Qoria Limited (QOR) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining our half-yearly results webinar for the financial year 2026. Tim, we've got a bunch of people in the room now, ready to kick off.

Awesome. Thanks, Ben. Thanks, everyone, for joining us. Look, in many ways, the half-yearly is a repeat of the information that's coming out in the quarterly results. But what I've done in this -- what we've done in this session is to provide some -- a deep dive into some of those really important strategic themes. Those things that we're doing in our business that are making sure that we are set up for success long term way into the future. So I'll talk a bit about sustainability in this presentation. The highlights of the half. I think this provides a good summary of them. We have got a business now that is growing comfortably above 25%. For the half, we grew 25% PCP, whilst doing so over the last couple of years, we've kept our fixed cost discipline strong with our CAGR of fixed costs at 4%. That's delivered $10.3 million of EBITDA, a 68% increase on the prior period, and $9.2 million of free cash flow, again, 51% increase on the prior period. There's some notable things going in our business, but one clear highlight is custodial. It has been growing at 15% per year in the first 3 or 4 years of its joining of our business, but it's really come into its own in the last couple of years, now growing comfortably at 34% for this financial year. It's profitable. It really is a strong part of our business. And all the other things we're doing around our K-12 business that are promoting into custodial are now proving successful. And again, we once again reiterate our guidance around ARR growth north of 20%, adjusted cash flow, free cash flow, and adjusted EBITDA margins of around 20%. I'm sure Ben will talk more about those in a moment. Before, I think where we're at a business is in a great spot. Honestly, I've never been more excited. Custodian business is on fire. We're profitable, cash flow breakeven or better. The next half of the financial year, obviously, everybody knows we will be generating significant cash flow. Crispin, who's on this call, he runs our K-12 business, and that has never been set up better than it is today, with clear innovation. I'll talk a bit about that in our product ranges. Our go-to-market motions are outstanding and only getting better. Reputation is getting better. Our pipeline is enormous and even bigger than what we reported in December. So I literally cannot wait for Chris our K-12 numbers in July with the annual results. So we have never felt more excited and more better set up than we are right now. And let me highlight some of the things that we're investing in that -- so we are seeking to be the most capable provider of safety technology globally, and here is a few indicators. We're looking after 30 million children, 9 million parents, 32,000 schools. And significantly, we've passed through 20% of U.S. students on our platform now. And that is a -- that's all organic. We entered that market in 2018, and now in 2026, we're at 20% of that market. And we're accelerating. If you look at our ARR growth, we're accelerating into that market, particularly in the big end of town, where we're becoming really the go-to for statewide procurement deals, and those big top 100 schools. Chris again is on this call if anyone's got any specific questions. And then, as we said at the top there, not only all of those kind of raw statistics, but we are literally intervening lit every couple of hours, which is really important. Talking more broadly about impact, I flagged this in a couple of last quarterly reports. We're now starting to see the indicators of the outcomes that we're generating for our school communities. So it's not just measures of how many people are using our technologies and it wouldn't be good if we're blocking kids accessing the appropriate content, but we're now looking through our data points to show that we're actually changing the lives of not only individuals but communities. I'll show you a couple of really important stats. This is, by the way, an analysis of 1.2 million students in the U.S. What this chart is showing is that in these intervals between launch and 6 months and 12 months after a school launches custodial. So U.S. school districts who start communicating to their parents, hey, you can now control your kids' school devices after school, and you can put custodial in your kids' personal mobiles. To be clear, we're only -- we're typically getting around 20% of these parents signing up to this product. Notwithstanding what it sounds like, in fact, it's pretty high take-up, but notwithstanding that, there's a modest portion of the community taking up these products. The reductions in toxicity, principally around bullying incidents in these schools is astonishing. Within 6 months of launch of these programs across 1.2 million kids, there is a halving of the incidence of terrace, extremist content and bullying. I mean think about that, just the launch of this product, even though a modest group of parents are taking it up, we're getting a halving of toxicity in these communities. This is the thing that's really opening up the eyes of school district leaders superintendents as to the power of the Qoria ecosystem approach. It's not just blocking content, it's engaging with kids, engaging with the teachers and admin of school and the parent community, and we're now seeing material changes in behavior inside these communities. This is becoming now the way we're talking about our products. We're not just flogging risk management, we're selling outcomes. And everyone is talking a lot about outcomes today, particularly