Felix Group Holdings Ltd (FLX) Earnings Call Transcript & Summary

Good morning, everyone. Thank you so much for joining today. It's a great pleasure to be here this morning and to take you through a strategy update for the Felix Group. We're going to talk to you today about our strategy around using AI to really activate the network that we already have in place in this business. If we could just move to the next slide, please. The 2 presenters you'll be hearing from this morning are our new CEO, Chris Atkin, who joined the business in April of this year; and myself, Dominic O'Hanlon, I joined in February of 2026. By way of background, we're both technical entrepreneurs, worked in a number of software companies, a number of other sort of related industries with ASX experience. And we've come along to Felix because we think there's a great opportunity here to do more with the business and to drive more value for our shareholders. Before we kick into the presentation formal, I'd just like to talk a little bit about AI and what it's doing to the software industry, if we can just step to the next slide, please. So many of you would have heard about the SaaSpocalypse and would have heard about software companies being disintermediated by people creating their own software using AI. And that absolutely has been the case and it is the case globally for a number of software companies. However, for other software companies, AI presents a really exciting opportunity to help them do more and to drive more value to their customers. There's a very large private equity firm in the United States called Vista Equity Partners. They have over USD 100 billion invested in software companies. They have about 90 companies that they've invested in and they've built a framework for evaluating software companies that are going to thrive in the AI age rather than being disintermediated in the AI age. And they're looking for 3 key attributes for those software companies. The first one is context, which is really about domain expertise and domain knowledge. They're looking for companies that have got a lot of experience in how to serve a certain industry, and that knowledge is not readily available on the Internet. So for example, it would be very easy to use AI to book a flight or a hotel, plan an itinerary or even get instructions on how to fix an oven because all that information is readily available on the Internet. But if you want to look at how to help a company to procure asphalt or concrete for a tunnel under a city, that's a lot more complicated and the process that companies have to go through to make decisions around how they're running that process is not something they can find available on the Internet. The domain expertise that companies like Felix have in that area enables them to use AI to build more and more value to their customers, but it's not something that's likely to be disintermediated by just a generic AI application available on the Internet. The second thing that Vista Partners look for in a business is trust. And this is simply just about how many customers have you got? How big are your logos? How many times have you done this before, who trusts you, who relies upon you. And the more trusted you are as a source and the more domain knowledge you have as a source, the more likely as a software company, your technology can't just be replaced by a program or with an AI bot. And the last thing they look for is scale, just that size, the size of the network, the size of the customer base, the size of the customers that use those customers, the size of the supplier base, the bigger the scale, the bigger the domain knowledge, the more the people are trusting you, the more likely it is that you can use AI to drive more value by complete more workloads and more workflows. But it's not going to be something that's very easily disintermediated. Felix is positioned very well in all these 3 categories, and I'm going to take you through that today, but we could do more. And using AI, we plan to do more. Before we step into that, I'm just going to share with you a little bit about the landscape that we operate in. Because when I joined the Board, one of the first things I did was have a look at who are our competitors and not just in Australia and New Zealand but globally, and it was a little bit difficult at first for the uninformed because there are so many software companies that talk about procurement, that talk about construction, that talk about infrastructure. And it seemed on first blush that there are so many software companies competing to solve the same problems. Actually, that's not the case. It is the case that there are many, many, many software companies but they all do slightly different things or they all specialize in one particular area. Some of them do a couple of things, some of them do a few, but most of them have a really deep expertise in one area. So without taking you through this in a great deal of detail, I'll tell you that there are software companies that do construction intelligence, like bids that are coming, who's bidding for work. There are software companies that do very deep vendor relationship management, which is absolutely the strength of the Felix platform. There are companies that do safety and compliance. There are companies that do bid and tender management. There are companies that do procurement to mid-market organizations, maybe for local government or maybe for small businesses. There are those that handle contract management that allow you to insert different clause categories inside contracts and do life cycle management. There are those that do enterprise source to contract, which takes you from the time of finding a vendor right through to contracting with them. And then there are enterprise source to pay companies like SAP Ariba that can do everything right through to actually the accounts payable ledger and raising the invoice and taking the payment. So there's a very fragmented market. And the reason that I'd like to share this with you today is because I'm going to talk a little bit, and Chris is going to talk a lot about where we specialize and where our focus is. But my view after many years of your experience in IT and software companies after having done 4 or 5 exits myself, is that there's always consolidation in these industries. So ERP is a good example of that, that market segment and CRM also went through a very fragmented software growth phase, and then it went into a consolidation phase. And our goal as a board is to make sure that we're positioning our business in the absolute best possible light to return the highest value to shareholders if and when that consolidation occurs. So let's just quickly talk very briefly about what Felix does. And I'm going to share with you sort of the good and also the opportunity, which you could categorize as the bad, if you like. Where are we really strong and where have we got opportunity to grow. On the left-hand side of this graph or this chart, you'll see that we are a business that has a strong portfolio of products, especially around vendor management, procurement schedule, sourcing and contracts. Our typical customer or our ideal customer is one that has a large group of vendors that they need to manage and that it's a fairly complicated group of vendors to manage in that. It's not enough to just go and buy from a vendor. It's not enough to just post a job and buy from a vendor. There's a lot of prequalification that's required about those vendors before you can buy from them. You may want to know about their insurance levels. You may want to know about the jobs that they've worked on before. You may want to know about workers' compensation or ESG. There's a whole raft of things that you need to know about a vendor and whether or not they're compliant before you can deal with them. And that's all done in our vendor management solution before you get to actually buying anything from them, well before there's any procurement that actually occurs. This is a very deep domain expertise for us. We're really strong in it. We're known very well for it, and we have about 87,000, 88,000 unique vendors sitting inside of our platform. On the right-hand side, closely related to this is a vendor marketplace. And just by way of explaining the difference. On the left-hand side, our biggest customers are huge infrastructure companies build their own instance of data using our software with their own vendors in it and their own procurement schedules in it and their own sourcing and their own contracts. And it's effectively their version, their enterprise version of the Felix application and platform. And you may have one company to -- I think we've got about 80 large enterprises all running in their own instance using our software to manage their vendors. On the right-hand side, we have a more generic vendor marketplace, not used specifically with data for an individual enterprise. But just the marketplace with 87,000, 88,000 vendors in it that allows you to actually go and find vendors to do certain types of work. And that marketplace, generally speaking, is less complicated, doesn't have the same procurement schedules, doesn't have the same complexity to the way to acquire. The opportunity for us, which we have not yet capitalized on as a company is to integrate these 2 things. So if you're in the enterprise version of our product with your own instance of data, you can't go into our vendor marketplace and go and find vendors to do work for you. We can help you do that manually, but it's not a technical integration at the moment. If you're in our vendor marketplace and there's work that's being put in an enterprise marketplace or an enterprise version of our software, today, you don't get to see those tenders and those bids. So the piece of work that we think is opening up great opportunity for us is to use AI to integrate these into one highly activated procurement network. Just quickly on Nexvia, it was an acquisition we did at the end of last year. It's an acquisition that is a good business. It's a stand-alone business. It's not really part of the vendor marketplace. It doesn't really play into the vendor management space. It was bought so that we could monetize and sell product to our vendors. And there is an opportunity for us to do that but it's not going to be the size of opportunity that we think we can get by integrating the vendor marketplace with our enterprise vendor management solution because the scale of it is just not as big, doesn't have access to those 87,000 vendors and those 87,000 vendors that we have are not all going to be a target customer for that Nexvia product. So in other words, it's a good stand-alone business. It's a wash its face, it should make some money over time, but it's not going to be a core part of that integration strategy that we just talked to. I'm just going to quickly step through the next slide. I'm sure that if you're an investors and shareholders in our business, you would have seen many of our organizations that we deal with before. But this just goes to the trust discussion that I mentioned earlier from Vista Equity Partners. We have a very big platform. We have many customers like the ones on this screen that are using their own instance of our data set -- sorry, their own data set on our platform. But the opportunity is to integrate all of these now through to the vendor marketplace, which is more generic and has more vendors on it. I'm going to hand over to Chris. Chris is going to take us through the strategy in some more detail. And then we're going to have a time for Q&A at the end. And we've already got some questions that have been sent ahead of the meeting. So thank you for those. But we will get to them we promise. Thanks, Chris.

