ReadyTech Holdings Limited (RDY) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the ReadyTech Holdings Limited FY '24 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Marc Washbourne, Co-Founder and CEO. Please go ahead.

Thank you, and good morning, everyone. I appreciate you taking the time to join our FY '24 results call. I'm Marc Washbourne, CEO of ReadyTech. I'm joined here today by Nimesh Shah, ReadyTech's CFO. And in today's call, we are pleased to provide you with highlights from our FY '24 results as well as an update on our growth plans and progress on our enterprise strategy. That includes recent success in the higher education market as well as an update on our progress in driving operating leverage across the business. Moving to Slide 2. ReadyTech is a vertical SaaS growth company, providing next-generation mission-critical software that closely meets customer needs across human-led verticals. We focus on 3 segments which are currently undergoing digital and cloud transformation, Education & Work Pathways, Workforce Solutions and Government & Justice, and it's that transformation that is driving our core growth. Our aim is to be a trusted partner to our customers and deliver both innovation and a superior experience for the ultimate beneficiaries of our software, students, job seekers, employees and citizens. On Slide 3, you will see that ReadyTech continues to deliver a combination of robust revenue growth and solid cash margins. I'm pleased to report that recurring SaaS revenue, which consists of subscription and license revenue, increased 13.1% on the prior period and now represents nearly 84% of total revenue. Despite some expected enterprise contracts shifting close dates to FY '25, as previously flagged, we achieved double-digit revenue growth in FY '24 with total revenue growing 10.2% on the prior corresponding period. Over the year, we signed another 22 enterprise contracts across all 3 verticals, representing $12.5 million in deal value. These higher-value enterprise wins increased the average revenue per new customer to over $119,000, representing a 25% increase on the prior period. Higher value contracts, coupled with a focus on strong operating leverage, resulted in underlying EBITDA of $38.8 million, which represents an annual growth rate of 11.5% and a margin of 34.1%, while cash EBITDA grew a very healthy 20.2% year-on-year. In the period, we also saw strong operating cash flow conversion of 103.7%, up from 95.4% in the year prior. Slide 4 shows the broad range and high quality of enterprise contracts we acquired in the financial year. These included our largest workforce solutions customer to date, Seeka, a major contract upgrade with His Majesty's Courts and Tribunal Service in the U.K., a new contract win with the Department of Justice in WA and several local government ERP wins to name a few. In the last month of the year, we also signed a multi-year contract with Avondale University, our first university-wide student management system, customer win, coupled with other wins such as University of Adelaide's Pathways Institute, We are particularly excited about unlocking a new and large opportunity in the higher education sector. I'll discuss this in more detail later in this presentation. Throughout the year, we've continued to demonstrate our ability to displace incumbent enterprise players through breakthrough wins across our verticals. We are now better positioned than ever to leverage the large market opportunities and to continue to grow our share in the enterprise arena of the markets we serve. Our strong track record of wins and customer success in our platforms has opened new and large serviceable markets and attracted new opportunities with the enterprise pipeline now expanded to $31.8 million. Moving to Slide 5. As the chart on this slide shows, clearly, we have grown our recurring subscription revenue consistently at a 3-year CAGR of 23%. This is driven by the success of our enterprise strategy, our ability to differentiate from the incumbent players and to ultimately win and deliver high-value contracts. I will now hand over to our CFO, Nimesh Shah, who, although is a little unwell today, will take you through ReadyTech's financial performance. Thanks, Nimesh.

Thanks, Marc, and good morning, everyone. Let's turn to Slide 7. On Slide 7, as Marc mentioned earlier, ReadyTech delivered another year of revenue growth and improved cash margins in FY '24. Underlying EBITDA, which includes the impact of LTIP and nonrecurring costs, increased 11.5% to $38.8 million, delivering a strong margin of 34.1%, equally important, underlying cash EBITDA margin improved by 150 basis points to 17.8%. Total revenue increased 10.2% to $113.8 million, driven by high-value customer wins and growth in net revenue retention of 104%. Strong net revenue retention reflects the progress we have made with upgrading things like IT Vision customers to cloud as well as success in upselling products to existing customer base. Subscription revenue grew at 13.1% on a PCP basis and now represents 84% of total revenue. Expenses for the full fiscal year were $75 million and grew at 9.6% year-on-year. Importantly, there was flat half-and-half, which reflects our commitment to invest in our platform while increasing operating leverage and also ensure that we are at the forefront of technology, and we continue to invest in sales and marketing to drive further pipeline growth. Moving to Slide 8 and on the balance sheet and cash flow. As at 30 June 2024, the company had $29.9 million cash available for use, including $21.9 million cash and equivalents and $8 million of headroom in the $50 million debt facility. The company remains conservatively geared with a net leverage ratio of 0.5x. The company generated $40.3 million in underlying operating cash flow, reflecting continued growth in subscription revenue, customer pre-payments and strong conversion rate of 104%. Turning to Slide 9, which gives you a segment view of ReadyTech for the full FY '24 performance. Education and Work Pathways delivered a 12.5% revenue growth driven by new customer wins, TAFE cloud upgrades and upsell of our learning management systems. EBITDA margin continued to improve, underpinned by high-value enterprise contracts. Workforce Solutions grew revenue by 7.6%, driven by new contract wins and successful software upgrades. EBITDA margin was lower than last year due to one-time planned investment in on-boarding and R&D staff. And lastly, Government & Justice revenue grew nearly 10% on prior year, driven by customer wins and upgrades and segment EBITDA for Government & Justice continues to improve now nearly 30%. I will now hand over back to Marc.

