Intercede Group plc (IGP) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Intercede Group plc investor presentation. [Operator Instructions] The company may not be in a position to answer every question it received during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so, and these will be available via your Investor Meet Company dashboard. Before we begin, I would like to submit the following poll, which will just appear on your screens now. And I would now like to hand you over to the executive management team from Intercede Group plc. Klaas, Nitil, Allen, good afternoon.

Good afternoon, everyone. My name is Klaas van der Leest. I'm the CEO for Intercede. I would like to welcome both existing investors as well as potentially new investors as well as analysts to the session, which will cover our results for the first half. During our session, I'm joined by Nitil Patel, who is our CFO; and Allen Storey, on my right-hand side, who is our Chief Product Officer. We look forward to providing you with an update in the coming 45 minutes. And whilst this is us presenting to you, we very look forward to your questions towards the end, but also to your feedback after the session. So without further do, let us start with the presentation. So what are we going to talk about, we're going to quickly take a very high-level view on company introduction. We then pass on to Nitil on progress report and financial review, Allen will then talk about product strategy, I then wrap up with summary and outlook and we'll move into Q&A. So if we start from the top, I joined Intercede just over 5 years ago as part of a turnaround play when the company was not necessarily in a good space. It was losing a lot of money. It was hammering cash. Good news is we're 5 years old, company is in a real good position as hopefully you've seen from the results. We believe we're on a good run now. Nitil has been with us just under 2 years. He's made a real impact on the business from a financial perspective. And [ updating ] Allen's [indiscernible]. He's been with the company 20 years, and he's going to keep Nitil and myself safe here when it comes to anything technology-related. So at 30,000 feet, what does Intercede do? For those who are new to the business, ultimately, we provide business-critical authentication software for a global client base. Authentication software, we'll provide a bit more color on that in Allen's update on product, and we'll also give a glimpse on our client base. If we now look specifically at first half, our revenues were very, very good. We had record revenues of GBP 7 million. It was quite nice compared to last year. And the same for operating profit. We roughly have 150 clients and growing, which is nice to see. Definitely in my tenure here, we've got the highest number of colleagues over the last 5 years. We have offices in the U.K. where all development is taking place, and we have a sales and delivery office in the U.S. just outside of Washington. Split between employees is roughly 90 in the U.K., give or take, 10 in the U.S. If we then take 3 highlights on the business. Our recurring and repeatable revenue is 84%. So what do we mean with recurring and repeatable revenue? Recurring is our annual recurring as well as our support and maintenance. And if we then look at our professional services revenue, which is very predictable over the last 3 to 5 years. When we add those together, we basically cover pretty much our fixed operating costs, and we're really pleased with that. 5 years ago, we started on the journey with the company. We've very much been pushing the channel. Our go-to-market model is indirect. So we absolutely do not want to sell direct. 87% of our new businesses nowadays going through channel. If we look at stickiness of clients, clients tend to stay on the platform for a long time. Our revenue attrition is very, very low, reflected in the percentage here as under 2.5%. So what does Intercede do? Well, again, very high level, we protect our customers against data breach. How do we do that? We replace weak credentials such as passwords with much stronger authentication. And we do that simply securely and at scale. But simply, what we mean is it's standard off-the-shelf software. We do it securely because our software is typically used for highly security-conscious organizations who have tested the software inside out. Think about governments here in the U.K., think about the federal agencies, think about 3-letter agencies, they've tested this software out extensively. And we can do it at scale. At the very low end, we probably have 500, 600 of licenses. Top end, we probably issued 6 million, 7 million digital identities in our largest clients. And the final point here is regulation is really good for us. Companies with strong regulations where -- or countries with strong regulations where companies need to comply, they tend to find good use of our software. And Allen, again, will provide more detail on that. So when we talk about our product, nowadays, we talk about a product family. But 5 years ago, we only had one single product, and that single product was the top end of this pyramid, so PKI. So our credential management solution or credential management system was, 5 years ago, the only product we have. What we've done over the last 4, 5 years is extend that functionality into the FIDO space, Faster Identity Online. Again, Allen will talk about FIDO more specifically. And then in the last 12 months, we've acquired a company here in the U.K. in Bracknell called Authlogics, and they have added multi-factor authentication as well as password security management. This pyramid is a very good reflection of the kind of things we do. We refer to it as the authentication pyramid. Weak authentication on the bottom, passwords. And as you move up this pyramid, you get stronger and stronger authentication. Clearly, our referenceability, our knowledge and experience very much comes from the high-end market of the PKI space, which is also reflected in our client base, but because we have that referenceability, because we have the client base and the experience in that client base, we very much fit into the middle and the bottom end of this segment. We will provide more detail as we go along. So we feel we'll be getting questions about market drivers and tailwinds. I'm actually going to pass on to Allen here because Allen was in the U.S. last week with our Client Advisory Board and a lot of what's on this slide is actually very relevant to the feedback and the input he's had last week. So Allen, over to you.

