Ai-Media Technologies Limited (AIM) Earnings Call Transcript & Summary

Good morning, and welcome to Ai-Media Technologies' Full Year FY '25 Results Webinar for the financial year-ending 30 June 2025. Presenting today is AIM's CEO and Co-Founder, Tony Abrahams; and CFO, Jason Singh. Today's format will have the team run through the FY '25 results presentation, followed by a Q&A session. [Operator Instructions]. I'll now pass to Tony.

Thank you, Mel. Welcome, everyone, to our FY '25 results presentation. I'd like to pay my respects to the traditional custodians of the lands on which we are joining from here in Chatswood, the Cammeraygal people, and extend my respect to elders past and present and from wherever you are joining from. FY '25 was a great year for us. It was the year where our AI-powered language solutions really allowed us to step into our technology future. Our AI infrastructure, we acquired with the EEG acquisition in 2021. We have completely transformed our business from a services business at IPO to a technology business now, where we have pulled humans out of the loop of almost all of our workflows. And by December, we are expecting a completely technology business with a services wrapper of 20% being a very different way that we've delivered that in the past. So with the launch this year of LEXI Voice and our forthcoming release of the LEXI AI suite, we're really moving from the transformation that has taken up the last few years to acceleration through this AI-powered future. We are scaling all of this through LEXI adoption, expanding into new markets and territories, and we continue to target our 5-year goal that we started 18 months ago of $150 million in revenue and $60 million in EBITDA in FY '29. We achieved 2 key revenue goals and 2 key product goals in relation to that 5-year target this year. When we acquired EEG in 2021, all of the sales were in U.S. broadcast. They had an 80% market share, and 90% of the revenue was derived from hardware. We had a lot of people say to us, how are you going to grow this business? And what we've done is, we've delivered on the path that we said in 2021. So our expansion strategy was to convert what was a hardware business into a SaaS business and to expand the range of customer sets that the AIM encoders can deliver for, and the first growth target was Europe. And happily, our encoder sales grew 472% this year from 55 units to 315 units. And the important thing to note about that is that every encoder that we ship expands the addressable base for LEXI subscriptions. And every time our LEXI Text product gets better, that improves our LEXI Voice product and our LEXI AI product. So our revenue growth KPIs were to expand outside of our dominant position in North America and with a particular focus on Europe broadcast. So we did this with that increase in encoder sales, which is the very first sale that we need to make to a new customer because those encoders are the gateway to LEXI. This accelerated the global expansion strategy, where we added 23 new countries this year for a total now of 36. Keep in mind that the EEG software only worked in 2 countries when we acquired the business in 2021, and that was the U.S. and Canada. So to now be in 36 countries really is a validation of the multiyear strategy that we have adopted. The 2 key product growth KPIs were the launch of LEXI Voice, which we are now taking an AI text future into an AI voice future. And very excitingly is the internal development that we've been doing in LEXI AI, which will be released next year, which is an LLM ChatGPT style product, but embedded in our customers' workflows, embedded in their secured data and that reflects the benefits of all of the data being collected through the rest of the LEXI architecture via the encoders, LEXI Text and LEXI Voice. So what we do is effectively, we provide the infrastructure that adds AI elements to live video. Through that EEG acquisition, we acquired the capability for secure ingest at the source of the video output from our customers. We then take that video and marry that with the customers' automation systems, which tell you what the context is that needs to be translated or captioned. And we then marry that together with an appropriate AI engine like a speech-to-text engine or a ChatGPT, depending on the required workflow. And then that delivers an enhanced video output, either with captions or with voice, back to the video in the workflow of the customer in less than 3 seconds for text and in less than 8 seconds for voice. By adding AI elements to live video, we are doing what the big tech companies do direct to consumer, but we are doing it for enterprise-grade B2B