Adheris Health Limited ($AHE)

Good morning, and welcome to the Adheris Health quarter 3 FY '26 investor briefing. My name is George Kopsiaftis, and I'll be your moderator. With us today, we have Chief Executive Officer, John Ciccio; and the Chief Financial Officer, Sean Slattery. Good morning to you both.

Good morning, George.

Good morning, George.

The format for today is for John and Sean to spend around 20 minutes discussing the results. This will then be followed by a question-and-answer session. [Operator Instructions] Just as a reminder also that the briefing is being recorded and will be made available on the Adheris website. I'd now like to hand it over to John and Sean to get us started.

Excellent. Thank you, George. Appreciate it. Good morning, everyone, and thank you for joining us today. George, if we could go to Slide 3, please.

Sean.

Actually, I just want to very quickly run through the agenda, George. If we could go to Page 3, please. So what we'll cover today, we'll start with the quarterly financial results, followed by a few updates on our technology platform, then we'll talk about key short-term priorities and our progress against those to date, and then we'll close with some points around our investment case. So if we can flip to the next page, I'll hand it over to Sean to cover the results.

Good morning, everyone. Thanks for joining. Obviously, just closed our Q3 results in terms of cash flow. Our opening cash at the beginning of the quarter was $8 million round figures. The operating expenditure net after collections was negative $4.6 million. We collected the payment from Jonas, the deferred payment, the holdback for the sale that occurred in July '25, and then there was a very material FX movement, closing the quarter out at $9.4 million. Two points I just want to raise in terms of our cash flow for the quarter just gone and the coming quarters. The Q3 cash flow was impacted somewhat in a misalignment of timing between the abatements we pay out to the pharmacies and the collections from the cash receipts. So there was a bit of timing difference in there that impacted the overall, and you can see that at the operating expenditure level. And then we've put in place initiatives to make sure we can smooth that out so that we're timing the payment of the abatements back to the pharmacies more in line with the collection from the receipts from the customers. If we look at the box on the left there, we've got revenue for the quarter of $5.4 million. That was down year-on-year from Q3 in FY '25. With the decrease in revenue, we saw a gross profit of $2.1 million, which in line with the revenue was down period-on-period. And our margin is sitting at just a shade under 40% there. And again, that is down a little on the prior period for the same quarter of the prior year. We're doing things internally to focus on our cash flow management, and that's around matching the payments. The abatements are our largest component of payments. We're trying to spread that out more in line with the collections from the customers. We're also continuously evaluating our internal spend, and we will see some improvements through that over the coming quarter and then into FY '27.

