Janison Education Group Limited (JAN) Earnings Call Transcript & Summary

Good morning, everybody. I think it's time to get started. It's 9:03. Welcome to the Janison FY '23 Annual Results and Trading Update. On the call today with me, I have David Caspari, CEO and Managing Director.

Good morning.

And myself, I'll be presenting as well. My name is Stuart Halls, I'm the CFO of Janison Education Group. In terms of the agenda for today, we'll go through -- David will take us through the FY '23 highlights to begin with. We'll go through an outlook for the year ahead. And then, we may go into the deep dive on the business performance, but I think what we'll do there is probably pause, and we'll do a Q&A session, just to make sure there's plenty of time for people to ask questions. And please feel free to enter questions into the Q&A chat function, as you go; otherwise more than welcome for people to put their hand up and raise their hand and ask a question, as we get to that stage of the presentation. And just for everyone's benefit, this is being recorded. So just to forewarn you, and we'll upload the recording onto our website at the end of the session. And with that, I'll hand over to David Caspari.

Thank you, Stuart, and good morning to everybody who's joined us today at Janison's FY '23 results update. As Stuart explained, I'm David Caspari. I'm the CEO and Managing Director of Janison Education Group. And at the outset, I'm pleased that Stuart and I today will be able to share the highlights of what we believe was a strong and successful fiscal year '23. At the outset, it's good to see a number of people joining today that have been on the Janison journey now for many years actually, but equally, there has been a significant lift in investors on the register. So it's prudent, as we keep this session off today to provide a brief overview of who Janison is. Janison is a market leader in digital assessments and testing globally, and we're focused on the very large addressable opportunity in the K-12 space and secondarily, in the accreditation market. Our purpose is to unlock the potential of every learner and our technology is built to be accessible on almost any device with any network capability and equitable for all backgrounds and abilities all across the world. We have 2 complementary and synergistic business units that together address the assessment needs and opportunities in enterprise, government jurisdictions, education departments, schools, teachers and parents. Janison Solutions and Janison Assessments are those 2 business units, and I'll briefly touch on both. Janison Solutions is an assessment technology platform software business, which, in conjunction with a highly specialized services function, addresses the needs of governments and enterprises. The core of our IP in Janison Solutions is our standardized platform, which is called Janison Insights. And when we talk about Janison Insights and our core solution, you will see us talk about solutions core through the end of -- through this presentation. And that relates to our standardized platform and specialized services, which is trusted to deliver close to 10 million digital assessments in FY '23 to what are the exacting standards of the likes of the Commonwealth of Australia and an ever more global set of the most elite education brands such as Cambridge, Oxford, the OECD, the Singapore government and many others. We understand humbly what it takes to deliver hyperscale, reliable, secure equitable assessments, and we believe that we set the global benchmark and being able to do that today. So Janison Solutions being our B2B assessment, software and services business unit is complemented by Janison Assessments. Janison Assessments is a digitally first product ARR and services business. It's been developed over the course of the last 3 years by educators, for educators and addresses the needs of schools and parents. This business unit is anchored by the ICAS academic competition, which we acquired 3 or so years ago. We then bolstered that in FY '22 by the acquisition of QATs for practice testing, Academic Assessment Services or AAS, that provides placement tests, scholarship tests and new products that we'll talk about today. And then we launched in fiscal year '23 the product called RiSE+, which meets the specific needs for parents. Janison Assessments, as a digital-first business has a number of core assets, particularly being a corpus of close to 60,000 test items or very high-quality test questions. And secondarily, a data layer that understands and allows us to understand at a very personalized layer, the trajectory and the individualized journey of a student, as they travel through their K-12 and provide insights and