around the use of AI tools, and we can now demonstrate a clear link between the products that we sell and well-being outcomes. But it gets even better. This is something that Crispin has been pushing for a long time is looking for evidence on the take-up of schools of our products, what's that doing in 2 dimensions. One is, are they becoming stickier? Are they liking? Are they getting value out of our products and staying with us longer, and that is a clear trend. I think you're seeing that in all our net revenue retention figures and our churn figures, which are industry-leading. But this is the other dimension, which is what are the behavioral implications of schools that are committing to our ecosystem. And what you see here is a clear correlation between the number of courier products that a school has signed up to and the amount of toxicity in that school community. So you can see it goes from 16 out of 0.16 toxic incidents for every 1,000 students per month -- sorry, per week more than drops by nearly 2/3 if you've got 5 courier products. So think about that as a powerful message that we can now sell to communities or talk to school communities. If you're engaging in our ecosystem, the more you engage in our ecosystem, the more benefits your community will see in terms of better behavior, better academic outcomes, better attendance, just better mental health outcomes. That's what we're now seeing through this platform approach. We've been talking about this for many, many years. And I think all of us in our hearts have known that a more engaged community will deliver more better outcomes for kids. And now I'm really glad to see that across 1.2 million kids, we're seeing very clear and dramatic evidence of that. So all of us in this company and all investors behind our company should be really proud of the difference that we're making. And if you want to know why I'm so confident about the sustainable advantage of our business, it's because us and only us can actually do this in our industry. But of course, it's not only about this kind of broad macro stats, and I don't want to get too my in this presentation, but it is ultimately about individual situations of children that are at risk of serious harm. And this is one example of the examples that we receive daily of our technology leading to direct interventions, which are saving kids' lives. Kids have a tomorrow because of the things that we all do. And this is one customer who's communicated to our team that they are, as they say, her bucket is continuously filled by the products that we offer. That is the reason why we do what we do, and I can't be more proud of the team. So there's a lot of things that we do for sustainable advantage. And obviously, I spoke about a few, this ecosystem approach. We layer content, professional services across our technology. We have a data analytics platform that means that we're more deeply being integrated in the decision-making of these school communities. There's a heap of things that we do to make sure that we have a sustainable business model, and we are penetrating deeply inside the school. I touch on a few things that we did last -- in the last year, so in 2025. There was a lot of work, in particular around content and in particular, around the use of AI technology. The video you see here at the top, this screen grab is from our AI content-based AI capability. We can filter real-time now what kids see in their browser. You see here them seeing it, but we actually can do it before the kids even see it. We can hide or blue inappropriate videos, in appropriate images. And recently, and it looks like it's been, I think, our most successful launch ever, real-time analysis of everything inside a page, even those hidden keywords inside pages, we see the lot which helps us protect kids from inappropriate content, but mainly the value of that technology is stopping kids using VPNs and proxy services using websites as ability to bypass the expensive filtering technology that schools use. So that's deeply embedded in our filtering platform, and that puts us bounds ahead of our industry. On the bottom of this slide, you see the new interface that's now starting to pop up across all of our platforms. And here, what you're seeing is the monitoring product, which is now you're starting to see signs of the deeper integration between our filtering and monitoring technology. So it's all starting to come together. On the right-hand side, what you see there is a commitment that we make that I still don't think any of our competitors are doing, which is leveling up our community to make to not only use our tools but how to use our tools in these situations that really matter oftentimes where kids' lives are at stake and making sure that those choices that they're making are appropriate, are ethical and legal given the jurisdiction that they're in. In custodial, look, these are just 4 areas of work. The custodial product has come on leaps and bounds in the last couple of years, so much so that the churn stats in that business in the mid-20% is clearly industry-leading. Churn in the consumer control space is typically in the order of 50%. That's part because parents start using printer controls when kids are 13, 14, which is too late. Our business model through schools helps to address that problem. And then custodial's outstanding product Barcelona, they're focused on making sure it's a feature-rich product, and you have a beautiful experience in your journey of opening up those features to deal with your life challenges. I can talk forever about custodial, but the innovation in that product is enormous. And this year, Victoria, I can say, this year, there's going to be a lot of work around