ikeGPS Group Limited (IKE) Earnings Call Transcript & Summary

[Foreign Language] and good afternoon. On behalf of the Board, management and staff of IKE, thank you for attending our 2022 Annual Meeting. My name is Alex Knowles, and I'm the Board Chair of ikeGPS. We welcome you as online participants through our virtual management meeting platform provided by our share registrar, Link Market Services. A special welcome also to the many new shareholders who have joined IKE since our last AGM. We note that you can vote and ask questions online, and we encourage you to do so. I'll provide you with further instructions as we progress through the meeting. If you encounter any issues, please refer to the virtual annual meeting online portal guide, or you can phone the help line on 0-800-200-220. I would encourage you to send through your questions as soon as you can. This will allow us to answer these questions at the appropriate time. In the meeting today, I am joined by Rick Christie, Independent Director; Fred Lax, Independent Director; Mark Ratcliffe, Independent Director; Eileen Healy, Independent Director; and Glenn Milnes, our Managing Director and CEO. Also present today is Stephen Fairbrother, our CFO; and representatives of our financial '22 year auditors, Grant Thornton. Ladies and gentlemen, with the introductions out of the way, let us move now to the formal part of the meeting. I will make some opening remarks. Then our Managing Director and CEO, Glenn Milnes, will present and outline some of the performance highlights of the year. After that, the resolutions that are before us today will be put forward. On the formalities front, quorum. The company's constitution prescribes with quorum requirement of 3 shareholders. I can confirm that this requirement has been met. On the proxies front, proxies have been appointed for the purpose of this meeting in respect of 20 million shares represented as 12.6% of the total number of shares. I'd like to thank shareholders for their level of participation in today's meeting. My fellow directors and I intend to vote all discretionary proxies as we have received in favor of resolutions 1 through 3 as set out in the notice of meeting, subject to the voting restrictions that apply to resolution 3. Voting on all resolutions in today's meeting will be conducted by way of poll. Those participating online through the virtual meeting website will have the opportunity to ask questions. To ask a question, you will need to click Ask a Question within the online meeting platform, select what item it's regarding in the drop-down window, type in your question and then submit. I'd encourage shareholders who are attending online to send their questions through as soon as they can. The financial statements for the 12-month period through 31 March 2022, together with the auditor's report, are set out in the company's annual report. The annual report was made available on the ikeGPS website on the 30th of June 2022. Now moving forward into the business today. As you know, my name is Alex Knowles. I am the Chair of IKE and based in Los Angeles, USA. Through the financial '22 year period, I was pleased to move into the Chair role, having been a director of IKE since its listing as a new pre-revenue hardware company in 2014. I'd like to take this time to acknowledge Rick Christie for his considerable inputs and contribution to IKE as our previous Chair. Thank you, Rick. We are very pleased that Rick has been able to stay on the Board as a director providing guidance and substance going forward. I'd also like to take a moment to acknowledge and thank the employees of ikeGPS based in Wellington; Broomfield, Colorado; and remotely for their dedication and amazing efforts that Glenn will talk through further in the meeting. Let me go through the company and what we've achieved this year. Our financial '22 period to March 2022 was a very strong year for IKE in terms of financial performance, market development and product development. Entering financial year '23, our signed contract backlog was strong. Our balance sheet was even stronger, and our market in the North American electric utility and communication sectors continues to improve in terms of demand for productivity solutions such as ours. Importantly, the work that we have put into technology and reoccurring business model development is translating to higher visibility for higher-quality revenue. Despite current valuation headwinds in the public capital markets for technology companies today, we are very optimistic about our growth and the value creation prospects for '23 and beyond. From a financial performance standpoint, we are pleased to hit all of our growth targets through the period. To follow, Glenn, our CEO and Managing Director, will take you through some charts and tables and highlights covering our revenue, gross margin, signed contract backlog and EBITDA for financial year '22 as well as providing an update on how we're tracking year-to-date with our financial year '23 half year closing today. In terms of customer and market commentary, as you know, IKE targets North America's 3,000 electric utilities and 3,000 communication companies building fiber and 5G networks, a lot of which has been attached to distribution poles with more than 2,000 engineering service providers providing these services. Once a partner becomes a customer of IKE, our objective is to become embedded and expand the use of our software inside of these large enterprise and infrastructure accounts. At this moment, we have approximately 350 accounts effectively, 5% of the total number of potential customers in North America according to the large long-term growth opportunity that we are facing. Importantly, our products are relevant in several unglamorous but large macro market areas, including more than $350 billion forecast to be invested into fiber and 5G infrastructure over the next 5-plus years by fiber and communication companies. An additional $60 billion of investment into rural broadband network development as part of the Biden administration's $1 trillion infrastructure bill is starting to be progressed. More than 3,000 delivery utilities have highlighted the need to address the challenges of network hardening, development and maintenance over the coming 10-plus years. Further pressures on electric utilities includes the regulatory requirement to allow communication companies to attach their fiber and 5G networks onto their power assets and an aging workforce that is driving a need to introduce technology to replace people. Our products are designed to deliver network engineering outcomes that are faster, safer, that result in a higher quality with full digitalized data. Glenn will talk shortly about our initiatives to introduce automation technology across the IKE platform. Like all businesses, there are some macro risks that continue to exist, particularly from the impacts of COVID-19 on the global supply chain. For IKE, this continues to present challenges to be able to be reliably source components for our field tools in the face of increasing demand. To conclude, our infrastructure oriented customer base remains very sticky, and we believe the next 10-plus years will see increasing levels of investment into distribution network development across North America, which is the engineering area where IKE delivers productivity outcomes. We seek to build decades-long relationships with these defensive customers. This is an industry that takes patience. And we are still early in terms of market penetration, but we're excited about the potential to create value for our customers and our shareholders in the years ahead. Thank you for your support. I look forward to discussing any questions you may have following Glenn's presentation. Thank you. Over to you, Glenn.

