OFX Group Limited (OFX) Earnings Call Transcript & Summary

Thank you, Ashley, and thank you, everyone, for joining the call. As Ashley mentioned, I'm joined by Selena Verth, our Chief Financial Officer; and Mat Gregorowski, who leads our Investor Relations program with Citadel-MAGNUS. Selena and I will take you through the pages, and then there'll be time for Q&A. This year, we'll cover 3 things: firstly, the full year results, what it is and what drove it; secondly, why we're a valuable company; and thirdly, why and how we'll be more valuable in the future. Let's move to Slide 4 in the pack. Our financial year was a full COVID year starting on 1st of April 2020 and finishing on 31st of March 2021. And against that backdrop, we're happy with the financial results and particularly happy with the second half and the momentum we take into fiscal year '22. We delivered revenue of $134.2 million, underlying EBITDA of $30.4 million and generated $27.9 million of net cash from operating activities against the backdrop of very mixed trading conditions over the full year. Whilst the first half was soft in the wake of exceptional activity levels in Q4 fiscal year '20, we saw a strong rebound in the second half of fiscal year '21, with net operating income up 18.7% and underlying EBITDA up 82% on first half '21. This reflects the strength of our corporate segment, up 23.7% in second half '21 versus first half '21, a strong online seller segment and a recovery in our consumer segment. Turnover was up 1.4% for the full year versus the prior period. We finished the year in good shape, over $60 million of net cash held, revenue momentum, particularly in our corporate segment, more enterprise wins, a healthy trajectory in bad and doubtful debt and a clear strategy to continue to grow. Moving to Slide 5. In a very unusual year, there was very good execution. We continue to be obsessed by better client experience, and our net promoter score grew to 68.7. I have rarely heard of such a high score in financial services, but we can do better. An example of that attitude and that execution is in North America, where the team, supported by our technology, risk and compliance teams, reduced the onboarding time for corporate clients by 25% through the year. Having a great client experience builds trust, not just with clients but with regulators and our banks. An example of how we turned that into progress with the securing of our Irish electronic money institution license from the Central Bank of Ireland. Regulators are appropriately more rigorous, and it's reassuring that they got comfortable with our approach. And naturally, we're delighted to have a new office in Dublin that will spearhead our European ambition. Our North American team continued to deliver, driving revenue growth of 5.9% in the second half fiscal year '21 versus second half fiscal year '20, even when second half fiscal year '20 included the month of March, which was the largest single month of revenue in OFX's history. The second half momentum in North America, growing 19.2% versus the first half, was excellent. Winning new partners takes time, expertise and some luck. But it's wonderful to see that even in a year like no other, we won the trust and support of new clients like WiseTech Global, Pearler and Storfund. These are some of the higher profile wins, but there were many more and to win well in every region is especially encouraging. Our pipeline is also stronger now than a year ago, and we'll share a bit more detail with you on the enterprise pipeline later on Slide 19. We could not have won those clients or grown our existing clients without continually improving our platform. Last year, we processed over 1.4 million transactions, a new record for us, consistently and quickly. We will continue to invest in our systems to improve this for our clients. But for our employees and our investors, it's great to see banking costs decline while transactions increase. That is delivering real benefits of scale. Another highlight was the hard work, skill and technical savvy we applied to our risk management. Last year, we saw bad and doubtful debts drop over 40% versus the prior year. We did that whilst the industry saw some very big losses. Managing losses is also critical to scaling. Our bankers want to see us operate sustainably, our clients want a trusted provider, and our regulators want to see us applied and disciplined consistently to the service we offer. Amongst other highlights, the regulatory exam results were again very strong, rewarding the investment we've made in systems, people and culture that is required to operate in this area. And finally, our people. I could not be prouder of our team across all levels, functions and geographies last year. They delivered when their clients needed them to. They kept us safe. They figured out how to make their contribution against a very challenged backdrop. On top of all of that, they are more engaged than ever, which gives us confidence to continue to invest. They managed to change to a work-from-home environment in less than 15 days, and they handled a record number of over 1.8 million calls in the process. Great execution. Moving to Slide 6. We shared previously that our corporate and online seller segments are valuable for their strong growth, strong returns and hard to imitate characteristics. We've grown our investment in these 2 segments considerably in the last 2 to 3 years. So it's wonderful to see the progress last year. Our corporate segment grew revenue over 11% last year versus the prior period and over the last 4 years, has grown at a CAGR of 12%. That is very healthy, especially given the high lifetime value of this segment. But it's incredibly encouraging to