PCI-PAL PLC (PCIP) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the PCI Pal Results Presentation. To start with, if we could cover a couple of housekeeping items. Before we begin, we would like to submit the following poll, which you'll see on your screens. [Operator Instructions] The company may not be in a position to answer every question it receives today. However, the company will review all questions submitted and publish responses where appropriate. These will be available via your Investor Meet Company dashboard. Finally, we would like to remind you that this presentation is being recorded. I would now like to hand you over to Chief Executive, James Barham, and Chief Financial Officer, William Good. Gentlemen?

Thank you, Tom. Hello, everybody, and welcome to the Half Year Update for PCI Pal for this FY '24. Good half year for the business. Some key financial milestones that we're aiming for this year, William and I are very, very focused on. So full year cash flow positive this year is the aim and full year group profitability, adjusted PBT level. So we're well on track for achieving that and not overly focusing on those, away from the other key areas of the business. So in the period, we're growing sales incrementally year-on-year, expanding our routes to market. Very excited about what we're doing in the partner ecosystem side of the business. So I'm going to spend a bit of time talking about that today. Growing our product capabilities as well. So an update on the road map progress that we've made, and I know many of you are eagerly, sort of, waiting to see what that looks like coming through in the second half of the year. And also, we had a very successful outcome from the initial trial in the rather unfortunate patent case that we're having to be involved in. But a bit more of an update on that shortly, but we're in as good place as we can be. So let's just start off with some of the key highlights. So I think all in all, what I tried to get across in the interim's -- in my sort of CEO section of the interim's report, was that we're really building a strong business here at PCI Pal. We've got a very strong core to this business. So not only have we built a foundation, but I think there's a strong core to the business when you look at the metrics, when you look at the performance, which I think means we can enter a new kind of phase of growth in the organization now that we are hitting those financial milestones of cash flow positive and profitability near term. Revenue in the period was up 20% that was in line with our own expectations inside the business. ARR, exit run rate, up more than that, 23% to GBP 14.7 million and that was really encouraging. When I talk about the strong core in the business, I feel that we're definitely operating very well from an operational standpoint as well. So operational performance in the business. There are record amount of projects in deployment, getting to revenue recognition, so moving out of our deployment phase into ARR. We moved GBP 2.5 million into that, into ARR, contributing to the uplift to the GBP 14.7 million. That compared to just GBP 1 million in the similar period for the prior year. So a 150% increase, which is great to see. Of the revenue, 90% of it is recurring, up from 85%. That shows you the health of the revenue that's coming through. You know we are a software business, highly sticky recurring revenues is what we want from our license fees. So we see that moving up from 85% to 90% is very good. And combined with that, sort of supporting that high-quality revenue message is gross margin, is up from 87% to 89%. And that's reflective of the fact that we've got more -- proportionally we have more licenses in our revenue than we do transaction based. So we do carry some minutes, we do carry some transactions. But clearly, we're looking for the licenses, which are at much higher margins, hence that's now tracking up. This revenue performance is driving our group profitability, which is evidenced very clearly by the first reporting period of positive EBITDA for the business since we set out on this journey, we saw growth trajectory and investment path that we've been on since late 2016. So very much in line with our plans, getting to EBITDA profit for the half year and sets us up for the full bottom line profitability for the full year. And if it hadn't been for the patent case costs in the period, operational cash flow is positive in the year so far as well. So all good to see and as expected. Moving to the right-hand side of the slide there, new business. So TACV is the total annual contract value, total recurring revenue value of all the contracts we have signed to date. So whether they're a revenue recognition or not, that was up 18% to GBP 17.5 million that tends to be a really good indicator of future recurring revenues in the next sort of 12 months. Contributing to that TACV was the new business and license fees that we signed in the period, and that's reflected in ACV, annual contract value, and that increased 9% year-on-year. We did want to be a little bit further ahead than that in the year, but we specifically updated investors in the current trading that we've had a strong start to January and February, and we're actually more than 20% up year-on-year as we stand today. So really just timing challenges there in -- as the half year closed in December. And some of that is a result of some slowness in procurement cycles. We reported this at the full year, I don't think it's uncommon in the B2B tech sector at the moment. It's much more common in the enterprise space. Contract negotiations are definitely a bit slower than they were. But encouragingly for us, our pipelines are up. So as I say, our