Pureprofile Ltd (PPL.AX) Earnings Call Transcript & Summary

Good morning. The format for today is for Martin and Melinda to speak around -- for around 20 minutes discussing the results. This will be followed by a question-and-answer session. [Operator Instructions] Just as a reminder, this briefing will be recorded and will be available on Pureprofile's website. And with the housekeeping now complete, I'd like to hand it over to Martin and Mel to get us started.

Great. Thank you, George. And again, hello, everybody. Thank you for joining this morning's presentation. Really happy to talk about Q4 and first view of full year. So with that, I will now immediately hand over to Mel, who's going to go through a summary of the year.

Great. Thank you so much, Martin. So just a reminder to everyone that these are our preliminary unaudited results that I'm very, very happy to share with you today. So really, the key headline is we achieved the guidance that we've been signaling to our shareholders for the last -- pretty much since the AGM. It was a record year for Pureprofile, and it was a record quarter as well from a revenue perspective. But what's really pleasing about the results that we're sharing with you today is that our revenue growth was 19%. So that's really a really strong acceleration from the growth that we did in FY '24 of 10%. We also launched lots of new technology solutions, many of which you heard about in our last quarterly update, and they're really important because they're really about setting us up for the future. So where do we land? Well, $57.2 million worth of revenue, as I said, which was 19% up on FY '24. $5.2 million in EBITDA, which is 18% up on the prior year. And then we had a very, very strong cash balance of $5.7 million. So we were really thrilled about our cash generation throughout this financial year. It's been a very, very strong year from a cash perspective. So as I said, that revenue growth for the year was a real acceleration on FY '24. Like we were really thrilled with our teams and how hard they've worked. So not only did we have strong growth, but we've also obviously done that while we have been really focused on these new solutions. We also maintained our margin over the year, and that was really important as well because we have continued to invest in our long-term growth throughout the year as well. Our Rest of World revenue is again a larger portion of the total pie of the revenue for the year. So that's now 46% of our revenue. So that, again, is showing that continued growth every year. We also obviously successfully executed on the i-Link acquisition, and that contributed to the 12% ANZ revenue growth for the year. Bearing in mind, in FY '24, the ANZ region only grew 2%. So that's an amazing result for us. And really pleasing to note that the acquisition was fully funded through our cash flow this year. We had 90% of our revenue was from repeat clients this year again. So continuing to see those really strong repeat clients coming back. And then we'll talk -- Martin will talk a little bit about some of our new solutions that we've released in Q4 this year with Datarubico and some AI solutions. So I'll hand over to Martin, and then I'll go into a lot more detail when we get into the financial section.