see our new corporate revenue, which is the revenue we received from clients who have registered in fiscal year '21 grow 30% versus the prior period. That is a very healthy lead indicator of the future. Quite simply, our scaling of new client acquisition in the corporate segment may just be the single biggest highlight of fiscal year '21 because it's taken us years to put in place the best value proposition, the right commercial teams, the improved client experience and the right operating disciplines to grow corporate at scale. Our online seller segment is also growing well, and we had a strong year. Revenue growth of 11% is lower than past years, but it was done against the backdrop of deliberately pivoting away from high-volume, low-value clients in Asia, as we've talked about previously and into high-value, high-volume clients in the rest of the world. We saw 36% growth in revenue ex Asia. And as you can see from the chart, we've developed a healthy regional mix in our online seller segment. Again, prior investments in a stronger product, better risk management tools and more commercial resources are working. Moving to Slide 7. When we announced our fiscal year '20 results this year -- this time last year, we shared what we saw in the fourth quarter of fiscal year '20 as well as some of what we were already seeing in our consumer segment. To briefly recap, our consumer segment delivered over $20 million of revenue in the fourth quarter of fiscal year '20, which was more than $4 million or 25% higher than the third quarter of that year. It was driven by a surge in clients moving funds as COVID unfolded. We saw a big growth in use cases associated with wealth transfer, and we saw a surge in new clients activating from registrations that [ were ] more than 6 months old. In March of 2020, reactivating consumer clients generated an increase of 132% in revenue versus the year-to-date average through February compared to an increase of 62% from already active clients. In the first quarter of fiscal year '21 that activity declined substantially, and we've delivered just over $12.4 million of revenue. Over the year of fiscal year '21, every quarter was better than the one prior, and fourth quarter was just over $15.2 million in revenue, lower than fourth quarter of fiscal year '20, but returning to levels we saw pre COVID, with the second half up 13.4% versus the first half. We've naturally done a lot of work to understand what has happened. And you can see the summary here. In short, several use cases disappeared during COVID, most obviously, travel, but also emigration and immigration, an expat/salary transfers and property-related transfers. All up, we saw a decline of around $14 million over the full year through these use cases declining or disappearing. Against that, other use cases grew, particularly overseas purchases well from family transfers. Those increases at around a $4 million gain in revenue versus the prior period. By subtracting the negatively impacted use cases from the positively impacted one, we see around $10 million of loss revenue last year. Naturally, we are very interested to dig further and have conducted client surveys to understand more. The great news is that to understand this in detail, we conducted a survey of over 1,500 clients across every region who have not transacted in fiscal year '21, but had transacted in fiscal year '20. And we've got a very healthy 11% response to this survey. Of those respondents, 76% felt they would have a need this year to transfer. And of those, 97% were either very likely being 81% or quite likely being 16% to use OFX. Further, they cited great rates, ease of use and great service as the reasons for sticking with us. We cannot predict the future, but we are especially pleased to know that the clients, who are active in fiscal year '20 but did not do a transfer in fiscal year '21 due to COVID, largely intend to do transfers this year and keep using us. Turning to Slide 8. This is a page we've shown you over the last several years. It helps you get a feel for what's driving our volume, and in turn, acts as a good lead indicator of the underlying health of the business. Starting on the left-hand side. As I mentioned, we saw a decline in active consumer clients that we hope that if their intentions are accurate, they will return. Pleasingly, we grew active clients in our corporate segment. These corporate clients, along with online seller clients, were busy, driving transactions per active client up 39% versus the prior period. That, in turn, drove a record number of transactions at over 1.4 million, though we have shared that some of that growth was due to an unusually high number of offshore share purchases that we don't expect to repeat in fiscal year '22. Those offshore share purchases also skewed ATVs down somewhat. But nevertheless, we saw turnover end up slightly over $25 billion, a small increase from the prior period, which is pleasing given the record fourth quarter of fiscal year '20. Apart from a new record, more importantly, it highlights the pivot we've been driving to more corporate and more online seller business. And later, we'll talk to the positive effects it has on the value of OFX. Moving to Slide 9, you can see the story by region. In short, the U.K. and Asia were the hardest hit by COVID, whilst we saw the strongest rebound in Australia and New Zealand and North America. The exceptional growth in transactions in Australia and New Zealand also reflects the unusually high volume of offshore share purchases I referenced previously. So overall, a good outcome in a very unusual year. Now let me hand over to Selena to walk you through more detail on our results and why we are a valuable company.

