Nuix Limited (NXL) Earnings Call Transcript & Summary

Well, good morning, everyone, and welcome to the Annual General Meeting for Nuix Limited. My name is Jeff Bleich, I'm the Chairman of Nuix. It's now 10:30 a.m. in Sydney, and I'm advised that a quorum is present. I declare this meeting open. Now today's meeting is being held as a virtual AGM. We're holding the meeting as a virtual meeting in the interest of the health and the safety of our shareholders and our people. I'm joined virtually by Rod Vawdrey, the Executive Director and CEO; and my fellow nonexecutive directors Jackie Korhonen, Sir Iain Lobban, Rob Mactier, Dan Phillips and Sue Thomas. Our CFO, Chad Barton, is also joining us. And also attending is Scott Walsh, a partner at PricewaterhouseCoopers and the company's auditor, who is available to answer questions on the accounts at the appropriate time. The prepared AGM speeches and presentations for the meeting have been released to the market. Now while it's disappointing that we're not together physically, we do encourage shareholders to participate in the meeting online. You'll be able to participate in real time, submit questions and cast your votes. I'd like to outline the technology and procedural matters for this meeting. As advised in the letter attached to the Notice of Meeting, an online virtual meeting guide which explains how shareholders may participate in the meeting, is on the Investor Centre page of our company's website. If you're participating via the AGM online platform, you'll see a screen showing the presentation slides on the right. And at the bottom of the screen, there are 3 boxes. These allow you to get a voting card, ask a question and download relevant documents. Now thank you to those shareholders who submitted questions prior to the meeting. We'll speak to those when we arrive at the relevant item of business. [Operator Instructions] So to ensure you have enough time to type and submit your question, I encourage you to type this now instead of waiting until later in the meeting. Questions that are relevant to the business of the meeting will be advised to me. We may aggregate questions if we receive multiple questions on the same topic. We'll address each question when we arrive at the relevant item of business. I will now summarize the voting procedure. All items of business will be voted on by poll, which is now open. If you didn't cast your vote prior to the meeting, you may cast a live vote using the online platform. So please click "get a voting card" and follow the prompts. You may cast your live vote at any time during the meeting. Aaron Calder of Link Market Service is the returning officer in this meeting. Live voting on the online platform will close 5 minutes after the close of the meeting. You must be logged into the online platform to cast a live vote. I confirm that where undirected proxies have been given to the Chairman, I will vote in favor of the resolution to the extent permitted. During the meeting, we will display on the presentation slides the number of direct and proxy votes received prior to the meeting on each resolution. The final results will be released to the market as soon as they are available. If you experience any difficulties using the online platform, a help line number is displayed at the top of the page. After my introductory remarks, our Group CEO, Rod Vawdrey, will take you through the 2021 financial year in more detail, including a year-to-date trading update. We'll then proceed with the formal business of the meeting to vote on the resolutions. Thank you again for coming to Nuix' first AGM as a publicly listed company. It's been nearly a full year since Nuix listed on the ASX. And some of the things we all believed then, that the pandemic had peaked or that the U.S. was beginning an orderly transition of power, turned out differently than we'd imagined. I hope you and your loved ones have been healthy and safe through these turbulent times. But looking back, despite a year of unexpected challenges, I'm very proud of the resilience Nuix has demonstrated and what we have achieved. Throughout the year, we've kept our eyes forward and stayed focused on the 3 pillars of our company: our innovative people, our inspiring customers and our extraordinary technology that promise to bring understanding and structure to a digital world. Since its founding 2 decades ago, Nuix has anticipated and adapted to the challenges of finding patterns and meaning in structured, semi-structured and unstructured data at scale and speed. And throughout this time, its purpose has remained constant, finding truth in a digital world. Our core technology, built around the Nuix engine, accomplishes this in a unique and proprietary fashion that enables the world-class solutions that Nuix is famous for. Nuix has earned the commitment of some of the most respected organizations in the world and propel the 1 small Sydney-based company to become a global leader in a vital space. Today, Nuix is the leading provider of investigative analytics and intelligence software with more than 480 staff worldwide, and we're serving over 1,000 customers across 79 countries. Now this past year is only the beginning of our journey. The amount of data in this world will continue to grow at a mind-altering pace and the need to find truth in this data is going to grow ever more urgent. Our software platform is evolving to keep up with the needs of our customers and capitalize on the shift to data in the cloud. Likewise, our company, we need to mature to match these demands. And so our company too is evolving to have the structures in place to become a truly best-in-class publicly listed company. Now we've been candid with you and with ourselves about where we've performed and where we've fallen short. While our FY '21 revenue results did not meet our initial expectations, we faced that disappointment head on and delivered a solid financial performance across statutory revenue; annualized contract value, or ACV; and earnings before interest, tax, depreciation and amortization, EBITDA. We have continued to experience low churn, a strong increase in multiyear deals and a rise in consumption, including SaaS, licenses. We finished this year with a strong balance sheet and net cash of $71 million. Now among the many tests faced in the early part of its life as an ASX-listed company, Nuix encountered varied COVID-19 related impacts on our operations and our customers. And we also experienced an extended transition of government administration in the United States during the November 2020 election and unusual levels of attention. Nuix demonstrated resilience through the volatile pandemic conditions across all of our international markets. Our people worked tirelessly to ensure continuity of our client services. Even in the lowest moments, their passionate commitment and their energy to our customers, our products and our mission were evident across the entire organization. A strong endorsement of the strength and uniqueness of our technology is that our customers have overwhelmingly stuck with us. And this is not out of sentimentality. It's because of the tremendous value our solutions bring to their operations. We're grateful to them and committed to continuously raising our game to carry on delivering the highest standard of technical excellence and support. When we help them achieve their ambitions, everyone benefits. We also recognize that our people are our most important asset. And as an organization, we've concentrated on our valued team members around the globe. One of our efforts this year was ensuring that they have the necessary support and incentives to deliver future success for our business. And Nuix continues to attract great talent, welcoming many dozens of new people last financial year, including a new world-class Chief Financial Officer in Chad Barton. We also added 2 outstanding solutions leads in Abdes Afras and Oliver Harvey, and other deeply talented leaders. And next Monday, December 6, we'll be adding yet another great leader, our exceptional new