AVA Risk Group Limited (AVA.AX) Earnings Call Transcript & Summary

Good morning, everyone. I'm not Mal Maginnis. I'm David Cronin. I'm your Chairman. Pleasure to have you all on the call today, and thank you for taking the time to have a listen to how AVA went in FY '25 and hear from management on our outlook for the current financial year that we're in. On the call today is our Group CEO, Mal Maginnis. Mal has been with us just over 2.5 years, and he will talk about, not only the financial progress the group has made, but also the operational progress that we've made to position us for growth into the future. Neville Joyce, who's been with us about 3.5 years, Neville. He's our CFO, and he's also Mal's [ 2IC ] based down in Melbourne, and he'll talk you through the numbers and how they relate to our performance in FY '25 and give you any insights into how we're going in FY '26. So over to you, Mal.

Thank you, David, and good morning, everyone. Thank you for giving us your valuable time to listen to the results for FY '25. We have had some questions prior to these results coming in through our Investor Relations. So I will address -- try to address those where I can. But if not, as Alex said, if you could put your questions to Alex. So first thing I would like to say is this is my second full year with AVA Risk Group. This has been a core foundational development year. In this year, my whole aim was to get the business to a growth position for the future. And I'm delighted to say that we have successfully grown the business in every one of its major areas during that year. Our revenue is up 5%, which is underpinned primarily by the Detect business. Of course, like any CEO, I would have liked it to be larger, but several large programs have moved into FY '26 as we announced earlier in July. The very pleasing part for me has been increasing gross margin, up to 64%, up 4% from the prior year. And gross margin is the fundamental metric, which will help us drive value going forward. I'd also like to point out that I did speak to you some time ago about growing recurring revenue. We successfully got that to $2.6 million in FY '25, which is up 30% on prior year. And I'll just remind you that, that is all in the Detect business. So it's nearly 13% of Detect revenue now. The EBITDA was a tremendous turnaround, and I was really pleased with the effort of the team, both commercial and financial. It was a $3 million turnaround to get us into a $2.1 million positive EBITDA. I was also very pleased with the cash position of where we were cash positive during the year, even with some of the large corporations moving their cash payments to the first week of the next financial year. So overall, an excellent foundational year for the business with very strong cost controls, good revenue growth, but even better growth in our gross margin and growth in our EBITDA, which reflects in our cash position. Just for the new investors with us, I just want to remind you about the business. We have 3 business units. The first one is Detect, which is fundamentally based on a fiber optic sensing system. That is a program business. So there can be quite large movements in that business as we do quite a few large projects above $1 million, some up to $3 million. So remember that in our business, a $2 million or $3 million program that moves 2 months can have a material impact on us. But the value in the Detect business, as I'll talk later, is fundamental to where we're heading. Illuminate is a smaller security business, which is all about small sensors. It integrates reasonably well with Detect, but it is fundamentally a distribution business with large partners, much shorter cycle in the business, lower margin, but it's a solid business within AVA. And the last one, Access, high security access and control technology, also a distribution business, has a good position in Australia, New Zealand and U.K., Europe, and we're building a position in the United States. Like Illuminate, though, it is a distribution business, lower margins on resale and much faster in the order-to-cash process. So in summary, 3 businesses: one, larger high-value programs; two, very good distribution, shorter order-to-cash processes. I'd like to just tell all the investors what we talk significantly with all of our customers and clients. The biggest