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 will see on your screens. 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, Ryan Murray. Thank you, Tom. Welcome, everybody, to our half year interims update, solid half year for the company. Good operational performance in the business. I'm always pleased to see record levels of new business sales as somebody with more of a commercial background. So pleased about that. I'm going to talk a bit more about that in a moment. Good progress across our product road map in the period as well, features, enhancements and some progress towards some product adjacency that we've been starting to talk about with investors. It's also our first period of trading since we got the patent case behind us, which was a distraction for management during that period. So been very much enjoying lifting our heads a little bit more or certainly having a bit more time to do that, very engaged with our investors this week that we've seen one-to-one in terms of talking about the next 3 to 5 years for this company. And taking it to the next level given we've now hit this profitability point and entering a new phase for the business -- and where we can take the platform and the products that we've got that go with it. So yes, we know what we need to do to execute for the rest of the year, but it's been a good start to the period. I start with a bit of background on the business for those new to the story. We have been using IMC for a long time. So please go back and look at some of the other presentations if you'd like a bit more background detail on that. You can also always submit any questions to us that you have. So a bit of an overview on PCI Power. So fast-growing SaaS business, so SaaS technology company. Effectively, what we do is enable companies to transact business through payments securely to do it in a simple fashion and to do that cost effectively as well with their customers. We primarily operate in the business communications space is the terminology that we use and particularly most of our customers use our solutions within contact centers. We do have more customers today using us in back offices as well. So more of the unified communications space as well. So for instance, finance teams using our technology. And we can do that. We can support payments. We can secure payments across any channel going into those environments. So that's right from -- we can service legacy environments, hardware environments right through to what the majority of businesses are using today, very modern cloud technologies. And then across those channels, there's all sorts of different ways that organizations communicate with their customers today. So across the contact center, you've got the traditional voice channel, which is predominantly still the main way that customers interact with contact centers over the phone, live voice interactions. You've got growing digital interaction methods such as web chat, social media, SMS, all these sorts of communications that you have with companies going to contact centers. What we're also starting to see is conversational AI coming into that as well. So these are chatbots and voice bots as well. And so we're being really proactive in providing our services integrated to those environments, too. So really do cover the full sort of spectrum across business communications. Now we effectively integrate very tightly to those sort of conversations that are going on. And the way that we do that typically is through partners of ours. Many of those are resellers. Many of them are technology partners as well where we have the deep integrations to those environments. So on the right-hand side, of your screen there, you can see a selection of some of our partners. Our sales model is primarily driven by sales through our partner ecosystem. So we typically sell about 70% to 80% of our contracts go through resellers. And we still do have a direct sales business, and it tends to be more enterprise sized operations that we're selling to through our direct business. So we're seeing more and more of that going through our integrated partners, too, which we like. Those that have known us for a long time will know that channel was a key part of our strategy early on. We do have the strongest partner ecosystem in our fairly specialist markets. And we live and breathe channel in this organization. So people ask us why do these organizations choose PCI Power. It's because we've built a channel business from the ground up right from the way our products interoperate with their cloud platforms, the way our commercial agreements work, the way we price our solutions, the people we hire, the relationships that we build, all very important in order for us to win the ground game with those important partnerships that we have. And that's an important part of our future at PCI Power. We have over 700 customers today. So that's been growing quite rapidly over the last sort of 3 years or so. We've got some fantastic brands that use PCI Power, very proud for them to use our solutions across -- particularly across the U.K. and North America, you can see some very well-known logos there. We're not sort of really vertically focused as such. If it takes -- if the contact center is taking payments, we're interested in it. We happen to be very strong in retail, strong in insurance as well and some well-known brands that you'll recognize on that slide. I would say it's the logo slide, so you tend to choose your best logos for that. We've got some other good ones too across that 700 customers. But we do also service a lot of sort of non-enterprise customers as well. So actually, one of the strengths of this business is that we can serve the breadth of the contact center market. So the small to midsize end of the market as well is an area that we service very well, and I would consider that more to be our run rate. And that's not to say that all the logos you can see on the slide here are enterprise sized contracts. A mid-market contact center for us might be 500 seats. an organization with a 500-seat contact center is normally a pretty large company. So although for us, we don't consider it an enterprise