Thank you, Alex, and thanks, everyone, for joining today's meeting, and thanks for your support through the past 12 months. It's been a very strong year for your company. It's been a strong 24 months for the IKE business. So what I would like to do is take you through some slide material. This was published to ASX and NZX earlier this morning. And then, I'll try to pass through -- there's quite a lot of material -- I'll try to pass through this quickly so that we get plenty of time for the questions and discussion at the conclusion. So as you know, we're IKE, the Pole OS or the Pole Operating System company. We're all about driving productivity outcomes into electric utilities and communications company so they can deploy goods faster and at a higher quality standard and some other benefits around safety, et cetera. That's our hyper focus, and it's the North American market. [indiscernible] based in Colorado, the United States. This is our center of gravity in terms of operation. It's central to our market and our customer base. And as you know, we operate a software development team in Wellington and also a satellite office in Alabama. So please take note of this important notice relative to the material. So what I'll do is try to go through this content relatively quickly, but there's a range of, I think, important update items that I hope you find of interest. First, in terms of financial performance, it seems a long time ago now that we closed FY '22 period in March. It was just around $16 million. So we grew about 70% in terms of the prior calendar period. I think the most important thing for shareholders is seeing the compounding growth of the recurring and the reoccurring revenue. So if you look at the green bar and the blue bar in terms of this chart, that represents subscription revenue and transaction revenue. And we've worked very purposefully over these last few years to build products that not only have high utility and drive productivity outcomes but also support this business model because that gives us much greater visibility into high-quality revenue that recurs. And again, just for context, the next slide, we'll talk about where we're tracking to from a half year perspective. But the momentum of FY '22 continued into FY '23, and it has continued. So this shows our Q1 numbers to the end of June. We closed just under $7 million of revenue, so 160% up on the prior calendar period. Again, really strong growth in terms of that subscription and transaction revenue component, which matters a lot. So this is growth on top of a strong growth year prior. And the new -- or the update to the market today is in terms of where we believe or where we forecast that we will lend for the half year. So today is the last day of the half year period to the end of September. And the good news is we're tracking to between $14.7 million and $15 million revenue for the 6-month period. We haven't broken down the components here. We'll do that when we release the financial data in the middle of October. But you can see the growth really just continuing. So this again is 160% up on the prior calendar period. I think the other things that really matter is our balance sheet remains fortress. So we -- one of our principles is to make sure we maintain a very strong balance sheet position, which we're doing. And with this growth, we're really starting to drive functional efficiencies into the business in terms of looking at our cost of customer acquisition, as sales and marketing costs, to grow at this really high rate and also our revenue per employee metrics are now trending favorably. Again, just a look in the rearview mirror. For good housekeeping, we've included here the FY '22 P&L detail, again, which has been released a couple of times previously this year. Again, we talked about subscription and transaction revenue, and we had a comprehensive loss in the period of $7.9 million based on our ongoing investment into sales and also into products, which is fueling the growth that we're seeing this year and we believe into FY '24 and '25. Once again, the balance sheet snapshot. As I mentioned, maintaining a fortress balance sheet is one of the key principles of how we operate, and we've maintained that through year-to-date. So just wanted to talk about -- Alex touched on some of the macro market tailwinds that support IKE, and perhaps good luck, but also through our focus. We are looking solely at the North American market around distribution assets or the power poles that exist that electric utilities tend to own, but which a lot of other network companies attach their infrastructure too. And it's just -- again, these macro tailwinds are very strong, more than 3,000 utilities. They all face exactly the same set of challenges, aging infrastructure, aging workforce, the need to -- a regulatory need and a legal need to be assessing their infrastructure and hardening their infrastructure on an ongoing basis, and that never stops. And if you just look at the tragedy in Florida at the moment with Hurricane Ian coming through, I think 2.5 million people have lost power in that market. That's the kind of problem that we help to solve for in terms of infrastructure