partner ecosystem is performing very well for us. Our sales pipelines across the last 12 months are up 20%. So you've got a counterbalancing factor going on there, which is meaning we can continue our sort of sustained momentum of new business coming through. One of the highlights I'll talk about was actually a sort of highlight continued from the full year, which is the momentum we're seeing in U.S. and U.S. sales. So excellent breakout year for the U.S. versus last year where it's kind of becoming the big brother of the group from a sales perspective. But given the size of the market opportunity there, we always expected to get to that point since we launched there in our first full financial year there in sort of FY '20, but up 35% year-on-year. We signed a number of new Fortune 500 customers, so very large organizations in the U.S. One of those are Fortune 50 as well. We've got a number of competitive displacements in the period as well. And also, we signed Zoom, a new strategic reseller partnership, which I'll update you more on when I get to the partners update. Now talking about winning customers. We are also consistently good at keeping our customers as well, really strong retention in this business that we've tracked at between sort of 95% and 97% for the last 3 or 4 years. So for the half year to date, we're 96% gross revenue retention. When I talk about a great platform for growth, this is another aspect to it. So the retention that we have with our customers means we've got a captive audience. We've got customers that like us, and even though we sell most of our deals through partners, we also manage to market to those customers and build relationships directly to and indirectly through our partners. So I think there's a big opportunity for this business longer term as we become more capable to up-sell and cross-sell. And that's really in line with what we're trying to achieve with the product road map that we have and the new enhancements that are really now starting to come through. And what ultimately that will drive is an increase in NRR, which is the net revenue retention you can see there in the second bullet point, the second point to the second bullet there, NRR. Now I look forward next 2, 3 years, I'd really like to see this business getting to a significantly increased NRR and wouldn't that drive some real additional value into the PCI Pal business. So product road map, final point there, as I've mentioned, all in line with where we expected to be. So all in all, half year, on track with our financial targets. I've definitely got one eye on FY '25 and '26 onwards, as we move into profitability after the drain on cash that we've had the last few years, I feel like we're getting -- coming out of the back of that, and we're in a very strong position to push on. So before I carry on with the updates, I'm just going to move on to a little bit of background, less than we usually do here. If there is anyone new to our story, there is plenty of other presentations you can watch going back over the last couple of years, and we give much more in terms of background to the business. So please feel free to watch those. We just want to make sure we give everybody plenty of time for questions at the end because you know that our investors seem to value that the most. So PCI Pal itself. So we're a fast-growing SaaS business. What do we do? We facilitate secure payments for organizations across business communications environment. And what we mean when we say business communications, environment, is we mean any number of the omnichannel mix going into contact centers or call centers as some know, the math, so traditional phone calls or voice as we know it, chat, web chat, chatbots, social media, e-mail, all these interactions go into contact centers generally today. And we deal with securing payments across those environments. The vast majority of our customers use our technology in their contact centers. We do have a growing number of customers that use our technology in other areas of their businesses too, that are handling payments. Main one is finance departments, but there are also some other back-office functions that -- they do not call the contact center, they have a need for our type of technology. So our value proposition is security around payments, and it's about doing that in a very integrated way with the tech stack within a contact center, but by using our solutions also customers are able to achieve various compliance standards. And the main one that's associated to our solution is PCI DSS, the Payment Card Industry Data Security Standard. As I said in previous presentations, we've got more into the background on that. So please feel free to watch those. So news in the last 12 months is that we're participating organization of the PCI Security Standards Council, and importantly, our CISO, our Chief Information Security Officer, is on the Advisory Board, and we're the only one in our market with that position. So we're very involved in the industry. Our core markets today are U.K., North America and ANZ, so Australia, New Zealand. Three core products, as you can see at the bottom-left of the slide there, Agent Assist and Digital, which effectively deal with live call center agent interactions with customers, so either by phone or any kind of digital interaction like web chat, as I mentioned earlier. And then also IVR, which is the industry term for auto attendant, no agent involved, fully-automated process, press 1 for this, press 2 for that. We've got speech recognition capabilities across Agent Assist and IVR and a bit more on that later because we've made some enhancements there as well. For those that know us, you will know that we are building towards