Ondo InsurTech Plc (ONDO.L) Earnings Call Transcript & Summary

Good morning, and welcome to the Ondo InsurTech Plc investor presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. And I'd now like to play a short video on behalf of the company. [Presentation]

My name is Craig Foster. I'm the Chief Executive of Ondo InsurTech. I'm joined by our CFO, Kevin Withington.

Good morning.

Welcome to our results presentation for the 6-month period to September 30, 2025. It's been a very busy 6 months period, it's been a very busy few days. There's a huge amount for us to talk about. So we're going to get straight into it. So the agenda for today: we'll go over the results highlights, we'll spend most of the time talking about the United States and then we'll also talk about the outlook and some of the news that we've announced over the last day or 2. So I'm going to assume on this call that most people are aware of the company's strategy and we're not going to do the intro slide. We thought we'd get straight into the details. So what you'll hear today is the overall results are recurring revenues more than doubled year-on-year, 110% growth to GBP 3.6 million on an annual recurring basis, and that's really powered by the growth in the United States. Group revenues, GBP 2.1 million, so up 26%. The group revenue is now 86% recurring where it was only half of the revenue in the same period a year ago was recurring. So it's been a big shift, and that's because of that pricing model in the United States. The U.S.A. is not only our biggest market, but it's now over half of group revenue already from almost a standing start just a couple of years ago. So the U.S. business, if you look at that in isolation, has grown by 7x year-on-year, whether you look at the customer number or the revenue number. Group customer numbers have grown by 86% year-on-year, and they've just passed 200,000 as of the end of November. So the expansion has been pretty rapid in the U.S. We were in just a couple of states not that long ago, and now we're in 26 U.S. states. We're going to talk in quite a bit of detail about the challenges of that growth, about how we've managed to execute that and the kind of tactics on the ground in the U.S. as we scale the operation because as you all know, we're a tech business at heart, but we've also underlying, we're a services business as well. And scaling a services business has its own set of challenges compared to scaling a tech business. So we'll tell you some more detail about what's been going on, on the ground in the United States. So the U.S. is now clearly our largest market. It's the engine for growth. It's the big opportunity that we've got in front of us. That growth in the U.S. has been offset to some degree by the fall in one-off device fees, which are all in Europe, specifically in the Nordics as we've migrated away from that model. We've announced a GBP 2.3 million investment to really help us accelerate U.S. infrastructure growth and also finalize the launch of what we're now calling LeakBot Edge, a really exciting product development that helps us round out the proposition in the U.S. and offer a truly nationwide solution across the whole of the United States, and we'll talk more in detail about what that project looks like. So the strategy here is really to cement our position as the market leader in the U.S.A. We're well on our way on the trajectory to do that. And I think now, especially with that financing agreed to accelerate that infrastructure build-out and to help us add this new product, it positions us very well to capitalize on the position in front of us. So let's get straight into the results. So the customer -- overall customer number has grown by 64% year-on-year to 187,000 registered customers. That's 200,000 as of today. But as you can see, this dramatic shift towards the United States, where if you look at that growth, 77% of the growth is coming from the U.S.A. If we look at the revenue numbers, you can see here that the overall group revenue year-on-year grew by 26%. However, U.S. revenues were up 7x year-on-year. And you can see the shift here, a year ago in the same interim period, 48% of our revenues were one-off device fees. So relatively speaking, lower quality revenue driven by Europe, primarily in the Nordics. That's now dropped to just 14% of our revenue. And now 86% is that high-quality recurring revenue, and that's driven by the United States. You can see here, 51% of overall revenue is now from the U.S. and you can see that growth in annualized recurring revenue here in dollar terms. We had GBP 0.4 million annual recurring revenue in the last set of interims. That's now just under GBP 3 million. The contracted annual recurring revenue in the U.S. at the period end was GBP 4.4 million. By the end of November, 8 weeks later, it's GBP 5.5 million based on a couple of contracts we signed recently with Westfield and Indiana Farm Bureau. So when you look at the headline level, I know investors have got a couple of questions about gross margin and about the cash balance change in the period. So we're going to take that head on now. I'm going to have a look at that in some detail because it's important to understand when you pick that apart actually what's going on. Kevin, over to you. Do you want to talk first about the gross margin?

