Research note


XMReality: Regarding new customer

Today, XMReality announced a software order from a new customer. The customer, Minebea Intec, is a manufacturer of industrial weighing and inspection products which has decided to implement Remote Guidance in its service offering. We believe that the deal clearly illustrates the value of adopting Remote Guidance and that there is good potential for increased sales of software licenses.

Minebea Intec is a manufacturer of industrial weighing and inspection products. The company, headquartered in Germany, has about 1000 employees and operations in over 65 countries. XMReality announced that Minebea Intec has decided to implement Remote Guidance in its service offering, which implies that it thereby will act as a reseller of the solution (as Minebea Intec will offer the solution to its clients).

Today’s announced order consists of Point pads and software licenses. XMReality mentions that the order value of the software licenses is approximately SEK 0.4m during 2018 and 2019 (annual recurring revenue). If our price estimates are correct, this should correspond to around 40-60 licenses. As XMReality only mentions the estimated software order value, we believe that the revenues from hardware (point pads) are minor.

Minebea Intec has announced that it will brand the solution as “miRemote”, which will offer “turbo-charged service” to its customers. It is thus clear that the customer sees great value in providing instant service remotely and thereby reducing or preventing disruptions for its clients. It further indicates that adopting Remote Guidance is a way to differentiate and strengthen companies service offerings, which, in this case, is illustrated by the rebranding and announcement of fair demonstrations of the solution.

XMReality stated that Minebea Intec initially will be offering the solution within seven European countries. There should thereby be potential for an increased user base as 1) its customers in the seven countries decide to use the solution and 2) if Minebea Intec takes its miRemote offering to additional countries.

An interesting remark is that the new customer started to evaluate Remote Guidance during the spring, indicating that the evaluation period before deciding to adopt the solution was shorter than usual. Minebea Intec has further delivered a significant amount of products worldwide and should have a broad base of potential Remote Guidance users.

Slowly but steadily, XMReality’s base of recurring revenue is increasing. Although the order value of today’s deal will not imply any shocking revenues in the short-term, we find the news positive as it highlights the value of adopting Remote Guidance while also bringing a potential for greater software revenues in the future. 

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