Thank you, Sean. Okay. So I'll transition now to talk a little bit about the technology platform, which, as you may recall, we officially launched in December of 2025. We rolled out several upgrades to the platform in the third quarter. So I'd like to talk quickly about those. And really, the functionality that we released in Q3 was focused on a few key areas. One is more precise opportunity sizing, which is how we determine budgets for customers and provide proposals, and so we're able to do that with a lot more precision. We did also launch UI and UX improvements to help our employees be more efficient with the tool. And then we also have added additional configurability for some of our digital executions. So what that results in is really shorter sales cycles, faster go-live from contract to program launch and an overall lower cost to deliver. And as we transition into Q4, we have a substantial release plan that's focused on 4 key areas. The first being the ability to set up and configure more complex programs that have, let's say, multiple segments that we might be focused on or more sophisticated targeting criteria, things like that where the program is much more complex. We're able to do that much more efficiently with this new release in Q4. We're also adding new THRiV and digital capabilities to be able to launch those programs more efficiently. We'll roll out a series of advanced reporting, and that's both for customers as well as for our internal use for decision support. And then lastly, improved program monitoring and alerting, which allows us to flag any execution issues before they become major problems and then mitigate those in real time. So if we can go to the next page, please. Okay. So when I came back in November, we established 5 key short-term priorities that we felt were really critical to execute on in order to get the business back to stability and then ultimately back into growth mode. So I'm going to just review those again quickly here, and then we'll talk about progress that we've made against each of them. The first one is to build a more scalable operation. And we've talked about some of this already, but we continue to optimize our cost base, and we're also increasingly leveraging the new platform to become more efficient and lower our cost to deliver campaigns. We have significantly reduced our staff costs, and we now project our approximate annual run rate to be about $14.5 million in staff costs, which includes full-time employees as well as consultants and contractors. And that $14.5 million is against a fiscal '25 total of $22 million, so a substantial reduction there. And that's what -- that's one of the things that's helping us continue to target a cash flow neutral position in the fourth quarter, which we'll talk more about. In terms of revenue diversification, we do want to increase the share of our revenue that comes from non-vaccine products, and we actually have made progress on that front already, and I'll explain that in a few minutes. We're increasingly focusing on high-growth categories, right, therapeutic areas like obesity, immunology, diabetes and specialty conditions, which are growing markets in the U.S., and that's where we need to be playing. Another component of diversification is selling more of our higher-margin products. So our sales efforts have been increasingly focused on selling THRiV and digital messaging, which each have higher product margin than some of the print tactics. And so we continue to push those products forward, and we're having some success with that with clients. When we talk about expanding the pharmacy network, we are actually especially focused on our digital footprint, and I'll talk about progress we're making on that front in a moment, but that is really critical to delivering those higher-margin solutions. We have to have significant scale, and we continue to grow that footprint. And then lastly, increasing our ability to engage patients digitally and creating a richer experience for patients through the digital channel is critical for our ability to compete in the market as well as to drive better results for customers and really ultimately for patients. So if we move to the next page, we can talk a little bit about how we're progressing on building a more scalable operation. So we've talked about the labor cost normalization. You can see the chart on the right reflects the data points I gave a few minutes ago, right? So a fiscal '25 total of $22 million in total people costs across employees, consultants, contractors against a projected run rate of $14.5 million moving ahead. An important one as well is our philosophy on executive compensation. We've changed that significantly. We've reduced base salaries significantly, and we've replaced those with equity upside that is completely aligned to shareholder value. So as share price increases, that's where the executive team will be primarily compensated. So we're happy to be aligned very closely between the leadership team and our shareholders. And then lastly, in terms of productivity, we've recently launched company use of a significant suite of AI tools, including ChatGPT, Claude, Gamma, which is a presentation software that is AI-powered, also using Copilot for more efficiency in terms of meeting notes, transcriptions, just making sure that we're actually taking key actions out of each meeting and being more productive as a team. So ultimately, these things will result in faster execution, fewer manual tasks and then higher output from each employee. And so when you put all these things together, this is how we will continue to build a scalable operation, and we'll be much more