ActiveOps Plc (AOM) Earnings Call Transcript & Summary

Good morning, and welcome to the ActiveOps Plc Interim Results Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to Executive Chairman, Richard Jeffery. Good morning to you.

Good morning, and thank you, and welcome, everyone, to this half year results from ActiveOps. As usual, we try to make it as interesting and colorful for the business, but we do welcome questions as well. So do either put them online and Paul will pick them up at the end as appropriate. We've got quite a strong message, I think, to convey today, the headlines are very good for the business, and there's a lot to be excited about. So in the course of the next sort of half an hour of actual delivery that Emma and I will talk through effectively the headlines of our positioning. We'll talk about the actual financial results. And I'll then finish up with our sort of fundamental strategy and some of the ambition in the coming time. So off we go. I think what I want to start with today is highlighting the fact that just recently, and many people on the call may have actually attended, we did a Capital Markets Day, and that was something about really unlocking the full aspiration of ActiveOps. This is not something we've done before. But in that day, we put out our sense now of where we're heading as an organization, and that's in financial terms, heading towards the achieving GBP 100 million of ARR and a 25% EBITDA company. And for reasons I can go into, but there's much more available on the investor website on that day, we think that's a kind of logical progression of where we are. So the whole underpinning of the sort of velocity of that is reflected in our half year results, which we'll spend more time on today. So for those of you who are familiar with ActiveOps, I'll spend a bit of time just explaining where we fit in the sort of ecosystem of SaaS software. Our customers are large banks, insurance companies or other organizations with lots of administration. And by consequence, lots of different things that people are doing in different teams, different products, different functions, banks, insurance companies with thousands of people, but thousands of people doing different things in different teams. And they have systems that, again, you may have heard of like workflow tools such as Appian or Salesforce and systems of record of people like Workday or People and SuccessFactors. And those are kind of different universes where you have the work going on and you have the people doing the doing. And ActiveOps sits at the intersection of those 2 types of organization -- 2 types of computer software, where organizations have need to stitch it all together to say how much time have people got, how much work can be done. And whether it's a team leader this week, next week or a departmental or indeed the strategic operation of the business in terms of how they configure the business, what the future looks like. And really, that's the sort of secret sauce of ActiveOps. We give people control. We give them visibility of the data, but we process it and we present it in a form that supports that decision intelligence that they so critically need. Now the interesting thing for ActiveOps right now is that's becoming more of a -- sort of companies are becoming more self-aware. The impact for us of AI, robotic process automation, process mining, these are all labels that our customers are wrestling with and trying to implement value from is making their world more complicated to run. And that speaks directly to the tooling and the support ActiveOps provides. So with our support, with our technologies, organizations are not only able to perform better, but they're also more able to exploit and be certain about those really expensive investments they're also making in their own transformation. So ActiveOps is that fundamental control tool to accelerate and augment their business transformation, which is, as you can imagine, right now, with all the sort of need for agility and customer expectation, a big issue for a lot of our customers. Now in terms of an organization, we think we have a number of sort of key strengths and some of those are on the slide there. At a financial level, ActiveOps is a really simple business. We sell SaaS software. It's built annually in advance based on our user base. And that gives -- and Emma will come back to this, a really nice financial model where the business can grow out of its own cash, it's 90% gross margin. And fundamentally, it's also rolls over. So as we go into any given year, typically about 90% of our forthcoming revenues are already essentially sold. And in each year, we're just adding to that as we sell new customers, we're doing new implementations and that rolls through. So it's a very, very secure and sound business model. We sit in a very interesting space, as I described, and it's an area which we're quite differentiated in, particularly with the new acquisition this year, which I'll come on to, we probably represent the leading authorities in this space. There is -- to my -- to our experience, no other organization is focused on that particular world of workforce optimization in the complex world of back office anywhere on the planet. And we operate now globally, and that's seen -- and the sort of success and the truth of that is seen in the fact that we have customers in Australia, in South Africa, in Canada and all over the world who use our stuff to leverage and solve this particular complicated problem. The very nature of our business means our customers are blue chip, all sorts of implications of that makes sales larger, probably more protracted. But also in our history, I think technically, we've never actually had a bad debt. So we