Pureprofile Ltd (PPL) Earnings Call Transcript & Summary

Good morning, and welcome to the Pureprofile quarterly business update for the 3 months ended 30th of June 2026. My name is George Kopsiaftis and I'll be your moderator today. With us, we have Chief Executive Officer, Martin Filz and Chief Financial Officer, Melinda Sheppard. Good morning to you, both.

Good morning, George.

Good morning, George.

All right. So the format for today is for Martin and Melinda to spend around 30 minutes discussing the results. This will be followed by a question-and-answer session. [Operator Instructions]. Just as a reminder, this briefing is being recorded and will be made available on Pureprofile's website. And with that, I'd like to hand it over to Martin and Melinda to get us started.

Great. Well, I am going to kick off with a description of our achievements during FY '26, which I'm very pleased to present to all of you. Just a reminder that all the commentary and all the financial metrics in this presentation are presented on a preliminary and unaudited basis, and that EBITDA and EBITDA margin exclude significant items and share-based payments. So how do we go during FY '26? Well, we delivered yet again record group revenue of $65 million, which was a 14% increase on the prior year and was about 16% in constant currency to a record $65 million. This places us at the top end of our financial revenue guidance of $64 million to $65 million, and it really extended a strong record of consistent growth that the company has had for the past 6 years. The growth was across both of our key regions being our ANZ business and our Rest of the World business. So our Rest of the World business grew 20% to $31.6 million and actually had approximately 24% growth in constant currency. The reason I'm talking about constant currency, if I look at our Rest of the World business, about 52% of the revenue that we generate in that region is in U.S. dollars and about 28% of the revenue we generate in the Rest of the World is in pounds. So that comprises 80% of that region's revenue. So during FY '26, as the currency, the U.S. dollar and the pound moved around compared to the Aussie dollar, we actually ended up with a negative reported impact of $1 million from a revenue perspective. So our ANZ business had a really strong second half of the year, and I'll get into that a little bit later. It grew 8% to $33.4 million. And if I take out the little CRNRSTONE acquisition that we did at the start of March, it would have grown 6% organically, which is really a strong contribution by that part of our business. Platform again was a standout for us during the year with revenue increasing 74% to $19.3 million as more clients have really adopted our scalable technology-enabled solutions. Now the key highlight for us also during FY '26 was that our earnings or our revenue grew faster than [ revenue ]. EBITDA increased 25% to $6.5 million, and our EBITDA margin improved to 10%, which was in line with guidance. If we hadn't had the reported FX impact of $1 million, we know that $1 million would have gone straight to the bottom line or a good portion of it after gross margin. And we also had an FX loss of $340,000 during FY '26. Had we not had those impacts to our FX during the second half of the year, we would have had our EBITDA margin at the higher end of guidance and likely slightly over that. So the other fantastic news to share with you also is that our reported cash balance increased by $1.1 million during FY '26 to $6.8 million. And that included funding the $700,000 cash acquisition of CRNRSTONE. So we had a really strong year for cash generation that we're really pleased about. So finally, just as a highlight, taken this together, these results really reinforce the strength of our strategy. Over the past 6 years, we have delivered internally funded compounded annual growth of approximately 20% in revenue and 19% in EBITDA, whilst also improving our net cash position and also funding 2 small acquisitions in our ANZ business. I'm going to hand over to Martin now, and then I'll come back and go through some more detailed financial commentary.