the kids experience to make sure the kids are part of their journey as well. And on the right-hand side, just to highlight that I'm asked often where are you at with the unification of all the different technologies that we brought into the Qoria business over the years. And it's coming together pace. What you see here is, I can't tell you the name of it. It's the Qoria unified platform. It is rolling out in the U.K. currently. It's going to be start being used in Anga this half in the U.K. And by the end of the year, we're expecting all customers to have access to this product, and then rolling out to the U.S. beyond. So it is the unified interface on top of the unified cloud application and unified data sets that have been plumbed over the last couple of years. It's very, very exciting, and it offers the opportunity to create huge value, particularly in the U.K., because they will have access to all of our products. It offers us a much simpler code base to manage, and therefore, this ability -- 2 opportunities from that. One is the ability to be more agile. We can deliver more features more quickly. And two, there is an efficiency dividend that will clearly come to our business as we simplify our tech stack and stop the duplication. All right. The other objective of this business, obviously, profitable growth. We see an enormous opportunity to grow in a space that's almost infinite, the school safety and pure control world is enormous. There is no incumbent. There is -- it's a fractured market, and we see an infinite opportunity for us, but we are seeking to responsibly grow into that market profitably. And so what you see here is a few slides with is kind of how we think about and how we've been organized to accept that challenge. On ARR, I think everybody knows that our ARR has always been the strength of our business. We've always grown last -- in the last half, we've grown north of 25%, with custodial growing 34%. As I said, looking forward to Chris reporting the June half, this is the key selling period for our Northern Hemisphere K-12 business. And you see here in the chart on the bottom left, our weighted pipeline at December is extraordinary, never been so high, and it's, in fact, materially higher now as we approach the key selling period in the U.S. All of our markets are growing extremely well. U.S. is obviously our biggest market now growing north or nearly 30% in the established market. And I don't see any signs of that being up. Our brand name is building, our feature sets are building. The channels that we work with are getting more excited. So again, Crispin Swan is on the call, people would like to ask more questions about that. The top line growth is very strong, and we're guiding the market to continually 20% or better. Our unit economics has also been a key focus for our business. Our average revenue per license is consistently getting bigger, and that's despite a falling U.S. dollar against the Australian dollar, we're still climbing on an ARR per student. So our net dollar retention is improving. And our gross margins at 92% is extraordinary. And so our data and hosting costs, the hardware we deliver our services, the app store fees that we manage are all accommodated within 10 points of our revenue, which is extraordinary. And the chart on the left shows that it's not just one product. We're getting better and better at selling other products. And we talk about this often. Our Trojan horse in school districts is the CTO is that IT persona with a compliance obligation. I think we're very clearly starting to own that relationship, particularly in the U.S. And that's a relationship that's very dear to us, and we've worked very hard to build that relationship. But then we're leveraging that into instructional learning, into safeguarding, into data analytics, and ultimately into the executive in schools. And you're seeing that represented in the increase in contributions from these different products that are in our portfolio. And again, I can't be more proud of the team there in Barcelona. We gave them very strict parameters to operate in within the last few years as they kind of build out their feature set, and our business became profitable, which it now is. And so now we're unlocking a little bit of marketing dollars for them, and they're turning it into -- honestly, turning rivers of gold. Most importantly, as you see in this line here about mono payback, they're investing more. We've given them extra I think it's $4 million of marketing budget this year. And importantly, every dollar of cost of acquisition is being covered by the average order value. So it's almost a cash-free growth engine. It does affect our EBITDA with the way the accounting works. So we can't just give them cash. But it's not burning cash. It is, in fact, cash flow breakeven growth in a business that's already profitable. And the net ARR is growing significantly. If you look at the chart on the bottom left. The ARR is growing materially above trends. You can see the top chart on the left. The CAC payback period is an instance at month 0 and net subscriber growth, which has been relatively flat. That business has been growing in many parts through pricing optimization. Now it's a combination of pricing optimization and share subscriber growth. I should note, I think analysts will be interested to know this, we are going through a price optimization process right now, showing good signs. So I'm expecting growth in this half through contribution from both price optimization and subscriber growth as well. So again, really excited about that theme in [indiscernible]. Cost management. As we highlight there, we're growing at north of 25% revenue and ARR, and yet our fixed costs