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

Okay. Let's get things started. Good morning, everyone, and thank you for attending NowVertical's Q3 2024 Results and Business Update Call. For those who cannot make it live, a copy of this call will be available on our nowvertical.com website shortly after we conclude this morning. Today, you will be hearing from NowVertical's CEO, Sandeep Mendiratta; and Interim CFO, Christine Nelson; and myself Andre Garber, our Chief Development Officer. This will be followed by a brief Q&A session. And if you have any questions during today's call, please submit them via the Q&A button at the bottom of the window. I'll note that our presentation contains -- today contains various forward-looking statements and non-IFRS measures, and I would ask that you read the disclaimers contained in this presentation. With respect to the non-IFRS measures, for a reconciliation of these measures, please refer to NowVertical's management's discussion and analysis for the 3 and 9 months ended September 30, 2024, which are available at nowvertical.com/financials and on NowVertical's SEDAR+ profile. Now on to the fun stuff. We cannot be more excited to share these results with you. Over to Sandeep to kick off our business update. Sandeep?

Thanks very much, Andre, and I'm very excited to welcome you all to this Q3 2024 earnings call. I'm happier than usual today. And the reason for that is we have beaten our own expectations on Q3 results. And I'm so proud to be sharing these results with you, along with Christine and Andre on the call. One of the minor detail is, I have been steering the NowVertical ship for exactly 10 months now. I joined as the Chief Exec, for the people who are hearing from me for the first time. I joined as -- I sold my business actually in January 2023 and joined as the Chief Exec of NowVertical in January 2024, exactly a year later. It's exactly 10 months that I have been in this position and what a journey it's been so far. What's more exciting for me is the potential that we can unlock from the business in the future, and that's really motivating for me. With that, I just want to mention, I will be giving you a bit of a refresher here for the investors who already know our story and have heard from us. They are already onboard. And especially for the newest investors who may be joining the call for the very first time, I will give you a bit of a brief on our business, what we do, where do we exist, what kind of clientele do we have, what kind of revenue streams do we have. And then we can get into the financial details for Q3. I will give you some highlights of that and how we are now developing the business and improving the business. And then Christine will take you through some details of the metrics that we have delivered. And towards the end, I will cover some of the business highlights that we have been delivering and working towards during Q3. And in the end, like Andre said, we will have the Q&A session for you to drill deeper into any of the information that we are sharing here. With that in mind, what exactly is the market that we are operating in? And this is the rapidly growing data and AI technology evolution era. We all know that we are way past just the hype of the AI technology, and it's become much more real for many industries, for many businesses on the planet. The challenge here for the businesses is they need to deliver, the CEOs, the C-suite, needs to deliver the return on their investment in the next 3 to 5 years. The challenges, however, it presents to these enterprises, these large businesses is how do they cope with all the growing data volume complexity, which already has been a pain for many of them. On top of that, we have now got the technology -- AI technology evolution, and they have to embrace it and get their head around that. And at the same time, the organizational complexities primarily around the skill sets, the organizational expertise around managing the data and AI technologies and deliver value with that. And what it means is because of these challenges, we have seen either many of the projects are failing or they are delivering underwhelming results. And this is why NowVertical exist in the world. Our mission is to help our clients transform data into tangible business value with artificial intelligence, and we do it fast. And when I made that statement, that statement is backed by numerous data and analytics and AI engagements we have delivered across the globe for our clients, and it's also supported by the deep expertise we have of 500-plus consultants that have got expertise on data and AI technologies. And this is the confidence and this is the promise we bring to our clients based on this expertise and capability. What this equation has translated into is the trust of many global large enterprise businesses, household names in NowVertical. And you see some of these household names, GlaxoSmithKline, Disney, The Economist, Informa, GSK, Adobe, all of these are very well-known enterprise businesses. And many of them are leaders in their own sectors as well. So what's the value that we deliver for our clients that's so valuable and high value for them? For some of the clients, we may be delivering increase in the customer lifetime value. For some of them, we may also be delivering the reduction in the customer churn. We may also be working with some of the clients to modernize their data platform, data landscape and the technology architecture and give them the tools so that they can deliver the right business value, if you like. We are helping some of the clients with the AI and the data science models that are really bringing out some complex and hidden insights which are very difficult to bring out otherwise. We could also be embedding our products into some of these clients that identify the risk of data, the sensitive data that might be existing in their data estate, data that should not be in certain places. We are also delivering 360-degree planning for their overall operations and the business, which is also called as Connected Planning. It brings many complex data sets together and run some very complex models on that so that the C-suite and the business leaders can really rely on the forecasting models. So these