profitable as revenue grows in the future. Next page, please. Okay. So I mentioned revenue diversification, and that's really primarily 2 flavors, right? So first is the therapeutic areas that we're focused on and where we're placing our sales efforts. And then secondly is product mix and which solutions we're selling to our customers at the highest rate. So as we talked about a little earlier, our non-vaccine revenue is up significantly as a proportion of our overall revenue. In fiscal '25, non-vaccine products made up 64% of our revenue. Year-to-date in fiscal '26, that's up to 82%. So we've made significant progress there, and we continue to expand our presence across those brands in gen med, specialty, GLP-1, et cetera. To that point, the highest growth markets in the U.S. across different therapeutic areas really are in immunology, respiratory, diabetes, specialty and obesity. And so that's where our sales teams are spending the most time and having really productive conversations, not only about deals that we've been able to win here in year, but also as we start to transition toward the sales cycle for calendar '27, which we'll talk more about in a little bit. I mentioned obesity as a key growth engine for us. This is a market that's growing at 15% annually. And actually, recent projections have that probably going even higher. It's a very competitive market. So those brands are spending aggressively to get their message in front of patients. And then once patients start, they're working hard to make sure they stay on those products. And so that's a really big opportunity for us. And we've already sold more business in this category so far in fiscal '26 than we did in all of fiscal '25. And then lastly, we're working really hard to win back customers who were with the business for a long time, but have not worked with us in recent periods. And we're starting to see some good success there. We've closed close to USD 2 million in new win-back contracts, and we also have a robust pipeline of win-back opportunities in addition to that. And then in terms of new customers, we've added 10 new brands who have not worked with us before over the last 2 quarters. Okay. So next page, please. Okay. So in terms of growing the pharmacy network, we are really happy to report that we've added 13.5 million new digitally eligible patients to our network in Q3, which is a significant increase over the baseline that we came into the quarter with. And this really helps us with our deal size, growing deal size in the digital side of the house as well as just being more attractive to customers that maybe have smaller brands, we now have a much larger population to go after. I'll talk a little bit about our digital regulatory product. So this is a product that allows pharmacies to deliver mandatory regulatory content digitally versus in print. Historically, this is material that's been printed at the pharmacy, and it's several pages long. It's very expensive for pharmacies to deliver paper costs, toner cost and so forth. And we've been able to develop a product that does that same delivery, but in a digital format that's easily accessible on a phone, and we're seeing much higher engagement with that versus the traditional print. We have 2,000 stores live on that product already with another roughly 1,500 in the contracting process right now and another 8,000 stores in our pipeline that we are confident that we can bring across over the next couple of quarters. So this product is really important not only to make us -- to continue to make us sticky with our network because we're providing a service that's saving them a lot of money, but it's also another opportunity to drive sponsored opportunities within the -- within that same digital format. So you have your regulatory content, but you can also think of an opportunity to deliver a sponsored message, maybe a banner, maybe a co-pay savings card and so forth. So this is just one more channel for us to reach patients through their phone. Digital network growth, I already mentioned the 13.5 million new patients. In addition to that, we've added 2 regional chains to our network, and they are currently in the onboarding process, and one of them actually will be launching their first program in the next few days. So we're excited about that. And 2 of our existing national partners are close to enabling new program types. So this is really the type of strategy that a brand might want to work with us on. So certain kinds of acquisition approaches, for example, or certain kinds of adherence programming where these pharmacies didn't historically participate, they are soon going to be participating, which allows us to generate much more revenue through those pharmacies. And then lastly, we have a large partner who historically has only been on the mail channel with us, but they are very close to adding both in-pharmacy prints in the store as well as our digital solution, which will drive a significant increase in scale across the network. So next page, please. Okay. So in terms of creating a richer patient experience, right, this is really critical for us for a couple of reasons. One is to generate additional demand from customers who want to reach patients through their phone, but it's also really important for us to drive incremental lift in a given program, right? So we've proven, we've measured and proven that digital interventions drive much stronger behavioral change than just print alone. So as we develop richer experiences with patients through the digital channel, that allows us to drive higher returns for our customers and also creates an opportunity for us to drive prices higher