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

[Technical Difficulty] And at the end of the presentation, we'll move to Q&A. [Operator Instructions]. But let me hand you over to our first speaker, Sujata Stead, who's the CEO of Janison. Over to you, Sujata.

Thank you, Adrian, and welcome, everyone, to Janison's First Half FY '26 Results Investor Update. And my name is Sujata Stead, and I'm the CEO of Janison Education Group. And with me, I have today Dharmendra Singh, who is our Chief Financial Officer. I would like to start off with the acknowledgment of country, and Janison acknowledging the traditional owners and custodians of the land on which we stand today and pay our respects to their elders past and present. And moving on to our first half '26 performance highlights. In this slide, what I'd like to highlight is the key highlights from the first 6 months of this financial year. Firstly, very pleased to share that as far as our core part of our strategy, which has been go-to-market acceleration, that has been progressing very well. And as shared with the market, we have now secured the landmark New Zealand Ministry of Education contract, which perhaps is one of the largest contracts of its kind that Janison has won internationally. And at this point, we are focusing on execution and delivery, with the first assessments being delivered in April. Similarly, we are also at that point when we are transitioning from disciplined investment to accelerated investment in our platform to ensure that we are now ramping up investment in our platform to ensure that we can realize the full values and the opportunities in the market in a way which is also financially delivering the right margins and the right metrics for the business as well. In terms of revenue growth, revenue growth is 2% versus PCP. And if you look at the platform side of the business, which is our core insights platform, like-for-like, if you exclude some of the legacy revenues, which fell off our books this financial year, like, for example, the legacy paper-based revenue for delivery of DoE selective exams, if you remove that and you also remove DOE -- so apologies, OECD PISA exams, which was also legacy, which has finally fallen off our books, the like-for-like growth is 13%. In terms of our balance sheet, strong balance sheet and cash position, and Dharmendra will talk a bit more about this later on in the financial slides. But essentially, I think our financial position in terms of balance sheet and cash position has been the strongest in many years, and this is primarily due to very good kind of commercial negotiations and strong fiscal management and very pleased to report a good $13.3 million of cash on hand. And again, moving on to the primary customer wins. Again, this is something we have shared with the market before. And this is very much aligned to Janison's core strategy of taking our incredible experience of delivering exams at scale in New South Wales, plus nationally with NAPLAN and taking that internationally, but also to other states outside of New South Wales. And on that note, of course, we've talked about the Ministry of Education in New Zealand, which is very much the delivery of the student monitoring assessment and reporting tool, which is going to be -- it's a major national initiative, which is going to be run twice a year for students across year 3 to year 10 across multiple subjects and languages. It is one of Janison's most significant international wins, delivering digital assessments for national education systems beyond Australia. Similarly, while the contract value is low, we are also very pleased to now have our first government contract in Victoria with the Victorian Building and Plumbing Commission. It's very much providing the platform for the delivery of building and plumbing accreditation applicants. And again, I think this is significant from 2 perspective. One is our first major inroad into Victoria, but secondly, also to a new sector, which is very much vocational education and training. And finally, of course, as we've shared, we've also now displaced the incumbent and become the technology partner for the delivery of Online Literacy and Numeracy Assessments in Western Australia. And all of this is basically a demonstration of our proven track record and expanding our experience and our engagement across other countries and also education authorities within the country. In terms of why Janison? I know there's a lot of conversations happening on how -- what makes Janison actually kind of very relevant and valuable to our customers. And from our perspective, I think there are 3 things, which are core to what Janison does, which makes us very sticky with our customers. We've got long-standing customers who we work with. We're expanding those relationships and bringing in other large sticky customers as well. And that's through a combination of deep technology expertise. Janison has over 25 years of experience in the digital delivery of assessments. Janison is an innovator in this space, being one of the first organizations in our part of the world, offering that end-to-end ecosystem right from your item development to test rendering to marking, the whole endless -- the whole end-to-end experience. And that is combined