operate to a very, very sort of secure audience in that respect. But then coming to the sort of forward look of the business, and it comes in a key stat for which -- which is net revenue retention, we have huge expansion potential in our existing customer base. So although we're now hitting around GBP 40 million of annual recurring revenue, we can see at least GBP 130 million of accessible revenue from customers to whom we've already sold to. So think about that. We don't -- there's no sales cost in terms of new customer acquisition. If we just keep that NRR, net revenue retention, so we're growing every year, there's GBP 130 million of accessible ARR for us to sell to. Now of course, we're not just doing that because we are selling. We're selling new customers who see the need for our stuff. And we've had the best half -- best year ever last year and the pace of that new customer acquisition is continuing to grow this year. So the expanding opportunity is very large for the business. And the business has been on the path. And in many ways, the half year results is just the start of what we think is the consequence of some sort of sequence of investments we've been making. About 6 years ago, we completely replatformed our technology, which has now been fully deployed on our customer base. So we're now deploying better and better product at incremental revenue. Our Series are generating more revenue because we're offering more value to our customers. And that is, if you like, creating this huge momentum to accelerate growth. And our next phase is really to sell more of what we've got. So we've made some strategic investments in our sales capacity in the course of the last year, which is genuinely is leading some significant results as seen through the figures. So from our point of view, an awful lot of a very healthy momentum. But just to bring that to life a little bit, there's a slide here on the screen, which just tells the story about one particular customer. This is CIBC Mellon, which is a trade -- the sort of a joint venture in Canada that handles fund investment accounting for CIBC and BNY Mellon, 2 of the largest banks or BNY Mellon is one of the biggest custodians in the planet. CIBC is a huge Canadian bank. And it is a classic example where a lot of people spending a lot of days trying to do that daily fund accounting, reflecting people's investment values, which was a very tight, tight cycle and with an awful lot of data. And an incoming manager found it was very hard to run. They had very little visibility over work requirements, skills, but also just productivity performance. And they knew they wanted to grow. They needed to expand their product set, but no real operational data on which to make that kind of decisions about where to put people and how to grow the business. And ActiveOps has comprehensively solved that. Catherine Thrasher, who was a keynote at our conferences this year at one of our conferences, was the COO there. And she will tell you all through the stats here how it's enabled the business to accelerate in all sorts of ways, the sense of safety and control of the operational staff from being in a better managed environment where they knew what they had to do and they could feel success of. But also from her perspective, her ability to flex the business and just as an example, open up another center in Vancouver to look after -- to give advantage of a 3-hour times shift between Toronto. It's just a brilliant example of how strategic operationally and tactically, they are enhanced by having the value of ActiveOps systems in place. Really great story, and there's lots more on our website about equal stories like that. So that's the type of experience customers have by introducing ActiveOps software and the methodology for managing operations that comes with it. So then let's just move on to the actual results for the half year, which Emma will come on to the detail of. But from my point of view as the Executive Chairman, it really feels like a business which is humming. The core growth engine is delivering new sales. So we've had 5 in the half year, and we've already had another 3 in subsequent to September and compare that to last year where we had 9 in total over the full year and 9 itself was 3x the rate of the previous year. So the new customer acquisition is really, really going well and speaking to both the product set we have and the market demand. But the other side of this business is that net revenue retention. Our software, if it does its job, actually reduces the number of people need, improves the efficiency of the business. So we're not doing our job, and we do if we don't enable that acceleration in productivity. But -- so then if you like, naturally, the business is in the heads, which we would using our software. But on top of that, with our product, our net revenue retention last year was 116%. So every single dollar of revenue last year, we're getting $1.16 for the current year. I mean that's phenomenal, and it's phenomenal in any SaaS context. So we're very excited about that because it's the manifestation of the product investments we've been making over the last few years. So if you compound that going into each year, where you'll get 16% growth in the book each year, plus, of course, we're adding in our new customers each year, you begin to see why we think while we came out with the path to GBP 100 million ARR business is pretty clear for us right now. The other facet of our confidence is coming from our expanding target addressable market. ActiveOps has been very focused on a certain type of work, the sort of complex administrative work. But of course, organizations have a lot of people doing a lot of things. And what we're doing in our Decision