NowVertical Group Inc. (NOW) Earnings Call Transcript & Summary

My name is Glen Nelson. And today with me, we have Sandeep Mendiratta, our Chief Executive Officer; Santiago Trogolo, our Executive Vice President of Latin America; Shailesh Mallya, Executive Vice President, Solutions and Services Growth; and Mostafa Hashem, our Executive Vice President of Product and Technology. This call is being broadcast live at 10:00 a.m. Eastern on July 12, 2024, and a replay will be available on our website following the conclusion of the call. Today's webinar we will make statements related to our business that may be considered forward looking. These statements reflect our views only as of today and should not be regarded as representative of our views at any subsequent date. The statements are subject to various risks and uncertainties that could cause actual results to differ materially. Today, figures will be discussed on an IFRS basis and in U.S. dollars, unless otherwise noted. And finally, at times in our remarks and the responses to your questions, we may discuss additional metrics that give greater insights into the dynamics of our business. Please be advised that we may or may not continue to provide this additional detail in the future. Sandeep will be taking questions at the conclusion of the presentation. [Operator Instructions] And with that, let me turn the webinar over to Sandeep.

Thanks very much, Glen, and welcome, everyone, to this webinar. We just thought as we had expressed during the Q1 earnings call, we will be bringing about some updates on the business, how the strategy is shaping up and how we are planning to execute our strategy going forward. This is what we wanted to bring to you all. I do understand there are certain investors who already know the story, and they might be there on the call. They have been following NowVertical story for some time. And I do appreciate there may be some investors who are quite new and maybe looking at the possibility of investing in NowVertical based on the valuations today. So a little bit of a background about me here. 25-plus years in the data and analytics space. I have been part of many large transformation programs for global clients, global brands, have worked with large system integrators, work with the likes of Deloitte, work with many global teams. And then in 2007, almost 16 years ago, started Acrotrend. Ran the business very successfully with a lot of focus on customer data and delivering business benefits to our clients with the right insights and have seen the complete evolution of the data landscape into the cloud world and all the hyperscalers today and moving into the AI technologies now. Sold Acrotrend to NowVertical in January 2023, and as the events change and some of the strategy was changing in January 2024, I became the CEO of NowVertical Group. So exactly 6 months as of today in this position, that's a bit of my background. But I just want to take you through what we have been doing in the last 6 months, first of all, and how we are preparing NowVertical for the future. One of the things that we have done is evolve the strategy completely. So we have gone from our roll-up strategy, acquisition-led strategy to integration-led strategy that is going to be driven by organic growth, sustainability and profitability. So we have changed the way the business is going to run the philosophy around how we are going to run the business completely. Changed the organizational structure as well to align with the new strategy, we have brought all the operators to the forefront, and you will hear from many of the operators today during this webinar. We have also gone through the process of reviewing all of our products and services after the acquisition across the business. And we have spent a lot of time in redefining those products and services completely for our future, and Shailesh is going to take you through what that looks like now for our future and how we are planning to execute on that. Very importantly, we have renegotiated many of the liabilities and earn-outs that were associated with the acquisitions. And these were really important for us to align ourselves towards the growth and the bigger objective of NowVertical coming as one brand, one business in the integration strategy. And doing so, we have also improved the balance sheet of NowVertical for 2024. You may have also seen the news about Allegient Defense sale, which was very strategic move, not only it brought our focus back on what we really do well. At the same time, it really added to our cash balance as well. So some of those things are what we have done. And we believe we are now prepared ourselves to leverage what we have created in the business, what we have got in the business and move towards the organic growth, and this is what has been happening in the last 6 months. What we will also want to do is take you through how we are preparing the business and how we are planning to execute on this strategy in the next 6 to 24 months, while we build NowVertical into a great business that's delivering fantastic value for our clients. What I would like to do is introduce you to my team that's here. We've got Santiago Trogolo, who's the EVP of LATAM. And he was the CEO of one of the assets, CoreBI, that was acquired a little over 2 years ago by NowVertical. So he's been there much longer than some of us in the business already. Shailesh Mallya, he has been also the co-founder of Acrotrend. So Shailesh and I have got a very long history of working together. It goes over 20 years now. And he is the EVP of Solutions and Services Growth primarily focused on North America and EMEA business. And Mostafa Hashem who came from Smartlytics one of the assets coincidentally was acquired on the same day as the company Shailesh and I sold, Acrotrend, last year. And Mostafa and us, we have been collaborating quite closely on many accounts and many initiatives for over 1.5 years now. So you will hear from all of them. One of the key things I would also mention is this is the operating team, and we are also the owners of the business. So our interests are completely aligned with yours. And we want to make sure that NowVertical becomes the business that investors can see making money for everyone and that would be our interest as well. One of the things I just want to mention is we will not go into any of the financial metrics for Q2. Just wait for our earnings call, which we should be ready within the next few weeks. So we will not be taking any of the financial metrics or talking about any of those financial metrics right now. This is primarily about our strategy. This is primarily about our operating model and presenting to you how we are now planning to execute on this strategy. So with that, I just want to give a bit of background on what NowVertical is, where do we operate, first of all. One of the things is the market, what market are we operating in. And this is the market which is fueled by data and AI technologies and the evolution in the technology that's coming along. This is one of the fastest growing trajectories that we are already in, and we are going to experience this growth over the years with the technology evolution that's already in place with AI and data. What that means is all the businesses across the world and the CEOs and the leaders of the businesses, they are under pressure to deliver value by leveraging these technologies, data and AI technologies and deliver that value fast. They have to do this in the next 3 to 5 years to stay in the market so that they are having that competitive edge. However, the challenge lines in coping up with some of the complexities like the growing data and the volume and the complexity of data. The technology on AI is quite new and embracing that technology presents another level of complexity for these businesses, and we work with many of the clients in many industries across the globe, and we see this as a common challenge across many of these enterprises. The magnitude of those problems are different. And at the same time, they've got their organizational challenges, for example, their in-house capabilities, their expertise around technology and how can they really work around these complexities to deliver results. Most of the times, these challenges result in underwhelming ROI and failed projects. And this is backed by some of the market statistics as well, which says of all the AI projects fail. That's what is happening right now. And more than 85% of all these AI projects are stored by these organizational data and AI complexities. So that's a big challenge for these enterprises. And this is exactly where NowVertical comes into play. We help our clients transform data into tangible business value with artificial intelligence, and we do it fast, because we have done it multiple times in multiple areas of the planet and in multiple industries. What this translates -- has translated into for us is a very strong portfolio of over 250-plus clients, many of them, 100-plus of our clients are falling under the category of large global enterprise brands, household names, some of them are listed in front of you here. And it has also given us a very strong revenue stream. And in 2023, we had a revenue stream of USD 51.7 million. All