sort of value contract as such, often we're dealing with enterprise organizations even at the mid-market level. Moving on to the H1 highlights after that quick background on the company. Revenue up 26%. We really need to be looking at the underlying basis there, though, because we had some revenue that was deferred from FY '24 that was well documented by us at the time. The normalized, if you like, the underlying basis of revenue growth for the period was 13%, and that's where we expected it to be. Probably the more important growth metric for us as a true SaaS company is ARR. And our ARR grew 21%, not impacted by those -- that revenue deferral as such grew over 20%, 21% to GBP 16.8 million, and that's really encouraging growth for us. New business sales, as I mentioned, which is ultimately contributing to that growth momentum in ARR, a record first half for us, selling GBP 1.9 million in ACV, ACV being annual contract value. That tends to be how we report our new business sales. It's very easy for investors to kind of figure out is the annual value of the licensing that we're selling. We -- our contracts aren't always 12-month contracts. Our average sort of contract length is more than 2 years actually. So it's very common that we're signing 3-year plus contracts, but we report to investors on the annual contract value so that it's easier to comprehend within the metrics. CV at GBP 20.3 million, up 16% year-on-year, and we are profitable at group profitability level, and we intend to stay that way now as we've pivoted into profitability and look to invest further in growth, but to do that from a profitable base. A bit more detail on some of those key stats. So in terms of the new business, good run rate business. So I've talked about this a number of times in our sort of recent reporting. It's the strength of this business. So quarter-to-quarter, we've got very good visibility of the new business coming through and a lot of that's being driven by the small to mid-market end. That is the vast majority of the contact center market that's out there. So if we can't service that what we're doing, important to be able to service that end of the market. And then we layer on top of that the enterprise deals, which might be 1,000 seat contact centers plus, and we signed A number of those in the period, including a FTSE 250 that was a competitive displacement in -- obviously, in the U.K. We're actually live with that customer now as well. So that's always good to see. Of the new business value for new logos that we signed, 77% of the value came through our partners, so ecosystem continuing to perform very well for us. Average contract values across that are pretty much in line with what we've reported historically. So we're around the GBP 20,000 ACV mark across the business. The U.S. is typically higher and the U.K. is a bit lower than that. So our U.S. average contract size is north of GBP 30,000, whereas U.K. is more around the GBP 15,000 mark. So you get the variance there just because of the different size in the organization that you're dealing with. In terms of retention, thinking about the sort of commercial health of the business, and I think we've proven that we're good at signing new business. We've got a good sales operation here. We're also very good at keeping customers, too. So we've had high retention for -- well, for a long time since pretty much forever. So 95% GRR, gross revenue retention at 95%. It's down slightly from 96% last year. It will move around a bit. We had -- we did have it up at 98%, 97%, but it's going to move around. We don't expect it to go below 95% retention. I wouldn't be surprised it tracks up a little bit before the end of the year. I mean you're talking very few logos here when these changes are happening. So I think for us, one of the things we really need to get a hold of is how we cross-sell more to our existing customers. So we have the strong retention, how do we drive that NRR, that net revenue retention up. which today is 102%, which is -- that's in line with management's plans for the half year. And that's where we expected it to be. That's broadly where we expect it to be for the full year as well, probably. I have an initiative within the business right now to look to try to increase that in FY '26 because I think NRR along with ARR, supporting ARR can be a key valuation metric for this SaaS company as it is for many others. So there's an opportunity there that I need to work on grasping. Probably the highlight in terms of retention in the period was that we were successful in winning the retender of one of our largest customers, the Department for Work and Pensions. We did put an announcement out about this before pre-Christmas. That's an initial 3-year term worth more than GBP 5 million over that period. There's a second 3-year period that we would expect the customer to flow into. So providing we do a good job for them in that first 3 years, which we expect to do, then the sort of total value of that contract over 6 years, I think it will be north of GBP 10 million. And so yes, very pleased to retain that. We're super strong in U.K. government, and we intend that to stay that way. So that's both central government. We've got HMRC as well. We've also got more than 100 local authorities and councils a bunch of housing associations as well. So the government space is very good for us in the U.K., and it's an area we continue to focus on. In terms of partners, there's more granular detail on this later, but we referenced the new partnership with RingCentral. So whilst I talk a lot about the primary focus of our teams from a business development perspective is building deeper, stronger relationships with our existing partners because we've got quite a few of them, and they are very big, most of them. We are still very targeted and quite selective about what new strategic integrated partners we bring on board. And RingCentral is one of those we've been sort of chasing for a while. If you look at the resellers that we've had over the last 3, 4 years, we've pretty much ticked off most of the vendors in the Gartner Magic Quadrant, and RingCentral was missing from that. And we've