issue that I've built in the business over the 2 years is the idea of sensors. We sense beyond an obstacle or a barrier. So just imagine fences, doors, windows, walls, stretches, these are just barriers. They're done. They don't actually stop any serious person who's trying to breach the perimeter or the access to a major piece of high-value infrastructure. What we do is provide our clients with sensing, 24/7 that allows them to trigger a response. So if you detect us, then you're able to react and respond before your infrastructure is actually damaged. And this sensing is the critical issue that we've been able to talk to and convince our clients that we give a unique position. So sensing beyond security has been the driving issue over the last 2 years. The other thing I mentioned in my previous discussions is obviously with our emphasis on large programs, you need a very strong pipeline. Because the programs are large and they can cause a certain lumpiness in our business, if we don't have a good solid pipeline, I don't have the freedom to be able to go left and right as I need to as programs move. So I'm delighted to say that with the Detect pipeline going into FY '26, we have the strongest position that we've had in my 2.5 years. So we're entering with a very high probability of $13.9 million, a very solid in progress. That means projects we know we bid, we're engaged in of $23.4 million and obviously, an earlier stage, which feeds into in progress and high probability. That gives me confidence in the program side that we have a capability going into this year. And we've seen some of those results, one of which you've seen us announce already. Overall, coupled with our very strong large project partners, Telstra, UGL, Siemens, et cetera, this repeat business with our core clients is what builds a program business. And the last one, again, I'll just reiterate the growth in the recurring revenue is a foundational piece for us. So this obviously just showed you again some of the key clients. The pleasing part for me is I can tell you that in every single one of these clients, we've had follow-on business. Now that's important because while you can win 1 big program that if you don't consistently repeat that, it becomes a one-off. And what we focused on as a team is repeat business with these major clients. So FY '25 for me was a strong foundational building year. The critical issue was revenue up 5%, EBITDA $3 million turnaround from prior year. That's an enormous piece for a $31 million, $32 million business. Our sales order backlog remains solid. I'm always working to grow that and our cash balance was positive, which again was a critical issue from last year to improve into this year. My own view is all of the foundations are here, a very good operating cost base, which is not expanding, and we've controlled that extremely well, good revenue growth, excellent EBITDA growth, good recurring revenue growth and a good cash balance. This underpins a really strong position to FY '26. I've had a series of questions over the last period about, could we break out a bit more on Detect as it's such an important growth driver. And so I've put this in to help the investors understand critical issue within our business last year, $21.1 million of revenue was Detect. That was a 17% growth year-on-year. The gross margin is coming in at 70% and the EBITDA at 18%. This is an outstanding technology business and is a platform for our future growth. We launched Aura Ai-X, our deep learning model in March '23 in my first 3 months. That has been a fundamental driver of our success. We have also added to it new installation training modules and a recurring revenue subscription model. And we've had success in our first large order deployments. You can see in the graph on the right, the number of units sold growing up to last year over 75, annual rate of growth in the units sold of over 30%. This has been a really great effort amongst the commercial team supported by the technology team, and I'll talk a little bit later about some of the changes already in those product lines. I'd like now just to turn to geographies. Of course, we're a small business. We only have 100 staff, but we are well spread across 4 key geographies. Asia Pac, which is our home area, obviously, is really growing consistently and