that can withstand storms and those types of events. Alex talked to the big investment into fiber. In practice, most fiber is going on to electric utility poles. Some of it goes underground. Most of it goes overhead. We help those companies to put the network much faster and do it in a defendable and digital way. 5G, which we all know is driving a lot of the fiber adoption, but there's a lot of small cells that need to be placed again on the outdoor and external distribution infrastructure. And then there's this very large number of engineering companies that support the network owners, and we also drive productivity and profitability outcomes for those groups. And just to give a bit of a guide as to whether this is a short-term view. This is the forecasted growth trajectory of CapEx into distribution network businesses. The dark blue, the top part of this bar represents investor-owned utilities in the U.S. market. And you can see those other factors below that. This is a growing problem. It's not one that is flat, and it certainly isn't a declining problem that we help to support. So I think this is topical just with the hurricane having grown through the Florida market. But again, if you look at the power pole, I don't know how many of you are familiar probably with pictures like it. But if you look at this power pole, at the top, you have the power infrastructure. Down the bottom on the left-hand side, you can see all of the cable TV or fiber or other network providers, just the sheer amount of infrastructure and load that goes into these assets. And we're building a stack of products and solutions that help everything from assessment through to design, through to engineering, through to maintenance. We talked a bit about the fiber boom. The reason this is growing and growing in the U.S. market is a difficult one to wrap your minds around coming out of the New Zealand or Australian ecosystem. But a lot of the U.S. market is not penetrated with fiber and is expected to be a very significant 5-, 7-year-plus boom of fiber deployment across North America. And the picture here just shows a pole with some 5G antennas attached and some of the other infrastructure that flows off it. It's just the level of CapEx spending here is very significant in the coming years. We help these folks -- we play a small part, but we help these folks deploy the networks faster. And that really matters if you're a network owner or a network developer. So some quick updates here, and I'll try not to get too carried away myself talking about the technology and our solutions. But again, we're investing substantially into productivity tools. And our solution set just continues to develop and develop. There's lots of words on this slide, but it's probably worth just looking back and remembering where IKE came from. I think when we listed the company, we're at a very early stage. We're a hardware-centric company with less than $1 million of revenue. But we've worked very hard to build the business around software and solutions for the electric utility market and distribution assets. And this is what's really shaped our products today, where we had 4 products and offerings that are interconnected but can be purchased on a stand-alone basis in the market. And I'll talk to each one of these in a little bit more detail as we hold our way through. And just the other item to touch on in terms of our transition from a hardware company selling hardware to the Department of Defense in the United States to where we are today, we've quite religiously followed 3 swim lanes of operational execution. So every quarter, we rolled forward our 3-year plan. We've got 12 quarters of -- we call them rocks, so they're key deliverables in each of our technology and customer experience swim lanes. And we're targeting to be the technology partner that our customers cannot imagine living without specific to distribution projects. And a lot of our technology, a lot of our products, a lot of our CX and the UX of our products are built around this rolling 3-year, 12-quarter plan. So I'll go through our products really quickly because I'm conscious of everybody's time. Our core product in terms of revenue generation today is called IKE Office Pro. What it does is it lets network companies or engineering companies do a number of things. First, they can standardize the way that engineers go into the field and can capture infrastructure data. So they use our field tools and they use our mobile software to standardize the way that they're going to catch the infrastructure data in a really high-quality and consistent way. Rework is a big problem in this industry otherwise. The second part is we have a cloud software called IKE Office Pro. What this does is it lets you digitize the asset information that's being captured in the field and create a digital twin of the asset that you own or that you're looking to engineer, you're looking to build or harden so it doesn't fail in the next hurricane. And this is the software that's plugged deeply into an electric utilities' network library and lets them, again, in a very systemized way, assist their assets. What we're excited about is the opportunity