of our clients and these projects are supported by 500-plus data and AI consultants working across the globe. So that's our position in the market and what we have got to work with is like. In this particular strategy, this is something we have shared earlier also, and this is a recap of what are the pillars of our strategy. These are the 4 pillars that we are working towards to create that integrated one brand, one business for ourselves. The #1 is the strategic account growth opportunities. Like I said, we have got 100-plus enterprise-class accounts. And there is phenomenal headroom for us to grow within those accounts. The second one is integrating the business units, and this will not only bring in some efficiencies or the operating efficiencies but also bring in some cost reductions, which is quite critical for us to become an efficient machine. Unifying our global design and strategy so that there is one proposition, one story, one set of or a catalog of solutions and services we can take to our clients. And then driving the stronger proposition mix for greater profitability, which is something once we have created the right foundation, and we are working towards it with our clients and delivering results, we will naturally move towards becoming more and more profitable as a business. This is just an old model, a very quick glimpse on it. This was led by acquisitions, capital raise, capital intensive. We acquired 12 businesses. They all used to operate independently with their clients within their own markets and with their own story. And what we are now -- have now built in the business to create that one brand and one business upon NowVertical is -- on the top, we've got our strategic accounts, that's what we are working with. And we will take you through what kind of strategic accounts we have, how we have analyzed these. We have done a lot of work going across our business in different areas and identifying with a very well-defined criteria, what kind of accounts and clients fall into our strategic accounts going forward for growth. What we have also done is rather than being very isolated, we have now consolidated ourselves into 2 commercial markets, North America and EMEA and LatAm. This gives us really good focus to grow in these 2 different markets. And this is where all of our client base is North America and EMEA and LatAm. What we also know is for our ambitions to grow, we have to have an operational delivery excellence. And what we have identified by working with many of our business leaders is identifying these 2 delivery powerhouses. One is in Argentina and the other one is in India. And just a week ago, I was -- I've spent 2 weeks in Brazil and Argentina business. Santiago was there with me, we traveled together to Sao Paulo and we were there in Buenos Aires. Met with the management teams there understood how the operations are working, did a lot of work and very productive time that was spent with the team, and we collectively came up with this kind of operational delivery ecosystem, which will be driven by Argentina and India and Santiago will take you through some of the benefits of that. The other part, as I said, we have to have a unified solutions and services catalog so that when we talk to our clients in any part of our business, they can see the complete picture of the value we can offer to our clients. And this is the process that we have gone through, which we have reviewed all of our products and services and redefined them completely and Shailesh is going to take you through all the effort, wonderful things that we have done and what is the outcome of this work. What we have also done is completely restructured our products, the software assets that NowVertical had acquired and some of the assets that we have built in-house. And these products, software assets are now completely embedded within our solutions and services. That offers much better value to our clients rather than just selling the software license to our clients. And they deliver the business benefits that our clients really expect out of us. And Mostafa is going to take you through what that product strategy now looks like for us. So this is the operating model that's going to be used for years to come for us. And this is our integration strategy that is going to be fueling our organic growth, fueling our profitability and help us be that one brand, one business going forward. Every strategy, and this is my belief, every strategy needs to have very simple and very clearly defined measurement criteria to understand how the strategy is working and whether it's being successful and how successful the strategy is being. And what we have done is we have identified 2 very simple KPIs for us to measure our strategy on. The first one is the growth within our strategic accounts, that's what we have been saying as our first pillar. We want to grow in these strategic accounts. So we want to measure ourselves on what is the growth we are bringing about in these strategic accounts which will tell us how well we are executing on our strategy and how well we are growing as a business. So that's going to be one of the KPIs that we will have. The other KPI that we are going to have is the cross-sell revenue. If we have now consolidated all of our solutions and services, we need to demonstrate that the integration is working by taking one solution from one part of our business and selling it successfully in the other. Of course, there's going to be some tailoring required, but what we need to prove is we can take one solution and services and sell it to the other and it is in demand across our business within the 2 markets that we mentioned. So that's how we are going to be measuring ourselves, and these are going to be not just our short-term and midterm KPIs, these are going to be our longer-term KPIs that are not only going to be measured for success and growth, but also going to be feeding back into our strategy based on the numbers that we see based on the success that we see and help us evolve our strategy even further. So these are the KPIs that you would see time and again, and I will share some other time another update on how do we see these becoming really long-term strategic KPIs in the business. I will now switch to take you through our North America and EMEA business because I'm still involved in that business. That's where Acrotrend, my previous business was, and this is where we have been operating Acrotrend with the clients. North America and EMEA at the moment is 30% of our overall revenue. You may have already heard about Allegient Defense, one of the assets that we had sold. So after that, some of the proposition of our revenue split has shifted. Now we have got 30% of the revenue coming from North America and EMEA, and we've got 35 identified strategic accounts that we are continuously talking to. We want to take all of our solutions and services to them, and we want to create a much better engagement based on value that we offer to our clients. So that's our North American EMEA business. Where we see ourselves operating there and what we see there is North America and United Kingdom, that's where most of our clientele is. These are the growth markets. There is a massive headroom available for us or if you look at it, our revenues are quite small. But what we have delivered to some of these clients, there is so much of headroom that we can create for ourselves in opportunities and keep growing in this market. There's a very high demand for AI-based solutions and services. These are mature markets. They adopt the technology much faster than some of the other parts of the world, and they understand what does a benefit-driven solution means. And that's why we are seeing there is a very high demand on AI-based solutions and services here. Middle East is an emerging market for us. We are testing the waters. We've seen some really good reciprocation. We've sold some projects there. What we've also finding out is, there is a better alignment for the product-based solutions in Middle East. People do not like the services or just the services-based solution, they appreciate if there is something wrapped around the product, then they latch on to that much faster and respond to it in a much better way in the sales cycle. But these are early days for us, and we will still be in that testing mode in the Middle East market. What we've also done is -- we've already completely aligned our earn-outs in the North America and EMEA market, and we are completely aligned towards the growth of the overall business. At the same time, there is a lot of integration work that has happened and Acrotrend, Smartlytics and Resonant Analytics, these are the 3 assets that were delivering many solutions and services in this market, they have been completely integrated already now. One of the things that we will be working towards as next steps is building the commercial capabilities for growth in this market. As we said, there is -- we've got big ambitions, and we are now structured properly for the organic growth. We just need to make sure that we are delivering on those growth with the right solutions and services catalog that we have identified. With that, I will hand over to Santiago to take you through the LatAm market.