well. We have an outstanding oil and gas and mining position, transportation infrastructure, obviously, and with the announcements on Sydney Metro and Western Sydney Airport. And I can also tell you that we are seeing really strong growth in defense, in airport sectors as a result of the recent government announcements, et cetera. So Asia Pac will remain a really key geography for us. We recently changed our position in Singapore with new staff, and we're seeing the first -- we've had the first successful sale in Vietnam, and we're selling in other markets and have great opportunities in Asia Pac. In North America, obviously, one of the biggest security markets in the world and critical for us. We have been very successful in the midrange programs. That's the up to 500,000 part. What I'm pleased to say is, we're seeing a much stronger positioning in this year for larger programs with larger U.S. government and defense detect customers. In the Middle East, we have an incredibly strong position in oil and gas plus general infrastructure across the region, and we'll see a very strong performance this year. And I'd just stress that this geography is what gives us a balance. When one of the regions is a little bit softer or weaker just because of politics or economics, we can compensate effectively with that with the other regions. So for a small company, we have a remarkable capacity across all of the major geographies. I'm going to go through some case studies now. I don't want to take up large amounts of people's time, but I just want to show you this is what we talk to our clients about. The images in the middle are the case studies we distribute to our customers, which they really appreciate. And the video on the right just shows you one of the major border areas that we supported. Without sensing on a 400-kilometer border, you wouldn't know where those people are. Now this particular stretch is 235 kilometers, but the actual breadth is even longer. If you can't sense that something is happening on the fence, then they break. Have a look at that. That's a big fence and they bring angle grinders and break it. Our system alerted the border guards, they stopped them. That's precisely what we do, detect and sensing to give an effective result. The next case study is Dubai International Airport, although this is only one of our airports, we also have other major airports, including Brussels and airports in North Africa and Istanbul, and we're working at the moment on Australian airports. But this has been a great airport to work with, very technical-based airport, and the results have been outstanding there. And again, it's just another great case study to show you what we do as a business. And I'll let you read most of the words in your own time because it does explain so well what we're doing. Airports are now a real infrastructure issue, which need to protect their perimeters. In the past, they focused on baggage and passengers, they've now realized they also have to focus on protecting the incredibly high-value infrastructure and branding that they have in each site. In Australia, our position with multiple of the large oil and gas plants is enormous. This is just one example at Woodside. We've been recently doing a lot of work in PNG plus other sites in Darwin and Northwest Australia. These are very tough sites. The image on the right of my 3 PSCs working in 44 degree temperatures on the fence lines. This is what we do with our key clients. And as I said earlier, the positive here is the repeat business we're getting from these clients and these case studies. Sydney Metro, we now have 2 projects on Sydney Metro, one with UGL and one now with Siemens on the Western Sydney Airport. These are extremely complex projects. Again, for a small business, this is very hard work for the team. But these are great foundational projects. They both have recurring revenue. They both have a large scale and the customer base, both Sydney Metro and people -- companies like UGL and Siemens are critical for our future growth. We also have had inquiries on metros from other environments across the globe. So I'm looking forward to getting some other results based on transportation in the near future. And with that background on the business, I'll turn over to the hard part, Neville, to do the financial summary.

