Kogan.com Ltd (KGN.AX) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining us for the Kogan Group's FY '25 Results Presentation. It's a pleasure to be here with David Shafer, our CFO, COO and Executive Director, to share the results of what has been a strong year for the group, driven by the remarkable growth of Kogan.com. This year, we significantly grew our customer base, scaled our platform businesses, strengthened our core product offering and converted that momentum into stronger cash flow. We welcomed 915,000 additional active customers, bringing the group total to 3.5 million, up 35% year-on-year. This strong customer growth benefited our revenue streams. Platform-based sales revenue increased 24% to over $111 million, and Kogan.com products revenue grew 15% to over $258 million. At the same time, we increased free cash flow by 40% to over $32 million. These are not just key highlights. They demonstrate the power of our business model, efficient, diversified, scalable and resilient in any environment. Now that we've looked at the key highlights for the year, I want to take a moment to step back and remind you of the business model that underpins our performance. At its core, the Kogan Group is underpinned by 2 powerful strategies working together. The first is our product division. Here, we sell a wide range of goods, both exclusive brands and third-party products at incredibly competitive prices. What makes this possible is our direct-to-consumer model, where we source directly from manufacturers, cutting out unnecessary steps in the supply chain and passing those savings on to our customers. The aim is not to maximize margin, but to attract and retain customers by consistently delivering outstanding value. The second is our platform-based sales, where we leverage that customer base through our marketplaces, loyalty programs, verticals and advertising. These businesses are capital-light, scalable and deliver recurring revenue at an attractive margin. So the formula is simple but powerful. Outstanding value draws customers in, customer loyalty keeps them engaged and our platform-based model generates recurring revenue with attractive margins. This approach has underpinned Kogan.com's growth since its early years, evolving over time, but always anchored in delivering outstanding value to customers. It remains the key to our future growth and financial strength. As we reviewed our performance heading into the year, it became clear that the best way to consistently grow our earnings was to grow our customer base. And the best way to do this was through increased investment in marketing. From the second quarter, we deliberately increased our investment, focusing on high-return channels and value-conscious customers. This wasn't just about investing more, it was about spending smarter. By targeting the right audiences and leaning into channels with proven ROI, we strengthened our brand presence, extended our reach and have set the business up for sustained growth. The results speak for themselves. Kogan.com active customers grew by more than 48% year-on-year, climbing to over 2.8 million at the end of FY '25. That's almost 1 million additional customers choosing to buy from Kogan.com in a single year. And this isn't just a short-term uplift. By reinvesting in our core asset, our customer base, we're ensuring that our platform continues to scale, generating recurring revenue at attractive margin streams that drive long-term value. With that, I'll hand over to David, who will take you through the financial results in detail, including revenue performance, cost management and cash flow for the year.

