Celebrus Technologies plc (CLBS.L) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Celebrus Technologies plc Half Year Results investor presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself; however, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. I'd now like to hand over to Bill Bruno, CEO. Good afternoon, sir.

Good afternoon. Thank you, sir, and thank you all, everyone, for attending today. We're excited to walk through this with you, share some customer stories, we'll walk through the financials and kind of give you a glimpse in some of the things that we've been doing in the product with regards to artificial intelligence and some other areas of importance. From a company perspective, this is -- for those of you that have been on this journey in previous calls, our last one having been in July, that was the first time where we sort of presented the new sort of revenue segments that we've now brought live in these first half results for this year as well as some adjusted versions of the prior year results to give you a proper comparison along the lines of those new categories. Ash will go through all of those in detail and help further explain that. But as a reminder, we now have sort of 4 revenue segments in the reporting. The first of which is ultimately Celebrus Software. Now that's candidly the line item to pay special attention to going forward. That is the key focus of our business is in driving our software revenue and Celebrus Software line item ultimately contributes to -- directly to the Celebrus Software ARR, and Ash will walk through the ARR growth from the first half and what that looks like compared to the previous year. The second revenue segment that you'll see mentioned is non-Celebrus ARR. These are our customers where we have long-standing relationships and deliver people-based services that are built around managing large analytic environments that don't contain Celebrus Software as a line item. So we've partitioned that out so that all of you going forward will be able to track the growth of our own software IP and the sales of that software IP. The third category is professional services. Those professional services are project-based work. So things that don't repeat. In our Celebrus Software deals, we do build in services that recurs. So for example, X number of days a month or per year as part of our managed service and Celebrus Cloud -- our Celebrus Cloud single-tenant private cloud environments that we stand up for customers. And in that case, it would show up in Celebrus software. Project work would be additional configuration or the client needs support with connecting our data into a different system or these are sort of one-off engagements and we treat them as such in that revenue segment. And then the final is hardware revenues. And that's pretty straightforward. For those of you that have followed the business for many years, we sell hardware occasionally to customers. It's not something that we offer to new customers, but it is something that we continue to support with customers that have been with us for quite some time. And anything that we do in that regard will show up in that bucket. Obviously, we'll continue sort of on this journey, and Ash will explain and reiterate sort of the revenue recognition policies and all the things that changed heading into this year. I know we had a lot of moving pieces as we sort of finish sort of the transformation of the business that we discussed about in July, but now we have tangible numbers and results that you'll be able to see and then hopefully better understand from a transparency perspective, everything that's going on in the inner workings of the business and where our focus lies. From an operational standpoint, we did have a couple of very key wins in this first half. The first of which was a fintech platform in the States and the other was a financial services firm here in the U.K. Both of those organizations are exploring some significant upsell opportunities with our customer success team that we stood up a little over a year ago as well, which has us quite excited. Now this has been a trend that we've built as we brought new logos into the business in this cloud-first mentality. It's allowed us, one, to be better connected to customers; two, deliver more value more quickly; but three, to also be able to engage customers differently and help them understand some of the things that our platform can do for their business above and beyond what it's doing today, and allow us to turn those features on or enable those use cases in a very streamlined manner now that we're not focused on delivering on-premise environments. We also had a significant number of upsells. And this is, again, a core part of our business, a core part of our pipeline. Ash will speak to the pipeline and some of the numbers that we're providing for the first time, as we've promised you for some time now that we would be bringing pipeline metrics into some of the things that we discussed to help give you a better comfort about what we're doing as a business and where we're adding value and what that pipeline and opportunity structure looks like for our sales teams, our new business teams as well as our partner opportunities. The Celebrus platform as a whole, we continue to innovate significantly. We do 2 releases a year. That's been our cadence for quite some time. I don't see that changing. It's just enough for us to manage from a development perspective, but it's also just enough for customers to have new features, new functionality at a pace at which our competitors are not delivering upon. And these -- much of this innovation has been focused really in what to do with the data. We've spent many, many years, Celebrus, perfecting how we capture digital data and how we contextualize that through the data models that we provide for customers, where a lot of our effort and a lot of our innovation has been focused is on taking that data and doing something with it. So namely things like our customer identity capabilities, the ability to sort of impact paid media investments, the ability to enhance from an analytics perspective and a reporting perspective to sort of bring that forth. From a marketing perspective, hopefully, those of you that interact with the brand, follow us on LinkedIn, if you haven't. We're quite loud on there with new content, new capabilities, et cetera. I'd urge you to do so above and beyond just browsing the investor website of the company, but it's been largely focused on creating content and awareness to support our prospecting efforts and to also better enable our partners to speak about the platform in a much more simplified manner focused on the way that we're selling it and where we're seeing that success. And finally, before I throw things over to Ash to work through some of the financials. The security side of the business is something we take very serious. Compliance, security, privacy, all of these things are very important to our business. We have several certifications through independent third parties, things like ISO 27001 as an example and to continue to grow in that journey and to continue to provide more certainty and more comfort to our customers. We also just recently added a SOC 2 certification as well. It's much more applicable in the States than it is throughout Europe, as we tend to lean on ISO 27001 throughout Europe. But nevertheless, it is a great certification to have, and again, speaks to not only the capabilities of our platform, but also our security processes, how we go about building product and how we go about securing customer data in the single tenant private cloud environments. So with that, I will turn it over to Ash to walk through some of the financials.