Yes. Good morning. So as Craig has mentioned, the GBP 2.1 million of revenue starting on the left is GBP 1.8 million of high-quality ongoing recurring revenue and GBP 0.3 million of the Nordic one-off revenue. I think what -- I think the key message is that as attached to that revenue is the cost of the plumbing repair service that we provide to our customers. And that cost is a function of the cost of the plumber and the efficiency of the plumber in terms of how many jobs per day they can do. And that ultimately drives the repair cost. And as you can sort of see from the slide, the underlying group margin is actually 54% before you add the cost of acquiring those customers in the period. There's another -- you need to click it, I think. And then when you add on the customer acquisition cost, which is GBP 1.5 million, which is the cost of all devices that we have shipped in the period, whether they have activated or not activated, that brings the average group margin down to just under 16%, so 15.5%. And the key message is that the underlying group revenue is -- group margin is 54%, but it's the cost of acquisition that brings that down, which is a year 1 one-off cost. The engineers across the group do -- our engineers plumbers do 1.7 jobs a day on average. But as you can see, and we'll go into this in more detail in the U.S., it's currently 1.4 due to the rapid expansion. So -- and both those numbers, the GBP 1.5 million for cost of acquisition and repair costs is just basically the breakdown of the cost of sales that you can see in the P&L. And in terms of those metrics, obviously, the U.K. and the Nordics are leading the way in terms of jobs per day. The U.S. is a function of the scaling that we've been doing. But we understand the metrics and we understand how the -- how that model is being improved and optimized as we go into the second half.

Thanks, Kevin. So we'll relook back to some of these numbers when we go through the U.S. results. But like Kevin said, it's important to understand that the underlying gross margin before acquisition costs already in the United States is 50%, even with the lower jobs per day, and we'll talk to more detail in a moment about that. But at a headline level, obviously, the gross margin looks like it's gone backwards. So it's really important to understand this in some detail. And I'll also address the GBP 1.5 million customer acquisition cost, is that a good investment? We'll come on to that in a moment. Kevin, the other question we know investors are going to have is about the cash movement in the period. Do you want to touch on that as well?

Yes. Do you want to move to the next slide? So as at the 31st of March year-end, the group had GBP 4 million of cash. So what's happened to that over the period? So we repaid GBP 1.3 million of HomeServe Loan note, which is the vendor loan note that we've talked to investors about before. That went from GBP 7 million to GBP 6.2 million over the period. We built stock. So the stock balance then you'll be able to see and the investors can see this from the stats. The balance at the end of the period was just over GBP 1 million of stock, around about 52,000 units, so a net increase in stock over the period. And that absorbed GBP 0.5 million of cash. We had some of the remaining warrants exercised. So that brought us in GBP 0.9 million. And then we've had trading receipts of GBP 2.5 million, which is the advances that the fee advanced structure that we've got that we used to fund the growth. And then there's operating expenses, so an outflow of GBP 5 million. So sort of net of those 2 is about GBP 2.5 million related to trading, which is close to the sort of EBITDA loss that we've reported in the period. So that gets us to a closing cash of GBP 0.6 million. On the right-hand side, you can see what the trading -- what the equivalent cash coming in was for the second half to March, which was just over GBP 4 million. And then you've got how many -- and then comparing that to the same the second half -- the first half of 30th of September '25. And you can obviously see the receipts are quite lumpy. Post the interim period in the last 2 months, we've had another GBP 1.5 million that has come in on deals and advances that have been concluded. The majority of that GBP 1.5 million relates to the Westfield and the IFB extension that we've done. I mean, obviously, there are some other movements in there. But -- and really, that cash we were expecting to be in the 30th of September. So it just missed the cutoff in the period. So the key message I would get across is that there was a lot of investment in stock. And when you look at the 6-month period in isolation, the equivalent cash that relates to that stock investment came in after the period. So -- and actually, when you look at the equivalent period to '24, we got GBP 1.8 million as a comparative number. So it does tend to be a higher cash outflow in the first half of the year than the second half. And -- but we are building stock for the future in the second half and for deals we've already announced. So we're not concerned.

