Catapult Sports Ltd (CAT) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Catapult Sports Limited Annual General Meeting. I would now like to hand the conference over to Dr. Adir Shiffman, Executive Chairman. Please go ahead.

Good morning, ladies and gentlemen. My name is Dr. Adir Shiffman, and I'm the Executive Chairman of Catapult Sports Limited. In accordance with the company's constitution, as the company's Chairman, I am also Chair of this meeting. On behalf of the Board, it is my pleasure to welcome you to Catapult's 2026 Annual General Meeting. Before I go any further, I would like to acknowledge the many traditional owners of the lands on which we are joining the meeting today. Catapult acknowledges the traditional custodians of country throughout Australia and their connections to land, sea and community. We pay our respects to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples. Before we commence the meeting, I would like to ask our CEO and Managing Director, Mr. Will Lopes, to provide an address.

Thank you, Adir, and good morning or good evening to everyone joining us today. I'll reflect on the year that was and the opportunity ahead before handing it back to Adir to conduct the formal business of the meeting. FY '26 was a transformational year for Catapult, the year the company became something categorically different. We executed 3 acquisitions, doubled the size of the company and launched some of the most meaningful products in our history, all while maintaining focus on our customers. We now serve over 5,500 teams globally across more than 40 sports and over 100 countries. That's an increase of approximately 1,000 teams year-over-year. That total includes more than half the teams that competed in this year's FIFA World Cup. This year, we combined scale, discipline and execution to deliver profitable growth. Key financial highlights for us were as follows: Total revenue grew 19% year-over-year, reaching $140.7 million. Translated into Australian dollars, we crossed AUD 200 million of revenue for the first time, a major milestone. Annualized contract value grew 28% year-over-year to $133.8 million. Normalizing for ACV acquired through Perch and IMPECT, organic growth was 18%, another strong year of delivery on a significantly larger base. Management EBITDA, our key measure of operating profit, grew by nearly $10 million year-over-year to reach $24.7 million. That's a 67% increase, delivering a record management EBITDA margin of 18%. On the Rule of 40, where we combine our ACV growth percentage and our management EBITDA margin percentage, we have achieved a record level of 36%, excluding acquired ACV, and we actually would have crossed the Rule of 40 at 46% when we include it. That's up from 31% in fiscal year '25. Incremental profit margin was 41% or 48%, excluding the impact of acquisitions, comfortably exceeding our 30% target and demonstrating sustainable operating leverage at scale. Free cash flow, excluding transaction cost, was $6.5 million, slightly below our FY '25 number, reflecting the timing of second half collections, which were impacted by these acquisitions. This balance has now been collected. And on the balance sheet, we ended FY '26 with more than $53 million of cash on the balance sheet and no debt. Catapult SaaS engine remains exceptionally strong as well. ACV retention exceeded more than 96%, on par with the most successful enterprise software companies, highlighting platform stickiness and value delivery. ACV per Pro team, our ARPU measure exceeded $30,000 for the first time, rising 10% year-over-year, driven by the continued expansion of customers adopting more than one Catapult solution. And with the expansion of our platform, we introduced a new metric this year, multi-solution teams. That is the number of Pro teams using more than one Catapult solution. And this past year, we added 506 new multi-solution teams in FY '26. That's a growth of 62% year-over-year with the vast majority of this growth coming from cross-sell by our global sales organization rather than acquisition. Catapult delivered significant innovations for our customers this year at every layer of our platform. Vector 8, the most powerful athlete monitoring system, faster, more accurate and built to save coaches time where it matters most, is now out and in the hands of the best Pro teams on earth. We introduced Perch P2, that is less than 12 months after acquiring Perch, we delivered a brand-new camera system with a 37% wider field of view and a frame rate twice as fast as the original, giving coaches richer, more complete data for every session in the gym. IMPECT is now live on the Catapult platform. IMPECT is the leading innovator in soccer analytics, covering player scouting, opponent analysis and internal benchmarking and its proprietary attacking data gives teams a unique perspective on player performance. With IMPECT on the platform, rich match data and video analysis are unified in a single workflow for the first time. Within our MatchTracker software, we introduced a new automated aggregation service that prepackages event data, positional data and multi-angle video for every team in a league that is hosted, synced and ready to be analyzed at the end of every match day. We also introduced a number of AI products in our