Great. Thanks, Bill. Hello, everyone. So we're going to go through the financial highlights first, and I will just touch on this briefly because I'll probably go into each of these items in a bit more detail on the subsequent slides. The key points are: The Celebrus ARR increased during the period to $15.6 million, that's an increase of just under 15% in the first half of the year, and it's just over 20% year-on-year, i.e., compared to the ARR at the end of H1 FY '25. The total revenue was $10.4 million. That's a fall of last year, and obviously, that's related for the large part to the move to straight line revenue recognition, and I'll go on and describe that in a bit more detail. Likewise, the Celebrus Software revenue, fourth bullet point, very significant. If you remember back to July, we talked about how we account for our costs and the fact that we reallocate them up into the cost of sales line. We no longer do that, as we announced in July. And so our Software and our gross profit margin is what you'd expect to see for a software company up in 93.1% in the period compared to 95.4% this time last year. The impact on revenues, obviously, has an impact on the loss before tax, and I'll go into that in more detail also and that flows through to our EPS. The cash position at the year-end -- at the half year was healthy at $27.3 million, and that cash balance is likely to grow ahead of the end of the financial year in March '26. And we continue to pay dividend. So we increased the dividend by 3.2% up to 0.98p for the first half. So let's get into a bit of detail. So if you remember back in July, we talked about a number of changes that we are making to our accounting and reporting. One of those was that we were changing the revenue segments. And as Bill described, some of the confusion about the old revenue segments was that we aggregated Celebrus and non-Celebrus into a single license line and also into a single support and maintenance line. So as a driver for these changes to the segmentation that you see at the top of the income statement is proved to be very clear in terms of what's Celebrus Software, what's non-Celebrus Managed Services; and then also, there are 2 lines there, which are less significant in many ways, the Professional Services, which is an aggregation of some Celebrus-related work and some non-Celebrus-related work. And then, of course, the hardware, which we talked about in the past and which will taper off in due course. So if we focus on the Celebrus Software line, we'll see that's down year-on-year, and that's driven by the changes to our contracts. So this is not an accounting change. It's a practical contractual change. In that, we've tweaked the terms of our contracts such that the revenue recognition for our licenses. Whereas previously, we would recognize the whole of the first year, for example, in a lump-sum in the month of signing, we now recognize our license revenue month by month. The impact of that is that let's take, for example, we signed something in late December, we will now recognize 3 months of revenue in this financial year, whereas previously, we would have recognized 12 months of revenue. And that's applied already to the deals that Bill talked about that we've signed in the first half. So that's a reduction year-on-year because of the straight-line revenue recognition. Because this isn't an accounting change, we do not restate the prior year numbers. So that's why the H1 '25 is higher and why now we're recognizing sort of month by month to get a lower revenue number. That period, as I described in July, will flush through over the next 3 years. So we have contracts renewing this year around now, in fact, in November-December. We have some more quite significantly renewing this time next year, and then we have slightly fewer renewing the year after that. So the impact of that year-on-year. This year, we're expecting an impact of around $6 million to our revenue line in total as a result of that revenue recognition change. About half of that is new wins and about half of that is renewals. What we'll find in FY '27 is an impact on the revenue line of somewhere around just around $3 million. And then in FY '28, we will see an impact on our revenue line of just over $1 million, i.e., under the old basis, we would have had $6 million, $3 million and $1 million-or-so more in years FY '26, '27 and '28. So this will be -- this will, as said, flush through. So once we've renewed all of the contracts which currently exists, everything will be on a straight-line basis, and you'll get better sort of like-for-like comparability in terms of software revenues. Another change we made in the period, we announced back in July, was the cost of sales, and I talked about that just a few seconds ago. In the past, what we would do is that we would allocate some of our OpEx costs into the cost of sales line. And this was something which we've been doing historically when the business was very different and it principally related to the managed service teams and the professional service teams in terms of those people being engaged in delivery services to our customers. With the business changing as it has started moving towards being a software business, we no longer do that. And that has 2 benefits. Firstly, you can see a true software GP percentage margin. And that's very important as you're trying to extrapolate forward in terms of what this business could look like in 3, 4, 5 years' time, you need to know the gross profit percentage for that. And then the other benefit is that you can very clearly see the OpEx line without the kind of confusion of how much we've recharged into cost of sales, whether it's $4 million or $5 million or $6 million. So you can see the OpEx line more clearly, and that's beneficial as you kind of track our OpEx and how we're controlling it. And in this period, what you see very clearly is that our OpEx has gone down. So earlier in the year, we took out just over 10 headcount. These were noncustomer-facing. Generally, these are back-office and some of them were in our Managed Services and Professional Services teams, and these were -- we were able to do that as a result of automation, systematization that we continue to do to seek efficiencies and there'll be more of that coming up in the next sort of 6 to 12 months-or-so. So OpEx is well controlled as we're going through this transition period. The adjusted PBT had a loss of $1.5 million roughly, and that is obviously related to the lower revenues driven by the straight-line revenue recognition. And