Gentrack Group Limited (GTK) Earnings Call Transcript & Summary

Good morning and welcome to the Gentrack's Full Year Results 2021 Presentation. I'd now like to hand you over to Gentrack's CEO, Gary Miles.

Hi, everyone. Welcome all. This is my first anniversary speaking with many of you. It's been a wonderful and transformative year, I have to say. I really enjoyed it, and I look forward to sharing the results with you all today. I'm going to open and then James will go through the financials. I would like to note that all the financial numbers in this deck are through September 30, whereas the customer metrics are up to current date, okay? So let's jump right into the numbers. So revenue is up this year, 5.2% for the group and 8.8% in utilities despite a $4 million headwind that we had going into the year from prior period losses. EBITDA was also up to $12.7 million. And I'd like to remind all that there was no capitalization of R&D cost in these numbers. Our cash position is in a very strong place as we added $9.2 million to bring our balance to $26 million. All of these numbers that you see here, and James will go through them in detail so I'm not going to touch on each one of them, but are on the backdrop of globally rising costs for the technology talent and significant investments that we've made in our people to build a high-performance organization. So I'm pleased with the numbers. Obviously, we'd like to see more growth moving forward. A lot of this year was about really building the machine, a high-performance organization, the reorganization and focusing on customers and innovation and technology. And I think we achieved well against those, which I'll speak about. So let me move on and give some more color to the business and the market dynamics. And once again, James will go into the financials in more details. I'd like to start with the 3 pillars in the utility business, and then I'll touch on the airports. So if we look at the first growth pillar, which is our customer base. So I would like to remind everybody that we support more than 50 utility customers in 6 markets and a unique, as a challenger brand, is an innovative challenger to the incumbents that are out there with the likes of Gentrack that are bringing new technologies. We are unique in that we support B2C and B2B for both energy and water and gas and electric and networks. And the breadth of this offering is unique, and to be able to support multi-play is something that we're proud of and our customer base. So to manage customers across all these geographies with this much diversity is a special skill that we believe has significant value. So if I look back on the year, our customer base is in a completely different place. You see some numbers here. We have a RAD -- RAG status, red amber green, on our customers, a 72% of our customers, and we have a pretty strong bar for this -- are in a very good place, a high performance. We really have 1 to 0 customers, if even any, in the red at this moment. So this is an excellent outcome for the company, and happy customers do more with their supplier partners. It's just the way we all know it works. So our revenue is up across all of our customers. And I'd like to say that one of the main achievements we've had this year is our customer-facing teams have done a great job getting intimate relations at the working level and at the [ C-level ] to understand our customers' strategies and to deliver towards the road map. This is -- I think before, we were a little bit of in a billing box, and I'm going to talk more about all the technology innovations we're bringing them, but this is a game changer for the company. All the while, we're managing -- I think we're selling better. We have better deal profitability and visibility. We're managing our DSO and our unbilled really well. So this is a strong achievement in this pillar. I'd like to note that I've got Red Energy on here as an example. We help our customers on their operational KPIs. I'll give you some examples. So one of the KPIs that we work on, which we think we probably have the highest in the world on is operating metrics like number of operational full-time engineers of our customers to the number of meter points that each of them manage or customer experience excellence. So here, we have an example of Red Energy in Australia that for 11 years in a row has been ranked as a Canstar 5-star ranking supplier. In the U.K., for example, 5 of the top 10 energy suppliers are in -- for which recommended suppliers, which is a consumer recommendation engine, run on Gentrack. And so these are very important metrics to help our customers succeed and lead. It's shown here, we're doing all of this on the backdrop of better throughput. So we've got some metrics that we measure. One is our revenue per delivery FTE because that's part of the business that scales and we can