Thanks so much, Sandeep. Thanks, everyone, for being here. I will lead you through LatAm and with operational model. I will just take some minutes. So continuing with what Sandeep mentioned in the case of LatAm, is a different reality so far. LatAm is 70% of the revenue of the proportion of the group revenue so far. We have identified there, and we are working very heavily with 66 strategic accounts, mainly divided in 2 regions that we will show in some -- in a few seconds. So mainly here, we make a different approach. First of all, because of the volume of the operation that we have in LatAm, we are -- we were for different companies that we are working on the -- we're operating in the region. So mainly we make an approach of continued operation -- operating, continue growing, understanding the biggest and the best capabilities of each of the different companies in order to make then one combined capability that will be enabler, not only for the region, but for the whole group. So having said that, in the case of Brazil, we have the largest revenue contributor of the region so far with a very, very strong commercial team, not only internal but with extensive partner network that make us available to grow and grow fast in the commercial part and in the technology part being one of the top [ Qlik ] master resellers of the region. That's in the case of Brazil. In the case of Argentina, it's the second revenue contributor of the area with all the technology and industry capabilities for data and analytics covering all the verticals that we work in data and analytics, with very strong partnership with the major cloud vendors, we are talking about here about GDP, of course, of course, AWS, of course, Microsoft and with more than 400 data analytic experts being this one of the most advantage about the powerhouse that Sandeep mentioned before, and I will drive you through in a few seconds. On the other hand, we have also Chile, Colombia and Mexico with a very good driver client base, opportunities to offer on extending these capabilities and very strategic presence in the key economies taking into account between -- these 5 are the top 5 economies of the region. So this leave us to a very, very good starting point that we can potentiate and we have started potentiating so far. Thinking about the technology partnership expansion, for example, as Sandeep mentioned, we were in Sao Paulo 2 weeks ago, we have a very, very good and productive meeting with Google there. We are partnered so far of Google regarding Argentina, Mexico and Colombia, and Google is very open to expand those -- that partnership in Brazil first and then in other regions, a very, very good productive there with Sandeep, with the local management team of Brazil. So very good news on the future in that part. And regarding the gross -- [ growth ] opportunities, another example, we have a very -- one of our strategic account buyer, one of the main company of the world talking about pharmaceutical biotechnology and agro that it was a local company -- it was a local client of Chile, where we know that there were a lot of and [ unattended ] needs that they have regarding data analytics when we put all the power of LatAm, we were able to deliver them a very specific data strategic consultancy service. And after that, with all the power of the Argentinian team, we can -- we signed 2 projects with them to deliver data architecture services, data engineering services, data visualization services. So that -- converting one strategic local team to -- sorry, a strategic local client to a regional local client, and that being one of an example of what we already done and showing us the potential that we have, not only regionally but globally and one of the things that we are empowering on the half 2 where the focus is the full integration that has already been done on EMEA, taking it here to LatAm. So having said that, we come to the operational delivery. As it was mentioned before, we identified 2 powerhouses, India and Argentina, as the 2 main powerhouses, we have been working very, very strong with Pankaj in -- of the management team in the case of India and what -- which are the 3 main advantages that we find here. One, of course, is that the worldwide globe, we have worked with our clients 24/7 to work with the whole region. India being the best and most common approach for EMEA. And in the case of North America being able to deliver not only by India, but Argentina too, so we can cover the around the clock delivery for all of our clients. And of course, Argentina for LatAm, in this case, not only covering the worldwide, but having us the possibility of -- to scale and to scale very fast, and that being the enabler to grow and to grow very fast. So having said this, of course, we have the second advantage of being leveraged, highly valued markets with very low operating cost and an IRS mitigation for the financial impact. And the third consequence, of course, combining the power of all the companies, center of excellence and cross-pollination of ideas of all the experts that we have around the world, combining them in very specific center of excellence that cover all the data analytics and of course, AI technical capabilities that we need to make this work and to make this growth fast. So having said this, thanks so much again, and I will hand over to -- hand over, sorry, to Shailesh, who is going to drive you with the unified proposition strategy of solutions and services.