done a bit with RingCentral in the past as has one or two of our competitors, but they are now very much standardizing the PCI Power, and we're looking forward to announcing the full launch of that across North America and Europe imminently. But yes, a big company, $2 billion plus in revenues, great momentum. Product highlight for us is getting them fully integrated really tightly desktop, repeatable telephony integration as well within 4 months. And we sold our first customer before Christmas. We've sold a couple in H2 already as well. So great peer-to-peer engagement. So one I'm very excited about with a very mature business already that we can go after and talk to the customers. And then all of this is kind of rounded off with the point I wanted to make at the end around the culture within this business. I think PCI Power has got an excellent culture. We're very proud of it. We continue to work on it. We're maturing. So it's less of that sort of start-up and scale-up culture now. And I think we're handling that well. You'll have noticed that we added somebody to our advisory committee in the period, and that reflects our sort of focus on that strategically around people. So we added a very experienced Chief People Officer to the Advisory Committee as well. So she's helping us with that, and we'll give a strategic viewpoint on future considerations we make around investment and investing in people as we go further. We haven't really grown our headcount substantially very recently. This year, we're looking to add about 10 heads, but people in our space are expensive. So we have to do that quite cautiously. We're 130 people today. That's the summary of H1. I'm going to canter through this bit because I'm conscious of time and leaving enough time for questions. Background on our products. So 2 kind of main product areas that we have here. So you've got assisted secure payments and then you've got automated secure payments. So on the left there, assisted secure payments is really where you've got a live customer and a live agent or employee in some kind of communication. So typically, that would be over the phone. More commonly today, it might be over a web chat session or whatever, but you've got 2 humans interacting with each other. And then on the automated side, traditionally, that would have been auto attendance or IVR as we call them in the sort of telephony industry. So you've effectively got a human communicating with a computer. And what we're starting to see a bit more of that it's moving fairly gently towards this is that we are seeing chatbots and voice bots coming in. I'm sure chatbots have been out there for some time now. we're also starting to see voice bots as well using speech recognition capabilities too. So we cover both of those sort of touch points from -- within contact centers and business communications environment. And then underneath that, you've got our 3 core products. We're fairly simplistic in terms of the products that we have. We've been building out lots of features and enhancements around these. But from a very base level, if you look at it from high up, it's fairly straightforward in terms of the three core products that we have. So you've got the click-to-pay solution, the key top solution and the Speak to Pay solution. And they're all delivering the same value proposition effectively, which is why I talked about earlier with secure payments. So we're enabling payments that are completely integrated to this communications environment in the contact center, the desktop, the communications platform, the payment service provider. And -- but we're also providing a mechanism by which our customers, the merchant can take payments without the sensitive personal data, the payment data going into their environment. So we actually help them from a compliance perspective, too. And the way that these work is that they're really covering the various channels going into the contact center environment. So Click to Pay is effectively where we're sending out a secure digital link to the customer. So at the point that there's a payment, let's say, you've got an agent and a customer in live conversation or through a web chat session, they can post a URL or a hyperlink through the web chat, which the customer can select and they'll be diverted to a PCI card payment page. And on that payment page in a very basic sense, they could process their credit or debit card payment -- but they could also use if they're using their mobile, we've got all the e-wallets enabled, so Apple Pay, Google Pay, they could use open banking, which is something becoming much more common in sort of the government space as well. They could use buy now pay later if they used to use a Klarna account. They can have all those options available to them through the ClickPay offering. That's one of the advantages to Click to Pay is that because it's web-based, you can enable all those different payment features, those digital payment features. Now key2Pay tends to be what historically we've been sort of more well known for, but the sort of industry and what we do has evolved to a degree since then. So Key to Pay is where, again, you've got a live communication going on. And at the point of payment, the customer is asked to type their card details in using their telephone keypad. So rather than speaking their credit or debit card data, they type them in on their keypad -- and the reason we do that is because it means that they don't have to read their very sensitive card data, which would go down the phone line, be heard by the agent, be recorded by the call recorder, the key it into their desktop, it would get all over their network. And from a data security perspective and compliance perspective, it becomes a real mess very quickly. We provide them with a solution where they can key in their card details, they stay in communication at all times if they want to speak. And PCIPower through the integrations that we have with the communications platform supporting that interaction, we're able to pick out those tones as they come through, and we wrap it up and send it off to be paid when the payment is ready to be made. And so the payment can