count is up 7%. While overall, our cost per FTE is down 3%, delivery FTE is down 3% as we take advantage of our India center as it comes up and scales and brings weight into our organization. On this pillar, I would say that we really achieved amazing results. Transformative, but we're a customer-centric organization, there's always room for improvement, and we're going to continue to do so. Let's move to the next 2 pillars. The second pillar is winning new business. So we had 7 new customer wins. We've put some good B2B wins on the board; B2C, new water, we talk -- I'll close in my session about the market opportunity for energy transformations in the world. But I would like to say that we're bullish on water. We put quite a bit of focus on building our water pipeline. And the water suppliers around the world have very, very old systems and need to transform. So we're pretty excited about that. We want to focus, moving forward, on tier 1 suppliers. And E.ON, which is an example that we've called out here is such -- E.ON, with the merger of npower in the U.K. is a B2B supplier. They're the largest B2B supplier in the U.K. They had a legacy system. And both E.ON and npower, the 2 companies came together, they consolidated on our platform. It's arguably, I would say,, one of the most complex transformations in the utilities industry worldwide today. They are happy and satisfied customers. They've been on stage with us talking about what we've done for them and their business. So new logos is something we're putting a lot of emphasis in around our pipeline. On the managed services side, revenues were flat. However, I would like to remind the audience that we had -- when we did our strategy days in June, we came with these 3 pillars. Prior to this managed services was not a growth pillar. It was a tactical solution. What we did through the course of the year is we articulated well I think our value proposition. The sales cycle for managed services is not a short one, and we built our pipeline, and we strengthened our team. And I can say confidently that this vector of our business with the pipeline and the backlog is positioned for growth in FY '22 and beyond. These are sticky services that make us very intimate and close with our customers, and we believe in this engine is a profitable engine and growth engine for the company. So watch this space is what I would say here. If we move to the next slide, I'd like to go pretty quickly because I know a lot of you are interested to get to the numbers. I do want to spend a little bit of time on technology. We've separated out our -- some of our delivery capabilities from our technology R&D shops so that they can move very fast, and they have been moving fast. So I have some examples. Here are the types of technology innovations we've brought in the utility space for cloud solutions. So we have things here like renewable generation products that we brought to some of our [ INC ] suppliers, time-based pricing and billing is when -- if the wind is blowing or the sun shining, energy is less expensive than having to use, let's say, dirty energy sources and you can charge accordingly. Smart meter data management, we've done a lot around 5 Minute Settlement and half-hour settlement in the U.K. and 5 Minute in Australia. Lots of upgrades to the cloud, build anything around EVs and SoLR and you can see more and more here around analytics, et cetera. So -- and all the while, we're continuing to develop cloud native technologies in the core and in new innovation. So I feel good about the stacks that we have, and it's bringing value and it's allowing us to upsell. And so as a CEO that, I will reiterate, believes that the best technology wins, we're putting a lot of emphasis here. I will repeat there are some of our competitors that also have new technology. I do think that they are struggling to deliver it. So having -- in the B2B space, you have to have both great technology and you need to be able to understand how to deliver it and manage a diverse geographic footprint with diverse road map requirements. And this is a skill set that I think Zeev, our COO, and many of the other leaders in the team know how to do very well. And we built this machine, and we think that this is ready to really scale after hardening it this year. So let's move to -- away from utilities into our airports business. So our airports business is a net contributor to the group. Revenues are down slightly. The good news is air traffic is up. Passenger flow was up 220% from 2020. It is still down by about 50% from pre-COVID levels, but it is on the go. And I think for many reasons we all hope that we'll continue to expand, not just -- or to revive not just for [indiscernible] sake, but also for Veovo. As we saw in a lot of industries, post-COVID, there was -- some of the industries saw the need to transform. We think the