in the long term. So it's very critical for us to execute on this. Some of the features that we're working to add to our current digital product include an AI assistant, which essentially serves as a health care concierge for patients. Some of the things that, that assistant can do are helping patients find the right physician to help them treat their condition or manage their condition, handling the appointment scheduling process for patients, which can be very inconvenient and very time-consuming for patients. This digital assistant can do it for them, and it's completely hands off for the patient. Another example is the assistant can sign up a patient for a financial savings program and take all the heavy lifting off the patient's shoulders and give them the financial support that they need to start and stay on the medication. So there'll be more to come on this front, but we're really excited about the work that we're doing behind the scenes on the digital product to drive a much stronger and much more robust digital experience for patients. And next page, please. Okay. So transitioning now to just a quick conversation about our investment thesis. So we believe that we are undervalued compared to our peer set, and that's really based on a combination of looking at some of the multiples that some of our competitors trade on today as well as some private acquisitions in recent periods for some of our competitors that have been at much higher multiples than where we sit today. And we believe we are uniquely positioned to get back to a profitable position quickly and to start driving strong growth again. Why we believe this? There's really 5 pillars here that I just want to run through quickly. The first one is we have a strong and trusted brand that's been around for over 30 years. And not just that it's been around for 30 years, but we've delivered results, real meaningful financial results for customers for over 30 years. And we've supported patients for our pharmacy partners for over 30 years. We've now reestablished a really strong experienced leadership team and talent underneath that team as well that's demonstrated successful results at this company before. And so that's a really important point for us. And as I mentioned earlier, we've aligned our incentives very closely to shareholder value so that we all win together as we get back to growth. Secondly, we provide a unique solution in a large market, and that has a lot of spend attached to it. The addressable market is about USD 1 billion. It's extremely large. Pharma spends lots of money to get patients on therapy and then to keep them there. And our solutions are unique in being very targeted based on factors such as prior medication history, demographics, lots of data that we capture every day about patients' health care history, which allows us to be very targeted in the way that we communicate with a brand's patients. And we've also proven that we can move the needle, right? We measure every program that we have, and we've driven results consistently for decades with strong ROIs. Our strategy is very much focused on getting back to growth, and we have a clear path for that. We've talked about revenue diversification. That's really critical to our ability to drive sustainable growth. So not just one-off period growth, but a long-term sustainable growth trajectory. We've talked about prioritizing our higher-margin solutions so that we can get to a better gross margin profile. We continue to drive expansion across the network and across our pharma customer base. And as I just talked about, this next-gen digital engagement suite is really a way to strengthen our customer relationships, our pharmacy relationships and then ultimately, the impact we can make for patients. On the platform front, the technology platform is what will allow us to continue to scale in a very profitable fashion. So faster product rollouts, right, a better experience for customers because we can get programs launched much more quickly, better experience for our own team because tasks that used to be very manual and difficult become much easier and faster. And the way that we've architected the platform supports very quick expansion into new markets, such as the payer market, just as one example, but it allows us to very quickly expand outside of pharma if we want to do that. And it also adds us to -- allows us, excuse me, to add new channels very quickly, such as the AI assistant that I talked about. The new platform is much more integration friendly, and it's much easier for us to bolt-on additional capabilities. And then finally, I think we've begun to demonstrate strong discipline and a clear focus on a path to profits. So a lot of the work that we've been doing right now, albeit has not translated to the financial results just yet, but we're very confident that we're laying the foundation for a much stronger selling season, which, as I said earlier, starts in August and runs through December, and that's a critical period for us to capitalize on pharma budgets as those are being planned out for calendar '27. We believe that the work we've done over the past 5 or 6 months positions us really well to capitalize on those budgets. We've put a very disciplined cost management process in place. You can see the impact already on staff costs, and we continue to be very focused on cost discipline across the company. And as I mentioned earlier, we are targeting a neutral cash flow position in Q4, which begins to demonstrate our ability to get back to profitability. So with that, George, that concludes the prepared presentation. So I think we probably can go to Q&A. That sounds good.