Thank you, Skander. Moving to Slide 11. We have delivered a strong financial outcome after a soft first half of the year. First half '21 fee and trading income or revenue was down 5.6%. However, a strong second half meant the full year revenue was only down 2.2% for the year. The second half was 18% higher than the first half, showing the recovery and momentum. As Skander has already taken us through, all regions were impacted by COVID in the first half, but we saw a solid recovery in North America and Australia and New Zealand, with North America, second half '21, up 19.2% on first half '21 and delivering an overall growth rate of 5.2% for the year. Australia and New Zealand second half '21 was up 17.2% on the first half of '21 and an overall growth rate of 1.4% for the year. Europe and Asia are improving with Europe revenue second half '21, up 19.9% on the first half of '21, but overall down 16.7% for the year. Asia revenue, second half '21 was up 12.8% on the first half of '21 and overall down 19.9% for the year. Net operating income, which is fee and trading income less partner commissions and bank fees, is down 5.8% for the year. The first half was soft, down 9.4%. There was a recovery in the second half, with the second half '21, up 19% on the first half of '21. You may recall, we said at the half year that the increase in offshore share purchases have had an impact on many of the metrics. They are high-volume, high-margin transactions, but with a low ATV and quite a high partner commission payment. The higher partner commission causes NOI to grow at slower rate than revenue. The NOI softness is also driven by a reduction in consumer activity post-COVID, which Skander took you through. As indicated when we released our third quarter trading update, NOI margins are lower than fiscal year '20 at 47 basis points versus 51 basis points. This is a result of our corporate and online seller portfolio has grown faster than consumer. We continue to carefully test ways to deliver a stable NOI margin through pricing programs, both in reducing price and increasing prices. Operating expenses of $87.5 million are marginally up on fiscal year '20 by $0.6 million or 0.7%. This has resulted in an underlying EBITDA of $30.4 million, down 20.5% on fiscal year '20, but a really nice recovery in the second half '21 with EBITDA of $19.6 million. The effective tax rate is higher this year at 21.7% after a very low year in fiscal year '20 of 17.9%. This was within expectations. Statutory net profit after tax of $12.8 million, down 37.1% on fiscal year '20 due to the impact of COVID in the first half. Net cash held is strong at $60.6 million and net available cash, which is after collateral obligations and bank guarantees, is $36.8 million, up $12.3 million on fiscal year '20. This is due to the lower volatility in renegotiated collateral lines. Moving to Slide 12. Our underlying operating expenses are $87.5 million, up 0.7% on fiscal year '20. We continue to manage our expenses while also investing for growth in our client experience. We continue to invest in our promotional spend as well as continue to adjust the mix expense. Last year, the mix was approximately 55% on demand generation or brand-type spend and 45% on demand capture or search spend. Commercial expenses were $6.9 million in the first half of '21. This is slightly lower in the second half of '21 at $5.9 million as more was spent on branding earlier in the year. What is fantastic to see is the spend delivering efficiencies with our second half '21 cost per NDC down 13.3% compared to the first half of '21. Also, our registration for the year of 127,600, up 4.5% on fiscal year '20 of 122,100, also show the same efficiencies. A reduction in promotional expense of 6.2% at generating more registrations. Technology expenses are flat year-over-year as we hold our software-as-a-service cost and server hosting cost constant while growing transactions. We're