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

Good afternoon and welcome to the Celebrus Technologies plc interim 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. And I would now like to hand you over to CEO Bill Bruno. Good afternoon to you. [Voting]

Hi. Good afternoon and -- good afternoon, everybody. Thank you for taking the time to join and listen in to our interim results presentation. I'm joined today by our CFO, Ash Mehta, as well. And the two of us will walk you through the results and some of the business strategy and, hopefully, provide you with some content that sparks some questions. So please feel free to interact with the Q&A tab. We've got that up here on the screen. We'll try to get through as many of the questions as we can here as we get to the end. So from an agenda perspective, kind of follow the same plan. For those of you that have attended in the past, it will look a lot like what we've done in the past, with a few small changes. So we'll walk through a little bit just a very quick reminder of sort of the Celebrus mission statement and values. And the reason we're doing that is, as we're building out the business and we continue to sort of communicate with investors, we communicate with clients and we set our various strategies across the business and business plans for each division, we really try to align on those values and try to bring that to life. So you'll start to see some of that coming through in all of the materials that we're putting out. And so we'll just do a quick refresher of that. I'll also walk you through some of the operational highlights that for -- those of you that had read the RNS from this morning would have picked up on several of those. Ash will then walk through the financial highlights and sort of review the balance sheet and several of the common views that we walk through in these meetings. And then I'll wrap up with some -- just a view into some elements of the business strategy; cover off on our competitors; cover off on some of the how we sell, how we go to market; and provide some use cases as well; and just give you a sense of what customer success has been doing globally with our customers in not only helping evolve how we grow those relationships but also in helping us sort of collect all the stories from the field and make that readily available to marketing, to sales, et cetera as we try to evolve the business and move forward. So from a mission perspective, everything that we do with the Celebrus platform and everything we do in terms of the services and the data and the technology that we provide to customers is geared around helping them just build better relationships with their consumers. As many of you are most likely aware, we sort of have two 40,000-foot-view use case segments, 1 on the marketing, advertising side; and 1 on the fraud. The Celebrus platform, the data that we create, the digital identity solutions that we provide in that marketing world are geared towards learning more about you as a consumer; and then ultimately helping you do something, buy more products; get you to the content that you're looking for; make the experiences that you're having on that website, on that mobile app, on that kiosk in an airport much more eventful, much more fruitful and much more streamlined. On the fraud side, it's about protecting consumers, right? And it's more about taking what Celebrus knows about an individual on that particular brand website or your banking app, et cetera; and making a very quick decision, based on the evidence that Celebrus gathers, as to whether or not it's actually you before that bank transfer, before that purchase, or if -- say, if you've fallen victim to someone gaining access to your credentials, et cetera, but at the heart of everything that we do, it's about being focused on our customers, helping them build better relationships with their customers and then ultimately making sure that we're innovating along the way and keeping things simple. And I'm not going to read all of the mission and value statements here that we sort of hold true as a business, but ultimately, innovation and simplicity is what you're, hopefully, seeing. For those of you who have been following the brand during the time that Ash and I have stepped in and built the management team that we have today, hopefully, this is what you're starting to see. Particularly for investors, if you've been to the investor website today, as an example, you probably noticed some changes there as well as we continue to sort of roll in the investor content with the larger marketing site and make it easier for investors to be able to digest not only what we're bringing out in terms of RNS and interims like this but also making it easy for you to dig into some of the case studies, some of the marketing elements and some of the more sales-focused elements that we're bringing in through our blog posts, et cetera, as well so that you have much easier access to that as we've rolled it all together. From an operational standpoint, the first thing that, hopefully, you noticed in the RNS is that -- is the broad sort of set of wins that we've chosen to highlight for both during and after the period, including a large global airline; a U.K. energy company, which was a new sector for us and was the utilization of our Salesforce application and the integration that we built with Salesforce to their Marketing Cloud and Data Cloud capabilities; a financial institution in the U.S. who has been with us now for a year and has taken on multiple upgrades during that time, sort of validating the land-and-expand approach that we've been building upon as we've built out several skills across sales. You might remember the last time that we chatted. We had vertically aligned our sales team so that we had sales team members in sort of our core five, if you will, financial services, insurance, health care in the U.S., retail and travel and hospitality. Now we