OFX Group Limited (OFX) Earnings Call Transcript & Summary

Welcome to the 2025 Annual General Meeting of OFX Group Limited. This meeting is being recorded so that it can be uploaded to our website. My name is Patricia Cross. I am the Board Chair of OFX Group Limited, and I will chair today's Annual General Meeting, which is being held as a hybrid meeting with some investors present at our offices in person. Nice to see you all and others attending online. I'd like to start by acknowledging the traditional custodians of the lands on which we're gathering and to pay my respects to elders past and present. I also extend that respect to any First Nations people attending the meeting today. The company Secretary has advised me that we have a quorum of at least 2 shareholders present, so I declare the meeting open. I'd like to introduce the OFX directors. First, I'd like to introduce Skander Malcolm, the CEO and Managing Director. And then attending here up front with me are the other nonexecutive directors. First on my right is Connie Carnabuci, who is a member of the Remuneration and Nomination Committees. Next is Jacqueline Hey, who is the Chair of the Remuneration Committee, and she also chairs the Nomination Committee. Next, on Skander's right is Cathy Kovacs, who is a member of the Audit Risk and Compliance as well as Nomination committees. And finally, there is Rob Bazzani at the end. He is the Chair of the Audit Risk and Compliance Committee and a member of the Nomination Committee. Adrian Wong, the Chief Legal Officer and Company Secretary, is attending. Adrian is back there. And we also have the company's auditor, Shaun Kendrigan from KPMG here in person as well as Karen Hopkins from KPMG, who will be taking over as lead audit partner for OFX following this AGM. Welcome, Karen. Members of the global executive team are in person with me or by a zoom, are Selena Verth, the Chief Financial Officer; Mark Shaw, the Chief Operating Officer; Axel Freytag, the Chief Strategy and Corporate Development Officer; Kate Malone, our Chief Risk Officer, who is also relatively new to our company; Lucy Allen, the Chief Marketing Officer; Yung Ngo, the President of Asia Pacific; Kate Svoboda, our Chief People and Culture Officer; Adam Thomas, the Chief Tech Officer; and Josh Goines is here from North America. He is the President of our North American office. We have here an online Jaco Veldsman in Francois Henrion. I want to give a special shout out to the founders of Paytron. Due time zones, our offshore Regional President, Maeve McMahon, will not be on the call. Before we begin, I have some quick housekeeping matters. For those attending by Zoom, hopefully, you've resolved any technical issues. But if not, please call the OFX team on 612-8667-9160. For those attending in person, should you need to leave the room at any point, simply use the doors that you came in through and toilets and emergency exits are located just outside those doors. Our aim is to ensure a productive and fair meeting for all shareholders. Please listen courteously to others and express your views fairly and respectfully, avoiding any language or conduct that could disrupt the proceedings. To ensure the meeting runs smoothly, I ask that all questions be directed to me as Chair, unless otherwise noted. And to give all shareholders an opportunity to participate, we suggest that each shareholder limit their questions to 2 per agenda item. Please keep your questions concise, relevant and if possible, avoid too much repetition. If time permits, we will return to any additional questions that haven't yet been answered. So now on to the agenda for today. The proceedings today will be, first, I'll make a brief introductory address. Then I'll introduce the CEO and Managing Director, Skander Malcolm, who will provide his address. We will then move to the formal part of the meeting and the resolution set out in the notice of meeting that has been sent to shareholders. As for my address, again, thank you for joining us, both virtually and in the office. And again, welcome. It's really pleasing to have all of you here. I'd like to begin by talking about the Board's commitment to increasing the sustainable through-the-cycle value of your company, hand-in-hand with excellent risk management and corporate governance. FY '25, as we all know, was highly unpredictable, especially for our mainstay business, Global FX Payments, OFX 1.0. Rather than slashing costs and reducing investment, we doubled down on our transition to our new client platform, OFX 2.0, which we also call NCP. The limited growth opportunity vulnerability of our monoline FX business underpinned our calculated decision to accelerate this pivot. OFX Limited is a small cap with balance sheet strength, cash generation and leadership experience of a much larger organization. This capability made such a quick and emphatic pivot possible during the year. Every Board and management team member has a successful track record in best-in-class international organizations, and we were in no doubt of the need to accelerate our commitment to OFX 2.0. We started FY '25 and keep in mind that this was back in April 2024, which seems an EON ago, with strong customer flows, a relatively benign investment environment and a plan for steady Paytron platform integration following the completion of the Firma integration. And by the way, April 2024 was one of our most record months to date. However, the macroeconomic environment, as we all know, deteriorated, especially as the year went on. And then we had the unprecedented macroeconomic and geopolitical events following the U.S. elections, which severely impacted our business and more importantly, our clients. A combination of low business confidence and more of than trading ranges in our key currency corridors created highly volatile and unpredictable results. Although we remain profitable with around 90% cash conversion, the market reacted severely. We do not underestimate this impact on shareholders, and indeed, we have all collectively shared it, but we remain very convinced that this company will deliver strong returns. Let's consider the governance behind our momentous decision for the accelerated transformational pivot. My letter to you in the annual report did say in a year where many pulled back, OFX moved forward. Whilst executed quickly, our strategic pivot was actually carefully considered by this Board, going back even well before November 2023 when we first discussed the strategy. Over the ensuing 12 months, in addition to carefully analyzing client reactions as we rolled out the new client platform in Australia, we invested in comprehensive research that endorsed substantial investment to accelerate our transition to OFX 2.0, the NCP, driven by early client signals and an extensive market analysis. The Board applied its global expertise with an independent perspective, constant challenge and for quite a few of us, further external analysis. The power of a Board is to engage, challenge and be constructive where you can be. This is no space though for chelators, and it's also not a space to be sitting around with you makes. This Board has extensively and independently reviewed and challenged the OSX strategy. We are highly convicted independently. In FY '25, we successfully launched our new client platform in Australia and Canada. We began migrating existing Australian clients and expanded to Europe and the U.K. in June. Our first quarter FY '26 results show promising progress, which Skander will speak to. OFX 2.0 transforms our offering from a focused foreign exchange offering to an integrated solution for modern CFOs, including global virtual currency accounts, corporate cards, expense management, accounting platform integration and critically our distinguished high-touch client service and risk management capabilities. Our strategic focus remains on accelerating our B2B pivot and expanding our product suite. In the first quarter of FY '26, we added 35 features to our new client platform products and services, including our industry-leading and only, I think, digital forward solution. Our unwavering commitment to compliance and operational excellence remains fundamental. Industry-wide regulatory intensity continues escalating sharply. AML fines surged from $8.9 billion in 2014 to over $19 billion in 2024. Interestingly, fines against fintechs and nonbank financial institutions have grown exponentially and even more so since then. While banks represented 85% of total fines roughly in 2014, the bank's share fell to around 60% by 2024. And 2025, as I alluded, does indicate a continuation of this trend. OFX's proactive risk management powered by best-in-class tech provides critical strategic advantage and is fundamental to our ability to sustainably scale up and grow. As I said, our cash generation remains strong. Over FY '25, we repaid debt and executed a share buyback program, acquiring 9.2 million shares for $13.7 million. Regarding today's advisory vote on the remuneration report, we are going to have a first strike based on the advanced votes. We take this feedback seriously, and we commit to meaningful reflection and consideration of improvements. The Chair of the Remuneration Committee, Jacquie Hey, and I met with many shareholders leading up to this AGM and having heard the concerns, we are deliberating further as a Board. I commit to an open and constructive dialogue with you. In closing, I want to thank the OFX Board for its terrific constructive challenge and support. Thank you also to Shaun Kendrigan of KPMG, who is here for the tough questions still. He has so well audited our company over the last 5 years, and he is rotating off and Karen Hopkins is taking the role. I would also like to express my thanks to an admiration for the entire OFX community who work very hard and with much passion for what we do. And most importantly, thank you to all of you, our shareholders, for your continued support and for being part of the OFX journey. Now I'd like to hand over to Skander Malcolm, our CEO and Managing Director.