Thanks very much, Dom, and good morning, everyone. It's great to be in the business and to spend my first 3 months understanding what the business has in terms of its capabilities, what it has in terms of opportunity. And so I understand how we can knit that together to an exciting new chapter. So I'll take you through this plan, talking a little bit more about what we call the intelligent procurement platform, how we will go about creating it, reinforcing some of the stuff that Dom has already talked about around Felix and it's really great positioning to be able to win. And then taking you through our view as to what some of the phases will be to bring this to pass and activate to expand and then to accelerate the network effect that it unlocks. So in short, we're in the era of AI and we can unlock a significant amount of capability that we already have within our system to become this intelligent, trusted procurement platform. It's really there for a slightly expanded group than perhaps the business has traditionally spoken to. It's anyone that owns, builds, manages or maintains assets, whether you're on the enterprise side or whether you're the suppliers and vendors that are helping to do that. And as we said before, we've got this really strong existing network that's in place today. That's the core foundation of this business, and that's what's ready to activate. But there are just some pieces that we need to do to be able to unlock that and then enable us to be able to monetize that more effectively. Subsequently, as we develop more in the way of AI as we expand more features within our products and bring more connectivity into the platform, and I'll explain a little bit more about that later then we can move into the expansion and acceleration. It's important to note, therefore, in many of my early conversations with investors, we sit, and I've heard 2 different types of things that we have this ability to potentially take that procurement solution, outsource to contract solution and to be able to take it out into different markets. I've also heard that potentially we could expand and add pieces to become a more construction industry ERP. We're not seeking to do either of those things in terms of the strategy. It's to build a trusted open platform for procurement focused here on Australia and New Zealand. So here's a diagram that captures where our view of the future state of the Felix Platform. On the left-hand side, you've got the enterprise businesses, on the right-hand side the vendors. And the principle here is that each of those have one single window or a portal or surface, whatever you want to call it, into a set of capabilities that the platform holds. So on the left-hand side, for the enterprise, that's this governance portal. Governance is the key thing that we stand out and that we offer to these type of organizations. Our vendor management capability and the compliance around that is best-in-class. We'll add to it, the contract life cycle management capability to mean that we can book end any different way that a business wants to do its procurement. And then through that, they can access the full platform of capabilities I'll touch on in just a minute. Similarly, on the right-hand side now, on the vendor side, we will offer to vendors today a single vendor identity. This will be enduring. It's able to be verified to be able to confirm credentials with peak bodies to be able to update and notify when insurances or various things like that have gone out of date. And then also give those vendors the access to the capabilities and the modules that exist within the platform. To be clear, what often happens today is that vendors get invited into these different walled gardens managed by these different enterprise businesses and so managing multiple accounts. We aren't even aware of accounts that exist within their name. And as a result, there's multiple pieces of information, inaccurate information in different age parties. And we want to bring that together because that will be the portal that brings them into the Felix Platform. So moving into the middle there, we'll talk about some of the elements that the platform brings. The jewel in the crown in the long term for this platform will be the marketplace. It's where you can discover, you can match and then you can seamlessly transact for initially just those fragmented sourcing needs. So for an enterprise, it's a quick job that needs to be done. It's low risk or it's lower value. It might be in a new territory where they don't have familiarity with vendors and suppliers that exist. It might be for a service, they very seldom use and therefore, they don't have an understanding as to who to use. That's what we want to be the default for. And then ultimately, as we deliver more and more confidence, more and more governance around that, the quality of information on either side gets there, then we can raise the bar and begin to be a legitimate option to a strategic procurement for these enterprise businesses as well. Moving on to the next section. The further workflow tools that we offer. We offer those today, but there to help them prepare or to work together within the procurement process. What we offer today, for instance, within there is the procurement scheduling tool to an enterprise to get a plan and break down the packets of work that they want to be able to run bids for. The source of contract solution that helps them to be able to run those tender processes. And then on the vendor side, you've got Nexvia as an example of workflow tool management, effectively a mini ERP that is fit out and specialty contractors to be able to work with. The next one, connectivity. We already have some API connectivity, but we want to become an open platform. And so that means expanding that connectivity to mean that you can bring integrations into other procurement systems. This way, by bringing different ways that we can do it, we're doing 2 things. We're alleviating the stress on ourselves to have to keep creating more and more workflow tools, but we're also helping an enterprise to bring on to our platform, the full suite of the procurement processes they're doing, bringing it on platform and giving them the tools they need to but still being able to use the governance control that they had over their vendors and similarly, the access to this vast number of vendors that sit with their identities being managed. We'll continue to add to connectivity to ERPs. As Dom mentioned, there are really significant part of that subsequent process. And the things that we do really, really well on the enterprise side, like vendor management, that compliance is not necessarily what they do well there. So it's a well-suited match. And then finally, we'll continue to add valuable third-party information. So that might be the sort of information I mentioned before that helps to verify or give notifications to a vendor to make sure their profile is fully up to date or it could be the data that helps to inform that final piece there, the platform intelligence taking AI and what's already 12-plus years worth of data and the ongoing data within our platform to be able to provide