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

Good morning, everybody, and welcome to Janison's FY '26 Results Investor Presentation. With us today are the CEO, Sujata Stead, and the CFO, Dharmendra Singh. Sujata is going to kick us off and talk through the results, and then Dharmendra is also going to be talking about the financials, and then Sujata will finish with an outlook. For those that are joining and those who want to ask a question, feel free to as we go through the session, add them and we'll get to all those questions at the end. And hopefully, we can answer them. So Sujata, without any further ado, let me hand over to you to get things underway.

Thank you. Thank you, Adrian, and good morning, everyone. And as Adrian said, my name is Sujata Stead. I'm the CEO of Janison Education Group. And I'm very pleased to be presenting the FY '26 results investor update for Janison today, along with my CFO, Dharmendra Singh. And I'd like to kick off today's presentation by sharing with you at a glance what Janison is all about. And this is a slide that captures, in one single slide, our credentials and track record and the incredible work that Janison is doing in delivering high stakes, high-consequence assessments across the world. We've been doing this for nearly 3 decades right now. And over -- since 2015, we've covered nearly 117 countries where we've delivered assessments. In FY '26, we've delivered over 7 million assessments, and we've covered over 10,000 schools across Australia and New Zealand. We have got recurring -- very strong recurring revenue and sticky customers. So over $31.7 million of our revenue in FY '26 is annual recurring revenue. This is over 66% of our total revenue. And the average tenure of our client is over 5 years. And what we are particularly pleased about is that our customer base is widening and very much delivering on our strategy of taking our track record with NAPLAN in Australia and replicating that outside of New South Wales in Australia and also overseas in New Zealand and the United Kingdom. So we are very pleased not only on the high degree of annual recurring revenue that the business has, but also the widening customer base. In terms of winning globally, of course, when we launched our new strategy about 2 years back, our strategy that we shared with the market was a very clear one, is very much taking our expertise in delivering high stakes, high-volume complex assessments and replicating that experience in track record elsewhere. And the markets that we particularly focus on were Australia, New Zealand and the United Kingdom. And FY '26 is very much demonstrating that strategy in practice and demonstrating that we are delivering and we are winning. And we've ended the year with over $23 million of new contract that we won in FY '26. And of these new contracts, the average tenure is between 3 to 5 years. As we -- of course, as we are continuing to grow and deliver globally, we are also continuing to ensure that we continue innovating. And as far as our AI innovation is concerned and our Jai platform is concerned, we delivered over 100,000 items that were generated through our AI platform with over 90% of acceptance rate. And we also ended the year winning two e-Assessment Global Awards in London, which is a testament of the quality of our AI innovation. And then moving on to the next slide, this is very much demonstrating what our performance FY '26 on the back of those credentials and track record, what did FY '26 in practice look like? Of course, as investors are aware, it has been a demanding year, especially given that we are in the business of delivering high stakes, high-profile programs. And we did encounter some challenges, for example, of day 1 with NAPLAN, where we work very closely with our partners to ensure the issue was resolved within 2 hours and the rest of the test continued. So that's very much demonstrating the philosophy of where -- who we are at Janison that is using technology to deliver the best possible outcome for learners and where problems do arise, making sure that we are working closely with our partners to actually minimize the disruption, always having the best interest of students and learners at heart and ensuring that we continue improving and continue developing. And from that perspective, if you look at how we wrapped up FY '26, of course, FY '26, as I mentioned earlier, was very much our strategy in action. So as a result, we actually took our experience from DoE in New South Wales and NAPLAN kind of nationally in Australia to new contracts outside of New South Wales to Victoria and to Western Australia. And we started the year with a large national contract in New Zealand and also ended the contract by finally delivering on our U.K. strategy of a large national program in U.K. as well. And so that has been very much the focus. The focus has been very much how do we ensure that we continue to build, deliver, transform all simultaneously within our own financial envelopes. So in terms of our revenue growth, we ended the year with 3% revenue growth to about $48.1 million. And however, this does not take into account the readjustment of the New South Wales Department of