be taken without the card data going into that contact center environment. So from a security perspective, you've got kind of a descope going on there, so it doesn't touch the environment. So that's a big part of the value proposition with that product. And then speak to Pay to a degree is quite similar from a value prop perspective. The difference is we're using speech recognition here. So rather than the customer type their card details in, they will speak them out loud and through enhanced speech recognition capabilities that we actually launched V2 of that about 2 years ago now, and it's really capable through Microsoft Nuance capabilities. We can pick up through the language that's being spoken when the customer is speaking card details over the phone. And we'll capture that voice traffic as it goes through and it works in the same way we package up the card data and pair it up with information from the agent desktop CRM and send it off to the payment processor to process the payment. Now all three of those products are available through the PCI Cloud platform. So we've got a single public cloud platform globally. And we've introduced for this time, it's a bit of a busy slide, but a slide that's kind of covering off what that from a very basic perspective, my engineering department is not producing I might add, this is showing you really what the basic sense what the platform looks like. So single public cloud platform, as I said, we touch over 500 million interactions a year through that through the channels that I talked about earlier across 700 customers, across many thousands, tens of thousands of call center agents that are using -- that have access to our products. In the center of that image that you have there, you can see the three core products, Click to Pay, Key to Pay and Speak to Pay. We -- those solutions cover both that pink section and the green section, which is the contact center environment and the unified communications environment as well. And then you've got the three sort of integration touch points that we have. So on the left-hand side, there you can see Salesforce, you can see Epic, Civica, et cetera. These are the CRM, desktop web applications that our customers are using and PCI Power is deeply integrated to those environments. We have repeatable integrations to those as well. So it's easy for us to support deployments into those environments. We also have integrations to a lot of payment service providers. So we're integrated to more than 120 payment service providers. Many of the main ones on -- certainly on a European and North American basis, you can see names on there. Some of those organizations are resellers of ours. So Worldpay is not only an integration that we have. They're also -- they've been a top reseller of PCI Power for a number of years now as well. And then underneath that, you've got some of the digital payment capabilities, which is some of the stuff we've added over the last sort of 12, 18 months. So that's just really providing contact centers with payment options that have traditionally only been available on websites. And so now they can benefit from having -- they use Klarna on their website and their retail website. They can use Klarna through their web chat sessions with their customers as well. And so that's great from a customer experience perspective because they're able to do the same service, whether it goes to contact center or on their website. And then on the right-hand side is kind of the really key part in terms of where we are today, which is the communications integrations that we have. And we are resold or certainly partnered with the majority of the logos that you can see there. And these guys are all really supporting those interactions across that contact center and unified communications environment. Our longer-term ambition from a product perspective is that we're going to be not just adding features and enhancements to our core, but our intent is to add adjacent products into that SaaS platform offering. And we think that, that could really add value to the organization longer term as we do that. So we're planning to be able to talk to investors about those sorts of things in the periods to come. Not too much longer left for me. But strategy-wise, cloud global channel. So very simply, we wanted to be the leaders in cloud in our space. We are the leaders in cloud in our space. We were the first mover into the market. We have very little competition with any kind of mature cloud environment that comes close to where we are with things in the cloud. So that's been one of the reasons we've been so successful with our partners, super reliable platform as well, regularly get 100% uptime month-to-month. H1, we were north of 5 9s uptime across the platform, which is very important for customer retention. The cloud platform allows us to access our market cost effectively on a global basis. So majority of our customers today are in Europe and North America. But if we needed to, we can spin up an instance of our platform through Amazon Web Services within less than a day. So we can do that super quickly, really cost effectively, so we can just do it based on commercial demand. So effectively paying for itself. So we don't need any sort of big initial outlay to set up data centers, et cetera. And then we use the channel model to cost effectively access that global market. So if I give you an example, we're expanding into Mainland Europe at the moment. It sounds quite a big deal, but we're not opening -- we're not planning to open a big office presence in Mainland Europe necessarily. We may have a WeWork office that's got 2 or 3 desks in it. But currently, we're hiring for our first hire in Mainland Europe, and then we're going to hire a second probably 3 months after that. we hire for people that will then go out and speak to our partners' teams that are already in that region. So it's quite cost-effective launch activity that we can go through with a region like Mainland Europe. I'm conscious of time. I've covered most of this, but please come back to our global cloud platform in terms of where the availability zones are. The green rot that you can see