Thank you, Ruslan, and good morning, everyone. It's great to be with you today to walk through the group's FY '25 financial results in more detail. As Ruslan highlighted, this was a strong year overall, underpinned by the performance of Kogan.com. At the same time, we also faced challenges in Mighty Ape, which we'll touch on as we go through the results. Slide 7 shows the group's results split between Kogan.com and Mighty Ape. Kogan.com, the group's primary business unit and the larger of our 2 reporting segments. It operates a Products division, Verticals, Marketplace, the Kogan First loyalty program and an advertising platform operating under well-known brands, including Kogan.com, Dick Smith, Matt Blatt and Brosa. Mighty Ape is headquartered in New Zealand and joined the group in December 2020. Mighty Ape offers a broad range of retail products. And in recent years, we've expanded its offering by rolling out a number of verticals and a marketplace under the brand. When we look at the group's results, the story is clear. Kogan.com was the driver of performance in FY '25. Gross sales at Kogan.com grew 20% to $794 million. Gross profit increased 21% to $156 million, and adjusted EBITDA increased 13% to just under $37 million. By contrast, Mighty Ape fell short of expectations. Gross sales declined 7% to $137 million, with gross profit down 15% to almost $34 million, and adjusted EBITDA was a small loss. These results primarily reflect the impacts resulting from the migration onto the new Kogan platform in October 2024, which caused operational challenges during the most critical sales period and into the second half of FY '25. More on this later. At a group level, gross sales grew 15% to $931 million and gross profit increased 13% to almost $190 million. Adjusted EBITDA was $36.8 million, down 8%. This result was delivered entirely off the back of Kogan.com with the challenges at Mighty Ape clearly weighing on the overall group performance. We will take you through the initiatives to turn around Mighty Ape's performance shortly. When we look at the breakdown of gross profit across the group, what stands out is the strength, quality and diversification of the earnings. Almost 2/3 of gross profit comes from exclusive products and services that can't be directly replicated by our competitors. These include our loyalty programs, our exclusive brands, our verticals and our advertising platform. These are recurring and highly defensible streams that deliver attractive margins. Even in competitive areas like marketplaces, we've built a scale advantage and capital-light model that drives customer choice and growing profitability. What this demonstrates is that gross profit isn't just growing, it's increasingly diversified and resilient, providing a strong foundation for long-term earnings. As you can see from the chart on the left, Mighty Ape's performance in FY '25 was heavily impacted shortly after the platform migration in October 2024. The platform change involved migrating Mighty Ape from its legacy platform onto the next version of the Kogan platform. The transition was designed to enhance PRIMATE loyalty features and enable the launch of a marketplace to broaden the product range and offering. Unfortunately, it created a number of issues, too, which was compounded by the timing of the launch before the peak sales period. We faced site stability problems with regular downtime, feature disruptions like wish lists and click and collect and a breakdown in marketing integrations, which played out through November and December right across the Black Friday, Christmas and Boxing Day sales periods. The result was that some of the inventory purchased for those peak events remained in the warehouse, missing the key sales window, and the business has been forced to discount heavily to clear that stock and reset product range ahead of the FY '26 peak season. The good news is that 3 of the 4 key issues have been resolved. Site stability is largely back on track, key features have been restored and marketing efficiency has rebounded as of late May. The final issue is inventory, which we are now clearing excess stock and optimizing inventory ahead of the FY '26 peak season. We're confident this will be fully resolved by the end of the first half, positioning Mighty Ape for normalized performance from December. This slide shows the outcome of our decision to reinvest in customer growth in FY '25. Marketing is one of our biggest discretionary levers. And this year, we used it deliberately to accelerate growth in our most valuable asset, our customer base and brand. Seeing the financial impact of that decision play out in real time is critical for understanding the group's performance. You can see the shaded bars for our customer base with the red segments highlighting net incremental growth each month. Once we lifted our marketing investment, customer acquisition accelerated immediately and continued through the rest of the year. By June 2025, Kogan.com had 2.8 million active customers. Importantly, this wasn't about chasing volume. Every additional customer strengthens our ecosystem, whether through marketplace, verticals or our loyalty programs. More customers makes us a more attractive partner to sellers and partners, which in turn provides us with a broader and more desirable customer offering. That creates a multiplier effect, more customers, deeper engagement and stronger recurring revenue. Turning to the balance sheet and cash flows. The group is in a solid financial position. We closed FY '25 with $42.1 million in cash and no debt. Importantly, free cash flow increased by 40% year-on-year to $32.4 million, driven by the significant growth across the Kogan.com revenue streams and increased cash flow from the Mighty Ape inventory optimization. On capital management, we returned $11.1 million to shareholders through the ongoing share buyback, and we lifted dividends, paying $0.145 per share during the year. We did recognize a $46.3 million goodwill impairment related to the Mighty Ape acquisition. This is a one-off noncash write-down that does not impact the group's cash generation or ability to fund growth and capital returns going forward. Importantly, we remain confident that Mighty Ape will return to profitability as operational improvements take effect, and we see the write-down as a reflection of short-term performance rather than a change in our long-term belief in the brand or business. Overall, the balance sheet remains strong. We have generally healthy cash flows, and we continue to invest in ways to deliver value to shareholders. If you're looking for all the details of our financial statements, you will find all the details in the annexes. With that, I'll hand back to Ruslan to deliver our business update.