an evolution in our product set and broadening value proposition that we've got, and we're well on our way to doing that. So looking forward to talking a bit more about that later. How do we sell? So the vast majority of our contracts come through partners. So 80% to 90% of our contracts every year come through our reseller community, our partner ecosystem. There's just some of the logos of some of the top partners that we work with. We live and breathe channel at PCI Pal. We have done. It's been a key part of our strategy since day one. We hire specifically to bring in people who understand how channel businesses work and our networks to our partners and the sorts of organizations that we want to work with. And this is an area of the business where we really are very strong. Most of those partners that we have are resellers. So of the 80%, 90% that goes through our partner ecosystem, the vast, vast majority of that is resold, so its organizations selling us on their own paper, more on the ecosystem to come. And then just on the logo side, as you can see there, some really strong logos. We've got more than 600 customers across our platform. This year, we're expecting to add probably about 250 to that across the full year. So net new logo count is accelerating by sort of 15% to 20% every year. It's not all just big logos, either we access and cater for the breadth of the contact center market. That's been a key strength of ours, is that we're able to deal with small to midsize as well as the very largest contact centers, which is important because the contact center market predominantly or by majority is the small to midsize end of the market. So it's an important area to be able to serve to maximize the addressable market opportunity. Just a little more on that strategy, just to keep it really simple in terms of we talk about 3 pillars to our strategic growth, and these have been consistent for the last 5-years plus, obviously evolve things around that, but this is very much at the core of what we do. So we've always been in the cloud. We've got the most mature public cloud platform in our market. We are hosted in Amazon Web Services. Our 600 customers plus are all across that platform. Cloud gives us the ability to access a global market opportunity, the contact center market and what we do may be a little bit specialist, but it is a global market opportunity. And we have the capabilities through our cloud platform to be able to access that market and do it in a cost-effective manner. And then further to being able to access that global opportunity, we align ourselves with channel partners, as I've just talked about, to be able to do that from a cost-efficient perspective and drive scale, leveraging our partners who buy vast majority are significantly larger organizations than us, large technology companies. A bit more sort of about the lay of the land for PCI Pal. So we've various locations in the main, that's U.K., U.S. and Australia. So the majority of our people are in the U.K., and that's because most of our engineering and back-office functions are in the U.K. as well. So we've got 85 in the U.K., 30 in the U.S., and then we've got a couple in Canada, and a small team in Australia, which is hotting up for us right now, and we launched there in about 18 months ago, something like that. There's more information on the background from previous presentations that we've done. But where I wanted to draw attention here was the global cloud platform that we've got. The orange padlocks represent availability zones in AWS, and that's a single platform for us that's joined by these availability zones. We can scale the platform very, very quickly. So if we move into a new territory, then we can easily add the new availability zone literally within hours, and it's ready to use under the same compliance approvals and everything else that goes with it. At the beginning, I was talking to you about the strong core that we have in this business and the strong foundations we've built in this business. Uptime is another piece of that evidence towards that and my feeling there. In the first half of the year, we had 100% uptime across our global cloud platform. That shows the maturity of that platform. As I said, we were first to launch by a number of years. It's got some really high volume customers on it as well. So 100% uptime is absolutely fantastic. When you're a company that provides a specialist solution, right in the mix of quite a complex environment, it's critical that it works. That's the first rule of retention, technology make sure it works. So 100% uptime. We talked about some competitive displacements in the interim write-up, some of those did relate to service issues that those customers were having. And so they were able to move to us and now they can sort of have a bit more trust in the platform that they're using. The green rosettes on the slide here show you where our key patents are. Our main patents relate to the innovation that we came up with mainly in terms of how we integrate to third-party cloud environments, and the light-touch ways that we do that. And we do ensure that we promote those patents to our partners and customers that use those integrations so that they're aware that they're protected by those patents that we have, and that's been quite important to us. Now moving on. So partner ecosystem. I mean, it's just really pleased to report to investors -- it's actually our last session after a really busy week since the results went out. Really pleased to report to our investors that the partner ecosystem continues to go from strength to strength. It's always been a key strategic focus for us. And yes, we're just very focused on building deeper, more productive