customers. The Board has endorsed our FY '26 LEXI product funding increase of 60% based on LEXI Voice and LEXI AI. Now what's important about this is that we know these products are going to be successful, but we have expensed all of the R&D and product development that has gone into that. And we would say, therefore, that the EBITDA that we reported of $4.6 million is effectively understated by the $3.5 million that we've invested pre-revenue in LEXI Voice and LEXI AI in FY '25. And notwithstanding that, our cash has increased by 3.8% to 14 -- sorry, by $3.8 million to $14.7 million, and we still have no debt. A large part of that has been due to the way we have changed the structure of our contracting, and I'll let Jason talk to that in a little bit. In terms of highlights, the key stat here is tech revenue because that is the number that we've been focusing on. And that is up 19%, plus there's $10.5 million in deferred revenue, where we have already invoiced the customer, but we are going to run that out over the next 2 years. Services revenue declined by 25% as predicted with the underlying EBITDA up 11%. Hardware sales were up 36%, largely due to the Europe expansion, increasing the number of encoders that we've got by 39% to 7,062. The total gross margin is up 5 points due to the increase in the tech mix. In terms of customers, we have some of the largest and best brands on earth as our customers. And what we're looking to do is to continue to expand the share of wallet that we're getting from these great customers by expanding from LEXI Text into LEXI Voice, into LEXI AI, all of which will help sell more encoders. Critically, we are still 75% broadcast revenue. We believe that government and enterprise have equivalent TAMs. And so, we're expecting to continue to see expansion in what we're calling the 9 squares, which I'll get to a little later. This slide demonstrates how well we have integrated EEG in the 4 years since acquiring them. So remember, when we acquired EEG in 2021, it was largely a hardware business. And in fact, what you can see is, there were only 9.7 million minutes of LEXI that were being delivered in that year before we acquired them. The total network traffic in FY '21 was 70.5 million minutes. So the total share that LEXI had of the network traffic in FY '21 was 14%. Fast forward 4 years, and we have grown the network from 70.5 million minutes to 135 million minutes. Now, given that EEG already had an 80% market share in U.S. broadcast, we have done that by expanding into markets outside of U.S. broadcast, while at the same time and critically, we have improved the share of LEXI as a percentage of the total from 14% to 59%. And we're expecting to see that continue to grow. And in fact, just today, we have heard from AWS, one of our largest customers, that they are now switching over from next week from humans to LEXI delivery. For the first time, we are able to report annual recurring revenue. We have reported some SaaS revenue in the past, but it hadn't met the true test of ARR. Very pleasingly, our tech revenue of 63% now includes $17 million in annual recurring revenue at an 86% gross margin, and that is forecast to increase in FY '26, while maintaining its margin to $23 million, which is an increase of 35%. We're expecting services to continue to decline and that mix of services will change as we completely shut down the legacy infrastructure in December. As I said, we've been increasing the percentage of technology revenue over the last several years. And the 19% increase in tech revenue, when you account for the deferred revenue, the actual billings were up 40%. And the key point here is that we have accelerated the decline in our legacy services business, which, of course, has had a drag on EBITDA for that component of the business. And so, once we're fully able to switch off that infrastructure in December, we will release some further savings. The total addressable market of voice is 30x that of text. People prefer to engage with voice, and the price point for voice is higher than the price point for text. And typically, when we deliver text, we deliver text in 1 language. When we deliver voice, we might deliver it in 3, 5 or 10 languages. In terms of the expansion progress, as I said, we were only in North America in FY '21. It took us 3 years to get another 3 countries. And then, by last year, we had 13 total countries serviced. And this year, we accelerated that add with another 23 countries, most of which were in Europe, but not only. Importantly, Brazil, Argentina and India as well are on that list. So I'll now hand over to Jason for the financial highlights before coming back for the outlook. Thanks, Jason.