with our expertise as education experts. So, we bring together the combination of education and assessment expertise with technology expertise because in our industry, technology is a means to an end. And the end is very much the whole kind of achieving our vision of unlocking the potential in every learner through exemplary assessment experiences. So, making sure that through technology, we are providing good learner outcomes and having that positive impact. And we have been delivering exams of scale, millions of exams around the world, very high stakes, which requires a high degree of concurrency, reliability and security. And now we are investing in our AI-enhanced platform capabilities, which means that we are providing that full end-to-end ecosystem, which is a combination of technology, assessment expertise and delivery services, all overlaid with AI to provide that human-in-the-loop superior services to our customers. And of course, I've talked about education and technology expertise combined, which is very rare in our industry. You're either an assessment expert or you are technology expert, but we combine both, which is one of our secret sauce. And finally, the huge amount of data we have. Not only the millions of data through delivering third-party, but importantly, also our own assessments like ICAS and AAS, which means we have a huge amount of data, which actually provides a huge amount of insight into student performance, which allows us to have those clear actionable insights to improve learner outcome. And this slide is again a summary of, I think, why customers choose Janison. It's very much the trust and reliability, the deep expertise we have built, the sticky relationships we built with large customers, all kind of powered by the human-centered design and being constantly innovating in the space of assessment and now with the use of AI. And we are doing all of them at a scale globally, but also working with local partners as we do in New Zealand. And of course, all of this is combined and underpinned by what is critical in our industry, which is security and compliance. In terms of future of assessment, I know there's a lot of conversation at the moment, whether in Australia or overseas where a lot of conversations on what does the future of assessment looks like, whether it is for K-12, where we have got deep expertise, but also other sectors we work like professional accreditation, university, high education and also vocational. So, a lot of conversations happening. We know that assessments are going to move increasingly digital. In fact, very recently, there was an announcement in the U.K. that by the end of the decade, all exams -- school exams in the U.K. will be digitized. But overall, I think if you look at the 3 key words we are looking at is organizations are talking about how assessments can be smarter, they can be fairer and more accessible. Because at the end of the day, even assessment is a means to an end, which means that assessment provides learners the opportunity to demonstrate their strengths and opportunities to build on. So as an organization, what we are looking at is that how do we make sure that we make assessments smarter, fairer and more accessible by expanding our AI capability for better quality and greater efficiency, also greater system interoperability so that customers have a seamless experience, also looking at how we provide next-generation analytics for improved decision-making and ensure that there's more flexible, inclusive test taking experience for all test takers who are taking the test through Janison's platform. And finally, I just want to touch upon Jai before I hand over to Dharmendra to take us through the financial slides. Jai -- I know we've announced Jai. This is something, which particularly excites us because this puts us at the forefront of innovation in our sector. Jai is essentially Janison's AI-powered assessment platform and its first application, which is now fully operationalized both internally at Janison and by our customers is very much our AI-enabled item development tool. And it's very much how through a human-in-the-loop model, Jai is actually kind of enabling organizations, including ourselves to create high-quality test questions and assessment items much faster at a significantly lower cost. And it's great to see that many of our customers are now -- who have bought Jai are using it, but we are also kind of talking to a huge number of potential customers, both in Australia, but also in the U.K., and we are at the proof-of-concept stage. But I think Jai is a platform that is actually in some ways at the forefront of innovation in our industry, not just for Janison because here is an AI platform that harnesses the power of large language models to ensure that the platform works not just as a tool, but almost like a member of staff in the team, for example, in our item development team, where true training, true feedback, it gets better and better and it works and provides and can be used in a more agentic way rather than just pure generative AI. So, this is a very exciting development, strong progress, including growth of pipeline, and we'll keep you posted. On that note, I'll hand over to Dharmendra now to take us through the financials.