over the last couple of years are growing about 4%, and inflation across the place where we operate is in the order of 3% to 4%. So I think that's a pretty good story. And that's resulted in now 4 halves of EBITDA, and that's consistently growing. So I'll let Ben talk more about the financials in a moment. So while I've got you, obviously, the big topic for us is our agreed merger with Aura, which we announced in January. It's very exciting. I'll talk about the transaction in a moment, but just again to position for those people aren't clear, Aura is a consumer security player with a deep interest and some real innovation in family safety, with the Qoria for families offering. Obviously, Qoria is all about family safety and school and student safety. And the combination of these businesses creates a really onceinalifetime opportunity for people in our business, for investors. And I think it creates the business that the world needs. It's that place. It's that household name that the world needs to protect adults, protect families and protect schools. Our mission is to empower communities with lifetime digital protection for everything that matters most. Everyone is precious. And the opportunity for our businesses and our investors is enormous. And I'll kind of touch on these things again because it's worth highlighting. Aura, it gives them a deeper access into the family with the custodial product set and a deeper access into a really important community where you can leverage the trusted relationships of parents with schools to offer not only safety, but hopefully offer security offerings, and let's face it, the distinction between security and safety with the rampant development of AI technology is disappearing. The challenge that we're all facing is AI threats that come in all shapes and sizes. And so Aura brings together these opportunities and creates significant opportunities. And for Qoria, it's the access to the AI capability of Aura, which is a huge advantage for us. I'll talk more about that in the coming announcements. It gives us access to higher revenue streams through our relationships that we built through schools and into the home, and importantly, gives us a much -- opportunities for much greater lifetime value where if you think about the custodial business, it has what's called an age issue. When a kid becomes 16 or 17, our product becomes less relevant. But with the Aura product set, we have products that are relevant from the time you become an adult to the time you end up in an aged care home. That is an extraordinary opportunity for our investors that we get to leverage. And actually, we have scaled, growing, profitable, cash flow generating. We have huge distribution networks. We are in global markets. We can take our products and leverage existing channels and existing markets. There's a lot of very exciting low-hanging fruit and broader strategic opportunities. And then kind of going back to the original part of this presentation, there was an impact opportunity here. There is this opportunity to be that world's brand name that the world needs to have that person on your side, as we're all facing these immense challenges from the dynamics of AI and the rapidly changing world that we're living in. It creates this opportunity to have that partner for a whole life protection for you. And also for me, it gives me much more of an opportunity to have a seat at the table as these big decisions being made around policy and technology that has been thrust upon the communities. That's the background. Now in terms of the transaction, this is essentially the same slide that we released in January. The transaction is on track. It's all expected to complete sometime in the middle of June, where AXQ will be listed on the ASX, and Qoria shareholders will become shareholders in AXQ. Just to reiterate a few things. Aura will be acquiring 100% of the Qoria shares. It's subject to shareholder approval at a scheme meeting expected in June. It's subject to no material adverse change, and that's an incredibly high bar, a 15% reduction in annualized revenue between now and completion. That's very, very unlikely. -- regulatory and court approvals, which are functory and receipt of the placement from the Aura holders, which we've mentioned in here, binding commitments have been received for that $75 million at the equivalent of $0.72 for Qoria shares. The exchange ratio is 35% for -- so the ultimate result of this transaction is that Qoria shareholders will own about 35% pre-money and just under 34% of the combined group post the placement. As I said, the placement is committed. It's around about $109 million at that $0.72. It values the combined business at about $3 billion. That's based on a view of the valuation of a company that's in the order of $500 million, $350 million at the time of the merger, we expect $340 million to $350 million, growing north of 20% profitable cash-generating. That's where that price was negotiated. And then just to be clear again, the equity placement pricing is fixed in the securities pricing agreements. There is no mechanism for repricing. There is a reimbursement fee in the event that the deal falls over because of failure of either party. But as I said, I don't think either party -- both parties are very confident in this deal going through. And I think it's also worth highlighting that the Aura holders are committed to this deal. A big chunk of the Aura holders will be, in fact, escrowed through the passing of the financial -- first half financial report, which will be sometime in '27. So there's clear commitment from the Aura holders into this merged vehicle. That's a brief summary. Let me hand over to Ben and [indiscernible].