airports will also go through a transformation surge. That's our belief. We're not necessarily predicting that in our numbers, but I think it's -- we are bullish on this space as the airports move into what's termed in industry Airport 4.0 or the airports of tomorrow. We have a very, very strong set of offerings in our space. We've -- are arguably the leader in the mid-tier. We've proven our technology in tier 1s like the Schiphol example I have here. The focus moving forward will be to the London Gatwick new win that we have here and others. The focus moving forward will be to go conquer the large airport hub space and as the airport industry turns back on and needs to transform. So we look forward to this. And in the meantime, we are continuing to invest in this space and our technology side. So I think that's important to note. Now there's a lot of news in the press about what's happening in the utilities market in the U.K. So I'm going to -- I prepared a special slide on it, and I'm going to address it head on. So from the year FY '17 to FY '20 -- and before I took this job, I went back and obviously read all the prior year's results and there was this kind of rhythm of small SoLRs that had come out and been a bit of a drag on the company's growth. Obviously, it was also a boom for the company, the deregulation in the U.K. Having said that, from FY '17 to FY '20, there were 6 of our customers went into insolvency. Since the beginning of FY '21 to this week, there have been 9 of our customers go into insolvency. This is a reflection of government-enforced price cap aligned or not aligned, I should say, with a really unprecedented gas prices, which are a combination of many things from Russian pipeline availability to the wind blowing. So we won't get into all of that, but we have a surge in gas prices, which actually means that for most of the suppliers they're selling at a loss. So many of the suppliers have gone into special -- have gone into SoLR or SoLR process. This week, Bulb went into a form of special administration. They are a customer of ours. They're a top 5 customer of ours. They went into a form of special administration, which has not been tested before. Today, they were actually signed an administrator, [ Teneo ]. We know them. We've worked with them before. We've already met with them. The government just published or I just saw some press that -- so this is from the press. I'm not 100% sure it's -- but this is obviously all live today. They had set aside $1.69 billion for the administrator to manage bulk through a new process. They will require our support and our active involvement in running their business because we run their critical systems. We will watch this space. Obviously, the Bulb opportunity represents -- I mean, realistically, it represents a big supplier could get that and needs a new modern system, and this could be a positive thing for us or they can move to a competitor. We do not know, but we will watch that space and see how it plays out and be very active in trying to manage that through. We do anticipate there will be some further supplier failures in the coming winter months. We don't think it will be many. We've made allowances for this. I would like to say that after this period, we believe that this long sort of process will stabilize for the future. But that's our position. Our revenue is diversified across airports and utilities. We support energy and water customers in 6 countries, covering both B2C and B2B. The SoLR situation in the U.K. is generally specific for B2C. And we're going to let you guys understand how that's affecting us in our forward forecast. But that's an update on the U.K. market. I'm sure there'll be many questions about that. I would like to close before handing over to James on the -- an interesting paper that was produced recently around CIS, which is the billing and customer information systems for the utilities market. And Gartner that said that by 2025, at least 25% of CIS contracts will be awarded to new entrants that would disrupt incumbent vendors offerings. That roughly estimates -- incumbent vendors roughly manage about 1.5 billion meters today. So 25% of that is 350 million meter points. This is a huge opportunity. There's a $5.5 trillion carbon business that needs to go to $0 in the world. This is a transformational opportunity that requires great technology and delivery excellence. We are excited about this opportunity. And we think we have a unique technology and delivery capability to try to take advantage of this. So that is a very quick overview of the company and market dynamics that we're in today. I would like to repeat, I think we had a good year, and we're positioned well for growth and leadership. So with that in mind, I will hand over to James, who will take you through more of the details of the performance of the financials. James?