Thank you, Sujata. Good morning, everyone, and thank you for joining the session this morning as well. I will take you through our financial section of the slides. But before I take you through the detail, I do want to spend just a moment on the trends chart of this slide. I think if you look at the group revenue slide, you can see growth from $19.5 million in H1 of 2022 up to $23.1 million in H1 of '26. That's a compound trajectory over the last few years. And we are pleased to also report and as Sujata touched on the new contract wins that we've had that will allow us to continue this trajectory going forward as well. On the gross profit trend line, you can see a slight compression from the highs in H1 of 2023 -- 2022, there is deliberate investments in onboarding a couple of our major clients that we won over the last few years, including the New Zealand MoE that Sujata touched on earlier on. So, we are in the phase of onboarding them. And as the delivery normalizes, we're expecting that margin improvements to come through. From an operating EBITDA perspective, I do want to sort of highlight right now that, that decline from H1 of 2025 is something that we flagged earlier on. It's deliberate investments ahead of our revenue in making our platform scalable, but also setting up ourselves for the trajectory of the growth that we are aspiring for. So, for example, we've started to see some wins, obviously, with the significant contract with New Zealand MoE and also the investments we've made, as I mentioned, on the gross profit comment around the services element as we are transitioning our clients into our platform. From a cash flow perspective, we'll touch -- we'll go through that in a little bit more detail later on. But I think as Sujata mentioned, one of the most significant halves where we've had some really good closing operating cash position that has allowed us to have a very healthy cash balance in the end. So, I'll move on to the group income statement slide. Again, Sujata has touched on some of the things that I'll be picking up in here, and we'll walk through our segments in a little bit more detail in the next few slides. So the top line level revenue growth of 2% is masked somewhat by the legacy revenue falling off, as Sujata mentioned, with the paper-based testing with the New South Wales DoE and also the PISA test that we've discontinued. So if you exclude that, the underlying revenue has grown by about 13% in our core insights platform, which is really pleasing. From a gross margin perspective, there's a slight improvement from the previous year from a group perspective, and that's obviously reflecting stable cost of sales. From an OpEx perspective, it goes back to the earlier comment I made. OpEx is up. It's deliberately up, and that is as a result of the continued investments we've had on initiatives in people, technology as we start to scale up and onboard some of our significant customer wins as well. The reported EBITDA tells a slightly different story. It's up 30%, and that's a result -- primarily as a result of the non-operating expenses being significantly lower this year. Last year, we had some strategic review one-off costs or restructuring included and hence, the improvement in the current year. Net loss after tax, again, a positive trajectory. There is a tailwind that will continue going forward, which is the falling off of the depreciation and amortization of some acquired intangibles we've had. So, we'll move on to the business unit performance. I'll start off with platform. And again, a lot has been covered by Sujata, but I will highlight that the decline of the $200,000 that you can see, that's the overall decline that includes the legacy revenue that has fallen off, which has been mostly offset by the new wins with New Zealand MoE. And again, on a like-for-like basis, the Insights platform has grown 13% over the prior corresponding period. I have highlighted and I have mentioned earlier on, and we've talked about that at the full-year presentation as well, we are onboarding some of our major customers as they're moving forward to the digitized ecosystem, and there is an element of services that we're investing with our clients. And that is quite strategic, and that has allowed us to actually win New Zealand MoE as well because that sort of showcases our ability to partner with our clients in this high-stakes transition that is a trend that will be a tailwind for not only Janison but the other sector as we move towards digitizing assessments. OpEx, again, reflects that investments that I've talked about and hence, that had impacted -- that has impacted the operating EBITDA in the current year in the platform business, which is a loss of $1 million compared to the $0.1 million in the prior corresponding period. I will move on to the Product segment. Product segment, pleasing result with a $0.6 million growth, which is 6% and that's been driven by our suite of products, ICAS, AAS, QATs, all contributing to that. It also included some past paper sales from an ICAS perspective, but also some price increases that we implemented in the past year. Again, that allowed us to have some operational leverage and hence, you can see an improvement in the gross margins as well, which has allowed us to offset the increase in investment in OpEx, which has left us with an operating EBITDA of $2.3 million compared to $2 million in the previous year. Moving on to cash flow. Again, 2 things I'll highlight from the slide. We already talked about the strong ending cash balance, and I think that's been driven by the stronger commercial execution with our working capital. That has included negotiations and commercial discussions we've had with the clients to ensure that we are able to smooth our billing cycles to ensure that we are not funding or we are funding our investments on a timely manner. There will be an element of unwind as the delivery progresses with this particular client that has paid us in advance. The only other thing I'll highlight on this slide is you'll see a decline in the investment or the product development that, again, is not a structural decline because we've been really busy onboarding our new customers and hence, we've been focused mostly on the services element. And we will be doing a bit of catch-up in the second half and going forward in our platform, enhancing our features and some of the stuff that Sujata talked about earlier on around AI as well. So, watch this space. We will catch up on that product and [ lot of ] investment. So again, closing -- healthy closing cash balance. It has been elevated, as I mentioned earlier on, and there will be an unwind, but it's a pretty strong cash position now. Moving on to the balance sheet. Again, a pretty clean and strong balance sheet. It's been stronger -- getting stronger as we've transitioned our major clients. As you can see, cash balance is very strong. We've talked about that. The only other movement that I will talk through is the increase in the contract liabilities. And again, the contract liabilities, we include the deferred income in there, which means the advanced payment that I talked about earlier on from our customers is included in that. So, there's a corresponding increase in that liability, which is offset by the increase in our cash balance. Both will unwind as we progress with the delivery. But again, I'll leave this slide with the message that, as you can see, a strong balance sheet, and I mentioned some of the tailwinds with amortization falling off will further improve our net asset position. So pretty strong cash position, flexibility to support our ongoing investment in growth, whilst we preserve our balance sheet optionality as well. On that note, I'll pass back to Sujata to take us through the strategy and outlook for the company.