Education contract, one of our flagship contract, which on the back of the delivery of the inaugural digital delivery of selective exams and opportunity class exams for Department of Education, we renegotiated mutually between us and the Department of Education, where in FY '26, we exited the venue procurement side of the contract. And similarly, we also had some amount of legacy paper-based testing revenue in our P&L in FY '25, which in FY '26 ended as a result of us being successful in ensuring that all the selective high school and opportunity class assessments were delivered digitally. As a result, there was a $3.9 million of variance. And excluding that, the business' underlying growth is about 12%. But what we are really pleased about is that we have very -- we have replaced that revenue, which is not necessarily aligned with the organization's core competency and core focus of platform and related services. So in other words, we are pleased to have [ increased ] revenue but we are also even more pleased that we replaced that revenue with high-quality revenue, which is very aligned to the organization's core strengths and core competencies. Earnings are also down. Operating EBITDA is $2.9 million compared to $3.1 million last financial year. And this is a result of a deliberate investment in onboarding the New Zealand Ministry of Education contract. And that's the single largest international contract that Janison has won in its history, over $21 million of TCV. And FY '26 was a year 1, where we mobilized a high stakes national program at speed and delivered the first round of assessments in record 6 months' time. That, of course, required us to ensure that we are fully onboarding the team and the capabilities required to ensure we can deliver New Zealand safely and successfully while concurrently delivering our commitments in Australia as well. And the EBITDA is a reflection of that. The other good news for us that we are very proud of this year, which is very much is my view on winning. There has been record win for this business. And in FY '26, we converted $21 million of New Zealand contract, but in addition $2 million of other contracts from other states in Australia outside of New South Wales. And I'm very pleased to report that all of this growth, winning, delivery, transformation, innovation, we have delivered while also ensuring that we maintain very strong fiscal discipline. So we ended the year with $11.2 million of cash, completely debt-free and all of our growth and transformation and innovation supported by -- no need for no new capital in the year. So this slide essentially kind of very much covers the high-level kind of demonstration of what the organization has delivered. And the slide that you have in front of you at this point is very much a demonstration of having that capability and capacity to actually be not only winning contracts, but delivering them successfully as well. And what I'm trying to say in this slide is, very much, if we look at NAPLAN, if we look at New South Wales Department of Education selective exams and also the New Zealand SMART National Assessment, these three assessments are some of the largest and most complex national level assessments or state-level assessments that require operating across multiple jurisdictions with complex infrastructure working in all diversity of devices. And we are very, very pleased that in addition to winning new contracts, the organization has demonstrated its capacity and capability by delivering three large contracts at state level and national level concurrently during the same operational window. They were within a period of 3 months, between March and June this year. And when problems did arise, as we experienced with Chartered Accountants Australia and New Zealand exam delivery, and also with NAPLAN day 1 issue, as I mentioned earlier, what the organization also demonstrated is our ability to work closely with our partners in the best interest of students and learners and resolve issues in a very quick manner and continuously learn and improve. And these are some very, very important kind of traits, which are important in our industry given that technology will have challenges from time to time. But we are not in the industry for technology's sake. We are delivering assessments that have positive outcome for learners who are taking our exams and combining our deep technology expertise and our deep assessment expertise to have the best possible outcome for the learners. Again, this slide is very much demonstrating very much that delivery in action. On one side, you have the Ministry of Education New Zealand, what we delivered, onboarding and the first SMART assessment, and FY '27 is going to be the first full year of delivery. But also demonstrating that in addition to New Zealand, we delivered a very significant landmark assessment in Western Australia as well with the online literacy and numeracy assessment. And that test was delivered first round in FY '26, was very, very successful. And FY '27, again, is going to be the first full year of delivery across multiple assessment windows for Western Australia. And of course, as you may have seen our market update, the ASX