are some of the things that we are doing. But at the bottom of that, at the bedrock of it, what we specialize in is the customer data and the finance data. And we know very well how to deliver the use cases and the business value for, say, marketing function, sales function, customer services and finance functions. That's where we really excel with the customer data and finance data, bringing it all together. And we do it in various industries. It could be the financial services. We also work in the media and entertainment world. We work in the technology or the high-tech industry as well. We work with retail and e-commerce client. We have also got some footprint in the public sector, especially in LatAm market. What's also quite interesting is that we have got 250-plus clients. But what's interesting is 100-plus of those clients, they fall in something called as strategic accounts. The strategic accounts for us are the large global, multinational enterprise businesses like the logos you see here. And we get a lot of -- our lifetime value from these -- some of these clients is quite high, even in the tune of $5 million-plus value. And that's a real good asset in our business. I would like to share another interesting insight here, which we have done on our top 30 clients. NowVertical generates 60% of its revenue from these top 30 clients, which is quite fascinating because we don't have that client concentration, which is often the case. We are not getting our revenue only from 2 or 3 clients. It's from 30 different clients. And our average revenue from each one of these clients in the top 30 list is more than $700,000 already. And if you look at our relationship length, it's 6 years plus. Now when you add these 2 data points together of the annual average revenue per client and our tenure and the relationship length, this is really massively valuable asset in the business that can be amplified quite nicely. Just want to give you another insight on how our revenue is structured. And you will see 80% of our revenue comes from our solutions and services, and 20% of it comes from the proprietary NowVertical developed products and by reselling some of the industry standard products or the software. The revenue mix by geography is about 70% of the revenue comes from Latin America and 30% of it comes from North America and EMEA. Just so you know, we are now structured -- we have structured ourselves into just these 2 markets, Latin America and North America and EMEA. Another interesting point to note is 80% of our revenue comes from these strategic accounts that I just talked about, which is really valuable for the business. This is high-value revenue that we are generating in the business. And 65% of these strategic accounts are coming from Latin America and 35% of these are coming from North America and EMEA. So that's just a bit of understanding that I just wanted to give you about how NowVertical is generating value from our clients and in turn, how we are creating longer term value for our shareholders. And it's the longer-term value, which I just wanted to emphasize on based on how this revenue composition looks like and what our relationship with our clients is. When we pressed the reset button on our strategy in January 2024, we communicated these 4 pillars of action in the strategy. This is the integration strategy that is led by organic growth, the sustainability in the business and the profitability in the business. This is the strategy that's now transforming NowVertical into one brand and business. And we are making progress in all of these 4 pillars. I have always believed in -- and this is backed by my experience as well, is that the strategy for the business has to be very contextual and it has to be right at the time. And this is what the strategy, very simple to communicate strategy that we brought in, and it's very practical as well because it's backed by all the data from NowVertical. But what's really critical is it's the execution of the strategy that really defines and measures the success of the strategy. And it defines the magnitude of the success as well. And this is where on the point of execution, you always bring in the team that sits behind the strategy and the execution. And I'm surprised at how quickly the management team not only onboarded this new strategy that we defined for ourselves, but also got their arms around it very quickly to deliver the results so far and making meaningful progress in all of those pillars, which is now reflected in our results as well. All the hard work that we have been doing for the last 3 quarters is now reflecting -- is beginning to reflect in our quarterly results as well. So a big shout out to the management team for their relentless work in the last 3 quarters for delivering these results and standing by and supporting this strategy with all their mind, and for everyone in the team who has been growing in the same direction to make this progress so far in the business. And I just want to let you know that I love you all for being part of this team and making this progress very tangible. So that's our 2024 and onwards strategy. Getting into our Q3 financials, I just want to bring your attention to this one number first on the screen, which is our EBITDA number, and that's USD 2 million already. This is quite a milestone for us, psychologically as well, especially for the team because this is the first time in the year that we have crossed this $2 million EBITDA milestone, which was a far-fetched, very distant dream when we started this strategy. So $2 million EBITDA is what we have been able to achieve. And what it means is really 19% of our EBITDA margin against the revenue that you see on the screen, which is USD 10.7 million for quarter 3. 