valuable analysis and insight to mean that anyone across the platform can make better decisions in using the platform. We'll continue to do that across the sort of sectors that we do today. But because of this broadened focus, we'll be able to do that across a broader piece. And obviously, we then kind of expand the network that we already have today. We believe it's going to be a compelling solution for either side. I won't dwell too long on this slide, but for the enterprise business, they have a single portal to access the vendor network. There's AI driving reviews and verifications for them. They have this open universe so they can work with the right specialized workflow tools supported by this platform intelligence layer that reduces the risk of them making poor decisions. On the vendor side, again, one identity that they can make the effort to manage up-to-date information, enabling us to be able to then AI assist in the bidding and management process, being able to pre-populate all of those consistently repeated sections that they have to fill in within a process, doing that automatically. Bringing an open market, so we're bringing them so critical for them more business through the marketplace or through greater exposure to the enterprises that are coming into the network. And then ultimately, things like reputation scores so that they can differentiate themselves from other vendors through the quality of their work in the past. This will help us to unlock smarter working reduced friction and encourage greater participation across the network. Just touching here on some of those cornerstones within the platform. You've got that enterprise governance tool on the left-hand side there. Really, the key for that enterprise procurement business to be able to access the network participation. I've mentioned before, some of the tools that were in there. But ultimately, the role of that is this compelling offering rather to the enterprise universe. So for someone using our products today, it's simply adding functionality. But for those new people coming in, it's giving them the ability to work in whatever way they want to on the enterprise side with the Felix Platform. Second column there is the vendor identity. Each vendor that constant identity, helping them to build both efficiency but also trust within the network that will be so critical for them to be able to win further work that have greater visibility. And strategically, what it does is helps them to become a prominent and active partner within the network to deliver more value to their business and obviously unlocking monetization for ourselves. If we think about the business here has talked about monetizing the vendor network before. But what we haven't been able to do is package and deliver the consistent set of solutions that unlock that monetization, and this is exactly what we plan to do here. Our third column is the marketplace, delivering smart reduced friction procurement and ultimately expanding beyond that tactical role that it can play today to become a genuine consideration so that more and more enterprises can think about taking more -- a higher percentage of their tendering and their procurement into the marketplace because they have a confidence that both the suppliers are there and the quality is there. Obviously, that in growing starts to bring more throughput and more efficiency and will help to expand the network for people to be able to come and benefit from things like that final column of network intelligence, bringing that knowledge, that benchmarking, our verification, our risk management into the hands of all of the users of the platform. We believe there's a really significant TAM to this. We're talking about ANZ alone here, we estimated around $375 million of ARR TAM, evenly split between the enterprise side and the vendor side. And as you can see today, we've used the license revenue on the enterprise side, we've used the vendor marketplace revenue to just give us a sense as to where we are today, as you can see, hardly exploiting that opportunity today at all. And so the key thing that I would say from this slide is 2 things. One is that you don't need to achieve a very significant share of that size of market for this to be a very sizable revenue of the business, 13% would deliver you $50 million of ARR, for instance. And most critically, Felix isn't starting from scratch and delivering this. We already have a network of significant scale when an enterprise comes into our business today as a top-tier contractor and they give us our vendor list, usually 3/4 of those vendors that they work with are captured within our network today. So this is really about monetizing, activating and monetizing an existing but latent opportunity within the Felix network. I'll move on now to talk a little bit about why we're best placed to win here at Felix. If we were starting from scratch, you'd have to build all of these things, and yet Felix already has it today. We have enterprise scale. In the last 12 months, we estimate that over $50 billion worth of contract value is managed by the existing customers either on or off the Felix Platform. We have scale on the vendor side. As Dom mentioned before, nearly 88,000 live and unique vendors within the network across the marketplace and across the enterprise tools. We have these embedded workflows already that people are using. So over 3/4 of our enterprise customers at least use one of our workflow tools. And then we provide governance credibility really critically every single enterprise business that uses Felix uses our vendor management tool. And that's over 7,000 users across the procurement community within Australia. And then we have an active marketplace. As Dom mentioned before, this is a marketplace that is doing over $250 million worth of estimated total contract value each year and yet every time an enterprise is won and starts using our tools, they're being taken out of the marketplace because they can't operate that way. So we've been shrinking that almost through our success on the Felix Enterprise side, something we will wish to change and bring those 2 solutions together and put them in the hands of the enterprise. And then finally, we've got monetized participation. So we've got nearly -- we've got $9 million worth of revenue from both sides of that system. So it really is about activation to be able to deliver greater value. AI, as we mentioned before, is going to be a very significant part of us unlocking this opportunity. This slide really just captures a few examples of the areas. As you might imagine, it touches every part of our business. We'll be using it internally to make sure that our teams are more efficient and effective, within our product and engineering teams to be able to build and to monitor the platform, but also in these areas from a product perspective. Driving compliance and verification information so that credentials can be checked or can be flagged if there are issues in real time. Matching and recommendation really being able to drive, obviously, most impactful within the marketplace. But equally, when there's a search down, somebody just really needs to find