expecting these to increase in fiscal year '22 as some of our software-as-a-service components go large. Other expenses are $8.8 million, down 8.2% on fiscal year '20. The reduction is due to lower travel costs, which are typically $1.5 million for our business. This is partially offset by an increase in insurance premium. Insurance is up $0.8 million or 53% for the year. Bad and doubtful debt of $2 million, which is a 41.4% reduction on fiscal year '20 to $3.3 million. Bad debts in the first half were $1.2 million and down even further in the second half of '21 to $0.8 million. This is a result of the investments we have made to detect and prevent fraud. A number of our new technologies, including identity verification and voice biometrics were live by third quarter and substantially reduced the number of fraud events, a positive lead indicator for bad debt in the first half of '22. This is an area where we'll always be vigilant and be active in fighting off new type of fraud as it emerges. Turning to Slide 13. We continue to have a strong balance sheet, no debt and generate good cash flows. This is exceptionally valuable as we have maintained this position throughout the pandemic and have a strong balance sheet for supporting future growth. Our net cash held position, which includes cash held for own use and deposits due from financial institutions of $60.6 million, down $0.4 million on fiscal year '20. You may remember, we hold some of these cash as collateral for our trading lines and a bank guarantee. Collateral was $23.8 million, down from $36.5 million. Trading volumes have reduced from the peak at March '20, and we have renegotiated our collateral agreements. Net available cash is $36.8 million, up $12.3 million on fiscal year '20. Cash flow from operating activities is $27.9 million, which is an excellent cash conversion rate from our underlying EBITDA of $30.4 million. Of the $27.9 million of cash from operating activities, we have invested $10.3 million in intangible assets, and we continue to deliver a single scalable platform and our payment and risk capabilities. We also paid a dividend of $7.8 million in our rent obligations. Moving to Slide 14. As part of our ongoing capital management strategy, we have announced an on buyback -- on-market share buyback program and to place the dividend on hold. The program provides capital flexibility if there are benefits returning capital to shareholders by way of an on-market buyback rather than paying dividends. The flexibility allows us to respond quickly to growth opportunities. We also believe that buying back shares at prevailing share price will provide a near-term benefit to shareholders. It further reflects the confidence in the group's ongoing strong performance. The on-market share buyback program will be up 10% of ordinary shares on issue over the next 12 months. The number and frequency of shares to be acquired will depend on the prevailing share price, market conditions, incremental growth capital requirements and any unforeseen circumstances. But there is a level of cash we do need to keep in the business for working capital and to support periods of volatility. During highly volatile periods, we do need a high collateral, secure trading and ensure we remain in business for our clients at this critical time. By suspending the dividend and entering our share buyback program, it allows more flexibility for capital management that provides both a way to distribute earnings by the buyback but also retain the flexibility to support growth opportunities when they come up. TreasurUp is a great example of this, which Skander will take you through in more detail later, an investment opportunity that we can fund via cash that will enable us to accelerate our corporate growth strategy. I will now hand back to Skander to take us through why we believe we are growing a more valuable company and the fiscal year '22 outlook.