Thanks, Tim. I won't spend too much time going through these slides, so we can jump into questions. But I guess the key highlight is the growth in revenue at 25%. So the lift in ARR delivering statutory revenue, notwithstanding a little bit of FX headwinds in the later period of the year, and we remain on track to our guidance around revenue growth. Free cash flow growth was also pleasing, up 50% or 51% year-on-year, and continues to be positive. As Tim mentioned earlier, the pipeline is strong, which we'll be able to talk to more at the end of March quarter, and that will, I guess, line of sight to investors through 30 June and will then give you line of sight into the next period of the year, which will be incredibly strong. So a lot of these numbers have been out in the market with the quarterly reporting. So, important to call out those things. EBITDA positive 8% [indiscernible] previously. I think that will probably continue in the next couple of months on a consistent currency basis, we're very comfortable with where our guidance is. I think, Tim, we can jump into questions in the interest of time.

A couple of questions, if you good nuggets to dive into. The first one on that comment around price optimization. Can you just maybe talk through the blended average price rise across your products in your key markets and mainly in the B2B side, the B2B side?

Chris, do you want to talk through that?

Yes, you should assume it will be around 5% typically through each renewal that we have on an annualized basis, where we're typically looking to exceed CPI. We do look at the products and the innovation that have been introduced over that time, and potentially may go a bit higher, a bit lower, but you can assume an average around that 5%.

And then commentary around the cost reduction there of $4 million. I guess the question here is that we obviously came out the other day with a huge cost reduction related to AI and AI optimization of its people costs. Does the $4 million relate to the acquisition? Or is this in the core business?

Look, we're chipping away where we can to reduce costs. There a big chunk of that is in engineering where we're not replacing the churn, which always happens, unfortunately, in businesses like ours. Yes, I'd say 2/3 of that cost is through efficiencies that we're finding in the engineering part of the organization. Yes, we've got a really important -- I think investors need to understand it's an incredibly important and complex integration exercise that's happening right now. It has to be delivered because there's so much value that can come from that, not only bottom-line efficiencies and cost outs and so on. But it's order of magnitude, more value will come from the additional -- of the ability to sell more products, particularly in the U.K. and to provide better experiences to customers and more features more quickly. Really important time. So those sorts of order of magnitude engineering savings that WiseTech are running, I think they're in our future. But for this year, we've got to hit this unification work. It's really, really important.