on there are where we have patents approved. So we've got a number of patents, probably the most valuable patent that we've got protect the way that we integrate in a very light touch way to voice platforms in the cloud. And what that means is that our partners can access PCI Power services in a very light touch way. So rather than having to route and lots of calls through our platform, they can literally ping us at the point that there's a payment, and we can get involved in the integration into action only at the point when we actually needed whereas we found that with some of our competitors, they actually need to carry all of that customer's call traffic when really we're just solving a problem that affects maybe less than 20% or less than 10% of calls. So that light touch approach has been really valuable to us, and we were quite sort of pioneering in the cloud space to be able to do that. So we patented that. And whilst we're not particularly sort of aggressive with our patents, we do use it as a protection method with our partners. And so that ensures that if we need it, we can use it with those partnerships that we have. And then talking about our partners. So just to summarize, we've talked about this a lot in the past and other presentations. But the top 2 categories on the left there, integrated partners and solution providers are really the main resellers that we have. so you can see some very, very well-known names there. In terms of updates from the period, I've talked about RingCentral, the onboarding was very fast there. Update on Zoom. So we signed Zoom in FY '24. It went live at the back end of FY '24. So we had 6 months of that this year. Pipeline is building, signed numerous new customers with Zoom. And what we've always said about Zoom is that they are newer to the contact center market. So they've got a big unified communications and video business, obviously, that most people know them for. If you listen to their earnings calls, they're investing a lot of money into contact center. So Zoom had a less well-established contact center customer base, but it is growing quickly. And we've got a fantastic relationship with them, really deep integration, and they are certainly one for the future for us. But I would say that's the sort of difference with RingCentral is that RingCentral has that very mature customer base already. And so the momentum is slightly different in terms of what we'd expect. But we're excited about both of them. They're just a slightly different fish between the two. New partners pipeline is looking pretty good. We've got some interesting new partners coming through as well. As I said, they're not -- we don't have masses of them. That's not our strategy. We're trying to align ourselves with partners that are going to really make a difference for us. So hopefully, we can talk to investors about some of the new stuff coming through in the next 12 months. Standardization, that's something that we've been talking about this week. So standardization is really one of the building blocks towards us ultimately getting to a point of our customers being able to completely self-serve our products and services. So we've been working with key partners for some time now to work with standardization and rollout with them. One of the building blocks towards us reducing our time to revenue. For those that know us, you'll know that we have a period of time from when we sign a customer to when we get to revenue recognition, which is typically around 5 months. or part of that is because there are some custom elements to the deployment or we have to wait for partners to do certain things. Well, we are -- longer term, we're really planning to move to more of a true SaaS type situation, whereby everything is completely self-served and easily accessible through APIs for every aspect of the product that we provide, not just parts of it. And standardization is part of that, and that's particularly aimed at small to mid-market customers through our partners where they're going to be using standardized versions of our products that you've seen, which should allow us to reduce our time to revenue and to get these customers also operationally live quicker as well. So there's efficiencies to be had there because we don't want to grow our PS with our revenue over the next 3 to 5 years. We want the product to do the work for us. So there's some near-term gains to be made, but there's certainly some sort of longer-term gains over the next sort of 18 months or so around that as well as we focus on this time to revenue project that we're running within the business. And then finally, conversational AI vendors. So we've got a number of resellers in the conversational AI space. So these are chat and voice bots that are reselling our solution. They're selling our solution because we provide that value proposition to the end customer. But they're also selling us for the same reasons that many of our integrated CCaaS and UCaaS partners sell us because we actually take their own platforms out of scope. So the way we integrate with these conversational AI vendors is that we do it in such a way that if their customers use our products, card data, so that sensitive personal data doesn't actually touch the conversational AI platform. So they're also -- they get that game as a result of doing that. Now it's an interesting space. It's moving quickly. There's lots of small new vendors out there as well, which is why we're building at the moment this voice and chatbot API that we expect to launch later this calendar year, and that's so that we can really deal with more of these conversational AI vendors than if we were just doing it all manually one by one, we were having to do it through custom integration. So that's why we're building the API. So that's something that's on the horizon for us. So rattle through of the background of the strategy. I'm going to hand over to you now, Ryan, for the financial update.