obviously have a U.K. energy company. We also have a telco customer. So there are some sort of burgeoning areas of interest, including the education sector, but those are largely the five. We brought on a fintech platform. We expanded our relationship with an existing European retailer. We added a bank in Poland. And that was our first time doing business in Poland, which was a fun process to go through but one now that looks fruitful for us given some of the partnerships that we've built in that market and several new opportunities sort of building in that region for us in Europe. And we also expanded one of our health care customers in the U.S., a customer that's been with us for a little over 2 years and has actually taken on, I believe it's, 3 upgrades over the course of that 2-year period, again showing the ability for us not only to sort of expand that sales capability, our ability to prospect and close business but also for our customer success team to be able to work with those clients once they become part of the family and help them get more and more value from the Celebrus software platform. From a marketing perspective, we've really focused on aligning with the sales hunting process and bringing -- and I'll come on to this later on, but really just helping align sort of an account-based marketing strategy. We've done a lot of fine-tuning; a lot of learning of what's working and what isn't, what's the target account and what isn't. And we've really brought the sales and marketing teams together through some recent summits that we've had to really align on that. We've also continued to innovate the platform. For those of you that follow our story, you know that we do 2 releases a year. We've extended some of our patents and capabilities significantly over the course of the past year, with a significant emphasis on our analytics capabilities, not just reporting in Celebrus Digital Analytics, which we talked about this time last year, but also now building out a self-service analytics application built around the Metabase technology deployed within all of our Celebrus Cloud environments, which continues to be prominent in all of our deals. And every new logo that we've done in the past 2 years, only one of them was not a Celebrus Cloud opportunity. And as a reminder: Celebrus Cloud is something we started standing up a couple of years ago that we've put quite a bit of engineering and innovation behind, but it's a single-tenant private cloud platform that we stand up largely with our partner, AWS, today around the globe. And we also continue to optimize the business. We've done a lot by way of new systems, new processes. One of the areas as part of this cloud transformation was that we took some of the data centers that were active on our side and we've consolidated those down now to just a single data center. So we continue to find ways to optimize the business, to optimize costs and to make sure that we're able to free up that money to put towards the things that are more revenue generating. Ash?

Yes. Thanks, Bill. So let me just run briefly through the financial highlights, but many of these points will come up in subsequent slides, so I'll go in a bit more detail on those subsequent slides. The key overall message from the financial highlights is that all of the key indicators are up compared to this period last year. So annual recurring revenue is up to $26.2 million. Total revenues are up, but more importantly, underlying that, the software revenues are up. And if you've been following us for the last couple of years, you will know that, for us, software revenue is really a very key indicator. And the gross profit margin is up, and I'll talk through why that is. And also I'll talk through what is more important, which is the software revenue gross profit percentage. And that's also going up in line with previous periods. PBT. We focus on adjusted PBT, which is effectively a proxy for cash. So that's up. I think that's our highest H1 PBT we've ever reported. And along with that, the EPS is up. Our cash position is healthy. We have no debt. And we're paying an increased dividend for this first half as well. So let's go through the income statement. As you know, we split out the software revenues and the hardware revenues. And the reason for that is that the hardware revenues are generally low margin, and they're also very intermittent. So we still have some legacy customers for whom we supply hardware as part of an overall installation package and -- but this isn't something we do any longer. In fact, there's only a handful of customers for whom we do that. So we separate those out because the real value creator in the income statement is the software revenue line. And what you see there compared to this period last year is that those software revenues are up 22.6%, up to $11.2 million now. And moving down the income statement, we see a gross profit percentage which is also up, so let me just talk about some of the dynamics behind that. So our software GP percentage is up to 56.2% (sic) [ 66.3% ], and the reason for that is twofold. Firstly, it's about scale. So as we scale up, as we keep growing our software revenue line, there are efficiencies and economies of scale that we benefit from. On top of that, where we add on new customers, whether it's a new logo or whether it's an upsell, the large part of that contract value is license. So typically around 80%, 85% of that contract value will be license. And you will know that, from our various revenue streams, license revenue is the most high margin, typically around 85% to 90%. So again as we grow the business, you ought to expect to see that gross profit percentage for software going up period-on-period. There is a first half-second half element, so it's best to look at it on a full year basis. So whilst we're higher than this time last year and -- we anticipate that the full year gross profit percentage for software will also be higher