suite. But to call out, we introduced -- we launched an AI-powered automatic shift detection in ice hockey, giving coaches instant automatic workload insights with no manual tagging required. This has materially expanded our leadership in Pro ice hockey and the same capabilities coming to more sports soon enough. And lastly, we introduced Focus Live for practice. Focus Live has now moved beyond game day and is now live for practice sessions with teams across the SEC, other NCAA conferences and NFL teams using it, further strengthening our position as the gold standard for video analysis in Pro American football. Before turning to the outlook, I want to touch on the announcement we made last month in relation to our new scouting product, IMPECT Video scouting. As you may know, a major part of our growth strategy is successfully cross-selling more solutions to our teams. And our product focus has primarily been in soccer, the largest sport by numbers of teams in the global professional sports market. We identified a strategic gap in scouting that was holding back our growth in this market. That is why we acquired IMPECT in November of last year. That's the company behind the most sophisticated scouting data in global soccer. That was one piece of the puzzle. The second piece of that puzzle was to take the data and add a video library solution to it, which required us not only invest in product development, but also secure access to video archives across over 150 leagues worldwide, spanning the last few seasons. We initially anticipated launching a video scout product in December of this year, but the process moved much faster than expected. The leagues were enthusiastic partners and our clients helped us learn and accelerate development. As a result, we brought the video scouting solution to market 6 months early. We launched in July and since launch, we have already sold IMPECT video scouting to teams in over 20 professional leagues in Europe and South America across 13 different countries, including teams in the English Premier League, Spanish La Liga and the German Bundesliga. This is in addition to the signing of agreements with two national federations prior to launch. We are very pleased with the early progress and the positive feedback from soccer teams and excited for the continued progress over the remainder of FY '27. Turning to our outlook. When we reported our FY '26 results, we said FY '27 will continue to focus on profitable growth, consistent with the outcomes we have delivered over the last 3 years. For FY '27, we guided to ACV growth remaining strong with low churn, continued improvement in gross margins towards our targets and higher free cash flow, excluding transaction costs as the business continues to scale. And today, I am pleased to reaffirm that guidance. In FY '27 and beyond, Catapult's opportunity in professional sports is significant. The professional sports technology market is projected to exceed $72 billion by 2030, with live sports drawing unprecedented levels of viewership, interest and investment. The last 2 years have seen an evolution of our company, where Catapult is no longer a company predominantly selling wearable subscriptions. Catapult is now a fully fledged platform spanning video analysis at global scale, strength and conditioning monitoring with Perch and a tactical and scouting analysis solution with IMPECT. We're also well positioned to lead the AI revolution in sports technology. No one else globally matches the history, quality and scale of our proprietary professional sports athlete monitoring data, the kind of data AI model needs to function and the data that could only be collected by our hardware, the best in the industry. AI also expands our addressable market by removing the analysis -- analyst capacity constraint, unlocking deeper value for existing customers and a larger market beyond them. In closing, our moat is wide, deep and defensible, and it keeps widening. Historically, our land and expand strategy took an average wearables contract of around $20,000 and expanded to around $60,000 through video analysis. With Perch and IMPECT on the platform, our profile to expand share of wallet now moves to $100,000 to $150,000 per team. That combination against our track record of landing new teams underpins our long-term ambition of getting to $1 billion in ACV. Lastly, I would like to thank our global team. Every result this year reflects their work, their standard and their belief in what we're building together. I would also like to thank our Board and executive team for their stewardship and partnership through this consequential and transformative year. And lastly, to you, our shareholders, thank you for your continued trust and belief in Catapult. FY '26 was a transformational year for Catapult, fully consistent with our strategy of delivering strong, profitable growth. We scaled, we acquired and we expanded margins simultaneously. That is a compounding model we have been building towards. We are only just beginning to realize the potential of our expanded platform, and I have great confidence in our ability to continue driving this business forward, helping improve the performance of the world's best athletes and team. With that, I will now hand it back to Adir to conduct today's meeting.