Thank you, Tricia. And as highlighted on Slide 6, in fiscal year '25, the business demonstrated resilience in what was a very unusual macroeconomic environment. The weak business confidence we saw in the first half continued through the second half with political instability and the prospect of tariffs later in the period adding to that uncertainty. This meant that our results were below our expectations as we'd set out at the half year with net operating income of $214.9 million, down 5.5% versus prior corresponding period and underlying EBITDA of $57.7 million, down 10.7% versus prior corresponding period with an underlying EBITDA margin of 27%. The team worked very hard to drive the business levers within our control whilst continuing to invest in creating a bold new company that supports our clients in many more areas than just FX and risk management. Our margins and cash flows remain very healthy, and we maintain very disciplined cost control, cash management and risk management. We finished fiscal year '25 with net cash held of $77.2 million, up $2.5 million from our first half, and that included repaying a further $24 million of outstanding debt through the year as well as completing an extensive share buyback program, buying 9.2 million shares for a total of $13.7 million. Moving to Slide 7. We have always set up and run OFX in a sustainable way, which meant keeping very disciplined on key financial and operating metrics especially when external signals were very mixed and volatile, while at the same time, continuing to invest in building a competitive advantage over time. Business confidence was subdued, but our small to medium businesses are feeling even more pressure with SME business confidence declining more significantly in our major markets, as you can see from the data points on the left. They saw the interest rate outlook change, cost of goods rise and whilst inflation moderated, it was persistent and later in the year was even forecast to rise. Political instability and the threat of tariffs drove further uncertainty later in the second half, particularly for our target clients who buy or sell cross-border. The chart on the left shows our monthly revenue versus the monthly average revenue over the year. We do see some variation ordinarily, driven mostly by the number of days in a month or if we see particular events. However, given we have very high recurring revenue, it was very unusual for us to see such variation. And in fiscal year '25, this weak business confidence affected the average transaction values or ATVs that we typically see unusually across the world. Given that backdrop, we worked very hard at optimizing our business fundamentals. The metrics on the right-hand side of this page demonstrate the way we run the company sustainably. We drive operating levers that create value over time, cash generation, thoughtful expense management and risk management designed to support growth whilst keeping the company safe. We work very hard on execution led by an experienced and very competent team. And this execution is what has delivered superior EPS accretion from the acquisition of Firma a fast and very meaningful integration of Paytron and a healthy environment for our employees to do their best work. We also continue to invest in our strategic transformation through the OFX 2.0 strategy, which extends and improves our value proposition and the total addressable market we can go after. We are acutely aware that a stronger value proposition will grow our client base and the average revenue we generate from each client, which in turn will drive faster growth. The Board and management team have very high conviction in the path we're taking, underpinned by market examples, detailed internal research and now also strong external research, which I will talk to shortly. And our team of approximately 700 OFXs are engaged, working hard, competing vigorously and creating value all around the world. Moving to Slide 8. Many investors will be familiar with this page as we have shared it previously. It lays out how our strategy has evolved as OFX 2.0, highlighting the outcomes we are targeting, which are scaling in our major markets, focusing on ideal client profiles or ICPs who generate the revenues akin to the more valuable corporate clients with an ARPC of more than $4,000, more products to help businesses manage their operations internationally and a modern and scalable client platform, which will mean we grow revenue faster and generate better margins over time. Given the potential value we felt we could unlock, we commissioned a global strategy leader with depth in payments and software to assess the market opportunity through an independent study. We felt that with this, we could also address the questions of whether we could -- should continue to invest in this opportunity, how we should invest and how fast we should invest to generate the best return. That study was concluded in late March, and we discussed it as a Board as we finalize our approach to fiscal year '26 and beyond. It not only validated the strategy we had in place and what we had already seen from our competitors who have put this in place, but it very clearly and unequivocally supports the accelerated new client platform investment we're making. You have heard us talk about a bigger global FX total addressable market, and you've also heard us say that there is very little industry data to draw from. What the study has given us is a much clearer view of the opportunity that is available. Through 2.0, this opportunity is doubled. By adding the products and services that tackle other pain points like getting paid and managing flows and liquidity, our TAM for target ICPs increases by 94% from USD 34 billion in the 1.0 world to USD 66 billion in the 2.0 world. Moving to Slide 9. The study was important in further building our conviction to accelerate because it confirmed that our target clients are very much ready to switch to fintechs, so long as we can provide an integrated solution. And that was a very key finding. Previously, we had always provided a superior product in FX and superior service through our digital plus human platform being a competitive differentiator, but the reluctance to switch was because target clients are looking for solutions across a range of problems, not just FX. To unlock this opportunity to switch, we have the integrated product set, a very contemporary and secure platform in NCP and the FX and risk management, which is a key differentiator in the sector, especially versus banks, but also versus many fintechs who focus on payments or spot FX only. Further, we have the team, a well-established global footprint, a strong balance sheet and cash generation to act boldly to take this opportunity. We have set up and run OFX for the medium to long term and have very disciplined financial controls and knowledge to consider when investing. So considering how much to invest and how quickly was a very carefully considered exercise. Moving to Slide 10. Here are the main reasons we have chosen to accelerate our investment. Firstly, as we've shared previously, the ARPC of a client who is more deeply engaged with more products is higher. To have more clients with a higher ARPC will drive top line growth faster and underlying EBITDA margin expansion. For example, we already see that