OFX Group Limited (OFX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the OFX Group Limited FY '22 Full Year Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Skander Malcolm, Managing Director and CEO. Please go ahead.

Thank you, Melanie, and thank you, everyone, for joining the call. As Melanie has mentioned, I'm joined by Selena Verth, our CFO; and Matt Gregorowski, who leads our Investor Relations program with Citadel-MAGNUS. Selena and I will take you through the pages and then there will be time for Q&A. This year, we'll cover 3 things: the full year result, what it is and what drove it; our focus areas for fiscal year '23; and our guidance on fiscal year '23. Let's move to Slide 4 in the pack. Fiscal year 2022 was a record year for OFX. In terms of financial performance versus fiscal year '21, we delivered turnover of over $33.2 billion, up 32.7%; net operating income of $147 million, up 24.7%; and underlying EBITDA of $44.5 million, up 53.1%. These results were underpinned by great execution. With every region up double digits, we're also growing active clients and stable margins excluding same-currency transfers. In addition to the great results and the great execution, the team completed the investment in TreasurUp and agreed to acquire Firma Foreign Exchange, which largely completed on May 1 and significantly bolsters our corporate business in North America. Finally, our consistent focus on risk management and the investments we have made have delivered exceptional risk outcomes along with consistent positive regulatory engagement. In an uncertain operating environment, I couldn't be happier with the team, the strategy and the momentum created in fiscal year '22. Moving to Slide 5. It's very encouraging to report the momentum of the company across its key operating metrics. As mentioned, turnover of $33.2 billion was up nearly 33% versus the prior corresponding period, which is excellent, but it was also terrific to see second half up over 21% versus first half. We will unpack the drivers of turnover later. But suffice it to say there is strength in all key areas and we saw a substantial growth in average transaction values that certainly helped. Net operating income of $147 million, up just under 25%, was outstanding, and the hard work on managing our costs that arise from revenue, being bank fees and commissions, is creating a much healthier leverage from the revenue we generate. It was also encouraging to see the second half grow over 14% versus the first half. Finally, the underlying EBITDA of $44.5 million, up over 53% versus last year and up over 19% versus first half, was also terrific. It reflects a very healthy company with good fundamentals. Moving to Slide 6. As we shared at our Investor Day on March 16, we strongly committed to growing our portfolio across 4 segments: Corporate; Online Seller, Enterprise; and High-value Consumer. I will share a regional view later, but for now, let's focus on the segments. As we said, we chose those segments and passed on others because we believe we can differentiate to those clients and prospects and create a valuable portfolio accordingly, though it's good to see such progress across the board. In Corporate, revenue growth was 14.5%, which is good. But when we remove the unusual revenue from offshore share purchases in fiscal year '21, it's even stronger at just under 30%. In the second half, it grew over 20% versus the first half. We have a very good platform, supported by exceptional service that more and more clients are choosing. Our marketing programs continue to tilt towards this segment, further reinforcing for clients why OFX is a great choice. The addition of Firma in fiscal year '23 will give us further scale, expertise and learning in Corporate. In Online Sellers, notwithstanding the ups and downs of the e-commerce market, we performed well, growing over -- growing 2.7% or just under 16% excluding Asia, which we have pivoted away from in the last couple of years. Again, good to see the second half up 6.6% versus the first half. It's clear to us that the capabilities we have built for this segment as well as the insights we've gained in serving these clients and this ecosystem will serve us very well both now and in the future as more corporate clients evolve their businesses to operate in the marketplace ecosystem. Our Enterprise segment delivered $6 million in revenue, up 31.3% versus fiscal year '21 and up 6.3% versus the first half. We will share further detail later. However, we are encouraged by the performance of existing clients as well as the pipeline of prospects we're building. In Consumer, we saw growth of 24.5% versus fiscal year '21 and we grew over 7% in the second half versus the first half. Again, I'll share more detail later on the drivers of this, but we're encouraged by the performance of Consumer in our portfolio. Moving to Slide 7. We're sharing for the first time further detail of performance by region. To remind all, we operate in 3 regions, each run by a regional leader. APAC covers Australia, New Zealand and Asia. North America covers the U.S. and Canada. And EMEA covers the U.K., Europe and small revenues from the Middle East. This chart shows revenue from each region and the split by segments. The regional view is also very encouraging, with every region growing double digits. In APAC, we saw growth of 12.8% versus fiscal year '21 or just over 24% when normalizing for the offshore share purchase revenue we saw in fiscal year '21. APAC is our largest and most diverse region, with every segment contributing, and Yung Ngo leading a strong mature team driving very strong outcomes. Highlights have been further great progress in Enterprise, a very strong Corporate performance and a good second half, especially in Asia. In North America, Alfred Nader and his team are delivering great growth and are balancing risks and opportunities well, driving down losses to near 0 in fiscal year '22. As you can see, their revenue splits by segment are similar to the group. They're doing a particularly good job of growing Corporate, delivering over 31% growth in fiscal year '22. And as Alfred mentioned, they're also building an Enterprise pipeline, and we are expecting to announce some wins in fiscal year '23. In EMEA, Sarah Webb and the team have done a terrific job, delivering growth of 26% versus fiscal year '21, and their second half was up 