Thanks, Tony. Our key successes right now, we are currently generating 70% of our revenue from technology. This is forecasted in the next 4 months to be 80% technology-generated revenue at 86% gross margin. We've put out a new metric, as Tony has pointed out, annual recurring revenue. This is aligned to our new SaaS model that we are rolling. We're confident that we can grow this to $23 million in FY '26, consistent with our growth of 35% for technology sales. Our encoder base has increased 39% in total encoders. We have sold 1,143 encoders in FY '25 in comparison to FY '24 of 843 encoders. This has equated to $17.1 million in revenue. There's been some strong financial tailwinds that we've received, in particular, the SaaS model, the change in the way we bill customers and our deliberate shift into a recurring revenue model. Regulatory tailwinds with the European Accessibility Act has now added 17 new countries in Europe. The European technology growth in that sector has grown 451%. We spent $7.5 million in product and development. Of that, $3.5 million is related to R&D, LEXI Voice, LEXI AI and other projects, and this continues to be expensed. Operationally, we will see the business shift in terms of proportionality to a 20% services revenue mix. And that 20% will then change from legacy services to professional services to support technology growth, and that continues out into FY '29 as per our modeling. We have taken a very strong hard look at our business and where we're spending our money. We have redirected costs of $5 million in efficiencies, reduced our labor force by 20% or 50 FTE. And we have seen opportunity to grow the business revenue if we invest in product and development in the future as per our strategy. Our model has meant that we have a strong cash conversion of 160%, and we still have no debt, and we are not raising capital. I think the strong message that I wanted to present here is, I joined the company 12 months ago approximately with a deliberate strategy to change the model into a SaaS model. If you look at the differences in terms of how we're performing, we have grown our technology sales at 32%, consistent with our prior year growth. We have grown deferred revenue from $3.9 million to $4.3 million, or $400,000. And in comparison to FY '25, we have grown from $4.3 million to $10.5 million in deferred revenue, or $6.2 million. And of that, $8.9 million is going to unwind over the next 12 months, and then $1.7 million for the first time in our model is going to be in the latter years. This is a big change and shift in our strategy. It will help with working capital. It will increase our cash as it has done already. Our cash conversion will improve, and we will have more capital to invest in the business if required. We have changed the way we bill customers, if we can just go back to that, Tony. We have changed the way we bill customers. Previously, we would bill a customer on a monthly basis, say, $100,000 per month. They would receive a $100,000 bill or depending on usage. We have changed that completely to flatlining that usage base into an annual dollar value of $1.2 million in this case, and we bill them annually upfront. Any overages over and above their usage will be billed on an overage basis. So there is no downside for us to bill in advance. We have received most of that $10.5 million in the bank and also in our accounts receivable and improving our balance sheet. The way we look at our business is obviously in the 3 regions, the Americas region where we're most dominant in North America. 