with our new clients, the growth in non-FX revenue is faster than FX, and it's at a higher NOI margin. We've previously shared that in looking at public competitors, our current corporate clients' ARPC is $4,200, and that includes only 1% non-FX revenue, as you can see on the left-hand side. So growth in non-FX revenue at stronger NOI margins grows NOI and underlying EBITDA margins. We expect to achieve 10% or more in non-FX revenue by fiscal year '28. Illustratively, if we got to the levels of ARPC generated by our competitors, longer term, we can generate around 40% more revenue from the same clients. So the sooner we're able to provide the expanded product offering, the better. However, to capture this upside, we need to invest up to a further $29 million in fiscal year '26 with between $16 million and $24 million of that in OpEx and $5 million in CapEx. This includes some natural employee cost inflation, investment in the accelerated platform rollout, our go-to-market strategy and our commercial resources to drive faster growth. If OpEx ends up at the higher end, it's because we're generating good NOI growth and paying bonuses in full. There is no further material step-up change expected to this investment in fiscal year '27 and is expected to normalize in fiscal year '28. Unlike others, we can self-fund this growth, which is absolutely critical. And then finally, on a straight ROIC basis, we look at the returns this investment profile, i.e., doing it in an accelerated fashion would generate and compare that to doing it more slowly. Doing it quickly provided the strongest return because the extra revenue, combined with the reduced client churn delivers the fastest and best ROIC. And this makes a lot of sense when we go back and reflect on the study that showed that the majority of market share is still with banks, but we are competing to dislodge it with fintechs. It is also consistent with what we see in active clients. If we lose clients, we can grow ARPC, but we will struggle to grow overall. So a stronger value proposition delivered quickly protects the existing revenue better. And interestingly, we see evidence of this in the early Australian clients who have been migrated to the new platform. When we compare the average monthly FX revenue we earned from them for the 90 days prior to the migration with the FX revenue we earned in June, we've seen the FX revenue grow more than 8%. And this is true for every cohort and has continued through July. Further, a longer execution time frame always creates other risks, both technical and operation. If we're too slow, we will waste this opportunity and risk competitors catching up on our product capability. Going faster is what gets us to more than 15% NOI growth by fiscal year '28. And this is underpinned by more NOI from both FX and non-FX, lower churn, more active clients and higher ARPC and ultimately, the kind of longer-term returns that will be very attractive for our shareholders. Moving to Slide 11. I want to highlight our positive start to the year from our 1Q '26 trading update as announced on the 24th of July. NOI rose 11.3% versus the fourth quarter, which reflects a strong performance in more stable market conditions and good execution as the NCP rollout gathers momentum. NOI growth versus fourth quarter '25 was supported by a 15.7% increase in group cross-currency average transaction values, offset by a 6.3% reduction in group cross-currency transaction volumes. NOI fell 3% versus prior corresponding period. Active clients in corporate were down 1.6% versus the fourth quarter with the lapse rate reducing as they migrate on to NCP and new products and features added. In Australia, where 40% of corporate clients were migrated on to NCP as at 30th of June, active clients were down 1.3% versus fourth quarter '25, and that's the lowest lapse rate in 5 quarters. And it was very encouraging to see our Enterprise segment continue to grow, up 33.5% versus PCP with positive momentum continuing and up 42% versus fourth quarter '25. Our Consumer segment was up 2.4% versus the fourth quarter and down 9% versus PCP on lower transaction volumes but with higher ATVs. Moving to Slide 12. The global NCP rollout is progressing well. The migration of existing Australian corporate clients is expected to be substantially complete in the second quarter. Through July, 62% of Australian corporate clients have now been successfully migrated. NCP went live in Canada in April and in EMEA in June for new clients, attracting strong early traction with conversion of prospects to clients improving post launch. In June, our industry-leading digital forward solution designed for automated invoice to payment was launched, and this feature allows clients to lock in rates, addressing the economic uncertainty they face. This was 1 of 35 new features added during the quarter, including customized pricing, cash back on cards, AI-driven expense allocation and payment engine enhancement to facilitate faster and lower cost payments. In July, the popular Pay by card feature was made available again following the transition -- the vendor transition, which was completed in the second quarter. Moving now to Slide 13 and the outlook. While global tariffs continue to create uncertainty, we have seen markets begin to stabilize in the first quarter. We continue to target growth in NOI, and we will work exceptionally hard to deliver that. And the year has started well, as I mentioned earlier on. As part of our disciplined approach to capital management, we elected to prioritize preserving cash for trading collateral through the first quarter as markets remain volatile. But as outlined in our trading update, in light of the return to more stable conditions, we will commence a new on-market share buyback program after this AGM. This program, which allows for up to 10% of ordinary shares to be bought back over the next 12 months, remains subject to daily trading volume restrictions and will be managed in line with prevailing market conditions and will also recommence debt repayments. As I mentioned, the OpEx investment we are making will be within the range of $16 million to $24 million, subject to NOI growth with no step change in fiscal year '27. This means that we are not targeting operating leverage in the near term based on our deep understanding of how valuable the opportunity and our high conviction in our strategy and the team and the platform we have to unlock it and the consequent ROIC and shareholder value that we can create by investing this way. We expect that it will make us a much more valuable company and will deliver the top line growth and underlying EBITDA margin we've been targeting. And finally, let me add that whilst I too share your antritious frustration at the market's view of our value and feel the pain as a large shareholder. I am equally convinced it is working and will create the more valuable company that we all want. I've just returned from a trip to the U.K. and Europe to meet with our team, our clients and our banks. They were unanimous in their excitement and commitment. Our people feel more energized than ever to solve a much bigger problem for our clients than FX. And our clients see the partnership as unique, and our banks see us as doing this responsibly. And with that, I will hand back to Tricia to conduct the formal business.