Thank you, Klaas. So some customers buy our product because they just want better security. The majority of our customers, the majority of revenue comes from customers who were driven to use technology like ours because of specific regulations. Big regulation for us that drives our business is in the U.S., so it's a regulation called FIPS 201, PIV, Personal Identity Verification. That states that all government employees must be fully background checked and must be issued with a strong smart card-based PKI credential. So that's been there for a while. That's been driving our business. So that started out in federal government. And then it moved into suppliers into government, so aerospace and defense contractors, et cetera. And it's now pretty much seen as the gold standard of security as far afield to some of our customers in Germany and Singapore who reference back to that technology. So what's changing in that market, what we're seeing that's driving adoption of our products? The first 3 on the left here are all coming out of the U.S. So that's the best-funded administration in the world to set cybersecurity standards. The Executive Office of the President is pushing people to use multi-factor authentication, so a stronger authentication, to the maximum extent possible. That means everybody within the organization but also down the supply chain. OMB, Office of Management and Budget. So they are an agency within the Executive Office of the President. They make that more specific, and they start talking about phishing-resistant multi-factor authentication. So phishing is where bad actors will steal a credential from someone and then log into that system with that credential. So if a credential is phishable, i.e., can be stolen, then it's weaker. So passwords, onetime passwords can be placed in that category. Once we start looking towards FIDO and PKI further up that pyramid, then it starts to become phishing-resistant. The actual standards within FIPS 201 that have done a lot to drive our business over the last few years have also changed. There's a recent version 3 that was published. That's actually introduced more of a concept of risk-based assurance. So partly, because of the desire to extend security down the supply chain and partly because of the real world that it's difficult to move everybody up to the highest levels of security in one go and accepting that people are on a journey to try and [ refoot ] that pyramid, they've taken more of a risk-based approach. So they're now saying, if you're protecting very sensitive information, so air traffic control signals, U.S. citizen data, military helicopter plans, as some of our customers do, then you absolutely need to be at the highest level of security. If the data you are protecting is of a medium level of security, then you're okay with a medium level of authentication technology. But interestingly for us, that's starting to bring a wider range of technology under the remit of the regulation. So drivers from the U.S., to use more authentication, more secure in more places. In Europe, there hasn't been a specific cybersecurity regulation that's driven people towards our sort of technology. So some of our customers such as BASF have chosen -- they've got a lot of intellectual property. They want to really protect their data and systems, but they're not driven by regulation. Regulations such as GDPR, some of the health care regulation says you need to protect information, but it doesn't tell you how you need to do it. That's changing. So there's a new legislation at an EU level now that's been passed saying that all countries must enact cybersecurity legislation by 2024. We're starting to look at some of the draft legislation coming out of Germany, Netherlands, Belgium, and that's becoming much more specific. It's starting to talk about phishing resistance. It's starting to talk about use of cryptography. So we believe that's a standard that's coming in Europe that will start driving a much broader market to our form of technology. And this too impacts about 50% of the companies in Europe. So it's quite broad. Looking in our own home turf, looking in the U.K., our organizations that issue the standards, NCSC, our equivalent of NIST, push out cybersecurity guidance, and they published something called Cybersecurity Essentials (sic) [ Cyber Essentials ]. So that's the baseline of security that they expect organizations to achieve. Again, what we're starting to see is insurance companies not offering people cybersecurity insurance unless they've at least achieved that basic level of cybersecurity, and that promotes MFA. So in the U.S., in Europe, we're starting to see increased drivers for stronger authentication partly because of the increase in criminal hacking, partly because of the geopolitical climate, but driving more people towards our technology in more regions.