Thank you, Selena, about excellent coverage of our financial performance. Turning to Slide 16. We worked very hard over the last 2 years, in particular, to get a deep understanding of what the opportunity is for OFX, where we want to play, how we can be distinctive, and if we execute against that, why we will be more valuable in the future. This slide summarizes that thinking. Firstly, our total addressable market, or TAM, is huge, with Mackenzie's estimating the total cross-border payments market at over $130 trillion in turnover per annum. We have a small fraction of that supporting just over $25 billion in payments last year. The economic outlook for the countries and regions where cross-border payments are largest and where we are located, particularly the U.S., U.K. and Australia is very good, with GDP growth in those markets in 2021 calendar year estimated at 6.3%, 5.5% and 4.4%, respectively. Healthy and growing economies tend to support increased economic activity, including trade. We have targeted segments of the $130 trillion market that we see as being valuable and where we believe we can be distinctive. Consumers who value great rates and the digital and human service delivery typically send larger transactions than consumers who value a purely digital platform or who send smaller amounts for remittance use cases. In a growing economic climate, we expect that segment to return to growth. Corporate or small and midsized enterprise clients who have also valued great rates, a digital plus human service and the expertise of a company able to help will typically do very well in a growing economic climate also. So we expect that segment to grow even faster than consumers. SMEs who specialize through e-commerce are expected to do very well indeed this year. And again, we see strong growth from them coming through our online seller segment. Finally, we see more and more enterprise clients flourishing in an increasingly global economy. So we also see strong future growth from them, particularly as global banks retreat from this segment. While each of these segments will grow, it's our job to win disproportionately in these segments by being distinctive and executing better than our competitors. I've mentioned that our research tells us that at the heart of what clients in these segments want is a great digital platform supported by human service to provide the expertise where valued. But to execute that well, we've laid out those elements that we believe and clients have told us are most important. The winners will have a single global platform that provides a world-class payment experience, both in terms of the product and the service supported by strong risk management and run by the best team. We believe that by unlocking that opportunity through those segments with our execution, we can build an even more valuable company, characterized by healthy revenue growth, high recurring revenue, strong EBITDA at attractive EBITDA margins that generates good cash flow. And as we've foreshadowed, we see the industry consolidating and see ourselves as well positioned to participate in that. Turning to Slide 17. This is a bit more detail on the use cases we're targeting and why we believe they can deliver the growth we want. Firstly, the use cases we are targeting are big enough but are fraction of the total market. But more importantly, the characteristics of the segments are very well positioned to grow. The consumers we focus on are more inclined than ever to switch away from banks, their traditional providers. SMEs who conduct cross-border payments for use cases like accounts payable payments and cross-border payroll are also growing well. SMEs who specialize in e-commerce are growing much faster than other SMEs, and enterprises who support cross-border flows are growing faster than those who don't. That's why we chose those segments specifically. The opportunity is better. Our job and our opportunity, therefore, is to be distinctive and much better than our competition for those segments. Turning to Slide 18. This is how we'll win in those segments and what makes us distinctive. Firstly, all of those segments have some common must-haves for the clients. They are the ability to move funds safely, the ability to move them quickly and the ability to move them cheaply relative to the incumbent provider, who's usually a bank. Delivering these is not as easy as it sounds, safely equates to strong risk management, strong regulatory relationships and good governance. Unfortunately, we've seen record fines for large and small institutions, which means safe is getting harder every year. Quickly is getting easier in some respects and harder in others. Our working assumption is that it will get to instant at some point. And in some cases, it's already there. But whilst that may be achievable already for some corridors, it is by no means there for all and with speed comes the opportunity for higher risk. Cheaply is also evolving. And years ago, we were very competitive. Now, somewhat cheaper, especially in the lower value consumer space. The key to consideration from our target segments is not being the best at any one of these must-haves but by being the strongest across a blend. Being instant and unsafe just doesn't work for high-value consumers or corporates. Being safe but slow doesn't work either. The consideration is not winning. Winning requires differentiation and great execution. And that's hard, especially in such a crowded space with over 7,000 new entrants in the last 5 years. Our research and experience tells us that delivery of a great digital experience complemented by humans that have the right expertise are local and are available 24/7 is what differentiates us for our high-value consumer segment. In the corporate segment is to deliver the must-haves of fast, trusted digital and great price and to provide the risk management product and service that's appropriate to their needs. That means things like forward products, knowledge and expertise and currency movements and a risk culture that ensures we'll be around when the markets are at their most volatile, not shut just when their clients need us, or lynching them out so they can transfer as with some of our