that brings us down to an adjusted diluted EPS, which is $0.0351 per share. I should point out, and I'll explain this perhaps also in the subsequent slides is that whilst we calculate an adjusted diluted EPS, the dilution comes from share options. However, we have enough shares that we bought back in treasury to effectively negate that dilution. So whilst we calculate this, and this is a key metric that we have used for some years, in practice, it's unlikely that there would be this dilution for investors. Interim dividend, I talked about. So let's go on to the annual recurring revenue. I talked about the percentage increases over the period, and those are obviously reasonably significant. Let me talk now, as Bill implied about, the pipeline that's driving future ARR growth. So this is a metric we will start sharing in our announcements from the final results. But for the time being, I can tell you the size of our pipeline, currently, is $26 million. And let me just describe how that number comes about. So in our pipeline, we have around 60 opportunities. And the aggregate of all of those values on those opportunities amounts to $26 million. So that's a growth of around 13% year-on-year, which will then obviously drive our ARR growth. The key point behind that is -- let me just talk through the stages we have in the pipeline. So we have stages 1 to 5 and the 1 is when it's first recognized and accepted by the sales team as being an opportunity and then 5 is verbal agreement and just moving to signing. Within that, we have a stage 3, which is proposals. So when I look at sort of the value of $26 million, that is accounted for by 44 opportunities out of those 60. The early stage opportunities tend not to have a value, as they're still scoping them, still in early stage meetings. So the value generally arises at stage 3, which is proposal stage, i.e., we've sent out a proposed, we know the value. There may be some opportunities in stage 2, where they're far enough advanced, we've done the scoping sufficiently that we can attribute a value to them. So the key point there is that these are not probalized. These are total values of proposals and other opportunities in the system. And the key point right now is that of the 60 we have roughly now, and we had a similar number this time last year, this year, 44 of those 60 have a value attributed to them; whereas, last year, 33 of those 60 had a value attributed to them. And the significance of that is that whilst the pipeline is 13% larger than this time last year, it is actually mature as well, i.e., opportunities are further advanced in the pipeline and nearer to closure than there were at this time last year. And that's obviously very positive as we look to making our numbers for this year and building out the pipeline for FY '27. Moving on to the balance sheet. The balance sheet is a lot cleaner. It gets cleaner every year. Obviously, you'll remember, we sold off our freehold property at the end of March. So that's no longer in the balance sheet. In terms of the other items, probably not a whole lot to say. You'll be able to see that in the property, plant and equipment, we've got the IFRS 16 leases, and those are winding down over the period of lease, typically around 5 years-or-so. Our trade debtors tend to fluctuate. At the half year, they're generally quite low, and then they're higher around November-December. We have a lot of billing and that billing converts to cash around February-March. So you should see a healthy cash balance at the end of March, and that debtor figure will be probably there or thereabouts. The other interesting item in the balance sheet, and I know a lot of investors track this, is the deferred income. So that is where we have invoiced a customer and they've paid typically, but we haven't recognized the revenue. So basically, what that represents is what have we billed that hasn't been recognized, but will be recognized as revenue. So in the past, if you look at the previous periods, we've had some pretty large numbers and those invariably were related to some of the hardware deals that we had done for one of our customers. Now that's largely flushed through. So that deferred revenue figure will fluctuate period-to-period, but the general long-term trend should be upward because, of course, as we sign on more customers, as we grow the business, there will be more billings going out and there will be more sort of cash payment upfront coming into us, so that will increase over a period of time. And of course, as I said, with high billings in November and December, that will be very high at that point and then sort of come down a little bit by the end of March. The upshot of all of that is that we've got net assets of $38.4 million, of which cash comprises $27.3 million. We have no debt. We continue to have no debt. And another point to make is that the majority of our cash is held in U.S. dollars. We hold only enough GBP to be able to pay for our GBP cost base, which is our employees and our property in the U.K. Then finally on to the cash flow. Again, a relatively clean cash flow. If you look at the movements in working capital, historically, there have been large movements. And these again connected to the hardware deals that we had done in those periods. As that's flushing through now, we see a positive working capital movement with $1.1 million coming in from working capital movements. As you know, we have very little CapEx. We did have significant CapEx in the last couple of periods, partly related to the property moves and the CapEx we had to invest into furniture and fittings, et cetera, and leasehold improvements. But the figure you see now in H1 is a typical kind of internal laptops and IT equipment and those sorts of things. We continue to capitalize development costs and those have increased now. And the reason for that is that we have a much more rigorous methodology for calculating the capitalization of development costs. In summary, previously, we used to do it on a percentage of FTE basis. So knowing what people's role was and how much they contributed to development costs. We now do it in a much more granular fashion, and that's by using a product called Tempo where people enter their time relate to particular tasks. And that's very important. Firstly, it gives us a higher number, and we were getting pressure from the auditors to recognize a higher amount because that was a sense of where we were. Now we have the data to prove that. And that's important also because we're seeing HMLRC chasing companies more rigorously