Yes. Thanks, Mal. Look, a little bit of a deeper dive on sort of what sits behind the numbers that were released this morning. As Mal has mentioned, revenue was up by 5%, underpinned by Detect. Detect had a really strong performance in the year, growth of 17% in revenue. In reality, we had an expectation be even more. As Mal mentioned, there were a couple of orders that we otherwise would have liked to have seen booked and fulfilled in FY '25 that have occurred in FY '26, including the Siemens order that Mal just referenced. Yes, margin has improved really on the back of a stronger Detect performance. Just a reminder to everyone that Detect has the highest gross margins in our portfolio, typically around sort of high 60s to 70%. The 2 distributor businesses are closer to 50%. So, obviously, as we can continue to grow our Detect revenue, we think that gross margins in that range of around 64% are very sustainable into the future. And the underlying EBITDA was quite strong, $2.1 million compared to a $900,000 loss. Two things really driving that result, the improved gross margin. And also, as Mal alluded to, the reality is our cost base decreased in the year just ended. So if I cast my mind back sort of 18 to 24 months ago, we were doing quite a lot of work around our technology and also around our commercial capability. That work largely completed in FY '24. And as that work has completed, we've reverted to a stable cost base in the vicinity of about $18 million annually. Now we expect that, that cost base is very sustainable as we move forward. And that's what drives the improvement in the EBITDA margin from obviously a loss last year to 7% this year. And as we look ahead into FY '26, we expect that trajectory to continue and EBITDA margins to be in double digits at least as we move forward into FY '26. Look, a couple of things I'll call out, impairment of goodwill. For those of you who followed the company last year, you may recall, we took an impairment charge against the goodwill in the Illuminate segment last year. Effectively, what we've done in the current year is impaired the remainder of that goodwill. It's really driven by the fact that in the year just ended, revenue for the Illuminate segment was relatively flat compared to last year, where we had projected to get some growth. So as we take that basis and roll it forward into future years, we've effectively tempered our growth expectations associated with the Illuminate business. We still expect it to grow and grow substantially. But as we've tempered that, that's effectively driven an impairment charge. And the other thing that I would call out is the lift in D&A is really just a result of an accounting change that we made at the end of last year, where effectively we're amortizing our intellectual property over 5 years, whereas previously been amortized over 10 years. So one thing I would call out and again, sort of focusing back on the EBITDA margin, sort of the basic financial model that we're running in the business is grow the top line, bank that gross margin coming out of the top line at somewhere between 60% and 65% and keep our operating costs stable. And that in the year just ended is what drove the improvement in EBITDA margin, and that's why we're confident that as we continue to do that into the future, we can see those EBITDA margins continue to expand. Just a little bit on the segment stuff. We've touched on this previously, but you can see the growth in the Detect business, which I've already spoken about. Just talking briefly around Access and Illuminate. So Access, you can see the revenue declined year-on-year, and that's really just a result of some orders we received last year for dormakaba associated with our Cobalt locking -- Cobalt series locking range. So what's happening with dormakaba at the moment is that, that initial order is working through their supply chain, and we expect to see them start reordering in the back half of the current financial year. So late in half 1 or early half 2 of FY '26. In the Illuminate business, again, following on the discussion I just had on impairment, you can see that the revenue was relatively flat year-on-year. The one thing I would call out for Illuminate is, they actually had a very strong second half of the financial year. And with the order backlog that they carry into FY '26, we expect to see significantly improved revenue coming out of the Illuminate segment in the next financial year. Mal mentioned before around the recurring revenue, we have $2.6 million of recurring revenue under contract, right? And in the year just ended, that delivered about $1.1 million worth of revenue that's actually booked in the financials. So that $2.6 million under contract will crystallize as revenue between now and the end of the contract period, which is anywhere over a 2- to 3-year period. And the last thing I'd call out here, I mentioned before, Detect margins, 70%. We don't really see -- we haven't experienced any pressure on those margins, and we don't really foresee that we will experience pressure on those margins in the near-term. Access margins around 52% and Illuminate sort of in the mid-40s. And again, we don't expect to see margin pressure across any of those 3 segments as we move forward. From a balance sheet perspective, improvement in cash associated with positive cash flow for the business. The reduction in receivables primarily relates to UGL contracts, which is the first Sydney Metro opportunity that Mal spoke about. So we've invoiced a reasonable portion of that contract now. There's still some more to come. The work has been completed, but the invoicing and payments are tied to the milestones that UGL have with Sydney Metro. And the other big change in the balance sheet is on intangibles. That's the impairment of goodwill. And the remaining balance that sits in intangibles primarily relates to the intellectual property that the company has developed and owns. Cash, favorable cash movement, largely driven by favorable working capital in part going back to the UGL contract that I mentioned on the previous slide, as well as collection of other receivables throughout the year. We continue to invest in our technology, so $3 million across development and physical CapEx. Of that $3 million, $2.6 million of it is development related. And again, that's around where we expect our run rate to settle. So that's the continued investment that we make in our technology platforms across the group. The remainder is associated with capital expenditure, a chunk of which related to some IT infrastructure upgrades that we had to do at some of our facilities. And that's it for me. Mal, back to you.