someone out there. We have the network that we can bring the recommendation or the match to their attention as quickly as possible. Risk assessment and benchmarking these dynamic reputation scores, performance information, pricing and risk compliance benchmarking, all really valuable tools to help with better -- unlocking better outcomes. Monitoring and reporting, so critical with people spending more and more time within our platform, they'll need that information to be able to monitor and report on the things that are going on, both with the contracting that they're involved with but also in terms of their management of their other responsibilities or their credentials. Procurement efficiency will just continue to improve within the network with smarter workflow and increased automation of the procurement process, both across the formal and the tactical sources, those formal sources of using the enterprise tools that we use today, all the tactical sourcing that the marketplace currently covers for the long tail. And then connectivity, as I say, seamless access to the data that we have, this immensely rich data we have within the network today, but also then bringing in those relevant third parties to better enhance that. I'll just move on now to the different phases that we'll go through, and you'll hear us talk about over the coming months and years as we go on the journey of delivery. As I mentioned, we see these 3 phases from where we stand today. As we stand today, we've got this network that already has scale. 76 enterprise businesses, the over 80,000 vendors and the ability to be able to unlock more effectively the value and therefore, the monetization. So the first phase is around activation. So that's really delivering more to those existing users today. Examples are on the vendor side, the vendor is taking up those single IDs, being able to start manage and driving the efficiency that they get of not having to rehandle, making sure their information is up to date, making them easier to be found within search. But then also having that ability to use the marketplace more effectively to win them more work. That's something that we can start to monetize and they'll be very happy to play because we noticed from our previous conversations with them. On the enterprise side, starting to bring the fragmented sourcing solution of the marketplace alongside the way that they can use the Felix Enterprise tools today so that they can have this full choice of methods that they can use for their procurement activities. As we move forward then and we continue to add more capability within -- to our product, more AI driving the value and the impact then we can start to expand even further. We'll begin this earlier and during the activation phase, but being able to go more broad in terms of the type of enterprises we can talk to and we can put an offering to or/and then subsequently being able to bring in the suppliers that are relevant for those sort of enterprise. So we can build both sides of the marketplace. An example here, for instance, would be starting to expand into 3 tiers, if you think of a gold, silver and bronze type tier on either side, the gold on the enterprise side might look very similar to a top-tier contractor of today that's using a full suite of Felix tools to be able to manage their procurement. Whereas right down there at the bronze level, it might be just someone that is using our marketplace to be a searcher on an infrequent basis, just on a pay-as-you-go basis. Similarly, on the vendor side, you've got a gold type vendor that would be using that single vendor profile that they have, that identity, managing that, getting the best of the value that's on offer within the platform, and therefore, being very willing to pay for these multiple layers of both access to new business opportunity, but also the efficiencies in dealing with multiple tendering processes. And then at the bottom end, again, it might just be someone that just pays to have a presence within the marketplace so that they can bid against relevant work that surfaced through the marketplace. But the key is we're moving to a situation where the platform and the product helps us to drive expansion on this ever-expanding network. And that brings us to that final phase of accelerate, where the network becomes the default and new participants joined because really, it's the place they have to be, the LinkedIn, if you will, for being able to procure within Australia and New Zealand. And therefore, obviously, the value proposition can continue to expand as that network grows. To do that, we see there being 4 key strategic pillars. The first one is to evolve the existing products. As we've mentioned already a number of times today, we've got a lot of the assets that we need to be able to construct into this platform that delivers this holistic solution to both sides of the network. So that's still focusing on that key of our enterprise products but starting to expand and making sure that they're helping to bring not just trust to those individual businesses, but they're starting to bring the same information and trust into the network as a whole. And then it's being able to bring and unify the vendors into that single powerful network that can start servicing the enterprise in the ways that the enterprise want to work. The second piece is really enhancing the marketplace infrastructure. Increasingly using AI and the scale of the network to create a self-serve governed transaction solution that can go from just selling with a long tail of sourcing, as I mentioned, to become this viable solution within the suite that a procurement manager has in whatever sort of enterprise organization is using the tool. The third one building the network intelligence. We've got an immense amount of data from our history. We will continue to add data within the network. And so we want to be able to leverage that to be able to deliver great insights and ultimately enable good decisions to be made across the network, both on the enterprise and the vendor side. And then finally, perhaps more from a Felix perspective, unlocking the customer tiers. So going from selling simple enterprise workflow tools on the enterprise side, these long lead cycles and higher touch to be able to set up and to maintain these customers. But actually expanding the network, expanding the network participation in this lower touch value-enhancing flywheel, which means that we can drive not just a bigger number of customers. We can have them work at the levels that they need to and be monetizing them at the level that matches the value they're extracting from the network and having effectively a network effect that's driving ongoing growth for the business. Now we believe that's a really compelling opportunity, and we're really excited to begin that. Hopefully, that has been useful and clear, but I know there's been some questions that have already come in and maybe some that have come through the webinar as we've been speaking this morning. So I'll hand over to James to read out what those questions are, and between Dom and myself will hopefully be able to address them to your satisfaction.