19% EBITDA margin is already best-in-class in our industry. And I'm so glad we have been able to achieve this and so proud of the team that we have been able to achieve this so quickly and much faster than anticipated, if you like. At the same time, I just want to show you how we are progressing year-over-year and how these metrics are improving year-over-year. So if you look at our revenue growth, it's 9% revenue growth year-over-year. I must mention our focus on the strategy initially was not really on the revenue growth. It was primarily on improving the EBITDA and the operating income. But I'm really fascinated that we have been able to demonstrate growth despite being through so much of transformation and change that's happening in the business. So that's really proud to be of. The operating income, which is one big metric and indicator for us as to what is the health of the business and are we really generating money in the business, we have been able to improve that by 87% already year-over-year as compared to the last quarter. And 26% is our EBITDA improvement so far in the year. And I'll paint some more picture around here, and Christine will take you through that as well. One of the key takeaways, another key takeaway, I would say here is that we have now -- if you look at our revenue and EBITDA for Q3, we have already achieved the annualized run rate revenue of $43 million and the annualized run rate EBITDA of $8 million. That's where we are also very, very pleased with our results and what we have been able to achieve so far. And this is, again, like I said earlier, and I have been repeating myself on this, we are working towards making this sustainable. So it's not just onetime kind of results we are sharing with you. We are working relentlessly towards making this run rate the future results of the future quarters as well. Just one other point I want to make is all of these numbers are excluding the divested businesses like Allegient, Seafront and Affinio. So it's all apples-to-apples comparison, if you like. What I also wanted to bring to the -- to all of our audience here is let's look at the larger picture as well rather than just being focused only on the Q3. And what is that larger picture? If you compare the same period for last year 2023, we did about $3.7 million of EBITDA. Our income from operations, we were incurring losses of about $0.5 million. And our acquisition-related liabilities were really massive, $6.2 million for the next 12 months when we started the year. So that's where we were. Like we stated in January, our integration strategy is all led by organic growth, and it's all led by the sustainability in the business and how we enhance the profitability to drive the shareholder value. And what I wanted to share with you is where we are now as compared to the last year and how does that feel like in terms of the progress. We are very proud of that. And we have been able to achieve $4.6 million of EBITDA so far already in 2024. We did $1.1 million in Q1. We did $1.5 million in Q2, which was again another massive improvement, and we have now been able to achieve $2 million in Q3. All of that has now given us $4.6 million of EBITDA already in the year. Another staggering metric here is the income from operations. Like I said earlier, $1.6 million of positive income from operations. That, to me, is an absolute healthy indicator, which is -- which we are always going to be working towards improving it further. While we are improving these metrics on EBITDA and income from operations, what I'm also pleased to announce is we have been able to reduce our liabilities, especially around the acquisition-related liabilities. And Christine will take you through some more details on what it really means and how we have been able to bring them down. But just talking about what -- where it stood 12 months ago and where it is right now, we also have been able to pay almost $2 million of our acquisition-related liabilities from our operations in this year. Just giving you a snapshot of what it means in terms of our change and improvement, 26% of our year-to-date adjusted EBITDA improvement, which is fantastic. Staggering 439% improvement in our operating income, which I'm very, very pleased with, and 31% of our liabilities reduction. So if you were to take 4 key takeaways from our financial results, I would say one of them is absolutely the 19% EBITDA, which is best-in-class already right now. Our income from operations, which is at $1.6 million already, this is massive change in the business. We have been able to reduce our acquisition liabilities, and we are working on this further every day. And at the same time, the fourth one for us is how we are now improving the run rate revenue, which is at $43 million and $8 million of EBITDA run rate. Just want to give you the level of progress and what we are aiming for right now. So this is where we started. If you are comparing apples-to-apples without all the -- excluding all the divested businesses, we started the year at $32 million or we closed the year 2023 at $32 million revenue and $4 million of EBITDA. That's where we draw in our One Brand, One Business strategy and all the objectives that we had around sustainability and profitability. What we have been able to end our Q3 on is $28.6 million of revenue already, which represents 87% of our '23 financial year; and $4.6 million of our EBITDA, which is already 115% of our '23 EBITDA number. So that's really a massive improvement in the business. What I also wanted to showcase is there is so much of potential in the business, and now we have the clear line of sight of how do we achieve $50 million of our run rate revenue and at the same time, $10 million of our run rate EBITDA, which is going to be 20% of our EBITDA margin. And if I was to come in and say to you all in January '24 that we are going to be doing $50 million of revenue and $10 million of EBITDA, I don't think many people would have believed me. But now that we have already achieved $43 million of our run rate revenue and $8 million of our EBITDA, I think this is a lot more believable story, a lot more believable milestone, and now we have a clear sight of how we go and achieve that. And this is what is really exciting in the business for us. At the same time, I just want to also mention that this is just our first short-term milestone that we are working towards. There is so much of potential to unlock, the growth potential to unlock and the value to unlock from the business. We will be absolutely evolving our strategy and accelerate our growth once we have really got the bedrock of our business solidified on these metrics that we can consistently prove to our investors. With that, I will request Christine to take you through some of the metrics.