to automate more and more of this work. This is extensive work done by pretty heroic engineers, but it's extremely unglamorous. It's quite a manual process. The opportunity is to build more and more software to be able to automate parts of these processes, and that's really what we're investing in at the moment. And also providing intelligence, business intelligence tools. You can see in that middle screen here is a dashboard. This is so -- imagine your Crown Castle and you're running projects across the entire nation. An executive or an engineering manager would come in here and see how every project is progressing right down to the productivity of an individual engineer in the field. So it's those types of tools and the specificity of these tools is what we're very focused on. And these add up to provide pretty dramatic productivity benefits for our customers. It's why we're growing existing accounts substantially now, and it's why we're winning new logos, which we'll talk about a bit further. Our second product is called PoleForeman. It's part of the IKE structural suite. This is 1 of the 4 standards for pole-loading analysis in North America. So imagine taking that information that we just saw in the IKE Office Pro screen and then turning it into CAD and 3D design so that you can figure out if you're meeting regulatory standards, if you're meeting your own construction standards. This is one of the tools which is trusted by 5 of the 10 largest electric utilities in the United States. Some of the capabilities here. This is technical in terms of structural integrity, National Electric Safety Code compliance, clearance measurements, et cetera. Again, it's a very specific software, but it's relied upon by every distribution engineer and our customer base. And it gives us a really privileged position in terms of being able to upsell and cross-sell our broader software solutions. And one of the really interesting items is we're working right now about delivering the next-generation performance solution that will be released to the market in 2023. And it's been designed from the ground up with the customer council that has the standards group leaders within these logos here, which may or may not mean much, I think, depending on familiarity with the U.S. ecosystem. But these are the very biggest energy companies operating in North America, and they're guiding our product road map, which is why we're excited. And they're obviously -- they're very tied to this next generation platform and a lot of the other things that we're trying to achieve for their engineering teams. Solution #3. Again, the focus or the opportunity is to automate as much of this work as possible. Remember, these utilities have got to be the same engineering work year after year after year for operational, regulatory and legal reasons. And so, there's a lot of words on this slide, but IKE Insight is an early-stage product and technology for us. The value proposition here is that we can process huge amounts of bulk data and images, and then using low-code AI, we're able to process and make insights around poles and infrastructure and do it many, many, many times faster than what it's taking at the moment in terms of an engineering subset. And this is just sort of a glimpse into some of the range of disruptive automation capabilities that we're bringing to market. On the left, you can see this is a photograph of a pole. Imagine having 0.25 million photographs of these types of assets we're able to see in the computer and then go and pull out the wires, [indiscernible] conductor sites, transformer breaks, et cetera. The picture in the middle is not a real pole. This is like an automatically generated 3-dimensional model. So you're creating these digital twins on the fly, and creating digital twins of the network is something that a lot of infrastructure players are really going for at the moment. They don't have this capability today. And then the picture on the right, it's a bit of a fun one. This is in terms of the example. But this is the ability for an engineer who doesn't need to be an AI expert. He can look at all this data and type something into their search and say, look, in this cable, I'd like to see birds on a wire. And the machines can go and look and identify specific objects, again, specific to poles. So this is about becoming the Google of search for the distribution networks. So we're introducing this capability. First, we're infusing it into the existing product suite of IKE. And then secondly, we're making sure we can productize it and sell it to the market. And these are applications that are required across the entire industry. And our last product offering is called IKE Analyze. So for IKE Analyze, we provide our customers with a technology. They're going to collect all the data. They send it back to IKE over the cloud and then layer our software, some automation technology and also some experts and engineering experts, we return an engineering outcome to them so they can keep going with their products. And this is really valuable for some players in the market. It's less valuable for others that would prefer to be doing this work in-house themselves. So