Thank you, Gary, and good morning, everyone. So if we turn to Slide 12, where we show the overall group profit and loss. We'll go into more detail on the individual components on the coming slides. But you can see here, the group revenue is up 5.2% to $105.7 million despite headwinds in both airports and previous year's customer losses affecting utilities revenue. The growth was driven by strong project revenues and utilities in both Australia and the U.K. and underlying growth in utilities recurring revenues, offsetting those previous year's losses. Costs are up. Again, I'll talk to this more on the expenditure slide. The cost increase is driven by investment in people, with some offsets in nonpersonnel costs. You can see that below the line costs are generally lower. Note there's a onetime benefit on the finance expense line as we restructured our internal funding structure, which gave rise to a onetime exchange gain. On the key earnings measures, EBITDA and NPAT, the numbers are moving in the right direction. Although, clearly room for further improvement when you look towards our FY '24 target, which I'll come to later. So if we turn now to Slide 13, where you can see the utilities revenue analysis. The headline here is an overall increase in utilities revenue of 8.8% to $89 million. This is driven by an increase in project revenue or NRR, up 68% to $18.3 million with successful project deliveries in the U.K. and Australia, which is good to see. The annual recurring revenue story is more complicated. As reported at the half year, we had headwinds of previous year's customer losses, which had an impact of around $4 million on ARR in FY '21, which we were able to offset with growth both from new customers and from existing customers, leading to overall flat performance in ARR year-on-year. So moving to Slide 14 and providing more detail on utilities revenue, where you can see the split of revenues by geography, with the U.K. continuing to represent over half of our utilities revenues. We've also provided a breakdown by subsegment of the U.K. utilities revenue, where you can see that non-B2C revenues make up around 47% of U.K. utilities revenues. We've also included a chart showing the concentration of customers in our overall revenue breakdown. We are not going to identify individual customers. I say that having seen some of the questions coming through. But Bulb, which has gone into special administration in the U.K. this week, is a top-5 customer. There are no other top 5 customers either in SoLR or on an exit path. So turning now to Veovo revenue analysis on Slide 15, where the headline is overall revenue is down 10.7% to $16.7 million, driven by the reduction in NRR where projects have been on hold due to the aviation industry slowdown. Pleasingly, annual recurring revenues have continued to grow as new customers have moved into operation, and we're seeing the pipeline building again, while they're still quite uncertain as we exit the pandemic. We continue to see good prospects for the Veovo business in the medium term, and we will be investing more in research and development in Veovo technology. So now looking at group expenditure on Slide 16, where you can see that overall group expenditure is up 5.2% to $93 million. The biggest driver of the increase is in our personnel costs, where we've recruited to support the growth in the utilities business and revised our reward structures with a greater emphasis on variable compensation in both short-term cash-based incentives and longer-term share-based incentives. R&D costs totaling $12.7 million are included in this total and have been fully expensed with [ no ] capitalization. As in previous periods, we've continued to see savings in nonpersonnel costs through efficiency measures. So now taking a look at the cash flow and balance sheet information on Slide 17, which is one of the highlights of these results. As we've seen in each of the last 3 halves, we've had another strong period of cash generation, taking the net positive cash flow for the year to $9.2 million and giving us a net cash position at the year-end of $26 million. Cash conversion remains strong. You can see that our EBITDA factors in the cost of noncash incentives, and there's no R&D capitalization in FY '21. Working capital performance has again been good. And I'd draw your attention to the note on receivables in the financial statements, where you'll see the proportion of our receivables in current debtors has increased. Pleasingly, unbilled, referred to as contract assets in the financial statements, is also down just under $1 million over the year. This all reflects a good focus on managing the company's working capital. Also, while on this slide, note that we're at advanced stages on the refinancing of our banking facility, which expires in March 2022 and is currently [ nill-drawn ]. Now moving on to my final slides on external targets and guidance. At the Investor Day in June this year, we provided external key metrics and said that we would provide updates periodically showing how we're tracking against them. So on Slide 18, you can see that against the FY '21 guidance we provided in June, our actuals for revenue and profit have come in ahead of that guidance. R&D spend overall has been $12.7 million, and we're expecting to see the strategic spend on innovative R&D accelerate through FY '22. In terms of our FY '24 target, we will continue to assess these on an ongoing basis. What we're seeing is upsides in some aspects of our revenue generation, with headwinds and/or uncertainty in other areas, most notably related to the U.K. market situation, which offers both challenges and further opportunities. We'll continue to report on this going forward, but for today, we confirm no changes to the FY '24 targets provided on the 16th of June 2021 at our Investor Day. Turning tightly to Slide 19, where we provide an update on outlook for FY '22. So on 30th of September this year, we advised that we anticipated an increase in FY '22 group revenues versus FY '21. Over the intervening 8 weeks, we've seen further turbulence in the U.K. energy market. You've heard Gary talking about that, including the recent special administration of Bulb, a top-5 Gentrack customer. In this context, we're pleased to reconfirm that FY '22 group revenues are expected to be ahead of the FY '21 revenues of $105.7 million announced today. We're not providing earnings guidance for FY '22. And also, as mentioned on the previous slide, we confirm no changes to the FY '24 targets provided in June. So with that, I will hand back to Gary to wrap up. Thank you.

