Vection Technologies Locks in $3.5M Revenue and $0.8M EBIT With DXLabs Close
Vection Technologies (ASX: VR1) has completed its acquisition of Digital Experience Labs Pty Ltd (DXLabs), a transaction that adds $3.5 million in revenue and $0.8 million in EBIT to the group. The Vection Technologies DXLabs acquisition closed at 9:00am on 9 April 2026, delivering immediate earnings accretion through a fast-growing Australian digital transformation business.
DXLabs reported 39% year-on-year revenue growth for FY25. All staff are expected to be retained, including CEO Luis Nejo, who is committed to expanding the business across Australia and Asia. The acquisition strengthens Vection’s capability in the Asia-Pacific region whilst creating cross-sell opportunities between DXLabs’ automation expertise and Vection’s extended reality (XR) and artificial intelligence solutions.
Vection Technologies completes DXLabs acquisition, adding $3.5 million revenue
The completion follows announcements made on 29 September 2025 and 31 March 2026. DXLabs operates within the digital transformation and solutions sector, serving enterprise customers in government, insurance and adjacent sectors. The business specialises in helping organisations build, optimise, and scale operations through modern intelligence automation tools that complement existing technology stacks.
The transaction delivers two material benefits. First, it adds $3.5 million in annual revenue to Vection’s top line. Second, it contributes $0.8 million in EBIT, providing immediate earnings accretion rather than speculative future value. This represents earnings-based growth rather than revenue-only expansion, a distinction that matters for profitability metrics.
DXLabs’ growth trajectory has been robust. The 39% year-on-year revenue increase for FY25 indicates strong market demand for its automation and integration services. Integration is expected to complete within one month, suggesting limited operational disruption. The expected retention of all staff, particularly CEO Luis Nejo, preserves institutional knowledge and client relationships that underpin the business’s performance.
For investors, the acquisition demonstrates execution of Vection’s stated growth-by-acquisition strategy. The company has acquired a profitable, growing business with established enterprise clients rather than pursuing earlier-stage opportunities with longer payback periods.
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Transaction structure and consideration breakdown
Vection issued 63,109,756 fully paid ordinary shares as upfront consideration, valued at $2.07 million. The shares were issued under the company’s existing ASX Listing Rule 7.1 capacity, requiring no shareholder approval. The upfront consideration represents 2.8 times EBIT, a valuation multiple that sits below typical software acquisition benchmarks when adjusted for growth rates.
Of the upfront shares issued, 18,292,683 are subject to escrow for up to three years. These escrowed shares will be released in three tranches and represent the sole recourse for warranty and indemnity claims. This structure limits the sellers’ exposure whilst providing Vection with security against potential breaches.
A performance-based earn-out mechanism applies, capped at $2.1 million and payable in Vection ordinary shares. The earn-out is tied to DXLabs achieving between 75% and 150% of its FY2025 EBITDA performance in FY2026, measured against a target EBITDA of $0.55 million. Payment, if triggered, is expected by 30 September 2026, with the share price determined using the five-day volume-weighted average price (VWAP) ending five ASX trading days before Vection’s 30 June 2026 results.
| Component | Amount | Payment Method | Conditions |
|---|---|---|---|
| Upfront consideration | $2.07 million | 63,109,756 VR1 shares | Issued under Listing Rule 7.1 capacity |
| Escrowed shares | 18,292,683 shares | Released in 3 tranches | Up to 3 years escrow; recourse for warranty claims |
| Earn-out range | $300,000–$2.1 million | VR1 shares | Based on 75%–150% of FY25 EBITDA vs $0.55m target |
| Advisory fee | 6% of total consideration | VR1 shares | Payable to advisers |
The earn-out structure aligns the sellers’ interests with ongoing performance whilst capping Vection’s total consideration if performance targets are missed. Standard net debt and debt-like adjustments apply at closing, including treatment of payables exceeding 120 days and overdue fiscal obligations, with ATO payment plans excluded from adjustments.
What is digital transformation and why enterprise clients pay for it
Digital transformation refers to the process of integrating technology into business operations to improve efficiency, reduce costs, and enable scalability. Automation tools allow organisations to complete tasks without manual intervention, whilst no-code integration platforms enable different software systems to communicate and share data without custom programming.