CEO in Jonathan Rubinzstein. As we look forward to FY '22, Jonathan and our team will continue to work to attract the very best people and to keep investing for growth, particularly in sales and engineering roles. So I'd like to draw some special focus on our efforts to mature our governance this past year. Now as you know, the transition from private to public ownership had disappointments, and we recognize the toll that this took on everyone, including those of us at Nuix, who had higher hopes for the year. But the measure of a company's governance is not whether it has ever experienced surprises or disappointments but whether it confront them honestly, acknowledges any shortcomings and takes actions to improve. The Board and senior management have acted to continue to strengthen our governance structures and we've been listening carefully to our share stakeholders and shareholders so that we take the right measures to achieve their aspirations for us. We understand that confidence is not a right but can only be earned. So we expect it to take time, but we're doing the things required to restore fully the trust and confidence of the market, including all of our valued shareholders. Hiring our new, highly accomplished Head of Investor Relations, Brett Dimon, adding new metrics and materials to our year-end results, expanding the scope of our audited FY 2021 financials, making executives and Board members available to meet with the investor community and increasing the number of directors with distinguished service to ASX-listed companies, all of those reflect our commitment to enhancing our engagement with the market and to meeting your expectations. We've reinforced our systems, and we've done the work necessary to be confident about our future. We stand by our financial accounting and disclosure processes, including those that underpinned the development of our prospectus. We take every concern seriously, and we have structures and people to resolve them. We established an Independent Board Subcommittee in May to examine and address concerns that includes Independent Non-Executive Directors Sir Iain Lobban and Sue Thomas, both of them eminent individuals with outstanding track records in their respective careers and past Board roles. Sir Iain is the former Head of the Government Communications Headquarters, that's the British signals intelligence agency, and a person of impeccable standing who just brings unparalleled industry insights to the Board. As Head of the Audit and Risk Committee, Sue has brought decades of experience applying critical and objective analysis to financial reports and applying the most exacting standards that have been honed during her career as a business leader and as an independent director. She's played a crucial role in overseeing the audit of our FY '21 financial statements, and she's worked tirelessly in recent months to support Chad and all of the finance team. We've seen progress and encouraging momentum from all these efforts. The effort to expand our Board confirmed we drew an exceptional field of candidates, leading to the additions of skillful and experienced Non-Executive Directors Jackie Korhonen and Rob Mactier. They both joined us in October. I'm delighted that Rob has been elevated to the position of Deputy Chair, a new position we created. And Nuix is now a truly global organization with its Board, with members across all 3 continents, reflecting that profile. Having Rob on the ground in Sydney as my deputy will assist in the management of our Board affairs and further strengthen our governance. We've also recently announced that Jackie will take on the Chair of Remuneration and Nominations Committee, in which I know she will provide excellent stewardship of this important function. I give thanks to Dan Phillips who, as outgoing Chair of the RNC, led the CEO and CFO recruitment process in recent months. Dan continues to serve as a valued member of the Board, and he brings passion and just extraordinary knowledge of Nuix to the table. Now you're going to hear more from Jackie and Rob a little later in the meeting. But they and the rest of the Board members and I are engaged in this process of listening to our stakeholders, reexamining and taking actions, and that's not a onetime effort, our actions here reflect our core values. We will continue to engage transparently and in good faith with our key stakeholders, including our regulators. That work remains. There are ASIC investigations that relate directly or indirectly to Nuix, the recent class action concerning the same issues, and an outstanding legal proceeding with a former CEO about his claimed compensation. At this point, we have no further updates on these investigations or the lawsuits. But if or when there are material updates, we will promptly advise the ASX and you. We want our leadership of this company to be known not simply for doing things right but for doing the right thing. Our commitment to you is that we will handle these professionally and responsibly and consistent with our commitment to finding truth. Our CEO, Rod Vawdrey, will be speaking to results this past year on offering insights about the year ahead for Nuix operations. But one area that I'd like to call out is something that doesn't appear on our bottom line, and that's our commitment to helping the people and communities that we serve. Nuix remains committed to promoting the well-being of our team members and contributing to the communities wherever we're. This past year, we've implemented a global well-being program enabling our team members by providing them ready access to resources and enhance their health and their wellness and make them even better colleagues, partners, parents and community members. We offer them access to resources and activities, fitness initiatives and a range of other programs. Our employee social groups have also driven their own agendas and own initiatives in each region to promote wellness. Now in 2020, we formalized The Nuix Foundation to protect and to defend vulnerable groups by donating software and services to agencies and not-for-profit organizations. During FY '21, the foundation supported Freeland and TRAFFIC, enabling those organizations to combat the horror of illegal human trafficking as well as the tragic exploitation of rare and endangered species through wildlife trafficking. The foundation has also supported a range of projects to deliver positive learning outcomes at all levels in digital discovery and forensics as well as building schools, providing literacy materials and sponsoring higher education paths. Looking ahead at our business itself, we're already at hard at work of writing the next chapter of the Nuix story. Part of this chapter involves a new CEO to steer the company towards its full potential. Thanks to Rod Vawdrey's willingness to announce his retirement plan so early, we're able to conduct a broad, global search and effective CEO transition. And we're delighted that we've been able to identify and select an outstanding successor before this meeting. What is more, we announced that Jonathan will take the reins as the new CEO of Nuix starting next week, earlier than our initial expectations of late January. And Jonathan can do that because of the smooth and seamless transition that he and Rob worked through together. Jon is a seasoned technology executive with a track record of leading dynamic organizations in international environments, a very deep understanding of our requirements and opportunities and a successful record of steering an ASX-listed entity through a period of transformation and growth. Our Board was especially impressed with Jonathan's strategic thinking, his global viewpoint, his tremendous energy, his commitment to culture and his devotion to Nuix' organizational mission. Now Jonathan is not on the call today. But we agreed that it would be a nice opportunity for him to say a few words to the shareholders of Nuix, which we prerecorded. So he looks forward to meeting all of our stakeholders in person once he officially begins next week.