Great. Thank you very much indeed, Mel. So just moving on for those of you, just a quick summary. So we're a data and insights company. So we help organizations better understand their businesses through understanding their consumers, their constituents, their clients, et cetera. So if you're a government, you want to understand your voters, people who don't vote, if you're a company, a brand, you want to understand your consumers, your nonconsumers, competitors' consumers so that you can sell more and be more attractive and have the right messaging, the right products, et cetera. So that's what we do. We do that because we have millions of people around the world that either, one, we can survey with specific questions that deliver the answers or two, we can gather data and gather behavioral data again to be able to answer people's questions. So it is said today that data is the new gold or the oil to the AI world, and it's fantastic. We're exactly in that right space. Where do we do that? Well, in the last 12 months, we conducted research gave insights in over 93 countries. We do that from having 14 offices globally, and we're one of the few companies, data and insights companies that has true Northern and Southern Hemisphere offices as we do. We had in the year 923 clients. That's up from 798. It's actually our biggest growth in new client wins for the organization in the 5 years that I've been here. So really excited about that and how the team is working. 244 staff around the world, of which about 130 sit in our India and Philippines offshoring centers. As Mel talked about, a record of $57.2 million in full year revenue, up 19% and the other one is $13.9 million in annuity revenue, up from $10.9 million. So that's a figure we've continually seen grow. I'm really excited about that because you're sticky, you move into a new year, you've got predictive revenue, et cetera, and it goes whether that's through platform or just long-term clients with contracts, it's the trust in Pureprofile. The strategy has been in place since September of 2020. So as I said, coming up to 5 years now. And that's focusing on 3 key areas. Number one, grow globally from the strong base you've got here in Australia, and that's working. We're now up to 46%. We see about 3x growth in Rest of the World versus Australia because that's where our focus is. That's where our investment new dollars goes versus maintaining and continuing to grow some market share in Australia, but seeing that Rest of the World. So that's working. Technology and AI now that -- as we've talked about, it used to be just technology in the last couple of years, added that AI. So how can we automate, how can we grow our clients, new types of clients, more efficient ways of working. And we've especially had over the last 18 months, a raft of new solutions we've launched in that space, including internal solutions such as AI translations, AI reconciliation, AI coding and other systems that enable us to be more efficient and efficient in our processes. And then especially in the last 6, 9 months, focusing on client deliverables, which I'll talk about in a moment. So that's making us more efficient and bringing in new clients. And then really being laser-focused on data and insights. So that's what we're famous for. And that Pureprofile this year is 25 years old. And that's hugely important because you have organizations making multimillion dollar decisions based on quality of data, quality of people, quality of delivery and service that we're famous for. And there are very few companies in our space that are 25 years of age, and that gives you permission in the marketplace to be able to have conversations with existing and new clients. Why do we focus on Rest of World? Because 54% of data and insights spend is in the U.S. markets and 24% is in Europe. And U.K. is about 11x bigger than the Australian market and U.S. is 44x bigger, and we continue to win market share into both those areas in both those spaces. The story has been a great one over the last 5 years. So we did a recapitalization in 2021, removed the majority of the debt, brought on a number of new investors and refresh the executive team. 2022 to 2024 was about internally improving the technology of the business, the processes, reengineering that, ensuring that we had the right global structure and global teams in place, delivering fantastic results in guidance or exceeding guidance in every year over that space, clear communication to shareholders and to the market, improving that confidence from 2021, real pride to 2021. And then finally, financial year '25 that you just saw and onwards, it's about now leveraging off of that improvements that we've done in 2022 to 2024. It's about leveraging that. It's about bringing on new clients, focus on automation, focus on the new world as we see it today. '26 that we're now almost a month into, continue to grow that client share of existing global wallet, which we're now able to confidently do. So that might be where we have a client in Australia, but actually they're a global client, so being able to tap into their U.S. spend, U.K. spend, et cetera, as well as the reverse global headquarters, particularly Sydney, U.K., U.S. being able to do their global work today. Monetize new products that we launched at the end of the last half. And it was really important to get those products out in the half so that we had a full run and momentum into '26 and onwards of those solutions and then continuing in that targeted investment in U.K. and U.S. so that we can see -- continue to grow market share into that much bigger market. Improving our margins. So again, moving from managed service to platform to annuity-type long-term revenue, and automation of client solutions, so directly being able to access our audiences or their questions without having to go through our managed service solution where they don't need to or want to, utilizing AI or innovation on new technologies where suitable and also that processes and that ways of working. And partly Mel will talk about that a little bit more, but where we invested into not only that 19% growth, which is double what we did in '24, but those new technologies, which we then launched for this year into that EBITDA slightly, and that's why it was flat for the year, but that enables us to accelerate with the new solutions into '26 and beyond. Globally, keep focusing on that global expansion, whether that's through data partnerships and more data or whether that's through bringing on commercial people or commercial relationships. And again, now we have the solutions, it's able to launch those scalable solutions in new markets that we can start to do without needing to add commercial people at every juncture. Technology and AI enable us to be more efficient, enable us to be faster, enable us to be scalable, bringing new clients and then keep focusing on