next steps to improve teaching and learning outcomes. If we could move to the next slide. As I said in my opening, I am pleased to share the highlights of what we believe was a strong and successful year for Janison Group. The financial year was marked by what I would consider as inflection points and other significant milestones for the company. Record revenue was a particular highlight for us. You'll also see, and we'll talk about strong and stable gross margins at circa 63% driven by pricing, scale benefits and efficiency. We'll also speak a little bit more about really disciplined manage of our OpEx too, within 5% year-on-year growth. And the operating leverage that tight management of OpEx and ongoing disciplined manage of gross margin sees EBITDA growth of 111% to $4 million. Pleasingly, operating cash flow was $5 million and Janison is now net cash flow positive. As of June 20 -- June 30, I apologize. 2023, the company had a cash balance of $12 million and no debt on hand. If we will keep moving, please? I won't spend too much time addressing these financial graphs, but what you can see in this is a brief snapshot of the growth trajectory of the last 4 years to 5 years. And particularly how we drove and transformed and set ourselves up -- our business up for sustainable cash flow positive growth in FY '23 and beyond. And you can see, in particular, group revenue sustainably grew and off the back of very strong management of gross margin, although flat year-on-year, and Stuart will talk about that driving strong gross profit, strong EBITDA, but we will talk very specifically now in the next slides on what is driving our solutions revenue growth and what is driving our assessments revenue growth being our 2 core business units. So if I use this slide really before I pass across to Stuart to go into more financially -- for more financials, this slide is meant to provide a holistic snapshot of highlights in FY '23, but equally, if not more importantly, what that has done in terms of creating momentum into FY '24. And I think it's important to note at this point that we previously articulated that we believe that Janison can sustainably grow at a CAGR of circa 20%, obviously, with ups and downs, driven by regular business activity within each year. But over the next years, drive a CAGR of circa 20%, and that's driven by both our solutions business and our assessments business, and we have strong focus on operating leverage to drive EBITDA and cash. In our solutions business, I think it's incredibly important to talk about our solutions core growth. This is our standardized Janison Insights software with our specialized services and the product and services that we market and we onboard new customers, as well as have transitioned almost all of our existing customers to that standardized core -- stream of code. The core solutions business grew 17%, and we saw significant international expansion. We secured strategic partnerships with prestigious institutions such as Oxford University Press, which is the subsidiary of Oxford University that focuses on delivering K-12 assessments globally. And equally Cambridge University Press and Assessments, which also is the subsidiary of Cambridge University that focuses on the K-12 market, and part of that is being the world's largest assessment publisher and equally a very, very large distributor of assessments globally. Additionally, Janison added 6 new key account clients and -- excuse me -- and those wins really further reinforce our differentiation and our position in the market. At the end of last financial year, we also extended our partnership with the Commonwealth of Australia to extend our NAPLAN online contract up to 2030, and that represented a -- up to $24 million total contract value. And in many ways that's arguably the benchmark of global assessments in terms of concurrent usage in terms of the number of tests that are run over a very small period of 2 weeks with more than 1 million tests on a single day. It really demonstrates the capability of the platform, the maturity of that platform. But also, we -- the Commonwealth of Australia is setting a very high bar for integrity, security, quality and scale. It really demonstrates the capability of Janison Solutions and demonstrates the continued trust and confidence placed on the company by the largest and most demanding educational institutions in the world. Pleasingly, we enter -- exit FY '23 and into FY '24 with a strong pipeline and momentum, both advanced stage pipeline with our existing key accounts, but also with our existing strategic accounts. And we now classify 4 of Janison's solutions accounts, as strategic accounts, being the New South Wales Department of Education, the