Intelligence suite with the product is extending that. So in a typical bank now we can offer a suite of software, which is not just in the administration, but it's in the branches. It's in the relationship directors, in relationship managers, it's in the people more customer-facing. So we're actually significantly enhancing the addressable community within that customer community and, of course, to our other potential customers. And the final component of our success this year, I think, is the acquisition of Enlighten. So Enlighten was a very similar company in a sense, it was very ops centric, probably more consulting-led, but a consulting with a tool attached organization. We've worked again them in Australia and particularly over many years. And we were delighted to have the opportunity to acquire them this year because with that comes, firstly, a body of knowledge and experience, which incredibly augments our own. Secondly, it extends our regional strength. So we are by now the completely dominant player in Australia. But also it's introduced us and brought with it some really new -- 22 new customers, of which 6 or 7 are very large enterprise organizations, which we will enhance our presence in the U.S., but probably more significantly, gives us a huge amount of additional sort of target addressable that we can go out. So that revenue, which, of course, we can leverage the infrastructure because we don't need 2 management teams. We don't need new development centers. There's a whole lot of associated cost efficiencies, which we can bring on top of what was GBP 8.5 million of additional annual recurring revenue coming to the books. So very, very good -- and we'll come to some details. But fundamentally, we're just as excited about having made the deal in -- here we sit in November as we were when we did it back at the end of July, which is not always the case. I think a final word for me is then about that line along the bottom. This isn't a kind of regional sort of regional pulse. What you can see there is all the different regions of business in various ways have had a very good half year. South Africa is very high percentage. It all depends on the base, of course. But SA is a great strength, but then other regions are much larger. So a percentage increase is in that sense, slightly harder to achieve. But the key thing, this is a very global group with a lot of global success. So that's the sort of headlines. Emma, perhaps I'll hand over you to pick up some of the actual numbers.

Well, super. Thanks very much, Richard. So we've had a very strong start to FY '26. Even without the value-add acquisition of Enlighten, our underlying metrics are solid for the first half of the year. It is worth just highlighting that the numbers that we're presenting for H1 only includes 3 months of the financial performance of Enlighten as suppose to 6 months. We acquired the business on the 27th of June. And so for H2, you'll see a full 6 months of trade included in the H2 numbers. In terms of the financial highlights to share with you, our organic SaaS revenue growth, apologies about the light. Our SaaS revenue growth increased by 22% year-on-year, which is supported by the acquisition of new logos that we've had in the year and also the underlying NRR rate, which I'll come to shortly. We've reported just under GBP 41 million of ARR at the end of H1, of which includes GBP 8.1 million coming directly from the recent acquisition of Enlighten. Even if you strip out the impact of the acquisition of Enlighten, we are still reporting an organic ARR year-on-year growth rate of 27%. From an adjusted EBITDA margin point of view, we've reported 9% for the same period last year, we reported 7% and that's despite the investment we've done in our sales and marketing in the first half of this year. And then finally, the cash position, we reported a cash position of GBP 13.3 million versus the previous year was GBP 13.4 million. So it's broadly in line. However, that is despite the fact that during the first half of this year, we paid out GBP 5.8 million of cash for the initial acquisition -- the initial consideration payment for a license. And one of the other things to highlight on here is the C&I revenue recognition. So consistently over the last few halves, we've reported GBP 1.3 million versus the first half of this year where we reported GBP 3.4 million. That is a 114% increase on a constant currency basis on an organic basis. One of the main drivers behind this is the new logo acquisition that Richard has already spoken to. So last year, we onboarded 9 new customers. And so far this financial, in the first half of the year, we've onboarded 5. So you're really starting to see that momentum pull through, which ultimately drives the professional services revenue for us. What we typically going to see return to normal levels. So if you look at the pre-COVID professional services revenue levels, we are currently on track to return to those previous historic levels compared to what we've seen in the last few years. In terms of some of the other P&L performance metrics from a gross margin, we've maintained an 84% gross margin. We've delivered that consistently for the last few years. You do see a little bit of mix on the gross margin. So we do have a mix between a SaaS margin and the C&I margin. Our SaaS margin for the first half of the year was 90%, which was a slight improvement that we saw in the first half of the previous year, which is driven by some restructuring within the server hosting environment to make that even more commercially additive to it. From a C&I margin perspective, these do fluctuate depending on whether we're installing an existing customer or a new logo. The margins typically that you'd expect to see margins for