Thank you, Skander. I will now turn to the formal business of the meeting, taking each resolution in the order as set out in the Notice of Meeting. There will be an opportunity to ask questions on each resolution, and we kindly request shareholders to limit their questions to 2 per agenda item so that everyone has a fair opportunity to participate. Questions not related to the resolution should be held until the end of the formal business when I will open the floor for general questions and discussion. Questions that have already been addressed are unlikely to be responded to again. A poll will be conducted on all resolutions. Certain votes will be excluded in accordance with the Corporations Act and the ASX listing rules. The combined proxy votes and direct votes will be shown after discussion on each individual resolution. Votes received prior to the AGM will be shown on screen prior to each resolution being put to the meeting. I advise the meeting that I will be voting all undirected proxies in favor of the resolutions as indicated in the notice of meeting. To ensure that all shareholders and proxies have an opportunity to vote, I now declare the polls to be open. Shareholders and proxy holders who have registered with their shareholder number or their proxy code can now vote in person or online. If you are a shareholder or proxy holder here in person, you were given a voting card at the registration this afternoon. Please complete this card by ticking the for, against or abstain box in respect of each resolution and hand it to the MUFG corporate Market staff that is sitting at the entrance table. If you have to leave prior to the completion of the meeting, please complete your voting card and place it in one of the ballot boxes held by MUFG Corporate Market staff on your way out. If you have joined online, we have now opened the electronic voting card for the poll. It should have popped up on your screen. Please vote by selecting the for, against or abstain box in respect of each resolution on the electronic voting card. After completing all items in the vote, you will need to click the submit button at the bottom of the voting card. If you want to vote later, then you can move the electronic voting card on your screen or you can close the electronic voting card by clicking X at the top right-hand corner. You'll be able to vote at any time until the close of the meeting when I will declare the voting closed. You just click on the poll button on the task bar to reveal the electronic voting card again. If you're not a shareholder or proxy holder or if you've already voted, please close the electronic voting card by clicking the X at the top right-hand corner of the electronic voting card. If you've already voted and you vote again during the meeting, your previous vote will be invalid. The votes will be counted by our share registrar, MUFG Corporate Markets, who will also act as a scrutineer. Once the poll is closed and the votes are counted, we will announce the results to the ASX, which is expected to be prior to the market opening tomorrow. If you have any issues voting during our meeting, please look at the detailed instructions in the OFX online AGM guide or call +612-8667-9160. So the first item is the financial statements. There is no vote on this item. So please check acknowledged if you have joined online. For items 2 to 7, please do lodge your vote. For those attending in person, could you please address all questions to me as Chair. And if you wish to speak, raise your hand and a microphone will be brought to you so that all shareholders can hear you. And please state your name before making your comment or asking your question. Shareholders or proxy holders who are attending online and have provided their shareholder number or proxy code when interesting can ask questions by typing it into the Q&A box at any time or by indicating that you would like to ask the question verbally. You need to no window appear enter your full name and your shareholder number or proxy code and then type your question into the box and press or indicate that you would like to ask the question verbally. If you are online and want to ask a question verbally at the appropriate time, we will indicate directly to you that you can ask your name and your microphone will be unmuted, and then please again state your name before asking your question. Now turning to Item 1. The first item of formal business is the tabling of the financial statements and reports of the directors and auditors for the year ended 31 March 2025. The company is required to lay before the meeting the last audited financial statements and reports. These were released to the ASX on 20 May 2025 as part of the company's annual report. No resolution on this matter is required, but I do now invite shareholders and their proxies to comment or ask questions on the reports. Questions may also be asked of the auditors in relation to the conduct of the audit, content of the audit report, accounting policies adopted by the company, independence of the auditor in carrying out the audit or anything else that you see fit to ask our auditors. Our auditor, Shaun Kendrigan, as I said, is present as part of our panel for that purpose. I'll hand over to Skander to facilitate questions or comments on the financial statements and reports of the directors and auditors for the year ended 31 March. But before I do that, remember that if you're in the room, please raise your hand. And if you're turning online, please navigate to the Q&A button at the bottom of your screen. Bear with us as we'll need some time to confirm that those who are asking questions our shareholders or proxy holders. Now I will hand over to you, Skander.