Perfect. Thanks, Sandeep. So I'll be running through some of the specific key metrics from our financial statements in our MD&A. And as Sandeep mentioned, these numbers, unless I let you know otherwise, are all excluding our divested businesses of Allegient Defense, Seafront Analytics and Affinio Socials. So with these divested businesses, we're now able to focus on our core market and present to you an apples-to-apples comparison of the business currently and how management is actually actively managing the business on a day-to-day basis. So this gives you a good idea of, okay, what's going to be the business going forward? And obviously, we want to provide you comparable numbers. So I'll just run through the numbers. So quarter-over-quarter, we had $9.8 million of revenue in Q3 2023, increasing by 9% to $10.7 million this quarter. Year-to-date, we went from $26.9 million, up by 6% to [ $28.6 million ]. Now this is a direct result of all the strategies that we have been executing this year, integration, One Brand, One Business, but also really our focus on strategic account growth. We have a high number of enterprise clients, like Sandeep said, and we have been focusing on increasing our own lifetime value within those accounts. So we've been -- our existing team has been focusing on that. And also, we've made a few strategic hires to assist us with this and then also help us increase account growth in the future as well. Now you might notice that if you're looking at the year-over-year of the individual segments on the financial statements, there might be fluctuations up and down. Well, with our integration and our strategy to have One Brand, One Business, we're now really just focusing on things as a whole as much as possible. And because the business is changing, it may be something that was in one business unit, is moving to a different market this year, but really, we're looking at things on a whole. And overall, this revenue growth is something that we're really proud of. So next, I will talk a bit about income from operations and admin expenses. Sandeep did highlight some of these metrics that we're really, really proud of. So income from operations, huge improvement here. Increasing by 439% going from a loss year-to-date last year to a gain of $1.6 million this year. And same for the quarter-over-quarter, going from $0.7 million last in Q3 2023 to $1.3 million this quarter, which is an 87% increase. Now this is great. What this means for the business is increased cash flow, increased profitability. And how do we get here? Well, obviously, this is going to be driven by that increase in revenue, increase in the profits coming from the operations themselves. But another big piece, and I definitely spoke about this previously, is our focus on decreasing our overhead and admin expenses. One of the biggest strategies we had and we started to execute almost day one in January when the new management came in, was our good moving to an operator-first model. And what that means is reducing our corporate overhead anywhere possible and capitalizing on the existing expertise that we already had in the markets and so -- and also looking at the markets themselves and say how can we become more efficient. And this is something we worked very hard on this year and big changes. So year-over-year, just for the quarter alone, I mean, admin costs have decreased by $1 million. That's a big, big number, 21%. So we're really proud of that metric. And also year-over-year, year-to-date, we've decreased by $2 million, which is a [ 13% ] decrease. So really great metrics, these admin expenses that's really helping to drive our operating income. Okay. Next, I will talk about our adjusted EBITDA margin trajectory. So as Sandeep mentioned, we're really proud of the fact that we've reached our highest EBITDA margin that we've had in NowVertical of 19%, and we're on an upward trajectory. What we're really trying to do here is reach a sustainable EBITDA margin, a best-in-class 20% margin, which we're on our way to achieving. I'm just going to drive home some of the points that we are executing and focusing on to get us there, which is that strategic account growth, integrating the business, so increasing cross-sell and upsell growth, reducing our cost base and corporate side of things, also becoming more efficient within the markets, all with the goal of increasing profitability, increasing our EBITDA margin and always providing that best-in-class client value at the same time. So we're just really proud of this and just looking forward to more sustainable quarters. Okay. This where -- next thing I want to talk about our acquisition-related liabilities. This is something we're extremely proud of. One of the big projects that we've taken on in 2024 is that we have renegotiated our -- the SPA agreements and the acquisition agreements from the acquisitions that we have acquired over the past few years. Now when we've acquired these businesses, when it comes along with the purchase price, there is cash on day one, but there's also obligations that you are owing in the future, deferred acquisition liabilities. It could be a year, 2 years. You also have earn-outs. So an earn-out for us is generally based on EBITDA. So if a business unit reaches a certain EBITDA, we have to pay out a portion of that to the prior shareholders. So that results in fluctuating liabilities from year-to-year. If business does really well. The liabilities go up and so forth. So what we've done is we've renegotiated these throughout this year to essentially lock in our liabilities. So we don't have any more earn-outs. All the liabilities now that we've renegotiated are fixed, which is just fantastic from a balance sheet management perspective. We know what they are. They're not going to fluctuate. We can manage our cash flow to them. So really big benefit from the business, from a finance management perspective. Also huge cost savings and huge liability savings. So prior to the renegotiations, our overall liabilities, including kind of what we've forecasted to pay out for earn-outs, was about $13.9 million prior to the renegotiations. After we renegotiated them, we were looking about $8.5 million of liability, including $2 million to be settled in shares. So that meant only $6.5 million in cash. So overall, potential cash savings of about $7.4 million, which is huge for our business. And we're really proud of these negotiations and all the hard work that went into them because this has really allowed us to clean up our balance sheet and also without those fluctuations, is less of a distraction and easier to manage from a cash management perspective. Also something we're very proud of in 2024, of that $8.5 million you see there, we've been able to settle $2 million of the $6.5 million in cash in 2024. And of the 2 million of shares to be settled, we've already settled 1.4 million. So making great progress towards reducing these liabilities. And I'll let Andre speak to you a little bit about the benefit from business operations side of things as well. Thank you.