78% of our revenue in North America comes from technology sales. We will see this region improve as we introduce new products to our existing customers, LEXI Voice, LEXI AI and any other products that we introduce. I think we have very strong relationships with our customers in that region, and they do look to us as leaders in AI. We will see further improvement in North America in diversifying into enterprise and government, a strategy that we're actively pursuing. The Asia Pacific business, predominantly still Australian, has a 2-phase program. The first phase of that program is transitioning our current services customers into technology customers, which is what's going to bring us from 70% currently to 80% by December. We're confident of that work being happening in the background. And then, the second phase of that growing Asia Pacific is getting out into Asia and having a foothold there expanding. Currently, we have a presence. We do think that there is an opportunity for us to further penetrate that market. EMEA has been a success story for us into 17 countries. We've grown the revenue from FY '24 in tech from $759,000 to what sits at $4.2 million currently, a 450% growth. We have increased the encoder sales from 55 to 315 encoders in EMEA. The next phase of the cycle will be SaaS revenue that will attach itself to those encoders as we keep growing in EMEA, considering that the European Accessibility Act was introduced only 2 months ago. We do have strong vision for EMEA, and we'll continue to invest in EMEA. We've increased our cost -- operating cost by $3.4 million, but we do feel we have invested in the right areas, $12.5 million to $15.5 million in sales and marketing, up 24%, was a big year for us, particularly with the expansion into EMEA. And we do spend a considerable amount of our resources on trade shows, ensuring that we have a presence all over the world so we can attract the right type of customers. This year, our product investment was 15%, just $1 million in product. We do see this as an opportunity for us to increase our investment in product, in particular, in FY '26. Some of those savings that we've made in repurposing that $5 million of efficiency, we will contribute to our product growth. G&A, we have deliberately been reducing it slowly, and we do see that further improving over the next financial year in FY '26. Moving on to the P&L. At face value, when looking at our revenue, you can see that there is a decline of $1.4 million or 2%. At the same time, because of the shift in the model and the revenue mix, our gross profit has increased $2.6 million or 6%. Our investments of $3.4 million have been spread with sales and marketing product and G&A, an increase of 9%, as identified previously. It's cost us $1.3 million for a $5 million savings, and a reduction of 20% of our headcount, approximately $26,000 per resource that we've moved on. Our underlying EBITDA is $4.6 million if you take out the one-off restructuring costs, which we do not foresee next year, an improvement of 11% on an underlying basis. Very strong cash conversion, an increase at $3.8 million due to the change in business model, which I'll go through in my last slide. One of the key indicators for us is our cash position, and we do see this as improving gradually over the next financial year in FY '26. We've gone from $10.9 million improved to $14.7 million in the bank. A large part of that was due to our deferred revenue of $6.2 million in cash receipts, and some of it has fallen into our debtors, which we do expect to get into the next 30 to 60 days. We've still got a very tight control in our debtors of 46 debtor days. And a change in business model, we are now paying our sales staff their commissions when cash is received, further incentivizing long-term recurring revenue from our customers. We do have -- some people may not know it, we do have a factory where we develop our encoders in Farmingdale, New York. We have spent money into that factory to improve the processes, to improve our capacity, and we do have the capability of meeting the demands currently. I'll now hand over to Tony to talk about the outlook and growth strategy.