Thank you, Dharmendra. In terms of market dynamics, I think what I've tried to do is in this slide, capture what are the key trends that we are seeing in the market, both in Australia and markets like the U.K. where we serve customers. So essentially, I think it can be broken into a few categories. One is, of course, I think almost every industry is talking about it, is basically the impact of AI. So, a huge amount of conversations happening on AI integration and what does that look like? Because -- and that's very much linked also to the second bullet point in terms of trends, which is very much a cost-constrained kind of environment. Here, basically, how can AI actually ensure that our customers can speed up in terms of even the quality -- speed up the volume of items at a price -- at an exceptional quality and price, right? So, a huge amount of conversations on AI. And the good news is that Janison is part of a number of these conversations. Given our experience both in digital delivery of assessments and now our innovation in AI, the good news is that we are having a seat at the table to see how AI can be a source of good in education when you use an ethical and a human-in-the-loop model. So, very much organizations are looking at how platforms can deliver AI-driven efficiency, whether it's a proctoring of the exams, whether marking or item generation, while of course, maintaining integrity and security, which are non-negotiable for high-stakes testing. But of course, at the same time, we are also seeing that as far as high-stakes testing is concerned, human oversight is necessary. In terms of cost constraint, given the nature of our customers, if you're looking at government organizations or the economic conditions in many of the markets we operate, we are seeing this more fiscal pressure and buyer constraints where we are ensuring that we deliver value to our customers in a way which is sustainable, both for the customers and for us as well. Then, of course, hybrid delivery. We are at that intersection in our -- the journey of transformation of the assessment industry where various delivery mode for assessments coexist, whether it's paper-based testing or it is digital testing at a venue or digital testing in a remote proctored manner. So, all of them are coexisting. And where Janison actually is in a very strong position is that our platform allows candidates to do the tests at a venue online or at a venue on paper or remotely as well. So for a number of customers like the Chartered Accountants of Australia and New Zealand, we offer remote proctored tests. For other exams like NAPLAN's digital delivery at venues and whereas for New Zealand Ministry of Education, it's going to be a hybrid model. There's also insights gap. We see that the market is crying out for more data, data to be used for actionable insights and how data can inform learning and have better outcomes for learners. And this is again where we are working on how we can work with our data to provide those targeted insights, which has better learner outcomes. Regulatory evolution. So at a time, I think what we're seeing is that many governments are thinking of curriculum review, new funding agreements and proposed structural reform. So, a lot of change happening in our industry. And in terms of market growth, the prognosis for market growth still looks very strong. Core assessment and proctoring markets are valued at about $18 billion in 2024 and is projected to expand to about $35 billion by 2033. So, it's a market that continues to grow. And of course, as we see digitization of assessments happening, I think the pace will increase at some point. And with that kind of market dynamics, I think our focus as an organization is very strongly aligned to actually be able to offer that differentiated value to our customers in that highly changing dynamic market environment. And here very much, again, I shared this slide in October last year, is very much if Janison is to achieve over the longer 3 to 5 years, our strategic vision of being a market leader in digital delivery of assessments in key markets, then what is it we are going to do in FY '26 to be making sure we are on track to be able to achieve that strategic vision? And with that, our focus for the rest of the year continues to be three-pronged. One is the whole execution of go-to-market strategy, continue building the pipeline, continue converting and continue growing. At the same time, ensuring that we actually now accelerate our investment in our platform to make sure our platform continues to be fit for purpose and allows us to scale up to our customers at a manner, which is also financially providing strong returns for our business as well. And finally, all of them are being backed by strong