Thank you, Neville. So going forward, what I wanted to talk a little bit about was the growth catalysts in each segment. And I'll try to answer a couple of questions that we've had prior to the call. So the first one is clearly Detect. We stressed on the call the sheer value of Detect to the shareholders, the solution of choice without doubt for oil and gas, energy, now aviation, transportation corrections and more. We have done our first major international border, and we are working on several others at the moment. And Neville mentioned the $2.6 million in investment that we're doing. For a small company like us, that investment has to be extremely targeted on the commercial opportunity of technology, not bespoke developments or one-off developments. And so, we are focusing using the Aura Ai-X platform and its success to develop additional products that customers have been actually asking for, and we have now successfully sold. So during the period, we released a shorter version. We had some customers who don't need a 10-, 20-, 40-kilometer or 80-kilometer type solution. So we developed a 5-kilometer version, lower price, still same margin, but a lower price entry point for those customers. We also developed a buried solution because buried and covert border solutions are becoming extremely important. And we found customers required that for some of their smaller key infrastructure. We also developed an L-band unit to support telcos. This allows us to operate on a live lit fiber as opposed to on a dark fiber. And we were able to release that on the back of our Aura Ai-X C-band, and that is currently in testing and working with Telstra at the moment and doing extremely well. And then last year, we also developed a phase solution. We currently use primarily amplitude, but we developed a phase solution because there are applications and some customers have asked for that. And again, all of those come off the back of a common platform. So that reduces our costs and increases our actual return on the investment. And we also achieved SIL2 accreditation, which is a core safety accreditation for metros and railways. In Illuminate, the focus on Illuminate has been to get it back to cash positive and to get it into a broader prime contracting distribution group. The business was, I think, a little focused on only several and particularly 2 large distributors. That is somewhat risky because if one of those changes technology platform or an approach with cameras, then we could lose that Illuminate side. So we have achieved now about 6 major partners. As Neville mentioned, we had a very strong second half with Illuminate, which is continuing into '26. But I do stress, clearly, it is a lower-margin business. And no matter how much I grow it, its impact on the business will be less, but it is an important part of the business with about $6 million to $7 million of revenue. It all helps. And remember that not all the costs are covered by Detect. Illuminate is also covering some of the broader costs in both development and management across the business. Similarly, Access, Access has a very strong position in Australia, New Zealand and the U.K., Europe. We were slower this year in America, primarily because dormakaba has a solid stock position and is developing the introduction of this new product line into the new market. And that has taken a little bit longer than we anticipated, but it remains useful and helpful to us as a business. And I'm confident that this year, as we move out of that stocking position with Access, we will see the American business start to grow. We also have a very good large lock position with the YG80, which has gained quite a good position in the cargo type markets. Overall, we are seeing more customers in the Access side. And so for both Access and Illuminate, lower margins, my focus is to be getting them cash free and supportive for the business. But I do remind everyone that you can't expect the same result out of the distribution businesses as you can with the results out of Detect. So strong growth outlook for us, which really is foundationally based on the cost base, the commercial team and the technology. That's what's going to grow us going forward. So we are expecting a revenue growth of 20% in '26. And that revenue growth will be primarily in Detect and will have an impact on our bottom line and our free cash flow. Our adjacency businesses, that's telcos and power were slower in '25 than I anticipated, but we are now deployed in those positions. What we've discovered because it was a new sector for us, these sectors move a little bit slower. They need convincing that the technology has an impact. But once they are convinced, this becomes a repeat business. And so I'm very confident with the adjacencies going forward, but it's hard work, but they are very important to us to broaden our approach in the market. We do expect the gross margins to continue across the group at 64%. Our operating cost base is absolutely rock solid. I will add some costs if required, but that will be entirely due to projects or programs or recurring service that's funded. The EBITDA is expected to be in the double digits for FY '26, and I don't see any fundamental reason that, that can't occur. And our cash flows continue to be strong. So I see a strong growth outlook for us. A business of our size, now it's all about the revenue. Every piece of revenue we deliver has an impact on the bottom line. And compelling case for investment. The real success over the last 2 years has been addressing the technology and giving it a real strength in the marketplace. Our revenue growth of 5% has specifically dropped straight to the bottom line. We have high gross margins, and we're trusted by blue chips and governments. Our model is absolutely scalable. And you can see that in the previous slide where I showed you the growth in the controlling sensors. Efficient, scalable go-to-market. It's a very strong commercial team, and I do target growth of 20% into this financial year. We have a very strong competitive advantage technically, a very strong market-focused team, and we have developed very good repeat business. And global opportunity, while a global position for a small company can be challenging, we're in a very good position given both the geographies and our customer support. The customers are strong and repeat and our system integrators and partners are strong and repeatable. So I see the global opportunity as continuing strong for us this year. And with that, I will close and hand back to Alex for questions. As I said, a core foundational year for us where we turned the business into profit. We grew the business. We maintained the cost base. We grew the technology base, and we've got a pipeline that's extremely encouraging going into '26. Thank you, Alex.