announcement from Friday last week, we also have closed FY '26 with a landmark U.K. contract, which was signed in this financial year, but it was closed in last financial year, again, which I'm very pleased to share with you. As you know, Janison's strategy has been to take our deep assessment and technology expertise and replicate our success in Australia in other markets as well. And our priority markets have been New Zealand and United Kingdom. I'm very, very pleased that in a matter of about 12 months or just over 12 months, we began the year with New Zealand contracts signing, onboarding in record time and delivering it safely and successfully for the first window of testing. And we've ended the financial year FY '26 by also being selected as a successful provider for Scotland's National Standardized Assessment, which is delivered bilingually in English and Gaelic across numbers, English and [ Gaelic ] reading and writing. And we -- again, what this contract in Scotland also demonstrates is our strategy of partnership paying off. This contract has been won on the back of the main principal contractor for Scotland, which is the National Foundation for Educational Research, NFER. NFER is one of the U.K.'s most established and prestigious assessment and research organization, been around for about 75 years. And we are the principal technology partner for NFER for the delivery of the National Standardized Assessments for Scotland, and the test will be delivered on Janison's Insights platform. And our focus is very much taking the learnings from Australia, taking the learnings from New Zealand and ensuring that we are mobilizing a dedicated team primarily based in the United Kingdom to be able to deliver this high stakes program in a manner that we are geographically close to the customer. This, of course, means that we are investing in year 1 to ensure that we are in a full capability of delivering have the capability, leadership and capacity to deliver Scotland program successfully while also delivering our programs in Australia and New Zealand successfully. And this is what really, really excites us, that the growth and the expansion is enabling us to build that global team required to be able to deliver to our customers in real time in our key markets. And of course, while we've been winning, growing, building and transforming, one of the areas that ensures that Janison remains competitive and continues to be delivering, and meeting and exceeding customer expectation is our spirit of innovation that remains truly alive and active. And in a sector like education technology where technology and AI is playing a critical role in how assessments are delivered or even the debates and discussions happening around technology and AI, it is really important for an organization like Janison to ensure that we continue innovating. And what makes us particularly proud is that our AI platform, which is called Jai, the platform is not only in production at the moment used by multiple range of customers, but we also ended this financial year by winning two global awards at the e-Assessment Awards in London this year in June. And the first award, of course, was for the best use of AI in item development. And the second one was the best use of AI in assessment overall. And this is something that makes us very proud and excited because the e-Assessment Awards in London are global awards where all our competitors from across the world, some very large compared to Janison had also kind of -- were competing with us. But to come out on top to say that our Jai AI platform demonstrates the best use of AI in assessment is a true testament and evidence of the spirit of innovation in Janison even compared to large global providers. And what was, of course, being recognized by the industry also is that the use of AI in education and assessment has to be thoughtful and has to be ethical, has to be with human in the loop with the best possible outcome for learners and for providers. And that's exactly the areas we are focusing. The column on the right-hand side is another exciting piece, which is hybrid assessment delivery. And that's quite exciting as well is because more and more organizations in our target markets are talking about digitization of assessments. But organizations across the world are at different stage of the digitization of assessment journey. And our innovation in this area, which we call hybrid assessment delivery, ensures that as organizations are on that journey of digitizing the assessments and delivering some of the assessments via paper and via -- and some assessments digitally, that our platform allows our customers to come on the journey at their pace and ensure that all paper-based or digital assessments can be all combined through our one single platform. So I think that's what we are very pleased as well, ending the year with a range of innovation that keeps Janison increasingly more competitive in the global marketplace for digital delivery of assessments. And at this point, I'll hand over to our CFO, Dharmendra Singh, to take you over through the financial results before I end our presentation with the strategy and focus for FY '27. Over to you, Dharmendra.