Thanks very much for that, Chris. The first question that's come in says, have you considered embedding early payment financing directly into the RFQ compliance workflow as part of the vendor initiative similar to solutions like Procore and what they offer on their platform?

Yes. Well, as you can see, with us moving towards the single vendor ID and wanting to provide this full platform solution. There is a vast array of things that start slotting into the set of solutions we can provide. And that would certainly be within that. And so what we're going to do is over the course of the next few months, identifying where we think the greatest value and the right sequencing is. And so we'll be able to share more of that as we go forward.

Actually, can I just comment on that too, James, if you don't mind. The strategy here is one about building operating leverage in our business. That's what it's all about. Currently, we make our money from very large enterprise customers. It might take us 6 months or a year or more to sell 1 deal. And when that deal is sold, it might take us many, many months, 6 months or more to implement that deal. And so the volume of revenue that we're generating is quite lumpy and there's a high cost of sale attached. That's the current business model. What we're talking about is using the data that we have, using the network we have with 88,000 vendors in it, integrating that and adding more value to it so we can charge a lot more customers and -- sorry, vendors just a little bit to be on the platform. So for example, a vendor might pay X dollars a month to be on the platform, but that will give them access to tenders and bids, which they currently can't see. Once we've done that, we can start growing our revenue in a much less lumpy fashion and we can grow our revenue in a way where we don't have incremental cost for every deal we close. So the operating leverage opens up in the business. Then adding more and more to it, maybe it's financing, maybe it's other features. That's where the real opportunity here is in our business. So this is a story of pivoting the business away from a small number of large deals with a high cost of sale towards a high number of small deals with a low cost of sale and then adding more and more and more capability to it and financing is one really good example of that, and there's plenty of others as well. Thanks, James.