relationships with that ecosystem. So I've said to investors for a number of years now, as we were adding new partners quarter after quarter, I said that will start to slow down because we have to get deeper into these large organizations that will build the better long-term sustainable business with those organizations. And we're really doing that. So actually, our first focus is not signing new partners. It's working better and being better enabled with those partners that we've already got. So we're achieving that. And that's evidenced by the 87% of new ACV value that came through partners. So in the top right-hand corner there, that's gradually tracked up over time. And that's really a result of the combination of run rate SMB business, which we've traditionally got from our partner ecosystem, so it's small to midsize stuff plus layering on all the enterprise business that we now see much more commonly through partner ecosystem. Even if we receive a direct enterprise opportunity, whilst we know we'll earn less from it, to go through our ecosystem, we're almost always try to fulfill it through an ecosystem partner because we've got a much better chance of winning it, and it also feeds productivity of that relationship long term. So yes, this is an area of the business that is really tracking well. And just finally on here, I will update on Zoom. So in the full year, we -- well, we announced actually in the first half that we signed a reseller relationship with Zoom. Many of you all know Zoom from video conferencing, particularly in the pandemic. Zoom are a very substantial business communications vendor. They're a Gartner Magic Quadrant leader for unified communications. So back-office phone systems effectively and they entered the contact center market, I think at the end of 2022 or early 2023, and they're going hard at that. And so they had an earnings call just this week, actually, and they were talking about the importance and value they see in their contact center business globally. So they selected PCI Pal. We signed that and announced it in the first half, and we're looking forward to getting to full availability across their phone and contact center products globally in the next couple of months. So really excited about that partner, and I really believe that, that can be a top 5 partner for us, really, very, very quickly. So we have more in the pipeline, and we do expect to bring on more partners in as we go, but we'll do it in a balanced way given our resources. Now before I hand over to William for financials, I'm going to give a quick update on the patent case. Obviously, we're a little bit limited in terms of what we can share here. But try to just give you the update rather than the back story, you can get the back story if you read the accounts. So as expected, really strong victory for us, resounding victory, we won on everything from the original trial. So we don't infringe on anything. And we also won our counterclaims to invalidate the patents. Now the trial judge awarded us GBP 1.1 million in an interim cost payment. However, that cost payment is being held in escrow by our lawyers pending any appeal. The other side did go to the Court of Appeal to ask for permission, and we're given permission to appeal. We believe it's a low bar is what we're always advised. And that's now been scheduled for 21st and 22nd of May. So I'm actually really pleased that that's not that far away. We want this dealt with as quickly as possible. So we're looking forward to that hearing coming around in May, and we're looking forward to being successful in that. We continue to believe that this is a competitor that's just doing this to try to disrupt -- to try to disrupt our business. So we'll get through that, and then we expect to get our costs back as well as the cost for the Court of Appeal as well. Now we strongly believe, given where we've got to date that the downside risk to this for investors is substantially reduced. And we continue to believe that the worst-case scenario for PCI Pal is certainly manageable. So given where we've got to today, it's been a long 2.5 years, we've wasted GBP 3.5 million on it defending this business. We had to do that, but we've done the right things. And it's -- well, I'm very proud by the fact we've actually built -- continue to build the business in the way that we have. The U.S. trial continues, so that just rattles on. We have got a date for that, which is February '25. So another year of the U.S. side, William is going to talk a bit about the remaining costs. The only other bit I'll add is that mediation is required by both the Court of Appeal and the U.S. courts as well. So I would expect there will be some kind of mediation probably between now and May because that's a requirement. Happy to take any questions I can and respond to the ones I can at the end, and I'll have a look in the chat in a moment, when I hand over to William. The other bit of news you will have seen is that William is moving on from PCI Pal later this year. So he and I are going to be going through a process with the Board to find a successor. William has been with the business with me for 7 years. It's been an excellent 7 years. He's been a great support for me. It's been a tough 2 to 3 years, the last 2 or 3 years, and I thankful, he sort of stuck by us during that time because -- whether he had some other interest as well. So we've got a great relationship, and we're going to be working through that process over the next 4 or 5 months, and hopefully, I can get a replacement in place. My plan is sort of the back end of the spring to have a replacement in place by then, with a good transitionary period with William. So William, I'll hand over to you now.