we're building our solutions so that we can cater to both parts of this market. And there's some really strong operational outcomes from using IKE Analyze for certain customers. We're saving a huge amount of time, cost, providing scalability, a lot of efficiency improvements. And we've now got real scale running through the IKE Analyze business. So I mentioned that's the business model upshot for IKE today. From where we came from is we've got a recurring subscription backbone to access any IKE solution. On top of that, there's an additive reoccurring fee or transaction fee based on the usage. So the more the customer uses the product, the more they pay in terms of transaction outcome. And then we've got these optional value-added products like IKE Analyze and IKE University, which is our training platform. Again, a lot of logos here, but these are all quite meaningful players across the North American landscape. So we're across telecommunications. We've got a really significant sales focus today on the electric utility market because we think taking a 10-year view, a 20-year view, that's where the very significant upside will set for IKE, but we already have quite a number of the biggest logos on the electric utility side, but a heck of a long way to run. Alex mentioned we've got about 5% of the market in terms of number of customers. We're not even close to penetrating most of those so that the upside is significant. And then at the bottom is the engineering companies, Burns & McDonnell, Cyient, Pike, TRC [indiscernible] are some of the bigger players with national footprints. I'll just touch quickly on team. We have direct sales. We're building a direct brand around IKE and we've got a direct delivery model in the North American market. We think that lets us control customer experience. It also lets us own customers. And we think that it's a scalable model. So we've got a team of pole experts, predominantly centered here in North America, but with our finance team and with Jareth leading engineering team in Wellington. An important item for us. We believe there's accelerating talent and for IKE to be an accelerator, we're fortunate to have a really young and diverse group of experts who are just wholly focused on this industry problem that we're solving. So we've highlighted here some of the sort of emerging superstars that are coming through the IKE system that have started in lower-level roles and have developed just so quickly and a big part of the customer experience for us. So there's some profiles here for Liz, Sara, Dan, Spencer, Blake and Jessica. And we're fortunate also for the talent to run all the way up to the board. I think most of the shareholders on this call are familiar with our Board of Directors. But it's a team. The balance is here in North America with Mark and Rick in Wellington, New Zealand, but with just a lot of experience across network businesses, technology companies and scale-ups, which is obviously our focus. And from a growth potential perspective, we do have a lot of momentum now in terms of our revenue. We're exceeding the stretch targets that we've set for this year and year-to-date. But further growth potential comes. This is a figurative chart, comes from quite a number of sources. So we have an existing customer footprint today. They're very, very large companies that we can expand. And so a lot of the growth that you're seeing in revenue and financial performance today is coming from customers that we invested in winning 2 or 3 years ago. This is the -- you've got to be patient in this industry. It's the nature of the business. They use us in a small part of their operation. They expand it to further regions, and we can move to national footprints like we're doing at the moment with some communications companies. So our growth comes from expanding inside and upselling into this existing customer footprint. It's also sales extension, winning new logos, which we're doing at right around 5, sometimes 10 new logos a month. And then there's inorganic growth opportunities. We've executed a couple of M&A transactions, I think, with good outcomes. Historically, so there's still an organic opportunity. And then in time, it's not within the next 3-year window for us under our core plan, is the international expansion opportunity. But for now, we believe if we can stay sort of laser focused on North America. The opportunity is so big here that we can head all the metrics in North America alone. And again, this is a slide that we published previously. Just looking at -- the orange bar here talks to closed contracts. Remember, our customers closed contracts because they're going to execute an engineering project in the future. It might take them a year. It might take them 2 years or 3 years. And then we recognize revenue over time through the subscription or through the transactions that flow through the platform. So the orange bar is a good lead indicator for where revenue is going, which is the blue bar in this chart. So a lot of slides and a lot of material. I hope some of it was useful. I think some of it is new for shareholders, but we'd obviously be very pleased, for both, Alex and I, to take questions.