Thank you, Tricia. First, let's take questions from folks who are here in person. If you have a question, please raise your hand and Tara will bring you a microphone. And again, just to remind you, please introduce yourself before you ask your question. Any questions on the financial reports from anyone here?

Good afternoon, David Kingston from K Capital. Look, firstly, I'd say there's no doubt the Board and management are a talented group of people and working hard. However, the elephant in the room, as you've acknowledged in the addresses is the weak shareholder value over 10 years I'm a new shareholder, so I haven't lost any dollars but some people have. Shareholders invest for capital growth and dividends. The daily voting machine of poor share price means OFX has delivered material capital losses for most shareholders. 10 years ago, share price was $3. 3 years ago, $2.50. 1 year ago, $2. To cliff-faced drops have taken it to $0.82 this year fall in market cap of around $280 million. No dividend since 2021. 2025 profit guidance not achieved. Underlying $225 million NOI declined 5%, and PBT declined 24%. Quoting from the great movie, as per Tom Cruise's iconic line in the movie Jerry Maguire, it is time for OFX to show me the money. Briefly, and I've only got a few background comments before making 2 questions. OFX has got very strong competitors. There's no doubt this space is attractive. There's no doubt that business is going to transfer from the major banks to companies like OFX. It's a hot space. But you've got some whales out there. You've got Revolut at $45 billion. Why is it GBP 10 billion, Airwallex at AUD 10 billion. A key issue for me, which is part of my question, is whether OFX, notwithstanding the talent and the hard work, can it carve out a sustainable niche? Or will it be swamped by the whales? Look, I've invested because I think the management and Board are strong, but, and OFX definitely has promise in this space. It's got a strong cash position with $51 million of available cash for its own use after commitments. Solid 2025 profits with underlying EBITDA of $57 million. I tend to prefer looking at PBT of $31.7 million because there's a lot of intangible spend that will continue. But to give credit, many fintechs don't have positive free cash flow. So that's one big advantage of OFX. Well done on the external strategic review and initiating OFX 2.0 TAM nearly doubles. Both addresses have referred to the $16 million to $24 million increase in OpEx and a similar increase likely in '27. That's understandable and a realistic goal, in addition, addresses are referred to the platform investment, which is increasing $5 million from $19 million to $24 million in 2026. No profit guidance for 2026, '27, I respect that. That's understandable. But unless there is substantial growth in NOI, it seems free cash flow will reduce materially over '26, '27, which I understand and respect. My two questions on the first issue are either do you Trish, I think you said questions to you. But given 2 parts to the first question, given the weak shareholder value over many years and noting no corporate strategy is ever certain. How material is the risk of the large uplift in OpEx and intangible spend in the next 2 years will not deliver growth in shareholder value? Noting my other comment that is it realistic that OFX now capped at $200 million, okay, a lot higher a year ago -- is it realistic for OFX to carve out a sustainable niche when there are other fintech giants cap well into the billions, which is seeking similar customers. That's my first question. Do you want me to have the second one now or..

Thank you, David. There are a lot of issues that you've raised there, even at my quick typing. But we will just address the questions that you've made, and I'm sure we'll have a chance to come back to the other issues. I'd love to comment on the whale specifically, as you know. Skander, I might hand that first question to you, and then I have it.

Thank you, David. The first thing I would say is history says that in financial services, very rarely a winner take all. And when I look at, for example, the growth in other products, there's been a range of different competitors all around the world that have taken share from incumbents. And as we pointed out in the TAM analysis, it's such a huge TAM. And somewhat surprisingly, it's sitting typically with banks, and it's fairly lazy. So we don't believe that even well-funded competitors will generate some sort of concentrated outcome in terms of who is going to take share. The second thing I would say on our ability to compete is, yes, there are some funding advantages that some of our competitors have. They don't necessarily have the same profit motive that we have, that we have our own advantages. Our licenses around the world are unlikely to be matched in the short term. And that is very important in rolling this value proposition out around the world. Many of the other competitors are very concentrated in, for example, Europe or Asia or North America, and that ability to compete in different parts of the world is really, really important. The other thing that the study was incredibly strong on was that our value proposition, which was benchmarked against those competitors was very attractive. And we're already seeing that. We're seeing lower lapse rates. We're seeing winbacks from those competitors. In fact, when I was in London, you mentioned Revolut. Two of our new starters came from Revolut for business, and we had a new starters meeting, and I asked them, why did you join OFX? And they told me two things which I thought were very interesting. One was they said your platform is way better than this. And I take that as a high complement because Revolut is certainly considered in the industry as having spent a lot of money on their platform, and they would benchmark themselves very highly relative, but they said, no, we think yours is much better. The second thing they said was culture, and they shared a data point that as salespeople typically Revolut would hire 100 people in a quarter and less than 40 would survive, which was a huge operational cost and drag on the business, and it also impacted their ability to go and do their jobs because it was very unclear where their support was coming from. So as you say, one can never be certain. I have launched products in the U.K. in the U.S., here in Australia. I don't think I've ever seen such strong signals from research, from existing clients and from internal and external factors that give us the conviction to do that.

I might just add quickly to that. Definitely don't want to do a race to the bottom in terms of risk and compliance because it doesn't reflect well on the industry at all. And really, what we're all about is offering a fair way for the customers and making a good return on that. However, I do like to remind people keywords to Google on each of the competitors. And one of them that might have just been mentioned, I think one of the key words would be license. And each of the competitors do have keywords to Google. So I think that Skander has said the gist of it on that question. There is a lot to be said about the whales. I would have the same concerns that have been voiced in a lot of the press about some of them. especially around moving jurisdictions, some licensing problems, and the AML piece is just absolutely enormous. But David, what's your second question, please?