So government regulation is absolutely good for us as [ highly ] associated standard, which is very much reflected in our client base. We give you here a sample. There are many, many clients that we have in our client base that we simply cannot put on there. So there's a list, if we start on the left, we're very strong in government, particularly U.S. federal where we have customers like the Department of State, Department of Homeland Security, the FAA, Federal Aviation Authority, the Senate, but we also have government departments in Singapore, GovTech. We run the national ID scheme for Kuwait, which is quite large. We work with the Dutch government. We also work with other government departments across the Middle East. If we then go to the second column, the aerospace and defense sector. As you can see, we've got some very high-profile names there. And again, a lot of these users actually have very broad-based installations. So we're not talking about 10s and 20s of licenses. We're talking about tens of thousands, if not north of hundred thousands of licenses. So they are large and large-scale implementations. Interesting to know that some of these defense and aerospace players, they're not just users, but they also start to resell MyID as a solution into their client base. Their client base are typically the government bodies on the left-hand side. If we then move to the right, you'll see more generic corporate enterprise, whether that's banks, whether that's health care with PII or health record information and data to be protected. And then the last one on the right-hand side is very much industry-driven, anything from chemical companies like BASF to mobile operators and anything in between. So we've got a very -- I always say, for a very small company based in Lutterworth, we've got a very recognizable and impressive client list, and what we know from our clients is they tend to stay on platform for a long time. We've had a question over the last couple of years. It's, okay, so why do you win? What's your proposition? And I think there is a number of angles here, so we tried to highlight that in this slide. From a product perspective, we believe we've got market-leading functionality not because we think it is but that's what our clients are saying. It's what our channels are saying and also what the independent market analysts are saying. So that feeds quite nicely into the market recognition point, the second point, regarding references and visibility. When you see the client list, you know it's very, very high-level clients. And by the time you dig into the detail, you'll see that they are typically large clients, and they spend good money with us. But we also have the analysts like KuppingerCole as well as the likes of Gartner referring to our proposition, which has taken a long time to get to, but we're in a good position now. Deployment-wise, we describe ourselves as adaptable. Yes, we deliver on-premise software because that's what our clients want in as far as when they protect -- want to protect their data assets and their credentials. They want to control that in their own environment. But we're very flexible in how they deploy that. If they want to do that in their own data centers or in a combination of public and private cloud, we're absolutely fine with that, so any hybrid solution is fine. We worked hard on our go-to-market model. And the last couple of years, we've very much been pushing forward increased reach. Interesting was also with the Authlogics acquisition, they exclusively are taking their product through distribution. So they're very strong in the Middle East. We've got some really good, strong distribution there with strong channel, with strong resellers and [ they often got ] good market coverage. Colleagues-wise has been a central theme over the last couple of years. We've got a phenomenal pool of technical, adept and knowledgeable people, who have this customer-first mindset. If there's an issue with the customer, my approach tends to be, fix the issue. And then afterwards, we can all [ demand the ] money, but solve the customer problem. And that's very much reflected in the NPS scores we're seeing. Our last customer satisfaction survey, we've seen an NPS -- a significant NPS increase. The NPS is nowadays 50. 2 years ago, it was 25. Generally speaking, an NPS of 50 is very much regarded as very, very solid in the software industry. Pricing-wise, those who've been following us for a while know that traditionally, we've been very much a perpetual pricing model, and we've maintained that through acquisition. That product line is all subscription. Going forward, we're offering a hybrid kind of approach and a flexible approach when it comes to pricing. We need to be very, very cognizant of the fact here that there is typically a crossover between perpetual and subscription price and particularly for larger kind of clients. So particularly, the large clients will calculate a TCO over a 5- or 10-year period, and they will choose a model, which they believe is most beneficial to them. So that's our proposition. If we then quickly revert back to 5 years ago. 5 years ago, we started with this turnaround. So that was very much Phase 1. Phase 1, we've completed quite nicely. The product is now in a good shape. We've invested a lot as you well know. Our R&D investment is typically GBP 3 million, GBP 3.5 million a year. We've put a lot of investment in the go-to-market model. We recruited some new staff. The business is now profitable, It's generating cash, and we started on Phase 2. Phase 2 is all about driving sustainable growth. We've increased the addressable market through both developing our own functionality, but also through acquisition. Distribution, the go-to-market model, again, we talk about really 90% of our businesses is going through distribution. We've made our first acquisition that's betting in very, very nicely, not just from a technical perspective, but also from a process perspective. Nowadays, we have joint development teams, which is really good to see. And from a pipeline perspective, this business is developing very, very nicely. And with all the work we've put in over the last 4 to 5 years, we believe our ambition has got to be to double revenues over the next 3 to 4 years. How we're going to do that? It's not just a question of buy and build. There are many companies who've done buy and builds in the past and have failed. Our starting point is double-digit organic growth and then we layer on acquisition as and when we feel there's value to be generated into the product from a revenue perspective, but also shareholder value. At this point, I'll hand over to Nitil who's going to talk you through the financial details.