Thank you, Jeff, and good morning, everyone. I'm extremely excited to be joining Nuix at such a pivotal time. There are a few Australian-born technology companies that have achieved the kind of global leadership that Nuix has in its target markets. Looking beyond the recent challenges, the potential and promise of the business remains enormous. Having now met many of the team, it is clear that the people of Nuix are world-class and passionate about what they do. I'm committed to strengthening what they have built and providing them the space to thrive as professionals and help fulfill our mission of finding truth in the digital world. I've come from another global ASX-listed business where 95% of revenue is recurring and more than 80% of revenue is generated outside of Australia. Working with our team, we drove a significant enterprise transformation, reinvigorated the culture, built out a world-leading SaaS platform and implemented a partnership sales strategy. The significant improvement in share price was built out of happy and strategic customer relationships and an agile and high-performing team. I can see the potential of Nuix' business remains enormous, and I can't wait to get started. Thank you, Jeff, for giving me the opportunity to speak today, and I look forward to communicating with the investor community in my upcoming role as CEO. Thank you.

So thank you, Jonathan. As you can see, we found someone just as passionate as we are about Nuix. Now we truly believe that Nuix is better positioned than ever to succeed over the long term. Our technology remains best in class. Our customers have shown that they understand the unique value that we're able to provide, and we strengthened our team and matured our structure to capture the significant market opportunity ahead of us. Once again, I'd like to thank all Nuix team members for their commitment and their resilience this past year. And I'm grateful to you, our shareholders, for your ongoing confidence and support. Finally, I'd like to take this opportunity to thank Rod Vawdrey. Today is his swan song as CEO of Nuix, and he leaves us with a record of achievement and a passion for Nuix that made it possible for Nuix to be the world-leading company that it is today. Rod has been the CEO for the past 5 years, and he enabled the company to list on the ASX to accelerate its growth potential. I'm grateful for his service. Right up to this point, Rod has been working to lay the groundwork for future success, helping transition Jonathan to his new role and ensuring the leadership team is in good stead. Rod, you've shown tremendous drive and passion for Nuix and its people, and we thank you for all you've done to grow and strengthen the business. And with that, I'd like to turn it over to Rod to give a CEO address to shareholders.