17% versus the first half. Again, they've done a good job in Corporate, growing over 28%. What is probably surprising to many of you is how well they're driving growth in the Online Sellers, up 68% in fiscal year '22. As we push into Continental Europe, we see Corporate and Online Seller as very attractive segments. Also in Europe, we're very encouraged by the TreasurUp investment. The team have great expertise, good annual recurring revenue and a strong pipeline of prospects. We will further support their growth in fiscal year '23. Turning to Slide 8. This is a bit more detail on the Corporate and Online Seller segments. As I've already covered, each region is contributing well. Several years of improving the commercial excellence programs, increased promotional expense, better currency options, faster payments and better client experience have driven this. As noted, we've benefited from elevated average transaction values in fiscal year '22, which are likely to moderate, but this also reflects a more embedded client base. Supported by our targeted marketing programs, we expect to continue growing the active client base over time. Further investments in [ that were planned ] for fiscal year '23 and beyond into better pricing options, a better platform experience, better risk management tools and further investment in commercial people. We know this segment is getting more competitive with new entrants and specialists targeting valuable clients and prospects. So it's good to see it's winning market share, growing active clients and of course revenue. As interest rates rise, our cash generation will help us continue to invest and continue to win. Of course, the addition of Firma will also give us more clients, more expertise and a valuable set of insights into the Corporate Client segment. The additional scale will no doubt help us create leverage, too. We're encouraged by the continued strength of our Online Seller segment. The overall revenue growth of 2.7% was modest. But excluding the Asian portfolio, it was a healthy 15.7%. And it was good to see growth returning in the second half, up 6.6% versus the first half. The decline in North America is due to a few large clients seeing reduced e-commerce volumes versus fiscal year '21, in line with the market. The growth in EMEA and the U.K. specifically is encouraging and augurs well for further European expansion. We're continuing to invest in dedicated promotional spends. And it's encouraging to see the growth in active clients over the year as a result. Our relationship and engagement with Amazon continues to be a source of strength. In fiscal year '23, we'll invest further in people, capabilities and risk management to drive our growth. Moving to Slide 9. We are building or rebuilding a valuable Enterprise segment. Back in 2014, Enterprise accounted for 12% of our group revenue, whereas in fiscal year '22, it was a little under 4%. It declined because we didn't seek to win new clients and invested very little in the capabilities to support existing clients from 2014 to 2020. That has changed, as Yung shared at our Investor Day. Today, we invest in product capabilities. We have dedicated commercial people in every region. We've refined who we want to target. And we're investing in supporting existing clients. So it's good to see us grow revenue over 31% as well as increase the number of prospects, particularly in North America and APAC. We're making good progress in activating wins from prior years also, including WiseTech and Link, and learning a great deal about how to do this well with our partners. Whilst the rate of activating prospect is less than our own expectations, the opportunities remain substantial. And in years to come, we believe this can return to a significant part of the group, which we're working very hard to achieve. Moving to Consumer. It's terrific to be winning the Consumer rebound in every region, growing revenue over 24% versus fiscal year '21 and seeing good momentum through the year, with the second half up 7.3% versus the first half. As we shared at Investor Day, we are quite clear about the consumers we serve best. And during the last 2 years in particular, the capabilities we have through Tier 1 banking partners, exceptional digital plus human service delivery and improved speed of payments has given us great results, especially versus the some of the competition that lacked this winning combination. We've shared with you how the use cases in the Consumer have evolved in the last 2 years. Of note, we saw substantially more property-related transfers, up 36% from fiscal year '20 and around 47% up from fiscal year '21. Wealth-related transfers were also up over 24% versus fiscal year '21. These are typically larger transactions, meaning that as with Corporate, we benefited from elevated ATV, which are likely to moderate as use cases change. But as you know, consumer does fluctuate with the market. And we're happy to take this kind of growth rate when markets work in our favor. Regardless, our clients need us to be strong, secure, fast and competitively priced. They can't wait for us to clear backlogs or will not be available to explain sensitive matters if the client prefers it. And we remain confident in our ability to grow this segment irrespective of the market conditions. Moving to Slide 10. This is a page we've shown you over the last several years. It helps you get a feel for what is driving our volume, and in turn, acts as a good indicator of the underlying health of the business. Starting on the left-hand side, we saw an increase in active clients, driven by healthy reactivation of dormant Consumer clients, growth in Corporate and Online Seller clients and good new Enterprise activity. Transactions per active client was actually down, but this was due to the very active offshore share purchases in fiscal year '21. When we normalize for that, it is up a healthy 7.3%. Similarly, we saw a decline in the total number of transactions. It was actually up over 10% when normalizing for offshore share purchases year-on-year. Those offshore share purchases also skewed average transaction values down in fiscal year '21. So the growth of over 58% needs to be read in that context. When normalizing for that, we still saw growth of 23.5%, which is extraordinary, as I've already talked about. Now let me hand you to Selena to walk through our results in more detail.