us is anywhere between 50% and 60%. The operating cost, you'll see that it's gone from GBP 11.1 million to GBP 15.6 million, which is a huge increase. But actually, that is mainly driven by the consolidation of the Enlighten OpEx and then also the sales investment that we've previously mentioned. We're talking a lot here about adjusted PBT and adjusted EPS. The reason why we've put the numbers on here as adjusted is we've removed the impact of the deal fees relating to the acquisition of Enlighten. So we did incur GBP 1.4 million of deal fees in the first half of the year. So the EPS and the PBT numbers shown on the screen have excluded that. We've seen an increase in the adjusted EBITDA. So we went from GBP 1 million in the first half last year to GBP 2 million. So we doubled the adjusted EBITDA performance in the first half of the year. One of the things that we've talked about for a number of years is around starting to see the operational leverage come through from our business model, and we are really starting to see that. So if you look at what the incremental revenue is half year on half year and then compare that to the margin against the increase in the EBITDA that we performed in the first half of the year. Every pound of new revenue coming through is worth more to us than what we previously had. So the adjusted EBITDA margin on new revenue coming through is 15% versus the combined average group, which is 9%. So you really start to see that leverage come through in the business model. In terms of the strength of the SaaS model of the things we've done here is that chart in the middle is what we've done is we split out the growth of the ARR. So we're talking about we've seen a 27% increase in ARR year-on-year on an organic constant currency basis. So what we're seeing here is the impact of the new logo momentum really pulling through. So of that 7%, 11% has come from new logo ARR growth, which comes from the new logos that we won in the back half of last year plus the 5 that we secured already this financial year. But also the other number on here, which is impressive is the NRR rate. So on a constant currency basis, we're reporting 116% NRR, which very much shows the expansion that we have in the existing accounts but also the series which we'll talk to shortly in a second. One of the things that we talk about is I just continue on the theme of the NRR, so what really supported by the NRR is the customer expansion that we see within our existing portfolio. So for some of you that have followed us for a while, you will have seen a similar chart before. So we shared a U.K. Tier 1 bank last year. This year, we're sharing a African Tier 1 Bank. This particular customer has been with us for over 10 years. However, just for presentation purposes we're just using the last 7 years on here. And this is quite typical for what we see. So quite often, we will go into a particular -- into a new logo and we'll go into particular division to try and solve a particular problem. What we then often will do is from the return on investment that, that particular division sees very quickly, we will scale through the organization, and that is exactly what's happened here. So in FY '23, we went into a new area, which is the central ops area with the particular bank. And then in FY '24, they continue to expand the user base, but also across to Series 3. So just to give you a bit of flavor on that, ControliQ, our core product, our cornerstone product is getting to series. So every time that we do a bundle of new releases of new features, we will basically call that Series and we will commercialize that. So with this particular bank, they move to Series 3, which actually does increase their ARR by 50%. The following year, we actually then upsold them to Series 4, which increased their ARR by a further 50%. And then more recently, we've been able to cross-sell WorkiQ, which then increased their ARR by a further 67%. One of the really interesting things is within the series that we have is we have a number of customers that are still on Series 2.5, so we got 35 customers that are on Series 2.5, which gives us a great opportunity to continue that acceleration in ARR growth. We've also got 26 customers on Series 3. And just more recently, we released Series 4 at the start of this calendar year, , and we've got 11 customers on that series at the moment. So there's a huge expansion potential within our existing customer base even just within the ControliQ Series releases. Then that's not to mention the cross-sell opportunity with CaseworkiQ and then also the expansion of WorkiQ. So in terms of the TAM and the achievable total addressable market that we have ahead of us. So what we've got here is the achievable TAM and what do we mean by that? So as an organization at the end of September, our ARR was just under GBP 41 million. If you look at the existing customer base that we have today and we look at the series uplift, the cross-sell opportunities that we have, we believe that we could grow the ARR within the existing customer base by GBP 130 million. If you then also look into our target of top 50 accounts, we can increase that ARR again by GBP 900 million. So one of the things that's worth highlighting is that with the GBP 41 million that we have today, we're actually only addressing 4% of the immediately achievable TAM that we have ahead of us. If you actually looked across the sectors in which we operate in beyond the target 250 accounts, we're actually addressing less than 1% of the available market that we have. So there's a huge opportunity to continue. Number one, pushing that NRR, the rates that we've seen recently continue to deliver similar rates that we've seen in the last year. But then also there's a huge