Thanks, David. I'll now take you through our business update, which delves into the many highlights we've achieved in the year. This slide highlights why Kogan.com holds such a unique position in the Australian and New Zealand retail market. Our customers are value-driven and tech savvy. They know how to compare products. They know how to find the best deals, and they care about function and quality over brand names. High status labels don't drive their choices. Real value does. Our customers are not bargain hunters looking for the cheapest option. They're value-conscious consumers who want the best deal without compromising on quality. And this aligns exactly with our purpose, helping customers live their best lives by delivering remarkable value [Audio Gap] by delivering outstanding value across thousands of products. But what's really significant is everything to the right. Our platform-based sales, this includes our marketplaces, verticals, loyalty programs and advertising platform. Together, these now represent almost 60% of the group's gross sales in FY '25. Why is that so important? Because these businesses are capital-light and scalable. They generate recurring revenue streams from our loyal customer base that grow faster and generate more attractive margins than traditional retail alone. So while our products division attracts customers, it's the platform-based sales that really power the long-term value of the group. That combination is what makes our model unique and why we're so well positioned for sustainable growth. Here, you can see the performance of our platform-based sales over the last 3 years. Growth has been consistent and compounding. In FY '25, revenue grew by 24% to $111.9 million. What's exciting is that this trajectory is only just beginning. In FY '24, we launched Mighty Mobile. And in FY '25, we introduced the Mighty Ape marketplace and significantly enhanced the PRIMATE loyalty program. All are in the early stages, but they represent significant opportunities to accelerate growth in the years ahead. So while the past 3 years have delivered strong, consistent growth, we're only just getting started. Kogan Marketplace, where third-party sellers advertise and sell their goods through our platform, delivered a strong rebound in FY '25 with revenue up 34% to $29.4 million. The recovery was driven by 2 factors: increased marketing investment, which accelerated customer acquisition and our continued focus on supporting top-performing sellers. By working closely with our seller base, we've improved product availability, broadened the range and enhanced the overall customer experience. Marketplace is one of our most scalable models, no inventory risk, minimal capital, and it expands naturally as our customer base grows. FY '25 not only marked a return to growth, but also strengthened the foundations for future expansion. This division is set to remain a key contributor to group performance. Kogan FIRST has once again delivered a standout performance. Revenue grew 17.5% year-on-year to $51.3 million. What makes the program so powerful is the loyalty it fosters. Around 90% of subscribers are on annual plans, which speaks to the level of engagement and trust our customers have in the program. These members are not just loyal. They're our most valuable customers. In FY '25, Kogan FIRST subscribers drove close to half of our product gross sales, showing just how central this program has become to the group's success. This year, we also launched Kogan FIRST MAX, a new premium tier of membership designed to give our most loyal customers even more value and benefits. It's still early days, but the enhanced features are already driving deeper engagement and encouraging members to spend more across the Kogan ecosystem. And now let's turn to the Kogan Verticals, which delivered a record year of revenue in FY '25. As you can see, the division grew 14.4% year-on-year to $22.9 million. Importantly, this growth was broad-based across all key verticals. Kogan Mobile grew 7%, continuing to provide great value in a very competitive market. Kogan Money grew strongly at 47%, led by our credit card business. Kogan Internet delivered 10% growth, and Kogan Energy surged 359% as it offered the best utilities pricing for most of the year. The performance of Kogan Verticals demonstrates the power of extending our brand into categories that deliver recurring revenue and high engagement. These businesses not only diversify our earnings, but also deepen customer loyalty, embedding Kogan further into our customers' daily lives. Many of these verticals also integrate with Kogan FIRST with complementary memberships offered to Kogan Energy and Kogan Money Credit Card customers and additional benefits for Kogan Mobile subscribers. Kogan Products delivered a strong result in FY '25, marking a return to revenue growth and the second consecutive year of gross profit growth. Revenue increased more than 15% to $258 million, while gross profit increased nearly 23% to $48 million. We saw gross margin expand by over 1 percentage point, driven by better buying, stronger negotiations with suppliers and disciplined inventory management. More than 72% of revenue is now coming from our exclusive brands, which gives us control over price, quality and margin expansion. We're also seeing strong momentum in higher-value categories such as home and living, appliances and consumer electronics. Our average transaction value is now $159, up 7% year-on-year and nearly double compared to 2 years ago. That demonstrates our customers are not just shopping for low-cost items, but making meaningful higher-value purchases with us. So FY '25 marks a turning point for Kogan Products, and we are confident it will continue to deliver strong and profitable growth from here. This slide brings us back to the strategy I outlined earlier in this presentation. Our dual focus is on driving growth in platform-based sales while bringing the Products division to breakeven. In FY '25, platform-based sales delivered adjusted margins of around 50%, while group product sales were loss-making at roughly negative 4%. Operating costs were allocated between the 2 streams based on directly attributable expenses and management estimates. The group adjusted margin for the year was 7.5%. In the medium term, we aim to increase platform-based sales adjusted margins to 50% to 55% through operational leverage from revenue growth and a relatively fixed cost base and progressively improve the Products division from a negative 4% adjusted margin towards breakeven. That combination has the potential to increase group adjusted margins into the 8% to 12% range. Longer term, we aspire to drive platform-based sales beyond 65% adjusted margins with products at breakeven. Together, that would drive group adjusted margins above 20%. So put simply, keep growing our capital-light platform-based businesses with attractive margins, bring products to breakeven and in doing so, deliver significant financial performance at the group level. Moving on from FY '25, I'm pleased to provide a July trading update. As in the past year, we will not be providing earnings guidance. Our priorities in FY '26 include completing the turnaround of Mighty Ape. The ongoing inventory issues means that trading is expected to be challenging until December with a return to better trading in the latter half of FY '26. We expect to maintain the strong contribution from our platform-based sales. We plan to further optimize our operations and drive operating leverage and continue to drive strong performance of our Kogan Products and Marketplaces. For the month of July, Kogan.com continued its strong performance with gross sales of $70.4 million, up 32% and revenue of $32.7 million, up 11.4%. As flagged throughout, Mighty Ape continues to work through its inventory optimization with gross sales of $10.3 million, down 3.5% and revenue of $8.6 million, down 20.9%. We expect group adjusted margins to be in the range of 6% to 9% for FY '26, progressively improving in the second half as the Mighty Ape recovery is completed. Before I close, I'd like to turn to shareholder returns. The Board has declared a final dividend of $0.07 per share, partially franked. Together with the fully franked interim dividend paid in April, this brings total dividends for FY '25 to $0.14 per share. The final dividend is partially franked due to losses recorded in Kogan Australia driven by the Mighty Ape goodwill impairment. This reduced available franking credits within the group, lowering the franking level that could be applied. That said, the decision to maintain a consistent dividend demonstrates our strong cash generation and solid balance sheet. We remain committed to rewarding our shareholders and the dividend reinvestment plan will again be available with shares issued at a 2.5% discount to the market price. This concludes our presentation. At Kogan.com, we're always finding smarter ways to drive efficiency, and today's presentation is no exception. We've used AI to record our voices for today's presentation, a small example of how we're embedding technology across the business to save time, work smarter and deliver more value for both customers and shareholders. On behalf of the Board and our team, thank you all for your interest in Kogan.com today. We look forward to meeting with many of our shareholders over the coming weeks. For those of you who have any questions or are interested in hearing more, please stay with us for the Q&A.