Thanks, Jason. So everyone has seen this slide before. This is the third time that we've shown it, and we're still on track to hit that $150 million target by FY '29. As Jason said, we're anticipating professional services to make up 20% or $30 million of that component. These are the kinds of services that see our engineers embed the technology into Disney, Paramount and Fox, places like these, and we want to be doing this in the United Nations as well with LEXI Voice. In terms of the 3 strategic pillars of expansion, firstly, it's product, so pushing more AI products to our existing customers. LEXI Text was still a blip 4 years ago, less than $1 million. Today, it's $17 million. And we believe that LEXI Voice and LEXI AI will follow that same trajectory. Keep in mind, it took 5 years before we acquired -- sorry, in the 5 years before we acquired EEG, LEXI went from $0 to $900,000 in revenue. And then, in the 4 years since then, we've gone from $900,000 to $17 million. And we have AWS flipping over today. That's because the accuracy is better. And of course, it's a much better price. We're going for geographic penetration, so outside of North America. And I think we had a big proof point to prove in terms of will this technology work outside of North America? Will it work as well in Europe, where we had 0 installed base? And I think we've proven at least that bullet point with this set of results. And finally, as Jason said, it's the segment expansion, so beyond broadcast, which is still 75% of the total, into government and importantly, into enterprise. It is the LEXI product suite that is driving this growth. People buy our encoders in order to get LEXI. And so, it's very important that we understand that our flagship product is LEXI Text. And while we're expecting LEXI Voice to overtake LEXI Text at some point because of the larger total addressable market, LEXI Voice incorporates LEXI Text as an element within its solution. So the LEXI Voice workflow effectively goes through 3 steps. It goes from speech into text. It goes from text into a translated text, and then it goes from that translated text into voice in less than 8 seconds. But unless you got the LEXI Text working, you're never going to get LEXI Voice right. And then, finally, LEXI AI, which is a very exciting development scheduled for release in 2026, ties this all together with a secure large language model, effectively, application that sits on the top of it and delivers profound media intelligence, not just from video and audio, but anything that exists within our enterprise customers' systems. As I said, the encoders are the gateway to recurring revenue. And the $50,000 lifetime value is based on the current LEXI Text basically attach rates to those encoders. As we increase the share of LEXI Voice, we would expect to see that lifetime value increase. In terms of the encoder penetrations, more important than the lift in 2,000 encoders is the fact that we did our first U.S. federal government sales in FY '25, and that was a very important security uplift that we needed to deliver. All of our manufacturing is made in the U.S.A. And importantly, our expansion plans into encoders involve moving away from just hardware into our Alta software encoders. And in fact, it's those Alta software encoders that will really give us the capability to effectively hyperscale by not needing to ship physical devices, but where we can effectively put our LEXI API or SDK on somebody else's encoder network. And so, that's a strategy that we will play out over the next few years. As I said, it's all about the accuracy. And to have gone in the last 12 months from 98.85% to 99.14% may not seem that big. But by comparison, we increased half of that amount in the 10 years from 2010 to 2020. So the pace of improvement for us is astronomical. And as the AI engines that we integrate into our system improve, that further improves the accuracy of the LEXI Text and LEXI Voice systems. I think we've established product market fit with a 1,500% increase in text sales to Europe. The APAC transition is on track, and we would expect some of that transition revenue to turn up in annual recurring revenue next year once we've got that second year of revenue from technology in those transitioning customers. Importantly, also, the LEXI uptime is now at 99.99%. And as Jason said, the -- we've got some regulatory tailwinds, which are continuing to help. In terms of LEXI Voice, we have just launched this product, so it is pre-revenue. We actually had our very first LEXI Voice customer just the other day at a stadium in -- just outside of Boston, the WooSox Stadium, for Korea Night. And so, it was a fantastic celebration of Korean culture in Worcester, and it was all powered by LEXI Voice at the stadium, and the feedback from that has been fantastic. We've got some of that on LinkedIn. And actually, I would encourage everyone to follow us on LinkedIn. We don't put a lot of stuff up on the ASX. We don't do ramping announcements, but we do have a lot of detail on LinkedIn. And we've also launched on InvestorHub and so we will be answering questions through that interactive platform as well. In terms of the product features here, we are taking effectively a single voice stream, splitting it into multiple languages, replicating the sentiment and the emotion, all done within a customer's existing workflow in less than 8 seconds. Now, this is obviously a revenue growth opportunity for broadcasters, but the monetization opportunities for us in the short term are where this is a replacement sale. And this is not a replacement sale for U.S. broadcasters because U.S. broadcasters only generally broadcast in English or sometimes Spanish. Where this is going to be a replacement sale is where people are using human interpreters, and that is in enterprise and largely in Europe. And so, that's where a lot of the expansion plans are going to be. And in particular, we're calling out Switzerland and the United Nations infrastructure there as a key LEXI Voice monetization opportunity. We've said we're not expecting meaningful revenue