Thank you, James. Good afternoon, everyone. I'm just looking at the financials for H1. It's a continued story of growth and delivery and movement towards profitability. So our total revenue for the half year is up 20%. Our gross margins are improving. You can see the EBITDA has hit positive, but as James indicated, it's not a measure we use internally. We tend to focus on EBIT or adjusted PBT. Why is that? As well, the amortization that relates mainly to people, and our investment in our platform, which are people right and that's something that's not easily switched off. So it's not a true measure of this business. New ACV continues to move forward well and as expected. Our TACV, which is the future indication of our recurring revenue is continuing to grow strongly. Our exit ARR was strong at GBP 14.6 million, and we finished the period with net cash balances of GBP 545,000, having paid down GBP 1 million in cash for the patent case. Just looking forward, do like these graphs, they just showed the progression and delivery. And it's something that James and I are very proud of from 2018 when we launched this new cloud AWS platform, and the growth that's come through and the momentum as we've driven sales invested in the business. I was the 12th person in, and there's now 120 people in. We've driven gross margins forward. Why is that? Because we actually own the AWS platform, whereas the original platform that we inherited in 2017, '18 was a revenue share model. And as you can see on the top left-hand side, EBITDA has continued to step down. We've purposely been loss making backed by our shareholders. But every year, we've made a commitment to drive down our losses, and we said when we last raised money in 2021, that FY '24 would be the year we turn to profitability, and we're well on track for achieving that. Just picking up a couple of particular points on the bullets below. Note, the growth in North America. North America is growing very fast. Why is that? The average contract side there is much bigger. The market is much bigger, and we're getting much more momentum through there, which is very, very pleasing to see. And then our margins continue to, as we say, progress towards 90%. We think they'll probably top out about 92%, our cost of sales mainly relates to telephony channels and transactions, which is a methodology we have to use for some of our customers to connect them to our platform. So that is declining as we move towards more integrated partners. Again, on the top there, you can see how our ACV growth has improved over the years. Just a reminder, H1 is traditionally slower than H2. Why is that? Well, our year-end is June, and we're Northern Hemisphere based. And so July and August always tend to be a little bit slower and then we pick up momentum. And hence, we reported in the accounts, in the written accounts that coming end of February, we are now at GBP 2.2 million, and that's 25% ahead of where we were last year. The other point to note on that second bullet point down is that TACV grew 18% to GBP 17.44 million. As I said, that is the indication of future ARR. But more importantly, the sub-bullet there, the transactional revenues are falling. Why are they falling? Well, that's because we're selling more and more through our integrated partners, those integrated partners, just in their very nature don't need telephony-type transactions to drive our -- to connect to us, and so we're having less and less transactions. I'm very pleased about that because license income is far more sticky and visible and better quality income than transactions. Just moving forward, this slide here is just to remind people that actually we're a people business, 75%, 76%, 77% of our business relates to the cost of employing people. And you can see on the top bullet point, we've grown from the end of FY '21. So June 2021, we were 71 people. We have just raised some money for growth. We've invested very heavily in engineering product, customer success during that time. And current head count numbers have reached 121, and we've expanded across Canada and Australia. And as James will fill you in, he will give you a bit more update on the products that we develop, which give us a new uplift for the future. The middle bullet point is the sort of unwelcomed financial distraction that's probably the kindest words I can find about the patent case. It has been a cash drain on the business. We have had to fund the patent defense out of our business, and that's led to some limited -- limitations on our plans, even though we've continued to deliver on what we said we would do, it has slowed us down a bit. To date, since the case was brought in September '21, we've spent GBP 3.4 million on defending it, that's invoice amount. As at the end of December, we paid about GBP 3.1 million of it. My new estimate is it's going to cost us between GBP 4.5 million and GBP 4.7 million to take us through the Court of Appeal hearing costs, and then through to February '25 in the U.S. when the court case happens, the trial happens in the U.S. We are, of course, hoping to recover costs from that, having -- believing we're going to win the appeal. We spent GBP 1 million on paying patent fees in the first half. Why is it so high? Well, the U.K. trial that James talked about was May, June, so we had all those bills sitting, waiting to be paid, and they got paid in July, August, September. So if you strip that out of our underlying movement in cash, the underlying operating business generated GBP 380,000, GBP 390,000 in the period, which is a further step forward from where we were in the last half. And expecting that operating cash flow to continue to grow as we develop and deliver more business. The only problem is that our operating cash flow is currently being used to pay the ongoing patent fees, which limits what James and I can invest into the future. So that's what we've been focusing on. So we finished the period with cash of GBP 800,000. I had GBP 250,000 drawn down on our HSBC facility at the time. That's now being fully repaid. That GBP 250 million was used to pay patent fees costs. There are several questions about what is our facility? Well, our gross facility is GBP 3 million. And as I said, it's currently undrawn. However, the availability of that facility fluctuates based on a complex calculation against the level of assets and liabilities we have at the time of drawing. So the effect is it can actually limit the facility down to as low as GBP 1 million. However, that GBP 1 million is more than what I need to fund this business going forward. So that's it from me. I'll take up -- we'll try and answer any questions later on. But in the meantime, I'll hand back to James.