Thank you. Next 2 questions focus on AI. So I'll sort of bring them together somewhat. Is your AI strategy closer to deploying AI functionality where you think will have the biggest impact or fundamentally restructuring the organization over time to put AI at the center of everything you do. And what is the time frame associated with that? That's the first one.

Yes. Well, I mean I think it's more the latter. I mean, AI has to, as I touched on before, has to be working at every level of the business. And so as soon as I came into the business, we identified an AI imperative within the business to make sure that we're doing 3 things: that we're embedding the -- at an individual level within the business, the capability, the knowledge and the ability to be able to use AI to impact every single individual's day of work. The second tier is for us to look at it at an organizational level to make sure that we've got our data set up in the right way, that we have the right mitigation and management of the different ways that we're doing stuff and that we have consistently across -- just insistency across the models, and we're making sure that we've got a secure way that we're using AI within the business. And then the third tier is to make sure that we're embedding and delivering value through AI to our customers on either side of the network, whether that be through the network intelligence that we talk about or whether it be through the ease with which they can see and use various bits of information within the platform. So it's happening at all of those levels. We already have stuff in flight today. There's already been quite a few internal products, if you will, built to help our teams be more effective to reduce some of the burden that they spend in setting up or in servicing some of our enterprise customers. And equally, we'll have some of our first bigger impact AI solutions going -- coming to market in Q1 of FY '27. And there's one tool, for instance, that's shipping in the next couple of weeks to some early trial customers that will have add to the broader universe at the end of the quarter.

That's -- that answers also other questions on AI. So I'll leave those. Have Briarwood been able to advise on what they are seeing globally to assist with the AI adoption and related strategy? Or are they more hands off?

I can take that one.

Yes, go for it.

Yes, Briarwood is a really good shareholder. We're actively in discussions with them quite often. I spoke to them last week. I think James spoke to them yesterday, they're very much at the forefront of what's going on in the world of AI. In fact, it was Briarwood, who shared the Vista Equity Partners model around the things that we need to maximize in order to survive and thrive in the AI age, they were involved in that discussion. So Vista Equity Partners is known to them. There's plenty of other private equity firms that are known to them. They do invest in software companies. And what they like about our business is the domain expertise we have. They like the fact that we have a really strong knowledge base with trusted loyal customers that are very sticky. The reality of it is, and I think we all know this as shareholders that are on this call, it's a pretty tough time to be a small software company listed in the public markets. It seems the companies that are still in the private markets are doing fairly well. I'm the Chairman of a Board of a small private company that's only a couple of years old, and it's just on a capital raise on a $50 million valuation, raise the money without any problem, even though it's not profitable yet. I think in the public markets at the moment, it's been a really tough time. And I think organizations like Briarwood that have got investments in private and public and sort of see that and see both sides of it. So good relationship with them, and they have been able to advise on what they're seeing in other segments of the market as well.

And I would just build on that, Dom, by just saying that, obviously, you've had the opportunity to meet with a lot of the major shareholders within the business as I have in my first few couple of months within the business. And I've been struck with their understanding, their willingness to share information and to advise and that their ongoing confidence and excitement about what we obviously have shared with you guys this morning.

Next one, how are you thinking about reinvesting in the business versus cash preservation? Is the capital raise a possibility in your mind?