Thank you, Ruslan and David, for that presentation. A quick reminder that you are -- that research analysts are welcome to ask questions of David and Ruslan through the Q&A function. At the moment, I have questions from 2 analysts. We might start with a question for David from Ed Woodgate.

Can you hear me okay, David?

I can. Thanks, Ed.

Right. Awesome. Well, I appreciate the update and thanks for putting out the medium-term and long-term aspirations. I think that's quite helpful for analysts, particularly given that you are understandably looking to reinvest in revenue, which seems to be like the right strategy. I just wanted to understand, you've put out what the FY '25 platform-based margins were. And within the '26 guidance range of 6% to 9%, is there anything you can talk to about how -- what the platform-based margins would look like? Do you expect them to go down or go up, just noting that you're probably going to be reinvesting a lot of marketing dollars into the business?

Thanks for the question, Ed. So in FY '26, we've, for the first time, released some forward-looking ranges of our blended overall adjusted EBITDA. You'll be aware that we've never done that before. And that obviously is driven by the combination of margin and overall business size between the platform-based part of the business and the product part of the business. We've flagged that we expect margins to improve over FY '26. And the reason for that is that we're starting off the year still working through some of the inventory issues in Mighty Ape. And we're ending the year, we have pretty high confidence that we will have worked through those issues in the lead up to Christmas. So we are expecting a positive performance for Mighty Ape in the second half of the year, which will improve overall blended adjusted EBITDA margins for the group. In terms of the platform-based sales margins themselves, as you'll be aware, gross profit margins are almost 100% on all of our platform-based sales. And the operating costs are fairly split between the businesses based on work. It's really only the marketing lever that influences the adjusted EBITDA margin on a variable basis for platform-based sales. And we believe as Kogan FIRST continues to grow, that we'll be able to get better adjusted EBITDA margins in platform-based sales as we become progressively a bit less reliant on paid marketing.

Okay. Makes sense. And then maybe just as a follow-up, if we think about the trading update, pleasing to see gross sales up strongly for the Kogan.com and the revenue up as well. Would you say -- would you characterize that you're relatively happy with the return on marketing dollars you've had for the start of the year? Is there any sort of trends you can talk to in relation to that?