Thanks, Kevin. So I think it's a really helpful picture just to spend some time understanding that properly because in the U.S., we obviously have a recurring revenue model. But as I think our shareholders understand, we have a prepayment model. So the cash receipts on new orders are lumpy in nature. So if they just -- depending on what date they fall, they can show big variances when you're looking at relatively tight windows like a 6-month period. So it was worth just explaining that in a bit more detail, I think. So let's go on to dive a bit into -- a bit more detail into the U.S. So as you can see from the chart here, it shows the registered customer growth through this half year period, and you can see what that takeover has looked like over the last year. We work with 10 insurance partners now in the U.S. We've done a lot of activity with Liberty Mutual through this period on their first order. Signed a host of new contracts. We've signed some of the smaller carriers that have got big books of business in some of the states that we're in, like Bear River Mutual in Utah, Indiana Farm Bureau. We did a really successful pilot with them. They then extended their contract recently in Indiana. So this is the goal of signing -- carriers that have got big books of business in specific locations where we've already entered a state, led by some of our bigger carriers. Nationwide expanded, as you know, into 16 states. We've just announced another order with them to expand now to 26. And we signed a couple of other bigger carriers, Westfield and Hanover more recently. So that brings the U.S. customer base on that new pricing just under $50,000 in the period are all on that $5 or more per month recurring revenue model. So that's just under GBP 3 million in annualized recurring revenue. As we said at the start of the presentation, the contracted revenue in the U.S. is now GBP 5.5 million. We've been -- in this period, the 6 months period, we've been in 1,400 U.S. homes fixing leaks, and that's delivered 135% return on investment for our U.S. carriers. And we've done that while maintaining an 86 Net Promoter Score. So as you can see from this quote from Jeff McDonald at IFB, the outstanding results, including the strong claim savings and exceptional customer satisfaction demonstrate the value that this innovative program provides. So this is really the key to maintaining the momentum in the U.S. It's continuing to deliver that exceptional customer service that homeowners love and also maintaining that return on investment for our carrier partners. It's clear we've got the solution that the U.S. market wants. And now the goal is to keep progressing at the same momentum and give them now what our biggest carriers want, which is a fully U.S.-wide solution. Now delivering that is not without its challenges. As we all know, the United States is a big place. You can see in this heat map the growth in the device distribution that we've delivered. So it's a big ramp over a relatively short period of time. Now we say that we're in 26 active states. But an insight to share with you is that actually 80% of the volume and the repairs are actually in just 10 of the states. And we've done that deliberately by working with our partners to focus on geographic areas and coordinate with them on the marketing so we can hire the plumbers and put them in the right place. We've obviously been doing that very carefully to manage margins and manage cash. We don't want to be reckless putting plumbers in places where we're not going to deliver the revenue off the back of hiring them. But nevertheless, coordinating this is a kind of careful dance with our U.S. partners. Now an insight, we talked broadly in the past about the importance of density in delivering the kind of network efficiency. So I wanted to share with you a case study, which brings this to life and gives you a more visceral kind of feeling of what it's like on the ground right now. So here's a comparison of 2 states in the U.S., Indiana and Virginia. So Virginia has got about 3,000 active devices installed across the state. We're covering the whole of Virginia with a single plumber. You can see the heat map for Indiana. Now Indiana has only got 7,000 devices. So not that many more actually. It's relatively easy for us to ship that delta of different -- a few more thousand devices into a state. Indiana is still covered by a single plumber. The difference is when we are scheduling the jobs, when you've got 7,000 active devices, it's relatively easier to schedule 2 jobs on the same day that the plumber can commute to and cover both on the same day. So on average, our plumber in Indiana is doing 1.8 jobs per day. In Virginia, that plumber is doing 1.3, 1.4 jobs per day on average because it's just more difficult to schedule 2 together on the same day. So when we talk about an increase in density, we're not necessarily talking about needing 10 plumbers in one particular state to start to drive economies of scale. Just a few more thousand devices in one area starts to lift that average jobs per day. And that has an immediate impact on gross margin. So you can see at the U.S. average at the moment, delivering 50% gross margin, we're at 1.4 jobs per day. You can see the split here of the different states. So in Indiana, we're already doing 1.8. That equates to a U.S. gross margin of 61%, all other things being equal. Other things are going to get better over time as well, the band leasing costs, there's other economies of scale, but this is just a like-for-like comparison on if you just do more jobs per day. So the point here is the underlying gross margin is already equivalent to the U.K. at just under -- just 2% points off. Even with this kind of suboptimal density at the moment, that will naturally get better as we expand in the U.S. So the key here is just building out that density and building out the state expansion. Now this comes back to this question. I'm going to look back to where we started. When you look at that gross margin where Kevin started, it looks like the gross margin has gone backwards. You can see the underlying gross margin is solid. So the question is, is this a good investment on all of these new customers in the United States? If you look at this business the way you might as investors look at SaaS business and SaaS investors, I know many of you have told me this, they have some simple rules of thumb about how you look at recurring revenue businesses to understand that return on investment. And we'll typically look at the lifetime value of a customer and compare that to the straight one-off customer acquisition costs. So at the current device installation rate, the cost per new customer that we're acquiring, and I'm talking about the straight isolated costs of shipping devices and installing those devices and also accounting for all the uninstalled devices as well. It means every U.S. customer at the moment at the current economics is costing us $54 in straight acquisition cost to activate them on day 1. If you look at the lifetime value per customer, even at today's economics, if you assume they never got any better for the next 5 years, an average customer will earn $150, $147 of gross margin over their lifetime. So that's just under a 3:1 ratio. Now when you're assessing SaaS businesses, the rule of thumb is, a business that has an LTV to CAC ratio of around 3:1 is a highly investable proposition and shows that the returns are very good on that customer acquisition cost. If you then factor in the -- if you also factor in, we've got a prepayment model, so the actual cash profile of a new customer is still marginally positive, we still make about $2 positive cash margin in the first year on each of those customers as we're acquiring them. Even if nothing got better, this is a highly investable proposition in the United States. Once we pull the average up, say, in line with Indiana, that LTV per customer goes up by another $30, the LTV to CAC ratio goes up 3.3:1. So the point being is even though we've got some suboptimal kind of repair economics at the moment, this is already a highly investable recurring revenue business model with no leaps of faith required. So we'll come back to the outlook in the U.S. in a second, but let's touch on Europe briefly. So the focus of the company has been squarely on the United States. We've got a relatively small team on the ground in the U.S. So all of the team here back in the U.K. have been focused on supporting the U.S. and driving that growth. Still, we've signed some new deals in Europe, too. We signed a deal with Ageas, another one with Admiral, a repeat order with Admiral. We've -- one of our most established customers is TopDamark. They've had a merger with a bigger group, which has created one of the largest personal lines insurers in Scandinavia now with If. We signed an extension agreement with them, so that's created a bigger opportunity. Some of the deals that we were working on in Denmark have gone sideways pushed out into 2026. And also Sweden still, although remains an opportunity in the long run, has been much, much slower than we anticipated and hasn't taken off due to lots of reasons that we've talked about before in the way that we originally anticipated. So the recurring revenues are still marginally up in Europe, 4% growth year-on-year, but the one-off device fees from Scandinavia, particularly from Sweden, have declined significantly year-on-year. So let's come back to the U.S. opportunity that we've got in front of us. If you map the U.S. today, you can see the dark green states are the states where we've got 80% of our installed base of units. That's where we're doing the majority of the repairs. The light green states are the more recent additions where we're starting to build out the volume, do the same thing that we've done with partners in the dark green states where we focus on an area, start to put more volume in, then put the plumber in place. What our U.S. partners are asking for is a genuine U.S.-wide solution. I'm just going to show you a quick video that Nationwide made recently. Can I see [Gus] play that, I don't know... [Presentation]