Thank you, Will. Ladies and gentlemen, the time indicated in the notice of meeting has passed and as there is a quorum present, I declare the meeting open. As this AGM is being conducted as a virtual-only meeting, technical issues beyond our control may arise. If this occurs, I will adjourn the meeting, and it will resume at 1:00 p.m. Melbourne time. If resumption is not possible, we will issue an ASX announcement with further information. The notice of meeting for this AGM was published on July 20, 2026. That notice or a covering letter with a link to that notice was sent to shareholders by July 24. As is customary, with the approval of the meeting, I will take the notice of meeting as read. I would like to remind shareholders that while the meeting is being streamed via the MUFG virtual meeting platform and a linked telephone facility, only shareholders and proxy holders may vote or ask questions during the meeting. Details of how to do this are set out in my letter to shareholders of July 20, the Notice of Meeting and the appended MUFG online meeting guide. I would now like to introduce you to the rest of your Board. Mr. Will Lopes, who I introduced previously; Mr. Tom Bogan, Independent Non-Executive Director and Chair of our SaaS Scaling Committee; Ms. Michelle Guthrie, Independent Non-Executive Director and Chair of our Nominations and Remuneration Committee; Mr. Shaun Holthouse, Non-Executive Director and Co-Founder; Mr. Jim Orlando, Lead Independent Director and Chair of our Audit and Risk Committee; and Mr. Igor van de Griendt, Non-Executive Director and Co-Founder. Also in attendance are our CFO, Mr. Bob Cruickshank; and our Group Company Secretary, Mr. Jonathan Garland. I also welcome to the meeting Mr. Ashley Butler and Mr. Wilfred Liu from Ernst & Young. Mr. Butler was the audit engagement partner for the company's 2026 financial year and signed the auditor's report in the 2026 annual report. In accordance with applicable auditor rotation requirements, Mr. Liu has taken over as the audit engagement partner for the 2027 financial year. Ashley is available to respond to questions as appropriate. The agenda for today's meeting is to consider the formal business followed by shareholder questions. We have adopted the same format as in previous years to make the meeting efficient and to enhance the experience for attendees as a whole. The process will be as follows: I will introduce and describe all the agenda items for consideration. Shareholders will then have the opportunity to ask questions about or make comments on all agenda items rather than dealing with each item in turn. We want to allow as many shareholders as possible to ask questions. To ensure the process runs smoothly, please keep your questions succinct and relevant to this meeting. If multiple questions are the same or share a similar theme, we will group them into a single question. We will try to answer as many questions as possible, but it may not be practicable to answer every question. Eligible participants may submit a question at any time during the meeting via the MUFG platform on their mobile device or computer. To do so, participants should click or tap the Ask a Question button on the MUFG platform. Eligible participants may also ask questions via the MUFG telephone facility, which is connected to the MUFG platform. To do so, participants should pause the broadcast on the MUFG platform and then telephone one of the numbers set out in the notice of meeting. For verification purposes, shareholders will need to enter a unique pin to ask a question. Participants should note that the telephone facility cannot be used for voting. This process is explained in detail in the Notice of Meeting, MUFG online meeting guide and the MUFG platform itself. Before moving to the formal business of today's meeting, I will say a few words about the process for voting at the meeting. Each item of business in the notice of meeting that requires a vote will be via a poll, and I will formally open the poll on all items now. The poll will remain open until the end of today's meeting. Please ensure you vote before the end of the meeting. Shareholders and proxy holders may vote at any time during the meeting via the MUFG platform on their mobile device or computer. To do so, these participants should register by clicking or tapping the Get a Voting Card button on the MUFG platform. After registration, participants can submit full or partial votes and edit them at any time until polling closes. Before the shareholder question session commences, we will display the proxy votes for each item of business that calls for a vote. The voting restrictions for all items are included in the voting restrictions section of the Notice of Meeting. If voting on a poll, proxy holders must vote as directed, subject to any applicable voting restrictions. Any directed proxies that are not voted at the meeting will automatically default to the Chairman, and I'm required to vote those proxies as directed. The Board recommends that shareholders vote in favor of each item of business that requires a vote. Further, any open proxies that have appointed the Chairman of the meeting, any of the company directors or the company Secretary will be voted in favor of each item. These Board recommendations and the voting of open proxies by the Chairman are subject to any applicable voting restrictions. I will now introduce the items of business on the formal agenda. The first item of business is to receive and consider Catapult's financial statements and reports for the financial year ending March 31, 2026, and the reports of the directors and the auditor. The next item of business is the reelection of directors. First, Michelle Guthrie retires at this meeting and being eligible, offers herself for reelection. I will now invite Michelle to speak to this resolution.