Thank you, Trish. Look, look, we're all realistic and nothing is ever certain. So let's give it a red hot go. And I think it's a good management team, a great board. So you've got the capital. As you said, Skander, it's terrific that this growth initiative is being funded internally rather than externally by debt or shareholders' funds. So there's a lot of positives there. But my second question, Trish pressing it to you or pass it to Skander or whatever, noting the losses in shareholder value over the past 10 years. If sadly OFX 2.0 doesn't achieve material growth in shareholder value in the next 12 to 18 months, will the Board consider a merger with or sell to another financial services company, Noting there is lots of current corporate activity in ASX fintechs, for example, Iris and Taro. Thank you.

Thanks, David. Good question. As you'd imagine, there's a lot of inquiry all the time with companies like ours from the minute that I joined. We've always been very, very focused on the value of the company as a Board and again, independently challenging management on that. The Board had already engaged just as an ongoing adviser, Goldman Sachs, who test all of our assumptions about our valuation I did buy 100,000 shares at $2.78 when I first joined. So that shows you some of the assumptions that we had, especially around multiples, which were based on growth ambitions. So you would expect that there's a lot of activity in the space and the multiples are quite staggering. We've been very encouraged, though, by some of this activity because it has related to companies trying to acquire the capabilities that we have on the new client platform. For example, the complete integration into the accounts payable ecosystem and in particular, integration with accounting platforms and identifying payments and controlling employee expenses. So we feel like we are right up there in terms of capability. we keep an open mind about any conversations. And I do talk to basically anyone that wants to have a chat. But what I always say is that we are very focused on the through the cycle, longer-term generation of shareholder value. I did believe that purchasing at $2.78 was a good price to purchase at based on where I would value this company, and I did not come down in the last shower on valuing companies, as you know. But things do have to work in our way, and I totally respect that. So we won't be giving the company away. However, we are very focused on what the market says, and we are always listening. Thanks for your question, David.

Just a very brief for joiner. You'll be pleased to know Trish that one of your shareholders said to me recently that he thought the value of the company was $3 a share. So you make a profit on your first purchase.

Well, since on that 100,000. I'm really happy to say that my other 237,077 shares were at lower levels, but I'm actually unhappy to say that Thanks, David. Are there other questions on the financial statements from the floor? All right. So I will now go on to online verbal questions. Are there any online verbal questions? No, I see nods in the back. And are there any online written questions about the financial statements? No. Okay. Thank you. So as there are no further questions about the financial statements, you've got off lightly Shaun, is it because they have a crutch?

In all seriousness, I'll ask that we now move on to Item 2, which is the reelection of Ms. Connie Carnabuci. This is item 2. Connie was appointed as a Director of the company on the first of April 2019, and she was last reelected as a director of the company's 2022 AGM. Connie will retire under Article 47 of the company's constitution. And being eligible under Article 47 of the company's constitution offers yourself for reelection as a Director of the company. Details of Connie's experience are set out in the notice of meeting, so I will not repeat those details. The Board with Connie abstaining supports Connie's reelection as a Non-Executive Director, and I'll hand over to Connie to briefly address you.

Good afternoon, shareholders. I'm seeking your support for my reelection this afternoon to the Board of OFX. Over the past 6 years, I had the honor of serving on this Board, and it's been a time of considerable transformation for the company and maturation for the company. What do I bring to the company? I bring over 3 decades of legal and commercial experience. I particularly have deep expertise in digital transformation, corporate governance and risk management. But most of all, I have passion for helping businesses innovate while remaining customer-focused and legally compliant. As a former senior partner and Global Co-Head of a technology practice of the U.K.-based international law firm, I have experience in managing global businesses. I understand how valuable this experience is to a company like OFX, where we are rolling out a suite of regulated products across a range of geographies, North America, Europe, the U.K. and Asia Pacific. I personally have been internationally recognized as an expert in intellectual property, technology and data governance. I've made a career in advising, IP and tech intensive businesses on their activities. My clients included names like Apple, Alibaba, Tencent, eBay, Telstra, HP and various divisions of GE, just to name a few. At the commencement of my career, I was advising on legal and regulatory matters in the context of on-prem mainframe technology solutions usually with bespoke locally built software applications. During the course of my career, we've traversed to the development of LANS, WANs and ultimately, the Internet and cloud-based digital economy. I've advised on commercialization and enforcement of intellectual property and technology assets and on M&A in both private and public context. I have a deep understanding of how important intellectual property and technology is to a digital-first business like OFX, especially in an exciting time where we see things like AI and ABM and similar technologies expanding so quickly into the delivery of our client service. As the former Chair of the Media and Communications law Committee of the Law Council of Australia, I was closely involved in the development of the law council submission to government on various inquiries around the regulation and responsible use of AI. Pleasingly, in the most recent report issued by the Productivity Commission just a week or so ago, many of those recommendations have been adopted. I'm proud to tell you that I was recently appointed as a fellow of the Australian Institute of Company Directors in recognition of my experience as a company director. A point was raised around the diversity of this Board, which came through various shareholder conversations that were had by our Chair and the Chair of the Remuneration Committee. And I'd like to share with you that I'm proud to be a first-generation Australian, born of Italian migrant parents and that I grew up in a home where Italian was the first language spoken. I also spent 15 years of my career based in Hong Kong, and ran a regional sector group for my former law firm. During my time on the OFX Board, I've contributed to strategic decisions that have strengthened our global platform, enhanced our regulatory resilience and positioned OFX as a trusted provider in an increasingly complex financial services landscape. Looking ahead, I'm committed to continuing my journey with you. My focus remains on ensuring that we navigate the evolving digital economy with foresight that we uphold the highest standards of governance and that we deliver value to our shareholders, clients and our teams around the world. I thank you for your past support. And I respectfully seek your continued support to serve on the board of OFX.