Yes. Great. Thanks, John. [Operator Instructions] We have received quite a few questions that are similar in nature. So I'll try and summarize some of them. First question, increased abatement payments due to timing difference. Can you please explain the process? And in addition to that, could you outline the size of the abatement impacting quarter 3 so that we can understand what a normalized cash flow might look like?

Sean, would you like to speak to that? Or would you like me to?

Yes. Sorry, George, so just a bad connection here.

Sure. I'll repeat the question.

There was a question about the abatements and the timing.

Yes. So we made a statement saying increased abatement payments due to timing difference. Could you please explain the process in the abatements payments? But in addition to that, could you please also outline the size of the abatement impacting quarter 3 so that they -- so that the investors can work out what a normalized cash flow might look like?

Yes. Look, breaking that down into parts, what a normalized abatement. In a perfect world, there are irregularities in terms of the collections from customers as well as the payback to the pharmacies. But at a rough rule of thumb, if you look at our gross profit margin, where we said that was, and I don't want to misquote the number, that was, say, 40%. The bulk of that is going back as abatements. We have our internal platform costs that we deliver our product on. But the bulk of that 40% margin, therefore, the 60% cost is the abatement payment. So in terms of normalizing and spreading it out, if you use a rule of thumb of sort of just under 60%, you'll be able to spread that out. What happened in Q3 relative to other quarters was it was just a bit of a buildup, nothing untoward, nothing sinister with any of the pharmacies. So it was just a bit of back and forth between the provider and us just to agree and settle the outstanding abatement due. So there was nothing sinister behind that. It was just clarifying a couple of things. So that's where we had a bit of a kick in the pants from a cash flow impact across Q3.

Thank you, Sean. Next question. What gives you the confidence that in quarter 4, you'll breakeven? Is it with business won in quarter 3? And can you please provide some examples of tangible results rather than aspirational?

So Sean, maybe you want to start on sort of our current view on cash flow neutral and then I can add in, if you like.

Yes. Yes. So what gives us confidence on delivering the cash flow neutral position is since John started and that was November '25, we have examined microscopically pretty much every line of our P&L twofold. One, the P&L impact, but more importantly for us is the cash flow impact. Now we've seen a lot of changes at the personnel level, and John explained the decrease year-on-year there and the impact we'll have there. Also the changing to the incentive program versus the historic compensation packets that were on offer for employees. So we have a very good handle around the quantum and the timing of payments, where there is a bit of movement potentially is with the collections. Now we deal with the blue-chip pharmacy companies, pharmaceutical companies. So we know they're paying. There is sometimes, again, nothing sinister. There's no commercial disputes or anything, but they do sometimes just miss payment. I think it's because they're the big dog in the room potentially. So that's the one area we have a little risk around, but we've modeled that as best we can, and we evaluate this on a very regular basis internally. So having said all of that, we've got confidence that all things being equal, that Q4 will be a cash flow neutral result.

Thanks, Sean. And then I'll just add that from the revenue side of things to the question, yes, we have had some wins in the third quarter that give us some incremental confidence on collections in the fourth quarter. And then over the past couple of months, our contract totals have actually been higher than last year in the same month. So sales have been picking up, even though this is generally a quieter period for pharma, and that adds to our confidence to get to that neutral position in the quarter -- in the fourth quarter.

Great. Thank you, both. If quarter 4 turns out to be breakeven, are you anticipating cash generation next year? And if so, can we expect it to be quarterly positive?

Yes, I can start with that one, Sean, and then feel free to add in, if you like. As Sean has described, right, we do have some seasonal fluctuations in terms of revenue and then ultimately collection and how that timing compares to abatement. But the goal is certainly to be profitable for the year for fiscal '27, that is absolutely our goal. And we will continue to manage our costs in line with our revenue as we go so that we can ensure to be profitable or do our best to ensure a profitable position in fiscal '27.

Sean, do you have anything to add?

No.

Okay. Great. Thank you. Next question. You mentioned in the investment case slide, the word undervalued. How specifically is it undervalued? And any peer group examples?

Sure. So I can take that one. I think I briefly mentioned this during the presentation, but in our competitive set, we have seen really 2 things that make us believe that we are undervalued. The first one is that we have competitors who are trading publicly at much higher multiples than we are, but they provide similar services that are U.S.-based, and they play in the same market. So that's one reason. And then the other one is that we are aware of a couple of private transactions, acquisitions of companies in our space that had much higher multiples than where we're currently trading. So the combination of those 2 things and the similarity of those businesses to ours is what leads us to believe that we are undervalued compared to that competitive set.