So that was a promotional video that Nationwide made themselves to market LeakBots across their sales agent community. They've been running around NFL stadiums across the U.S., giving out LeakBots to their agents. They announced recently that they're investing $1.5 billion in the next 3 years on AI and connected home technologies. And their vision is to connect the data from solutions like ours, utilize AI and integrate that into their pricing engine, their CRM system, their underwriting decisioning engine. So you can see how AI is accelerating this type of change with insurers. And we've got a great opportunity in front of us to cement our position as a market leader in the U.S. And we're working with some -- already some of the largest insurers in the United States like Nationwide, Liberty Mutual. And now insurers want something that they can offer all the way across the United States. So we've got 2 big jobs to do ahead of us. One is filling out that density of devices, building the plumbing infrastructure in those light green states and also all of the white space states that we haven't entered a single device into yet. Now what I'm not planning to do is just hire plumbers across all of the U.S. and wait for the volume. We'll still do this in a very coordinated way with our partners. But what we want to do is to be able to lean in and build out that infrastructure as quickly as we can, which is obviously a big undertaking when it comes to hiring, onboarding these plumbers, training them, giving them the right equipment, but it's in -- it's what our largest insurers are asking for, and that's the direction of travel. And we need to maintain that really high level of customer satisfaction and the return on investment, which is really a straight math of making sure we do enough jobs and save enough claims for them. The other thing is the orange states highlighted on the map along the south of the U.S. So in these states, the plumbing is different. So the existing LeakBot works, as you know, by the plumbing coming underground and up into the property. The device is located inside the property. So in all of the light blue states here, the plumbing is a lot like here in the U.K. where it comes underground into the property, the shutoff valve is inside the home. What we now know is that the plumbing looks different in Southern California, in Texas, in Florida, and it's similar -- very similar to in Australia, where it doesn't freeze, so the pipes are often like in the pictures here outside and then the pipe work goes into the wall. Now some of you may remember, we've been working on a project for a while in Australia, where we've been trying to redesign our product so it can be used in an external context. So it's a different sensor, but what we're trying to do is essentially offer the exact same solution that we know works today, something that has micro leak sensitivity, a single device that can protect the whole home, can be installed without cutting the pipe, so it doesn't need a professional installation is key, and it plugs into our plumbing service that we know works. Now in the U.S., there's 28 million houses in those hot states. So it's a significant size of the U.S. market. So the good news is we figured out and cracked the technology concept on how to do this. We're now ready to move to the next phase of development. It's a process that we've done before with the development of LeakBot, one, we know very well how to do this. The device will clip to the pipe. Again, it's self-install, and this device can detect leaks below 10 milliliters per minute, similar sensitivity to the existing product. But then everything will plug into our existing operating model. The same app will just differentiate which one of the sensors you're installing. It's the same operating model, the same value proposition to our partners, the same plumbing repair service. It's a question of which is the right sensor for that specific home. So in terms of the work that's still left to do, we've done the hard part. So the technology concept is done. We know how to -- we know the specification for this product. We've worked on the algorithm. The final piece is left to do are what we call design for manufacture. So this is when we do the final piece of industrial design and optimize that so we can produce this in -- manufacture it in the most efficient way and optimize the kind of bill of materials and the final cost of the product. Now this is a project -- that final piece is something that has been unfunded in our plan. U.S. carriers keep asking us, when are we going to be able to launch this solution? And we were very honest with them about, well, that final piece is not funded, and we don't currently have the funding for it. One of our customers, Indiana Farm Bureau stepped up to the plate and offered to become a strategic investor, so we could finish off that design. IFB are a very happy customer based on their pilot. They are very enthusiastic about the solution. They see a big opportunity across farm bureaus, of which there are lots across the U.S. And they were very keen to sponsor this project so we could finish the job. That is the reason for the investment, both to help us finish off the design work on this product and get it to launch and also to provide some additional strategic support so we can build out that infrastructure across the U.S. with a path to getting to that fully Nationwide solution across the U.S. and really cementing our position as the market leader in the United States. So that really brings me to the end of the formal part of the presentation. I'm sure there's lots of questions as always. But in summary, it's obviously been a busy period. It's obviously been a busy couple of days. I know there's been a mixed reaction from investors questioning about the strategy, and you have lots of questions today that we've endeavored to really answer. I'm absolutely certain that the steps we've taken recently are the right thing to do for long-term shareholder value. This investment is really needed to help us accelerate and give our U.S. partners what they're asking for. And it's absolutely the right thing to do to cement that position in the U.S. So I think we'll end the formal presentation there, and we'll go to the Q&A.