data and insights. We talked about aspirational objectives for '26 and '27, not at all guidance, but aspirational objectives. And this talks to where our focus is. So focus on U.K. growth, focus on U.S. growth, focus on platform revenue, client interest -- sorry, increased uptake on the client-facing solutions, which delivers automation and new types of clients to us and also to expand and actually expand our offering that beyond where we are today and actually start to think about becoming an important source of data within the AI space and to AI clients to LLMs, that's large language models, OpenAI or Google or Meta, et cetera, and actually be an important player within the AI space, which is a brand-new vertical for us and a brand-new area we haven't played in before. Mergers and acquisitions. We've done really well with the i-Link acquisition that's given us growth, new people and fantastic people, I should say, have joined the team, new clients, new data points and actually look to U.K. and U.S., can we do an acquisition that gives us an immediate step change. Economies of scale, continue to roll out the tools where we can see that we can reduce those costs, salaries and contractors, especially data that we -- third-party data we acquire versus our revenue growth and see more of that EBITDA margin expansion we've seen over the last few years. Reduced reliance on suppliers, especially around data, where we utilize third-party data and deliver that as our own data sources and then continue to be a leader and utilizer of technology and technologize the business and automate the business where possible. New solutions. So the new product range is called Datarubico. The focus behind that and talk to here is self-serve, but it's data as well as insights. So now we're able to move into space of it's not just surveys, it can be data solutions as well within the platforms, automation. So again, feeding that platform revenue line, improving that EBITDA margin, opening up new clients to Pureprofile that before maybe wanted to work with self-serve automated-ype solution, but we only offered managed service. So it's leveraging that, leveraging, as said, those opportunities. And already, we've had a great response to the solution, even though it was a soft launch in sort of June, early June, and we've had 40-plus presentations across both solutions to new types of organizations we haven't worked with before and already had 11 sign-ups to the 2 self-serve solutions that sit in there. And those are going through onboarding, training, et cetera. I can't give a monetary number at the moment because it depends on the usage of the tools, but really pleased with the initial response, and it's most probably exceeded what we were expecting. So first solution is Insights Creator. So that allows people to create a survey similar to they might in Qualtrics or SurveyMonkey, manage everything through the system that they would have before we would have had to do that in India or Philippines or locally. They can monitor in real time and then generate, deliver the data at the back end. And the key thing is it's our data sources that are plugged into this that they're now utilizing end-to-end. Why? It's faster. It's the same quality. The control is now in the clients' area that they want to. It means, again, through these type of surveys, I've got better responder engagement. They've got richer solutions and again, fastful insights. So I'm really happy about that. Why it matters again -- sorry, and why it matters is it enables -- go back to this -- sorry, and then the Sample Only tool that allows people to do the same, but they've created the survey in Qualtrics, SurveyMonkey, et cetera. So again, I utilize this to a whole lot of clients that before had to come to our managed service to deliver the same. So within those 2 tools, Insights Creator and Sample Only, I talk to clients that want to create their own tool in their own environment or want to use a really feature-rich solution to create their tool, but it's all of our own data behind the back of that. Then launched a couple of other new tools, which we're really excited about Conversational AI. This is a great utilizing AI features and functionality where you get a much richer response to clients, i.e., there are automatic prompts, I've said I use Woolworths or go to Woolworths instead of Coles, the system automatically can say, okay, you talked about Woolworths. What was it about Woolworths you like? Well, I like the ease of use, the lay stores and layout and the price. And then the AI automatic tell us a bit more about this, so I can start to deep dive into responses and gathering data that I couldn't before. So it's really utilizing what latest in AI. Message testing. This is where an organization might have 4 or 5 different messages they want to give out to the market. So for example, they want to talk about the main user of a car in a household, and they're talking about electric vehicles. And that might be where actually the main user is doing dropoff of kids or going to shopping and the key things they want to talk about safety or range anxiety, et cetera, not performance or speed of the company of the car. So that enables clear message testing. Actually, these 3 messages work better than these 10. And before, it might have taken me a few weeks to get the answers. Now in seconds using AI, I actually can get the gauge on which the best 3 are, and then I can drill down on those through surveys, et cetera. So much faster, richer data utilizing AI. AI coding, fantastic use of AI. So that means we gather a huge amount of data every day. We conduct, I think, over 18 million surveys a year, for example, apart from behavioral data we gather. AI is brilliant to see trends, help understand data better, help be able to answer those questions for clients faster and utilizing AI, especially what's called AI coding in our space allows us to drill down and understand that data much faster, insights faster and large volumes data. We're quicker. Clients are happier because they get the data responses and maybe we find some new areas we didn't know before. So why did we launch all that? It's delivering more faster to our existing clients at scale. It's bringing on new clients, utilizing our new tools that we couldn't speak to you before. And it means that Pureprofile now is no longer just a survey company doing a manual managed service solution. Now it is a SaaS-based data-rich company where clients want that to add to where we are market leader in certain markets around managed service. So really excited that this is a new string to our bow, enables us to scale faster in new markets and scale new clients. So there's method behind the madness and great that we now have a platform that we can launch these solutions. And with that, I'm going to hand over to Mel, who will talk about our numbers in a bit more detail.