I mean, Christine, I think you've covered it beautifully so far. So just a couple of points to add. This really took a ton of time for the management team, and I just want to thank all the sellers involved in aligning this to have everybody row in one boat, if you will. This really does successfully pave the pathway to integrating NowVertical as a single business. And essentially what Christine -- in addition to what Christine was mentioning, these earn-outs and these deferred obligations were very much linked to individual performance. And now it's linked to the success of NowVertical as a whole. And that's everybody's first priority now in this business. So it's really paving that pathway. So we are very well set up for today and also positioned well for the future. And again, thanks to everybody involved. And if it wasn't for your commitment to driving this business forward, we wouldn't be where we are today on these restructurings. Over to you, Sandeep.

Thanks, Christine. Thanks, Andre. I can see that relief on Christine's face already for the very first time on these earnings calls. Her balance sheet is becoming cleaner and better. Just going into some business highlights here. What are we doing in the business? What are the exciting things that we are bringing to the market? One of the things we did, and you can see that on our refreshed website, is how we have now consolidated all of our solutions and services from across the business. There were tons of different use cases and services and solutions we were delivering, and it was a massive effort to just bring them all together and identify what are the solutions and services that are really high value. They are current. They are really in demand from our clients and the targets we want to chase. And we have now been able to bring in that catalog of solutions and services together. This is really high value. All of these solutions and services are very high value. What we are now narrowing it down to is what are those solutions that we are now hitting our target audience with and taking to the market. One of them is the data risk mitigation, and it's also got the NOW Privacy, one of our products, embedded into that solution that's already gaining a lot of traction in the market. We are opening up different channels and different kinds of communications with our clients and how we can help our clients reduce the risk on data and at the same time, get them AI ready sooner and faster. The other solution that we have already taken to the market is the partner marketing, which is specifically focused on the high-tech or the technology sector, where massive amount of revenue, a significant portion of the revenue of the technology enterprise companies actually rely and come from the partner channel. And what we are bringing to them is how do you make it more efficient, how do you make sure that you are generating the right value, how you are converting the opportunities and delivering the return on investment on your partner channel relationships. That's a very specific technology-driven -- technology sector-driven solution. You may have seen some webinars. We have press released them. They are all on our website as well. You can have a look. And you will, in the future, see more and more of these solutions coming to the market. What we really want to see is these solutions really becoming more of our floodgates that we can open with our clients and bring in -- generate more high-value revenue from our clients. At the same time, we are also working with some technology vendors, the hyperscalers and some of the other technology vendors. So hyperscalers like Microsoft and Google. Microsoft Azure is a cloud platform we utilize in many of our solutions and services. We have got strong expertise in there already. And what we are looking to do is develop deeper relationship with Microsoft so that we can have some joint campaigns and we can have the mutual benefit of having the client base that we can both serve and bring our value to. Google, we have got a lot of expertise in Latin America, and that relationship already exists there. We have got phenomenal capabilities and expertise there, many certified consultants on Google. And what we will be looking to do is bring that capability to North America and EMEA and see how we can explore that relationship with Google in the other market as well. And our plan is specifically on the 360-degree planning on the Connected Planning solution I mentioned, which is targeted towards the CFOs, but other business leaders as well, who want to look at -- who want to create those models for a forecasting of their business, their budgets, their revenue, and it's got so much of complex data sets. But these are the technology vendors that we are just establishing and exploring that relationship with them, and we just want to make sure that we have mutually agreed vision and beneficial growth plans before we invest a lot more with these technologies. Just on the client updates, we have already secured 94% of our revenue against our 2023 revenue. And this is at the end of Q3. So we have, of course, obviously progressed further than that. So 94% of revenue was already secured. One key metric that I'm absolutely keeping a clear sight of with the management team is our retention of the strategic accounts and the growth within our strategic accounts, as I mentioned, which is one of our key pillars of the strategy. Very glad to announce that 100% of these renewal contracts that were up for renewal in Q3 have been retained with the strategic accounts. And that's a really strong message for ourselves and a strong belief in the capabilities of the team and how they are working with -- in the relationship with our clients. Some of the big wins, I just wanted to highlight. Some of you can ask me more questions in the Q&A session, if you like, around this, but we have added 5 new enterprise clients, which are now part of our strategic accounts within Latin America. We have also won very significant contract with the cybersecurity global enterprise in the technology sector. This is around the marketing analytics in the North American and EMEA market. And we have won a 3-year deal with a utilities business in the U.K. with our products team, which is again now embedded within our solutions. So these are just some of the highlights I want to bring to you as to what we are doing as a business with our clients and how that is translating into value for NowVertical. And this is pretty much the update, and we can kick off the Q&A session.