operational excellence, making sure that our operating model is fit-for-purpose and scalable for a business of our kind with our vision. And in terms of looking ahead, one of the updates I wanted to provide to our market is very much the Department of Education New South Wales contract. As you know, last year was the first year we delivered the digital delivery of selective high school and opportunity class assessments. It was a very large ambitious projects where for the first time, exams were delivered digitally in a new type of exam and also in venues, which were outsourced away from schools. And at this point, our laser-sharp focus continues to be on the delivery of the exam for 2026, which happens in May this year. But where we have landed with the department is we've clarified roles and responsibilities between Janison and the department, whereby Janison is going to focus on what the organization's core competencies are, which is primarily around platform and platform services like invigilation of tests, whereas the department will focus on what its core assets are, for example, the venue sourcing given the New South Wales Department of Education has one of the largest school networks in the world. So very much, we bring our expertise of platform and invigilation into New South Wales Department of Education's school infrastructure. And what this means, of course, is that there is going to be some revenue variance for this particular contract in the second half of this financial year. And at this point, where the business is, is we are having a strong focus on offsetting any revenue loss through New South Wales Department of Education and strong pipeline conversion over time. Similarly, I think our focus now is very much for management. We have a large number of high-stakes, high-profile assessments, national programs we are delivering, whether it is the Western Australia program, the National NAPLAN assessments, some assessments for Oxford University Press in a few select markets, DoE New Zealand. So, our focus is making sure that we have this very complex high-stakes assessment. We are delivering them safely and successfully. In terms of near-term earnings, it's very much dependent on pace of pipeline conversion. Medium-term outlook is supported by strong contract wins and margin expansion. So, strong work continues on the pipeline, which I'll share with you in a minute. And of course, now with our full technology leadership team in place, we are also now focusing on accelerating technology transformation, including having AI-enabled capabilities supporting scalable, efficient and sustainable long-term growth. In terms of pipeline, I think when I shared the pipeline with you in October last year, we shared a $40 million worth of pipeline. Very pleased to let you know that over 50% of that pipeline has now been converted, which is very much $23 million has been converted. We've also put in about $9 million of new opportunities. So after the over $50 million -- sorry, 50% conversion of the pipeline, where the pipeline stands right now is about $26 million. But as you'll see in the note at the bottom, this actually excludes an international opportunity with a total contract value of more than $10 million, which has been excluded as a single large prospect at a very early stage. So in other words, I think these opportunities are where they are more than 30% kind of probability of conversion. But at the same time, I also want to share with you that there's been strong momentum on pipeline conversion and that momentum. We're looking at continuing with that momentum. Next slide, Adrian. And this is very much showing you the current $26 million pipeline where it stands, of which $22 million are at the discovered needs and qualified stage. 4 of them are at proposal development stage. And very much, as you know, typical sales conversion takes about 12 to 18 months. And opportunities in the pipeline span both private and government clients. And there is an improved diversification with no single opportunity, which is more than $12 million. And strategic focus and target markets remain on APAC, U.K. and surrounding region. So, still very strong and aligned to our strategy of focusing on market opportunities in our region over here and in the U.K., looking at diversifying so that we have a broad range of organizations, so not kind of reduce the organization's dependency on a few large contracts and pushing hard for pipeline conversion, but very pleased with the momentum that we are having as of now. Okay. I think on that note, it comes to the end of our market update presentation. So, thank you very much for being here and listening. But we now have time for answering any questions. So Adrian, over to you to field any questions?