Great. Thank you, Martin. So we will be releasing our audited results, which will include our profit number, which I'm sure everyone is super excited to hear about. That will be at the end of August. So we'll be releasing then. I can be -- communicate that we are obviously profitable and a lot more profitable than we were in the prior year. You will recall that we had an NPAT of $1.5 million in the first half of the year. So that trend has obviously continued into the second half of the year of remaining profitable. So as I said, FY '25, a record year of $57.2 million. What's really exciting, obviously, is the growth of both the regions, the Rest of the World being 28% up at $26.4 million. If I kind of go back 5 years, our Rest of the World business is actually as big as our total business was 5 years ago. So that's a pretty exciting metric for our business there. And then obviously, our ANZ business had a really, really strong year as well off the back of the 2% growth the year before. We did see really strong growth in both the U.K. and the U.S. this year. Obviously, that's because we've been -- that's where we've been investing from that perspective, strong EBITDA growth, broadly in line with the revenue growth. And it has been really important for us this year to really get that balance right of continuing to invest in our future business, while at the same time, trying to continue to build the bottom line profitability for the business. So I want to talk a little bit about some of the investments that we made this year. So the key thing, obviously, we've been continuing to invest in sales capability in the Rest of the World business. So we've hired a number of new heads in the U.K. from a BDM and account management perspective, also new sales leadership in the U.K. And that investment will really help us with next year as well. A couple of those roles came in at the very start of the calendar year this year. So we'll have a full year of them next year. Now the new solutions, there were investments from a CapEx perspective. Our CapEx expenditure was broadly in line with last financial year at about $2.3 million. But there was OpEx related to those new solutions as well. We also had a full year of investments related to our ISO 27001 accreditation. You might recall, we implemented that or we've got the accreditation at the very start of this financial year or FY '25. So we had a full year of all those new solutions that have allowed us to get that accreditation, which I will say is incredibly important in the world that we're living in today to make sure that the company has got really robust systems and processes in place around cybersecurity, particularly given the nature of our business. We also made a number of investments in marketing. So obviously, marketing was hugely important going into Q4 with the release of new solutions, ensuring that we're at a number of conferences and that we've got collateral systems processes really around supporting our sales team with those new solutions. So that's been really critical. And they're kind of the key investments that we've made throughout this financial year. And as I said, our reported cash balance was $5.7 million, up from $5.2 million at 30 June. We also, at the half year, we had $5.1 million cash at bank. So that obviously included the full payment for the i-Link acquisition this year. And then we also have paid $200,000 of the debt -- principal payments throughout the year. So we have had an exceptional year from a cash generation perspective that we're really pleased with. If you go to the next slide, Martin? So this really shows -- so we haven't put in the total revenue growth for the last 5 years in any of our slide decks for a while. So we just wanted to kind of reiterate where we've come from. So you can see in FY '21, $25.7 million worth of revenue up to $57 million. So we're really proud that we've had 22% revenue growth over the CAGR growth over the last 5 years. We've consistently executed on the strategy, and that's grown the top line significantly. And this year has actually been exceptional from that perspective. And then you can see how the growth in the Rest of the World has really gone from 29% back in '21 up to 46%. So that's really ensured that we've got a reduced reliance on our ANZ business, where we are a market leader. It's a competitive environment. We already hold a huge market share, and we've really diversified our risk by going into these other regions. And also, as Martin says, these -- the U.K. and the U.S. are big markets. There's a real opportunity for us to continue to make -- to take market share over the next couple of years from that perspective. If you go to the next slide, and then you can just see the trends. So consistent, nothing significantly changed here. I will just repeat for EBITDA for last financial year, the reason that it went down from the prior year from '23 to '24 is just really the change in short-term incentives from being equity-based in '23 to cash-based in '24. But no surprises here, the same trends that you've been seeing in -- for the last 4 to 5 years. Just go on to the next slide, please. So I want to talk a little bit about Q4. So it was a record quarter. We've been having record quarters every quarter. That's how we've continued to grow. It was a strong revenue generation quarter of 17% and that again was the strong expansion in the U.K. and the U.S. Our platform revenue has grown 10%. Now the growth has obviously slowed down compared to where it was maybe 2, 3 years ago. And what we're expecting with the new products and solutions that, that will start that allow us to continue to accelerate that growth into '26 and '27 with these new solutions as they start to ramp up. We did have a good result for the ANZ business of 8% growth, and then our Rest of World was 27% growth. Now our EBITDA was down 13% to $1.3 million, and that really reflects what I talked about the investments that we've made. So we did actually have an FX loss in Q4 of $120,000. So that has partly impacted EBITDA. You will be aware that we did have obviously -- the Aussie dollar has been a lot weaker against the pound and the U.S. dollars, and that benefited us in the first half of the year. But obviously, that started to -- the Aussie dollar has strengthened a little bit again coming into Q4. So there was an impact from that. And then really seeing in Q4 was the increased investment with the new solutions, which is -- yes, as I said, there was CapEx and OpEx related to that as well as investment in some further sales capability throughout that quarter as well. If we go on to the next slide, then you can see, yes, same trends. And you can see Q4, obviously, the last quarter of the financial year. In various years, we have made more investment in Q4 to set us up for the next financial year. And you saw that in Q4 FY '22 and obviously, in '25, it was important for us to release new solutions, which will allow us to have new revenue streams to attract new customers from that perspective. So that's really what you've seen experience in Q4 from that perspective. And then the next slide, I'll hand back over to Martin for a summary.

