xReality Group (ASX: XRG) says its subsidiary Operator XR has signed its first European defence contract, supplying an OP-2 virtual reality tactical training system to a Swedish military end-user within the Swedish Armed Forces.
The contract, worth about A$450,000, was executed through Swedish distribution partner Promoteq i Sandviken AB. xReality Group said 30% of the contract value will be invoiced on signature, with delivery scheduled for Q4 FY26.
Under the agreement, Operator XR will deliver an Australian-built OP-2 system configured for tactical training requirements. The company said the package includes software licences, integrated training hardware for use-of-force and tactical training scenarios, and ongoing maintenance and remote software support.
The deal gives the Australian company an entry point into the European defence training market at a time when Sweden is increasing defence spending. The company cited Sweden’s 2026 defence budget increase of 18% year-on-year to 2.8% of GDP, and a stated path to 3.5% of GDP by 2030.
xReality Group chief commercial officer Ben Smith said the contract represented the company’s first European customer and first deployment with a NATO member’s armed forces, following activity in North American and Asia-Pacific markets.
Promoteq business area manager Anders Hedqvist said the distributor selected Operator XR for VR tactical training and that it was seeing interest in Sweden and the Nordic region from defence, law enforcement and other public safety users.
The ASX release said the company’s board considered the deal material despite being below the value of xReality Group’s recently announced contracts, citing the strategic significance of securing a reference customer in Europe.