[Operator Instructions] I'd like to remind you that recording of this presentation along with the copy of the slides and the published Q&A can be accessed via our investor dashboard. As you can see, we have received a number of questions throughout today's presentation, can I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

All right. So Kevin, I don't know if you have a chance to look at these as they have been coming in. So we just...

Yes, there's a lot. There's a very easy one that says, Ondo was pleased to announce its registered office change. Are there any cost implications? No, there aren't. It was just driven by our corporate cost at moved locations. So that was an easy one.

[Secondly], more news is about potentially frozen pipes. It hasn't been able to, but it's actually a new feature that we're about to launch. So yes, it can as of now.

Next week according to...

We'll hold you to that.

Yes. No, I checked this morning.

What barriers to adoption, it's given the great customer success so far, it would be good to understand -- useful to know what barriers to adoption are you seeing other than just inertia slow decision make with insurers? Are some waiting for us to have a full national U.S. coverage or an even longer track record with current customers for instance? Yes, it's a good question. So yes, I think it depends on the size of the insurer. So what we find is with some of the regional players, we have a sales kind of methodology that works where we offer the senior execs a kind of quick free pilot. We give them some devices, get their feedback, show them the data that we can see for their property. And then from there, we sign a Master Services agreement and agree a first order so they can try the product out at some kind of scale. For the regional carriers, usually, after that first pilot, 6 months later, we do a review. We show them the customer feedback that we've got. We show them the claim savings, and that typically leads to them wanting to expand the program as much as they can into their customer base. For the biggest carriers in the U.S., that second -- if they were to do the same thing as a second point, it would be hundreds of millions of dollars of investment. So there are obviously some steps along the way with the bigger carriers. So the bigger insurers able to measure the ROI on a much more statistical basis as you get bigger and bigger. So one of the key things is building up that data set so we can show the ROI and continue to build confidence in addition to showing them the regular wrap reports. So that model generally tends to work. In terms of what are they -- how did you...

Number 7 is -- should be probably a good question that's linked into what you just said.

Sorry?

Number 7.

Yes. Okay. Well, yes, let me just finish up answering that one. So in terms of barriers to adoption, the barriers to a partner doing a first order with us are often just due to bandwidth and capacity. It's often the team is working on something else. They might have an IT project. There's some other priorities within the organization. Sometimes they're doing a first deployment with the Ting, another solution that can prevent fires and then we're in line to do something afterwards. So sometimes it's just down to organizational priorities. Once we've signed a partner, the thing that we're reliant on the insurer is often then doing the initial outreach and the marketing. So again, sometimes it can just come down to bandwidth and other competing priorities. But then over time, it's just a process of building that confidence with the partner, continuing to show them the same ROI, results and the same great customer service and then that confidence builds, and we do bigger and bigger deployments as we go along. So Kevin, yes, do our ROI calcs include indirect claim savings such as reductions in insurer claims handling overheads? No, they don't actually. It's a good point. So there are other benefits that these retention benefits. We do a straight claim saving just on the reported -- their average severity of claim, which is the straight -- basically the cash amount that would go to you as an insurance customer if you were to have a claim. Any other interesting ones, Kevin, what should we -- anywhere else you want to go? Ting is available to people to purchase. When will LeakBot be available? I don't think we will. We haven't got plans to make it available to purchase in the U.S. We're just focused on the straight B2B model with insurers.

Probably 14. What's the biggest gating factor for carriers joining LeakBot or rolling out LeakBot?

The biggest gating factor? Jumping on the band wrong.

And they're queued, in there really.