Thank you, Connie. Are there any comments or questions concerning Carnabuci's reelection? David Kingston.

Firstly, Connie, I'm jealous, Trish told me to curtail my comments as I'm to valuable, but you had a far longer leaves base for your speech, so well done. Look, on a serious note, I think some of these proxy advisers are incredibly petty, ridiculous accusation of lack of diversity. I think they just lack enough things in the day to do. So they come up with silly recommendations. Look, you obviously got an excellent legal career also Director of BDO, the accountant. So that's good to cover both jurisdictions there. My question to you could be to any director, Connie, but just to make sure that you continue to speak. On the buyback, in the last 2 years, the company has completed a buyback, not just the year just ended, but over 2 years, around about 18 million shares, $28 million. Now look, things change. It's impossible to tell which way prices go. But in hindsight, the price paid is way over the current market price. New buyback to commence, which I know has been advocated by a number of shareholders and the shares are now $0.80. Are you confident, Connie, that there is value in the shares at $0.80 and that there won't be a further payment of money for buyback in excess of what the future price might be? Thank you.

Thank you for your question, David. Connie, if you don't mind, I'm going to speak to this, but I might have you stick to the decision making in 20 -- at the end of 2021 and 2022 when we weren't on the Board and you were there. when the company did decide that it would be more appropriate for a growth company such as OFX not to pay a dividend, but going forward to work through the share buyback mechanism. That is part of the answer to your question. But Skander, do you have some more that you want to add to this? Or is that all?

Thank you, David. I mean the decision on the buyback rests in our capital management. And obviously, as we discussed yesterday, we generate good cash, and we have various options for that cash. At the time, what we were very mindful of is we felt to Tricia's earlier point that the company was undervalued and therefore, buying back shares was a good use of that cash. That said, we also had a lot of growth in front of us, and we invested, obviously, in CapEx. We also had debt that we were paying down. So that decision to do the buyback was actually 3 different ways to use the cash. And yes, as of today, that the shares have not appreciated in value, but we would not have changed that decision then based on the value -- the undervalue of the company at the time in combination with the other uses of cash.

Connie, I will just ask you to speak briefly.

I mean I think, David, thank you for the question, and thank you for your support. I think for us as directors, the view was that offering the buyback actually indicated our confidence in the underlying value of the company. And I think we would continue to hold that position, David. Skander has taken you through all of the numbers and the independent report and why we think there is value there to be captured. None of that changes, so in my opinion, the single reason is we do have confidence in the value. We believe it's a great opportunity for us to demonstrate that confidence by offering the shares on the buyback.

Thank you, Connie. Are there any other questions related to agenda item #2? And there are no -- sorry, we have a question here on the floor. Thank you.

Charlie Kingston. Can I just, given your legal background, Connie, focus on risk management, et cetera, and part of the narrative around the space is that the competitors, the scrappy upstarts, they take risk, they cut corners, they're not as focused on risk and compliance, and they get in trouble, et cetera, but they are growing their customers, and they are growing their valuations at very fast rates. Conversely, OFX seems to have a lot of focus on risk management, compliance, et cetera. That's one of the pictures as to why you would go with OFX, et cetera. We are losing customers and shareholder value is going down. So is our focus on risk management handbrake to our business and value creation going forward or the scrappy upstarts that are more aggressive and happy to take on risk and cut a few corners. Is that a disadvantage to FX? And how do you balance that given just your focus on risk management and your experience, please?

Connie, I will let you say something, but I do want to say that having strong risk management and having the ability to manage a risk using the most modern, scalable technology, especially is an absolute key to being able to scale up your business. And some of our competitors are finding that they didn't get those basics right because they did go healthy for leather on the other side. And so they are scrambling to get back to where we are. I mean they're nowhere near where we are. But Connie, I'm going to let you comment.

Thanks, Charlie. I think in my speech, I used a very important word, which is we want to be the trusted service provider. As you're probably aware, AI has only accelerated the number of potential online risks that provision of services such as ours that are associated with provision of services such as ours. So perhaps not surprisingly, Charlie, I'm going to say the strength and the investment that we make in our careful risk management and having the right processes and structures and technologies, supporting the delivery of our services is probably one of the single most important things that's going to drive value in the long term. You only need one blow up for brand equity to be run, perhaps irrecoverably. So in our opinion, we have a quality mindset. If you look around the management that is in this organization, they all come from the big end of town, high-quality, very thoughtful very considered approach to execution. None of that's going to change.

Thank you, Connie. Are there any further questions? And there are none verbally online and there are no written questions? Okay. Thank you.

So I will have the direct votes and proxies received for this resolution prior to the meeting on the screen. Thank you. As shown on the screen. Open proxies in favor of the chair of the meeting at the time of the meeting will be voted in favor of the resolution. Congratulations, Connie, based on how much has been voted. S the next item relates to my reelection as a director. And so we will ask Jacquie Hey, the Chair of the Nomination Committee to chair this item of business.

Thank you, Tricia. Item 3 is the reelection of Mrs. Patricia Cross. Tricia was appointed as a Director of the company on the 20th of July 2022 and was last reelected as a Director of the company, at the company's 2022 AGM. Tricia will retire under Article 47A of the company's constitution and being eligible under Article 47C of the company's constitution offers herself for reelection as a director of the company. Details of Tricia's experience are set out in the notice of meeting, so I will not repeat those. The Board, with treasury abstaining, supports Tricia's reelection as a Nonexecutive Director. I'll hand over to Tricia to briefly address you.