Thank you, Nimesh. In the next few slides, I'll walk through our strategy, our growth drivers and outlook in more detail. Turning to Slide 11. Our growth strategy is reflected in 4 coherent pillars. First of all, in terms of our dominant growth strategy, we continue to target large enterprise customers, having now been successful in winning multiple, those all important breakthrough customers across all our verticals. The second pillar of the strategy captures the power of our install base as a growth lever, bringing value across our customer ecosystems and supporting transition to cloud to accelerate growth in net revenue retention. Third, and importantly, we continue to invest in R&D and innovation to aim for perfect product fit in our markets, and that includes this year investment in AI to unlock new value for customers. Lastly, as evidenced in FY '24, we continue to target operating leverage by the benefits of scalable SaaS revenue and other efficiency gains in order to grow margins over time. Moving to Slide 12 and the why of our enterprise strategy. First off, with a growing list of reference clients across our key verticals, ReadyTech is in a strong position to win large enterprise contracts in key sectors. An example of this is our success within education, where success with TAFEs has enabled expansion into higher ed and our first breakthrough university win. Number 2, we have a significant opportunity across the enterprise landscape to replace legacy systems as digital transformation and cloud adoption across our target market gains more traction. Next, we have a unique value proposition with our open ecosystem approach, which gives us a competitive advantage in the market. And finally, ReadyTech can deliver improved margins through enterprise wins via the benefits of large SaaS contracts and scale. I'll now talk you through our growing opportunity within education, and we're turning to Slide 13. With the proven TAFE platform and enlarged credibility, we are well positioned to capitalize on the large opportunity with TAFE. We are confident that despite some delays in the prior period in FY '25 many TAFEs have the readiness to replace their legacy systems. We've had several major wins in this space, including Bendigo TAFE and Kangan Institute, Chisolm and Melbourne Polytechnic, which serves as both case studies of benefits derived from the ReadyTech platform and as reference customers for our pipeline. On to Slide 14, in addition to TAFE, ReadyTech's breakthrough university win with Avondale University and the expansion of our higher ed customers and capability opens a large serviceable market for ReadyTech. And this is a market right and ready for change with legacy systems needing a generational upgrade and a strong need for a modernized and elevated student experience. As with TAFE, the pathway is clear to become a major and trusted enterprise player in higher education with a market size of an estimated $240 million now available to us through this break-through half year. On to Slide 15 and another key enterprise market opportunity for ReadyTech in local government, we are well positioned to execute on the major market-wide cloud enterprise opportunity. Here, we have the benefit of a large serviceable market, existing relationships with 51% of the 530 councils, Australia wide and growing momentum across the cloud upgrade opportunity within the IT Vision customer base of 170 clients. Our Ready Community cloud product, which puts the citizen at the heart of the experience is resonating strongly with both our existing customers as well as increasing traction in the wider market via notable new ERP wins. To optimize our success in this important market, in FY '24 we have invested in our local government capability across key senior roles and continue to leverage our partnerships with leading ERP and technology providers as well as the key implementers in the space such as Atturra. Slide 16 provides a snapshot of our enterprise wins over the last 2 years. These logos demonstrate the broad range of organizations who are not just now ReadyTech customers, but also serve as valuable references with similar opportunities across the pipeline and across our wider markets. The chart on the left shows a steady increase in the average revenue per new customer over the last 3 years, which now stands at $119,000. Slide 17 depicts one of the key reasons we are winning in enterprise. ReadyTech provides our customers a unique value proposition with our open ecosystem architecture and approach. Being open and connected means greater choice, flexibility and inter-operability compared to legacy systems and the platform monoliths. This approach also means we can play well with the horizontal big tech players who are committed to investing in our markets in areas like CRM and finance, and this is serving as a major advantage for ReadyTech. To further extend the advantage, we can also leverage specialist vertical partners who act as a valuable referral network and bring deeper innovation to our customers. Slide 18 provides more detail on unlocking the value in our large customer install base, one of the other pillars of our growth strategy. We are actively pursuing continued growth in net revenue retention by ensuring our customers are satisfied and highly engaged, minimizing any customer churn while also driving an increased share of wallet by adding value and up-selling and cross-selling new solutions. In the medium to longer term, we aim for a net revenue retention rate of more than 106%. One of the primary drivers here will be an acceleration of the migration of the remaining customer sets on to cloud, particularly in local government. The next 2 slides and connected to the install base strategy, go into more detail on how we leverage AI at ReadyTech. So turning to Slide 19. As a business, we are well positioned to benefit from the AI revolution. And we recognize the immense potential it presents in terms of the value exchange with our customers. In the coming year, we're investing in a dedicated emerging technology team who will unlock this value for our customers across every platform, delivering AI-enabled products that will increase productivity, automation and provide more focused task management for our customers. The first ReadyTech wide release of Ask AI in FY '25, a policy and process agent is expected to further increase customer engagement, put customers on the AI runway and unlock new revenue opportunities. Slide 20 provides details on the ways we are leveraging AI to drive operational efficiencies and open up new capacity within our team. In FY '25, we will see the increased use of AI in customer service at ReadyTech with agents acting as first line of support, co-pilots increasing software development velocity, as well as growing capacity across our quality assurance teams all providing potential to require lower corresponding increase in human resources as we scale and grow. This being strongly aligned to our strategy of driving operating leverage at ReadyTech. Slide 21 provides an overview on our outlook. In FY '25, we expect further enterprise wins and solid net revenue retention to deliver revenue growth accelerating to low to mid-double digits. We're targeting an EBITDA margin, which includes the impact of LTIP of 34% to 35% and a further cash EBITDA margin improvement of 100 basis points. Today, we also maintain our medium-term revenue target of $170 million for FY '27, and we expect cash EBITDA to exceed 20% in the medium term, as we continue to benefit from a growing recurring revenue base and operating leverage as we have outlined. Finally, on Slide 23 and the key takeouts from today's presentation. We are benefiting from significant momentum in the enterprise space, having delivered another 22 contracts in FY '24 and with a solid pipeline of over $31 million in new contract opportunities. The higher education market has now been unlocked. We are excited about this new expansion opportunity, significantly increasing our serviceable market and further strengthening our position within the broader education vertical. As outlined, we have introduced several initiatives that leverage AI to build capacity within our teams, supporting our strategy of continuing to increase operating leverage and grow cash margins to greater than 20% in the medium term. And lastly, I'm very confident that our open ecosystem, alongside our innovation and AI agenda, will continue to resonate with enterprise customers across our core markets. And that our strategy will deliver continued and sustainable revenue growth coupled with incremental year-on-year margin improvements. I'll now pause and I'm very happy to take any questions.