Yes. So we're very happy with the top line performance of Kogan.com. Obviously, growing gross sales, which is the amount of dollars going through our online cash register, 32% up year-on-year, which would make us one of the fastest-growing retailers in Australia at scale. So that's an incredible top line result for Kogan.com, obviously weighed upon by the performance of Mighty Ape. In terms of marketing levers, it's working. You can see the ROI that we're getting in one of the charts that we provided. Active customers are up to 2.8 million. You'll be aware that that's a reversal from the last couple of years. So we're very confident in that, in the performance of our marketing. And you might be aware that we're also experimenting with a few new marketing channels this year. We used to be almost exclusively a Google-based marketing business. Now we're experimenting a little bit with Meta advertising, which is having some decent ROI as well. So all of that has weighed into the fact that we're growing 32% in gross sales in Australia or in Kogan.com year-on-year, which is a result we're very happy with.

And just maybe last one for me, with Woolworths and Wesfarmers closing Catch and MyDeal, are you seeing any -- is there anything you can point to other than obviously the strong trading numbers that you're taking the share that they had in the market? Is it...

I mean, only one of those 2 names has formally ceased trading. The other one, I think, is still pending. But what I would say is that we're speaking to our sellers. It's no secret that many of our sellers also sell on other marketplace platforms. And as we become one of the largest sellers in the Australian market, we've become increasingly more important as an avenue through which our sellers access millions of consumers. So it has had a big sort of improvement in the working relationship with sellers. We've become progressively more important. We're doing better deals with our sellers, and we're increasingly a more vital channel for them. So it does make a difference in that regard.

Thank you, Ed. We have a question from online. That is one for you, David. It's a question in relation to Mighty Ape and whether or not EBITDA will continue to remain negative in the first half. And tied to that is, will the guidance range of 6% to 9% EBITDA margin apply in the first half of FY '26?

So we do expect Mighty Ape's EBITDA performance to continue to be negative or challenged for the next few months. We are working towards getting through all of those issues in the lead up to Christmas. So we're targeting a reversal potentially by the end of this half and certainly into next half. So yes, we believe the range of 6% to 9% is applicable through the year, but progressively improving over the year. So we would expect the second half to be at the upper end of that range. And while we work through some of these Mighty Ape issues, it will start somewhere south of that.

Okay. And a follow-up question. Has Kogan.com benefited at all from the closure of Catch?

Rus, I'll pass to you on that one.

Yes. Look, Catch and Kogan were 2 very close competitors since that business was founded in 2006, we were founded a few months apart. So there was certainly -- while they had quite different specializations, a big overlap, especially on the Marketplace front and the Marketplace sellers that were both had listed. So there's no doubt that a competitor who you've gone toe to toe with for the better part of 20 years disappearing has a positive impact on the business. And obviously, them disappearing, there's a few others that are about to -- or at least one other major one about to disappear in various other market factors that we're pretty happy with and is a bit of a tailwind.

Okay. Thank you, Rus. We might go to another live question, Owen Humphries.

And confirming that I'm speaking to the real Dave and Rus here.

That is confirmed.

Just on your margin guidance, you said 6% to 9% with medium-term ambitions of 8% to 12% going higher over time. Can you just talk through the lower number through this period? Is that the delta there is around marketing for you guys?

Yes. So the primary driver of the delta as to why we're projecting 6% to 9% this financial year growing into 8% to 12% over the medium term is the fact that we're still weighed down by the performance of Mighty Ape. So Mighty Ape, if you'll recall, did about $8 million of EBITDA in FY '24. That's essentially 0 in FY '25 and obviously starting off FY '26 in a negative way. So if we back out that performance, then we're already at the top end of the range for just Kogan.com. If you exclude Mighty Ape's performance, we're already at the top end of that range. So we're asking for a grace period over the next few months while we work through the Mighty Ape issues and effectively implement all of the learnings that we have from Kogan.com into Mighty Ape. I'm getting some background noise. Is that from you? Someone put it on mute. Owen, can you put it on mute? So essentially, we're working through Mighty Ape issues as we improve EBITDA over the course of the year. Kogan.com is already performing with a strong EBITDA, and we expect Kogan.com to maintain its level of EBITDA or slightly improve over the year.