Yes. Thanks, Sujata. You can hear me okay?

Yes, we can hear you.

Great. We've got a number of questions. So not surprisingly, good group in the room, which is excellent. So the first question, which I'll pose and you can direct who best to answer this one. So, New South Wales Selective School test FY '25 revenue was $10 million as originally indicated. How much in FY '25 revenue was from it?

Can you repeat the question?

Yes, sorry. Sorry, Dharmendra. So the New South Wales Selective School test in FY '25 was $10 million. How much in '25 was the revenue from this?

So in '25, it was slightly more than $10 million, Adrian.

Okay. Next one. Can you expect the Platform segment gross margin from here to stabilize at 51% level now that New South Wales Selective School contract no longer includes logistics venue? So that's one part of it. And the second part. What's the probability of it recovering to historical 55% level once the newly won clients such as New Zealand fully implemented and implementation services a smaller percentage of this segment?

Yes. So I'll take that one. So there's 2 things, Adrian. And I think as we mentioned, we will be transitioning into the delivery phase now because we have done that initial onboarding of both the DoE and the New Zealand clients now onto our platform. So, we are expecting that margin to normalize because the revenue mix will change because it's going to be more focused on the platform recurring revenue as opposed to the services element, which is slightly heavier in the front part. One of the other things that we are also working on is investments in our platform as well, which I alluded to earlier on. So, there is a number of projects that we'll be working on to enhance some of our features, including AI, but also other features that we will be investing in that will help us with this operational leverage. We are expecting that as we onboard new clients, that's when the operational leverage will start to come on. So in addition to obviously moving our major clients into a more standard delivery mode and some of the investments we're doing in our tech stack will enable us to stabilize the margin and grow from there.

And what we have is now we have about over 1 year. We've been on this -- our new strategy journey for the last -- just over a year. And I think we have now enough data to actually say, yes, we need to now accelerate the investment in our platform, thereby actually improving our margin. So, we've got the clearer data, clearer learnings. And as a result of which I think I said one of our focus is going to be now how do we accelerate those investments in our platform, which will also provide us greater operating leverage.

Thank you, Sujata. Next question. Regarding the 5-year NZD 24 million TCV for the New Zealand MoE contract, could you please provide a breakdown of platform versus services revenue?

I think firstly, the important thing out here is that the huge part of one of our -- before answering that question, I want to say one of the key moat that we have as an organization is these large complex digital delivery of assessments are not necessarily just a plug and play to make sure it is fit for every context. And that's why every time we bring in new customers on board, especially in year 1, there is a significant element of services. But as it's operationalized over future years, I think it's going to be more of the platform and less of the services.

Yes. I'll just add on to that, Adrian. A significant part of that is platform revenue because we are not including SOWs and services in the TCV. So, whilst there is an element in the first few years of services, a large part of what we've shown in that TCV of $24 million, that will be mostly platform driven.

Thank you. Next question. In the presentation and previous presentations, you've mentioned the benefits and the objective of achieving scale. Is there a revenue number where we can start to see the real benefits of scale?

I think while it is difficult to put an exact revenue number where we can achieve scale, what I would say is that, again, nearly over a year of experience behind us on executing this strategy. At this point, I think we are gathering enough data and learning to make sure that how do we achieve that, where I think our investments will enable us to deliver at scale. So, that's what we are working on without putting exact numbers to that. But Dharmendra, do you want to add anything else to that?

Yes. I think if you just go back to the significant win, so we've got a $21 million contract that we just onboarded in the past. There's far few years in between where we've landed such a large contract. So, we obviously are planning and Sujata has talked about our first pillar in our strategy, which is to accelerate to go-to-market. We are aspiring to work on getting a few of those contracts in. There's not a massive number yet, but I think, obviously, as we onboard a few of those clients, we'll start to see this operating leverage. But I think one of the things that we do want to stress, it's not a pure revenue plan that we sort of focused on. We are also making enhancements in our technology as well, which is going to also give us operating leverage.

Yes. Thank you, Dharmendra. So just back on the revenue growth this question. So it was modest in the half. Can you talk us through the underlying growth trajectory of the business over the next 2 to 3 years?

You want to start? I'll pick up from you. You can start.