opportunity to onboard new logos, which is what we're really seeing that momentum through at the moment. Just to quickly touch on the Enlighten integration. So when we initially acquired Enlighten, we shared with the market our plan of an 18-month integration plan, which we are well into 5 months into that 18-month integration plan. The one thing I can say is we're currently on track to deliver that 18-month integration plan and the cost synergies that we've identified at the point of the acquisition, we are in the process of executing and we are realizing as we work through that process at the moment. And we have combined the operational activity of the Enlighten organization within our own op structure already. And then the other thing really to highlight is we talked around the acquisition being EPS accretive from FY '27, which we're very much on track to still deliver. It is worth pointing at this, the initial consideration for Enlighten we funded through our own cash reserves. So we didn't bring on any debt as part of that acquisition and the balance sheet still remains strong despite the active acquisition. So just from a capital allocation perspective, so in terms of our order prioritization, so as an organization, we remain an organic growth business is our first priority. So we will continue to invest in our sales and marketing. We will continue to invest in the partner channel, which we've just started on that journey very recently, and we'll continue to invest in our products as well. We will continue to look for M&A opportunities provided that the right opportunity for the organization. And then finally, the third part in order of prioritization, we would look to return any additional funds available back to shareholders as and when appropriate. So then finally, just a few takeaways from me. So firstly, we do expect to remain a double-digit ARR growth business for FY '26 and beyond. We do have a clear strategy to drive growth within the organization, a huge opportunity [ ahead ] and then also to continue driving operational leverage within the business. And we still have a very strong balance sheet. We have no debt. We are highly cash generative. And then finally, as Richard has already mentioned, our ambition to become a GBP 100 million ARR business in the medium term is absolutely achievable. We believe it is achievable and is what we are currently working towards.

Very good. Thanks, Emma. So just moving on then in terms of some more substance about how the growth sort of strategy. I think if there's one anchoring point I want to make is that this is essentially about continuing to improve on things we're already doing. So this isn't about a sort of magic left turn or a big pivot. We have a powerful product, which people are buying quite well. As such, the agenda is moving from, if you like, product development and effective marketing to much more about the selling. And then to that extent, what we have is a proven engine, we're just going to scale it just. But there's so much about that. It's resilient. What do I mean by resilient? We're global. So we're not subject to the vacancies of individual, if you like, regional economies go up and down. And what we've seen over the years, the value of currency spreads. So in other words, because we have Australian dollars, we have New Zealand currency, we have U.S., we have Canadian and all coming back to the U.K. That makes the business also very, very resilient. There's lots of aspects of our business model, which means we can tactically deploy sales in particular regions to, if you like, capture opportunities. The NRR, I know we've mentioned that a lot, but you really can't underestimate the value of that core growth engine where your existing customers are buying more from you at the level they currently are. That's a huge growth lever for us. And because what we've done in this year, we've increased our sales capacity. So as of September this year, we had 16 quota carriers, and that would have compared with 8 of the prior year of just 8. So imagine that working through the system, becoming ramped, different -- vagrancies of different sales in different areas, as you can imagine. But fundamentally, the sales capacity of this organization is very, very different than what it would have been a year ago. But also to augment that and to focus it, I've just appointed Steven Teasdale as our new Chief Revenue Officer. And his role, because we operate quite a globally diverse model, is to pull that sales structure into a coherent proposition and give us the platform from which to scale. So as we hire the next tranche of 5, 6 sales teams, they're stepping into a well-structured, well-disciplined environment. [ This shows ] expansion of our existing customers, the importance of account management, as you can imagine, and identifying what part of the organizations would value from ActiveOps' software is a critical part of expansion selling. So Steven has come in to augment our capabilities in that area. And of course, underneath all that, the value of our IP and the value of our intellectual property, we have 15 years of underpinning our AI tools now. And that's our kind of uniqueness. We can bring some specific capabilities at the desktop that others just can't do. That's part of our moat, if you like. And of course, we're simplifying how we make our products work in terms of for our customers. Instead of a team leader or operational leader looking at a set of numbers, however well structured, they can now tap a query into this ActiveOps software and say, what should I worry about? And it will come up with a considered view of all the different things that they might want to give their attention to. So lots and lots of really interesting capabilities on