[Operator Instructions] Your first question today comes from Chris Gawler at Goldman Sachs.

Just a few questions for me. Firstly, on that pushout of timing from deals from FY '24 into FY '25 that you flagged back in Feb and you flagged again today. Do you mind giving us a sense of whether any of those have landed so far in FY '25? And how important those deals landing are to being able to accelerate revenue growth to your '25 guidance?

To answer the question, Chris. So I think we would have flagged that there were 4 enterprise opportunities that slipped from FY '22...

'24.

'24, sorry, to FY '25, apologies. The key reason for that really was deferrals of procurement processes for one reason or another. Pre-dominantly, they were based around budgetary decisions. I think that the reason that we remain confident on or all those opportunities is that they are replacing legacy technology that is causing issues, some of them very major issues. So they have to procure new software. They all remained open alive as we've previously reported. I think since we last updated, one of those have since closed, and that was the university opportunity that we have announced. Another of those opportunities, we are confident closes in the next couple of months with very high-quality revenue. And the other 2 remain live opportunities with close dates during the financial year. So when you put those together, as well as the wider enterprise pipeline, that's what has given us the confidence in the accelerating revenue growth and the guidance that we've been able to provide today.

Then just a couple on the medium-term guidance. Just notice for FY '27, it used to be greater than $170 million. Now it's $170 million. Is there any change to your medium-term thinking? Or is it more a factor of where we are now in FY '24 growing at 10% on '23 and just make that a little bit harder to get to?