competition. For online sellers like corporates, they need that digital plus human product and service, and they want risk management support. But in addition, they need their provider to understand and be respected and active in the marketplace ecosystem. It's no good launching a product in the U.S. and withdrawing 6 months later or not being able to support sellers in Europe. Marketplaces are very global and increasingly are very focused on high-quality sellers. So they want their payment service providers to be strong, well credentialed as well are technically savvy. For enterprise clients, they value the platform-as-a-service proposition, integration to their ecosystem to make their clients' lives easier and better valued. If you want to serve enterprise clients, you need a strong technology platform, but more than that you need to manage the risk on behalf of your client and provide them and their clients with a great experience that is aligned to their proposition. For WiseTech Global, for example, integrating to CargoWise. It's not enough to just be fast, cheap and safe. Moving to Slide 19. We've talked for the last 3 years about growing our presence in the enterprise segment. And in the last 2 years, we've highlighted 2 new strategic alliances with Link Market Services Australia and WiseTech Global. Looking forward, key to us being more valuable is adding to these 2 wins. And this is a snapshot of our pipeline in this segment. As you can see, we've broken the pipeline into 5 different stages to give you a sense of what we're working on and what stage these prospects are at. I'm delighted to share with you that as recently as the 1st of May, so after year-end, we were appointed by the reserve Bank of Australia to provide money transfer services. The Reserve Bank of Australia acts as the provider to government agencies, and the first agency to benefit from our appointment is the Australian Taxation Office. Our job will be to provide a payment service for Australians overseas, both consumers and SMEs, who want to pay an Australian tax obligation. This is a very important win for us in 2 ways. Firstly, because the TAM is large, estimated to be between $400 million to $800 million per annum and secondly, because it's a huge vote of confidence by our government in who we are. I'm also delighted to say that as of the 17th of May, we're already helping with several new clients using our service and many more registering to use it. The verticals we're focused on include wealth management, payroll services, financial institutions, government and accounting platforms, and our pipeline includes prospects in every vertical. We see this segment as being hard to win but highly accretive to earnings as it matures. Moving to Slide 20. Let's talk about our investment program. In the last 3 years, you've seen us invest in our global operating model, global and scalable systems, risk management and people. For the purposes of this slide, we're focused on the investment in intangible assets or CapEx. There's also been considerable OpEx invested in people, in software-as-a-service and in service with [indiscernible]. Our CapEx investments so far have delivered many substantial improvements and several differentiators, such as a customized client experience for Link Market Services clients. There is more to do. Over the next 3 years, we will continue to invest in the main categories, always with an eye to winning and growing in our target segments. For our investors, we expect it to peak in the next year or so. And that excludes one-off opportunities that we may see. And as we touched on earlier, the returns from this investment historically can be seen in areas like enterprise wins, lower bad debts, stronger regulatory exam results and lower cost of payments. Moving to Slide 21. I'm delighted to share that we'll be investing EUR 3.15 million in preference shares and EUR 750,000 in a convertible note that will mean we will hold a major investor position in TreasurUp, a software company located in The Netherlands that provides automated hedging and risk management solutions to bank and corporate clients. We will co-invest alongside Rabobank and Coera who are the software development company TreasurUp have used to develop this solution. We're delighted with the expertise and cultural alignment between us and the TreasurUp management team. Like us, they want to make the CFO or treasurer's life simpler, safer and more reliable in the cross-border payment space. That's what their software does. It allows the CFO or the treasurer to automate their hedging policy as well as implement controls to make it safer and more reliable. The high degree of automation also saves time as the software executes the relevant trades rather than the staff. Our client due diligence was highly encouraging on this point. It's very exciting for us in a number of ways. Firstly, it's the first substantial M&A investment for us at OFX ever. More importantly, it gives us access to a risk management tool that we know midsize corporate clients value and one that we also believe may be attractive to both online seller and enterprise segments, too. The investment agreement is signed, and the transaction is expected to close by the end of the first half, and we'll update the market further at that point. In conclusion, on Slide 22, we're very encouraged by the progress we've made and by the outlook for this year. We will continue to invest in the areas that will make us more valuable, being regional growth in North America, particularly, but also globally. We'll invest and grow our corporate and online seller segments as a priority. We win prospects in our enterprise pipeline and activate the ones we already have, and we will win the rebound in consumer as it happens. As we do these, we expect our financial results to be healthy. Net operating income growth of 10%-plus at stable net operating income margins, we will preserve the principle of delivering positive annual operating leverage that we will keep an eye on opportunities to invest, and we may do that if we deem the opportunity to be in the medium-term interest of our investors. Thank you for your time. And now let me hand back to Ashley for any questions.