Commonwealth of Australia with NAPLAN, Cambridge University Press and Assessment and Oxford University Press, all of which we're confident in our pipeline and momentum, but equally, the expansion of our key accounts, as well as the opportunity to transition pipeline of new accounts into Janison gives us confidence for the year that we have this year and the momentum beyond that. If I move to Janison Assessments, we achieved 21% revenue growth in FY '23. The ICAS competition grew 15%, and we saw an increase in our cost per test, but also a higher average revenue per school, which is pleasing. The company signed a co-branding agreement with the University of Sydney in the second half of last year, and it addresses both our joint strategic and purpose goals of addressing equity gaps. But equally, it promotes awareness of the Janison Assessments portfolio and associated one of the most highly regarded educational brands in Australia, if not the world, to drive significant improvement in awareness and consideration for that critical K-12 market, particularly in assessments, Janison Assessments business unit, particularly in Australia. We were very pleased with the performance of our acquired businesses, AAS and QATs. We completed integration of those business and the successful execution of the integration and the sales activity and delivery activity in our AAS and QATs portfolio underpinned a 53% increase in the combined revenue of those 2 parts of the business compared to the previous years. So if we take a look now across solutions and assessments holistically, and we reflect on portfolio performance, we manage our business through a number of product lines that sit underneath our business units. And we are very pleased with the overall operating performance of the business across the vast majority of our product lines with the exception of our partnership with the OECD for PISA for Schools, otherwise known as PBTS, and you'll see comment on PBTS, PISA-based Test for Schools at the bottom of both the solutions column and the assessments column. The international partner -- platform partner program, which is where we provide a software platform to countries to execute on the PBTS program, continues to be flat year-on-year. We were significantly affected by Russia and the decision by the OECD to exit Russia. But equally, we continue to see greater-than-expected delays through the impact both of geopolitics. But generally speaking, the -- our challenge in being able to predict the pace that an opportunity will progress through a sales pipeline into contracting. And that equally applies for the national service provider portion of the PISA for Schools business, which sits in the assessments P&L. The national service provider part of that business provides the -- this exceptional test directly to schools, particularly in the key markets for us of Australia and the U.S. And we are deprioritizing in the short term, our opportunity in the U.K. as we focus on what we see as bigger opportunities in the U.S. and Australia. Equally, for the national service provider part of the business, we saw a greater impact than expected from geopolitics, also from the flow on form the [ PISA '22 main test ], which stops the operational and logistical roll out of the PISA for Schools program until some of the variables of the main test actually get locked down. The delays of locking down those tests have affected us, and we do continue to see that flow on into FY '24. I am pleased with the strong alignment with the OECD. That said, I have less confidence at this particular point with the timing of the transition of both the NSP and the IPP sides of PISA for Schools into revenue. And so, we are redeploying part of the investment into other higher confidence line -- product lines and executing that accordingly. Finally, on operations, we've covered the fact that Janison in a key inflection point is net cash flow positive, equally reinforcing our focus and our confidence that we will be sustainably able to drive growth in positive cash flow in '24 and beyond. In other metrics, as we look at Janison's balanced scorecard, I'm very pleased with the feedback we got from our customers, very pleased with delivery execution in FY '23. But on a people standpoint, I think we set a benchmark, certainly against peer organizations. And I'm pleased that what is not mentioned here is 2 weeks ago, Janison was awarded 13th Best Place to Work in our category in Australia by the [ WPP Plus ] program. And I think it just shows our commitment to align a purpose of our company to the experience and the dynamic inside our organization. So with that, I'll pass back to Stuart to talk about some of the underlying financial drivers and measures.