Obviously, with the business losing as it is today, we have to be very mindful first and foremost of the cash burn within the business. But equally, this is not a business that can slash costs and still expect to deliver the growth that we have the potential to do. So what we are doing at the moment is we are working on the basis of driving those efficiencies internally. We're not adding to our cost base. We believe we can add significant revenue growth to our business without needing to add to the cost base. And the key is in a number of ways. As we unlock each of these opportunities through AI, then we can look at. Does that mean we can service more, does that mean we can take that resource spend and put it somewhere else in the business on the product engineering side, for instance, where we can be able to accelerate forward the delivery of the different pieces of the platform. One thing in all of the talk of AI and that one doesn't talk about is there's a cultural reset within the business as well. It's really important when one comes in and there's a new direction is we're raising the bar internally from a performance perspective, and that means that there will be churn within the business as well as those different expectations that we're laying down of accountability and driving forward for growth will mean that there will be changes within the business as we go forward. And so that, again, gives us opportunity to change where we put our resources. So we don't expect there to be an increase in costs. But again, we're not about to slash costs. We need to be driving our revenue forward, and we have plans to do that. And then obviously, what we'll look to do is if we need we need to -- if we feel we need to supplement capital in the business to give the runway that we need to be able to deliver against this plan, then we'll make that decision quickly and clearly and communicate the market. Was there anything you wanted to add to that, Dom?

No. I think that's perfect.

Just a follow-on from that question. So the initiatives outlined in the presentation, go-to-market self-service, capabilities, AI functionality, et cetera. Are they able to be funded by a reallocation of spending priorities within the current cost base? Or do you think there will be a need to actually increase the overall spend to drive these initiatives?

I think I'd answer that in 2 ways. So I think that a lot of the things that we are talking about being within that future state of our platform today, are either primarily there today or possible today within the way that the technology is architected, but we haven't unlocked it. So the good news that means is that there's not as significant a piece of work as if we were building something from scratch. The second thing I would say is that as we stand in the business today, until we've started to unlock the revenue, we have to be constrained to the capital and the resource that we have in the business today. But we'll be just changing the velocity using AI and supplementing the team with the skills that we need from an AI perspective, to be able to drive that forward rapidly. Once we start to get forward, let's say, a year's time, where we're starting to see a lot healthier revenue increase, and we're starting to see the confidence and the impact of the stuff we're starting to add, then obviously, we can look at it further and work out whether there's a valuable ROI in investing further into our resources to be able to accelerate the product growth. But at this stage, it has to be unlocking the pieces that we've got today with the resource that we have today.

Yes. I think I would just add to that, that from my perspective and from all of our perspective, this is not a big cost-out story. You shouldn't be thinking, these new guys have come in and they're going to slash and burn and cut the cost out of this business to get it back to breakeven because if we do that, we think that the shareholder value will be diminished significantly and the revenue opportunity will disappear. We just want to be able to execute. Same on the same hand, like on the other side of the coin, we're not planning to come in here and add a whole bunch of costs either. So it's about how do we work within what we've got, now bearing in mind the company is still losing money. So we know that we need to manage capital very carefully but you won't be seeing us coming out announcing we're going to add another 50 people either. So it's -- we're in the public markets, have shareholders' expectations that we've got to try and deliver against while building a long-term successful business. And it is a tricky balance, but the balance for us is one where we're going to try and maintain our current cost structure and grow our revenue over time by using AI.

Cool. What does the sales pipeline look like? Are there any near-term opportunities that can be converted into new contracts?

Yes, yes. Confidential, though. But I'll let you talk to it, Chris.

Yes, I would say we consistently have a strong pipeline within the business. I think that what we see in the very core group of Tier 1 contractors, we already have 75%, 80% of the key Tier 1 contractors within Australia and New Zealand. So we're having to go further in terms of expanding the pipeline. And that can mean just a slower turnaround to get the sales. But we have a strong pipeline. We've got -- we're expecting to close our good Q4 and continue that momentum into FY '27.

Can I just add to that, while all of that is true, our business currently in its current model of operation is reliant on us closing these deals and doing long, long sales cycles to try and close a deal and then a long implementation cycle and at the end of it, hopefully, make some money out of the customer. That's the current business model. What the strategy we just announced to you today is about is building that operating leverage by having a much higher value, that whole higher volume of low-value clients with a very low cost of sale. And it's going to take us a while to get there. We've probably got 6 months of development ahead of us at least, but that is absolutely the plan.

Okay. With the stated focus to be Australia and New Zealand, what happens to your international customers and resources, what quantum of cost does the international business currently consume?

Yes. The international business that we have today is relatively limited. I think it's less than 5 customers that exist overseas. So they will continue to be serviced by our teams. We have that set up to be able to service them today. But what we're not going to do is be deploying sales and marketing resource outside of Australia and New Zealand. We're going to be focusing our efforts in delivering to the existing infrastructure, the existing network of enterprises and vendors within Australia and New Zealand. And just remember, we have over 50 countries that our enterprise customers operate within. So we're already servicing beyond Australia and New Zealand. We're talking about where we're going to focus our efforts to be able to monetize the key players within the market of enterprise and vendor.

Cool. A few questions here on Nexvia. What's your plan for the Nexvia business? Is it stand-alone? Is it a firm integration? And what's the growth potential that you see in that business?