in terms of their R&D tax credits. So we now have, in great granularity, all of the data that supports our R&D tax credit claim. And that's also important in our Patent Box claims as well. And if you remember, that was a very significant reason for our low tax charge last year. So moving down into the financing activities. We paid a dividend, of course, that was $1.2 million. That was the final dividend that we paid in the first half of this year. We did have a share buyback scheme. That is now completed. We purchased 500,000 shares over the last few months for a total of just under $1 million. And those are the shares I referred to earlier, the treasury shares, which are held on our balance sheet. The purpose of those is not to enhance earnings, it is solely around negating the dilutive impact of share options. So whenever an employee exercise their share options, we can issue them from the shares we already hold in treasury without issuing more shares and creating dilution for existing investors. And that, I think, is pretty much the balance sheet. I will just repeat again the impact of the change to USD reporting about a year ago is very significant because it reduces our FX exposure. It also reduced the amount of time and effort we spend creating FX hedging contracts. So previously, we would hedge contract for every new deal that we won. We would hedge it for year 1 and year 2 and year 3. That's a lot of time and effort and a lot of risk. Now what we do at the start of the year is we merely hedge the GBP cost base on a month-by-month basis. We know when it's going to happen, we know roughly how much it is. And that's why -- well, part of the reason why when you look at the balance sheet -- sorry, the cash flow, rather, the effect of the FX is really minimal. It's because most of our revenues, most of our cash coming in is in USD, and of course, our reporting also is in USD. That's the financials. Bill?

Thanks, Ash. So I'll spend a bit of time before we go over to the questions. And please continue to submit those, and we'll try to go through as many of them as we can. There are some fun ones in there that I'm looking forward to addressing already. But the platform and the positioning of the platform hasn't changed. We've kind of landed on what we think is an easy-to-understand story that seems to be resonating in the market, embodying our values such as simplicity. We think that the content we're putting out is easier to understand. The feedback that we're getting from the market is that it's easy to understand. And ultimately, in the market, there's been sort of, say, 2 main drivers in the pipeline at the moment in terms of both prospects as well as existing customers. From a prospect perspective, 90-some-odd percent of our deals in the pipeline right now are driven by one core challenge that our platform is uniquely positioned to solve. And that's around better understanding who your customers are. We talk about digital identity in all of our marketing materials and when we're meeting with prospects in sort of 3 phases, right? If you think about how you interact with the brand, hopefully, this will make sense and resonate, right? If you go to a website on your laptop or on your mobile device or what have you, and you've never been there before, let's say, you're anonymous to that brand. In the Celebrus world, we start building a profile about you in a compliant manner from the very first time you arrive on these sites, taking into account what you look at, the content you consume, the journeys you take, et cetera. Now at some point, maybe down the line, weeks later, et cetera, maybe you create an account or you log in or you tell the brand who you are. So in that session, you're authenticated. That's sort of the phase on the other side from authenticated to -- or from anonymous to authenticated. Now where the meet the standard is and where 70-plus percent of interactions happen between a consumer like us and a brand is when you're known but not currently authenticated. So what that means is maybe I've logged in previously, but in this current visit, I'm not logged in. In the Celebrus technology, we have the ability to remember that and to stitch your journeys together across devices and to be able to tell brands, "Hey, this is Bill, he's not logged in right now, but he was last time he was here, and here's everything we know about Bill." And that creates an opportunity for brands, whether it's on the marketing side and they're trying to generate more value or trying to create a better experience or on the fraud side, where they're trying to use all of that information about you and I to confirm whether it's actually us before that purchase, before that transfer. And that identity, that needing to know your customers better, not only has it become a main driver of business for us, but it's also become sort of the proof point that we use with a lot of companies that we're coming into contact with, and I'll share that story on the next slide. The second thing that's coming up quite a bit, and I'll delve into some of this as well, is this topic of AI readiness. A lot of organizations, at least in our experience thus far, are starting to hire people or put people into roles that are focused on artificial intelligence or data intelligence or something to that effect. This is becoming an area of investment and strategic sort of guidance for many brands that we're interacting with. And this topic that's come up several times is one that they call AI readiness. And the best way I can describe is, it's a little bit tongue and cheek, right? But it's -- they're not sure what they want to do with AI, but they want to be ready for it. And our platform, our data platform and our digital identity platform, happens to deliver the 2 most important things when it comes to building ethical AI, and that's better data and better customer identification. And so I'll walk through some of that and what that means as well as we step through a few of these slides. From an identity perspective, I walked through this already. But in essence, what we're helping with the Celebrus platform, and we've done to a pretty significant degree, is in lowering that water level and making those things below the water level easier to understand, easier to comprehend and more complete from a customer profile and a customer identity perspective. And I'll give you a couple of case studies. These are actual case studies. The names have been cleared to protect the brands themselves. But in most cases, and I mentioned this in the RNS, and