Thank you, Skander. Moving to Slide 12. We have delivered a strong financial results with growth across the portfolio. We've seen continued momentum in the business with fiscal year '22 fee and trading income, which is what we refer to as revenue, of $158 million, up 17.7% on fiscal year '21. As Skander has already taken us through, it's great to see that the growth is across the whole portfolio, with all regions and segments up double digits. We have also seen consecutive growth with fee and trading income up 13.7% in the second half of '22 versus the first half of '22. And again, this has been seen in all regions and segments. North America is up 27.8% versus fiscal year '21 and 8.3% versus the second half of '22. APAC is up 12.8% versus fiscal year '21 and 13.9% versus the first half of '22. EMEA is up 26% versus fiscal year '21 and 17.2% versus the first half of '22. If you look at our segments, we see the same trend, with Corporate up 14.5% or 29.9% ex offshore share purchases versus fiscal year '21 and 20.3% versus the first half of '22. Online Seller is up 2.7% or 15.7% ex Asia versus fiscal year '21 and 6.6% versus the first half of '22. Enterprise is up 31.3% versus fiscal year '21 and 6.3% versus the first half '22. And finally, High Value Consumer is up 24.5% versus fiscal year '21 and 7.3% from the first half of '22. Net operating income, which is our fee and trading income less partner commissions and bank fees, is up 24.7% on fiscal year '21, which is a stronger growth rate than fee and trading income as all our work on reducing bank fees and partner commissions continued to hold during the first half of '22. Our NOI margins are down 3 basis points. But when you look at FX transactions only, by excluding same currencies, they are at 53 basis points and consistent with prior years. It makes sense for us to exclude same currencies given they have a very different margin. Firma also has large same currency volumes, which we will split out at the first half '23 results. We're working hard to sustain our margins and look at our pricing on a regular basis. Underlying operating expenses of $102.5 million are up 15.4% on fiscal year '21 but is growing at a slower rate than NOI with 24.7%, which delivers positive operating leverage. We've delivered our largest ever underlying EBITDA of $44.5 million. Underlying EBITDA margins are strong at 30.3%. Skander will take you through the guidance for fiscal year '23 later in the presentation. For fiscal year '23, we expect EBITDA margins to be around 28% as we integrate Firma with OFX. As outlined at the Investor Day, we expect EBITDA margin to return to 30% after delivering synergies over the next 2 years. This is our biggest statutory profit of $24.5 million in the history of the company. The effective tax rate is just under our guidance of 24%. We expect our tax rate to be 24% in fiscal year '23. And we're working through what the tax rate for fiscal year '24 and beyond will look like given that our offshore banking unit tax benefits will no longer continue in fiscal year '24. We will still have some benefits from research and development, tax credits and offshore tax rate. But the rate in fiscal year '24 would be closer to 29%. Net cash held is strong at $84.2 million. And net available cash, which is after collateral obligations and bank guarantees, is $31.1 million, which is down $5.7 million on fiscal year '21. And I'll walk through this later in the presentation. Moving to Slide 13. Our underlying operating expenses are $102.5 million, up $15.4 million (sic) [ 15.4% ] on fiscal year '21. The largest increase is employee expenses, up $9.4 million over fiscal year '21. This is a combination of 3 items: being investing in more people, salary inflation and an excellent performance, driving increased incentives paid versus fiscal year '21. We've added 52 employees who support both revenue-generating and revenue-enabling functions. Like all companies, we are experiencing salary inflation. And due to exceptional performance, our short-term incentives are paying out 100%, up from 47.8% in fiscal year '21. And the LTI plans are in the money. STI and LTI accounts for over $5 million of the increase. We continue to invest in our promotional spend, which is $16.5 million for the year, up 29.3% on fiscal year '21 and across all our regions. Our mix is consistent with fiscal year '21, with 60% spent on demand generation and 40% on demand capture. We've also launched and are activating our partnership with the National Hockey League in North America as the official currency exchange sponsor. We expected our technology expenses of $8.3 million to increase [indiscernible] rising 8.5% on fiscal