[Operator Instructions] We've had a few questions on the performance of the Access and Illuminate segments, which you obviously just talked to now, but perhaps just to cover that off, we've had 1 question on when management expects those businesses to contribute positively to the bottom line and interest in whether there's any intersegment revenue overlap opportunities there as well.

Yes. So as I explained, my focus has been to get Illuminate cash positive this year. I was aiming to get that last year. The first half did not let us do that. The second half, they were cash positive. And Access is close -- in fact, I think it is actually cash positive, but the challenge was the lack of business coming out of repeat business out of U.S. while dormakaba clears that stock position.

[indiscernible] some positive tailwinds going forward. What's going to drive the group sales conversion rate help with forward-looking projections?

The key driver is, as I said, the technology itself is now producing the results we need in the marketplace. We also are seeing a significant uptick in customers' concerns about the security of critical infrastructure. As everyone, I think, listening knows, critical infrastructure has been scaled back over the last 20 years. There are some significant areas of single point failure. So protecting those critical infrastructures from interference is driving a lot of customer engagement. So the technology is the first issue. The customer requirement is the second. And the third one is the impact of the commercial team, which I mentioned 2 years ago, I was rebuilding. We saw the foundation of that this year, and we see that growing in the pipeline.

In the Detect business, could you provide a bit of color on who you're competing against and how the product compares?

Yes. Thank you for that. Yes, there's a group, as I think I've mentioned before, it's a very fractured market. There is about 25 various fiber companies across the world, including several large ones like Huawei, et cetera, in China. The biggest ones we would compete against in the market space are companies like [ Sensa ], OptaSense Luna, Sintela and several others. I would stress though the majority of them have other detect or other businesses, for example, DTS or various other businesses in sensing or other types of sensing. We don't have many companies that are pure detect businesses that is DAS fiber sensing. And against those, we compete extremely well. Now we lose business exactly like every company, we win some and we lose some. I would say what has been pleasing to me is we have been winning business back from opposition companies. And this has been primarily on the back of the success of the technology, fundamentally about not overpromising and actually delivering what we say and demonstrating that the product works. That's been the key.

Thanks for that, Mal. And just on the work being done with Telstra, could we give an update on that and whether we're expecting further revenue from that relationship? And if so, when?

Yes. So Telstra has been a really good partner, very tough to work with. I think many of you would know that. It is a very strong technology and infrastructure company. We've been showing them a new technology and a new approach, which they have embraced. We now have 3 projects running with Telstra in various applications. It wouldn't be appropriate for me to say exactly what that is. One of them we did announce where we have started to do some work on them on securing their cabling, both offshore and onshore. We're in the middle of that at the moment. And I think as that is going extremely well. In fact, we were with them only recently. I would see more follow-on this year. But in specific months or dates, I would not be able to give you that because it is really dependent on the Telstra process. But I would say that the impact has been very positive, both from a performance issue and obviously a revenue issue, but even more so on helping us to develop the next generation of Detect. The L-band specifically came from request from Telstra, and we were able to develop that in 3 months. So that was a really powerful result driven by a customer, and it's already in service.

Thanks, Mal. We just had another on the guidance piece, which we briefly covered off. But one of the questions is on the outlook provided 2 years ago at the AGM in '23 and whether we can just give a bit of insight into the difference between our expectations then versus the results today.

Yes. So look, I might get some help here with David and Neville. But in my 2.5 years, obviously, there was an outlook that was already set before I joined and I supported that. The outlook has been very strong in the Detect side. I think we have been more challenged in the distribution side of the businesses, which have not contributed to that growth that we anticipated. But I think maybe I'll ask David and Neville your thoughts on that to comment.