Great. Thank you. Next question, is the existing cash of $9.4 million at the 31st of March sufficient? Or will future capital raises be required?

Yes, so I can start there, and Sean, feel free please to add in. From my perspective, I think we've done a good job of building a much more sustainable base. We've gotten costs in check, as Sean described, and we're feeling much more confident moving ahead about our revenue performance. So my view is that we do not need to raise any funds for working capital purposes, and we don't have any plans for that. Sean, is there anything that you'd like to add to that?

No, that's exactly right. Look, just adding to that point a little, we have no debt on our books. Working capital, we're going to be managing through our existing cash flow. So no, there's no plans to go to the market for anything to fund our working capital requirements.

Great. Thank you. Next question, I think it's a bit of a follow-on from the last one, which is, is liquidation, I think it means receivership of Adheris no longer a possibility. Can liquidation be eliminated as a risk going forward?

Sean, maybe you can start on that one, and then I'm happy to add.

I was just shuffling internally because the comparative accounting in me thinks, well, receivership, liquidation, however you want to frame it, it's a risk for any business in any environment. But look, having said that, I'm being somewhat facetious, but we're certainly in a position where it's not something we talk about. We're confident and comfortable with our internal modeling around cash flow and profitability. So yes, it's always a risk is the honest answer, but it is a very minimal risk for us, but certainly something that we look at internally on a weekly basis. We have a few measures in place where we just do a sort of pulse feel of how we're traveling. But no, it's not a risk for us in the immediate future or all things going well, medium or long-term future.

Yes. Agreed.

Great. Thank you. Question in regards to the earn-out payments. What earn-out payments remain from the ANZ sale? And how much is now expected and when?

So with the balance of the earn-out, we have contractually 3 years and that will be for the year ended 30 June 2025 -- sorry, what year are we now, '26. Sorry, 3 years, 30 June 2026, then '27 and '28. Now they're contractual, there's formulaic agreement between both parties. What we don't have a great deal of visibility of right now is the breakdown of the numbers. The high level is that it's tracking as it should. But until we get to the end of the fiscal year, we won't have great visibility on that. We've got a conservative amount forecast for Q1 FY '27, but that's something we'll need to work through in that first quarter once we get the final financials from them.

Great. Thank you. Next question, is Adheris still debt free, which I think you answered earlier, but follow-on question, will it remain debt-free?

Yes, there's certainly no. But back to my earlier comments, we have no plans or requirements internally to raise capital by way of a -- sorry, raise money by way of a capital raise or take on debt. There's certainly nothing needed to fund working capital. So no plans.

Great. Thank you. Just coming back to the abatement question, the size of the timing impact from the abatement in that quarter -- third quarter.

Yes. If I can take that one on notice, I'll come back to the person asking the question on that just because I'll need to pull up. I understand what they're asking is what was the impact in Q3. So I'll come back to the individual directly on that one.

All right. Great. Thank you. What is the revenue assumption for quarter 4 that drives breakeven cash flow?

The assumption is we've got our internal revenue target. And I won't disclose that. We've moved away from talking about putting forecast out there. But it's one that we're comfortable that we can deliver on. We've got a couple of levers there that might have an impact for Q4 in a positive way. So we've got a couple of things in there that all things going well, if they fall our way, it could be a slightly improved position. Just want to point out that similar to what John was saying earlier that it's really the Q3 revenue that will impact the Q4 collections. So any new revenue we win in Q4, we won't see the cash flow impact of that until Q1, potentially Q2 FY '27, depending on the timing.

Great. Thank you. Can you advise where the gross margin will settle in the short and long term? And secondly, are you still expecting material revenue skew between the first and the second halves?

Yes, I can talk about the second one, Sean, if you want to take the first one.