Okay. Thanks, William. Okay. Products update from me. So some sustained investment into the business over the last sort of 18 months to 2 years off the back of the last fund raise we did, which is 2021, but we had a delay before we started investing that. And a lot of that was about investment into product and engineering. And we're really getting to the point now where this is probably the last time I'm just going to be giving you sort of verbal updates on these things because the road map progress is really where we wanted it to be. So we're very much going down this path of an evolution from pure-play security and compliance solutions to a much more broadened payments-type business with strong revenue generation, cost control-type messaging to go along with what we already do to date. Update for you in terms of how we've progressed in the first half. So actually, I've seen a question coming on the chat with regards to speech recognition. So I think this will answer that. So at the back end of FY '23, we announced that we've launched a significant enhancement to our speech recognition capabilities. We're seeing very high success rates across this new offering that we now have in place. And across H1, we were really successful in moving all of our existing speech customers across the new enhanced service. So we moved sort of 20 to 30 customers across to that in H1. But then we've also signed a number of new customers as well. And those new customers are therefore now paying for the uplifted license fee that goes with having speech. So we actually got an incremental increase to the license that we're able to achieve. So you've got the core underlying license from the Agent Assist or the IVR solution that they're using, but then we've got some overlay license uplift that we can put in place because of the Speech Recognition enhancement plus some additional usage as well that goes in there. Now that's just a good example of how the product enhancements we're working on are going to complement our existing pricing models and our existing revenue model as well. So they will give us the opportunity to expand the amount of value and sales that we're making through our existing customer base and to new customers that are coming our way. In terms of that speech recognition solution, we are seeing a trend to continue that I mentioned 3 or 4 months ago when we saw you at the full year, that we are seeing more customers, particularly in North America, who are opting to take speech recognition as the primary data capture method when they are either using IVR or a live agent-assisted solution and that wasn't really possible before when speech recognition success rates were down in the sort of 70% to 80%. But speech recognition is an industry that's been significantly helped and benefited from AI capabilities, and so we've been pretty smart in going out there to get some of the best available speech recognition tools, which we then integrated to our products and are now out there being used by customers. So it's really quite interesting to watch that happen and see that customers are opting to use the solution as the primary rather than the secondary with keep that entry going to the secondary. In terms of road map progress that I've got to report. So it's not just road map progress, we actually have minimum viable products, or MVP is the terminology, MVP stage for a number of these new product features. We've got a full version 2, basically of our agent interface and the -- effectively the consumer view that they see as well for Agent Assist and Digital. We've got a number of customers live with that, using it with live customers of theirs, which have gone through our MVP process. Within that new UI, we incorporate a range of different digital payment capabilities such as Apple Pay and Google Pay, pay by bank so bank-to-bank transfers. They're both things that we've had to date. But when we deploy those, it's a little bit more customer or a bit bespoke, whereas with the new user interface and the new version of the product that we've brought to market. We're able to very quickly deploy these. Customers can pick and choose what payment methods they want to add or not to what they're using. And in addition to that, we're adding the capabilities to buy now, pay later as well. So we've got a lot of retail customers. Some of our largest customers are retail customers, and they use buy now, pay later quite prevalently across their e-commerce environment. Some of them use them in their stores, particularly in the U.S. So actually having their buy now, pay later service available to them through their contact center as well across all channels is really quite compelling. And then finally, in FY '23, we announced a new partnership with Stripe, and we're actually leveraging that partnership to be processing payments, too. So in a number of those MVP customers that are using our new versions, they're also using PCI Pal to process the payments as well. And we're doing that leveraging a strategic supplier relationship that we have with Stripe, and again, that's creating a new revenue stream opportunity for us as we are earning from the transactions that are going through. Longer term, this direction of travel for us more towards payments is very much in view, and we look forward to seeing that evolve over the next year to 3 years because some of those things will be quite far off in terms of opening up the payment's opportunity. But near term, we'll be adding in these enhancements and features that we think will grow our addressable market across our existing kind of base and existing target market that we have. Just on the right-hand side there, more sort of longer term back out into the next financial year. We are busy working through the early stages, when I say early stages, we're busy