for the full year as well. So it's about scale, but it's also about some of the work that we've done. So as Bill was referring to on a previous slide. We've done a lot in terms of moving our infrastructure into the cloud. And that has helped by lowering costs, but on top of that, as we add on more customers and almost all of our customers now are on Celebrus Cloud, we're able to extract a lot of efficiencies and automation from the Celebrus Cloud environment. And that also then contributes to our software gross profit percentage. Moving down the income statement. Our operating expenses are up quite significantly against this time last year, but that's really a carry-through from some of the increases we made in Q3 and Q4 last year. So of course, as we're going through a year, we're not only looking at delivering the numbers for the year. We're also looking at what we need to do for the subsequent year. And so on the 1st of April for the next year, being able to deliver the numbers for that year and being ready to be able to do that. So we made a number of investments, principally in customer-facing roles, around Q4 of last year. We saw the costs go up for the full year last year, and we sort of carry through of -- that into the first half of this year. Head count currently is just over 160, and -- but the head count we're adding are principally customer facing. So we've talked previously about how we've built a direct sales team, we've built a customer success team; and how we've invested further into marketing. So these are the main contributors to the operating expense line growth. Finance income net. We have healthy cash balances. I'll talk about those on the next slide, but not only do we have those, but we also manage them very well. So we have converted our cash balances from GBP, into USD. We did that in the early part of this financial year. And that's all part of the change to reporting in U.S. dollars rather than GBP, but we mange those well. So we manage them really looking at the interest increments between investing for it overnight or a week or 2 weeks or a month. And so over the period, we've got $658,000 of interest income. So that brings us down to an adjusted PBT of just over $1 million, again, higher than last year and the highest we've ever reported for a first half. Moving down, we've got amortization and share-based payments; and those are typically noncash items. And that's why we focus on the adjusted PBT. That's effectively a proxy for cash generation. Below that, as I said, the amortization noncash, share-based payments noncash. And that brings us down to a profit before tax of $250,000. No tax charge for the period. You may remember we had a high tax charge for the previous year. And I did talk at that point about our tax charge coming down, principally for the fact that we are -- we have some tax losses in the U.S. And those will be used up this time around. And also, through our further investment into R&D, the utilization of the patent box regime, on top of the R&D credit regime, we'll bring our tax charge down quite significantly this year. So that $250,000 for the half year translates into an adjusted diluted earnings figure of $0.0255 per share. So all of these numbers are in U.S. dollars and in cents. And that again compares favorably for this -- compared to this time last year -- thank you. So on the balance sheet, not a whole lot to say, I mean, other than the fact that it's a very strong balance sheet. We have a healthy cash balance. We have no bank debt. Of the movements that are up there, let's look at the property, plant and equipment. It's moved compared to this time last year, but you may remember from the final results this is really as a result of entering into 2 new office leases. And of course, under IFRS 16, we have to capitalize those and put those on the balance sheet. So that's what that $2 million is, and that will runoff over the course of the leases. We had some inventory at the full year-end, and we have some of that still at the half year end. And that will be -- well, that has already moved off the balance sheet now. We don't hold inventory. We don't have a warehouse, so this is typically goods in transit or goods in advance of a particular customer sort of hardware deal. Trade and other receivables have come down since the year-end. We continue to collect our cash very effectively. Typical payment days by our customers are 45 to 60. We have very little aging, aged debt. We have no bad debt, and we've not had any bad debt for some years now. Moving on to liabilities. Trade and other payables is down from the full year-end. And if you remember, we had inventory on the balance sheet. That was for a particular customer contract. And [ aligned to that ], we had the payment that we needed to make for that hardware; and that's why the cash balance also at the full year was so high. So that has now unwound. And what we see now in the balance sheet is a much more kind of typical and normal kind of balance sheet, if you like. And you'll note within that also the deferred income line of around $12 million. That's fairly typical. So we bill customers in advance of the sort of year of services and license. And so we collect the cash in advance, and that's what that figure there represents. It's people who've paid us in advance of the recognition of the revenue. So that brings us down to $37 million of assets, of which $26 million roughly is cash. Let me say one thing about the freehold property. It was one of the questions already posed. So in the "assets held for sale" line, you'll see there a figure of $4 million. That is the property we have in West London. That's our U.K. office. We have had that on sale for some time now. We have an offer. The buyer has put in planning permission. And we're waiting for that to complete before we then get into finalizing the legals, but we anticipate that happening, hopefully, in the next few months -- okay, thanks, Bill. Okay. And