Thank you, Sujata. So I'll take you through the financial section today. I'll start off with Slide 9. So on Slide 9, you'll see a couple of our key metrics. So the thing -- the graph on the left on group revenue is an interesting one because you can see consistent growth year-on-year, started off in FY '22 with the 4 years of data in here, going from $36 million to $48 million in FY '26. What's very pleasing to report on this is also the trajectory that we are leaving FY '26 on. And I think Sujata has touched on some of the significant wins that we've now onboarded, but also the announcement that we did on the 21st of August, which Sujata, again, touched on, which is expanding outside of Australia and New Zealand, and then in Scotland as well. So I think that trajectory is quite strong going out of '26. So really pleased to report on that. From an operating EBITDA and gross profit perspective, you can see from an operating EBITDA perspective, it's hovered around the $3 million to $4 million mark over the last 3 years. It has FY '26 slowed down a little bit. It's gone down to $2.9 million. I'll talk about that a little bit later in the presentation. The slide that -- the graph that I want to highlight is the graph, which is the free cash flow slide. So 2 years in the running, it's positive. But most importantly, I think as Sujata mentioned, there's a number of things that a small company like Janison has done transformation growth and expanding into different markets. It's all done within its financial envelope and the discipline it has maintained. So really pleased to report on that. Moving on to the next slide, which is the group income statement. So I'll talk through some of the consolidated numbers, and then we'll sort of spend some time on the individual segments as well before I wrap up the financial section of the presentation today. So from a revenue perspective, revenue is up 3%. The number that's most important on this slide is the underlying growth of about 4%. And I think Sujata talked about there, and I touched on earlier on as well. That's the back of replacing the lost revenue from venue hire and the selective exams or the paper-based testing, I should say, by high-quality recurring revenue from the likes of New Zealand, which is one of our most significant wins over the last couple of years. And then also highlighting the penetration we have also in Australia as well. So we've now expanded outside of New South Wales, which is our stronghold into WA and into Victoria, into a different sector as well, which is in the vocational educational space. So that resulted in our underlying revenue to grow by 12% overall. From the perspective of gross margin, that was held at the 56% mark. So that reflected a couple of things. So the first is, obviously, as Sujata mentioned, we are in the business of end-to-end delivery, which means that we have a service element. So when we onboard a major clients like what we've done in the current year, it does represent a bit of a mix shift from the platform revenue into the services side of the business, which is still part of the overall end-to-end delivery of platform, but that does mean that it does impact the margins in that transition year. What we've also done, and you can see that in the OpEx line, is a growth of about 5%. We've also invested in the business as well. I think Sujata touched on the high stakes nature of the business that we're in and also the changing appetite. We'll also talk about that a little bit later in the slide on how the market dynamics is changing as well. We have taken this opportunity to scale the business so that it is ready to grow. So we've invested ahead of some of the revenue coming in, but also have shored up some of our governance and scalability to deliver safely to our customers. That obviously has impacted the EBITDA, which has gone slightly backwards from last year, but we are pleased to report on that because that sets us up for success in future years. Below the line, the reported EBITDA and net loss after tax, that's a combination of the non-operating expenses and the amortization profile. Again, most of them are non-cash. And the net loss after tax is halved from the prior period, and that's at the back of the nonrecurring cash write-off that -- or tax write-off, I should say, that we had in FY '25. So I will move on to the next slide. The next slide is a bit of a visual representation of the revenue trajectory that we were talking about earlier on. So you can see starting off FY '26 with an exit run rate of $46.8 million. We have exited venue hire services for the New South Wales Department of Education. And also, as we talked about, the paper-based testing nonrecurring in FY '26, which left us with a normalized base of about $42.9 million. So the most pleasing thing on this slide is the $5.2 million number, and that's at the back of the new logos, as we've talked through, that we have now put in, really proud of that and the effort that the teams put in to be able to win so significantly outside of Australia. And again, that does not include Scotland because Scotland, the win was announced a couple of days ago. So that revenue will start to fall in from '27 onwards. So that resulted in ending the year with $48.1 million, with an underlying growth of 12% and a reported growth of 3%. So moving on to some of the individual segments. I think if I talk about platform, that's the core segment. That's the core of our business. And again, I won't repeat a lot of things that we said earlier, but platform is where most of the loss of that revenue of venue and selective or paper-based testing came from and also the gains from the new logos we put in. So if you look