Thank you, James, and good afternoon, everyone. We're very pleased with our first half financial performance with growth in both top line revenue and also down to adjusted profit levels as the momentum of the business continues. Revenue growth as covered 26%, the underlying being -- the normalized sorry, being 13%, demonstrates the trend and growth in top line revenue continues in the business. So from this revenue, we saw growth in both our gross profit and gross profit margin to EUR 9.6 billion and 89.6%, respectively. And that's pleasing as we work towards our target of a 90% gross margin level. And from that gross profit, we reinvested some of that back into the business and didn't flow it all the way through to adjusted profit. Some of that was absorbed as the business grew, but also with key strategic initiatives in the business, first one being around partner management and development. as 70% to 80% of our new business comes from our partner network. We invested in partner management team. We've hired that in North America, and we are expanding that. And that's to drive deeper relationships with existing partners and the embedment of PCI Pal within those their ecosystems, but also to evaluate and add new partners to the group. Secondly, around new business and retention, that sales and marketing and customer success around, yes, winning new ACV, but also expanding with existing customers who are with the group. And then thirdly, around the deployments. As James mentioned, the our deployments are threshold services element, making sure that's efficient as possible. We work with our partners and our customers' technical resources to enable that, but also the integrations into our partners' ecosystems that requires a technical element and also some R&D into for future products. But overall, this delivered a profit before tax of GBP 175,000. So profitability of the group continues as we continue to grow and was achieved through the fiscal discipline during the period. Taking a closer look at the revenue mix and how it is built, the top line revenue continues to grow underlying 13% but actually really pleasing with that is 91% made up of recurring revenues, which really underpins the high quality of the revenue that we're delivering and the stability of the business. The nonrecurring is primarily made up of professional services, which is around the deployment and configurations for our customers. So the majority of our revenue as the revenue whole revenue grows, actually, the most of that is recurring, and that continues at that percentage, which is really pleasing. You'll see on the right-hand side, the regional revenues, we are cloud-based. So therefore, our offering is global. We have seen growth in all of our regions during the period. EMEA being our most mature market is still seeing strong double-digit growth. And as we continue to expand across Europe, we expect that to continue for the foreseeable future. North America, again, really strong growth. It did see the benefit of the deferred revenue coming in. So the normalized growth there is still about 13%, 14%, which is still really pleasing. And in the Australia and New Zealand region, yes, a much smaller base, but yet again, we are still growing our revenues in that region. So overall, globally, we are contributing to our top line revenue. So the main indicator for our revenue overall will be TACV converting into ARR. So TACV is the annual recurring revenue that we have is contracted and signed with the majority of this actually paid for upfront. And yes, it has grown to $20.3 million, up 16%. But within this mix, we have what we term as on hold, and that is really the initial stage in area that contract is signed and contract has been signed with technical resources from our customers or our partners being assigned to allow the delivery of that. But what you'll see is as the revenues of the TCV has increased, the proportion of on hold and deployments hasn't increased accordingly. We maintained those at a low level as we continue to drive efficiencies in the converting of signed contracts into our revenue. I'd say that the deployments are below our target of 15%. So that is very pleasing. And I said really, it is the conversion of that our deployments that drives our revenue, and that is we work closely with our customers and our partners ultimately to deliver that. Jim has covered off our revenue retention, but I suppose the bit that I would like to add to that is it continues to be at 95%, 96%. We generally trend around 96%, really strong, which demonstrates the quality and the stickiness of our revenue. We -- in my previous slide, I talked about how the revenue -- recurring revenue is 91% and this demonstrates how sticky that is and that continues going forward. Now if we turn to the balance sheet of the group. A few of the things that I would like to draw our attention to is we continue to invest in our product with capitalization are running at the same similar levels as the prior year. But as a percentage of our revenues, our investment in our R&D is beginning to drop off. It was running at over 10% now it is dropping to sub-10%. So we are investing in our product at the right level to keep it relevant, keep it up to date, but actually allowing the top line revenue to grow and not be putting that all back into the R&D aspect of it. The other receivables is driven by deferred commissions sell ACVs, we pay our sales team with the commissions, and that gets released to the profit and loss in line with the recognition of the revenue. But putting that we still have a good cash balance with GBP 4 million of cash on hand at the period end, driven by good working capital management, which means the business is funded for the future growth. But alongside that, we still have access to our HSBC facility of GBP 3 million. And yes, while it fluctuates our availability to that is there, and we have availability for most of that as of today. But it is undrawn and remains undrawn and it is not planned to draw on that at any time in the near future. Deferred income remains stable. It's added to a new ACV, but is offset by the unwinding of previous prepaid multiyear contracts, which is something the business is an offering on a prepaid basis anymore. We do have multiyear contracts, but we allow the customer to pay annually and offset by that and also if there's terms or cancellation of contracts, a small number of contracts might cancel before they go live. But overall, the group is generating a positive operating cash of just under GBP 1 million on an adjusted basis, which overall leaves us with a strong balance sheet and a really solid business position to push ahead of the business.