from LEXI Voice until the second half of FY '26, and that's still on track. Excitingly, LEXI AI, which we've been testing internally, is effectively linking up all of the benefits of the encoders, LEXI Text and LEXI Voice that have access to the secure data behind our customers' firewalls and integrating advanced models like ChatGPT to effectively streamline business operations with our customers. And we will have a target release date for this product again next April at the NAB Show. And we know that this LEXI AI will then continue to improve the quality of the LEXI Text and the LEXI Voice, really, really expanding that sort of flywheel effect of AI improvements that we're seeing. In terms of our strategic moat, it's really 5 pillars. Our encoders, 7,000 units installed, 40-year track record of working, very high-value customer workflows, full disaster recovery and 99.99% uptime. Customer data security is critical. So nothing gets uploaded to any private -- any public LLMs in any form of what we're doing. The workflow orchestration and integration is the sweet spot for our top 20 customers, all of whom have over $1 billion in revenue. And what we've been able to do with integrating the workflow orchestration and integration layer of LEXI is not just reduce our customers' costs on captioning, we've also reduced headcount at the customer sites by improving the broadcast automation process. And that certainly has been a big win for Fox in the U.S. in their new facility in Phoenix. iCap Network, we're now -- 59% of that iCap Network is being delivered with LEXI. And the other 39% we've successfully monetized, and we're earning about $1.5 million a year in iCap charges, which we introduced a couple of years ago. And finally, it's building on the power of that LEXI suite, fully AI delivered, all dealing with live video, less than 8 seconds of latency and tying in together all of these products creates the flywheel. New customer comes in, they buy an encoder. That encoder gives you the gateway to SaaS. Once that encoder is installed, it's connected to the automation system that sits behind our customers' firewalls. Then there's a professional services implementation, which will be the bulk of that services revenue by FY '29. The first product is LEXI Text. And then, you build on LEXI Text for LEXI Voice, and then we will wrap that all up with LEXI AI. The more coherence that we deliver across the LEXI suite, the better the quality of all of the products become. So it really is a fantastic flywheel. In terms of the competitive landscape, I've had a few people ask me whether LEXI Voice is similar to the live interpreter product available on Microsoft Teams. And the answer is, it's almost identical, but it's in a different environment. So Microsoft, Google, Amazon and Meta are focused, obviously, as the hyperscalers on direct-to-consumer solutions. We are effectively doing exactly the same product for a different customer set. And our customer set is a really large enterprise customer and a really large enterprise customer that doesn't have a Microsoft Teams environment, for example, at the Worcester Baseball Stadium. So it's really effectively integrating all of the underlying AI engines. For example, we use Google, XL8, ElevenLabs, DeepL, ChatGPT and many more, and ensuring that those -- effectively the big tech retail offers really validate the market opportunity. If there wasn't a $70 billion TAM on this, there's no way that you'd be getting Microsoft really so excited about their live interpreting product. And it's very good. We've had 0 churn from our large customers, and we are continuing to grow our share of wallet with them. In terms of the FY '26 strategy, remember, when we acquired EEG, we were only in that top left box. That was all of our sales, all of our technology sales certainly. And so, we will continue in that largest space to grow, and we're going to grow that by continuing to displace human competitors with LEXI Text and to introduce LEXI Voice to those U.S. broadcasters and Canadian broadcasters. So we will build on the first sales successes in FY '25. We did almost $750,000 in U.S. and Canadian government sales of encoders. And then, obviously, the LEXI will attach to that. We told you 6 months ago that we'll have a big focus on Europe broadcast in that -- the middle of the top line there. And we will continue that successful focus area, particularly, as I said, with the LEXI Text as the first product and then building on that with LEXI Voice. In terms of APAC, as Jason said, we will complete the transition from services to tech in December, and LEXI Voice is then a priority into the new Asian markets. And finally, really, LEXI Voice is our product strategy for enterprise, and we will be focused on those enterprise customers that are currently using human interpreters across all of our regions. So in summary, before I hand back to Mel, the investment case is that we have already transitioned our legacy services business now to high-margin SaaS at much higher volumes. We have demonstrated penetration of new markets with acquired technology that only previously worked in the U.S. We are leveraging all of the AI advances that are going on with the tens of billions of dollars being invested in the core AI engines, and we are focused on integrating the best of those engines securely into our customers' workflows. We have reinforced our defensible moat by doubling down on our security, on our uptime and on our workflow integration and orchestration. We have expanded the TAM with the launch of LEXI Voice by over 30x. And finally, we have no debt, a strong position. And with Jason's strong leadership, we've also transitioned to that SaaS model, which is seeing that cash balance grow even while we're making significant investments in these pre-revenue products that we expect to be a majority of the total, certainly 5 years out. So I'll now hand over to Mel to moderate questions. Thank you all, and look forward to answering the questions either here or on the InvestorHub website on our Investor Center afterwards. Thanks, Mel.