The floor is now open for any questions after the CEO's presentation. Our CFO will aggregate the questions online so that we can be advised to mute. If we run short of time and we're unable to answer your questions today, we will endeavor to respond to you after the meeting. Stephen, are there any questions received?

Yes. We've got a few questions here. The first one, [indiscernible] and Brian had a similar question. Given the really positive performance, the market hasn't seem to -- the market share price hasn't really reflected this financial performance due to the liquidity of the NZX. Is there any thoughts on moving to the U.S. or listing in the U.S. or ASX in the future?

Well, let me start on that before I ask Glenn to jump in. We are constantly evaluating what is the best interest of the shareholders. At this moment, we are comfortable with the Australian and New Zealand listing. But should we see an opportunity to expand on that or change that, we will be constantly open to changes. Glenn, what are your thoughts?

I think, it's a good question. The timing is interesting. I think if you look at what's happened in capital markets since about November of last year, SaaS companies, particularly smaller ones, valuation multiples have dropped, I think, on average, from 16x revenue to 4 or 5. So it's been pretty precipitous. And at the same time, we've had a hit down looking to keep our goals operationally. So we hope that this sort of continued growth at some point will flow its way through. But I think there have been some market headwinds that have been part of the last 9 months.

Stephen, further questions?

We've got a question from Michael. How are expenses tracking in FY -- in financial year '23 versus financial year '22? And what is your anticipated headcount at the year-end of FY '23 versus the prior year?

Glenn, would you like to have a go at that, please?

Yes. Expenses are tracking to plan or favorable to plan overall. So we're achieving this growth without a substantial increase in OpEx. If you were to look at operating expenses from FY '22, our current head count today is, I think, 93 or 94. So on a run rate perspective, we're chatting out north of $300,000 per -- revenue per employee. The part of the business where we will continue to invest in terms of headcount is sales, account management and solution engineering. And I think we can do it in a way that is growing at a much slower rate than revenue. But it's important for us. We support the biggest infrastructure companies in the country, and it's important that we maintain that ability to touch customers with people.

Next question, Stephen?

In AI and machine learning, to what extent are you procuring capabilities externally versus growing internal capability? For example, how many data scientists, engineers to reemploy?

Glenn, thoughts?