year '21. This is a result of our Software-as-a-Service expense due to our investment in risk and customer service tools that we have paid on a tax basis. Bad and doubtful debts are $100,000, which is 94.1% reduction on fiscal year '21 and an exceptional outcome. This is a result of the investments we have made to detect and prevent fraud. We use multiple technologies, including identity verification and voice biometrics. However, we do expect losses in the future, especially in North America as North America continues to grow and plan for at least $1 million per year. This is an area where we'll always be vigilant in tackling new types of frauds and [ measures ]. Other expenses of $10.5 million are up 20.2% on fiscal year '21, which include increased professional fees, insurance premiums, which everyone is experiencing, and the return to travel. Turning to Slide 14. We continue to have a strong balance sheet and generate good cash flows. This has been critical to enable us to secure the $100 million of the debt facility for the purchase of Firma. This will be included in our financial statements from May onwards. Our net cash held position, which includes cash held for own use and deposits due from financial institutions of $84.2 million, up $23.6 million on fiscal year '21. You may remember we hold some of this cash as collateral for our trading lines and bank guarantees. Collateral was $52.6 million, up from $23.8 million in fiscal year '21, due to $16 million of customer cash for our global currency account products being held as a bank guarantee and increased collateral requirements due to volatility at the end of March. Since then, over $6 million that was being held for increased volatility has returned. Net available cash is $31.6 million, down $5.2 million on fiscal year '21. Cash flows from operating activities is $47.6 million, which is an excellent cash conversion rate from our underlying EBITDA of $44.5 million. Of the $47.6 million of cash from operating activities, we've invested $10.5 million in intangible assets as we continue to deliver our single scalable platform and our payment risk capabilities. We also invested $6 million in TreasurUp and bought back $2.65 million through our on-market share buyback program. We announced with the acquisition of Firma in December 2021 that the Board considered it prudent to put the share buyback program on hold to prioritize repayment of debt associated with the acquisition. OFX remains committed to repaying its debt in less than 4 years, subject to no other value-accretive growth opportunities emerging which require funding. Moving to Slide 15. We continue to invest in our client experience and reliable scalable systems. In the last 12 months, we've invested $10.5 million. You may remember our original guidance for fiscal year '22 was $12.6 million. And while we have had a successful year in delivering enhancements, like all companies, it's been hard to find resources in this space, hence, the gap. We've developed a number of outsourced partnerships and expect the development in fiscal year '23 to increase to between $12 million and $16 million. Firstly, let's cover the progress we made this year. There have been some exciting developments. Delivering better payments capabilities across 4 key currencies, being the Philippine peso, Indonesian rupiah, Malaysian ringgit and the Indian rupee. This not only reduces the settlement time from days to minutes for our customers, but also provides bank fee cost reduction. So everyone wins. We have automated payment allocation, speeding up payments for our customers and achieving straight-through processing. We've improved customer verification tools in the U.K. with consumer conversion rates up 107 basis points and the U.S. up 117 basis points. We've also implemented improved onboarding processes for Online Seller customers. Lastly, we went live with our CargoWise solution with WiseTech Global, and their customers are trialing a new experience. The investment in intangibles in fiscal year '23 and beyond will be focused on Firma integration and providing the clients a digital platform experience, continued work on payments and straight-through processing, also allowing clients to track their payments across key currencies, improved client due diligence and verification experience for all our global clients, a new client platform that is fit for corporate as it integrates transfers, global currency account and multiuser services, and new tools for customer service teams to perform client relationship management and communication more effectively. I will now hand back to Skander to take you through our areas of focus for fiscal year '23.