Thank you, David. So I'll -- over the next few slides, I'll take you through sort of a high-level summary of the key kind of components of our financials. The full annual report was launched or lodged, I should say, on the ASX this morning just before the call. So glad to know, there may not have been enough time to sort of digest that fully, but if there are any questions, please feel free to drop them into the chat or ask me at the end. Just kicking off with a summary of revenue to begin with. So what you've got here are 2 visuals that represent the revenue growth of the 2 divisions. On the left-hand side is Janison Solutions, as David said, is our B2B platform license business with associated services that go with it. And on the right-hand side is the Janison Assessments division, which is largely a collection of acquisitions that we've made over the past 4 years, and it is our school and parent product business. As you can see, the $41 million is made up of the 2 business units, $26 million in solutions and $15 million in assessments. The growth rate in Janison Solutions was 9% overall. But again, as David touched on at the beginning, the core component or a core area across solutions that we're really growing or focusing on growing is that Janison Solutions core business, which comprises our platform clients, the likes of the key strategic accounts, New South Wales DOE, ESA, Cambridge and Oxford, and also other key accounts such as FINSIA, transport for New South Wales and so on. It also includes our Jem business. Jem is -- was previously known as LTC that was acquired a number of years ago now and has been very well integrated into the solutions business, as a support function, providing exam services across all of the platform clients that we have in our business. And then the other aspects of solutions, which we call Janison Solutions other is a combination of the learning business and our PBTS IPP or international platform provider business, which is that country to country level of sale of PISA for Schools. And what we've done is we've broken out the 2 sort of components of solutions here on this chart, just to really show you the sort of -- despite the sort of 9% growth rate, what we're seeing is pleasingly the 17% growth rate on the core business, that element that we're really sort of focusing on growing with the other business learning and people just going backwards in FY '23 from [ $6 million to $5.1 million ], down 18%. And as David touched on as well, a lot of that is to do with the loss of Russia, having to exit Russia, that was about $0.5 million a year of revenue, and the remainder coming from a slow downturn in our learning business. On the right-hand side is Janison's Assessments, again, a really good growth rate over the past 4 years. In FY '23, we saw 21% overall, and the components of that somewhat broken out in the table below. ICAS, the competition itself grew by 15%. ICAS, the collection of products and practice tests and international papers grew by 13% overall for the year. AAS, a really good standout for FY '23 grew by 58% year-on-year. There was a tiny component of pre-acquisition in FY '22, but largely that was sort of a like-for-like. And the pleasing thing about that is that since acquisition, we have overdelivered or the businesses overachieved to the tune of about 20% of the earnout target. So just for everyone's benefit, there is a -- well, there was a $1 million cash payment made in July for the earnout component -- deferred earnout component for AAS to the vendors of AAS. And [ there ] will be a share-based payment in the form of Janison ordinary shares in September, likely around the end of September to the value of around about $7.4 million. That's based on the contracted sale agreement and the overachievement against the 2-year earnout period. And then within Janison Assessments, so there is a smaller components, but including the other ICAS products was -- the USW (sic) [ UNSW ] products that we acquired, such as Reach and [ Jem ] and so on and also RiSE and the PBTS for NSP, which is the school-to-school component of PISA-based Test for Schools. Actually, one other component in Janison other is the QATs business. QATs is another acquisition we made a couple of years ago now. And again, that had a very good year as well. Smaller numbers of circa $1.2 million for the year FY '23 in revenue, but nonetheless, very good growth rate of about 43% year-on-year. That's the sort of revenue summary. Just a quick snapshot of our high-level P&L and cash flow for the year. As you can see there $41 million, $41.1 million was our revenue, full year group revenue from ordinary activities, which represented a growth rate of 13% on the prior year. As you can see from the previous slide, where that's coming from. Gross profit was also pretty strong. We finished with $25.8 million just below $26 million worth of gross profit or 11% growth. The gross margin wasn't so strong. We actually went backwards by 1 point. And the rationale there was that the FY '23 year was comprised of a much higher proportion of services revenue -- services revenue as opposed to platform license revenue. Services revenue is usually a lower margin, sort of circa 40%, 50%, and the reason it was a higher proportion in FY '23 was a combination of factors. Number one was, there were a large number of, in fact, a record number of new client wins in the platform Janison Solutions business unit. And generally, what happens is with these clients, there is a process of onboarding, and that onboarding can consist of integration, training, offering questions into the platform, configuring the system for them to [ go red ], go live. And all of that work generally is classed as a services revenue piece, and that's charged for at a lower margin, and that onboarding process can take anywhere from 6 months to -- well, it can be done as quickly as 2 weeks, but generally speaking, most of our clients tend to go through a fairly detailed change process, and it can take up to 9 months. And so in FY '23, there was quite a large number of implementations, more clients getting ready to go live, and we'll see coming into FY '24, the platform revenue really start to turn up from those clients then going live into production. The other component was a -- just a growth -- sheer growth in AAS. AAS is a services business. It's part of Janison Assessments, and it's a suite of school products, school assessments that include things like scholarship tests and placement tests. It is gradually going digital. And in FY '23, we actually digitized all of the test items, all the question items were actually digitized. So it's in readiness to go digital later on. But at the moment, a large component sort of circa 90% plus of revenue of AAS is delivered