Yes. So the Nexvia business, as Dom mentioned before, we will operate as a business unit within the group. I think that there's limited need for there to be significant integration on the technical side. But obviously, from an operational perspective, we look to find the synergies that we can to manage the teams on a day-to-day basis. In regard to how it contributes to the group as a whole, I think there's 3 key ways that I would identify. The first key way is that we have the ability to focus on the go-to-market there and to be able to drive a revenue uptick within that business. And so we're doing that by looking at the pricing and packaging to again move from a system where we are only growing our revenue when there are more users coming on board to being a more product-led structure. So as we add modules or improve modules, we can have this expansion leverage for the customer base. So that's the first thing that we'll do. We'll be able to drive further revenue into that business. Again, with limited, if at all adding to the cost. And so therefore, it will be a cash contributor to the business. The second opportunity is to take -- it's a very small percentage of the vendor network that actually is a viable fit for the Nexvia product because it's quite a detailed and specific type of product. But what we'll be looking to do is to add into our marketplace, the requisite type of enterprise businesses that are buying from those customers so that we can start to bring the marketplace functionality into the hands of the Nexvia business and be able to monetize that more effectively. And then finally, they have a really deep understanding of workflows on the vendor side, basically within a small proportion, but some of the same principles that exist. And so what we'll be looking for from that team is to be able to add to the innovation of the sort of workflow tools that might be a lighter structure to help with things such as project estimation or planning that we might be able to then offer as part of the fuller suite of workflow tools into that vendor package that we offer to the different vendor tiers.

Yes. I think -- I was going to add that I think the Nexvia part of our business is a very good part of our business. It's an important part of our business. The team are highly valued to us. They do contribute to our revenue. We see some opportunities to increase that revenue growth. We see the opportunity to increase the margin growth. But it's not going to be a product that we can sell to our 88,000 vendors. It's going to be a product that we sell to a small subset of them, and it's going to be an important product, and there may be others in the future. But what we've been talking about in our strategy today is how do we unlock those 87,000 vendors. That's been our core focus. It doesn't mean that we don't value Nexvia, we do. But it's just to explain to our shareholders to pivot away from one-off lumpy deals towards more of a high-volume sort of play is key to our strategy as we move forward and it will be key the way we build our core platform out around Felix.

Okay. Thank you. That's actually the last question that's come through via the chat system. So I don't know if anyone is sort of mid typing at the moment, but I don't know, Dom and Chris, if you have any final comments before we end the webinar.

Yes. I don't mind doing a bit of a wrap while -- we'll just see if there's any other questions. So look, my background is I'm a tech entrepreneur, and I've built and sold a number of businesses as I said at the start, and my last business was a publicly listed company called Rhipe, stock code was RHP and we grew that from a very small business to quite a large business and sold it for $400 million at the end of 2021. And there's some synergies here or similarities here with this business and that business in terms of the data is what empowers the business. We were -- in that business, we were selling fairly large deals to companies like Telstra and Optus, Singtel and StarHub and Macquarie Telecom, big, lumpy deals. It sounded really exciting, but they were very low margin at the end of the day. And what we did is we pivoted that business towards driving high-volume transactions, primarily around Office 365 and Microsoft Azure data centers. Now we were selling deals for $20 a user a month, but we got that business up to $400 million in revenue. And every single day, more and more customers were being added digitally without a single salesperson touching them or even knowing who they were. And that sort of business became a really highly valuable business because of the operating leverage in it. And so what we've been talking about today is while running the business of today, which is an enterprise-focused business. And by running it carefully and cleanly and using our capital in the best possible way, we believe there's an opportunity to also build out a much higher volume business on the side. But before we do it, we've got to deliver value to those vendors. You can't just go to a vendor and say, we want to charge you. They'll say, what for? So we need to work very carefully on what it is the features and functions that the vendors need and want and that they're prepared to pay for, and that's what we're embarking on as we announce this strategy. Any other questions, James?

Just reading through, there's quite long one here. Just a question on any further clarity that you can provide on capital strategy?

I think everyone wants to know we're going to do a capital raise. We'll announce it when we do. The reality of it is, everyone can see the 4C, everyone knows the company is burning cash. Everybody knows that the business to execute this strategy over the next year plus is going to need to raise capital at some point. And when we decide to do that, we will let you know.

Okay. Cool. There's been no other questions that have come through, and we're right on 1 hour.

Perfect.

Well, thanks everyone. Much appreciate of your time today. Thank you, Chris. Thank you, James. Hopefully, this will be the first of many that we can share information with you and share our progress. I think I'll just say one other thing, which is I think one of the things we need to do from a shareholder point of view is start working on how do we communicate better with you from time to time in terms of not just our results, but how the business is tracking and what are the key KPIs and the key levers we're pulling to pivot our strategy. So we'll be working on that, and we will be communicating with you. Thanks, everyone, for your time. Appreciate it.