finally, on cash flow, the major point here is really the unwinding from the full year. So at the full year, we had a high level of inventory. We had a high level of cash. We had a high level of trade creditors. And those have now pretty much unwound. And that's why you see that movement in working capital which covers the inventory under debtors and creditors, outflow of just under $10 million. We had a high tax charge last year, as I said. And so we paid that tax. That's around $2 million. And then the other items of note here: probably the capitalization of development costs. So historically we've had around 0.4 million capitalized. We would rather not capitalize development costs, so most of them run through the P&L and typically around GBP 2 million per annum. However, there is an element which we are required to capitalize under IFRS. The amount has gone up in this period. And that's as a result of certain investments we've made into more of the development side rather than the research side. This is all related to utilization of our software on -- for mobile apps. Lower down, dividends paid. Typically, in a year and -- we'll pay around sort of $1.8 million. So in the first half, we paid the final dividend, which was $1.1 million. We did have a purchase of some shares. So you may remember we had a share buyback scheme. The purpose of that was really to negate the dilutive impact of our share options. And it's not for earnings enhancement. And we don't anticipate doing a share buyback scheme in the near future. We have enough shares in treasury which will cover the dilution from options, so again as you look at the figures and you look at the adjusted diluted earnings per share, you also need to bear in mind that actually that dilution won't happen at this point in time because we are fully covered for that dilution. Okay. And one final point I said at the start but just to reemphasize in terms of what our key metrics are. And ARR is a key metric, and that's a figure which went up in the period. Software revenues is a key metric for us as well. Adjusted PBT is a key metric but probably secondary to the others. So we have a profit target we aim to make, but we remain flexible. And if we did see opportunities to invest to accelerate organic growth, whether it was a particular vertical or a particular geography, that's something we would consider and with some impact potentially on profit, but right now we're geared towards delivering that profit figure and consequently also paying a progressive dividend period to period. Okay, thanks, Bill.

Excellent. Thank you, Ash. So just a bit about the strategy, competitors and kind of our approach in the market. And again, this slide has kind of become our intro slide these days for how we talk about the Celebrus platform, which is our predominant and -- what we offer in the market, what we're selling and what we're building our strategy around. This is delivered through Celebrus Cloud predominantly, as we mentioned before, on a single-tenant private cloud instance. And it's all part of sort of how we simplify the story around what Celebrus does. And as a refresher for everyone. Brands that are using Celebrus to improve those relationships with their consumers are deploying our technology on their websites, their mobile apps, their kiosks in an airport, their ATMs, et cetera. And they're using that to basically build a compliant profile about you that includes your journeys, your interactions, the things that you're typing, your common behaviors and interests, et cetera. And for the -- on the marketing side, that then is used to build better experiences, as I mentioned before. On the fraud side, it's used to confirm that it's you, to protect your money, your assets, your accounts, but it's also used to power a lot of partner integrations. I mean we talked a little bit about this in the RNS and how we've continued to expand some of the integrations. We've had long-time partners like Teradata and Pegasystems and others. We've had recent partners. As recent as a couple of weeks ago, we announced a partnership with Optimizely, an A/B multivariate testing solution and decisioning platform. We've done the same with Braze, with Salesforce, with Snowflake, with Databricks. And all of the new technology partners are generally driven by a client need, so we're not building things and hoping that people will show up. We're using what clients are asking. So for example, one of the financial new logos that I mentioned early on in the U.S. uses Databricks as their data platform, their cloud-based environment. And so we had to build an integration with Databricks. And then that facilitates a great value discussion, a mutually beneficial discussion, with someone like Databricks about how we might want to do that elsewhere and how we might want to bring that to market. And so we're building these integrations based on client need. And then we're aiming to have these partnerships and these integrations become fruitful in the coming years, so it's a way of us building more and more pipeline. We've also invested heavily in analytics over the last 2 years. And this is something that just made sense for us. We've had clients wanting to just build visualization and reporting on our data. And it's become quite cumbersome for them to have to do that in another system, so it was quite easy. I say easy because we're blessed with an unbelievable engineering team, but it was quite easy for us to stand this up based on the data model and all the structure and thought that has gone into the Celebrus platform and all of the various patents that we've maintained for years now and how this platform operates, to really bring that together. And so we've really started to round out the platform. And I know there's a couple of questions that I can already see popping in kind of around the acquisition targets, as we've talked a bit about our acquisition strategy. As we think