for 2024 in May this year.