How EPX Limited (ASX:EPX) Grew Revenue 11.4% and Slashed Cash Burn by 53% in Q1 FY2027

Sonal Goyal

03 November 2026 10:02 PM AEDT

How EPX Limited (ASX:EPX) Grew Revenue 11.4% and Slashed Cash Burn by 53% in Q1 FY2027

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Key Highlights

Unaudited statutory Revenue rose 11.4% on the prior corresponding period to $4.4 million in Q1 FY2027
Annual Recurring Revenue (ARR) stood at $17.6 million and Annual Contract Value (ACV) reached $19.3 million at September 2026
Operating cash outflow reduced to negative $0.3 million, a 53% improvement on the H2 FY2026 average quarterly run rate
A Partnership agreement was signed with Tech Mahindra, expanding EPX's technology offering and route to market in the UK and Europe

EPX Posts Its Strongest Q1 Revenue Growth in Several Years

EPX Limited (ASX:EPX), the ASX-listed energy monitoring and analytics company, opened its FY2027 financial year with revenue momentum that puts its path toward Cash Flow breakeven in sharper focus. The company's quarterly operating update for the period ended 30 September 2026 showed unaudited statutory revenue of $4.4 million, up 11.4% from $3.9 million in the prior corresponding period — the strongest first-quarter result the Business has delivered in recent years.

Recurring revenue accounted for more than 90% of Q1 FY2027 total revenue, a metric that underlines the quality of the company's income base. With 1,144 connected sites at September 2026, EPX's hardware footprint continues to serve as the foundation for its software and services revenue layer.

Cash Position Improves Materially

Perhaps the more significant development from the quarter is the sharp improvement in cash dynamics. Operating cash outflow came in at negative $0.3 million for Q1 FY2027, compared with an average quarterly run rate of negative $0.6 million across the second half of FY2026 — a 53% reduction. Quarterly customer cash receipts also rose to $5.0 million, up 12% on the H2 FY2026 average quarterly run rate.

These figures collectively suggest EPX is closing in on Operating Cash Flow neutrality, a threshold that would significantly alter the company's financing outlook. For a small-cap technology business, the ability to fund operations from customer receipts rather than Capital Markets is a material de-risking event.

Revenue Drivers: Rail, Education, and Reactivations

Revenue growth in the quarter was driven by three identifiable streams. The Great Western Railway (GWR) agreement, won through a competitive tender process covering an initial two-year term with a further two-year extension option, contributed higher revenue per site relative to prior arrangements. The TAFE contract, now fully operational and billed monthly, added a recurring education sector stream. Continued reactivation of Wattwatchers agreements — including Charter Hall Industrial, now billed monthly — rounded out the growth contribution.

The ACV figure of $19.3 million excludes approximately $0.3 million related to a terminated UAE contract, following a favourable court ruling for EPX. While the loss of that contract is a minor setback, the legal outcome provides some certainty around the matter.

Tech Mahindra Partnership Opens New Geography

The most forward-looking development in the quarter was the signing of a partnership agreement with Tech Mahindra, one of India's largest IT services firms. The partnership is designed to expand EPX's technology offering and open a route to market in the UK and Europe — two regions where energy monitoring regulation and sustainability reporting obligations are tightening.

Access to Tech Mahindra's established enterprise relationships and sales infrastructure could allow EPX to scale its UK and European pipeline without proportionally increasing its own headcount or cost base. Near-term pipeline opportunities of approximately $1–2 million are under active development, led primarily by existing customers looking to expand their deployments.

Risks

EPX's revenue base, while increasingly recurring, remains concentrated in a relatively small number of large contracts. The GWR agreement and the TAFE contract together represent a meaningful portion of quarterly revenue, meaning any disruption to those relationships would have an outsized impact. The UK and European expansion through Tech Mahindra carries execution risk, particularly given the complexity of navigating new regulatory environments and customer procurement cycles. Currency exposure on international contracts adds further variability to reported results.

What to Watch Next

The progression of the $1–2 million near-term pipeline opportunities will be the key metric to watch in Q2 FY2027. Any formal contract announcements through the Tech Mahindra channel would validate the partnership's commercial trajectory. Reaching operating cash flow positivity on a sustained quarterly basis remains the headline milestone for the business.

Sector Context

EPX operates in the energy intelligence and monitoring sector, a space that is gaining relevance as corporate sustainability reporting requirements intensify globally. Mandatory climate disclosures in Australia, the UK, and the EU are creating Demand for granular energy data at the site level — precisely what EPX's connected-site model provides. The company competes in a market where scale and data network effects matter, making its partnership strategy with large distribution players like Tech Mahindra a logical path to growth without proportional capital outlay.

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