about the first acquisition that could come to pass -- and there's nothing imminent, but it is something that we've invested in and that we're exploring and evaluating companies. It's really about rounding out this platform, making it more business friendly, adding new features and functionality. And so that first acquisition is going to be focused on being a bolt-on capability that we can bring into the Celebrus platform; and cross-sell to their customers, to our customers. And continue to innovate in the market is sort of the thought process there. From a competitor standpoint. As we've rounded out the platform and continue to evolve, the competition does change and based on kind of 4 high-level categories. On the marketing side, the bread and butter that Celebrus goes back to 1999, all right -- my first interaction with it was 2003, when I was a consultant at the time in the U.S. The marketing side, the main competitors are Adobe and Tealium, for those of you that are familiar. On the fraud side, the main competitors there are folks like BioCatch or BehavioSec or organizations like that. A lot of them start with a letter B for whatever reason. In the analytics world, it's things like Adobe Analytics, Google Analytics and a few others like an Amperity or things like that. And then we broadly get kind of thrown into the CDP arena, I suppose, as well. It's a common nomenclature, but in my opinion, it's become very confusing because everyone claims to be one. And the definition of a CDP has kind of expanded a bit and lost its way, if I'm pontificating for a moment, but we do find ourselves against some of the technology in that -- in there like a Segment or perhaps a Lytics or things like that. And so the competition does vary based on what we're selling, based on who we're selling to. And we have sort of different battle plans for how we approach that based upon that particular sales situation, based upon the existing marketing technology stack that a brand might have. And we are very much on the front foot of really trying to sell a story with 2 sides of the coin. One is the value story of what Celebrus will bring to an organization, and I'll show you some examples of that shortly. The other is cost savings. Candidly, if we're talking to someone who's perhaps frustrated with their analytics platform, we're not talking about making that platform better. We're talking about moving them to ours. And that's something that we've been very successful in doing over the last couple of years with several of our key clients. From a market approach standpoint, as -- again those of you that have been following the journey and meeting with Ash and I -- we've stood up a direct sales function. That includes hunters. That includes farmers. That includes customer success. We've stood up a marketing function that we continue to innovate around the globe. We have our partner team. And we've really evolved our partners, in terms of not just technology partners but also consulting partners. And the three of them sort of formulate our prospecting funnel, if you will. So when we're going out to the market, trying to find opportunities, trying to turn those opportunities into new customers, the sales team is obviously managing the lion's share of that, but marketing and partners are feeding it with the activities that they're doing as well. As we land and expand those clients, then we have in essence 3 growth funnels to think about as a business. You have our customer success team who's focused around the globe on helping clients get enabled on the platform, making sure that we have happy customers, making sure that those customers understand the value that we can bring and the art of the possible; et cetera; et cetera, but we also have 2 other growth funnels. One is professional services, managed services, the teams that are on the ground standing up the environment, working with clients to enable the use cases. From a customer-first mentality standpoint, to go back to our values, every interaction that we have is an opportunity to improve satisfaction, to be easy to work with. And the more and more that we focus on that across the business, the easier it is to upsell our customers because they want to do more business with us. Getting feedback from customers that we're the only vendor that actually cares about them or that has delivered on everything that we promised, which is feedback that we've gotten, means a lot to what that team is doing on the ground. And then finally, the marketing team. We've started to spend a lot of thought and put a lot of strategy into how we better enable and continue communication with clients as well sort of through things like an ongoing newsletter; enhancing the way that we support our customers; updating the portal, updating a lot of our web content; investing in some research around the use of AI and our technical brochures and how-to guides, to make it easier to digest for customers. And so there's a lot there, the growing use of YouTube as a channel for us to show videos and capabilities of Celebrus in a meaningful way. And so this is how we talk about the business. This is how we think about our field teams and how we think about not only [indiscernible] the market and winning business but then also retaining customers and growing them in their usage of the platform. As we're doing that, we come across, basically when we're prospecting, 3 different types of personas that we've kind of simplified it down to. And based on the persona -- sort of determines how we engage. So if we're at an event and we're sitting at a booth or maybe presenting on stage and talking to people afterwards, what we're trying to do -- and basically 3 to 5 questions, max. Think of it as you're in the elevator. You've got 30 seconds to catch someone's attention -- is figure out where they're at on their journey, where that person is and where their organization is. The key persona for us is someone who's very