just at the platform division, we have grown on an underlying basis of about 18%. So that's very pleasing to report. And then this division also represents most of the investment we've done on scalability and also reflecting the onboarding we've had to do for New Zealand. As a result of that, the EBITDA went backwards, and it ended up being $1.1 million as compared to the $1.7 million number that we reported last year. I will move on to the other segment, the product segment. So revenue here was up by $400,000. The segment gross profit also improved. And as a result of that, the operating EBITDA was up by $300,000 as well. So this provided a bit of an offset to the platform segment, which is pleasing. But this is what we have expected this segment to do. It has provided consistent revenue for the business, consistent cash generation and consistent improvement in profitability, which has helped offset some of the headwinds we talked about from an investment perspective in the platform segment. I will move on to the next slide. And I think we talked about cash flow, but it's important to sort of highlight in here consistently, we've now generated positive strong operating cash flows, which has allowed us to fund our own investments in our platform, but also in the innovation that Sujata talked about earlier on, particularly in Jai over the last 18-month period. That has -- the key takeaway from this slide is that we've ended up the year at $11.2 million, up about -- by about $600,000 over last year. There's an element of unwind from the advanced payment that we received from one of our major customers, but overall, still a pretty strong cash position to exit out of FY '26. I will talk through the balance sheet quite quickly, a pretty straightforward balance sheet. So a couple of key things that I'll highlight. Cash, we've talked about up from prior year. Intangible decline over the period is reflective of the scheduled amortization that we've had over the years. And then the other key movement is the contract liabilities, which represents the deferred income or the income in advance as we deliver on our client commitments. And that does reflect the advanced payment that has helped our cash balance as well during the year. So overall, the net asset decline is mostly a result of the amortization. What I'll leave the financial section with is that the group remains debt-free. It's got a pretty strong cash balance as we sort of move into FY '27 and look forward to the delivery of the clients that we've put on our books now. So on that note, I'll hand back over to Sujata to take us through the outlook and the strategy slides.

Thank you, Dharmendra. In the last section of our presentation today, I'll focus on the strategy and outlook for the business for -- and what we are focusing on FY '27. But let me begin first with the market dynamics. So being in the industry and being in the middle of helping organizations plan their journey on digitization of assessments, there are some fundamental trends that we are observing at this point. Firstly is, of course, the growing information and growing conversations and dialogue about the whole digitization of assessment at the national level, whether at a state level in kind of countries like Australia or at a national level in other countries as well. So often, what you are finding is that the growth is structural and government-driven. Just to give an example is, for example, in England, the Office of the Qualifications Regulator (sic) [ Office of Qualifications and Examinations Regulation ], Ofqual, they have been announcing and discussing about the progressive digitization of GCSE exams in England starting from 2028 or around that time onwards, right? So this is where Janison has an incredible opportunity and role to play because Australia and the digitization of NAPLAN is one of the first movers in terms of digitization of national assessments and through nearly -- over nearly 10 years of doing that work of delivering NAPLAN online since 2017, we picked up with experience, the things that have worked very well, things that you got to watch out for, as we all know, when delivering high-profile assessments digitally at this scale. So that's where we feel there's a role to play for Janison as organizations and governments are increasingly discussing about the structural move away from paper-based to digital tests. Of course, the speed and pace at which it moves is different in different countries. The second trend that we're observing, of course, is that customers want flexible multi-format assessment platforms that they want to make sure that rather than one single platform offering one single assessment program in one single delivery mode, whether that is paper or digital, increasingly, as organizations are on this digital journey, delivering multiple exams at the same time, the demand is gradually shifting to platforms that support multiyear programs, multiple assessment strategies, including hybrid and digital delivery. And this is exactly what Janison has done in New Zealand, which we are very proud that we've been able to mobilize and deliver in record 6 months, the first round of testing that essentially, I think how do we ensure that through and nationally at a country -- at a national level, we can deliver the test through multiple delivery modes, multiple programs simultaneously and offer customers the flexibility they're increasingly looking for. The third discussion, of course, is the responsible use of AI. And I think -- I know in every industry, there's a huge amount of discussion of AI and whether organizations are net losers or beneficiaries of AI and what is the real role of AI in that industry. And