And just talk through the active customer growth was super strong, like you’ve added 900,000 active customers in the last kind of 8 months. But Kogan FIRST, so that's nearly 50% growth in active customers. Kogan FIRST only grew by, call it, 20%. Just talking through -- I know there was -- historically, there's been a strong correlation between active customer growth and Kogan FIRST members. Is there a disparity between the conversion rates now between those 2 items?

Historically, there were periods when our active customers were actually trending down and Kogan FIRST were trending up. So they're quite different measurements. One is taking how many very, very loyal customers do you have, which is what Kogan FIRST would typically be. And the other one is those that have transacted throughout the year. So you become an active customer if you've done at least one transaction in the last 12 months. Typically, that's an indicator of top-of-funnel activity. So how many customers are you exposing the business to? How many customers are you showing your products to? How many customers are you enticing to start transacting with Kogan. And Kogan FIRST activity often happens once a customer is more familiar with the business and is planning to do a few purchases from Kogan. So it's quite an important part of our strategy and part of the increased marketing expenditure is to win more customers and expose more customers to how the business operates and what value we provide with our products. I'd add also on top of that, the very important thing that we discussed in the presentation today, even though it was my AI discussing it, but I fully back what was discussed being that we've got this wonderful opportunity with the business, whereby because our subscription revenue is so meaningful and growing, our products business can essentially operate at breakeven or even at a small loss, fully costed, meaning that it gives us the opportunity to have unbeatable deals, like you literally take our 55-inch 4K TV that's got all the Google AI smarts and everything and try find an equivalent TV anywhere in the world for anywhere near the Kogan FIRST price, and you won't be able to. And that is enabling us to have a lot of confidence in our ecosystem and increase that marketing spend to bring more people in because as they get exposed to the value that Kogan FIRST customers get, that virtuous cycle can begin.

Yes. Last question for me, and I guess is an important one for an online business. Amazon made the decision to exit Google Performance Marketing in July. It’s one of the primary customer acquisition channels for you, but that was -- we haven't seen any data points on that. Can you just talk us through what you're seeing 1 month post that initiative by Amazon? And are you seeing any changes in your cost per clicks or customer acquisition channels?

Yes. So for those familiar with how Google CPC works, it is a competitive marketplace, meaning that advertisers put in their bids of what they're willing to pay to bring people in for certain clicks or their CPA targets and then Google basically runs in the background maximum EV calculation for them and shows the ads that will generate the maximum expected value. When a huge advertiser or publisher in that space disappears, simple economics dictate that you will see reduced competition, meaning you will see reduced price. And that's exactly what's happened. We've seen a significant drop in CPC. But that's -- so it's a great time to advertise. But look, that said, who knows how permanent, you know that Amazon and Google are going head-to-head in various arenas. Who knows how permanent that change is. So it is a positive change for someone like us. But like you said, it's only happened about a month ago.

[indiscernible] Looking forward to another year of growth. Well done.

Thanks, Owen. There's -- I see that there's a couple of questions that have come through the chat. Dave, will you…

I can. I'm happy to take the first one from Aryan. So thanks for your question, Aryan. The question is, in July '25, gross sales grew by 26%, while revenue grew only 3%. What happened? And for the rest of FY '26, should we assume a similar relationship between revenue and gross sales? So just to recap, gross sales reflects the consumer transactional dollars that come through our business. That means the amount the customer pays in parts of our business like the Kogan Marketplace. That's the full transaction amount and Kogan Mobile, whereas revenue reflects only our take rate or commission. So it's a smaller level, particularly for the Marketplace and Kogan Mobile. The biggest year-on-year difference in July was the launch of the marketplace in Mighty Ape. So a year ago, there was no marketplace in Mighty Ape in July, but there was in July 2025. So that's the biggest driver. All the other parts of the business were existed year-on-year, albeit that Mighty Mobile was much bigger this year than it was last year. So the trajectory of growth of the platform-based sales being higher than revenue. Obviously, revenue went down in Mighty Ape. So that's product-based sales and inventory is driving a sort of wedge in those 2 reporting lines. Second question from Aryan is, do the comments imply Mighty Ape EBITDA will continue to remain negative in the first half of '26? I've sort of answered that in the sense that we are expecting it to be challenging for the next few months, but hoping to reverse that in the lead up to Christmas. Will first half margins still be in line with the 6% to 9% guidance range? That's the third question from Aryan. And the answer is yes. We believe we'll be within that range over the year, progressively improving towards the second half of the year.

David, [ Arie ] has actually raised his hand. I was wondering if we could see if he has any further questions.