Thank you very much, Santi. I'm very excited to talk about our integrated solutions and services. Earlier this year, we started with a very ambitious task to collect over 100-plus use cases across all our markets. This was a rigorous process that we did involving deep dives into specific strategic accounts across the board to understand what resonates most with them. And then through numerous brainstorming sessions that we had with the team, right, and collaborating across all the markets, we then distilled these use cases into a handful of solutions and services. Each selection of the solutions and services was made with a clear focus, a very simple clear focus that Sandeep delved upon earlier, to deliver maximum value to our strategic accounts and ensure applicability to new clients when we go to the market with these solutions and services. And now what do you see on the screen is the solutions that we have delved into. Now these solutions comprehensively cover the entire customer journey. It's from acquisition to engagement to retention, applicable both to B2B and B2C models. So for instance, our customer engagement solution, we actually apply that with The Economist, which is one of the most popular publication brands in the world, that helps them drive the retention rates. Now these solutions ensure that at every touch point, our clients can engage with their customers more effectively, leading to an increase in the customer lifetime value. And these are split into different areas that you see on the screen, there's marketing, finance, there's customer service data. And of course, there's a digital thread that runs throughout these solutions. A pivotal part of our strategy that Sandeep again touched upon and which Mostafa will talk about more is embedding products into our solutions. If you take an example of NOW Privacy, which is one of our key products, we did that with Haleon, which is a global consumer health care company. So we took our solution and then reduced their cost by around 37%. And using this platform, we want to do more and more as we go along. What we want to also look into is how can we ensure that can help organizations that get AI ready, enabling them to operate in a much more secure and safer environment. So this is our solutions. Sandeep, if you can go to the next screen, please. And then these are our services, right? And these services span across the data life cycle. So solutions, as we talked about earlier, span this entire customer life cycle, whereas our services span the entire data life cycle. Right from ensuring when we ingest the data, we have the right architecture. We can modernize that, store that process that analyze them and ensuring that we deliver that full life cycle support to our clients. Now this comprehensive approach, right, allows us to transform what we call as raw data into actionable insights, right, that the businesses can actually use. And we have experience and expertise around all the different technologies that you see on the slide that we want to leverage as we go along. As an example, our data services were used by one of the clients that we had, called Reed Exhibitions. It's a global events exhibition company, and that help them streamline their sales finance operations, resulting in significant cost savings. And one of the important elements that we are doing as you can imagine us, right, embedding AI at the core of our solutions and services that will help us drive efficiency and enhanced decision-making. For example, our AI-driven approach at Palo Alto Networks, which is one of the leading cybersecurity multinationals is enabling them to cross-sell and upsell to their customers' CXOs. And what we are also looking at is, of course, how -- what is the reason, right, of having these solution services is to drive those 2 critical KPIs that Sandeep touched upon. So that's growth in strategic accounts and cross-sell revenue. So by aligning our solutions and services with the specific needs of our strategic accounts, we're going to drive that revenue growth. Simultaneously, the integration across various markets, right, facilitate the effective cross-selling, showcasing our ability to deliver comprehensive solutions and services across different industry verticals. And as I said, again, we want to focus on those technologies that you see on the screen and work with them closer to take that to the market and embed that within our solutions and service. And Sandeep, if you can go to the next slide, thank you. And this is an example of what we talked about earlier on how we really integrate our solutions, right, within our markets in practice? So this is an example of a predictive recommendation solution that has been implemented in LATAM, [ Brooks ] and Liberty, which is a large telecom conglomerate, reducing their subscriber cancellations by 60%. The same solution was tailored to the needs of Informa, which is the world's largest events company for matchmaking, increasing their client meetings by 15%. Now this is how our integrated solutions can be applicable to different industries, to our different markets and tailoring to the needs of the clients that we want to work with, with specific business outcomes. On that note, I would hand it over to Mostafa to talk about our fabulous products. Mostafa, over to you.