Yes. Look, I think we are very pleased with the clients we are onboarding now. We're expecting that momentum to continue, as you can see from our pipeline. So, we are really focused on opportunities, some that are included in the pipeline, some that are put as a footnote. So, we are expecting that trajectory to continue and particularly with some of the industry tailwinds that Sujata talked through. So the move towards digitization is accelerating as well. And we are also excited about Jai as well. So, I think combined with onboarding this big new client that we have with New Zealand and also our pipeline, we are relatively optimistic that we will be able to play in the market and get a fair share of that growth in the next 2 to 3 years.

Yes. So I think, Adrian, if I can add to that is that I think our laser-sharp focus remains on that vision of where we want to be in the next 3 to 5 years as a market leader in assessment delivery, digital assessment delivery in select markets. And we are on the right journey and we remain confident, especially given that the whole market is moving towards -- a large part of the market is now either moving or talking about digital delivery of assessments, which will perhaps accelerate in pace in the next 3 to 8 years. Then we have got Jai, which is harnessing the power of AI to have better learner outcomes. And then we also are demonstrating through the New Zealand contract, through Western Australia, through Victoria that our experience and track record in NAPLAN and DoE are replicable, whether in other sectors like vocational education or other states and territories and countries like New Zealand and other states across Australia. So, I think we are on the right trajectory in terms of the growth and expansion and meeting our longer-term vision where our focus is, yes.

Thanks, Sujata. I'll just remind the audiences that there's one question from an anonymous attendee. So, I prefer that you actually nominate who you are before we get to your questions. But just coming back to some other questions, Sujata. And you've spoken a bit about this as well, but obviously, not -- it's an obvious one for people to ask. Given the New South Wales DoE changes, how should investors think about contract risk and concentration?

I think in terms of concentration risk, I think -- yes, I think we are moving in the right direction, I would say, because this time last year, the organization had 2 major contracts, which was largely with -- ESA with NAPLAN and Department of Education. But now we have got New Zealand Ministry of Education, plus we also have quite a long tail of large number of smaller customers as well. So, while I have to acknowledge the concentration risk, but I think at the same time, I'm pleased that we are moving in the right direction in terms of diversifying that concentration risk. And in terms of contract risk, I think contract risk remains in any business. So, no one can say there is no contract risk irrespective of what business you are in. But one of our strengths actually is the stickiness, right? The stickiness that we have got are very much organization ethos. It's not just a customer-vendor relationship, but a partnership relationship. So whether you look at NAPLAN, whether you look at DoE or even the smaller customers, we have got those long-standing partnership and stickiness conversations where we are trying to make sure that when these organizations and our customers are talking about their review and their strategy, we have a seat at the table to ensure that our road map fits into these organizations' vision and strategy as well. So while the risk always remains, I think we ensure that through active partnership and long-standing relationships and stickiness, we reduce that risk.

Thanks, Sujata. This next question is probably a level of detail you'd feel uncomfortable with, but let me share. Maybe you can make some directional remarks. So, could you please quantify the revenue and/or profitability impact of the variation of the New South Wales DoE venue and logistics activities going forward into FY '27, FY '28, et cetera?

So at this point, I think we still don't have the definitive number. So as a result, it is too early for us to share the actual definitive revenue impact. But given that some of the lower-margin activities are going to be no longer there as we deliver the test in 2026, I would imagine that our kind of margin profile for this particular project will improve. And also from a strategic point of view, I think we are comfortable in losing those non-core activities because that's not the organization's core competencies and allows my team to focus on what really is important and what really is the organization's core competency, which is around the platform and related services.

Thanks, Sujata. One final one on New South Wales. So is the remaining New South Wales selective test contract still a material contract or no longer 5% of group revenue going forward?

Sorry, Adrian. Can you repeat that question?

So is the remaining New South Wales selective contract still a material contract or no longer 5% of group revenue going forward?

I think it is a material contract. Yes, it's a material contract.

Yes. It remains a material contract, Adrian, as Sujata mentioned. We've just got a clarification on roles and responsibilities, which takes away a little part of that overall revenue. That remains a very important relationship for us, and it is an important project for us and we're really focused on ensuring our partnership with the department continues.

And the revenue continues to be material.

Okay. Thanks, Sujata. This is one of the great recent successes question about the New Zealand MoE contract. So, how transformational is the New Zealand MoE contract and what does success look like financially?