Thank you, Ryan. So just to wrap up before we get some time for some questions. So just on the platform and product update, I've touched on some of this as we've been going through. And look, we do include uptime in this. It's absolutely critical. I mentioned some competitor displacements, and I do know that some of the reasons for that are to do with uptime and performance. So it is the first step towards good customer retention. It's critical that the solution works. And if it doesn't work, then it's going to receive some he quickly because it involves payments. So our uptime has been consistently very strong for a number of years now and very pleased with that across the platform. The RingCentral integration, certainly a highlight on the product side, just so you can get some kind of understanding these sorts of processes that we go through with these large organizations, if we're going to embed ourselves properly so that we're fully productized by them. There's a lot of work that goes into that on the engineering side and our small product team as to product manage that through. So you've got the integrations on the desktop, you've got the integrations on the voice side of things as well. You've then got working through the commercial aspects of the SKUs, so the pricing on the other side. And there's all sorts of things that go into it. And then after that, only after that, you then have the enablement of the partner, which is something we're very methodical about, but takes time when these are organizations with thousands of employees across various territories. getting out and communicating even marketing to those employees takes time to do that. We're pretty good at that, though we are not -- we're nowhere near the size of those organizations to be able to do that, but we do a good job with that. And then some of those partners also have their own partners. So they have their own resellers, whether that be telcos or whoever else might be reselling them. And so then we want to work with our partners to speak to their own partners as well. So it's an ongoing thing, and there's a lot of effort that goes into that. But we are making it easier for us to onboard these very large integrated partners, 4 months for that one is really quite encouraging. Standardization, we've talked about good momentum there, and I'm hopeful of seeing some gains in the second half of the year. We're sort of deploying more customers than we ever had before in shorter time span than we ever had before. So I expect to see that continue in H2. The data project, that's something that Brian has actually been very involved in. The finance team are heavily involved in that. This is engineering work going on in the background. It doesn't necessarily come out as a sort of product highlight that investors are going to pick up on that regularly. But this is about single source of truth of data within PCI Power, and we've come a long way in the last few years, but we want to be completely interconnected across every department within the group, and we've made good progress towards that. The smarter we can be with our data, no matter what that data is, then the easier it will be to run the business, and we'll be able to do it more intelligently as well. And data, of course, is very key to AI. It's key to are we able to use AI effectively within the business. And can we use AI within our own products as AI product features of PCI Power platform products. So data is really critical to all that. So it's sort of spread throughout the organization. Now as part of that, we do expect to have our first own AI features of the payment products we talked about earlier, so Clicktopay, KtoPay, Speed to pay. We have some features coming out which are AI-enabled, which will add AI capabilities to those offerings, which effectively work to intelligently recommend the most effective payment methods to customers, to agents, to merchants to make those decisions themselves. We are fairly careful with information that we share on these things. We are now officially the only publicly listed company in our space. And so that is one of the reasons we don't always readily share as much detail as some of you may want us to, but we also have to trade that off with what's commercially sensitive and moving the business forward. So -- but yes, that's coming. Voice and chatbot API, we talked about as well. And then we've got some good stuff going on with adjacent products, too. So hopefully, later this calendar year, we'll be talking to you about adjacent products. What do I mean by adjacent products? The difference there with features and enhancements of our existing products is these are products that can really create either new revenue streams or materially move the needle on the existing revenue streams that we've got. And so that for us is quite key. It's key for my ambition for the platform to be really seen as a strong SaaS platform longer term as well. And all of this I'm talking about is being generated organically by our team. I think it's worth pointing out that whilst we have mentioned M&A a bit recently, that's because it is the right time for us to start thinking about that in the considerations we make strategically with the business. However, we're not going to make stupid decisions given where the share price is. So that doesn't help us in that regard. So we look at that and take that very, very cautiously. So everything we're doing at the moment is being produced by our own in-house development teams. But sometimes that's not always optimal to move as quickly as you want to, but we have to work with what's in front of us, and we have to take on responsibility to move that price forward as well that may then give us more options available to us. So that's a bit of outlook that I'm touching on there. But in terms of that outlook, we started the second half