Thank you, Selena, for that excellent coverage of our financial performance. Now let's turn to our areas of focus in fiscal year '23. Moving to Slide 17. Our attention and effort is very firmly on delivering EPS accretion in year 1 through the acquisition of the Firma business, which largely closed on May 1. I traveled there in early May along with several members of the global executive team and several members of Alfred's North American leadership team. It was an excellent visit. I conducted over 15 one-to-ones to add to the 20 plus that already done. We had workshops on the integration program. And we reviewed areas of progress in Firma's business. I've got a good sense of their client focus. My observation is that this is a well-run business, with clear focus on service and risk, that generate real cash, make real EBITDA and have been growing well in the last 12 months. The team understand their local context and are very committed to the growth of their clients and sustainability of the business. It's clear we can learn from them, especially in commercial excellence, and that we can help the portfolio grow faster by giving access to better banking, better product capabilities and a better digital client experience when it's required. The U.K. business, which accounts for 11% of turnover, has not yet been formally acquired as it remains subject to approval from the FCA. While we go through that process, we will support their U.K. clients via our service agreement. Our integration efforts are well underway. We've split this under 3 main streams: people, customer experience, and business combination synergies. As part of our people program, Phase 1 of the new organization is in place and planning is underway for Phase 2. Integration leaders have been appointed, and work is going well. In customer experience, the product stack analysis is well underway. And there's already a plan to integrate by regions so as to minimize risk and disruption. In terms of synergies themselves, as we have said, we expect these to be more than $5 million in fiscal year '25. The areas are clearly identified in both cost and revenue, and we are already simplifying bank fees, for example. Performance at Firma has been good, underpinning our revenue synergy assumptions at this point. In conclusion, on Slide 18, we are very encouraged by the progress we've made and by the outlook for this year. Our strategic focus will be largely in the same areas, with the addition of a strong Firma integration being a high priority. We will continue to invest in the areas that will make us more valuable, regional growth in North America particularly, but also starting our European expansion. Plus, APAC will continue to be a strong core region for us. We will invest in growth of our Corporate and Online Seller segments. We will win prospects in our Enterprise pipeline and activate the ones we already have. And we'll continue to grow our valuable Consumer segment. As we do these, we expect our financial results to be healthy. We are providing specific guidance for fiscal year '23 this time given the integration of Firma. And that looks like net operating income of between $200 million and $212 million at stable net operating income margins. Underlying EBITDA will be in the range of $55 million to $60 million. These numbers take into account the fact that we don't expect the Consumer rebound to continue at the same levels, a tempering in average transaction values as outlined earlier as well as a normalized loss rate. Further, we'll have the contribution of 11 months of Firma rather than 12. As planned, we expect to deliver Firma underlying EPS accretion of 20% on an annualized basis through the integration synergies we've identified. Finally, we expect intangible investment to be in the range of $12 million to $16 million, as Selena outlined. So a very strong fiscal year '22 and a bright outlook for fiscal year '23. Thank you for your time. And now let me hand back to Melanie for any questions.