Thanks, Klaas. So just going to walk you through this slide. If you start on the left-hand side, progress report. So revenue growth, as Klaas said, is at a record high for us. And why is that important? As the revenue grows, our margins increase and our profitability increases, which is really good. And as you noticed that we [indiscernible] put a note out to that on Tuesday, [indiscernible] increasing our FY '24 forecast numbers for the year. The basis of that foundation over the last 5 years, we've been able to increase our capability and bandwidth by investing in our products. We're bringing a quarterly cadence into the system, and that means that we're having our clients upgrade also as they move on to -- from the old product to the new product. And that's really good news, not just for them as a client with new functionality, but also for our professional services income, and I'll come to that in a minute. We're also integrating product. Allen will mention further what we're doing with our MFA product, and we're planning to launch a new version 5 in Q4 2024. All this feeds into a client base that is resilient, that is happy, as Klaas has mentioned, NPS at plus 50 and a low churn. That gives us the ability to continue to invest in our people. And as Klaas has mentioned, we're over 100 people now in colleagues across United Kingdom and the United States. That's good for us because we're able to then recruit the right people for succession planning. We're recruiting the right people for our professional services and therefore, giving us the capability of increasing our revenues. We're also -- and as we've indicated last time, we're planning 2-year investments in our infrastructure, and we're moving the bulk of our back office into Azure and into the cloud. We're doing this for resilience as well. As we grow, we need to make sure that the foundations are strong for us to achieve and execute on that growth strategy. What does that all mean? So if you look on the right-hand side, as we've mentioned, revenue is increasing, that's a good sign, but we're deploying our product across apiece, not just in the United States, but obviously -- still our largest market, but also in the Middle East with our MFA product and our professional services as our income is increasing. All that is converting nicely to cash. Our cash balance is relatively equivalent to last year's comparative and last year's comparative prior to us buying Authlogics, an outflow of GBP 2.5 million, [ GBP 32.5 million ] in cash before the acquisition. So if I move on to the income -- sorry, for the financial highlights. We just want to show you the 4 highlights. Why we want to show you these is to show to you again the stability and the growth that we're showing for the group for the last 5 years. If you look at the top left, the revenue streams from each one, S&M, PS and then license income, all going in the right direction wise. Support and maintenance, PS, important to us as a key metric. So if you have the 2 together, they represent a big chunk of our operating expenses. What does that mean for the group? It means that any additional sales in license income or additional income on the PS will flow down very accretively to the bottom line. That's a good metric to have for us. So we see this as recurring and repeatable revenue that we can then build the basis of more license sales and more profitability into the group. Revenue as we mentioned by region, the Americas is still the largest market, but we're seeing more traction in the rest of the world, especially in the United Kingdom. Continental Europe, Middle East and APAC. And that's good news again because that means our product is starting to spread across, not just the federal and government agencies, but also into the corporate world. We also want to show you the difference between us and some of our other competitors and adjusted EBITDA profit and reported profit for the period. As you can see, our reported profit is higher than our adjusted EBITDA. And the reason is threefold. One, we don't capitalize our R&D. It goes through our income statement as an expense. We also have cash balance with no debt. So we have finance income rather than finance expense. And because all our developers are in the United Kingdom, we're able to use the favorable U.K. tax scheme on R&D, and you'll see a tax credit in the income statement. And as we wanted to show you, another key metric that we focus on is obviously cash, and we'll come to that later. But the equity is also increasing. And for the first time is the group has a positive P&L account, which is important for us as well. So income statement, simple income statement. We don't want to complicate it with adjusted EBITDA numbers across the piece. The reason we're showing you adjusted EBITDA as a stand-alone for the front end of an RNS [indiscernible] income statement is just to highlight the fact that due to the acquisition [indiscernible] amortization costs coming in, and we have had some expenses regarding an acquisition. Again, Klaas mentioned to you what happened with the M&A strategy on that. The key focus for us is always the gross profit margin. It's important because that means that the higher the margin, the bigger the number, the more accretive it is, and you can see the conversion, so operating profit and profit for the period. The other 2 metrics, obviously, that we focus on is operating expenses, making sure that we have control