Thank you, Chair. Good morning, everyone, and thank you for the opportunity to speak with you today as you consider my reappointment to the Board. I've had the privilege of serving as a Director of Catapult Sports since 2019, and it's a company I remain genuinely energized by. Catapult sits at the intersection of elite sport, data and technology and few businesses have the opportunity to build products that shape how the best athletes and teams in the world train, recover and compete. During my time on the Board, I focused on global expansion, financial discipline and talent retention and motivation, in particular by leading the Nomination and Remuneration Committee. I brought my experience in media, technology and global business to Catapult, having led organizations through periods of significant digital transformation. If reappointed, my priorities for the future are: first, continuing to support management in delivering great products and being an invaluable partner to our customers; second, maintaining rigorous oversight of the company's financial discipline and risk settings as we scale; and third, ensuring the Board itself continues to bring the right mix of skills, independence and international perspective to match the ambitions of this business. I bring a combination of global perspective, strategic rigor and continuity that will support management in driving long-term shareholder value. Catapult has real momentum and a significant opportunity in front of it. I'd be honored to continue contributing to my journey as Director, and I ask for your support today. Thank you.

Thank you, Michelle. Next is the reelection of Shaun Holthouse. Shaun retires at this meeting and being eligible, offers himself for reelection. I now invite Shaun to speak to this resolution.

Thanks, Adir. Hello, everyone. My name is Shaun Holthouse. I, along with Igor, founded Catapult in 2006 and led it as CEO for 12 years through its IPO on the ASX, all of its early acquisitions like GPSports and XOS Digital, its expansion into all key international markets like the U.S. and Europe, its transition to a subscription-based business to name a few highlights. I have deep technical expertise in sports technology, having authored many patents and worked with the Australian Institute of Sport for the years in the lead up to founding Catapult. But I also have deep commercial knowledge of the industry, the market and our strategic landscape and opportunities. We have worked hard to assemble the pieces of our strategy necessary to unlock the next phase of Catapult's growth. And I think we are poised to really capitalize on that, which includes a growing platform of offerings for our customers, ranging from our original wearables invention to monitoring in gyms and now helping clubs make better data-informed scouting decisions. I'm excited about this next stage, and I want to thank shareholders for their ongoing support.