Thank you, Jeff, and good morning, everyone. Three key pillars underpin the strength of the Nuix offering: our technology, our customer base and our people. Nuix is truly a global business with more than 1,000 customers across the globe, generating nearly 90% of our revenue outside Australia. We have strong relationships with our loyal and well-diversified customer base, many who have been with us 10 years plus. Our technology is best in class, supported by a talented and highly driven pool of people. The global pandemic has presented a unique challenge for everyone. During the financial year, most of our staff worked from home, and we saw enormous resilience and flexibility from our people. Our marketing events, customer engagement and training shifted to virtual settings, as our people pivoted to interact with our client base in the most appropriate ways given those circumstances. I'd like to take this opportunity to sincerely thank the Nuix team for the way they've responded to these challenges and for the way our customers have responded with a continued commitment to the Nuix offering. Our first year as a listed entity presented a range of challenges to Nuix. We were not able to meet all of our original prospectus forecasts. And as Jeff mentioned, we acknowledge the impact this has had on our stakeholders. I'll briefly revisit our financial results for fiscal year '21 now, which highlighted the recurring nature of our revenue and sticky customer base. Statutory revenue came in at $176 million, 0.1% up on the previous year and up 7.4% on a constant currency basis. Annualized contract value was $165.6 million as at the 30th of June, down 1.7% on the same time last year but again up 4.1% on a constant currency basis. Pro forma EBITDA rose to $67 million, up 20.9% on the prior year and up 31.9% on a constant currency basis. Our relationships with our customers remain very strong highlighted by our low churn figure and increase in subscription revenue. Customer relationships are an important area of strength for Nuix, as I've said, Nuix is trusted and valued by organizations all around the world. We work closely with customers to make sure their complex needs are met in a sophisticated and trusted way. During the course of the year, Nuix faced several headwinds in addition to the pandemic. In particular, foreign exchange movements weighed on some of our metrics as did the shift to consumption licenses. This latter issue, the shift to consumption-based licenses, is a trend that does present some near-term headwinds but benefits Nuix in the medium to longer term as we become more aligned with the exponential growth in data volumes and how our customers are choosing to consume our software. Nuix made important progress on a number of key initiatives during this last financial year. In Australia, we had important wins with government agencies and law firms. We also signed 2 very important Discover Software as a Service deals with Tier 1 global law firms in the United States as well as important multiyear contracts with major advisory firms in EMEA. In Germany, we welcomed 27 new SaaS customers, and new employees were also onboarded for our expansion into Southern Europe. While this was happening, we continued to drive our research and development program. During FY '21, our R&D team developed important connectors into market-leading business and productivity applications as well as the ability to quickly review chat messages in Discover and Investigate. We were able to open up new markets with localized versions of Discover and Investigate as well as develop support for additional mobile forensic platforms. In addition, we made important progress on our FedRAMP and iRAP accreditations in Australia and the U.S., which are key initiatives for the organization. These accreditations will open up new opportunities for our business across both government and corporate sectors. We're now several months into the new financial year and in a position to provide some commentary on trading for the 4 months to the end of October. I'll first provide an overview, followed by some more specific detail. We have seen a lift in revenue compared to the same time last year driven mainly by multiyear deals, although it's worth noting that Nuix' revenue profile does fluctuate, and this revenue growth is not necessarily predictive of growth over the remainder of the year. Our annualized contract value is flat compared to the F '21 result. As flagged at the fiscal year '21 results, Nuix is investing in, and accelerating, our product development pipeline, including Engine as a Service. In addition, we are building and enhancing our sales and distribution capability as planned. The labor market, particularly for engineers, remains very tight, and this has contributed to a lift in our employee retention and recruitment costs. We've also experienced a large increase in nonoperational legal costs. All of these factors have contributed to a material increase in our cost base in the financial year-to-date. Accordingly, pro forma EBITDA is down on the prior corresponding period as a result of the large and ongoing increase in our cost base. As an organization, Nuix is investing for growth, with the benefits of this increased level of investment to flow in future periods. Getting into the detail a little more, statutory revenue for the 4 months ending October was up circa 10% on the same period last year in both reported and constant currency. This increase has been driven by the re-signing of a major advisory contract on a multiyear consumption license, along with other significant multiyear deals with existing customers. In addition, this period also saw the benefit of some deals, which had slipped from the prior year, being signed in this pay period. Offsetting this, unfortunately, new customer revenue is currently tracking 40% lower than the same time last year. But as I touched on earlier, Nuix' revenue profile is variable over the course of the fiscal year, with December and June being particularly critical for contract signing. So this level of growth early in the financial year is not necessarily predictive of the remainder of the year. As we discussed at the fiscal year '21 result, Nuix is leaning forward to invest in further sales, distribution and development capabilities given the medium-term opportunities available to us. In addition, we're continuing our work on migration of the core engine to a Software-as-a-Service offering and other development work to support that. Given this investment, pro forma EBITDA for the 4 months ending October is down 27% in both reported and constant currency compared to the same period last year. As mentioned, we have seen a material increase in our legal costs of about $4 million, in fact, year-to-date. These costs will reduce over time but are ongoing while investigation and claims are underway. Annualized contract value, or ACV, is a measure we use to consider the run rate of our business and is particularly useful in that it strips out the sometimes volatile impacts of multiyear deals on revenue. Our ACV is tracking in line with the run rate we reported at the FY '21 results in both the reported and constant currency. Subscription ACV, which is a subset of the total ACV is also tracking in line with the fiscal year '21 results, highlighting the recurring nature of the majority of Nuix' revenue streams we've mentioned before the transition occurring to consumption-based licenses. Our consumption ACV has, in fact, grown in excess of 20% since the full year result, again, partly due to the big contract change that I already mentioned. Churn remains low and is in line with our very low rate at the full year result to now sit at 3.6%. Net dollar retention has improved since the result at 97.5% in reported currency and, importantly, 102.6% in constant currency. Nuix' balance sheet remains robust with net cash of $57 million as at 22nd November. The reduction since the FY '21 result incorporates the approximately $7 million initial investment in Topos Labs as well as the overall increased investment in the business. In September, we announced the acquisition of Topos, a developer of natural language processing software, based in Boston. The Topos artificial intelligence platform is designed to reduce the workload on data reviewers and analysts by surfacing relevant or risky content much faster. It also has the potential to offer user-friendly dashboards and the ability for more customizable solutions to be developed. With financial close now well behind us, integration processes are underway with the Topos team, which is now referred to in Nuix as the natural language processing team. We have finalized the terms for a proof-of-concept, in fact, trial with a global public sector contractor. And a broader proof-of-concept program is now being finalized to support early interest from customers wanting to be part of the early adopter program. And we continue to hire to build out our NLP capability, including hiring to support the Spanish language capability translation. Our product, solutions and engineering teams continue to focus on innovation within and extending our portfolio to address the increasing file types and use cases that set Nuix apart from its competitors. We've spoken about the passion and drive of the Nuix team multiple times. As an organization, Nuix is driven by a sense of purpose: bringing structure from chaos and contributing to the greater good of society. It's this mission that moves us forward as an organization and is critical to the reason why so many quality people are drawn to Nuix: finding truth in a digital world. In June, I announced my intention to retire from Nuix. And I have to say it's been an enormous privilege to lead Nuix over the past 6 years plus and to be part of Nuix' transition to a truly global company. During my time, Nuix has almost doubled the team and introduced world-class enterprise selling, support and engineering talent. We have more than doubled average transaction values while attracting unmatched customer base of the world's leading government and enterprise clients. I sincerely believe we have one of the most passionate customer focused and talented teams in the global software space helping our customers solve many of the most complex and difficult investigative challenges in the world. Our team constantly goes beyond to help save lives, catch bad guys and improve the security and safety of our customers and their customers. It has been a privilege working with the Nuix team and I want to acknowledge and thank our extraordinary team for the amazing efforts that they go to every day. There have been some challenges over the last year, and the Nuix team has consistently risen to meet those challenges. I will leave Nuix in the next few weeks confidently knowing the business and our customers are in safe hands. And I believe genuinely that Jonathan Rubinsztein is the right leader to take Nuix to even greater heights. I look forward to watching Nuix' progress, and I wish the organization every success for the future. Thank you.