Thanks, Sandeep. [Operator Instructions] We've got about 6 or 7 open questions here, Sandeep. So I'm going to start at the top, starting with the income statement and top line and work my way to the balance sheet and liabilities and whatnot. The first question is asking about the level of interest that we're seeing in our recently announced solution offerings.

This is -- we are priming ourselves right now. We have gone through a lot of change in identifying what these solutions and services are going to look like. So we are already getting some traction, and I don't want to be over bullish about it right now. I would like to see some more metrics and some repeatability and reusability that we can demonstrate to you before I bring some of these metrics to you. But, for example, there is one of the clients where we have brought in the products and our services together in the health care sector, and we have given them a solution which is a combination of what was just the product division within NowVertical earlier and something that was just being delivered as a solution from another part of the business. We have now brought it all together, and the client has been very pleased. One of the numbers that I could share is we helped them reduce more than $7 million on the data risk, and we could demonstrate that tangibly with data points and the evidence on it. So that is one of the stories that I want to share. Our ability to sell bigger solutions and higher-value solutions has grown. One of the case studies or incidents that I could share with you is in a large media and entertainment client, we have now been able to sell one of the contracts on the financial forecasting modeling in the tune of $750,000. This is again, by bringing various capabilities together from the business. Otherwise, we would not have been able to position ourselves within that high-value contract in just one contract, if you like, because we didn't have enough capabilities in one part of the business. And this particular contract has been actually won against one of the incumbent Big 4s, and we have replaced that incumbent Big 4, which was a big deal, I would say. So these are some of the examples that I just wanted to bring in. There are more, but we are getting traction. We are seeing traction, and our clients are appreciating the combined strength of the business as well in our solutions and services.

Great. Thank you. The next question is asking about CoreBI, and how much of the success that we're seeing there can be attributed to the new global delivery model?

So Argentina, Argentina has already got a very mature delivery model. Argentina has got capabilities on various technologies. They are already serving phenomenal clients, both within Argentina and in the other parts of Latin America. What we are now doing with Argentina is how we can bring those, for example, data engineering services; for example, data science services; for example, our capabilities on the Google Cloud platform? How can we bring it into the growing economies like Brazil and leverage the capabilities of the local team in Brazil to go and sell those? Because we have very good commercial capabilities within Brazil. And this is already -- we are selling our services from Argentina into North America. We are also looking to bring in that delivery capability on specific technologies into the U.K. We are also then bringing those delivery capabilities into the other countries within other regions of Latin America. In terms of the numbers, it's not massive. Like I said, we are just primed the business for all of these integration to happen in true sense and demonstrate into the revenue and the metrics as well. I would say it's already beginning to happen, but it's not so significant that we can start reporting into our numbers.

Thank you. The next question is in a similar vein, asking about, can you dive a little bit deeper into the revenue momentum going forward?

Yes. Like I said on one of the topics, I mentioned that our focus during this transition or the transformation of NowVertical was more on profitability and sustainable profitability. But we will not focus as much on the growth of the revenue. However, we have seen that growth in the revenue as well. What we -- what you will definitely see is our focus now that we have brought in the foundation of the organic growth into the business, you will absolutely see the change in the acceleration on the revenue in the coming quarters. So in 2025, you must see we will be able to demonstrate the revenue growth as well, based on how we are bringing and integrating the business together.

Thank you. Has the integration in LatAm been completed in the second half of the year, as you mentioned back in July?

Very good question, and I'm glad you are tracking my answers down. So the LatAm integration is going really well. We announced the release of A10 sellers and NowVertical from the SPA, which was a very large asset within LatAm that was acquired in 2023. And that has removed a lot of liabilities from the balance sheet. But at the same time, it has opened up the doors for the integration to happen more seamlessly. We have restructured our Chile operations already. We are restructuring how we integrate our solutions and services within the Latin America business. Some of the integration efforts on how -- what services are going to be sold in the different parts of Latin America, that has already been acertain-ed, that's already fixed. We now have to work towards the execution of that strategy. So I would say we are still probably 20%, 25% away from that integration within LatAm. But the true integration -- for me, in my opinion, the true integration is not just how we have integrated and structured ourselves into the market, that's a big step anyways; but how does that then translate into our numbers, which we will be able to demonstrate in 2025.

Next question is a little bit high level. It's asking about the competitive advantages, and do we think that will lead us to grow above the market average? And do we think our margins are sustainable as we achieve those high growth rates?