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

Congrats on the good result. Just a few questions from me, starting off on the Corporate side of the business. So obviously, the second half is really strong and that run rate now tracking over $72 million if you annualize that in the second half. Just wondering how we should think about that growth throughout the year. I mean, does the 1H '23 deliver positive growth? Or should we sort of look at that more on a whole year basis and then going back to that sort of low single -- double-digit growth rate?

Yes. Look, we haven't split it by halves, Seth. We continue to think there's going to be strong momentum in Corporate. And as we touched on in the call, it's just going to be a case of tempering a little on those average transaction values. That's what we're kind of assuming. But I will say that we're still seeing pretty good performance in Corporate. And we still feel pretty good about the outlook through first half, second half fiscal year '23.

I understand you don't want to guide half-on-half. But -- and then just sort of on the ATVs, obviously, you talk to them, and they're a big driver of the result. So what are the other levers that you have within them? You've got that slide that works through that. But if ATVs are coming down, how do you sort of offset that headwind going into '23? Is that higher transactions per customer? Or do you think you can drive a bit of margin?

Yes. It's a bit of both. So you definitely saw transactions per active client continue to be strong. And then secondly, obviously, from an NOI margin perspective, some of the compression in NOI margin is just down to average transaction values. So if they moderate, then there should be some improvement in NOI margins. And then obviously, the other thing that we touched on that the team has really done a fantastic job on is things like bank fees and commissions because those more active clients, just by definition, are using -- doing more transactions. So the bank fee benefits actually grow as well as the work that we've done in the corridors to drive up speed and drive down costs. So all of those things are really the levers, to your point, that we can drive to offset if there are ATV moderations.

That's really helpful. And then just is it possible to get a bit of an update on, I suppose, the market dynamics financial year-to-date? Obviously, the fourth quarter, we saw a real spike in volatility, which drives transactions through a consumer in particular. But just how has that evolved at the start of the year? And how does that kind of impact the outlook over the rest of the calendar year if that pulls back a bit?

Yes. So look, I mean, obviously, all of you will have seen the volatility out in the market in currencies. And as you would expect, that's been a tailwind for us in our Consumer business through April and even to some extent in the first part of May. So we're obviously encouraged by that. It's kind of in line with our expectations when volatility hits. So we feel pretty good about that. But as we've highlighted, that's not something that we can predict for the full year. But certainly, it's performing well given the volatility.

Your next question comes from Lafitani Sotiriou with MST Financial.

Congratulations on a good result. A few questions from me, if I may. The first is in relation to Firma. And it's great that you've reiterated the guidance and also provided $5 million in synergies. I think the last number you provided in terms of the EBITDA was $10.9 million odd or $11 million for the year finishing September '21. Is the underlying Firma business tracking at about the same rate? Or has it come off? Or would you be disappointed if you can't reach at least that level pre synergies?

Yes. So obviously, we've only -- it only went live in May. Everything we're seeing is tracking well. We're happy with that. And you would have seen that we also recommitted to the 20% EPS accretion on an annualized basis. So really happy with what we see. We're really enjoying integrating the businesses together. And we're off and running with some of the synergies, which is great.

So just to clarify. So the $11 million-odd EBITDA that they're running at beforehand is -- sounds like that that's a baseline. And the timing of the $5 million synergies is, if I was to have a best guess, they'd be half in this financial year and half in the future years?