by physical invigilators people going into schools with paper-based assessments and delivering their exam in person. And so that revenue is classed as services, but the plan is over the next few years is to then gradually digitize and transfer -- transition schools across from a paper-based assessment to a digital assessment at that point then, we expect that the one, the revenue will convert to a platform license for the tests on our Janison Insights platform and also it will step up in margins, as we deliver the test without so much in the way of sort of people costs. And the third component was just a -- also in our solutions business was a large amount of work for our platform clients on exam services, so that's assisting with the likes of Cambridge and New South Wales DOE with a large assessment that currently is paper-based, and that's the selective high schools entrance exam in New South Wales. And the plan is eventually to go digital in 2 years' time. So we are sort of comfortable that we're recognizing services revenue for that because it is helping our clients eventually go digital, and then therefore, move up into that higher margin platform license fee. And then the only other component as well within services was around software development. We do, do some software development only for one particular client now, unless it's on our road map, and it's accelerating our product road map. But we do, do some work for one of our clients, which is the Education Services Australia for NAPLAN product, which you probably know well. And some of that work was again, in preparation for delivering a new use case for the platform going into the future and, therefore, obviously setting ourselves up for new potential platform license revenue to come in the future. So all of those sort of all components contributed to having a higher services revenue mix in FY '23, and hence, why we do see a little bit of a dip. And I think you'll see this from time to time. We do expect that gradually our gross margin will increase over the next few years incrementally. But we do recognize that it may sort of accelerate faster in some years than in others based on the proportion of services to platform revenue. In OpEx, OpEx is a really good standout, I think, as well. This year, we did accelerate quite quickly over the past few years, and we put the brakes on a couple of years ago and we actually reset our cost base at the end of FY '22. So just over a year ago now, we made some pretty reasonable cuts to headcount, where we thought necessary, but without impacting growth in revenue, and we've managed to sort of this year, deliver almost flat OpEx spend of $21.8 million, which is just less than 2% growth on the prior year. And going forward, we think that we've got confidence despite the sort of the 20% CAGR growth rate we're expecting that we can do that without a huge amount of investment in OpEx, and we should start seeing a lot more operating leverage come through each year from here on in. And as a result of all of those things, so good revenue growth, steady gross margin and flat OpEx, we've managed to deliver a pretty good EBITDA result. And you might have seen on the -- one of the slides before, with 6 charts -- the 6 bar charts, we've seen a sort of pretty consistent growth in all of our metrics. And even I took a bit of a step back last year, but sort of looking back over the long term, it has -- it's sort of back on track now for $4 million in FY '23. And also, I think one of the biggest standouts this year as well was the work that's gone in to get us to a place, where we are now, what we believe to be sustainably free cash flow positive. We have been cash flow positive before in the past, but we believe this -- at this point in time now at the end of FY '23, we've set ourselves up with the right OpEx structure, the right client acquisitions and on a path to continue to grow our cash flow into the future from here on upwards. [ Here's just ] a couple of slides just a -- or charts, I should say, just to represent the couple of things I've already mentioned here. OpEx has taken a bit of a step up over the past couple of years, as we've grown into the business that we are now, but we've managed to maintain that at slightly above flat for FY '23. And as a percentage of revenue, a lot better, 53% versus 59% last year. Gross margin as well, as I mentioned, with that heavy services mix in FY '23, we did see a bit of a flattening of the percentage margin, but now obviously dollar gross profit growing quite well to $26 million. Just moving into cash flow quickly, and this sort of wraps up the sort of main financial section of the presentation, and we'll move into question -- Q&A. Good operating cash flow $5.4 million, that we saw good revenue growth there from flow-through to customer receipts. In investing cash flow, there is a couple of things to mention here, acquisition costs. The $0.7 million was a payment we made in the year for the deferred earnout of QATs or QATs, which is an acquisition we made in the year before. As I mentioned, we had a $1 million cash payment made in July, so that you'll see that come through in next year's cash flow on top of the $7 million of net in shares, as well later this quarter. Another good stand out as well in our cash flow was our spend on CapEx or product development. We -- as you can see there, we were pretty heavy in FY '22 with $7.8 million of spend on product development. And that was really all about aside from just general product development and item development, it was about really consolidating all of those branches of our platform into -- back into a one standardized assessment platform for Janison Solutions, and that work came to an end at the beginning of FY '23, and so that cost has rolled off. And we believe that the $4.4 million is a good sort of baseline now from which we'll continue on into the future years with some incremental growth year-on-year, but nothing as significant as just the $7 million or $8 million we've seen in the past. Proceeds from equity was just a -- it wasn't a capital raise. It's really just a repayment of a loan to directors from 2017, which was an equity incentive, a while back. That was just the settlement of that loan. And lease liabilities is obviously our rents now effectively classified on the cash flow, not in the P&L. And -- and sort of a wrap-up of our cash flow, and again, finishing the year with $12 million in the bank, no debt, and a positive cash flow overall. So that's the end of our presentation. We've got quite a bit of time now if anyone wants to ask any questions. There's a chat function in the -- in teams, where you're welcome to add questions or feel free to raise your hand virtually, and we will ask -- answer questions, as we go.