Yes. So look, first part in terms of the margin, where we would like to see that. Look, historically, it sort of sits around that 45% to 50%. Aspirationally, we'd like to get that north of 50%. Now that will take a little bit of time. Part of that is twofold. One, we need to increase the revenue which we're actively working on. The revenue incremental growth year-on-year will have a positive impact to our gross margin. And the other one is the platform that we rolled out and we're working through now. We're transitioning customers from the old platform onto the new platform. We'll see when all customers are transitioning onto the new platform, we'll see an increase to that gross margin once all customers are on the new platform. Now that won't happen until the end of calendar year '26, and we'll start to see that coming through in Q3, Q4 of FY '27.

Yes. And I'll just add to that on the product mix. So we talked about that a bit earlier, but THRiV and digital products do have a higher product margin than the legacy tactics. So as we continue to sell more of those programs as a proportion of the overall mix, we do believe that, that will also push gross margin higher. And in the longer term, we can -- we're trying to push into the 50s.

Okay. And the skew first to second half?

Yes. Thanks for reminding me, George. So I mean, that is a bit of seasonality that really has to do with our customers and how they budget and how they spend their funds. So our clients do typically budget on a calendar cycle, and that's really what drives that seasonality and the difference between first half and second half. So it's really just a function of how our customers make their buying decisions. So I do expect it to continue. What I will say is I believe that we can start to layer in some more -- something closer to recurring revenue streams to maybe mitigate that a bit, smooth it out a bit. But I believe that we will continue to see some seasonality in the future just given how our customers operate.

Great. Thank you. Next question. Just coming back to the valuation. Are there any particular public companies that you can point to?

We probably should come back on that one, George. I can take that one as an action just so we make sure that we provide the right examples. So I'm happy to take that on as a follow-up.

Okay. Great. Next question. Could you please provide further detail on your high-growth categories, particularly GLP-1? Specifically, are you already engaged with the pharma companies behind the key brands in these categories? And is revenue growth a function of winning new programs with existing partners? Or does it require onboarding new pharma relationships entirely? Just trying to understand both the conversion pathway and realistic time frame for these opportunities to translate into high-value contracts.

Yes, it's a great question. Thank you. So in terms of are we already engaged with brands in those categories, absolutely. There are several projects in our pipeline that are -- that live in those disease states. So those are very active conversations that are moving through the pipeline. We will continue to surface more. But just for example, we have several obesity drugs that are in late-stage pipeline with us. And similarly, for some of the specialty conditions and some of the other therapeutic areas that I mentioned, those are already underway. And one of the things that helps us out is the customers that we work with typically have portfolios in several different therapeutic areas. So having relationships with a single customer actually gives us access to brands across a variety of therapeutic areas. And so within our existing customer base, pharma company base, we can get to both existing brands that we've worked with before as well as newer brands coming to market. So short answer on the first part is, yes, those discussions are already active. And so we're not too far away from working to convert those to revenue. As far as does growth come from existing customers or net new, it's a combination. There's certainly opportunity within our existing customer base to expand deal size with current brands as well as to expand into new brands within the same customer that we already work with. So that's how we can grow within our existing customer base. There are also customers we don't currently work with, and I alluded to that earlier, some of them are ones we used to work with, and we're confident we can win them back. And there are also customers out there that we haven't worked with, but that we have active sales activity -- active activity -- that we have sales activity with that we're pursuing currently. So I think, again, it's a mix of the two. It's growing our existing footprint within customers we already deal with as well as adding new customers to the mix.

Great. Thank you. Next question. So there's a question on monetization. My understanding is that the bulk of the revenues are from the pharma companies. Do some of the tools you're providing pharmacies generate income directly from them? And is this a change from the past?

Yes, that's a great question. So actually, when I spoke earlier about the digital regulatory products that we have, that is a product that does generate revenue from the pharmacy directly. And that's a newer solution for us. So historically, we would have one-off projects with pharmacies. They do trust us to do things like drug takebacks and recalls and things like that. We can help them with those, and those can be revenue generating, but they tend to be one-off items. But the digital regulatory solution is something that our pharmacy partners are actively paying for as a subscription. So that is relatively new and an increasing part of the mix.