Good question. And I think there is always the balance that you need to strike between your growth and what's your EBITDA margin. And we are completely mindful of that. The growth always requires a bit of investment, and you want to have the margins being sustainable and something that you can sit behind for longer term. So we are quite mindful of the structure and the balance that we need to carry on our revenue and -- the growth in the revenue and the margins. So one, I would say the margins are absolutely going to be sustainable. We are building that sustainability into our business. We are focused on our margin improvements. We are focused on making those sustainable, and this is what you would see 100% in the future. The growth is definitely going to be on the cards as well. And we will be ensuring when we are investing into that growth that also delivers the right kind of margins for our business. We have primed ourselves. Like I said, there's more work happening. We are going through the planning for 2025 already. A lot of that planning activity has happened already. The management team is coming together very frequently to establish what are the changes we need to bring about on this side of the new year so that we are well positioned to leverage this growth and unlock the value in the business in 2025. So the growth will happen, and we will absolutely keep our eyes on the sustainable margins.

Thank you. The next question is very similar, asking about the scalability of the business and how much operating leverage do we think we will have with sales growth? And could a 20% EBITDA margin be the floor for the next few years?

The reason I took over as the Chief Exec of the business is because of the potential in the growth that I could see. And I'm really glad that I could spot those things early on. And these are the growth drivers. The 4 pillars that I mentioned in the strategy, one of them is the strategic accounts growth. And that strategic accounts growth is there's so much of headroom there. We can just keep growing within our 100-odd strategic accounts. Think about it, our average contract value from the top 30 clients is $700,000. I can share more insights if anybody is interested in that. But if we just look at the 100 strategic accounts, 100-plus strategic accounts that we have in the business, many of them are giving us less than $100,000 in revenue, but they look exactly like a $1 million revenue strategic account for us. How can we work together to make those more than 30 accounts, top 30 accounts that are generating $700,000 and more of revenue for us in a year. And that itself is a massive headroom for growth. And at the same time, we will also be focused on bringing in more and more of these strategic accounts completely in line with the growth in the industry, the growth we are seeing and spotting in the market, and that will then add to the [ pot ] as well. The solutions and services that we have identified, these are all high-value big-ticket items. They provide such a big value for senior stakeholders in the enterprises. The ticket value on each of the contracts is quite high. And this is what we have put together by bringing those key nuggets from every part of the business so that we put in that strength, the combined strength into our solutions and services. So I definitely have a lot of faith and belief in the growth potential of the business going forward, and it's almost unlimited growth potential. I can touch upon how we are embedding products into these solutions as well, and that gives us more profitability, and that gets more traction as well in the market. We are now -- if you look at our revenue size in the U.S., look at our revenue size in the U.K., there's so much headroom just to grow in these markets. Latin America is growing. There are so many emerging markets there. There are so many growth markets, growing economies. You can just keep growing in those markets as well. I'm not even touching on the inorganic growth potential as yet, that adds another step-up in our growth potential. But that will be on the cards. Once we have proven the consistent organic growth and how we are keeping the margin sustainable, the inorganic growth is going to be a no brainer. So that's another level of growth we will bring about. So I would say, unlimited growth potential in the business. We can keep working on this for 10 years, and we will not have a single dull day.

Great. Thank you. The next question actually is a segue from the answer that you just provided, complementing the team and also asking if the focus for the near term is to be heads down and focus on organic growth for the foreseeable future ahead of any potential acquisition activity.

At this point, I'll be very clear to say no potential of any inorganic growth or acquisition as of now because we just need to make sure everybody is focused on bringing the organic growth, bringing the margins and making this business grow sustainably. And there is so much of organic growth we can bring about anyways. The acquisition strategy needs to look very different in the future. We have that on our minds, but it's not for now. It will only distract our focus from the organic growth and the momentum that we have picked up already as a business. So acquisitions will happen, but with a very different strategy. And when the time is right, we will definitely talk about what that acquisition strategy would look like.

Perfect. Thank you. Changing tracks a little bit, we've got a few questions about the earn-outs. And I think you might have already sort of gone over this in your prepared remarks, Christine, but we've got a few questions asking about, could you provide an update and go over the expectation for the earn-out payments in terms of timing and size?

Yes. So through the renegotiation -- renegotiated agreements, we have extinguished our earn-out liabilities. So the earnout, there are no more -- there are not any earn-outs anymore. So there's -- it's...

The next question is similar...

The only thing to add there is that we want -- we have fixed our earn-outs already. So we know exactly how much we are going to be paying. And we have clear sight of what that amount is and timelines may look like for us.

Continuing on that thought, could you also touch on the expected earn-out timelines, which I guess we just answered? And any other near-term strategies to improve your working capital?