I think in no industry, that discussion is as kind of fraught as in the case of education and assessment, given at the end of the day, all we are trying to do is not AI and technology for its own sake, but doing pretty much what Janison's core competitive advantage and one of our moats are, which is combining our deep assessment experience with our deep technology experience and now overlaid with AI in the best interest of the students. How do we ensure that the three cornerstones of good assessment, which is reliability, integrity and trust, are maintained and enhanced in a world of AI to ensure you have the best possible outcomes for students? We know that discussion is a huge amount of that discussion happening in Australia, including in New South Wales, Victoria and other states and jurisdictions about the role of AI and technology. And that is a discussion that Janison truly welcomes because we believe we have a role to play in how the responsible ethical use of AI can contribute to a better learning outcome for students. And conversely, if not rolled out in the human-in-the-loop model, empowering the educators, the outcome may not be as desired. So I think given that as an organization like Janison, we exist to ensure that every learner has the best opportunity to demonstrate their skills and abilities through the assessment that we provide through our platform, we believe we have a very important role to play in this space, and those conversations are continuing. Similarly, another trend that we're observing in terms of market dynamics is the budget constraint. Of course, a large majority of our customers are government customers and governments, whether in our part of the world, in APAC, or in the United Kingdom are operating in an increasingly budget-constrained environment. So where I think there's a demand for offering, in a budget-constrained manner where the tolerance for risk is also lowering. So as a result, that's where Janison has to ensure that through the innovation that we make, the investment in AI, the investment of capability that we are investing in as an organization, how do we ensure that in that kind of a budget constraint and low-risk tolerance environment, we offer customers the solutions that meets their requirements, but in a way that also is financially sustainable for Janison as well. And that's a journey we are well and truly in the middle of, and that continues. And so those are the kind of at a high level, the key market dynamics we're experiencing, all of them overlaid with AI and technology. And that's where we believe Janison can play a role, is playing a role at the moment, talking to a large number of government agencies and other organizations as well who are in the business of assessment and where Janison can be truly kind of playing a different role in the sense of bringing assessment and technology together and not just providing a platform, as Dharmendra mentioned in the financial section, we provide platform with the services that come with the platform. And that actually generally makes sure that Janison is able to use AI as a true competitive advantage for our business by combining our platform along with the services all overlaid with AI. In terms of our organization strategy, the strategy, we are pretty much true to the strategy that I launched soon after I joined as a CEO about 2 years back. It's very much on the back of what Janison has done over decades in digitization of national assessments like NAPLAN, how do we take that experience, that track record, that credentials and replicate that in other jurisdictions, whether outside of New South Wales or outside of Australia, in New Zealand and the United Kingdom and surrounding markets. It's very much using our experience to help organizations provide the best possible digital experience and be a global leader in this space in the markets of our choice. And how we are doing that, we are doing that by ensuring that we can connect content, that's curriculum, along with assessment and insights through a single intelligent platform, which is AI augmented and built to deliver assessment at scale safely and sustainably. It is not just assessment for the sake of assessment, but pretty much how we ensure that our platform ensures that we translate the curriculum into solid, good, reliable and trustworthy assessments. And through the insights and the reports that we provide, teachers and parents have the information they need to understand how students are performing with trends and opportunities for improvement. And those insights go back into ensuring that education keeps improving and having the best possible outcome for learners and students. So it's very much assessment being a part of that continuous cycle of learning-oriented assessment and improving education outcome for students alone and not just assessment for the sake of assessment. That's the strategy I launched about 2 years back. That's the journey we are on. FY '26 is perhaps the full financial -- first full financial year that this strategy has been delivered, and we are very pleased and very proud that we've been able to demonstrate that strategy is working through the market expansions in New Zealand and United Kingdom, through the innovation awards that we are winning and through the incredible fiscal discipline that we are demonstrating where we are funding this entire transformation growth and innovation through our own operations. In terms of the three areas that we are focusing on in terms of how we deliver on our strategy, again, those three areas haven't changed. The continuation of the three focus areas, which is very much how do we now accelerate our go-to-market strategy, continue