That's great. Thank you very much, Mel. Great set of results. So for those of you who don't know, Pureprofile at a glance, what do we do? So we help brands, businesses, governments answer critical questions. And how do we do that? We connect them with millions of engaged and profiled consumers and B2B around the world. So we recruit and manage these audiences, then collect high-quality consented data that could be through surveys, behavioral tracking or transactional sources, all privacy protected and permission based. So we're allowed to do this. Our technology and expertise validate that data at scale. So -- and then we turn that into actionable insights for those businesses. So why do they do that? It helps them make better understanding of their customers, their competitors, optimize their strategies, make faster, more informed decisions, et cetera. Also, as we see AI adoption accelerate and trusted first-party data, which is what we generate and becomes increasingly valuable because all of the AI that companies use and that we use as individuals really is only as good as the data that's behind it. We have the highest quality first-party data. So really it positions Pureprofile really very strongly as a global provider of high-quality data at scale. So that's what we do. Thank you, Mel. It has not changed on my end. Has it changed? I've got it. Yes, thank you. So we truly now are a global data and technology company. So we completed studies in over 106 countries in the past 12 months. So truly global. 996 clients, with that close to 1,000 clients. So that gives us a broad and diversified revenue base and that reduces reliance on any single customer, any single market or any single sector, whilst also it creates significant opportunities to cross-sell our expanding range of solutions. Platform revenue $19.3 million, so 70% growth. That demonstrates an increasing adoption of our technology, both internally and externally. That gives us greater scale and supports that margin expansion. So it's a big part of the margin expansion that Mel just talked about. Now we're also already seeing that operating leverage with our headcount reduction. So at the end of quarter 3, we had 275 headcount around the world. Now at the end of the year, we've got 266, despite we added an additional 8 people through the CRNRSTONE acquisition. So this reduction was both through natural attrition and a proactive exercise that we did. So it reflects the benefits of all the AI that we've rolled out, that we've talked about, our process improvements that we've talked about, increased platform adoption and all of those things enable us to grow more efficiently. And also then just on this slide to pick out, annuity revenue at $16.7 million. So what does that do? It provides greater predictability, visibility and resilience, again, creating a strong foundation for our ongoing sustainable growth. So we can carry on as we have for the last 6 years. Thank you, Mel.