Thanks, James. I would like to close on saying that we had a good year. We built a strong organization. We think it's in a good state. There's obviously room for improvement, and we will continue to improve that. We're investing a lot in technology, and we're accelerating that. I think we're using our dollars well there. And we look forward to the year to come. So that's -- I think with that, we'll open it to questions. So let's proceed to the Q&A. Thank you all.

Thank you, Gary. Can I please ask Laura to invite questions from our audio callers. We'll then take questions from the live chat on the webcast.

Thank you, Jan. [Operator Instructions]. We'll now take our first question from Wassim.

Gary, can I ask a question about the water prospects? You talked about the pipeline there. Can you offer some more color in terms of the number of prospects, the indicative size of some of these engagements and potential timing, please?

Yes. Thanks for the question. Look, I think on water, I mean, there's -- I think the water opportunity in Australia looks interesting. The reason the water players are transforming is mostly around the customer experience. Some moved to smart meters. I wouldn't say that the compelling event to transform is as compelling as it is in utilities today because you really -- I mean the utilities' markets dynamics talked about in the June Strategy Day for energy are really changing a lot with consumers becoming prosumers and variable rate tariffs and smart meters and settlement and all kinds of new [ RAGs ] to try to enforce national targets and things like that. So we really believe that the energy sector is potentially one of the most transformative sectors on the planet today. When you look at water, the reality is just a lot of the systems in water are really old. And the regulator is usually inclined to -- on a cost-plus basis to try to push the water suppliers to provide better customer and social metrics around their communities and things like that. So this is driving transformation. I wouldn't say that we expect at the same pace as the energy business. But we do have a good presence there. We're in 6 of the top 13 suppliers in Australia. We have more than 50% of the contested water in the U.K. We have not entered and talked to the uncontested water suppliers in the U.K., like the Thames and Seven Rivers and things like that -- Seven [indiscernible] sorry. But that's an area that we'd look to target. What we did do this year is we started to engage with these players proactively. And we're going to do more and more of that. And we built up our water offering as a more, let's say, a more -- from a product marketing perspective, a more clear proposition, but I don't have specific numbers for you. I just don't want -- I just don't -- my comment mostly was I don't want to get water to get lost in the equation because it's obviously a sizable set of customers around the world.

Great. And can I also ask about the -- your Indian center. If you can you give us an update there as to how large that is at the moment, how many people, how many more to go? And what the early data is available on the relative performance of those teams from a productivity sense?

Yes. So this is a certain art to be able to spin up an offshore center in a quick period of time. As you know that Zeev who led this started with us, I think, in November, and we had the center opened in February. We have more than 50 people there now. We're going to lean into the Indian center as one of our growth vectors. We had a net people growth of 84 people this year as a whole, but we will always have people close proximity to our customers, always. But we spent a lot of effort and training and tooling the Indian center and getting the right customer authorizations to be able to service them from India. I think we've succeeded with that. We feel -- I would say, realistically, they're probably about 70%, 75% full capacity today, and we'll move that into the 90% range pretty soon. And it's definitely one of our growth vectors. I don't want to get into specific numbers, but that's something that we think is an important facet of any B2B company like ours.

Great. And then just the final question for me. Just on the reluctance to provide any FY '22 earnings guidance that -- you've obviously talked to revenue improving. but what's the key variable that you're not comfortable with in terms of visibility at this stage that's preventing. A bit more color on earnings?

James, do you want to take that?

Yes. Look, I mean, there are a couple of things. Obviously, there are -- you can see that there are moving parts here in our various markets, but R&D as last year is something we're working on accelerating and that will be a factor that ultimately determines -- is a key determinant of where we land on EBITDA.

Yes. And to be fair, I would like to add. I mean I think that's a controllable number in all the aspects besides probably the R&D, which we really have exciting things that we may want to tackle. So we haven't given guidance on the number.

We'll now take our next question from Jules Cooper.