building the pipeline and converting the pipeline in a planned manner, ensure that our platform capabilities stay up to date and continue meeting the needs of our customers and remain competitive in the market where we are often competing with large global players who are much bigger than Janison, but we are still able to win when we are competing with these organizations and meet customer requirements. And thirdly, of course, is that now when we create the opportunities, have the platform and the services to meet customer needs, ensuring we are consistently delivering reliability and with resilience at scale. So that's essentially the whole Janison strategy in a nutshell. It's about being the global leaders in digital delivery of assessment. We are in a very strong position to be delivering on the strategy. FY '26 was the first year -- full year and FY '27, we continue the journey, but we increased the pace of how we deliver on the strategy in '27. And of course, that leads me to the pipeline. What does it mean in terms of opportunities? And what you can see in front of you is very much what our pipeline was at the end of FY '26, which is at the end of July '26, where we had a $38 million of pipeline. And of course, as you may remember from my last market update, this included an opportunity of about $14 million, which was the total contract value for an opportunity that we were pursuing overseas. So what FY '26 demonstrates is that many of these opportunities have been converted. So very much, I think that's the key message out here, the strong conversion of the pipeline, including New Zealand and also including the $14 million of Scotland contract, which is now converted, a signed contract, and we are in the process of mobilizing that opportunity. So where we are now as we begin FY '27 is we are beginning with the many conversions happening in FY '26. FY '27, we begin with a pipeline opportunity of about $24 million, and that continues to grow. Just a quick reminder on the pipeline, of course, is that when we share the pipeline here with the market, there is only opportunities at 30% or more probability of conversion. Of course, there are all other opportunities that we are not sharing here because they are very much in an earlier stage of qualifying. So the work on building the pipeline continues. And finally, I would like to end my presentation here with the FY '27 outlook, what our focus is on FY '27, this financial year. Very much, I think one of the things that make us very pleased and confident is that we are beginning FY '27, and the growth on the momentum that we've built is very much underpinned by contracted programs and a full year of NZ MOE with continued investment to deliver reliably at scale. So it will be the first full financial year when we'll be delivering New Zealand, first full financial year when we'll be delivering Western Australia. It's also going to be the first year of mobilizing Scotland. The first 6 months is going to be very much focused on building the team and delivering to ensure that in September 2027, the first round of assessments are ready to be delivered. Also, of course, all of this means that now from FY '27, the investments we are making across the number of programs that we are delivering and building the capabilities across ANZ and in Europe as well that gradually we'll start seeing the operating leverage that we build from all these investments from FY '28 onwards. In terms of margin, of course, platform margin will improve as NZ MOE reaches steady state and which is going to be offset by year 1 of Scotland investment. Innovation continues. Innovation is what gives us the license to operate to ensure that we can harness the true power of AI and technology. And now, of course, the way we are progressing with AI is not just AI in our product, which is our Jai platform, but also AI is being well integrated into our ways of working, whether we are doing prototyping for our customers, whether we are designing our -- the way we do our test scripts for testing or whether how we actually automate workflows. FY '26 actually had a huge amount of test cases in terms of how we use AI, not just in our product for customers, but also for our own internal usage of AI. And we've learned a lot and FY '27 is going to be the year when we ensure our AI platform, Jai, continues to deliver the features that customers need, but also that AI becomes an integral way of our ways of working, thereby improving our efficiency, productivity and quality, but of course, in a human-centric manner to ensure that integrity and trust are never compromised. In terms of funding, Scotland and New Zealand mobilization is funded from our own operations and that fiscal discipline continues. We are also going to, as I mentioned earlier, going to begin this financial year with $24 million of pipeline opportunities in terms of the platform side of our business and continue ensuring that the product side of our business, which is our assessment products like ICAS, AAS, QATs, they continue growing, where I think AI plays a key role in ensuring we continue innovating and growing those products as well. So in summary, FY '27 priority is conversion and safe delivery and turning contracted revenue and a standard delivery model into sustainable earnings and cash generation with operating leverage being built beyond FY '27. So that brings us to the end of our presentation. And I just want to say thank you. Thank you for being here, and thank you for your support and your partnership during the year and I look forward to continuing this conversation, and we have some time right now as well. So very happy to take any questions from participants.