DXLabs specialises in helping businesses build, optimise, and scale operations through these tools. The company’s services create value by reducing operational friction, eliminating repetitive manual processes, and enabling faster decision-making through better data flow. Enterprise clients in government, insurance, logistics, and lending pay for these solutions because operational inefficiencies in large organisations carry material cost impacts.
No-code platforms have become increasingly relevant as organisations seek to reduce reliance on scarce technical resources. These platforms allow business users to configure workflows and integrations without writing code, accelerating implementation timelines and reducing ongoing maintenance requirements.
DXLabs partners with established enterprise technology vendors to deliver its solutions:
- Workato
- Decisions
- ServiceNow
- AWS
- Microsoft
- Riverbed
The company has published case studies for clients including Money3, Fidelity Life, and Solution Underwriting (CFC) across Australia and New Zealand. These clients operate in regulated industries, which typically demand longer engagement cycles and more rigorous compliance requirements than small and medium enterprise (SME) clients. Regulated sector contracts tend to exhibit higher renewal rates and greater resistance to discretionary spending cuts during economic downturns.
For Vection, DXLabs’ automation expertise complements rather than competes with the company’s existing XR and AI capabilities. Extended reality solutions help organisations train staff and design products in immersive environments, whilst automation platforms optimise the operational processes that support those activities.
Cross-sell opportunity and APAC expansion thesis
The strategic rationale centres on combining Vection’s spatial computing and AI solutions with DXLabs’ automation and integration expertise. Vection now has direct access to DXLabs’ live enterprise customer base, creating opportunities to introduce XR training solutions, digital humans, and AI-powered platforms to organisations already paying for digital transformation services.
Luis Nejo’s commitment to grow the business across Australia and Asia provides continuity in client relationships whilst expanding market coverage. Vection has historically generated significant revenue from European and US markets. The DXLabs acquisition provides an established platform to accelerate revenue contribution from the Asia-Pacific region, supported by an on-the-ground Australian delivery team with existing enterprise client relationships.
Three specific cross-sell pathways have been identified:
- Introducing Vection’s XR training solutions to DXLabs’ government and enterprise clients, particularly where organisations require compliance training, operational simulations, or remote collaboration tools.
- Offering DXLabs’ automation platforms to Vection’s existing enterprise relationships, enabling clients to optimise workflows that support their XR and AI implementations.
- Creating combined AI and automation offerings for new enterprise pursuits, positioning the group as a full-stack digital transformation partner rather than a point solution provider.
Government clients represent a particularly attractive cross-sell opportunity. These organisations typically require multiple technology vendors to meet diverse operational requirements. A vendor capable of delivering both immersive training solutions and back-office automation reduces procurement complexity and integration risk.
The acquisition also strengthens Vection’s capability in automation-driven industries including insurance, logistics, and lending. These sectors have demonstrated sustained investment in digital transformation despite broader economic uncertainty, driven by regulatory requirements and competitive pressure to reduce cost-to-serve metrics.
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Next steps and investor considerations
Integration is expected to complete within one month. Vection will lodge an Appendix 2A with the ASX documenting the shares issued as part of the transaction. The shares were issued under the company’s existing Listing Rule 7.1 capacity, which allows issuance of up to 15% of issued capital in any 12-month period without shareholder approval.
The earn-out determination will occur following the completion of FY2026 results. DXLabs must achieve EBITDA performance between 75% and 150% of its FY2025 result, measured against a target of $0.55 million. If performance thresholds are met, the earn-out payment is capped at $2.1 million and will be paid in Vection ordinary shares by 30 September 2026.
Key dates and milestones:
- 9 April 2026: Acquisition completed
- Within one month: Integration expected complete
- 30 September 2026: Earn-out payment determination (if applicable)
For investors, the tight integration timeline and performance-based earn-out structure mean FY26 results will provide important confirmation of DXLabs’ performance within the Vection group. The acquisition adds immediate revenue and profit contribution, but the earn-out mechanism links additional consideration to sustained performance rather than historical results alone.
The transaction’s structure provides downside protection through escrowed shares and a capped earn-out, whilst the 2.8 times EBIT multiple for upfront consideration sits below software sector averages when adjusted for DXLabs’ growth trajectory. Whether the acquisition delivers value will depend on retention of existing clients, successful cross-sell execution, and integration efficiency over the coming quarters.
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