And then around -- we're in the key U.K. selling period now this quarter. In the past, you've always talked about, I think you call it, whatever the words you use. Just talk us through the pipeline there. Are you comfortable with that business where it is today? And I know the integration is fully done, and you may miss the sales period, but just maybe talk through how that pipeline is maturing in this quarter because the pipeline was quite strong.

Yes, I'll take that. So pipeline year-year basis is up sort of 15%, 20%. The U.K. actually is 116% of target year-to-date -- and yes, we're seeing a real positive trend towards the blended monitor and filtering proposition in the U.K. I think just a general positivity in the market overall. So even whilst the team wait with bated breath for, as Tim was saying, the Qoria Connect proposition, which essentially brings what dominates in the U.S. market into the U.K. with the first tranche of that release literally happening in the next sort of couple of months, everything in the U.K. is extremely promising, really exciting, actually, whereas in the last couple of years, we had challenges and with growth there for reasons we don't need to get into, we've come through that now. So yes, I'm really, really optimistic on the U.K.

And just one more. Just to go back to that price optimization. In the past, you always talked about 20-plus percent growth. Was that on volume -- is price additive to your growth rate? Or is it embedded inside 20%?

Yes. Look, we -- a better way to answer that question is we think there's upside in the 20%. So we've got a lot of levers to pull from additional products to price increases to new logos. So it's just one of the streams of work for us.

And for shareholders buying today, whatever share price it is today, $0.0-odd, they're really buying Aura. There's little information today around the Aura business. Maybe you can provide -- is there anything you can provide to provide shareholders of Qoria around the financial performance of Aura? And we've had strong growth in the past, around 35% in that business. Can you just talk through your understanding of that growth trajectory into calendar year '26?

Yes. Well, so let me firstly say that Aura is being IPO-ed, but they're going through that compliance process, and a prospectus will be coming out sometime in April. So ASIC doesn't like asset requires to be quite careful in the promotion of Aura until the fulsome disclosures are available to the market. But what I can say is we came into this merger incredibly excited about not only the product set, but the growth profile of the business and the opportunities that will come to the businesses by bringing them together. That's self-evident in the reason for bringing these businesses together. So where we can, we're hoping to provide some more insights to educate the market prior to prospectus coming out. But once that prospectus comes out, the questions you're answering, I'm sure we'll have very, very confident positive responses.

There's a question in the Q&A that you touched on when you were talking about the deal, but as just sort of reiterate. So Aura is owned by Warburg Pincus and Accel. What lockup is expected on existing Aura shareholders after the ASX listing?

Yes. So we've asked the main 2 investors, which is Hari Ravichandran and WndrCo, which together own about 40% of Aura. We've asked them to have a voluntary escrow, so they'll be escrowed through to essentially the end of February next year. And that doesn't mean that they have an intention to sell in Mark. Please be clear on that. Both Sujay from WndrCo and Hari are absolutely in love with this business. They're committed to it. And so all the representations from all of those holders is they're in for the long haul. They're really passionate about building something that is world changing, and that's really the pedigree and history of these people. If you spend some time googling the people that are behind the individuals that are behind this investment, they are about making life-changing, world-changing investments. So we're really excited about that, and that's been backed up by the voluntary escrow and they've also -- those other investors also making commitments to what we describe as orderly sale provisions. So a commitment to take any intentions to sell shares to the Board for review. So we believe they're truly very committed.

So I just wanted to follow up on some of the timing around the sort of IPO and what disclosure can come out when. So are we -- are you saying now that we're not going to get any detailed information until April? Is that the next date? Or how should we think about -- can some of like any information come out before then? Or what's your plan on -- what does the time line look like over the coming months?