Yes. Well, I think the big lumps that we've talked about on previous investor calls was the adjacencies. We had an expectation of 5 building to 10 and then building up from there and those adjacencies, particularly around the telecommunications sector, just haven't materialized in that time frame. And we've obviously kept the market updated on the changing forecasts in that sense. Detect has been a little bit slower because of the lumpiness. And we pointed out even the FY '25 year would have been a lot, lot better had those 3 orders that got pushed into the current financial year landed when they originally promised to land. So that certainly had an impact on our thinking from 2 years ago. But as Mal points out, Access and Illuminate haven't really -- Access had good growth last year, but then you smooth it out on a 3-year basis. Those businesses 2023 when that forecast was put together have really underperformed on what our internal expectations were. That said, we're broadly aware of the reasons why Mal has pointed out and Neville has pointed out that we are a small group, and it's all about resource allocation. And if I look at spend in front of house and sales resources and if I look in spend in CapEx terms in terms of product development and product launches, et cetera, 85%, 90% of the investment that we've made in the last couple of years has really gone into Detect. And obviously, the Detect margins are higher. The growth has been higher. So that's been money well spent. But unfortunately, as a small company, we don't have excess capital to push around where we're seeing a slowdown in Access and Illuminate to try and drive more front-of-house activities, more trade promotion and potentially more development in the back end to meet customer needs. So that's been disappointing for us all in the last 2 years. The lumpiness of the adjacencies, I think, is very explainable in terms of the cycle that we've gone through with Telstra and all of the work we've had to do behind the scenes on product and positioning and applications rather than in actually installing. We're obviously starting to see the benefits of that now. But definitely on Access and Illuminate in the slides that we then Detect in the last year, that's been something that we didn't consider 2 years ago at the AGM. Do you want to add anything to that, Neville?

No, look, I think that's pretty right. I think if I was characterizing it, it's just things have gone more slowly than what we had expected or forecasted a couple of years ago, right? So having said all of that, I do believe that the fundamentals around the technology and commercial capability are pretty strong. So the challenge for us as a business and obviously for us as leaders of the business is to really sort of get after revenue and drive that revenue. When we produced those forecasts a couple of years ago, it really sort of was predicated on drive revenue, convert it to gross margin and manage costs. And that's still the focus. It's just that as David and Mal have identified, it's just gone -- taking us longer to get that top line growth, and we need to get after that.

And just one clarification on the 20% revenue growth for FY '26, should investors focus on that as the forward guidance as opposed to the previous table provided?

Yes. I think is the answer to that.

Correct. Yes.

Yes.

Great. Thanks. We have no further questions.

Sorry, I think something pop up on a forum just asking around the difference between the underlying EBITDA of $2.1 million and the EBITDA loss in the Appendix 4E. That's really around -- primarily around the treatment of the impairment charge, right? So when we look at underlying EBITDA, we're trying to manage the underlying or the underlying drivers in the business, the underlying performance in the business. So when we look at that number, we exclude things like foreign exchange variations, which we don't really have any control over. And we exclude impairment because while it's an important disclosure, it doesn't really go to the ongoing operation of the business. In the 4E, when we report EBITDA, that is really profit after tax adjusted for depreciation and amortization. So it includes foreign exchange variations. It includes impairment charges, which are things which are important, we need to look at, but don't go to the heart of the underlying performance of the business, which is really sort of what we're trying to identify and manage and report against.

Thanks for clarifying, Neville. There are no further questions. I'll now hand back to Mal for closing remarks.

Thank you, Alex. Thank you, everyone, and my thanks to all of you for your continued interest, support and following of the business. As I said, '25 for me has been a foundational year that position with strong technology, good revenue growth, excellent EBITDA growth and free cash flow and the recurring revenue. These with the performance of the controllers and detect underpin where I see a strong FY '26. So thank you very much.

Thanks, everyone. You may disconnect the line.

Thanks, everyone.