Right. So I'll kick off again with the more detailed financial results. So as I said, when we went through the highlights for the year, we had revenue growth of 14% from a reported perspective and 16% in constant currency, up to $65 million. Our ANZ business grew 8%, up to $33.4 million. And Rest of the World grew to $31.6 million, 20%. And that was supported by demand in our U.K. and U.S. business. When we start talking about EBITDA and EBITDA increased 25% to $6.5 million and the margin improved by 1 percentage point to 10%. A key driver of that, as Martin talked about, the headcount reduction. We've actually kept our expense growth to 10% for the year. And actually, when you -- our headcount growth has actually only been 8% over the financial year. So we really have seen a benefit of all these process improvements, AI tools that we've been rolling out and talking to you about over the last 18 months, it's really got us to the point where we are able to slow down our growth in headcount and really start to get that operating leverage in our business. And I did want to point out, we did have a $340,000 FX loss that was predominantly in the second half of the year. But compared to financial year FY '25 where we had a $337,000 gain. So that basically meant the bottom line had an impact over those 2 years of $700,000. So had we not had that change in foreign currency during the year, we would have had an EBITDA result well over $7 million and closer to 11%, 11.5% margin, which would have been amazing. But unfortunately, that's the reality of the world that we live in when we have a global business. And then just finally, touching again on the cash balance of $6.8 million. As at 30 June, we had our CBA term loan was at $2.5 million. So over the 2.5 years that we've had that facility we've paid down $0.5 million of the principal. We're actually in the process of just finalizing our refinancing arrangements ahead of the debt maturity in November '26, and we'll expect to communicate the outcome in the coming months, most likely at the time that we release our audited accounts at the end of August. So I'm just going to go through some of these trend slides. You've seen them if you've been joining our webinars over the last couple of quarters or years, et cetera. So lovely, beautiful, nice steady growth there. As I said at the start, over the 5-year compound annual growth rate has actually been 20% for revenue. And then on the right-hand side, we're showing the shift in revenue growth between the 2 regions or the percentage of revenue growth for ANZ and the Rest of the World. And you can see the Rest of the World is growing from FY '21 from 29% up to 49%. In the first half of the year, it did tick over, overtook the ANZ business, but we have a lot of healthy competition between our regions at Pureprofile between our ANZ business and the Rest of the World. So they came back fighting in the second half of the year. I do have a little slide here to talk about the ANZ business because I think it's really worthwhile calling out how strong the second half of the year was. So you can see in Q1, the growth was 1%. Q2, the growth was 2%, and then we hit 16% in Q3. If you joined our Q3 webinar, I did talk about the fact that a lot of that growth came from our top 10 clients growing well above all the other clients, and then when we got to Q4, the growth is 15% on last year. Now the growth has actually come from a variety of different clients. It's not just the top 10 clients in Q4, it was a variety of clients being top 10 clients plus smaller newer ones that we've brought on board over the last 2 years. So that's fantastic news. And that sort of resulted in a 16% growth over the second half of the year. If we pull out the CRNRSTONE acquisition that brought us $600,000 in the second half of the year, that growth would have been 11% versus 2% in the first half of the year. So an amazing result for that business, and it was $2.6 million worth of additional revenue this financial year. And as I said, the CRNRSTONE contribution, which was 4 months of revenue was $600,000. Then we get to the Rest of the World, which was impacted, as I said, in the second half by the FX impact of 4%. It was actually 5% -- sorry, 10%. You can see here, we've got a little chart that shows you what the reported growth was versus the constant currency. You can see that the last Q3 and Q4, the growth was actually 10% lower than what we had -- than what we've reported. Well, it should have been 10% higher than what we've reported had the U.S. dollar and the pound not weakened against the Aussie dollar, which, as I said at the very start, impacted our revenue by about $1 million, so quite a big impact from that perspective there. I won't go through this in too much detail. You can see the individual compound annual growth rate for each of the business units. So it's obviously 13% for the ANZ business, which is obviously our more mature, our bigger market than we've been in for quite some time. The Rest of the World, a 5-year compound annual growth rate is 33%. Our platform revenue at 78% and then the EBITDA was 19% as we said at the start as well. So then I go into Q4, just to sort of go through how Q4 looked. So again, a record quarter. I know that we say that every quarter, but we do -- we have been growing consistently for 6 years now. The revenue was $16.9 million, which was 10% up on the prior quarter or it would have been 15% in constant currency. And that's actually marked 20 consecutive quarters of year-on-year revenue growth for Pureprofile. Our Platform revenue more than doubled, increasing to 103%. So we had a really strong Q4 for platform revenue to $5.5 million. As I said previously, the ANZ business grew really strongly in the second half of the year and Q4 was 15%. Would have been otherwise 10% if we had excluded the CRNRSTONE business. Our Rest of the World had a slightly softer quarter in Q4 at 5%, would have been higher, obviously in the constant currency, would have been up to 15% from that perspective. And then from an EBITDA perspective, we had a very strong quarter as well. So the actual EBITDA result increased by 30%. So materially outpacing the revenue growth of 10% for that quarter. And the EBITDA margin quarter-on-quarter for Q4 is actually up by 2 percentage points and that is, as I said previously, demonstrating the operating leverage we now have in our model. Again, our quarterly trends charts look very similar to the full year ones. And that just really again demonstrates the consistency of our results. Q4 has historically had 5 years -- a 5-year compound annual growth rate of 17%. And then the split between Rest of the World and ANZ broadly similar to what you would see for the full year perspective. And our trend chart is exactly the same. So for Q4, we've historically grown at 11% 5-year CAGR for the ANZ business. The Rest of the World has been at 28% for that Q4. Platform revenue of 64%. So obviously, Q4 this year was a real step up there, as you can see in that chart. And then our EBITDA result is 9% for Q4. And then I'm going to hand over to Martin to sort of talk through our corporate strategy and some of our priorities, as we've now commenced FY '27.