Thanks, Shailesh. So the transformation in the product strategy. So where were we and where are we today? So historically, the product function was quite isolated from the rest of the business. And we primarily focused only on the sales of licenses -- stand-alone licenses. And it's quite easy to get excited about building software. But if that software or the features aren't tied into a clear return on investment, it becomes quite problematic. And that's exactly what we wanted to shift away from. So our new strategy is -- #1 is we've completely restructured the product function. The product function when I took over the product group, I described it as a very heavyweight jumbo jet. It's is quite slow. It's not agile, can't maneuver and I said we really need to change this into a fighter jet. Agile, nimble, fast, can do all these maneuvers because that's what we really need. And we've done that through restructuring the teams, making use of our global footprint and our global capabilities and making sure we're a much more agile software development team. We also wanted to move away from just focusing on selling licenses but selling end-to-end solutions. And usually, when you're in a software team, it's quite difficult to do an end-to-end solution because that means you have to also have a service team. But the beauty of one business, one brand is we've got the service team. We don't have to reinvent things. So having that extra capability allowed us to move from selling individual licenses to end-to-end solutions, which delivers more value to our clients and it also improves our customer lifetime value. We've also said we've got great ideas. We've got a lot of ambitions with our software development. But unless it's tied to a clear return on investment, we're not building it. We want to invest, but we also want to make sure that the time and effort we're investing into our products is -- has a clear outcome in terms of an ROI. And then we've narrowed our product focus on 2 key products. One is NowHub, which is a new product that was soft launched last year internally developed, and it's our end-to-end analytics platform. And we've already got several clients using it, and we'll have a proper launch in this quarter. And NOW Privacy, which is our data governance and management platform. And just to give you a bit more sense of these platforms being provided as a solution rather than a stand-alone software. On the next slide, I'll share a couple of examples. So the first example is Blinds 2go. Blinds 2go is a large U.K. retailer operating in 6 countries. They've used NowHub as a software, and they've used our professional services alongside. And using NowHub and our professional services, they've managed to transform their entire data estate. They're now able to have a single source of [ tools ] find actionable insights through visually appealing reports, use Gen AI to query their data in plain text, allowing them to make better strategic decisions. Now the beauty here is, if you get a software on its own, you need to figure out how to make it work. And if you look at the software companies in general, you find they always have partners because they need that delivery. Well, we've got the services side. So we've got the partnership in the services business here. The next example is Helion. So I know Shailesh touched on this briefly. They use NOW Privacy as a software in addition to our professional services provided through Shailesh and his team. This allowed them to reduce the surface of risk through identifying PI data, becoming more proactive with risk management and data remediation. So these are a couple of examples from large corporates that are using our software, plus our services to get this end-to-end solution. I hope this helps. And I'll hand over back to Sandeep.