over that. We have a controlled expansion investment, as we've mentioned. But that's all, again, gearing itself up to either being attached to a revenue stream that we see in professional services from demand from our clients or we're obviously increasing our capability and our functionality to keep the product ahead of our competitors and increase our market share. As we mentioned, the finance income is a positive number on the income statement, and that's obviously benefiting the current high interest rates. We have our banking in United Kingdom with Barclays and Investec and Citizens in the United States. Next page, financial position. Again, clean balance sheet for the group. The addition movements, obviously, are the IFRS 3 acquisition accounting for the Authlogics transaction in October, November '22. You'll see obviously goodwill arising on that and obviously, the identifiable intangibles. The other 3 metrics we focus on here are trade and other receivables, cash and deferred income. Why are they important? Again, working cash flow for the group, it's very important that we continue to look after the current capital for the next 12 months. We have a forecast out there. We adopt that every month, rolling 12 months. And why is that important? Again, back to investing in our capability and our products and helping us to do an M&A, execute on an M&A strategy. And then still on cash generation, we don't expense -- we expense our R&D, so you don't see that on our cash flow statements prior to that. The 2 movements this year are mainly to do with capital infrastructure, CapEx that -- upgrading our laptops and our back-office [ service as and when it is ] required. And obviously, the investing activities all to do with the [ price of use assets ] on our leases. Again, as we've mentioned, no debt from the group, gives us a good unleveraged balance sheet to pursue an M&A strategy as well. [ With this ], I'm going to pass you over to Allen on the product strategy.

So starting to look at what are we doing with our product set, where are we investing to try and capitalize on the growing demand for our sort of technology. The first one is rebranding. Over a year ago -- just over a year ago, we were a single product company. We have a credential management system. We then acquired password security management and multi-factor authentication on the Authlogics acquisition. We believe we can take that to market better and stronger if we rebrand those under the Intercede MyID product family. So we've moved from being a single product company to a multiproduct company. That rebranding allows us to capitalize on our reputation in the market for some of our very high assurance customers and take that down into a lot of the mid-market. So brief reminder what the products are. Password security management is all about if you are still using passwords, and a number of our customers are on a journey towards stronger authentication, how do we protect them? So that's the world's largest database of compromised credentials. When a data breach happens, BA, Marriott, TalkTalk, for example, usernames and passwords are leaked online. Bad actors will take that and try and break into systems with it. We do the same, but we don't try and break into systems with it. We tell our customers their passwords are compromised and we allow them to change them immediately. Software will force that to happen. Multi-factor authentication is the product that sits in the midrange, thus anything between passwords and [ the very ] high assurance authentication. So using phones with onetime codes, push notifications, for example. And the credential management is the core product we've been working on for a long time, still generates most of the revenue in that very high assurance government space. So first step is rebrand and then looking into the individual products. So password security management, when we acquired it, we believe and still believe it is a very capable product. It's technically excellent. It's got lots of information and lots of intelligence about, I recognize this particular username and password being used for an online account. It's also the same one in the business account, therefore, you need to change it immediately. So that's really investing in marketing around that. So that's part of the reason for the rebrand. We can use our credibility for supporting the existing reseller channel and extending our reseller channel for that particular product. MFA, multi-factor authentication, in the middle of that security pyramid. That's a very busy market. It's a very competitive market. There are lots of vendors with products in that particular space. So it's important for us to differentiate. So what we're doing is taking some of the knowledge and skills we have from the high assurance product and bringing it into that mid-market product. Not all the way to the top of the pyramid in terms of PKI. We believe that's too complex. But FIDO, bringing that into the MFA products, or Faster Identity Online, that uses cryptography, gives us highly secure mechanisms for authenticating people. We can bring that into that product, so it really starts to differentiate. There are probably 30 or 40 MFA vendors out there. With this in here, there's probably only 2 or 3 who could support FIDO in the enterprise space. The main reason we're doing that is because we believe with this, too, starting to push people towards stronger authentication. A