So just the first one, providing FY '22 guidance. Just the fact that you're doing that has not been lost on us at all. But so I just wonder if you could maybe comment -- prior, you had talked about a $10 million expected headwind from customers that were in-sourcing or some smaller failures in the market in the U.K. Has there been any change to that expectation or that headwind into FY '22? I guess you can see I'm going -- I'm trying to understand what the underlying growth you're trying to communicate in the business. I just wonder whether any change there has been a factor. Otherwise, it looks pretty strong to us. So if you could comment, that would be awesome.

Yes, Jules. Gary, I'll take that, if that's okay. It's a good question. We haven't provided an update on that number, and what we're seeing is there are some ups and downs on that number. It's -- at this stage, I would say you can assume that, that number is materially similar to what we said back in June, which I think is important because that does, as you say, illustrate some of the underlying growth that we are seeing in our numbers in terms of being able to indicate that FY '22 revenues are expected to be ahead of FY '21.

Excellent. All right. And just lastly for me. I think on the slide deck, you talked to -- just around managed services, you put a $5.6 million number there. Is that tied to the 5 engagements like some sort of ARR metric that we should think about? Or -- I'm just not sure how to sort of read that $5.6 million.

The 5 engagements are new engagements that we've got. So we did not break the revenue down by engagement. So we didn't publish that metric.

Okay. So just the $5.6 million number, though, is that the sort of total scale of the managed services business today, is it?

That's correct, in FY '21. And as we stated, it was relatively flat from the prior year because like I said in the [indiscernible], this is something that we're packaging and have made a growth engine starting this year.

[Operator Instructions] We will now take our next question from Philip Campbell.

Just a couple of questions from me. The first one was just maybe for James, just on the utility revenues. Looks as though in that second half, there's quite a big increase in the nonrecurring revenue. So just keen to get a bit more of an explanation around that. And to what extent that's one-off? Or can you convert some of that into kind of recurring revenues this year and next year? And then the second thing, just for Gary, in terms of your comments around SoLR, just interested in kind of your views in terms of why you think there's going to be not that many more SoLR failures and why you think the market will stabilize?

Okay. James.

Okay. So I'll take the first part of that. Yes, look, Philip, the way to thing for our business is that when we win a new customer, we'll go through an implementation phase. And that we classify as nonrecurring revenue. So that's when we do the project work to put the system in place. The good thing here, and I think you're picking up on a really important point here, is that NRR increase, which you can see in FY '21, will absolutely convert to ongoing ARR, not at the same level as the NRR because the project implementation itself has a particular -- obviously, the revenues are associated with the cost of the implementation, but that post go-live converts to ARR and subscription revenues. So it slightly goes back to the question that Jules just asked in terms of where is the growth coming from. When you see that NRR increase that we've seen in FY '21, that ultimately converts into future ARR. Gary, over to you.

Yes. So on the SoLRs, look, there's been a lot of SoLRs in the last 6, 7 weeks. I mean we just mentioned the ones that were our customers. The -- in some of our customers -- we had a couple of customers that merged. We track all of our -- obviously, we track all of our customers very closely. In this case, we have a -- almost daily that we see our B2C customers and the status of them. I mean Bulb is a very, very well-run shop. Its operation metrics were really the best in the U.K., I believe. It was a balance sheet problem and a hedging situation. And when you're -- you could argue that, to some extent, the energy suppliers had to subsidize 27 million homes of heating. And if you didn't have the right balance sheet, then things would move very fast on. And it would put the company in insolvency. So what's happening is a lot of the less well-funded companies are not weathering the storm. And we're pulling out of the market. And after the winter months, there'll be much smaller, stronger number of suppliers remaining in the U.K. And we don't expect to see just -- it just -- it would be logical to assume that you wouldn't have the kind of SoLR activity that we've had in the past.

Great. Okay. That's awesome. Just maybe just one quick one on R&D spend. I know in the Investor Day, you were targeting this kind of 15% of revenues. What is the -- I noticed, for example, like TechnologyOne has a kind of a higher number than that. I just -- what is your -- when you're benchmarking against other tech companies, what type of number do you think is appropriate for Gentrack?