Thanks very much, everyone. This was a wonderful overview. And I think I just want to switch over just to showcase this operating model that is going to be at the core of our strategy, which has been defined after a lot of work, insights, discussions, brainstorming, all the things that we have done identifying the capabilities, and we believe we have now created the platform that is ready for the organic growth. It's all about executing on this strategy. That's what it's all going to be about. And we want to make sure that we are measuring the success of this strategy properly as well. This also then positions us very nicely once we have proven the organic growth and the stability of this operating model and the success of it, this also positions us very nicely for many other possibilities of growth in the future. And that's what we want to work towards. And that's what -- if you heard from everyone, that's why I wanted to present the whole team to you. This is what we are getting up towards. This is what we are completely aligned on, and this is what we are dedicated towards, and like I said earlier, we are not just the operators, we are the owners in the business as well, and our interests are completely aligned [ to yours ]. So this is what I just wanted to present here, and this is the -- very quickly, the management team. You have heard from most of them, Pankaj was not here as a speaker today, but I'm sure in the future, we will bring in some more updates, and you will hear from Pankaj who is the EVP of Program Delivery and Operations primarily focused on North America and EMEA. You will have, in the past, heard from Christine Nelson, who's our Interim CFO. And you have heard from Andre Garber, who's our Chief Development Officer. That's our management team that I just wanted to present to you. And I will now open it up for the questions.