Thank you very much, Mel. Strategy, which is the same strategy we've had in place for 6 years and is working from an operational perspective. So it's built around the 3 connected priorities, so global expansion, technology and AI and then proprietary data. So we're going to continue to strengthen our global business, that's where we put the investment, our audience reach because that has a direct impact on both GM and revenue. And also all the time, we'll add complementary data sources through strategic partnerships and acquisitions, as Mel talked about, we've done 2 in the last year. At the same time, accelerating our investment in technology and AI, we're creating new client solutions. So improving -- and improving the internal efficiencies because we also use the new technology internally and therefore expand margins, which we're now seeing coming through this business. So by combining that with valuable proprietary data, we can develop more scalable products. We can deepen our client relationships. We can create new revenue streams, which we've started to do over the last 12 months and therefore, it adds to that sustainable growth and ultimately, shareholder returns as we see that revenue, EBITDA and then the profit line growth. Thanks, Mel. So the opportunity. So geographically, we've obviously a market-leading position here in Australia and New Zealand. So what we've been focused on, and that's that first point also of the strategy is replicating that success in the much larger U.S. and U.K. markets. U.S. is 40x bigger than Australian market, U.K. 10x bigger than the Australian market. So over the last 6 years, the U.S. has actually been one of our fastest-growing regions. We don't specifically call out the revenue, do we? But Mel just mentioned 52% of our Rest of the World currency is in dollars. And so that actual growth has been supported by dedicated teams in the U.K. and in India as well as local marketing events, activities, et cetera, visits that we do. Now in quarter 4, we actually appointed our first U.S.-based commercial leader in the U.S. So we put boots on the ground. And the plan then is to build out our presence as the business grows. But I will say Christina has already joined in June. She's already made a tremendous start, tremendous impact, and we've really got a strong quarter of sales direct in the U.S. for quarter 1 and a healthy pipeline. So it really reinforces the strategy to add more boots on the ground. From a technology standpoint, the AI is reshaping the data and insight industry as every industry. It's creating opportunities across our business internally, faster delivery, improved quality, greater efficiency, less people, Mel just called out some of those numbers, and ultimately, you see a margin expansion. So we're seeing that in the business. For clients, it allows us to develop new products faster. It deepens those relationships because, as I said before, we can cross-sell and also new AI companies who need high-quality consented human data to train and improve their models, and that creates a whole new segment and potential revenue stream for us. And we've been looking at that and working hard on that for the last 18 months or so. Boots on the ground helps. It's having that local U.S. presence so that you're taken seriously as a U.S. company. Thank you, Mel. So a little bit on the journey. So our growth journey and my journey at the company 6 years ago, began in financial year '21. So we did a fundamental restructure of the business. We exited unprofitable operations. We strengthened the balance sheet and refreshed the leadership team. So that really gave us that strong foundation for growth. From '22 to '24, it was investing in our people, global panels and technology, replicating that successful Australian business model, building out a true global team, processes, improved efficiency, profitability, all of that, that you saw that growth chart was whilst we were investing in the business. From '25 onwards, it's then really about the next phase, which is accelerating that global growth, whilst continuing to expand margins. So we're not investing ahead of the revenue curve, and again, you've seen that in the CAGR numbers. So that consistent and considerable above-market performance is really the result of that clear long-term strategy that I talked about a few slides ago, supported by our technology global reach, strong client focus and the highly engaged team that we've got. So all of that coming together that you can see on those consistent results that we've had over 6 years. So then if we look at -- sorry, next slide, if we look at '27 and beyond. So it's pretty clear, right? Continue to grow revenue, continue to expand our margins, continue to increase shareholder value. So we're going to accelerate our growth by increasing our market share, specifically in the U.S. and the U.K., boots on the ground, now acquisition, if possible, winning new clients. So we're now up to nearly 1,000 clients. So you can see the growth in the clients, expanding our existing client spend. So you saw that coming through, especially in quarter 3, Mel talked about that, and scaling our new products. So that's -- we continue to do the same with a bit more acceleration in U.S. and U.K. As we grow our global platform, technology, AI, centralized operation, that enables us to grow faster than the cost. So we saw in the first half 9% versus 14% revenue growth and 9% in the salaries. Salaries only grew 8% in the second half. Mel already talked about cost only going up by 10%. So you're seeing proactively we're bringing down salary costs. And then we're seeing that leverage of the business that we -- our overall costs are growing a lot lower than our revenue growth. So that continued margin expansion. So sustainable earnings growth, disciplined capital allocation. We've not been using that to keep the lights on our capital, but to make those strategic acquisitions or small tuck-ins that we're seeing. And carefully -- continue those carefully targeted and importantly earnings accretive acquisitions. So that's designed all to compound shareholder value over time. That's what our aim is of the business and what I believe we're doing. Thank you, Mel.