lot of those midsized customers won't move all the way up to PKI, but with FIDO, we can really differentiate and bring that skills and knowledge into that product set. And again, that's then launching that through the reseller channel. From a credential management system perspective, we believe we already have the market-leading products. That's been stated by an independent results from reports on the likes of KuppingerCole looking into this particular market. But we need to make sure we keep ahead of the competition. A number of our very large U.S. government wins tend to deploy the product for 5 to 10 years. So they need to be confident that our product doesn't just meet their needs now, but as technology changes over time, we're ahead of the game, and we will meet their needs. So a couple of examples there. One of them is MFA integration. So some of our customers today will buy high assurance authentication from us, multi-factor authentication from another vendor, password management from another vendor. By integrating the products, we can give them a single pane of glass that allows them to manage all of those credentials from a single interface. So it gives them an operational advantage. But we also believe we capitalize on the fact that we are the only vendor who covers passwords, MFA and high assurance FIDO and PKI. So we can start to give flexibility from a commercial perspective. So if you don't have to do as an organization, and therefore, create 3 contracts with 3 sets of licenses from 3 sets of vendors, you can come to us. You can buy 10,000 CMS licenses, you can buy 20,000 MFA licenses. And as you want to move up the pyramid, we'll simply migrate those licenses. So you don't actually have to enter into multiple contracts there. Second one of the 2 we'll talk about here is mobile. So mobile is quite strength for Intercede. We've deployed large-scale mobile deployments in U.S. government. And we also have, with the national ID of Kuwait that's mentioned earlier, we've deployed 4 million smart cards with our technology, but also 2 million digital identities, citizen identities onto citizens' own phones. If you look at some of the players in this space in the enterprise environment, mobile device management vendors, people such as Microsoft or VMware AirWatch, who both coincidentally embed our SDKs in their products, then a 10,000 or 20,000 or 30,000 user deployment is quite large for them. We've got over 2 million life mobiles out there for a project. So we have a lot of [ credibility ] in the mobile space. One particular area of interest for us at the moment is in the U.S., a technology based on mobile driving license. So if you get stopped by traffic cop in the U.S., you don't show a plastic card, you show an app on your phone. But that's cryptographically signed so that the traffic cop will scan it with their phone, it will do a cryptographic handshake. And it will check, that's a genuine driving license. It's not being faked. It's not been tampered with and it's still current. So we're working with a partner in the U.K., NEC, in providing a lot of the back-end police infrastructure. So if you phoned 999 in the U.K., the people actually in that call, in routing an ambulance or a fire engine, for example, to your location, they're using NEC software to do that. So NEC, with working with our innovations lab, spotted a gap in the market, whereby it's not easy to identify genuine police officer from their warrant card in the U.K. The warrant card is police identification card, and it's just a plastic card. Recently, the organization that issued those, not us, somebody else, got hacked. So there's lots of police information leaked there online. So there are known fake police warrant cards out there. It's also very difficult to check whether that person is still a police officer. So if they're sacked from the police for misconduct, they could still carry their warrant card. It's difficult to know they're not genuine. If the police officer is [ in a place ] of violent demonstrations, for example, probably nobody is going to stop them and ask for an identity. But the most sensitive cases such as child abuse, domestic abuse, it's really important the person reporting those crimes knows the person they're talking to is a genuine police officer. So the NEC solution, they have the back-end infrastructure that connects to police systems. They've written an app, they embed our technology within the app, so we can publish a digital police warrant card down to that police phone. So it's using the mDL, mobile driver's’ license, technology, but it's not a mobile driver's license. It's a police warrant card in that NEC app. What happens then is the citizen can go to a single point of presence on the police website. They can choose to verify an officer. They don't need to download any software on their phone. They can scan the police warrant card that's presented on the police officer's phone, that will do that cryptographic handshake. So very secure, key-based technology. It will verify that's genuinely present information about the officer, and that citizen can then know that, that police officer is genuine. So that's just an example of the way we're taking what we believe is already a very strong credential management product, and we're keeping it ahead of the competition by investing in the technology. So just a couple of examples there of what that looks like, but I think I probably explained those.