Great. Thank you very much, Mel. So I think Mel said all we said I'm so delighted that we've had strong fantastic growth, 19%, held our EBITDA margin for the year, whilst investing in now a really strong platform for the future and not just the internal development that we've been doing for the last 4 years, but now actually having a strong client platform with a range of new products as well that we're taking to the market and a strong cash balance, even though we've completed the i-Link acquisition and really set ourselves up nicely for '26 and beyond. And now I will hand back to George and any questions, please.

Yes. Thanks, Martin. [Operator Instructions] There's a question here, Mel, on FX. I know you talked about the fourth quarter. Question here is around what was the FX impact in the second half?

Yes. Q3, there really wasn't any change from an FX perspective. So it was really Q4 [indiscernible] yes, from that perspective, and it was $120,000. In the same quarter last year, we actually had an FX gain. So obviously, the FX impact was actually a little bit more negative than the expense that went through the P&L in Q4.

Great. A question on Rest of World. What's your plan for recruiting additional commercial people in FY '26?

Yes. Yes is the answer. And we look at it as we go into '26 as with other years. So really happy with '25 that we added to our roster, especially in the U.K. for -- sorry, for '25, for '26, really pleased that we added to the roster. And then in '26, as with other years, we look at it as an opportunistic standpoint. So if any great people, we know leaving other organizations or continually have conversations with people and Pureprofile is the company that's growing beyond all of the competitors. We have -- it's a great place to work. We have a voluntary staff turnover of under 2%, which for a company our size is incredible. So we're a good place to work. And so opportunistically, as I said, we look at as people come on the market or continuing those discussions, we continue to bring on great people.