I mean I'm not sure how I'd answer that. I think it's the -- I mean, we're talking to a lot of carriers. Some of them, it's just getting the lead into the company in the first instance and finding a way in. There's still some big carriers in the top 10 that we haven't found a meaningful way into them at a senior level yet. So sometimes it's just getting their foot in the door. But once you're in there, it's -- every insurer we've learned goes at a different pace. So sometimes, the first conversation to get a pilot live can be quite quick. Sometimes these conversations will go on for a long time. And sometimes it's a timing thing just depending on other organizational resources. But the job that we need to do is to continue. U.S. insurers really want to see the same thing that you guys do. It's the continued momentum. The more that they see their peer group companies adopting this, rolling this out, the more and more traction we get with other partners. So whenever we put an announcement out about what one insurer is doing, it tends to lead to more either inbound interest or interest with kind of warm leads asking for another conversation to get an update on what we're doing. So I think there's a momentum game. And as we've talked about before, our goal is to establish ourselves as a market-leading solution in the U.S. market. Why did IFB subscribe in the placing? Was the interest from other carriers? We have had interest from other carriers in the past. And it's sometimes the fact that we're a U.K.-listed entity, makes it difficult for them to invest. For some reason, that wasn't a problem for IFB. I don't exactly know the difference.

It's their legal structure. Their legal structure made it easier for them to do it because they had an investment mutual company that could do. So that was the reason it was easier for them.

So their interest is they've got some parts of their organization that sells services. Our actual commercial contract is with an entity called Peril Protect. That was in one of the RNS that you may have seen. They offer some services across different farm bureaus. So I think there's an opportunity with IFB as well to help them to help us expand the solution with some of the other farm bureaus across the states, of which there are many, and they tend to be very large in a specific state. Kevin 19 is one for you about inventories.

Inventory is my favorite. Yes. Read the question.

Inventories built to GBP 1 million?

Yes. What do we think the right level is? Probably at least half what it is at the moment. So yes, so around about GBP 0.5 million, which is around about 25,000 to 30,000 devices with the majority of that count in the U.S. because the U.S. orders are bigger and they tend to move quicker.

Yes. Why can't you tell us Nationwide extended rollout will look like in terms of new numbers? We are lucky that we manage to name our insurance partners in press releases. Jim in the U.S., our General Manager, does remind us that in all of his experience, it's very difficult to get U.S. partners to put their names to press releases. They allow us, I think, because we're a listed entity, so we have a regulatory duty to let you guys know about things that are material to us as a business. So there's always a conversation with partners around what they will and won't let us put in a press release. So the policy of Nationwide is there hasn't ever been any volumes in any of the previous disclosures. So that's the reason. What are the benefits to plumbers of working for LeakBot? That's a great question. So we talk a lot about the high satisfaction of our customers. Our plumbers generally really like working for LeakBot. And I think it's a couple of reasons. One is that normally, if you're a plumber, maybe you're a sole trader and you've got your own business, which is constant hustle because you've got to go find the jobs every day. If you're working for a big plumbing firm, the downside of that job is there's always difficult conversations with customers about the price of extra jobs and the -- if they're -- you're not meeting the customers' expectations about what you'll do for the price. They love working for us because the customers' expectation is often quite low when we go into the home. They're often even skeptical whether we've -- they've got a leak. So when our plumber comes in and fixes, sometimes multiple things in the home and there's no charge to the customer, they're often very surprised at how good an experience that has been. I put a few customer verbatims in the deck that were all -- I think they all came in the same week in the U.S., but all of them are in the public domain. If you look at our Trustpilot feedback, you can have a look yourself about the way customers react to that in-home repair service. That's a nice job for plumbers to do. It's quite satisfying. And they also -- it's quite a high-tech plumbing job as well because we give them a whole bunch of equipment, infrared scanners that can show -- that can look through walls to see leaks. They've got our proprietary technology that they carry to be able to pressure test the property when they're on site. So I think all of that adds up to a quite satisfying job. And actually, in our organization, the plumbers are really the stars. My dad was a pipe fitter, my father-in-law is a plumber. I have a huge amount of respect for tradesmen. And everyone in our organization knows that we think the plumbers are the most important people because they're the ones at the front line, ultimately delivering that claim saving and return on investment for our insurance partners. And that, by the way, is also the thing that our insurers love about our solution. In addition to the technology, it's the quality of the plumbers that we're putting in the homes to fix these things that is really a part of our secret sauce. Why is the customer going -- there's a lot on here, so I'm just picking them up randomly. Why is the customer acquisition cost so high when the cost of the device is much lower? What other costs are included? So the customer acquisition cost that we were creating today also factors in the uninstalled devices. So that's the total cost, some other periphery kind of marketing costs as well, but that's the fully loaded cost of manufacturing the devices, packaging the devices, shipping them to the country, storing them in the warehouse, shipping them on to the end customer, but also factoring in all the uninstalled devices as well. So remember, our U.S. partners will pay us a cash prepayment on the number of units that they expect to ship, but then we activate them and we're actually drawing down on that prepayment on activated devices from a P&L point of view. So we get the cash upfront to fund the distribution of the devices but when it comes to recognizing that in the P&L, we'll take the full cost of all those uninstalled devices as well through the P&L at the time. So that basically explains why that number is higher. And that installation cost is different across the markets. It's really high in Scandinavia, often above 90%, 80% in the U.K. In the U.S. at the moment, it averages about 70%. So it's our newer market. It's a bit lower, but that will keep getting better over time. We're seeing with some of our more advanced partners where they're integrating this more completely as part of their proposition, they're getting well into the 80s. So we'll expect that will improve over time. But that customer acquisition cost was based on a 70% installation rate in the U.S.