Innovation is one of our key values here at Nuix. From the very beginning, we've always worked closely with our customers to help solve their most difficult business problems. And there's nothing I find more personally exciting than adapting our technology to help them. The Technology landscape is rapidly changing. We're keeping up with it so we can continue to solve the most difficult data challenges.

What makes Nuix innovative, I think, is their ability to continue to grow as a technology. Nuix is constantly investing. So creating new workflows, new solutions as part of their technology to benefit their end clients.

It's a hard to think of a crime now that doesn't involve technology and digital evidence to some degree. Nuix' innovation in the web review technology, Nuix Investigate, helps put that data straight into the hands of investigators at their desk, allowing them to meet those time-critical decisions often around what is and isn't relevant to their particular case.

When we look at the Nuix platform, I think that it has contributed to our ability to be innovative. Some of the things that I'm really proud of when we talk about innovation and knowledge management is how do we leverage that existing technology that we have, data technology investment in the Nuix Discover product and benefit other practice areas besides litigation or investigations and what have you.

Before we return to the business of the meeting, I'd like to answer a number of general questions that have already been submitted by shareholders. So Vanessa, would you please read out the general questions that you've received?

[ We've received several questions from ] shareholders in relation to the share price and financial performance of the company since the IPO. The following question from Mr. [ Michael Hern ] addresses the theme of these questions. Mr. [ Hern ] asked, what happened? Was the IPO over price to begin with? Are we giving the wrong information? Is the company poorly managed?

Well, thank you, Mr. [ Hern ] for your question. I touched on some of these areas during my Chairman's address, just the range of challenges that Nuix faced in its first year as a listed entity. There was, of course, the pandemic to navigate, but that affected many other companies as well. But in addition, there were a range of issues that were specific to Nuix. Some of the most significant were just foreign exchange impacts that affected us particularly hard because of the lumpiness of our revenue stream and also because so much of our business is based in the United States, the delays in the U.S. government contracting cycle and then the government shift or the customer shift towards consumption as opposed to subscription models for licensing. As Rod just explained, it's a near-term impact that was negative in this year. But over the medium and long term, it's actually a positive thing and it benefits the company. So those were some of the most significant factors. And the pricing of the IPO was made in consultation with our advisers and also the entire investment community that was engaged in the due diligence process. And as I mentioned, we stand by our financial accounting and our disclosure processes, so including those that underpinned the development of our prospectus. So we did have a bit of a perfect storm during our first year, but we have a very strong and accomplished senior management team at Nuix, which has really been strengthened by some of the important senior hires that I've mentioned. So hopefully that answers your question, Mr. [ Hern ]. Back to you, Vanessa.

We've received several questions in relation to the Board and senior management. The following question from Mr. [ Maximilian Rucic ] captures the theme of these questions. Mr. [ Rucic ] asked, what are the Board and senior management doing to repair the reputation of Nuix?