which to sell that platform. So that is the anchor of our growth is doing what we do better and at larger scale is what we already do. And just by way of example, some of the tooling that's now in beta for our customers, I won't go into much and again, much more on the website if you want to hear more information. But it's a combination of really practical stuff at the cold phase to help organizations simply exploit and do better what today. That would be a productivity boost with being tested with our customers. But we're also going into different domains like case analysis and process mining is a huge issue for our customers. And we're providing tools to do that just as a byproduct of using our software rather than having to get extra software or additional experts or consultancies in to do it right through to one of the most troublesome issue for organizations is benefit measurement as they deploy technology. And we're giving them a transformation tracker as a tool so they can essentially score keep themselves not just within operations but across the whole enterprise as they deploy and they manage different tools. So that makes ActiveOps the kind of meter of value of those projects and processes they're looking to change, which in a world of so much moving parts is data beyond -- it's worth a lot, let's put it that way. So lots of exciting things to talk about. The other thing that I think is really notable in terms of the last half is just the level of interest. We've always taken a pride in networking our customers and building this community around professionalizing operations management. And there's some stats on the screen there. We have our customer events, one in Toronto, one in Melbourne and in London. And this year, we were exceptionally pleased with the turnout, huge number of customers and also a huge number of potential customers who, frankly, coming to our events gives them a sort of a -- very much an experience they realize they want to be part of, very powerful as a business accelerator tool. But also this particular year, I think almost all the Enlighten customers came to capacity events. And that's really had its impact in terms of then seeing that becoming part of the ActiveOps community is going to augment and add a huge amount of value. So we're already seeing cross-selling opportunities and accelerated demand to move on to the ActiveOps platform from the Enlighten customers, which again will help to improve the pace at which we can achieve operational gearing. It will help expand the target addressable market because some of those customers are really quite large as well. So an awful lot from our sort of infrastructure, again, which is just driving extra value but very little incremental cost. The second pillar, though, beyond sort of doing what we do better and larger is now starting to focus around different ways of going to market through channels. ActiveOps has a relationship with many, many organizations because of the nature of who we work with. But we've recruited a Head of Group partnering because we see there's a huge opportunity to take our product to work with some of those other big institutional systems like Workday, like ServiceNow. So we're not rather than going direct to those core system owners and their own ecosystem, we're working with the partners, the people who have responsibility to -- and a business model that requires selling more software to those infrastructures. The example at the moment is a healthy relationship building with a company called Rulesware in the U.S., which is a very big Pega partner, Pega being a workflow tool, where we are working with them to deploy ActiveOps in the environments that they have with their customers, but also develop a kind of niche product fit to that specific environment, which we can only do with their help because we see that opportunity for us is in terms of business development, where those environments, those software platforms have particular features, which we can sell to. So I think our partner strategy is something that we'll be working on in the course of this year. I think by the end of this year, we'll have a very clear view in some prototypes working like the Rulesware relationship. But I hope within 3 years, we'll be looking at the introductions and the co-sells from our partner network being incredibly accretive and additive to what's really fundamentally an organic direct sales growth engine. So it all adds together to really a hugely positive outlook for this business. It does feel like a number of threads are coming together. We have had -- in terms of the outlook, the second half has continued in the same vein. So lots of things to talk about in due course at the next results show, we're pretty confident to be reporting positive things. But fundamentally, we've already had 3 new customers after the half year. So that's 8 cumulatively for the year. As Emma said, the Enlighten acquisition is bedding in nicely with absolutely confidence around the cost savings, but also the capability enhancement, I think, that we are looking for. And that -- the impact of the investments in those -- the sales structures and the like really starting to kick through. So overall, that ends up with a management team that's pretty confident about the outlook, but also returning to that GBP 100 million ARR thing. That's -- of course, it's not going to be easy, and it's not -- but it feels like a logical progression of the rate of velocity of this business right now rather than a sort of moonshot goal activity. So a lot that we have to work on. But as ever, it's an interesting space, and we're excited about it as we ever are. So that's the presentation deck, but I see a few questions have popped up on the Q&A here. So...