So if we then move on to summary and outlook. Clearly, we've put a lot of time and effort in the last couple of years to reposition the business, which really has resulted now in what we believe is a company that's got the leading CMS product, not just because we think it is, but very much endorsed by clients and those by our channels but also through recognition in the analyst world. We've moved from a single product company to a multiproduct company through acquisition, and the aim is to do more in that space. Pricing-wise, we're very much implementing the dual kind of pricing strategy, both perpetual as well as subscription. Revenue margin, profitability focus was definitely extremely strong in year 1 when I started. But actually, it stayed on the same trajectory and we're [indiscernible] onboard now for the last 20-odd months. This has definitely not been [ lacking ] either. We are very, very hot on the margin. We know our KPIs inside out. Good news is cash conversion has been strong. Cash at the end of the period was again very, very strong. And over the last couple of years, we've cleaned up the balance sheet quite nicely. We had -- or used to have a convertible loan out there, which we retired a year early of its maturity, and we believe we've got strong momentum into the market. So if we then look at outlook, we had record revenues for the group, and we expect to be ahead of previous market expectations, which I think is a good testament to the hard work that's gone into the last 6 months. But also in the last 6 months, taking advantage of the hard work we put in there in prior periods. Product portfolio, very much expanded through acquisition, but also we continue to build net new functionality across the product portfolio where required. We talked about the pricing strategies. We talked about the balance sheet. We've got very strong, high recurring revenue. We've got very little attrition. So we can use that cash we generate for both internal investment but also for potential M&A, which is the next point, which the M&A is there not to -- for Intercede to perform a buy-and-build exercise, no. The starting point, objective #1 is solid double-digit growth. And where we can, we will layer on additional revenue and product through acquisition in the same way as we've done with Authlogics. And because of the efforts we've done over the last couple of years, we believe we're now in a very strong position with a lot of KPIs moving in the right direction that our ambition should be to double revenues over the next 3 to 4 years, which pretty much concludes our presentation. We've got a little bit of time for Q&A. Jake, are you coming back in at this stage?

[Operator Instructions] Klaas, Allen, Nitil, if I may just hand back to you just to read out those questions and give your responses where appropriate to do so, and then I'll pick up from you at the end. Thank you.

Thank you, Jake. I will read the questions. And if I'm lucky, I can hand the questions to my colleagues to answer. So we'll have a good go with this. So how is Authlogics trading? You forecast revenues of GBP 700,000 in FY '24 when you purchased it. Is it on course? Why did you extend the contingent consideration? It's a question from [ Alistair ]. Nitil, this is definitely one for you.

Thank you, Klaas. How is it performing? It's been slightly behind the curve, and I'll give you a reason why. When we're doing our DD, we identified some pain points to add. I think Allen mentioned that their sales and marketing function wasn't very good. We knew that when we were buying this. But we let them set their own revenue targets, which we thought were quite aggressive. And so we let that happen in the SDA. And since we bought them, we gave them 3 to 4 months to continue with their current existing sales and marketing strategy. When that wasn't working, we took over. Since we've taken over, the pipelines increased, the marketing is more effective, and we see traction now increasing. However, it's a subscription model. It's a Rule of 78. You have to sell in the first quarter to benefit from the full revenue streams for them to get benefit from the deferred consideration. So they are slightly behind target. On that basis, why did you extend? They saw this, and they see this obviously, the writing on the wall. It was slightly disgruntled. How did we approach this? We like them. We think they're smart humans. We think they are delivering a good product. We're integrating well with them. And therefore, we thought that it is beneficial for us to then meet in an equitable manner of, a, making sure that the acquisition integration is working well and how can we make sure that they've got the capability of achieving the deferred consideration going forward. By extending it by another year again, that capability, that ability because I see the movement in the pipeline and the conversion with that new sales functionality. And so it's a win-win for us in a sense that this is a self-financing acquisition. If they deliver against those target revenues in years 2 and 3, it pays for itself in the deferred consideration. We get the revenue, we get the profits, and they get the deferred consideration. So we decided as a Board that it was the best course of action, a, to keep the vendors happy, to [ keep them ] focused and also to give them the runway to achieve that earnout.