Yes. Look, we're hoping -- we're working with the lawyers and effectively ASIC at the moment to work out the extent of the disclosure that we can provide in the lead up to the prospectus. We're kind of been scheduling to do something in March to bring people along for that journey with not only financial information, but product demos and so on, the publicly available sort of information, which I'm hopeful that we'll be able to disclose. So still aiming for that sort of time frame, love to run some events. And then as soon as that prospectus comes out, we'll be doing a significant company and giving an opportunity for the broader investment community to really get under the hood, both financially go-to-market and product and meet the team. And then I'm also hoping to work with people such as yourself and other groups to kind of hone in on specific areas of interest, and there might be particular channels or use of AI or security threats or whatever. So that we're planning a whole series of events in the lead up to the shareholder vote in June.

Can I ask one question on AI and in relation to Aura's solution set? They're using AI, you can see internally for their own efficiencies. But how are they set up for, I guess, preventing AI style attacks on cyber phishing or whatever else may come through? Have they got specific tools that they've already worked on? Are they -- is it a competitive advantage for them? Can you talk through how they are positioning to protect people in the new world?

Yes. Look, I think this is one of the main reasons why we're keen on this merger. So thank you, and I didn't set this question up. So thanks a lot for the question. The anomaly detection platform that they've built looks for these, looks for strange things that's going on. And there might be something strange in your bank account or strange in your credit file. or strange activity on your child is undertaking at 2 a.m. in the morning. It allows an analysis of what's unusual based on an individual and a collective level. And that's powerful. And I am of the view that, that's beyond all of our competition. And it's something I'm really excited about bringing to the K-12 world, which doesn't really exist in the K-12 world. But beyond that, the thing that's really powerful about the way of thinking of Aura I think driven by Hari, he's a genius is this idea of, well, let's find an gentic response to those risks that have been identified. So don't just scour your experience in your digital life to look for these issues or risks, let's deal with them on your behalf. And it might be removing your data through data brokers or contacting your bank and getting your transaction removed from your bank or an entry removed from your credit file. It's an agentic response to the risks that are becoming apparent in our digital lives. That's really clever. And I think they're years ahead of anybody else in the world. And that was, in my view, that's my main driver as to why I want to bring these businesses together.

And how does that filter into their pitch and marketing and sort of their partners? Like is it -- like is that a big component? Or can you talk to anything that can prove that, that's actually resonating?

Well, yes, I mean, look at their website. Look, it's all over their website. It's all across all of their marketing materials. In fact, they talk about their speed of the ability to identify risks, which is -- I forgot the stat, but please look at their website, but they actually quote specific stats about their performance in detecting threats beyond their competitors. So yes, that's core. It's core to the point.

We have a question in the Q&A on the capitalized development cost, how much development spend is capitalized versus expensed? And what would free cash flow look like if you treated some development as recurring maintenance? It's about 45% of our engineering spend that gets capitalized, but it all was included in free cash flow. So it doesn't matter if we change that mix. So free cash flow includes the capitalized salaries as well. So there's no impact there. I think there's no more hands raised. There is one other question in the Q&A, Tim, for you. Have you spoken to Qoria's largest shareholders on whether they intend to vote in favor of the deal?

Yes. Look, we're engaged with all of our largest holders. They're all indicating positivity, let's say, to the deal, and we're hoping in the lead up to the vote that we can get clearer and more public indications of their support. But at this stage, it's all -- I feel very confident and I feel, in fact, really, really grateful for our top 3 or 4 institutional investors for the support they've given to this deal and what we're trying to achieve as a business. So yes, I'm feeling today really comfortable.

That's all the questions, Tim. So if you want to wrap up.

Yes. Great. Look, thanks, everybody, for attending, for your interest for backing this story. As you see in this presentation, we're really set up. We've moved now from a start-up cash burning business into a business that's profitable cash generating, growing well. We really understand our markets. We're performing better, I think, than all of our competitors in these markets, never been set up for more success. And we're about to join forces with an innovator, a leader in the digital safety, digital security space. It's really exciting time. So looking forward to speaking to investors in March when we get to -- sorry, in April, we deliver the March quarter. And obviously, all eyes are going to be on Crispin and his big pipeline into that June quarter. So looking forward to seeing you there.

Thanks, everyone.