Thank you very much for that question, Mr. [ Rucic ]. I want to emphasize that we take Nuix' reputation very, very seriously. A lot of the people who work at Nuix who came here did so because they come from law enforcement, and their goal is to bring truth to the digital world, the integrity to it, go after the bad guys and help make us a better and more fair society. And many of us even on the Board come from that background, including myself and Sir Iain. We have been a trusted partner for our customers over the years, and you'll notice it even during a challenging first year that our customer churn rate, which are lost customers, so that's very low, 3.6%. And that's because of the tremendous value of the solutions that we bring to our customers' operations, but it's also based upon the strength of our customer relationships and the trust that they have in our people. We're taking none of this for granted. And as I mentioned in my initial address, I've been acting to continue to strengthen our governance structures, and there are multiple ways in which we've done this. One was establishing the Independent Board Subcommittee, which is composed exclusively of independent nonexecutive directors. And I mentioned Sir Thomas and Sir Iain who joined me in that to review any material concerns that were raised about the functioning of the company. We added a number of new key positions, including a Head of Risk and an enhanced Investor Relations program. We went out and listened to our investors, spent a lot of time understanding where there were disconnects and their expectations of the company and the company's performance itself and in those situations where we've worked to provide new metrics and expand the way in which our information is presented with respect to our results. And we've gotten positive feedback from shareholders about that. We've also appointed new directors. We recognize the importance of having people who were in Australia, who really understood and had served in multiple roles as directors on ASX-listed companies, understood the media environment, understood the regulatory environment and had a close connection to the investor community. And we've done a number of other things as well to ensure this, including bringing in a real world-class CFO; and now Jonathan joining us as CEO to continue to grow and strengthen the business. So we take our reputation very, very seriously. And I really think we're moving in the right direction. But we appreciate the trust we've built over time. It doesn't happen instantly. And we're committed to being transparent with the measures we're taking and continue to do so. So hopefully, that answers your question, Mr. [ Rucic ]. Now back to you, Vanessa.

Mr. [ Raymond Logan ] asked, will I be considered as part of the class action?

Well, thank you for the question, Mr. [ Logan ]. As we flagged to the market, Nuix has received a class action claim. We actually noted that there's another one that has been reported to us as filed, but it hasn't been served on us. We're of the view that the claim, we're aware it was conceived, and that Nuix will be attending to the matter. The class action with which you've been served indicates that all persons who acquired Nuix shares between 18 November of 2020 and 30 May of 2021 are members of the class. And in terms of your own personal participation in the class action, that's, of course, something that you'll need to consider in terms of your own circumstances. But as I've said, we have our own point of view about the class action. Are there other questions, any further questions, Vanessa?

Yes. There are several questions in relation to the company outlook captured by questions asked by Out of the Woodworks Pty Limited. Where is the company heading? Is there an update on SaaS?

Yes. Thank you very much for that question, and it's a good one. Look, the company is heading where the opportunity is. We're skating to where the puck will be. So obviously, we're doing quite a bit in connection with the fact that people want consumption as opposed to subscription licenses but we're also moving to the cloud. We're moving into Software as a Service. We're expanding in GRC. We have a focus on how sales are done and partner programs. And these are some of the critical areas in which we've been reinvesting for growth in terms of rebuilding our research and development, making sure that we are staying ahead of the competition, and also our sales distribution capabilities. Our R&D programs continue to pace. And as you mentioned in your questions, SaaS is an important component of that program. And as we discussed in our full year results, we're currently doing a lot of work to transition our solutions to the cloud including, and I think Rod referred to this in his address, Engine as a Service, which we think is a great opportunity. Yes, we've done outstanding, have a team in place, really world-class technology and wonderful customers who have faith in us and have created very solid relationships. And we're going to take the next step in Nuix' evolution with the new leadership and with the new energy that, that brings to the company. Are there any further questions, Vanessa?

Yes. There are two questions from Mr. [ Dermont Cox ], is a company encouraging additional research coverage by investment banks? And do you have any comments in relation to the equity holdings of nonexecutive directors?

Yes. So Mr. [ Cox ], yes, we are encouraging more investment banks to cover us right now. We currently only have 1 analyst. We think it will be better to have more perspectives and more attention. So that's something that our excellent Head of Investor Relations, Brett Dimon, is working on. And part of our effort, going back to a prior question relating to trust, is we want to have a greater understanding among our investor friends about the work of Nuix. And I and the other Board members have made ourselves available to investors to talk about it, and we want as much transparency as possible. So that would be ideal. With respect to the shareholders of individual nonexecutive directors, I wouldn't know that off the top of my head. What I could say is that we are all very, very engaged and committed to the success of the company. We believe in the company. Some of us put our own money on the line, purchasing shares, to both demonstrate that and also because of our faith. And I think that aligns us with shareholders. But we're all very much independent but also very much engaged. I don't know if I can offer more than that. Vanessa, are there other questions?

There are no more general questions, Mr. Chairman.