Perfect. Thank you, Sandeep. [Operator Instructions] All right. So the first question comes from Mark Lacey, what is the company's current client retention percentage, specifically related to larger clients?

Very good question, Mark. I can take this one, Glen. I should have mentioned this actually when I was showcasing all the clients earlier on that slide, a lot of our clients more than -- and we have done the analysis on this, more than 50 of our clients have got a relationship of between 3 to 10 years with us. And that's just a reflection on the value that we offer to our clients and the relationship that has been established with them. And this is across the business. So that retention is really, really high. Of course, in some of the cases, like we said, the strategic accounts, there is a lot of headroom for growth in one of the enterprise clients, we might be doing, say, over $1 million revenue in one year. In another client, which is very similar to this client, we are only doing $100,000 to $150,000 worth of work in a year. And that's primarily because these clients do not have the visibility of what kind of complete end-to-end life cycle on the customer journey that Shailesh mentioned, on the services, data life cycle journey that Shailesh mentioned and what Mostafa showed on the products. They've got no visibility of our complete proposition and that's the reason they are underserved in our opinion.

Great. Our next question comes from Julian Luke. After the sale of Allegient and the integration into one brand, what are your medium-term objectives in terms of gross margin and EBITDA margin?

Yes. Very interesting. If you have learned about that press release and I released one short video as well. The Allegient Defense business always, well, it was a nicely run business. The margins were quite low just because of the nature of the services Allegient offered to be very specific client base within the U.S. government defense space, the margins were very low as compared to rest of our growth. They were somewhere around 7% to 10%, and the possibilities of increasing those margins were quite low as well in that kind of a business just because of the nature of the clients and the nature of the services that were being offered there. What that has done is, actually, it will now because Allegient is not part of NowVertical, you will actually see improvement in the gross margin and the EBITDA of the overall business. And we will be -- when we do the Q2 earnings release, all of these reflections will be there in the future.

Great. And the next question comes from Jesse Black. He said, first, thank you for this update. Very productive 6 months. How do you think about the normalized organic growth rate going forward?

Thanks very much Jesse, for the comment. The organic growth is what we are setting ourselves up well. Like I said, what we would like to do is rather than giving you the percentage right now, what -- like I mentioned, there are the 2 KPIs that we want to measure ourselves on. Organic growth, becoming sustainable, profitable, I've always believed that this kind of a business -- and I saw this opportunity because I saw that potential in the business when I took over as a chief exec. There is so much that you could do with this business and position it for the organic growth properly. And that's what the whole team has done in the last 6 months. So I would not go and talk about what exactly is the rate, but this organic growth is the key foundation of our integration strategy that you would absolutely experience in our numbers.

Great. And the next question comes from [ Russ Pachos ]. 2023 Canadian revenue, about $70 million, give or take, and a market cap in and around that $15 million mark. Why do you think the market has reacted like that?