frustrated, been let down by other technology; and is trying to do something that our platform can enable. That's our Holy Grail, right? That's who we're searching for. The second persona is a more open-minded person. Maybe they know that there's a better way to do things, but they need to be educated or convinced. And that there is more of a sales and a marketing play and going back to kind of the funnels of how we educate and how we really bring them on a journey to become part of the family here. And then the third persona is the "see you next year" folks. A bit tongue in cheek, right, but they're the folks that think they've got it all figured out. Maybe they haven't hit the level of maturity yet with their platforms to realize that there's gaps and problems. And that is purely a marketing play. We're just going to stay top of mind; reach out to them through our newsletters, e-mail marketing, et cetera; and hope that they graduate to either person 1 or persona 2 over time. What we're selling has also kind of been simplified. Again if you think about the platform slide that I walked through before: We're really trying to sort of bucket the stories. And that really coincides well with how we've vertically aligned and specialized our sales teams so that we have use cases and stories for marketing, for fraud, for advertising, for data science, artificial intelligence. You can't have a presentation without saying that word at least 3 times. It's just the rule these days -- around our digital identity verification, which plays in both marketing and fraud, analytics, et cetera. This is what we're selling. When you think of -- when you're looking at the balance sheet, when you're looking at the revenue breakdown that Ash walked you through. The software revenues, they are made up of this, our services and our capabilities and our software and our IP. And ultimately what we're finding to be the biggest source of business for us in terms of "top of the funnel" entry in our pipeline, so when we think of prospecting in the true sense of the word. If I'm going to have a conversation with a brand and I'm at an event or I'm out at a networking thing and I've got a few seconds to really capture someone's attention, it's going to be focused around one very simple theme, which is how well do you know your consumers when they're not logged in. Generally speaking, that's why Salesforce reached out to us to build the app that we built. That's the integration we have with Pega. That's the integration we have with Optimizely. You can go down the list. Every time we're building an integration, it's because the profiles and the identity solution that we offer for how we build a profile about a consumer is quite powerful. And when you marry that up with technology that needs that data, it generates some unbelievable results for customers. It also helps that, in the sort of cookie apocalypse or however you want to refer to it, there's so much clickbait out there around first-party cookies, third-party cookies. The way that we've architected our platform as a single-tenant private cloud platform, combined with the intellectual property and IP that we've built around this, means that the way that we're interfacing with consumers as you're browsing websites and apps is the most compliant and the most respected version of a cookie and how we identify individuals. And it does give us a leg-up on the competition in terms of how we manage that across all the different verticals that we ultimately operate within. And what that ultimately has done is it generates results. And this is -- I'm such a fan of our customer success division and our VP of business development that we brought in to help really guide how we engage with customers and how we build a robust value story for our customers, but one of the added benefits outside of just upselling and the revenue and the ARR that comes with that is that we've been able to consolidate a bunch of stories. And these are stories around how clients are using our data to generate real results in the field, focus on improving those relationships with their consumers. And you can see things here like cart abandonment in the retail sector and being able to get people to come back and reengage and purchase those items; things like marketing attribution, that if you do a cursory search for, because of the deprecation of third-party cookies, has made it very difficult for marketers to understand where their dollars are going and how well it's working. And it then also makes it very difficult for them to understand their customer acquisition cost, which is something that's going to be scrutinized on every balance sheet for every marketing department in every vertical that we operate within. And you'll see things like decisioning. You really can't build a decisioning program using a system like Pega or a Salesforce or others or Optimizely without knowing [ who ] the customers are. It's really easy when they're logged in. So when you unlock that power and you bring something like Celebrus to the table and can now start to build profiles from the very first time someone loads a page or a screen on their mobile device, that can become quite powerful. And to kind of bring that kind of further, we'll just drill into one of these examples, but media and advertising has been an interesting exploration for us. It's something that I always felt like Celebrus should play a much larger role in for many years. And through partnerships like Merkle and others, we've really found ourselves in the forefront of helping guide brands on how to best spend their money and how to avoid wasting spend. When I was at my previous employer, the -- and we did a lot of media auditing, we came across a common trend. Marketing and advertising budgets, particularly media, was one of the largest line items on a balance sheet, larger than R&D in most organizations as well, which means even a 5% savings and when you're talking