Okay. Well then, we'll turn to the formal business of the meeting. We'll now consider the formal matters set forth in the Notice of the Meeting. As set out i the explanatory statement for today's meeting, as Chair, I intend to vote all of the undirected proxies in favor of each resolution. And as required by the Corporations Act, the financial report, the directors' report and auditor's report for the year ended 30 June 2021 are set out in the annual report. There's no requirement to approve these reports. Shareholders have been asked to lodge questions to Scott Walsh, a partner at PricewaterhouseCoopers, the company's auditor, about the conduct of the audit and the preparation and content of the independent audit report. Vanessa, do we have any questions for this item?

Yes. There's one question from Out of the Woodworks PTY Limited. What provisions have been made to pay Mr. Eddie Sheehy in the event that his court proceedings are successful?

Well, information in the Sheehy matters has already been outlined in the financial report and our annual report. And that's Section 9.5 of the notes of the consolidated financial statements. As we've indicated before, Nuix' rejects Mr. Sheehy's claim, and it's defending the proceedings. No liabilities have been recognized in the financial statements in relation to these matters. Obviously, because of matters in litigation, I don't want to say more than necessary, and so I won't. But back to you, Vanessa. Are there any more questions?

There are no further questions.

Okay. Well then, there being no more questions, we'll now move to the first resolution for consideration today, and that's resolution 1 of the remuneration report. Resolution 1 is for the adoption of the company's 2021 remuneration report, and I'll read out loud, that the remuneration report included in the directors' report provided to shareholders as part of the annual report of the company for the year ended 30 June 2021 be adopted. Vanessa, do we have any questions for this item?

There are no questions on this item.

Okay. Well, there being no questions, proxy votes for this resolution are shown on the screen. If you haven't already submitted your vote for the resolution, please submit your vote now. [Voting]

And seeing that was a decent interval, we will now turn to the second resolution, the reelection of Ms. Jacqueline Korhonen as a director. Resolution 2 concerns the reelection of Jackie Korhonen as a director, specifically to consider and, if it seem fit, to pass the following resolution as an ordinary resolution. So I'll read this aloud as well, that Jacqueline Korhonen, being a director and seeking reelection in accordance with Clause 47(d) of the constitution of the company and being eligible, offers herself for reelection, be hereby reelected as a director of the company. Now before we open voting on this, I just want to say a few words about Jackie myself, having been part of the process of selecting new nonexecutive directors and having had the privilege of working with her over the past recent months. Jackie is terrific. She is a highly experienced business leader, has extensive experience in the IT sector, started her career as an engineer in IBM and she's held senior roles with IBM over a 23-year period across the entire Asia Pacific, Australia, New Zealand, ASEAN, India, China, for a range of markets. She's also held key executive roles, been CEO of Infosys in Australia and New Zealand and also SMS Management & Technology. She's been a valued nonexecutive director and Board adviser. She's currently a Non-Executive Director of MLC Insurance of Auswide Bank and .au Domain Administration. She's also a member of the Board of Chief Executive Women. A copy to Jackie's bio has been included in the Notice of Meeting. She just brings extensive IT sector experience to the Board, particularly in the area of software, product engineering and data and analytics. Her experience, including as a business leader in the IT sector, exposure to a wide range of geographic markets and as a director of Australian-based organizations, she's been a terrific fit for Nuix' requirements. In recommending her appointment, the Board notes that Jackie confirms that she has the capacity to fill her obligations as a nonexecutive director of Nuix. The Board considers Jackie an independent director and recommends a reelection. And I will now play a message to the shareholders from Jackie.

Thank you, Chairman, and good morning, everyone. It's a great pleasure to be with you virtually today. I'm hopeful the opportunity will present itself to meet face to face in the new year. My appointment as a nonexecutive director was announced in October. And it's a real privilege to now seek election from shareholders. Nuix is an Australian technology company that has grown into a global organization. Over a long career in the IT sector, I've seen firsthand the exponential growth in data over recent decades and the important ways in which accessing and harnessing the power of data can benefit both organizations and individuals. My executive career span 23 years with IBM, living and working across a range of international markets. After IBM, I was appointed CEO of Infosys Australia and New Zealand and then CEO of SMS Management & Technology, an ASX-listed IT services company. After that role, I returned to IBM as the Vice President of Cognitive Transformation Services across the Asia Pacific region. I've previously served on the Board of NetComm Wireless and I'm currently a Non-Executive Director of MLC Life Insurance, Auswide Bank and the .au Domain Administration. Nuix' vision is finding truth in a digital world. The power of the Nuix engine and the multiple associated use cases mean Nuix is well placed to continue to provide meaningful solutions and insights as our digital world becomes ever more complex. I'm excited to be able to leverage my background across a range of IT organizations as Nuix moves forward. Combined with my experience as a director, I look forward to contributing to the collective skills of the Nuix Board. Thank you for considering my appointment to the Nuix Board.

Great. Vanessa, do we have any questions for this item?

There is a question about the reelection of directors in general. Mr. [ John Laird ] has asked why you put the new directors up for reelection instead of the other Board members.