Yes. So yes, I agree that the EBITDA is baseline, the $10.9 million, which is fine. The synergies will ramp over the 2 years. So you'll see more in the second year than the first as we start. And it's really due to what we're trying to achieve. So the really easy ones [indiscernible] those things like a little bit slightly easy, bank fees. So we'll start looking at bank fees providers and making sure we get best rates and it doesn't require any technology, whereas those other synergies will require an integration which will come later, and that will come through further in the second half. So I wouldn't bank half-and-half. I would probably ease it in over the 2-year period.

That sounds good. So moving on to second area. I just wanted to dig into the Enterprise piece a little bit more. I think there were some comments made by Skander that you're looking -- you'll be looking to get your first wins in financial year '23 in the North America. Did I hear that correctly? And are we talking about at least one win? Are we talking multiple wins? And just the timing on those wins and the magnitude, if you could add some color.

Yes. Sure. So yes, you did hear that correctly. The thing I would say about North America is they've got a good pipeline, got a strong team. We're adding resource at a product and technical level. So we're expecting progress. And the words I used was some wins. But as with these things, it's very, very hard, if not impossible, to give you a date or a size. Let me just say that we're encouraged and it's looking healthy, which is why I made the statement. But I can't be more precise than that at this point.

No. I understand that. I mean just on the other side of the Enterprise, the $6 million-odd revenue you achieved in last financial year, can you give me broadly how much of that $6 million was made up of WiseTech and Link?

We don't actually split it out. But we did make the comment in the presentation that actually the really encouraging thing is that the existing client growth is really what's helped that overall number. In terms of the WiseTech and Link, relationship is very strong. We feel really good. And there's lots of excellent partnership going on there. It just is taking time to activate. And the more you sort of think about it, you're sort of talking about working with major counterparties and their clients to go in and change their systems. So it just does take time. But very encouraged and -- on both sides, outside and the WiseTech or Link side, there's continued commitment and excitement about [ what to do ].

Look, I understand that. I guess, where I'm -- I understand that. I guess where I'm coming from is that there's existing guidance for $5 million apiece revenue for both Link and WiseTech. And your current revenue in that whole division's $6 million. And so if we're looking out over the next 2 to 3 years, just trying to work out the ramp-up in those 2 revenue lines that had been already previously flagged. Would you be disappointed if you didn't hit those target guidance in the next year or 2? Or what should we -- how should we think about that?

Yes. I mean we actually updated the market on Link. I think it was about 6 months ago, to say that the $5 million revenue number that we had previously guided to, we were no longer guiding to, really as a result of a couple of technical items that we're trying to work through with Link. Certainly, on WiseTech, we're continuing to make good progress. And as you say, we'd certainly be disappointed if over the medium term we didn't hit those types of numbers. But we're not providing specific guidance by relationship at this point and were any change to that from what we've said in the past.

Okay. Understood. Just a couple of more questions. One is in relation to the staff number. There's 52 new staff members over the last year. Can you just remind me, Selena, how many staff members do you currently have on the books? And so just trying to work out the magnitude of that increase. And can you be a little bit more specific around where they've been allocated, both -- is it R&D, is it sales, is it BDMs just so we can get an idea? Or are they broadly evenly spread to what you've currently got?

Yes. So we went from about 400 to 450 is the magnitude. Also remember that Firma has a wonderful talent pool as well, and that also adds another -- just under 200. I think there are 197 FTE on top of that, which is excellent. Look, it's broad-based where the staff has been added across. There's regional adds. Obviously, we want to grow each of the regions. But there has been probably more than most increase in technology as we are building our platform, and you've seen that as the CapEx expenses rises or the intangible expense rises year-over-year. But it's pretty broad based. It needs to generate growth in the -- growth. First is sales growth in the regions and then also continuing to build on that technology and capability for the business.