Thank you, Jacquie, and good afternoon, shareholders. It is a privilege to be standing for reelection to the OFX Board, although I do so with considerable humility given the significant number of votes cast against my reelection. This has sent me an unprecedented but very valuable message, and I want to acknowledge that directly. I also might just note that when I first took the Chair of this company, I said to my Board 2 things. I said, one, we have to have a constructively psychologically safe environment for our Board meetings. That doesn't mean don't discuss things that are difficult, but I want to hear from everyone. And the second thing I said, if you ever need to get rid of me, it is your duty as directors to do so, and I still very much hold those principles. The level of opposition to my reelection reflects shareholders' dissatisfaction, not just with the company's performance, but clearly with the leadership during one of the most challenging periods in my 45-year career. I accept this feedback back entirely, and I recognize that as Chair, I bear responsibility for both our strategic decisions and how we've communicated with you throughout this difficult period. FY '25 did test every assumption we had about our business and our markets. And as I've said, the combination of macroeconomic volatility and geopolitical uncertainty created trading conditions that were completely unprecedented. Our customers lost confidence in their business outlook and they adopted a more cautious approach. Our revenue suffered and our share price reflected the market's judgment of our performance and also the way that we communicated that performance. As someone who first purchased, as I said, 100,000 shares at $2.78, I felt this disappointment as acutely as any of you, but I've kept buying. I do think this is a fabulous company with great potential. Where I believe that we got it right was in our strategic response, doubling down on the new client platform. We could have simply cut costs and stay in a monoline world, and I'm sure there are those that would have preferred that. But the earliest indicators suggest that our approach was the correct approach. Where we clearly got it wrong was in how we managed expectations and communicated the reality of what we are facing and why we made the decisions that we did. The vote today tells me that my stewardship has not met your expectations, and I do take that seriously. If reelected, I commit to being more accessible. And equally, I would welcome your regular feedback on our strategy and execution. The trust you place in directors is earned, not assumed, and I recognize that I need to earn that trust back. Part of the vote and also the vote related to Connie stems from an opinion that our Board lacks cultural diversity, as Connie said. We believe this is an incredibly misguided opinion. It stemmed originally from one of the proxy advisers, generally proxy advisers were very, very supportive of mine, but one of them had this opinion and a couple of investors went along. So I want you to know that each member of this Board has a combination of one, having lived and worked for a substantial amount of time overseas; two, speaking a language other than English; and/or three, having been born overseas are having parents born overseas. We feel these global passports are absolutely essential to an FX Board. Professionally, we have worked in a variety of industries and companies, large and small, industrial, financial services, professional services, technology and more. This is a very highly qualified, highly effective, very interactive and very challenging board. As you know from my profile, I've worked, been very privileged to work on some of the best company Boards in Australia and in the U.K., best companies. They aren't all necessarily the best boards. I think this board is one of the best boards I've ever worked with. So thank you, Ying. Personally, I do bring a completely different DNA to this Board, literally as well as figuratively. As I say to everyone, I'm a foreigner, everywhere I am anywhere I am. Yes, I was born in the U.S. but left there and have a very highly Nordic DNA. Never having been overseas first is I went was still living more in a sea union. I've lived and worked over many years in 7 different countries at the very beginning in the U.S. public service and foreign affairs, and then extensively around the world in International Banking, with some of the best companies that still exist and thrive today. And my deep and abiding respect for best-in-class risk management comes from working with these companies as well as for working with the governments of the United States and Australia. I have always done some type of public service throughout my career, sometimes honorary. I do speak 6 languages, 4 of which were rated for Georgetown University School of Foreign Service U.S. State Department Certification is fluent at the time. Later, I picked up 2 more on the job living and immersing in local cultures. So cultural diversity is fundamental to OFX values and obviously, to mine. I might remind shareholders that 47% of our OFXers are from culturally diverse backgrounds and speaking language other than English. And I'm really proud of that. I do hope I can continue to serve OFX as we execute our strategic transformation, but experience means nothing without the humility to listen, learn and adapt. So I thank you for your feedback. And other than the culture of diversity, I really do appreciate very much the feedback and for the opportunity to continue serving if that's your decision. Thank you.

Thanks, Tricia. Are there any comments or questions concerning Patricia Cross' reelection? And again, I'll first take any questions from those attending in person. Please again, raise your hand and Tara will bring you a microphone. And thank you Mr. Kingston, I'll introduce you. So I hope you go.

Look, I repeat again, I think the proxy adviser who is raising diversity is really stupid. Wasting everyone's time. But let's move on to the more important issues. Look, I understand the frustration of the shareholders who've lost money. Yes, losing money, you could do get frustrated. So, it's disappointing to see the vote against Trish, but I understand it. But congratulations, Trish, an extremely humble, honest and courageous response to that. So very well spoken. Look, I've known Trish for a number of years. She's been an outstanding executive and had an outstanding Board career, absolutely an A grader. And from a business point of view, Tricia's role, not just as Chairman, but to provide credibility to OFX and its huge dealings with counterparties is incredibly important. So the company would be dramatically diminished without Trish. So well spoken. I understand the vote against, which reflects the share price. But in my opinion, Tricia's contribution is excellent. And her role is pivotal to the future of the company. I have 1 question, Trish, for you, given your extraordinary experience. Just appreciate your insights into the global expansion. Lots of Australian companies have failed in their North American acquisitions. Indeed, probably the majority have. It's always harder than it looks. In 2022, the company acquired the Canadian company Firma for around about $100 million. I don't know the detail well enough, but superficially, that acquisition seems dubious. If we look at the enterprise value of the entire OFX company today, namely the market cap minus the available free cash. The enterprise value is $150 million, whereas $100 million has been paid in cash for Firma a few years ago. Just appreciate your insights as to whether with hindsight, which is a marvelous thing. You think maybe that was too ambitious an acquisition or it's been harder to implement, integrate? Or do you consider it a success?

So thank you very much for your question, Mr. Kingston. I think both on Firma and Paytron, maybe I could ask Skander to say a few words and then end up with Trish to add on. Is that how you'd like to do it? Or would you like to take it all?