we mentioned this in the RNS, but we have competitors out there naturally. On the marketing side, our biggest competitor tends to be Adobe and a few other solutions here and there. But this particular gaming customer had been using Adobe for many years. And the recall of a consumer, so what I was talking about before where that known category, the meat in the sandwich, right? If you came to their site and then came back to their site a number of days later, about 25% to 30% chance that they'd remember who you were, and that was the best that they predicted they could do. They deployed our technology for only 8 weeks. Now keep in mind, that 25%, 28%, 30% realm that they fluctuated within, that's what they achieved over multiple years. In 8 weeks of having our software deployed, that number for them, the ability to remember someone and be able to remember who they are and tie it to a rewards IP and all of the other great stuff that comes with that, shot north of 80%. I think it was 82% at my last look. And that is a significant increase in sort of building a better addressable audience because not only do you then know using our technology that people are coming back to the site, but you also know who they are, you know what they care about, you know what they've looked at, you know perhaps what bookings they've abandoned, et cetera, et cetera. And it creates much more opportunity for the marketing teams at this brand to generate value. Similarly, a completely different vertical, but in the auto industry, we had a very similar case study in the first half, which was around this particular auto manufacturer was trying to answer a very simple, albeit complicated question. As you guys are all aware, you have sort of configurators on auto websites, right? You could build a car, right, or build a car and the features and things that you want. And sometimes during that process, you can provide an e-mail address or maybe in a previous visit, you could provide an e-mail address or you've signed up for a newsletter or some sort of notification. And they wanted to go through their historical data and basically say, anybody over the last 6 months that configured a car that we know, let's send them an e-mail and try to get them into the dealership that's local to them, right? When they went through their own data that they had in their CRM, it was about 7,000 e-mails. When they went into Celebrus, because of our ability to persist profiles over time, let's say you provided an e-mail address 6 months ago and then 3 months later, you came and configured a car, that was missing in their data set, in their CRM because they didn't know who the customer was. But in the Celebrus dataset, it was known and it was stitched together to the profile. So what we ended up actually being able to provide them was another 10,000 e-mail addresses. So driving the total number up for this campaign from 7,000 to 17,000 just by -- just because of our identity solution and the capabilities of that. So again, another story where we're providing very real results that are taking and expanding the addressable audience that these brands can activate and build better relationships with and then ideally generate more mutual beneficial value from that. A lot of this, when it comes to artificial intelligence, for those of you that have heard me talk about this, you've heard me talk about our data model, and it's a big differentiator of the product. The fact that not only do we make digital data easy to collect, but the fact that we give it a structure when a lot of marketing technologies do not. And that structure is table and logical and easy to work with. I've said for years, even before I worked here that Celebrus creates sort of a data scientist dream for data because it makes it easy not only to use and interrogate and work with, but it also makes it very easy to integrate it with other datasets. And that's been a core part of our value prop for many years. And being able to do that now creates some of that AI readiness that I mentioned before. And AI in general is a significant investment for us and also a significant area of exploration. Internally, when I'm meeting with my management team and we're talking about sort of what does good look like in the business? Our stance is that if you're not utilizing AI that we're not doing it right to build efficiencies, to build better processes, to simplify and automate the mundane so our people can be applied against things that are much higher value and require much higher brain power. And that's been the focus internally as well as how we sort of centralize information to better support our customers as well. From a customer perspective, Celebrus data has been used in machine learning, in predictive models, et cetera, for many years. It's never been hotter though than now because of just the last 16 to 18 months of sort of, I'll call it, AI hysteria, I suppose. And we have a small but mighty data science team internally, and they sort of built upon that. So in working with one of our customers in the U.S., we've built our first AI predictive model. It's a churn model. So what that means is if you have a funnel, say, a loan application process or a shopping cart, as 2 examples. We've now built and we're in the process of testing the portability of this across our customer base, but we've built within Celebrus, it's our own IP, it's our own code, and it's built on top of the Celebrus data model. But ultimately, we've built a churn model that can predict the likelihood of somebody abandoning a process. And the reason that, that could be so powerful is probably best shown through visual. There's a lot going on in this visual, data science charts aren't the pretest charts on the planet. But ultimately, what's happening here is these are different probability intervals and outputs of the model. And focusing on sort of what's rectangled there on the left, I suppose, and highlighted, is you'll see sort of blue in the bar and you'll see red in the bar. For different probability elements, what this is showing is our model's accuracy at predicting that somebody abandoned. And so this could be, like I said, a loan application process where someone has started that process and our model is predicting are they likely to finish this or are they just window-shopping, maybe they're going to abandon, et cetera. And for many of our customers, particularly in the financial sector and retail as well, if someone's window-shopping, this is a potential opportunity to convince them to do business with you. So the goal of