Okay. Just checking the chat here, I can see a couple of questions. Maybe if I jump to the second one, I don't know if you can see that, David. I'll jump -- perhaps jump to the second one first, and then if you want to touch on the first one -- is that good? So question here...

Why don't you go first? Yes.

Yes, just well on the financials. So the question here is when do we expect to be NPAT positive in which financial year? Really good question. FY '27 is, in fact, the year we expect to be in NPAT positive. The reason being is because we have a heavy amount of historical intangible assets that are being amortized off largely because of the businesses that we bought like AAS, which had a $17 million purchase price, that rolls off over 5 years, and that we will see it being completely amortized off the balance sheet by FY '27. So it is quite a long way away. But the underlying cash flow and earnings of the business are obviously profitable, and we'll continue to grow from here on despite the sort of accounting impact on the P&L.

Thanks, [ Stuart ]. I might cover the first question, when can we expect a pickup and to what extent in PISA for Schools in both the solutions and assessments business. Just reiterating firstly that our confidence in the ability to build our national service provider business in assessments in our IPP business and solutions remains strong. What we are less confident in at the moment is the rate and pace of bringing on more countries on IPP and bringing more schools on in NSP. And so, we are thinking now less about in quarter and even in half and in year, performance and more about what we are driving in the medium term. What is really encouraging though is, as we take a more conservative view on that part of our business, we're equally seeing a reassuring uplift in our Janison Solutions core business. So as you'd expect in any business, you see ups, you see downs in the performance of the various business lines. And so, we're seeing the very least an increase in the horizon and our confidence on the solutions business even as we're more conservative with PISA for Schools, and that balances out our overall horizon. I -- Stuart's gone frozen. Can I just confirm that people can hear me?

I can hear you still. I thought [indiscernible].

[Technical difficulty] Thank you. No, thank you, Stuart. The second question was color and time frames around our use of AI? Thanks for the question. And you would be benefit -- be referencing the unaudited results deck that we issued 2 weeks ago, which goes into a little bit more detail around how we are commercializing AI as part of a multiyear adoption curve. I think it's firstly relevant to know that we see AI, as a very positive disruptor to an enabler to Janison's business and in -- and almost entirely provides a tailwind not of headwind just due to the nature of the part of the assessment market that we address, and we focus on. We see AI as driving two things. Firstly, revenue growth, as we improve our products, but also enter into new product lines, but also driving quality and importantly, efficiency. We're focusing on very tangible practical use cases and very, very, very much not seeking to get caught up in what I'd call a hype cycle, more focused on practical tangible implementation into products, but also practical tangible research and experimentation. We've already embedded AI capabilities, whether they be neural networks or large language models and so on and so forth into parts of our product. Our Janison remote product, which is our remote proctoring and invigilation offer already applies machine learning algorithms for the areas like continuous biometric identification of candidates, infringement detection, and that's already launched and embedded. Equally, we are -- and we have been in early adoption phase for our PSAM product, which is the evolution of the AAS portfolio towards being able to provide very, very high-quality psychometrically supported prediction of VCE, ATAR and so on and so forth results. We're already using and have been using small and large data sets in psychometrics to predict student performance and psychometrics, which is the measurement of abilities, mental trades, processes are -- is very adjacent to AI models, and so we've already got that embedded. I think the most exciting opportunity that we are already in development on is the use of large language models and neural networks for assessment, marketing -- marking, sorry. The cost associated with the human marking of very large cohort test, tests in the tens, hundreds of thousands or even millions of tests is very expensive for jurisdictions to implement a very large cohort of humans that drive marking for those exercises. We see an immediate opportunity to use large language models and new algorithms to learn marking skills, train algorithms. And in areas that are most obvious, such as assessments, which are double marked, where a human currently marks it once, human marks it a second time, and if there is a deviation in those 2 marks, it would go to a third marker. Indeed, an obvious first step would be to replace one of those in double marks with a machine because if there is a deviation between the machine and the human, it continues to go to a human. And that's an obvious immediate saving, an immediate opportunity to drive a significant product even [ as is ] a very, very significant focus on making sure that adoption is psychometrically valid and so on and so forth. If we keep going, Stuart, do you want to cover the question around equity issues and so on and so forth?