about that sort of magnitude of spend can make a huge difference on the bottom line for an organization and free up funds to be able to put that elsewhere in improving their relationships with consumers. And you'll see that here in this example where, because of the data that we were providing and the digital identity solution we were compiling and the ability for them to build better models and make better decisions in their advertising; because they had data that was timely, accurate and complete, without any gaps, they saved 40% on their paid media spend in that first month and saw an increase in activity. So not only were they saving money, but where they were placing the ads was generating better results. And that's the 2 sides of the coin I mentioned before, the value story of increasing the throughput or increasing the value of that particular campaign but also saving money along the way. And I don't think, in today's market, you can do one without the other. You have to be able to show your ability to save them money and make them money at the same time. Similarly, on the fraud side, a lot of what we're doing in fraud for customers and a lot of the cross-sell and upsell and even some of the new logos that we've brought in on the fraud side have been very focused on this specific use case. There's a lot of legislation in the U.K. around scams. At the end of the day, someone is either getting access to your account, pretending to be you. Or they're trying to guide you to doing something that you're not sure you should do or that you shouldn't do in the first place. Either way, you're behaving differently. And ultimately that's the common use case of what we're solving, and it's rooted in the same things that we do in marketing. It's rooted in our ability to understand digital identity. And it's rooted in our ability to build a profile about you as a consumer as you're interacting with your bank across your various devices, as an example, but in this case, we're building an evidence profile. And that evidence profile is ultimately what the brands are using in real time to stop the fraud before it happens; or as marketing likes to say, outfox the fraudsters, as they've started to use all of these animal images, which interestingly enough is we practice what we preach. When we're spending on our advertising and we're advertising on LinkedIn and in Google and elsewhere and bringing the brand out there with our marketing, for whatever reason, these animals in funny sunglasses and suits, et cetera get way better click-through rates and interactions than anything else that we're doing. So you're going to see a lot of these animals, probably in our annual report as well, so just, I guess, consider that a warning. And finally, before we open it up to questions. From an outlook perspective, the pipeline continues to grow. For us, we know exactly what we need to do as a business. We know how much more we have to sell. We still have 4 months left in our year. We had a strong first half, as Ash just walked you through. And it -- we are confident in our ability to achieve this year's results. There were some slowdowns, and we mentioned that in the outlook statement in the RNS. I'm sure some of you have questions on that. It was related to few things. We had a couple of clients in the U.K. that were sort of waiting to sign, pending some of the budget decisions that were being made. Those have come through since then and closed. They were supposed to be first half deals, though. And we had a couple in the U.S. that were sort of waiting on the election cycle, as an example, which obviously still leaves a bit of uncertainty in the U.S., but from our perspective, it -- the pipeline continues to grow. We're seeing some fantastic efforts from the team in not only growing the top end of the funnel, the prospects but also finding our way through that funnel and getting ink to paper and closing deals. And so we've got work ahead of us, as every business does at this time of year, but we're continuing to plug away at it. And we're really happy with the growing pipeline, the visibility and the new wins that we've brought in, particularly post the period as some of those ones that we were waiting on started to come through and the dominoes started to fall. So ultimately this brings us to the Q&A. Really appreciate everyone's time today. And we'll jump over to questions. [Operator Instructions] And we'll run through a few of these here and try to cover as many as we can.

The sale of the old premises, we've covered.

Yes.

Who are our competitors? We've covered that. "You've mentioned exploring acquisition targets." That jumped on me. "Could you share more on the specific types of technologies?" So I talked a bit about the acquisition strategy and the bolt-on approach and kind of what we're looking for. In terms of capabilities, it's more on the activation of data, so it would be -- and personalization is a common term that I would throw out around that, marketing automation. Or in the fraud world, it would be called intervention, but it's really, if you think about our platform, we've rounded out the analytics and the reporting, the machine learning. We've got the data collection and the digital identity capabilities, so we know who the consumers are. We know what they're doing. We know what they're interested in. It's a structured data set that can plug into any technology, as we've proven through our various partnerships. It's really about finding some technology that we can plug into but this time in a more formal acquisition-type relationship that brings value to our customers and gives us something else to sell in the market as well. Anything you [ might ] add on that, Ash?

Yes, no, [ I think that's okay ], yes.

Okay, all right. "What gives you comfort in achieving the PBT FY '25 forecast?" Do you want to talk through maybe the second half weighting and kind of some of the margins that come in through that, Ash?