well. We've got good new business sales momentum going through. We've got a good continued increase of the 12-month rolling pipeline. So pleased about that. We've got the business there to sign to get to where we want to for the incremental uplift on new business signed year-on-year by the time we get to the get to the end of the year. We do need deployments. We need to get customers to revenue recognition to drive towards that -- the revenue numbers, the targets that we've set ourselves, ARR and top line revenue as well, maintaining that profitability level. And -- but during that time, it's -- yes, it's been great this year to be able to think more long term about the business and not like we stopped doing that during the patent case, but it was quite a distraction. And we do a 3-year plan refresh every year that we -- many investors know we do that. I'd say we're doing more of a refresh than ever before this year or certainly than we've done for a number of years because we're kind of at an inflection point with the business. We got to profitability, and we're in a good position to push on from here. So some good work going on, on that side and myself and the Board look forward to updating you all on where we're ending up with that, but we've started to drop in some of that messaging and give you some sort of directional guidance with the interims that we've released this week as well. Okay. And so that's the end of the presentation. Thank you for listening. We've got some time for some questions, which I can manage from here.

So taking the first one I can see here. I'd like to know when your company is paying a dividend. So I know that this is important to many or it's certainly something that you'd be thinking about in your investment thesis. Today, PCI Pal is a growth company. And where we are today in terms of profitability means we're in a position where we want to invest those profits over and above what we expect to show in the market in the business for growth. the levels we're expecting to grow our ARR at this year are very strong, and we want to try to continue that growth going forward because we think that, that is what will deliver value to our shareholders longer term. And we think we've got strong support from our investor base on that basis. So hopefully, that clears up the position on dividend. It's something we will clearly review on a regular basis. So we're happy to answer that question on a regular basis and give you an update in terms of where we are at with it. So there's a question here about why didn't we announce the RingCentral partnership when it was signed, if it was the one announced in August, -- wouldn't that have been a positive for investors. I think there's a general point to make here around this. So -- because I've been asked similar questions before. So there's 2 things to consider here, particularly. So nondisclosure requirements within contracts. So that's not a price-sensitive announcement. So when we sign a reseller, there's no guarantee there's going to be any business coming with it. So it's not like we've signed a contract that's worth 10% of our revenue or something and we need to put an announcement out, it's price sensitive. So there's no regulatory requirement to make that announcement. So if we're under nondisclosure requirements in our contract, then we can't make that announcement even if we might want to. The other consideration, which is what I'm always sensitive to is that we are in the biggest market in the world from a competitor perspective, but I am also always conscious of protecting the business and protecting our knowledge and our strength and our strategy from competitors who are watching. And so we will pick and choose when we make announcements. And there's often a trade-off between do we want that out in the public domain before we've gone live with that partner. And in this case, no, we want to make that announcement when that's all done, dusted and we can move on. And so that was the decision we took around ring. So there's a lot of thought that goes into these things. We just -- it's not that we just sort of forget about making an announcement. We do think about it tactically. -- you, Ryan. Well, there's one around sales seasonality. I can take that, and I'll try to get a financial one for you. Is there seasonality to our new business sales? I was actually asked this earlier in the week on the analyst call that we did. Yes, there is. I mean there's not really seasonality because more people buy licenses from us because of certain times of year. It's more because of the way our financial year falls, so -- which is something I inherited. But the financial year runs from July to June. So that means in H1, you've got July and August, which are two of the -- probably the most dead months of the year for any technology company because everybody is on holiday. You've then also got Thanksgiving, which is a big holiday in the U.S. It's bigger than Christmas for them. And then you've obviously got Christmas here in the U.K. So we don't have any of that in the second half really. You kind of have an Easter break in the U.K., and that's it. But we have typically sold more in the second half of the year than the first. And that's probably the main reason. We've got a few partners whose year-ends are in January. So you often get the overflow from their year-end into sort of February, March. So that also contributes to H2 typically being slightly stronger. And as you can see, we've had a relatively strong start to our Q3. We've had -- there's a number of questions here from the same person that are relatively technical. So I don't think they're really appropriate for me to try me and Ryan to try and answer them now. But if you can guess who you are and you want to send those through to Wallbrook, please do so. And we're happy to answer those in more detail or we can in the portal to pcpow@wallbrookpr.com. -- if we can pick out some of those. Okay. Well, this one is -- there's a question here about -- Ryan, if you could try and answer this one or clarify this one on which period are you recognizing deferred revenues? I think that relates to the deferred revenue bullet.