The contract, I think, from a strategic perspective, is quite transformational for our organization, both in terms of revenue and as Dharmendra mentioned, I think there are other revenue, which is not mentioned in the TCV for this particular contract like SOWs and other opportunities as well, right? So from a revenue point of view, it is transformational. It's a top 3. But even putting the revenue aside strategically, it's a really, really transformational project for Janison. A, because as I mentioned earlier, it actually is taking our experience of delivering high-stakes complex exams at stake in Australia to another jurisdiction to another country and delivering that at scale. But also the features that we are developing for New Zealand are going to make our platform even more competitive. So it's also going to be, in many ways, similar to many of the projects we're doing, but in many ways, also different. For example, I think I mentioned earlier that the test we'll be delivering in New Zealand is going to be hybrid. which means that students -- some students might continue taking the test in paper-based format, but everything goes back into our system and then marking can happen, either human marking, of course, but there's also an option for marking through AI as well. So what it does is it actually makes even our platform more competitive, releasing new features and a greater embedding of AI capabilities into our platform.

Thank you, Sujata. I'm not surprised by this next question. I think you used the referenced legacy revenue. So, how much more intended loss of non-core revenue are you still planning to let go?

I think I'm going to hand this to Dharmendra to answer. But I think if I remember correctly, the OECD PISA project and the paper-based, these 2 legacy, they were kind of the last of the 2, but I'm checking with Dharmendra?

Yes. So, those were the ones that were falling off over a couple of years and the DoE was pretty much the last year of the paper-based testing. So aside from that and the additional stuff that Sujata has talked about on the clarification of roles and responsibilities, which will have a bit of an impact of revenue in the near term, there is not a lot of other legacy revenues that's going to impact H2.

Thank you. So, final question. And so it goes back to the pipeline. So, how confident are you in converting the current pipeline and what revenue visibility do you have?

In terms of -- I think we don't -- at this point, it's difficult for us to provide a financial outlook because, as you said, the pipeline moves at different rates, takes typical 12 to 18 months. But what I can say is we are pleased with the pipeline conversion that since I talked to the market in October last year, we've converted over 50% of the pipeline. So, our focus remains on the pipeline conversion, while it's difficult to put an exact number to that. Do you want to add anything to that, Dharmendra?

Yes. I think the nature of our business, Adrian, is like, obviously, there's a lot of procurement practices with the large departments. So we are, at times, contingent and subject to some of those practices as to how fast that moves along as well. But I think as Sujata mentioned, obviously, we would like to be reporting similar conversions every time, but that's not reality. So, there is a 12- to 18-month window as we convert. But I think we've got a really balanced pipeline now. There's no one big opportunity that's sort of contributing to the $26 million. And hence, we are pretty optimistic that we'll continue with the trajectory we've had -- all the successes we've had in conversion.

Thanks, Dharmendra. One has just popped in. I think it's a good one for you to talk to, Dharmendra, because you've spoken a little bit about this. So, cash improved materially in the half. How sustainable is cash generation as the business scales?

Yes. Look, I think our business continues to be quite positive in terms of cash generation. So, we -- as you probably would have seen, we've self-funded most of our investments over the last few years, and we'll continue to sort of expect to do so. So, I think as revenue and as our major contracts stabilize, we are confident that our cash positions will remain strong. I think the only temporary element to that $13 million that we talked about is the unwind. So, that's a working capital unwind. Even if you take that aside, we have remained or we would have been able to still self-sustain most of our expected investments in the short term.

Thanks, Dharmendra. We've exhausted the crowd, Sujata. I'll just make one comment to that anonymous question. More than happy for them to send me their questions, and we'll endeavor to answer them in turn. But Sujata, can I hand back to you to any closing remarks for the group?

Thank you. Thank you, Adrian, and thank you to all our attendees and our shareholders for your time today. And next, we'll come and provide you an update at the end of the year. But in the meantime, if you have any questions, anything, please feel free to drop me an e-mail or Dharmendra or Adrian, very happy to answer. Similarly, I think if you want to ask to come and see you in person, very happy to do that as well. Just want to end saying thank you. Thank you very much for your time, and thank you very much for your support.

Thanks, Sujata. That ends the conference. Cheers.

Thank you. Bye-bye.