this model inside of Celebrus is to be able to prompt that brand with the opportunity to intervene and try to engage those individuals if they have a high likelihood of not completing. And you'll see there's not much red because the model for this particular customer where we've rolled it out in development with them is predicting with a very good amount of accuracy how likely somebody is to actually complete that process. The value of this can be exponential to customers. And we're in the process of sort of doing some early access with our customer success teams engaging a few other customers that we think would be the right fit for us to do sort of an early access to test the portability of this from one customer to the next. This will be targeted at all customers in Celebrus Cloud because we deploy those all in a very -- in the same construct with the same versions of Celebrus. We keep it up to date because we manage this on behalf of each customer that has a Celebrus environment. And so that should make this very easy to bring in, to train and to add value to customers in a very short window of time and fits perfectly with the use case selling-based model that we have where we're trying to land and expand with customers from that perspective. So hopefully, that gives you a bit of a glimpse into some of the things that we're doing and some of the things that are driving the pipeline that Ash mentioned and some of the details that we've provided with regards to that pipeline. I'll make a couple of final comments on outlook here, and then we'll turn over to the Q&A and try to answer as many of these with the remaining time that we have today. As Ash mentioned, we have a significant number of deals in late-stage pipeline. As a reminder, 3 years ago, we didn't have a sales team. And we've been building, innovating and learning candidly on the fly as we're doing this. And we have gotten better at positioning the platform and simplifying that story of figuring out what resonates like the things that I just walked you through and utilizing that to keep brands focused and move deals through the pipeline in a very sort of laser-focused, you have this pain, we fix that pain and we upsell you on the rest of the later once we've proven our value-type model. And so right now, our focus is on late-stage pipeline and bringing those deals over the line in the last mile. We are comfortable with where we sit. You've heard the pipeline statistics. We'll continue to bring more data out as that is vetted by finance, and we're comfortable doing so. But given what's in that pipeline, the 44 deals that have dollar values attributed to it, the $26 million in deals in that pipeline, we currently are comfortable with our expectations and ultimately, our ability to deliver the results for this year. Just like every other business, though, we are keeping our eye on market challenges. I'd be remiss if I didn't -- if I and we didn't comment on that. We have had some deals take longer to get budget approvals where we've gotten the verbal, where they're happy to proceed and we're just waiting for budgets to be approved. We've had a few situations where there's been some turnover as a result of layoffs and redundancies in some prospects and deals that we're working, where we've kind of had to sort of ride that wave out as those changes were being implemented prior to sort of reengaging to complete those deals. And it's just -- it's an interesting market, and I say interesting in every sense of the word, I suppose. But we do believe we have the right strategy, we believe we have the right team and we have enough pipeline to support our ability to deliver on those goals for this year. So with that, we're going to turn things over to questions. There's some fun ones in here. So we're going to go through a few of these here.

The first one is, I'm assuming this is referring to the RNS where I talk a little bit in my section about some of our main competition. And this person is saying that risk aversion or blaming customers who don't buy seems like a poor excuse. How would you describe this concern in further detail? What can be done to address these? So in the RNS, I'll highlight a few things. But I do think this is a really important topic to understand. One, we definitely have technology competition. On the marketing side, we run into solutions like Adobe all the time. Two, both new wins that we announced to the market happen to both be situations where we're replacing Adobe. That being said, there is a fear of change in organizations. We are sometimes up against technologies, take the gaming company, for example, where they've been utilizing that technology platform that's the incumbent for 4, 5, 6 years. People on their teams have been trained, certified on that, maybe in their careers as analysts. That's the only technology they know. When we talk about the risk aversion or the fear of change, that's what I'm referring to, it is very real. We have had deals that we've lost not because we didn't prove we were better, not because we didn't have a stakeholder or a main point of contact that wanted to proceed, but because each year they were overruled by somebody who didn't want to make the change regardless and didn't want to uproot the existing technology despite us being more cost effective and us offering a more powerful solution. So it's not an excuse. It's just the reality of life. We run into that quite a bit, and it's something that we've gotten better and better at mitigating. We also have gotten better and better at identifying whether or not those people and those mentalities exist in that organization so that we know how -- so that we try to sidestep them or placate them along the way to avoid them trying to interfere with our deals. So there is a lot of things that we've learned and that we've strategically adjusted in how we do deals so that we know ahead of time if we're walking into that. We also have specific people on the team that in these situations where we run into that inertia, if you will, there are certain people on the team that we bring into those calls because of some of their prior experience to be able to help and work with organizations to get them comfortable in making that change because they've done it in their careers and they know what it looks like and can kind of help with some of the handholding. But it is a very real thing we run up against. So I did want to address that. The next question that's in there is you didn't mention any churn, which you have historically. Was there any? So our churn is