Where do you want to go next?

I mean I'm just picking them up random really. With the expansion of the share register through this raise with the recent Danish fund taking 3.6%, can you dive the identities or the nature of these new or expanding investors? I think that is in the public domain, Kevin, isn't it?

I don't think it's named yet, but, yes, I expected to get a TR1 notification because it was an existing and it was an existing holder that expanded, wasn't it -- or there was one existing holder that expanded and some others. So...

Yes. So yes, I mean, the investment was covered by one of our institutions increasing their position and by this strategic investor, as we talked about. I meant to mention it, but I forgot. One of the things that you, our shareholders told me very forcefully in the past is if ever we were to raise money, we should always let retail investors participate. So we did also announce the opportunity for any retail investors to take part through a retail offer as well. That was absolutely based on that previous feedback. So I know I'm expecting a question on it. I'm sure there is if I look. But to also address that, I've made it clear today what the rationale for that investment was. I hope now you've heard us explain the context of what we're trying to do in the U.S. that, that makes sense. I know some investors were upset because we said consistently that we didn't need to raise money to get to that cash flow breakeven position. That was the case. The -- at this point in time, given that where we are and the opportunities we had in front of us, it made sense with that inbound strategic investor to back those projects so we could build out that infrastructure. So I hope that explanation makes sense.

There's another one.

Should Craig relocate to the U.S.? Yes, I mean it's a very good question. There may be a point in time in the not-too-distant future that, that might make sense, obviously, if we continue on this trajectory.

There's one on there that says, are we -- would we switch to U.S. accounting standards and we start reporting in dollars? Reporting in dollars, I would -- as the U.S. business grows, I would say, yes. U.S. accounting standards, not yet. I think that will be the best answer. There's another one that just come up. Will our U.K. business suffer with the focus on the U.S.? No, I don't think so.

Yes, I think that's fair. I mean the focus of the whole team pretty much is on the U.S. So I mean, it's a good question. There is a risk of that. I think it is the right emphasis for us, not just that it's a big market, but the unit economics in the U.S. work for our preferred proposition, which is the recurring revenue model across the U.S. In the U.K., particularly, it's interesting like you talk to U.S. insurers, the average premium people are paying for home insurance in the U.S. is $1,400 a year. In the U.K., we were speaking to a major U.K. insurer the other day, and they said their average premium is GBP 200 in the U.K. So it's a very different market. And it means the opportunity for our preferred model is more niche in the U.K. We have to target higher-risk cohorts or more higher-end premium properties. So there are opportunities. NFU is a good example of that, where it's priced in the same way that the U.S. deals are priced. It's a relatively large book of business, and it kind of looks like a U.S. partner towards it from an economic point of view. So there are good opportunities in the U.K., but there are not nearly as many of them as there are in the U.S.

And actually, that the European team are in the Nordics at the moment, aren't they? With the U.S. partner Nordic -- Danish partners.

Yes. The external LeakBot looks very different and more expensive. Will it be priced differently? And then I just saw another question saying, when do you think it will be launched? So the -- we've -- in anticipation, we've already spoke to a range of suppliers in the U.S. So we've obviously got our partners that we developed the first LeakBot with. It's a kind of specialist skill to do the electrical engineering and the design for manufacture. So we'll work with a partner to do that. We've already spoke to suppliers. My preference is to use someone in the United States given that that's the first primary market. We spoke to a range of suppliers. That's why we're confident in the costings and the time lines involved. We're saying that the aim to launch is within 12 to 18 months based on what those partners have told us. They say what we're asking them to do now in this stage, we've done the hard part. This is relatively routine. The target is for the device from a manufacturing cost point of view to be in a similar range to what we produce the existing version for. We won't know for sure until we get to the end of that design for manufacture process because the point of that process is to fully optimize both the component list and the assembly process to minimize the manufacturing costs. So we won't know exactly until we finish that job. But when we look at the componentry involved, there's nothing radically different to the existing device from a cost point of view. So there's nothing immediately obvious that leads us to think it will be particularly more expensive than the LeakBot one. I think we're on the hour. Any last questions you want to answer on here, Kevin? I know we're at time. Is it a benchmark for comparison or is it an outlier? No, it's a good benchmark. That's why we put it in the presentation. It's the -- you can see on that the scatter chart on the slide that there's a distribution across the states at the moment. So they're all somewhere in between. But it's a great density question. As we put more devices in, the number of jobs per day naturally increase.