working through our AI road map. We've got some way to go in terms of how we're going to be using that in our own products to improve data analytics capabilities to drive more intelligence around and customer experiences, better data insights that we can make available to our customers and also use ourselves to drive more revenue through customer interactions. So what payment options to present to a customer doing that autonomously, doing that in an automated fashion to try to maximize revenue when there's a payment opportunity with the customer or maximize customer experience. Majority of the use that we have of AI today is actually inside the business, in engineering, but actually, we are intending and we are currently developing our own AI capabilities but being realistic, we're looking at FY '25 for the release of those things. But it's really exciting what the scaled engineering and product function of PCI Pal is now able to do for us. We've really grown up a lot over the last 2 to 3 years with that investment following the support of our investors at the last fund raise. And that's exciting to see. There is a question in the chat about operational gearing and will our cost base continue increasing at the same rate as our revenue. The answer to that is no. And actually, that operational gearing is going to start coming through from now. Hence, we're now starting to hit profitability. And actually, I think, proportionately, the cost base doesn't have to increase at anywhere near the rate that revenue can because of the strength of the products because of the strength of engineering and the state of the public cloud platform that we've got. So just to wrap up before we do move to questions. So in terms of the outlook, what am I focused on right now. So accelerating our revenue growth into the second half. So we're not there yet. So we need to work on getting revenue to where we need it to. There's less that can impact our revenue this year now as a result of how the revenue model works and revenue recognition rules work, but getting deployments through is very, very important. So to see our customers going live, that will drive us through to profitability at adjusted PBT level, full year cash flow positive. So closed eye on those things. I will continue to obsess about our partners and the importance of our partners, the importance of getting deeper and building stronger relationships with our partners. As I've mentioned there, it's time to get our new products and enhancements to a revenue state. We are starting to see new revenue coming through as a result of that through the MVP process. We are -- H2, there's a big focus on the rollout of the V2 of the core products to our top 5 partners. So I'm hopeful that we can get most of those rolled out by the end of the financial year, and they will simply switch to using the new version rather than the current one. And then hopefully, that will give them more opportunity for more success for their own business. I have certainly got one eye on longer-term investment. As I said earlier, we are moving into a profitable stage. And so I very much believe this is a growth company, and I don't want to change that. I think it suits the business. The addressable market is there. We have the opportunity to do that. But I think what we want to do now is that we've got to profitability or certainly, are very soon, we want to be able to do that from a profitable base. But we do need to think about what we're doing with those profits. And certainly, my mind is on continued growth because I think that's where the value opportunity comes for this business and for our shareholders. And then just finally, looking forward to getting the U.K. side of the patent case behind us one way or another come July, but certainly expect them to be successful and get some cash coming our way as a result of that. So that finishes the slide, so we can move to some questions.

Yes. Okay. So James, you obviously had a quick look through those. I don't know whether you want to pick those straight up or where we can...

It is. Yes. William, I'll kind of push one of these over to you. So just taking them in order in the chat, the one at the top, William, from Tim K. There's a question there about, which is really about operational gearing of the business and the costs to date tracking increasing in line with revenues and asking about when is the timing of that going to change and you're going to move into more sort of profitability. I thought you might like to talk about the ratios we've been looking at William from a G&A perspective to revenue.

Yes. So James and I have kind of an unwritten rule. We've always said from day one that however fast the revenue is growing and the amount of revenue we're getting in, we always want something to get through to the bottom line, to make sure that our shareholders rewarded and can see us heading back towards profitability, cash generation, and that's been shown in that EBITDA graph I showed earlier. Moving on to these current times. So currently, we're looking at -- we're trying to keep a ratio of around 2:1. It's quite hard to keep to that. But -- so if revenue is growing at, let's say, 20%, James and I plan around keeping our cost base growing at 10%. So 10 -- effectively 10% of the revenue will drop through to the bottom line. And I think that's a particularly sort of valid ratio for us at the current time of our investments and our profile. Having said that, it could be the ratio -- that's the opening target. It could be 12% to 20%. It all depends on the timing of new sales, deployments and everything coming through. And one good thing about this business, we have high visibility of revenue. We can see it coming, so we can control those costs, especially bearing in mind that 75% of our cost base are people related.