quite low, but we always wait until the end of the year to break that down. For those of you that have followed our results, you know that at the end of each fiscal year, when we do the rounds in July, we provide a waterfall of ARR that shows sort of the new wins, any churn, et cetera, et cetera, and adjustments so that you get a full breakdown of that. But given the nature of when our renewals are and things like that, providing it at this point in time wouldn't be a complete picture. So it's best to look at that over the course of the year. I will tell you that from a renewal perspective, we've largely secured -- well, we've secured every main renewal that we intended to secure this year, and we've done a great job across the whole list of existing customers that were renewed, barring a few small things here and there, nothing major. It's always typically in the realm of a couple of percentage points of churn in any given year, and our customer success team is focused on retention and also growth targets in terms of revenue growth from our existing customers, and we've got a good handle on that. Have any customers pushed back on the new terms you are proposing? So -- that's a great question. It's something that I definitely want to clarify. So I will tell you that our customers see no difference. This is -- as Ash mentioned, this is not an accounting change, which is why we haven't had to go back and restate anything. All we've done is work with our auditors on the right language to sort of have in the new contracts such that it qualifies as the managed service that it is. But if you went and asked our clients, in their mind, we've been delivering a service anyways. And the language terms is just simply changing a little bit of the wording around the delivery of that service so that it can be recognized monthly instead of in one lump-sum under IFRS. And then ultimately, nothing's changed. We invoice the client annually upfront for the entire year on the anniversary date of each agreement. So to them, there really is no difference. So there hasn't been any pushback at all because to them, it's all the same. It's just us changing how we're recognizing the revenue to make it more clear to the market and also to make it more aligned with the managed service that we're offering now that we've moved to a cloud-based service as our primary delivery model. What is the conversion rate from stage 3 to stage 5 opportunities? We've given you guys a glimpse into the pipeline. As I said, we will continue to advance some of those details. They're being vetted as we go through finance for accuracy and when level of comfort comes into play around things like those conversion rates, we'll bring those to the market as well when we're ready. I'm an experienced investor, I'm rather confused. How are you really doing? Is it better and stronger than it was in July? Can you give me a view? So I think -- and Ash, feel free to chime in here if you think I've missed any of this. I mean I think, [ Tony ], from where I'm sitting, there's 2 things that are important to follow from a company sort of strategy and execution perspective. One is the Celebrus Software revenue line, which ultimately feeds the ARR, CElebrus ARR. In the first half, as you've seen and Ash walked through, Celebrus' ARR increased by 14.7% from period-to-period comparison, almost 21% year-on-year. That is what we care about. So when I think of success, when I'm meeting with the company, when I'm meeting with investors like yourselves, who have put your faith in us to deliver value, when I'm meeting with the management team, it's really do we have happy customers that are going to renew? Are we going to grow those customers? But ultimately, are we going to hit our ARR targets? And that's really where the value of the business lies. That's why we've built out the segments, the new segments also in the way that we have to make that very clear to the market because we know that it's been confusing for many of the reasons that Ash mentioned to understand sort of where the growth is coming from. All of the growth that we had in the first half fell in the Celebrus Software and as a result, the Celebrus software ARR total. That is the plan going forward, and that is where the growth will be. And hopefully, we execute as a team and we continue to close deals and continue to be successful so that we can continue to drive that number up year-on-year because that is what we focus on. And it's -- we've made a lot of changes to the business. We've brought the business a very long way in a short period of time in the 4 years that Ash and I have been here in transforming the business, the culture, et cetera. Right now, the focus is quite simple. It's selling more software. We've done all the other bits. We've hopefully brought more transparency to the market around company performance. We've built the business around software. We've taken many, many steps and put the right systems, processes and people in place around the globe to help us execute on that. And right now, the focus is just simply on executing and selling more software. Ash, anything you want to add on that?

It's all good.

Has there been any interest from other airlines? There are a lot of airlines in the world. Yes. So we have a salesperson who's solely focused on travel and hospitality. That includes airlines, hotels. We've got some large airlines using the platform today. And similarly, the case studies that I provided for auto and for the gaming customer previously in this meeting, we're using those as well. Everybody's story is an opportunity to sell to more just like it. And the challenges that we're solving in one airline are the same challenges another airline is having. Similarly, what we're doing for banks, what we're doing for hotels, what we're doing for auto manufacturers. Getting these stories in a very simple, factual, easy-to-understand stories that our sales team can use in prospecting and can use at events and our marketing teams can use to build better video communications, better LinkedIn posts, et cetera, all of that helps. There's ample greenfield opportunity for us. Right now, our focus is on finding the right way to get our teams in the room with these brands with the right people so that they can do what they do best, and that's still the vision of what Celebrus could do for their business. What percentage of recent deals are direct versus via partners? Everything that we've closed in recent memory, Ash, keep me honest here, but it's all been direct, I believe, right?

Yes. Certainly.