[Operator Instructions] Your first question comes from Seth Hoskin with Canaccord Genuity.

Just firstly on the guidance commentary and the NOI growth. I suppose, just touching on what level of bounce back end consumer that assumes? Or is that largely a continuation of the corporate and [ online seller ] since some pick up from the Link deal and then consumer provide sort of somewhat upside if you can bounce back above that pre-COVID level?

Yes. So I'll take that one, Seth. We are expecting continued growth, and we're really happy with that growth rate that we've experienced in corporate online sellers this year. So we're expecting continued growth in those areas. We are expecting consumer to bounce back, but it's yet to be said when and how. Like if you look at each quarter, it's more positive than the quarter before, but if it gets back to the full levels, we're not sure this year.

Okay. No, that's really helpful. And I was just focusing on the fourth quarter result, which in terms of fee and trading income was flat quarter-on-quarter. It was sort of despite some seasonal benefits you flagged in the 3Q update. As we go forward throughout the -- I suppose, FY '22 and beyond, should we see a least volatility sort of interim result as corporate and online seller makes up a greater mix of your revenue base. And then I suppose just further, was there any sort of benefits in the one-offs sort of seasonal benefits in the fourth quarter that we should be aware of? Or is that 36 number pretty consistent with what we should expect going throughout FY '22?

Yes. Maybe I can talk to that. Look, the composition of the revenue and the momentum, as you touched on, for corporate and online sellers, is something we're very happy with and typically, what we've seen over the last several halves is it's fairly consistent. So as we look forward and as you touched on in terms of the guidance, that corporate and online sellers revenue is really underpinning kind of what our outlook looks like. And to the second part of your question, there were no unusual one-offs in that number for fiscal year '21. Obviously, fiscal year '20 included some fairly unusual items with -- both on the revenue and the bad debt side. But in fiscal year '20 -- so in fiscal year '20 -- whereas in fiscal year '21, bad, doubtful debts was down, revenue was obviously recovering through the third and the fourth quarter.

Okay. And then this is more sort of a point of clarification in terms of maintaining positive operating leverage. I suppose looking -- there was a bit of a diverse result in the year, as you've talked to. But is the positive operating leverage versus the 27% EBITDA margin in the second half? Or is that versus the full year?

Look, it's versus the full year. But as we always say, we do run the concept of positive operating leverage. But that being said, if we do find an investment opportunity that makes sense for the business and we're obviously positive operating leverages within the fiscal 12 months. But if we found something that made sense to the business and it happens to be in the third or the fourth quarter, and we wanted to invest in that, which would then move us away from a positive operating leverage, we would do that. So we have an overall guidance and positive operating leverage for the business. It's good for making really good decisions and understanding if things are working. But if we see something we like, we'll go after it.

Cool. Just a couple more. In terms of the enterprise pipeline, you obviously announced a couple of deals today, and then you've got 40 in the pipeline. Could you just touch on a few of the key reasons you're being selected in these deals? And I suppose, on the other side of that, what you're investing in or working on over the next sort of 12 to 18 months to position yourself to win more of the pipeline?