Thanks, Sujata. [Operator Instructions] There have been a few that have come through, Sujata. So let me just start with the first one. And not surprisingly, it starts with Scotland. So congratulations on the Scottish contract win. Following on from this success, are there other U.K. opportunities?

Very good question, Adrian. And indeed, there are. In fact, one of the reasons why when we launched our strategy, we said our target markets, in addition to ANZ, is U.K. is because the United Kingdom is one of the world's largest assessment markets. That is in an earlier stage of digitization than Australia. And however, they're beginning to have those conversations now of digitization of assessments. And that's where we believe that in addition to Scotland, there are other similar opportunities in the other countries like Wales and so on. But also at the same time, the big assessment boards in England where assessment delivery for schools is privatized, delivered by about four or five large assessment organizations. They are on that journey of digitization of assessment. So yes, we believe there -- it's one of the world's biggest markets, a lot of opportunities. And Scotland finally gives us the license to operate because that's what the hardest and most challenging part is when you're delivering in United Kingdom as a small company, Janison, they're always looking at what is your track record in the United Kingdom. And Scotland offers just that opportunity, plus it also gives us a partnership with the NFER, a U.K.-based company who has a huge amount of experience of assessment in the U.K. on the back of that partnership and the back of this track record that we'll be having through Scotland, we will be able to, gradually, over a period of time, access other opportunities in the market.

Thanks, Sujata. Next one. I think a lot of these questions are -- seem to be focused on the international, which is not surprising. But the next one is, can you talk more about the competitive intensity in these global markets?

The competitive intensity is quite intense, I would say, because every time we are competing, whether in Scotland or whether in New Zealand, where the initial list was made transparent to us by the government, though we don't know who the final shortlist was, we are competing with some of the world's largest assessment organizations, whether it's a big multibillion-dollar American corporations or the new generation of new breed of assessment providers coming out of countries like India and Ireland and/or some similar players to us in terms of size and scale as well. So in other words, the competition is very -- it's stiff. But I think -- and that's what actually makes us particularly pleased because we are winning these contracts in a highly competitive tender environment, not just on the back of pricing, which is often a very small part, but on the back of the capabilities that we bring and the track record that we bring and the ability to innovate that we are demonstrating. So one of the areas where I feel particularly pleased is one of the feedback we've received from one of the successful tenders, is that our tender also demonstrates our ability not only to meet the needs of the customers right now, but also demonstrates through our innovation, how we have the potential for being a longer-term partner for these organizations and to innovate their assessments over the years.

Thanks, Sujata. And probably a question for you, Dharmendra. So still on Scotland. Can you give us a sense of the profile of the investment in this first year and the timing of revenues?

Yes. Thank you, Adrian, for that question. Look, the first delivery of the exams under this program would fall in September 2027, which is in FY '28. So the first year will pretty much -- will be focused entirely on mobilization and getting it ready for the platform to be live by 1st of July in FY '28. So the first year profile will be mostly services revenue, but it will move into steady-state real platform licensing revenue beyond -- from 1st of July 2027 because that's going to be the first delivery window. What that really means is that we will be investing quite significantly in the delivery of that. And I think landing a contract of this nature did require us to obviously dislodge a large incumbent. So we are absorbing some of that implementation costs that will fall into FY '27. I will also just add one other thing that Sujata just mentioned on this. This was an interesting tender because we also gave -- we were given pretty detailed feedback. And just so that everyone is aware, pricing was only 25% of the criteria of which -- at the back of which we were selected. So I just thought to add that in.