Yes. Let's jump in there with one on deferred income. There's a question around the deferred income fell from GBP 16.7 million to GBP 13.9 million. [indiscernible] so the first half most of [indiscernible] in the second half of the year. So actually the highest deferred income in H2. So if you look over history, you will see that at the end of H1, there was a natural [ shift in ] deferred income [indiscernible].

From James, how much of the Casework ARR came from cross-selling rather than new logos? And can this pace continue? I think to answer the last bit first, yes, definitely. But interestingly, most of the Casework is expansion. So it's customers who absolutely know the value of ActiveOps, but the value of the Casework product to extend it to a more complex type of work. Interestingly, though, all the -- almost all the new logos took a blend. So from the get-go, there was both the ControliQ and the CaseworkiQ. So I don't think we've had a single pure-play new Casework sale. I might check myself on that one. But to the point, it's certainly complementing the portfolio, and it's a very big expansion. Should we expect further mergers and acquisitions to drive the next phase of growth? Or has the strategy shifted to purely organic? No. I think what we're saying there is with -- I mean, ActiveOps has the capacity to achieve its targets through organic growth. But as the Enlighten acquisition, I think, is demonstrating, it's a very useful accelerator, both in terms of client prospects and also just fundamental revenues. So it absolutely is part of our activity. And in fact, with the return of our share price to what you might sort of -- certainly where we -- in excess of where we floated, of course, that gives us greater access to capital and the potential of doing M&A through that raise, which sort of -- some of you may know the history, but shortly after we float, we had an opportunity. But with the market context, we weren't able to do the deal, which is frustrating at the time, but I think that's in a much better place today. So no, we will absolutely do selective acquisitions if the opportunity is there. And we have a very clear sort of set of criteria against which we would be doing that.

In terms of the time frame the GBP 100 million ARR, so we haven't gone out with sort of deadline or a time frame as such. What we have said on that is in the medium term, so what do we mean by that is anywhere between 3 to 5 years is [indiscernible]

Market speak for that sort of time frame. Yes. And outside of share buyback, any thoughts on potential timing or financial achievement to trigger a shareholder dividend? Yes. I mean, it is third on the list of capital allocation. This is primarily a growth stock. And I think for most of the people who have invested in the stock, it's a growth agenda. However, there is an element of sort of financial maturity around dividend. And as a significant -- as a founder and as a shareholder myself, that would -- that is a factor to consider. But fundamentally, with the level of opportunity we see in front of us, I think it's a growth investment. We would invest for growth. We'll take that under advisement. I mean at the moment, I think the answer is not. We just recognize that there is potential for that should the cash pile grow and we haven't got the obvious opportunities in terms of M&A. And for EBITDA reasons, we want to maintain our profitability and so on, you get to that place that share buybacks or possibly dividends will become the logical next step.

That's great, Richard. Emma, if I may just jump back in there, and thank you for addressing all those questions from investors today. And of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet Company platform. But Richard, before I redirect investors to provide you with their feedback, which is particularly important to the company, could I please just ask you for a few closing comments?

Thank you. ActiveOps is on a really strong role. We've got a fantastic NRR. We've got a growing client base that's a new customer client base. And so as I hope has come through today, I think it's a business which has got a long way to run. The only other point, I think, is we are, I think, enjoying being on the public markets. And I think that the ActiveOps sort of participation and aim is certainly a very good place for us to be right now. And for that reason, I'm grateful for anybody on this call who's taken the interest in the stock. So thank you all.

Fantastic, Richard. Emma, thank you once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of ActiveOps plc, we would like to thank you for attending today's presentation, and good morning to you all.