So the summary, record revenue, again, $65 million at the top end of our guidance of 14% growth. So we're demonstrating continued commercial execution of our business, which is fantastic. Our EBITDA grew to $6.5 million, 25% growth, materially outpacing the revenue growth for the year and delivering a 10% margin, reflecting operating leverage and disciplined cost management. ANZ revenue grew 8%, including the CRNRSTONE acquisition while the Rest of the World grew 20% on a reported basis and 24% in constant currency. As we said, Platform revenue grew 74% as more clients are using these delivery solutions with our business, which has really been supporting our revenue growth and also helping us contribute to our EBITDA margin expansion. And then we've had strong cash generation with a really healthy year-end cash balance of $6.8 million. And that included funding the CRNRSTONE acquisition this financial -- last financial year, and that's really set us up to pursue our '27 growth and capital allocation priorities.

Great. Thank you, Mel. Thank you, Martin. Quite an extensive review of the quarter and the year. We've got quite a few questions that come through both in the Q&A tab and also by e-mail. So I'll get started. First question, congratulations on what is the strongest quarter, I can recall. Thanks for providing some context around constant currency performance, which is relevant information given the meaningful movements in the A dollar against Pureprofile's other trade currencies. Can you provide some idea of the extent to which PPL's cost base is non-A dollar denominated?

Okay. So if I think about the cost base, so it obviously includes a huge portion of its people costs, right? So that's a huge chunk of our operating expenses. At the moment, as Martin said, we don't actually other than Christina that just started in June, she's the only person we've got in the U.S. We are paying her in U.S. dollars. The bulk of our -- I would say the bulk of our cost base would be outside of when we're buying data from third parties would be predominantly in Aussie dollars. We obviously pay our employees in the U.K. in pounds and then ones in Singapore, in Singapore dollars, New Zealand dollars, but the bulk of the cost base would be in Aussie dollars. That said, we do have a couple of our larger contracts. For example, the outsourced providers that we have for our team in India and our team in Greece where our contracts actually allow us to pay in different foreign currencies. So we make a decision every month in conjunction with those outsourced providers as to what currency we pay them in. I obviously have cash balances in multiple currencies. Part of the reason we have had some of the FX losses as our U.S. balance has been quite high. So we might choose to use the U.S. dollar depending -- we basically review every month of what we're sort of going to do from a treasury perspective. And in some cases, we even sell currency if we're going to make some money off it occasionally as well, which we have done a little bit during the year.

Thanks, Mel. This next question, I think you actually answered in your commentary, but I'll ask it again. Would you consider highlighting EBIT or even better NPAT in your commentary rather than EBITDA, which is a meaningless metric from a value investor's viewpoint?

Look, it's definitely something that we can discuss with the Board. The general consensus is in the unaudited results that we've taken is that we would release the EBITDA result. And then obviously, it's only another month out that we'll be releasing the full audited results. If you look at all the expenses that sit below EBITDA, depreciation, amortization, share-based payments, they're actually pretty consistent every year, like there hasn't been any material change in those. So I don't think it's necessarily that difficult to kind of figure out what the profitability would be of the business moving forward from that perspective. And obviously, there's a few analyst reports out there that would give a bit of an indication of that, too.

And we did, as you said Mel, half year and full year NPAT and cash flow.

Yes.

Yes. Great. Next question. We've had a lot of this question from a number of different participants. But I think this one sort of captures it. Pureprofile has consistently generated good cash flow and the cash balance is increasing. Given the long down trend in the share price, is the Board considering any capital initiatives such as a share buyback, which would help EPS?

Yes. I think that's a great question. I know we had quite a few questions even in the last results release in Q3 regarding this. I think the key thing is our board is constantly reviewing capital allocation strategies. And they're also taking advice, receiving advice around this, whether it's considering share buybacks, dividends. We're actually only just in a cash paying position in Australia. This year will be the most material. We've used our tax losses up in FY '25. So we'll be starting -- we won't be starting to generate franking credits probably till like maybe next year, so that might make sense at another point in time. But effectively, it is definitely obviously a key part of what the Board spent a lot of time thinking and discussing. And yes, as I said, they're constantly reviewing and taking advice regarding it.