Yes. I'd say the first thing in terms of why we're getting selected, largely, we're not in, let's call it an RFI process. Not exclusively, but largely, we've typically gone and approached prospects in order to determine whether there's an opportunity and to some extent, obviously, that drives a longer time line. But at the same time, it allows us to present our value proposition, I think, earlier on in the consideration cycle of CFOs and CEOs. What we typically are seeing in the enterprise pipeline, that prospects are finding attractive about OFX relative to some of our competition is firstly, obviously, table stakes are, you've got to be able to support them across the range of different currencies. Second of all, you've got to provide a cost effective solution. That's a kind of must-have. But what's starting to become a differentiator is risk management and having a better culture and a set of tools, that mean that the enterprise client is comfortable that as they service their clients, there's not going to be a hidden risk, for want of a better term, that materializes for them clients and that they can rely on a firm like OFX that has a very strong regulatory track record and risk culture to make sure that the services are done well. And what we're also starting to see as well is that as we learn more about the particular verticals, there are certain things that we're learning about what's particularly important to particular verticals. And obviously, what we wanted to share in ensuring that pipeline of the verticals that we're focused on, we certainly think that's helped us fill that pipeline. And obviously, our experience in the verticals is something that prospects find attractive. The last thing I'd say is that we've also completed our hiring in every region in the last 12 months. We've got an exceptional group of enterprise, commercial talent across the region. They're very well supported by risk, tech, product, marketing, talent, and it really does take a team in order to win clients of this size. They need to get comfortable across several dimensions. So having that talent in place as well as a bit of experience has certainly helped us fill that pipeline and start to pull through some wins.

That's really helpful color. And then just finally on the e-money license in Ireland. Would you just be able to touch on what that sort of provides any additional functionality that allows as you look for the European expansion?

Well, I mean, as of January 1, if you didn't have that, then you couldn't be offering services outside of the U.K. The prior license obviously was passported into Europe. And with Brexit taking an effect from January 1, money services businesses were required to have a license and then have that passported into Europe if you wanted to provide those services, both to originate and service existing European clients. And we chose Ireland because we understood the geography. We felt they were a very strong regulator with a very good track record. And again, they were appropriately rigorous. This was not a straightforward process. They really want to understand our corporate structure. They really want to understand our track record. They wanted to see people in the region and so on. So all those things came together, and we were delighted to be able to be granted that license and have that passported into Europe. And it allows us, to your question, to push into Europe, which we intend to do really starting this year in more earnest and into next year as well.

[Operator Instructions] Your next question comes from Owen Humphries with Canaccord.

Well done on the results today. And this momentum it's good. Just a quick question around that e-money license. I'm sorry if you already answered it. But just curious, one thing around what the e-money license brings to your business? And two, you mentioned about instantaneous payments or cross-border payments. Can you just talk me through who do you think the market leader would be in that space? The timing of when that could be available for some of those large cross-border corridors? And I guess, is that something that you guys are investing in?

Sorry, I missed the second part of your question. The first part was about expand on the e-money license and what it really means. The short answer to that is that if you want to originate clients in Europe, and you want to support existing clients with their money transfer needs who are based in Europe, you need to have that in order, and that goes across consumer and corporate clients and online sellers. In the case of enterprise, obviously, as well, we'll need that license in order to win enterprise prospects that are located in Europe. I missed the second part of your question.

The second part of the question was just around the instantaneous payment you just talked about on the call. Just walk me through when do you believe that could be a reality. Are you guys investing for that opportunity? And could that be a differentiator for your business in the future?

Yes. Okay. Thank you for clarifying. Look, it already is a reality in certain corridors. And we know that in certain clients they certainly, for example, will pay extra, for instant. So we know some of our competitors will charge a fee if a client wants it done instantly. Look, it's impossible to tell when the whole market gets to that point. Right now, if you looked at it on a sort of conjoint basis and you had a pack a bundle on one side and a bundle on the other, clients would, generally, in our experience, be happy with a bundle that included same day at a great price with great service versus instant at a slightly higher price where there was no service. But again, that varies depending on how much they want to send, whether the client is consumer or corporate, which currency corridors. So there's no short answer to what it's actually at right now. We certainly think it's attractive. We certainly think it's heading there. And as I said, there are already players who are making instant happen. But I wouldn't want to kind of describe it as the whole market's there now or that if you're not there, you can't satisfy client needs and win clients.

There are no further questions at this time. I'll now hand back to Mr. Malcolm for closing remarks.

Thanks, Ashley, and thanks again for joining the call. As I said, to summarize, from an OFX perspective, we're really delighted with our second half rebound, very strong momentum, good quality, and we're encouraged going into fiscal year '22. But the momentum we have is sound, it's well instructed. And then secondly, that really, we do believe the investments we've made and we continue to make a positioning as to be a much more valuable company going forward. So thanks for your support.