We have an engineering team of about 30 individuals, and the most significant part of that is tied to IKE Insight. And keep in mind, so this is driving -- AI is a bit of a poisonous term in the world today. I saw an EY report an 85% of AI projects across infrastructure have failed in the last 2 years. We're driving automation into some of these workflows that we just explained to fuel their own products. And that's the focus, and we're doing it virtually entirely internally with internal talent. We've got a very brilliant lead engineer that runs our AI team. We use a little bit of contract resource out of a couple of offshore geographies, but they do very, very specific, very sort of turn-a-handle type of work.

Next question, please, Stephen.

What work is going into increasing institutional investor interest in IKE? Are directors and management regularly leading investor road shows and frequently engaging with panelists in the U.S. and elsewhere to increase the visibility of the business?

Well, it's a good question. And I think Glenn and the Board are all involved in their own respective areas of understanding and bringing that to the Board table as well as constantly looking for opportunities in their own networks to bring before Glenn? But the underlying sales development is done in the company. Can you comment further on that, Glenn?

Yes, it's a good question. It's really is top of mind in terms of Investor Relations activity. We worked pretty hard, particularly developing the Australian market. I think today, more than half of our shareholders are on the ASX register following our joint listing subsequent to the NZX listing. And we've worked hard to bring in institutions when it's been -- when we've been able to do so. And because liquidity is not particularly high, it's more difficult to bring the institutions in. But we've got a good spread now across both the Australian and New Zealand market. And the question on the U.S., no, we don't. We're focused on the ASX and NZX environment, not on the U.S. institutional side, although we had some -- fortunately some really significant U.S. shareholders on the register. But that's been through ASX and NZX links as opposed to other options.

Stephen, next question, please?

We have a question from Donald and Jane, which is similar. Are there any other companies in the market that provide the same services as IKE? And what are the key competitors in size compared to IKE?

Glenn, I'll let you answer that.

Yes. So we have 4 products. And so the competitive set looks different, depending on which products we're referencing. IKE is really the only dedicated technology company looking across those segments that we explained in the slide presentation. I think on the pole loading analysis side, there's 3 other players in the market. Two of them have been acquired by Bentley Systems in the last 12 months, pretty eye watering prices. So one of those companies is called PLS, and the other one is called Spider Software. So we compete with 3 other companies on the structural side. In terms of the IKE Office Pro solution, it's really -- we compete against manual established workflows. And there's one other technology company called Katapult Engineering that has the closest comparable product to the IKE Office Pro. But otherwise, we're dealing with highly, highly competent engineers that have been doing work certainly for a long time. And so that's the challenge, is replacing that.

Stephen, additional questions?

Yes, we've got 2 more, one from Karen. Are most customers taking advantage of IKE University training?

Glenn, do you know that?

Yes. Yes. IKE University, we accelerated that product when COVID struck because we knew we had to be able to deploy without physically being on-site with customers. And we've now trained thousands of engineers through IKE University on the tool. I don't think -- it's not a platform that's been built to drive outright revenue and profitability. It's around education and learning. So it's been a useful tool. I mean we just finished training 340 engineers on the electric utility called [indiscernible]. However, hurricane got this time last year. So it gives us some scalability on some of these training items.

Next question, please.

A question from Barry. Given all your revenue is received in USD, I presume that the recent sharp fall in the NZD versus USD will deliver significant translation benefits to the company.

Glenn, I'll let you handle that.

Yes. So we -- that's right. So we generate U.S. dollar revenue, and we report in New Zealand dollars. So the currency -- New Zealand dollar currency drop is favorable. We value our -- we translate our revenue at a midpoint every month. So we're probably not seeing the full benefit flowing through just yet in the half year, but we should see that benefit in Q3.

Stephen?

And a final question here from Terry. As the cash on hand is $1.2 million, up on the June '22 position, can we assume that IKE is now cash flow positive?

That's the question.

Yes. Can we -- yes. Can we assume that IKE is now cash flow positive?

Yes. I'm not sure -- we have reported that in the September cash and receivables version. So that's not something that's in the market. And in mid-October, we'll release and all updates to the market, includes cash and gross margin and customer wins and what have you in that normal format. So at the moment, that's not something that's in the market.