Yes. And then on the map of the lighter colors, those states will go more -- it will get more efficient over time, and I think some of the investment in the engineers are in plumbers...

Just very quickly before we end the call. What data do you have that support the average lifetime value in the U.S. of 4.9 years? Can you increase that life expectancy? So that's a great question. So we haven't, in the decks before, talked about a lifetime value per customer. It's a really important metric to understand the value of the future cash flows that we're creating as we acquire these customers. So the 4.9 years is based on -- obviously, this presentation is verified by lawyers. So we need to -- every single stat in there is supported with quite detailed process. So the 4.9 years is supported by our existing datasets across the universe of devices, which equates now to over 300,000 device years of data. And it's based on an average monthly churn over all those devices of 1.7% per month. So if you do 1 divided by 1.7%, you get the average lifetime of a device in months, which equates to just under 5 years. Can we increase it over time? Absolutely. So part of that is to do with the insurer churn as they cancel policies. Part of it is to do with what we call technical churn if a device is out of batteries and the customer doesn't replace it, that kind of thing. There are definitely opportunities that we'll announce fairly soon that will have a significant increase on that lifetime as well.

A couple of questions are just coming about IAG in Australia, would they roll out the all-weather LeakBot Edge?

Yes. So obviously, they're the partner that we've been developing with this in Australia. They are keen and the testing has obviously been going well over there in Australia. The -- what we were keen to do now is accelerate the development of that because it's got broader applicability, obviously, far beyond Australia as well. The other thing that, I forgot to even mention in the presentation, is we think the applicability is broader than just other hot climates as well. We think there may be opportunity that we can use it. It's more flexible in terms of where you can use that new sensor. So we think it will also work from some rudimentary testing that we've done in apartment buildings, obviously, of which there are a lot in Western Europe, in the United States. And there isn't a good solution at the moment for apartments. So that could be another big addressable market for that solution. But day 1, target #1 is those hot climate countries in the U.S.

Do you want to take the 37, in terms of -- that was a question, but I think you've added that to the presentation, haven't you?

I see what you mean. Yes. So annualized recurring revenue -- contracted annualized recurring revenue only increased from 5.9 to 6 in the period. That's a very good question. So as we contract revenue and then we start to install it and it hits the books as actual revenue, one offsets the other. So yes, do you want to answer that, Kevin? That's -- second point is the cash point, isn't it? It's one thing...

Well, I mean I think the question is why it actually happened. So over time, you move from the run rate -- the run rate at the end of the period plus the contracted position. And so it does flex. The 2 deals that we talked about, Indiana Farm Bureau and Westfield that happened post period increased that annualized recurring revenue. So between now and -- between September and November, it jumped with that extra volume. So it's now -- I think I'm sure it's added -- I think it was added into the press release now about 6.9 with those additional -- because there's additional contracted revenue.

Yes. Okay. One more question then, Kevin.

What about Canada?

That's a good question.

That's literally just come in. Do you want to talk about that [indiscernible] America?

Yes. I mean it's an obvious question. So there are some big insurers in Canada. And controversially, our American General Manager likes to point out that Canada is very similar to the United States, although since Trump tried to annex it, I think that's become quite controversial thing to say. But yes, Canada is a good opportunity.

But yes, I'd probably just add to that. Obviously, Canada is a Commonwealth country. So going America to Canada is a little bit tricky at the moment in terms of the tariffs. But going U.K. to Canada is fine, and it's obviously something we have looked at.

That's great. Thank you for answering all those questions you have from investors. And of course, the company can review all questions that were submitted today and will publish those responses on the Investor Meet Company platform. Just before redirecting investors to provide you with their feedback, which is particularly important to the company, Craig, could I please just ask you for a few closing comments?

I would just say that, hopefully, on this call, we've managed to convey -- give you some more detail as to what's going on in the ground in the United States. The -- how it feels internally in the company is we've made amazing progress in the U.S. It's been hard. It's obviously difficult to scale a company like this that involves technology and involves a services element. We're still a small company today. We're working with some of the largest insurers in the United States. And proving to them that we've got what it takes has been our primary focus. And we're really well positioned now to capitalize on that and become that market-leading solution in the U.S. So it was with a heavy heart that I've read some of the comments and seeing a mixed bag of the responses from some of you guys. I understand some of those frustrations. I understand some of the questions that you've had. I hope today, we've gone some way to allay some -- answering some of those questions. And I do genuinely believe the decisions that we've taken recently are absolutely in the long-term interest of all of us, of shareholders, and we've got a great opportunity ahead of us. So thank you for your support.

Thank you.

That's great. Thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Ondo InsurTech Plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.