Working capital, I think it's the direct -- there's a direct correlation with the income from the operations and whether we will need the working capital. And I say this on pretty much every earnings call, when this new management team came onboard and took the new strategy, I think everybody was quite suspicious that we will have to go and raise funds to just survive. And some people even gave me the reflection that if you don't do that in 2 months' time, this business may not even survive. But here we are in November, and we have survived. Not only survived, we are thriving in the business. So if you look at our working capital needs, it's really very well being served from our operations. That's the work that we have been doing in bringing -- when we are integrating, we are bringing the efficiencies in the business, we are reducing the cost that's not really driving the growth in the business. We have restructured ourselves so that it's more meaningful. And the scale is there and the scale, and the revenue is significant so that you can really drive the growth with the revenue. We have unified our proposition as well so that we can see what are the high-value drivers in that story in our business that will resonate with our clients. So all of that work is happening really in parallel.

There's 2 questions, a similar idea, asking about the probability of receiving the earn-out of $4 million from the sale of Allegient.

Yes. So what exactly is the question, Nick?

What is the probability of receiving that earn-out, I guess, to the best of your ability to answer that question right now? And is there any update we can provide to investors?

Well, it was a very well established, strong business. It was just not an integratable business for us, and it was a lower-margin business. I gave all the reasons about why we sold at Allegient. But it's a robust business model, and it's a good business, established business in a very specific and niche area. So we are really glad to see that the business is progressing further, the business still is doing very well. So if you ask us where we stand today, the probability is 100% is one. We will absolutely get that earn-out. But we will be tracking this as we go. We have got the measures in place to make sure that we are tracking the progress of the business and where the earn-outs are going to fall.

Thank you.

Anything else you would like to add, Andre Garber?

No. You covered the measures, so I'm comfortable there.

I see 2 more questions in the queue pertaining to the share price. So the first one is it seems like the company's share price is on a downward trend. Is there any plan to instate a buyback?

I won't say that that's the case for the last 3 days, I would say. It's -- we have been surprised, but pleasantly surprised and for good reasons, I can see that. The fundamental point when the new management team came in and we started the strategy, of course, I can understand that there was restlessness in our investor community about all of the change that was happening in the business and whether this strategy is going to work, whether this management team is capable enough to make it work and translate that into the numbers. And I think we have seen that downward trend while we were just working on the business. Our key objective was to make sure that we first fix the fundamentals of the business, make the business look good, bring it to the best-in-class metrics, bring -- prime it for the organic growth, do everything that we said in our strategy, and that's what we have been heads down focused on. So stock price, I can totally understand, is a big metric, but we have just not been focused on that. We have been focused on what really are the factors that influence the stock price. So hopefully, and what we are seeing in the last 3 days here is just phenomenal of how the stock price is going -- taking the upwards direction in really massive ways. Again, I'm not distracted by that. I know my management team is not going to be distracted by that. We will keep our focus heads down on the fundamentals, which will then drive the stock price, in our opinion.

Got it. Two more questions pertaining to investors and the stock price. Could you shed some light on the strategy to attract new investors? Will this be more of a focus in 2025?

Yes. I think one of the key things that we did is initially, while we were working on our strategy and bringing about those changes in the business, I do understand that our communication was not up to the standard, up to the mark for our investor community. But we are changing that already. You would have seen some of the press releases in the past on what kind of things we are doing, what are we changing in the business. We are becoming more and more vocal about it. We did a webinar where I brought in my whole management team from the markets as well to give you a view of who are these people, who are these business leaders, how are they turning the business around and whatnot. So I think that the key objective here has been from our overall strategy perspective, just to make sure that the fundamentals of the business are being worked on properly.

Okay. Thank you. We've got one last question in the queue pertaining to the share price again or I guess, the stock rather. Are there any plans to negotiate an extension of the lockup of the shares with [ Darren ]?

I think all I would say on that right now is we are keeping them apprised of what is changing in the business, how well the business is doing. And I think there will be different kind of dialogue that may happen in the future around that. But I believe right now, we do not see that as a concern. He has been supportive of NowVertical's new strategy, and I don't see any problems in that as yet. But yes, in the future, there may be some conversations in that direction.

Thank you. I see no more questions in the queue. So I'll hand it back to you, Sandeep, for any closing remarks.

I just want to thank you all on behalf of the management team here for all the support you have shown towards NowVertical. I know there have been some distressed times. We have been going through a lot of transformation, but I just wanted to assure you that we have got longer-term value for the shareholders on mind. This is how we are creating value in the business. We are working relentlessly to change this business and make it great business and bring about those best-in-class KPIs to share with you all the time. There is so much of growth potential to unlock from the business. All I would say is patience is going to be one of the things and the longer-term view is going to be the way to look at NowVertical. But thanks very much for your support.

Thank you.

Thank you.