Yes, sure. Well, the first thing to remember here is that, when we sign a customer or when we renew a customer, it's typically for a 3-year term or a noncancelable deal. And what that means is that, when we [ go into a ] financial year, it's not as if we have to sell that amount of our revenue for that year, because a lot of it was already in the backlog and we know how much it's going to runoff over the course of the year. So we monitor that on a month-by-month basis. So at the start of the year, it might be a certain amount. Obviously, during the course of the year, we'll sell more upsells, get new logos. And that sort of amount already kind of banked, if you like, for the year will increase. We'll know what renewals are coming up for the year. And we'll put them into our pot as well, although they're not certain, but we have high visibility, if there are any customers who aren't going to renew. And what that effectively leaves is a kind of a gap, if you like. And that's the gap we need to fill, which is through new sales and upsells. And that's the number we track month by month, well, week by week sometimes, in fact, to keep an eye on. And the comfort in filling that is based around the fact that that's a number that goes down month by month. And on top of that, we see our pipeline and how that's grown. And Bill talked a little bit about the further investments we made into marketing over the last sort of 6 months or so. So we keep a list of all of those deals that are coming up in the pipeline and their close dates. And that's effectively how we monitor it. Now historically we have had an imbalance between the first half and the second half. The reason for that is that historically we sold principally through partners who had a December year-end. And so a lot of our renewals and anniversaries are in the second half, so if you were to split out our ARR of $25 million, $26 million in terms of does it come for renewal or anniversary in the first half or the second half and -- the bulk of it will be in the second half. So when we go into the second half, and we've already reported the numbers we have reported, and we look at what's still to do, a large part of that is already covered by the ARR for the second half and on top of other service contracts that we might have as well. So that's what gives us that level of comfort. And the systems we've implemented over the last couple of years or so in terms of a much better CRM system, a much better finance system, [ there's ] sorts of tools that we're using in terms of monitoring this.

Thank you, Ash. "What is the average deal cycle length? And how has that been affected by recent market conditions." So that's a good question. I'll give you -- I'll try to give you a succinct answer here because there's a lot of analysis that we do. As we win or lose deals, we do a bit of a deal review, which includes a bunch of metrics that we capture in HubSpot around how the deal flows, the time lines, how long they're in each stage. We've got a 5-stage pipeline. And sort of amount of activity that's happening with the client at each of those stages, which generally shows how good the engagement level is with those customers. And you can start to see what's working and what isn't and start to see some patterns. So our VP of global sales has kind of revamped our sales process, so very early on in a deal now, we're getting quite a bit buttoned up in terms of commercials and the costs and kind of all of the basics of the thing that -- what you'd want before you start the legal process. The legal process is the longest part. Our average deal cycle, it kind of averages out around 6 months, but types of deals seem to have different time lines that factor into that average. Holistically it's about 6 months, but if it's a partner-led deal, it's usually a little longer. And that's because, when we're selling direct, which the time line is shorter, we do a lot of prequalifying that we're still trying to help educate partners on how to approach that. So when we're direct, it's shorter than a typical partner time line. We've initiated a -- over the last year a Celebrus alumni program, so people that have used Celebrus that perhaps have gone on to other organizations. We've noticed that in those situations it's a much shorter time line to close those deals. So we -- it averages out about 6 months, but we're looking at it. Hopefully, that gives you a little bit of insight. We're looking at how that's impacted based on the lead source, the type of deal, the use case that we're selling. And now that we're, frankly, closing more business and generating more new logos, it's giving us a good amount of data to dig into and really use that to learn. The cash balance over the next 12 months, how will we use that? We've -- Ash, you can speak to some of these things. I'll just kind of refer back to the comments I've made around acquisitions. I'd also mention that we're not thinking about this as a one-off scenario. This is something that we want to have as part of the strategy. We think it's prudent to constantly be monitoring what's going on in the market and look for opportunities that might make sense to bolt onto the business, so while there's nothing imminent, it also isn't something that we're planning on doing, acquisitions, celebrating that and then stopping that process. That being said, we also -- and Ash alluded to this. We're looking toward, looking at how we might invest in some of the things that we're seeing working as well, different marketing campaigns and different types of events. PR has been a big driver of business for us and we've made some new investments in that. So it's constantly a conversation at the Board level. Any decision that we make to invest will be based on strong analysis and data to support that. And -- but ultimately those are some of the things that we're evaluating. And Ash, do you want to talk through maybe buybacks and kind of our general views there?