We think 15% is appropriate. We have -- but by the way, one of the reasons we didn't do [ earnings ] is maybe we'll choose to do something additional in the cleantech area, but we think 15% gives us a very strong competitive position. We also have customer-funded development that helps us advance our road map. And we try to always have a customer that we do some new things with, and they help us with that funding as well. So we think this is a healthy and a very competitive number.

[Operator Instructions] There currently no questions in queue from the audio participant. Handing over to you, Jan, if there is any from your end. Thank you.

Thank you, Laura. Okay. A question from the floor. What is the green high-performance measure? What is that based on?

Okay. We debated whether we'd put this up. It's just -- look, we have a measurement that are -- Zeev and the team -- leadership team put in place for -- and we do customer engagement surveys that impact this. We look at [ P1s, P2s and P3s ] that come into our trouble ticket system and resolution time. We look at the profit and health of the customer. And so we have kind of a matrix of things that we take into account when we look at how we qualify the relationship we have with our customer. The order book, the size of the business increase, all these things come into play. It's not a science. I would say it's more of an art. But I think the main thing is to look at it proportionally. The number was probably flipped at the beginning of the year. And this is -- we've really -- I mean I meet with the CEOs regularly. We've -- the CIOs are joined up. So I think that these kind of relations didn't exist before, always in all cases. And so this is how we judge it, but it's an internal assessment together with the customer engagement survey. So not an exact answer. I get it, but I hope that helps.

Okay. Lovely. I'm going to ask a question. I'm going to combine a few questions together on the next one. On your revenue guidance for FY '22, how much of that is locked in or represents an annualization of prior wins? And how much do you still need to win? And also on your Strategy Day in June, you said the issues in the U.K. in power and energy market were not apparent then -- sorry, yes, the issues in the U.K. and energy market were not apparent then. If these issues are currently acting as a drag and you're retaining your FY '22 targets, does that mean you're doing better than you expected initially?

Maybe I can just start off with that one. First of all, we don't share externally how much of our revenue is locked in. But what I would refer you to is to look at the -- we split out for FY '21, the analysis between CMRR, which is our contracted monthly recurring revenue; TRR, transactional recurring revenue; and NRR, our nonrecurring revenue. I think that's probably the best indication of the stability of our revenues. Now that's not to say that all of the ARR is locked in, but it gives you an idea of where the stability is. In terms of the second question, I mean, the short answer is we've seen some growth coming from our customer base, which is positive. I mean that's exactly what we're targeting. And we've been somewhat -- probably somewhat conservative back in June, and we've got more certainty now in terms of FY '22, having gone through a very rigorous forecasting process for FY '22, which gives us confidence to provide the outlook that we've provided for FY '22. I can see there's a related question to that in relation to Ovo, which I think came up at the Investor Day in June. And I think there's been some commentary, some estimations on that. And I've tried to be very, very explicit. I hope everybody picked up the comments that I made there that if you look at that pie chart on Slide 14, Bulb is a top 5 customer. There are no other customers in that top 5 that are either in SoLR or on any exit path. So I hope that gives some indication of where we're at. Thanks, Jan, are there any other questions? Oh sorry [indiscernible]

James, maybe I can add. I mean, I think the answer to second question on whether it was -- because we didn't know about the SoLRs, the answer is -- and do things look better, the answer is clearly, yes, the business was moving [Technical Difficulty]

Gary, I think we've lost your audio.

Can you hear me okay?

Yes, you're back.

Yes. Sorry, we had -- I had some kind of power surge or something. Anyway, I think the answer there was some request or some -- in June to have the FY '20...

We've lost you again, Gary.

[Technical Difficulty] post-budgeting. And we didn't know about the SoLRs obviously. There's some SoLRs that came in and take some revenues out of the forecast and the numbers looked really pretty strong. And those clearly do represent some headwinds into the year. So I think that's pretty clear. But we're comfortable with the numbers we're presenting.

Okay. Thank you very much. I think that closes down the questions for today. Thank you very much for your participation. And I'd now like to close the session. Over to you, Laura.

Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.