Great. Thanks, Mel. And as an extension to that question, someone here has asked, with the current lack of interest in the stock, is the Board intending to explore a sale of the company to maximize value to shareholders?

Yes, good question. Look, as Mel said, we're looking at all options, a proactive sale process is not something that we are engaged in or interested in. We're a company that's growing well above our industry, operationally doing phenomenally well. A proactive sale process destabilizes clients, employees, the business, et cetera, and might not result in anything except you've actually potentially harmed the business. But as Mel said, we're certainly looking at other options.

Great. Thanks, Martin. Well done on Platform, strong growth with the growth coming from the adoption of automated data delivery solutions, has it been taking away from some revenue from the Data & Insights segment?

I think that's a really great question, George. And I suppose we just want to clarify, it's not -- we wouldn't consider it to be cannibalizing our Data & Insights business because it's actually the same business. When we talk about Platform revenue, there's obviously a number of different components to the Platform revenue. But where we're seeing the growth is really it's the delivery mechanism of the Data & Insights. So traditionally, we've been a very managed service heavy business, meaning we've required lots of people in our sales team and lots of people in our operations team to deliver those insights to our clients. So from the sales side to the procurement side, et cetera, what we spent a lot of time over the last 18 months to 2 years is actually automating those processes and that's why you've seen the headcount growth come down because we're now delivering data and insights through a different mechanism, which is more tech-enabled. So what that means is it improves our EBITDA margin. We're not selling at a different rate when we have a manual managed service mechanism of selling data and delivering data and insight. So it's something that we just want to make sure that our investors and other stakeholders understand that it doesn't mean that we're charging a customer less because it's been delivered from a tech-enabled solution versus having a person delivering it.

Great. On the cost side, how has the gross margin trend been?

So the gross margin trend has been impacted also by foreign currency. When you see the income statement when we put our annual report out at the end of August, you obviously do see detailed cost base there. So you'll be able to clearly see what our cost of goods sold was. That has -- the gross margin has declined by just under 1%, and that's been the result of obviously the FX movement with pounds and Aussie dollars. And we obviously buy lots of different data in different currencies. It might not necessarily be sold at the same currency as well. So that has had a slight impact from that perspective. But obviously, the bottom line, the EBITDA margin, which is obviously the most important has grown because we've managed the rest of our cost base well as well.

Great. Probably an extension to that question from another participant. In FY '27 for each incremental dollar of revenue growth, how much do you expect to drop through to EBITDA and it's sort of asking 15% or 20%?

Well, that's kind of asking me what's the EBITDA margin in FY '27, which we're obviously not putting guidance out at that point in time. I mean, obviously, this year, we haven't been growing. Look, I suppose one of the things that we talked about a little bit in this presentation, too, is our centralized overhead costs are pretty fixed now. We're not putting more people on our exec team. In fact, actually, our exec team is slightly smaller than it was 12 months ago. We're not looking at increasing any of those centralized functions. So $1 of revenue is going to -- should be going through to the bottom line in the quite same way as it is now. We've always said that every year, we are trying to grow our bottom line by 1% to 1.5% EBITDA margin. So you could probably look at it from that perspective as to what the EBITDA margin could be next year. But we won't be putting out guidance until our AGM, which is the same as what we do every year. I don't know if that answered the question, but kind of me putting a bit of guidance out there is too early.

A question around U.S. acquisition progress. So how does the team approach the acquisition funding plan with the share price being relatively depressed?

It means that we can't look at such large companies is the bottom line. So with the share price being where it is at the moment, then the opportunities that we look at for acquisition are really all just cash based, similar to small acquisitions that we made in Australia. So good news is obviously that cash part is growing. So that gives us more capability. But with a low share price, it means that it's hard to find an accretive acquisition. So at the moment, there are smaller ones that we're looking at.

Thanks, Martin.