Yes.. Okay. Just my final question, in relation to the EBITDA guidance. I just want to unpack that a little bit. So just as our starting point, we've got $44.5 million, sorry. And if we just go to the Firma numbers, and I understand there's some timing issues. But if $11 million is the base and there's, say, $1 million or so of synergies, then that will come through in the current year and you minus, I guess, some of the timing impacts, you still have over $10 million EBITDA being added. That effectively gets you to the base of your guidance, which is the $55 million to $60 million. And so effectively, the organic number is around 0 to $5 million. Given the momentum that you're seeing, the continued growth that you've called out, particularly in the Corporate and Enterprise, is it a case that because of the volatility and you're cycling such strong numbers, you're just more concerned of putting a big number out there particularly because we know that consumer can be volatile? But can you just give a little bit more color as to, when you walk through those numbers there isn't a lot of guidance for the core business?

Yes. I think that's a fair assessment, Laf. And look, the 3 things that we've kind of guided conservatively on, one, as you say, the ATVs. So at the moment, at $28,000, that's sort of 20% higher than the highest they've ever been. And it's north of 20% higher in Consumer and even more in Corporate, and it's all over the world. So there's a lot of, let's call it, demand that we're getting, and we love it, and we're servicing it very, very well, and it isn't necessarily going to abate all of a sudden. But it's hard when we've been in this business for 20 years to suddenly see that sort of jump and then just assume there's been some dramatic shift in one year that's permanent. So we've been conservative on ATV. Obviously, if it comes in, that's great, and it's upside. The second thing to your point, which we've been consistent about, is Consumer volatility. And as we shared on the chart, that there was 51 days of what we define as volatility in the second half. It's actually less than other parts that we've seen. And it's jumping around a bit. We think as well competitively, as I mentioned in my script, relative to the competition we were open and available with Tier 1 banking relationships, so we kind of won more than our fair share. But it's very hard to predict what that's going to look like. So again, we've been relatively conservative on that. The other one, on the EBITDA side is outstanding execution on losses. It's about $100,000. But you only have to go back a couple of years, and it was $2 million. And the year before that, it was $3 million. So again, we'll be very, very strong and our execution incredibly focused. But it'd be unwise for us to just build that into some sort of permanent very, very low loss rate. So those things, plus the timing on the Firma, we've just put a conservative outlook which we think is sensible. I think people are heading into a very, very uncertain operating environment and economic environment, geopolitical environment. All of those things will have an effect on our Corporate clients, on our Online Seller clients, on our Consumer clients, and of course, on Enterprises who are trying to go execute. So that's hopefully unpacks it for you on how we thought about it.

[Operator Instructions] Your next question comes from Cameron Halkett with Wilsons.

May I just weigh in on last, last question there. Following a bit of a similar train of thought, I'm just wondering what you guys are baking in or thinking for the Aussie dollar in terms of strength or weakness over the coming 12 months now that as you consolidate Firma, there's around 2/3 of earnings now coming from offshore? So just wondering how that relates to your EBITDA guidance.

Yes. So I don't think we -- I think we -- it's not that. Yes. So we haven't really thought about that too much at the moment. While Firma earnings will come back, yes, it will be other offsets. If you have a weak Aussie dollar, that'll come back as stronger as earnings, but then you'll have other costs that will offset that. There are some natural hedges within the portfolio. So we haven't provided any insight into that. We can take it and think about it and get back to you.

Yes. But the other thing I'd just add to Selena's comment on there is obviously a strong U.S. dollar with a growing North America and U.S. region is tailwind.

And you're going to make more -- we're going to make more out of volatility in revenue from customers than any upside or downside on earnings coming back.

Yes. That's fine, guys. I guess the summary there is guidance on the market is more or less constant currency. And then as things swing around a bit, it hasn't really been factored into the statement that has been produced.

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

Well, thank you, Melanie, and thanks, everyone, for taking the time. As I said upfront, we are absolutely delighted with the results. It's very high-quality results. We think the outlook is healthy. We're being conservative because we are all heading into a very uncertain future economically and politically. But lots of cash generation, lots of profitability, love the execution of the team. And we'll continue to keep you updated on progress. Thank you very much.

That does conclude our conference for today. Thank you for participating. You may now disconnect.