Thanks, Tony. Tony, could we just start with a question on ARR? We just have -- what does tech ARR entail? Is it the annualized run rate of LEXI revenue and doesn't include any software encoder revenue?

So the annual recurring revenue is almost all LEXI Text. And there is also some LEXI Text that is not in annual recurring revenue. So the total of LEXI Text is actually higher than that number. So as Jason said, we will now try to sell annual recurring revenue contracts for fixed volumes in advance, but there will often be a top-up, if you like. And so, that's where that split is in the tech revenue between $17 million in annual recurring revenue and $24.1 million in that other tech. Now, of the other tech revenue, $17.1 million of that is hardware. So that implies that there is -- the delta between $17.1 million and $24.1 million is nonrecurring SaaS. Now, nonrecurring SaaS also includes transition SaaS, so where we are transitioning a customer from a human-delivered service to LEXI in the first year, we don't record that as annual recurring revenue. And that's what's giving us the confidence that we know that we will be at $23 million in annual recurring revenue this time next year at a 35% growth.

Thanks, Tony. Can you -- this might be for you, Jason. Can you add some comments on the reasoning behind reclassifying approximately $1.7 million of services revenue as tech revenue for FY...

Yes, sure. Yes. So I think our technology growth outside of the reclassification was 25%. However, due to basically accounting rules and the auditor's requirements, some of those transition revenue that had transitioned from services to technology in FY '25 also needed to be moved around in FY '24. So it was due to the accounting standards.

Thanks, Jason. Just sticking with revenue, we have a few questions on the upfront annual subscription and deferred revenue. So Matt asks, does the FY '25 revenue include the impacts of the new upfront annual customer billing?

I can take that. Yes, it does. The short answer is, we have started that whole process upfront, that's why the deferred revenue is sitting at $10.5 million. We're going to see that increase over time. The good thing is, of that $10.5 million, already $8.9 million of it is sitting -- is going to be recognized over the next 12 months. And then, whatever we sell throughout the year, that would also increase. So I think we've got a head start in this financial year for recognized revenue.

Thanks, Jason. We have a couple of questions here on the government segment. Tony, it was said that we expanded the government segment in the U.S. and Canada. Can you just talk to that a little bit and maybe the potential of the market going forward?

Absolutely. So we have really used the index customers that we had in the parliamentary space in Australia and the U.K. to find an adjacent sale at the U.S. Congress. So the first sales that we made have actually been to the U.S. Congress and the U.S. Senate. We're now expanding in talks to the Library of Congress and other federal government agencies. Importantly, we've also had security accreditation given by the U.S. Department of Defense, and that's with our LEXI Local products. We have added the Canadian Parliament in as customers as well. And we've recently confirmed that CBC, the government broadcaster over there, is also switching across to LEXI as well.

Thanks, Tony. We just have a couple of questions on encoders. So can you talk to the change that happened in FY '25 from those 800 inactive encoders that became activated? And could you just also mention if these were physical or cloud-based?

Those encoders that were inactive in FY '24 were mostly hardware. There was a small amount of software. Some of those encoders were not switched on due to security concerns. And we've had a number of very large customers with more than 100 encoders that needed to wait for our SOC 2 Type 1 accreditation, which we received, which has been the critical element of turning them on.

Thanks. Tony, congrats on AWS switching to LEXI. Could you please remind us what AIM does for AWS?

Yes. So AWS is one of our largest enterprise customers, and enterprise customers represent 20% of FY '25 revenue. 5% is government and 75% is broadcast. AWS produce and host a lot of events. Again, we've got it split across Europe, Asia and America. And basically, every event that AWS has done for the last 18 months has been captioned by Ai-Media, and we've been encouraging them to switch from human to LEXI. And yes, today, we got the green light, based on accuracy, right, just based on accuracy. The accuracy of the AI is better than humans.

Tony, just sticking with North America there. John has asked why was there flat revenue growth in North America in FY '25? Was there specific competition or adoption factors?

Well, it wasn't flat. I mean, it did grow. And remember, we acquired EEG in 2021, and it already had an 80% market share in U.S. broadcast. So it's hard to grow when you've got already an 80% market share. But effectively, that number is recognized revenue. When you actually include the deferred revenue, that number -- those billings are significantly higher, and that's based on what Jason has just described in terms of the change in the billing, and importantly, also the change in the commission structure so that the sales team are now rewarded with commissions when we receive the cash.

Thanks, Tony. So John just has another question. He says, as the technology and underlying models improve, do you expect any downward pressure on your product pricing?

In short, we haven't seen any so far.

Okay. For FY '26, you've mentioned a focus in strengthening your position in education and government sectors. What's the process for promoting Ai-Media in those new markets and sectors? You sort of talked to it, but can you expand on how it's going so far?