Stephen, are there any further questions?

No, no more, no further questions.

Thank you. All right. We now come to the formal part of the meeting, matters requiring resolution, which are outlined in the notice of meeting. You may ask questions on each matter and put shareholders through the virtual meeting website. Please note, you will only be able to ask a question after you've registered as a shareholder. Moving to the resolutions. I propose to call a poll on each of these resolutions. As mentioned, the shareholders will be able to cast their vote using the electronic voting card received when online registration is validated. To vote, you will need to click Get Voting Card within the online meeting platform. You'll be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking for, against or abstain on the voting card. Once you made your selection, please click Submit Your Vote on the bottom of the card to lodge your vote. Please refer to the virtual meeting portal guide to use -- to get any help if specified and you require any further assistance. Voting will remain open until 5 minutes after conclusion of the entire meeting. Results of the vote on each resolution will be announced on the NZX and ASX after the meeting. Each resolution set out in the notice of meeting is to be considered as an ordinary resolution, and as such, must be approved by a super majority of the votes cast by shareholders entitled to vote and voting on the resolution. Resolution 1, auditor's remuneration. I acknowledge the work done by Grant Thornton in financial year 2022. And their first year as the company's auditors has been a seamless transition, and we welcome the professionalism of Grant Thornton who continue as the company's auditors for financial year '23. This motion concerns the fixing of the auditor's remuneration, and the Board seeks shareholder approval that the directors be authorized to fix the remuneration. Are there any questions to the Board concerning this motion? Stephen?

No questions, Alex.

Since there are no questions, I would ask you now to select for, against or abstain for resolution 1. [Voting]

Moving to resolution 2, that Glenn Milnes is reelected as Executive Director of ikeGPS Group in accordance with the New Zealand Listing Rule 2.7.1. Being a director that you must hold the -- being a director must not hold office without reelection past the third annual meeting following the director's appointment. Glenn has been CEO and Managing Director of IKE since 2013. In this period, he has overseen the growth of the company and its transition to a software and solutions business. The Board recommends Glenn Milnes to you as an ikeGPS Executive Director and unanimously support his reelection. Stephen, are there any questions?

There are no questions on this matter, Alex.

Please now select either for, against or abstain for resolution 2. [Voting]

Non-executive director fee pool. To reflect the market fee levels for nonexecutive directors in both the USA. and New Zealand market, the Board has determined that the approved pool should be increased from $320,000 to $550,000. The current maximum aggregate non-executive director fee pool of $320,000 has not changed since the company's IPO in 2014. Being centered in the USA, the company recognizes the need to attract not only high-quality New Zealand-based directors but suitably qualified U.S.-based directors in determining and moving the company forward. The Board has reviewed market rates in both the U.S.A. and the New Zealand environment. The Board believes the proposed fee pool for the non-executive directors' remuneration is fair and reasonable to the company and to the shareholders and will help to attract and retain highly qualified directors to the Board. If approved, the increased fee pool will apply from 1 October 2022. In connection with this increase, the Board seeks shareholders' approval to have discretion to pay remuneration to non-executive directors is in part or whole by way of an issue of fully paid ordinary shares in the company provided that any issue occurs in compliance with New Zealand X Listing Rule 4.7. Additional details, including intended allocation of fee pool, is set out in the notice of meeting. Are there any questions on this resolution, Stephen?

We have no questions on this matter.

Thank you. Please now select either for, against or abstain for resolution 3. [Voting]

Finally, before we close this meeting, I'd like to provide the opportunity for shareholders to raise any further questions on any subjects that have arisen or any thoughts that they may have about the company. Stephen, are there any questions?

No. No questions have come through, Alex.

All right. In the absence of any further questions, Glenn, do you have any further comments before we close the meeting?

No. Just thank you again for the support through the past year, and we look forward to updating you again middle of October.

Ladies and gentlemen, thank you for your attendance and your engagement today. We will be announcing the results of the voting on NZX and ASX later this afternoon. And thank you again.