Yes. Sure. So there's a question here around [ have we seen ] into the equity issues from the directors of staff at diluting the paying shareholders. Good question. And also, [ there is a ] sense of frustration for some people, there were some legacy instruments that were set back in 2017, they have all definitely all gone now. The only equity plans remaining are the long-term incentive plan for management. That's detailed in the [ RIM ] report with the annual report this year, and that just covers the 6 executives in the executive leadership team. It's a performance rights plan over 3 years and has various metrics and thresholds, as you can read about in the report, and that's just the main plan that's in existence. And then the other one is an ESOP, which is just an all company ESOP plan or Employee Share Ownership Plan, and that's [ capped ] as well a certain amount of people salary, so, yes, not too dilutive. And that's what we have now. So that's -- yes, there's no [ called ] director other than the sort of 2 options that were granted to the new NEDs, a couple of years ago. We don't have any legacy equity plans for directors.

Thanks, Stuart. Why don't we just pause and see if there are any other questions on our meeting chat. A question from Olivia around expectations for ICAS and what you're seeing now in terms of demand post COVID. Are you likely to push through further pricing increases? Let me cover this off. So I think that this particular ICAS 2023 cycle will be very insightful and telling in understanding what the more sustainable growth trajectory for this business is. And what we're seeing is, we're seeing some strong tailwinds and also some headwinds. And we are very encouraged at this particular point with the progress of this particular sales cycle. In terms of headwinds, obviously, with ICAS being a discretionary product and ICAS being a product that, in many cases, parents buy from our parent portal rather than schools buy now from batch. We are very sensitive and watching for the pressures of the household and discretionary spend. We're seeing that through and watching for evidence through the number of tests that a parent will purchase for a student, but also potentially schools that are very sensitive of equity within their schools that don't want to create a haves and have nots environment for those, who can and can't afford it within their school. So with that overall economic headwind driven the tailwinds, obviously, are certainly a new normal inside schools, and therefore, an increased capacity carefully and slowly increasing capacity for organizations and schools to absorb the small additional workload to deliver ICAS at school and also our brand partnership with the University of Sydney. I think the other very important point to note is, Stuart, and I mentioned before, I just want to reiterate the focus of Janison on sustainable cash flow growth and therefore, focus on the higher profitability lines of the business. And as part of ICAS 2023, we continue to focus on growth of the core products. And in the areas, where we don't see a line of sight to profitability, we've taken choices to not go ahead in particularly year '11 and '12 has been a very small and not profitable part of ICAS, as well as digital technologies. So confident of seeing growth in those core test volumes. Watching carefully through what is going to be an important next 4 weeks for 2023, but also certainly investing in the second half of this financial year to drive a material lift in the international side of the business, which we had to deprioritize through the pandemic, but we've now refocused more effort on. In terms of further pricing increases, ICAS 2023 did not see price increases sensitive, obviously, about those discretionary pressures in an inflationary environment, but we believe that this is a high-quality product. And as we continue to enhance it, I do envisage in 2024 and beyond that we will be carefully increasing or looking at least at prices. Last call, perhaps for questions for today's session. All right, Stuart. Unless you have any other comments, I might provide a wrap-up and then we can close the session today.

Yes. Perhaps sounds good.

All right. Well, look, firstly, once again, thank you for joining our ASX briefing for those of you, who've been on the journey for a long time. I'm confident that in our FY '23 results, you can see strong evidence of the progress we've made on our strategy, on our execution, and in particular, the significant milestones, financial milestones around revenue, operating leverage, our inflection point to net cash flow positive, and our confidence that with the momentum in the business, we'll continue to see strong revenue growth resilient and carefully growing gross margins, ongoing tight OpEx management to continue to be within circa 5% into 2024, tight management of R&D, and therefore, sustained ability for the company to drive cash flow growth. So on that note, I'd like to thank our shareholders for and investors for their ongoing support. Our new investors for joining us on this journey, and our customers, and our partners and our staff for making Janison the company that it is today. Thank you very much for joining us. And I look forward to seeing people at the AGM, which will be announced in due course in October or at other forums between now and then. Have a good day, and thank you.

Thank you, everyone.