So everything has been direct. From a partner perspective, we are sort of revamping the partner relationships. I want them to be much more of a 2-way street where we're providing value to partners so that they also feel compelled to provide value to us. And that's how we're sort of transforming our engagements with technology partners as well as with some of our service partners around the globe to make it much more focused on revenue generation. But to date, everything that we've been doing has been driven from marketing investment and direct sales. You didn't ask this, but just in case others want to know this, the majority of our leads, the best lead source for us these days continues to be events. And there are events where in our sponsorship package of these events, we're guaranteed a number of one-to-one meetings with brands in our ICP or our ideal customer profile. That continues to be the best opportunity for us, these one-on-one interactions where we can show them the platform, help them understand the value and ideally get them excited for follow-up meetings once everybody returns home from those events. Are you going to split out identity security revenue from marketing revenue? No. It's all Celebrus Software revenues. And the reason being is clients are taking on use cases that traverse both. I think I mentioned back in July during this meeting, things like bot detection, as an example, being something that both the marketing and the fraud departments are using. We don't really see the value in splitting that out. Where we see the value is reporting our software -- Celebrus Software ARR, the growth there in and the revenues associated with that in each year. As that number grows and we continue to show that growth, we think that's what matters from a value perspective. If we show, for example, 20% to 30% growth in ARR year-on-year, I don't know that it matters how we split it as long as it's our IP that's driving it. How many substantial-sized customers do you have? The number of global deployments, I think, now is upwards of 140-ish maybe when we factor in deployments. We don't have -- in the Celebrus Software side, we don't have a single customer that sort of makes up a substantial amount. We have several customers that are north of 7 figures. Our average deal size, as I've mentioned in previous meetings, is about $0.5 million a year, so TCV of about $1.5 million as a starting point since our deal structure is a standard 3-year deal. Do you have any realistic medium-, long-term ARR target? I just kind of mentioned a growth percentage. I don't know, Ash, if you want to add anything else to that from your perspective?

No, I don't think so. I mean, obviously, we model this out sort of 3, 5 years forward. And so we have some ideas as to where we could get to. You could argue kind of the next milestone, if you want to talk around numbers, is 25 and then 50s. But yes, so we do monitor that and our progress against it, but we don't disclose that publicly.

Thank you, Ash. And it looks like we've got one more question. So with the current market cap, are you concerned you become an acquisition for someone, particularly given the high cash holding? Absolutely. I'd be remiss if I didn't acknowledge that and say, yes, that's a conversation that we actively have at the Board level and also that Ash and I have been acutely aware of during the tenure here. Obviously, there's a lot of things that you can do in terms of readiness as a business to be able to respond to something like that and try to drive as much value as possible for shareholders should something like that happen that forces us to consider that a real offer and take the necessary steps from a regulatory perspective. But that's not as far as it goes. We're covered, we thought about it, we're prepared. But I don't really let the business focus on that. I'm not a big fan of like what ifs, right? Because I think you can get really caught up in that and take your eye off the ball. I think as a business, what we need to do right now is continue to focus on executing, selling more software and continuing to grow our customer base, but we can only control what we can control at the end of the day. And so you can be as prepared as you want the running -- the comment I always make. And I suppose it's very American of me, but it's the Mike Tyson philosophy of everybody's got a strategy until you get punched in the mouth. I think you could plan and plan and plan, but really what we need to focus on is what we can control. What we can control is what we're doing in the business day to day, how we're engaging with our customers, how we're executing in the market, how we're engaging our partners, and ultimately, what we're doing to drive that ARR number up so that our value for the business and for our shareholders and in the market continues to go up. And that's why I try to keep it laser-focused on, but I want to do least acknowledge that question because, yes, it's obviously something that we keep an eye on, it's something we're acutely aware of, but it's not something that we like it in our way of executing the business day to day.

And that's it, Bill, Ash, thank you. Indeed, you've covered off every single question that we've had through, so thank you so much for that. Of course, any further questions do come through, we'll be able to review those. Just before redirecting investors to provide you with their feedback, which is particularly important to you and the team. Bill, could I just ask you just for a few closing comments, please.

Absolutely. As always, I'm just going to end it with thank you. I appreciate -- for those of you that have invested in us, I appreciate your faith in the business and our strategy. I appreciate your engagement today and all of the questions. This is the first sort of foray into the new way we're presenting our results. So hopefully, that came through clearly. If it didn't, obviously, feel free to you reach out, reach out to Cavendish, we're happy to have further meetings to make sure that you're comfortable and understand sort of where we're going and what we're focused on. But thank you so much for your time, and have a great rest of your day.

Fantastic, Bill, Ash, thanks indeed for updating investors today. Can I please ask investors not to close the session. It should now be automatically redirected to provide your feedback, in order the team can better understand your views and expectations. This may take a few moments to complete and it would be greatly valued by the company. On behalf of management team of Celebrus Technologies plc, we'd like to thank you for attending today's presentation. And that concludes today's session, and good afternoon to you all.