Thank you, Shaun. We now come to the nonbinding advisory vote on adopting the remuneration report. The remuneration report is included in Catapult's 2026 annual report, which is available on our website. It sets out Catapult's remuneration policy and arrangements for nonexecutive directors, the CEO and Managing Director and senior management. The next item is to ratify for the purposes of ASX Listing Rule 7.4, the prior issue of 19,461,078 fully paid ordinary shares pursuant to the underwritten institutional placement announced on October 13, 2025. In Item 5, the company is seeking to ratify for the purposes of ASX Listing Rule 7.4, the prior issue of 12,037,929 securities to participants of the company's ESP. Item 6 seeks shareholder approval for the grant of 324,861 securities to Will Lopes as part of his FY '27 incentive arrangements. Finally, Item 7 seeks shareholder approval for the grant of 1,542,114 securities to Will Lopes as a one-off conditional retention rights award. I now formally propose each of the resolutions that are specified in the notice of meeting. Items 2a, 2b, 4, 5, 6, 7 are ordinary resolutions. Item 3, which is the adoption of the remuneration report is a nonbinding resolution. For the benefit of shareholders, the proxies received prior to the meeting on each item calling for a vote are now shown. These votes do not include those to be voted at today's meeting. However, based on the results we are anticipating, I would like to thank shareholders for their strong support. I now move to the shareholder question session of the meeting. It is my duty as Chairman to allow a reasonable opportunity for shareholders as a whole at the meeting to ask questions about or make comments on the management of the company, audit matters, the remuneration report and other items of business before the meeting today. All questions will be directed to me as Chairman. Questions to the auditor must relate to audit matters and will be directed to me in the first instance. I will now ask Mr. Dave Schiller, our Head of Investor Relations, to advise whether any shareholders have submitted questions in advance or through the MUFG platform and if so, to identify them and read their questions.

Thanks, Adir. We have not received any questions in advance of today's meeting, but we have several questions on the MUFG platform. First question comes from Mr. Stephen Mayne. Whilst virtual AGMs suit me in terms of attending 300-plus meetings a year, best practice is to run a hybrid meeting with a physical component as well so that shareholders can personally engage with the company's leadership in an environment where it is more difficult for the directors to avoid detailed space. Will the Chair undertake to hold a best practice hybrid AGM next year? Whatever you do, please don't revert to a physical-only meeting as so many companies unfortunately still do.

Thanks, Stephen. I don't think it would be best practice for Catapult to have a hybrid meeting. Most of our -- the management that would be at this meeting are based in the U.S., and it would just involve a high cost of flying them out to Australia again when they're out for results presentations regardless. And so what we try to do is find the balance between being parsimonious with the company's cash and ensuring that all shareholders have an opportunity to participate. And certainly, we try to provide a forum for honest conversation and question asking as part of this AGM. So I think it's working really well to have this structure, and we don't have any plans to change the nature of the AGM.

Next question from Mr. Mayne. Well done for recently negotiating an extension and expansion of our loan facility from U.S.-listed Western Alliance Bank, which has now agreed to lend us up to $50 million for the 2031. How much is currently drawn? And did we run a full competitive tender ahead of the August 10 announcement as it seems strange that a Melbourne-based ASX-listed company isn't being banked by a major Australian bank. What is the history of our relationship with Western Alliance? And why aren't we banking with Australian banks?

Well, I'll take the compliment. Thank you about -- and that was a great job by Will and by Bob in finalizing that arrangement. Generally, I'm very candid in my responses to questions that are asked at this AGM, including by you. But in this case, it will be very disadvantageous for our future negotiations with banks for me to provide a whole heap of detail or really any material detail about the nature of the information that you've requested. I will say this, there's a lot of sophistication in this management team about how they handle banking and general finance relationships. Certainly, there was a process. This was the best outcome that emerged from that process, and we're really pleased about it. And we certainly took into account the fact that we're an Australian domiciled and Australian-listed business in working through this process, but the outcome that we achieved was the best outcome possible. So I hope that gives you some feel for it, but I'm hesitant to provide information that will harm the business subsequently in our negotiations.

The next question from Mr. Mayne. I asked you last year to stop putting up placement capacity resolutions, and you've done it again with Resolution 4, even though the 15% capacity would automatically have been refreshed in November. If we do another capital raising, why not adopt the best practice pro rata model, which don't require these sorts of shareholder approval resolutions. Will you undertake not to put up placement refresh resolutions again as all they do is signal an intention to do more selective placements, which don't treat all shareholders equally?