Great. Thank you. Next question. How are you progressing with rebuilding trust with your customers?

I'm actually really happy with the progress on that front. I think that we -- given that we've only been back for a handful of months, I think that we've made a lot of progress with customers who may have lost some trust or even had pulled business from us. We're really optimistic going into the sales cycle for calendar '27, that August to December period, and that's because a lot of customers who've been either spending less with us or not at all, are very much a part of that process for planning for calendar '27. And we're in those rooms with those folks talking about their strategy for calendar '27. So that makes me much more optimistic about those relationships than I was when I started. And then on the pharmacy side, it's similar. I would say that our relationships, particularly with the largest pharmacy chains are as strong as they've been in at least over a year, if not longer. And they've been coming to us for additional services, and they've also been moving much more quickly on program approvals to get things live. So those relationships are really strong right now and something that -- part of why I am confident about our ability to get back to growth.

Great. Thank you. Next question. When do you expect to know the size of the pipeline opportunity for the FY '27 year?

Yes. So with the sales season really starting in earnest in August, I would say that by the end of the first quarter of '27, we should have a pretty good feel for what that pipeline looks like. And then over the second quarter is when we really need to convert that into contracts that will be delivered in calendar '27. So I would say by the end of Q1 fiscal '27 is a good marker for what that pipeline will look like.

Great. Thank you. Next question. Have you now got the right team in place? And how are they being incentivized?

Yes. I really -- I believe that we do have the right team in place. I think I mentioned that earlier in the presentation that we brought back a lot of folks, both in leadership positions as well as other positions in the company who've delivered in this business before, have been very successful in this business before. So that gives me a lot of confidence that we can get back to where we were a few years ago at our peak. As far as incentivization, that really goes to the point that Sean made earlier in the presentation around our compensation philosophy, right? We are very much tied now to share price and shareholder value. So if we do our jobs and we get the company back to a position where shareholders are happy, then we will also benefit from that. If not, then we won't. And so we're very much aligned to shareholder incentives.

Great. Thank you. Final question. It sounds if the business seriously lost its way in the 18 months prior to John's appointment, even allowing for vaccine drop-offs. Can you comment on that?

So I mean, I wasn't here at that point, right? So I probably don't have full visibility to all the different moving parts. But I would say that where I'm really focused now is our approach to customers here over the past 6 months, which has been really strategic focus, understanding what they're trying to accomplish within their own brands and then trying to match a solution that helps them achieve that strategy. And I think that, that's resonating with our customers. I know that it is because I can see it in the pipeline, and I can see it in some of the more recent wins. And I can also see it in the customers that are returning to us. So I'm not sure that I could comment with much detail around 18 months ago or how -- what was happening back then. But I can say that the approach we're taking now is very strategic and it's working.

Great. Thanks, John. Just conscious of the time, we're running 5 minutes over. I might just leave the questions at that. There are a few left, but we'll try and get back to you through e-mail. John, I might just hand it back to you for a second for any closing remarks.

Sure. Yes. Thank you, George, and thank you, everybody, for attending and for all the questions. Very much appreciated. I guess I would just close by saying that, as I mentioned earlier, right, we're obviously not pleased with the actual financial results on paper for the quarter. But underlying those is a lot of good work that's laying the foundation for growth not too long from here. And I'm really optimistic about that. I see it in customer conversations. I see it in conversations with our pharmacy partners. I know that the market has a ton of opportunity out there for us to go get. And so it's really just now about execution. But I really feel good about where we are. I'm happy with the progress we've made over the past 5 or 6 months. And I think that we're going to start to deliver better printed results very soon. So I appreciate all the support and look forward to chatting again soon.

Great. Thank you to John and to Sean for your insights today. That now concludes the briefing, and I invite everyone to now disconnect. Thanks for your time today.

Thank you, everyone.