That's a very fair question, Mr. [ Laird ]. I'd like to emphasize that the current directors have been in place less than a year. And I think the process that we've selected is entirely the standard within our constitution and also listing rules and guidelines. The reason that directors are generally not required to be considered for election in the first year is because that time is generally too short for them to have had a chance to really fully understand every aspect of the issues confronting the business, to develop their strategy, to implement it and then to be able to assess its success. And it's essentially the same reason generally that we give political leaders multiyear terms before we judge their performance. Now in the case of Rob and Jackie, they're up for reelection only because they haven't previously been approved by the shareholders, and we felt it was important for shareholders to have that opportunity just as they had the opportunity to consider qualifications of Dan, Sue, Iain, Rod and myself. We will, of course, continue to put Board members up for reelection on an ongoing basis, in line with our obligations under of the constitution and our listing rules. But good question, and thank you. Now back to you, Vanessa.

We have a question about Ms. Korhonen's judgment and experience as a business leader. Can Ms. Korhonen comment on what she's learned from her previous executive roles that she brings to Nuix?

She's been CEO of 2 companies in the same business area. She's been a respected independent director in a number of major companies in Australia. She has an impeccable reputation. So hopefully, that answers the question. Are there any other questions, Vanessa?

There are no further questions on this resolution.

Okay. Well, there being no more questions, proxy votes for this resolution are shown on the screen. If you haven't already submitted your vote for this resolution, please submit your vote now. [Voting]

Okay. Well, assuming that was a decent interval for people to cast their votes, we now move to the third resolution, and that's the reelection of Mr. Rob Mactier as a director. Resolution 3 specifically is to consider and, if thought fit, to pass the following resolution as an ordinary resolution. And so I'll read it aloud, that Mr. Robert Mactier, being a Director seeking reelection in accordance with Clause 47(d) of the constitution of the company and being eligible, offers himself for reelection, that he'd be hereby reelected as a director of the company. And again, it may be helpful, I know that his bio was provided in the meeting materials, but a few reflections on my own experience both in the selection of Rob and also in his performance during these early months as an independent director. He is a very experienced company director both in Australia and offshore, has strong investment banking experience in telecom, media, entertainment and technology sectors. He commenced his working life at KPMG before embarking on a really extensive career in investment banking that spanned more than 30 years, including roles with global firms, Citigroup and UBS. He's currently the Non-Executive Chairman of ALE Property Group as well as a consultant to the Investment Banking Division of UBS AG in Australia. Rob was previously a Non-Executive Chair of ASX-listed WPP AUNZ as well as a nonexecutive director of a NASDAQ-listed company, Melco Resorts and Entertainment. Rob just brings a very comprehensive experience set to the Board, including a strong understanding of capital markets and financial expertise. Rob's extensive skill set spans financial markets and institutions across both domestic and international markets. In addition, Rob's deep experience as a nonexecutive director across a range of organizations makes them very well placed to contribute to the broad expertise of the new Nuix Board generally. Perhaps a measure of that confidence from his fellow Board members is that we recently voted to appoint him to the newly created position of Deputy Chair of the Board. And I should have mentioned this earlier, with respect to Jackie, she has been named -- and again, this is in a prior release -- as the new chair of the Nomination and Remuneration Committee. And again, just an expression of confidence by the Board in these 2 new nonexecutive directors. In recommending Rob's appointment, the Board notes that Rob confirms that he has the capacity to fulfill his obligations as a nonexecutive director of Nuix, and the Board considers Rob an independent director and recommends his reelection. And now I'll play a message to shareholders from Rob.

Good morning, all. And thank you, Jeff. It's a pleasure to be with you virtually today and to offer myself for election to the Nuix Board. I'm currently the Chairman of ALE Property Group and have previously held Board positions as the Non-Executive Chairman of WPP AUNZ and as a Non-Executive Director of Melco Resorts and Entertainment. I'm also a consultant to UBS in Australia. I was attracted to the opportunity to join the Board of Nuix because of its world-class technology, its passionate and purpose-led people and its outstanding global customer base. I believe I have the background and skill set to complement the existing Nuix Board capability as well as add some unique perspectives to the Board. My executive career in investment banking has spanned more than 3 decades across a range of markets. Over the course of my career, companies and markets have experienced unprecedented disruption, innovation and globalization. I am committed to adding my capital markets and financial expertise, together with my own Board experience, to the skill set of the Nuix Board as Nuix itself continues to grow and evolve. Thank you for considering my appointment to the Board. It will be a privilege to represent you on the Board of Nuix, a company that I believe has all the qualities to further its position as an Australian-born, globally leading technology company. Thank you.

Vanessa, do you have any questions, Vanessa?

There are no questions on this resolution, Mr. Chairman.

Okay. Well, there being no questions, proxy votes for this resolution are shown on the screen. If you haven't already submitted your vote for this resolution, please submit your vote now. [Voting]

Okay. Assuming that was appropriate enteral, as previously noted, the results of the polls will be released on the ASX market announcement platform later today, which brings us to other business. Before closing on today's meeting, Vanessa. Are there any other questions?

There are no further questions, Chairman.

Okay. I note that there are no further questions received on any other business to be brought before the meeting. And so there being no further business, I now declare the meeting closed. So thank you all for your attendance and your continued support.