Yes. If you look at the $170 million, we did 10% in '24. to get to 27%, that means we will have to you know, low to double digits this year and do 14% and 15% for the next couple of years, which is around the mid-teens growth. We are very comfortable getting that. We've got a good pipeline as we have said, $31.5 million. We've mentioned a number of good logos that are on the page of $12.5 million value of 22 clients. So the pipeline is good. Your earlier point is, as Marc mentioned, that those that slip will come in '25, plus we've got some new ones coming through in local government, justice and education. So we're very comfortable with the medium-term guidance.

Then on the change to the medium-term margin guidance before you're saying it would be high 30s, pre-LTIP EBITDA. Now you've moved to cash EBITDA. Is your thinking still the same with the pre-LTIP EBITDA or any sort of things you call out there?

Yes, look, we say greater than 20% cash margin. And look, it's really important that - as market we've said for a long time that our monthly side is all about cash margins. You know, where prior use of EBITDA so greater than 20%. It's very similar to what we have said in the past. We retained that and, you know, we want to grow those margins. We grew 100 bps in '24 -- 150 bps, basis points in '24. We have 800 bps in '25, we'll continue to grow that to be or greater than 20% by '27.

Then one last question on the Workforce Solutions business. A little bit of a drag on the group at the moment in terms of both growth and margins. What's the outlook for that business in '25? Is it sort of under-performing compared to your expectations? Would you consider any strategic options for that business?

I think the key reason, again, was some deferrals of procurement processes. I think that, that probably reflects somewhat of uncertainty in the overall economy was certainly how we read that. I think that one thing worth noting in that business is that it does have a managed services component. Although it's predominantly software, the managed services component does grow a slower rate than the software, but we certainly expect the pipeline that we see, some of the opportunities that we're working on and a really, I think, a deeper strategy into the verticals that we focus on. I'm sure you know we work in the stand up economy, areas like agriculture, hotels, where we play transport and logistics. As we go deeper into those verticals, we remain confident in the medium and long-term prospects for Workforce Solutions.

Yes. Chris, I'm just going to say, if you look at the Workforce software part, that was just shy of 10%. So as Marc mentioned, the managed services growth, which is mainly predominantly for client retention, the software part is still growing faster than [ internal ] segment.

Your next question comes from Cameron Halkett at Wilsons Advisory.

Just 2 quick ones. I'm just trying to understand the margin or potential margin expansion in the forthcoming year. So your guidance is either calling it either largely flat year-on-year or just under 1 percentage point higher. So just looking to understand the operating leverage, IT Vision scaling quite well, so it's reducing its dilution on the overall group margin. You also had strong hiring in the first half of FY '24. So just kind of wondering on the reinvestment requirements for this forthcoming year.

Yes. Look, Cam, if you look at our cost picture, we are actually doing quite well. The first half operational cost of $37.5 million, and we maintain that in the second half. Our labor capitalization in the past was more towards product market fit. We've actually maintained that, the capitalization amount is going around 3% on absolute values. So we expect the cost to hold and then operating leverage is coming through, integration of IT Vision and growing the cloud upgrades, growing the net revenue retention from 103% to 104% and grow to 106%. That's very high accretive margin growth there. So all that will add to growing our cash margins.

If I just come back to, I guess, a follow-on from what Chris mentioned around the medium-term targets for revenue. If you've done 10% growth in the top line this year, a slight pickup next year in the guidance, it implies you need about 15% for '26 and '27 to get to about $170 million. So what's some of the key initiatives that reignites that growth rate? Is it the NRR getting to 106%? What are some of those things that give you confidence that you can get there?

Yes. I think, first of all, that you touched on it, I think one of the key elements is the net revenue retention. It was 103% in FY '23. We've just done 104% this year. It's growing and accelerating. We're seeing that continue to grow. As we said, we target 106% plus. First of all, that comes from continuing [indiscernible] opening up the ecosystem of customers and adding new value. There's an element here, which is that as the new AI solutions and AI products are made available and delivered to customers. That's going to provide incremental revenue opportunities across the customer set. We have one of those being released in the first half, which is called Ask AI, as we mentioned, which we're confident will have strong uptake across the customer set. And then, of course, we have the cloud upgrade opportunities predominantly driven by local government. We feel that, that will accelerate in the coming years and helps with that net revenue retention. And obviously, on top of that, to get to the one month, the 15% mid-teens revenue growth is the continuation of the enterprise strategy. Of course, we feel we have a strong pipeline for FY '25, but there are also a number of opportunities that we flagged for FY '26 and beyond that are very large where we're well placed that also help us to get to that higher number.

Your next question comes from Wei Sim at Jefferies.

A few questions from me. The first one is just in terms of the labor cap guidance that we previously had given, are we sticking to that? I don't think I've seen the commentary this time around, but...

Yes. I'm absolutely sticking to that. I think we have said 14% to 15% for '24. We said in the past, and we have said medium term to 12% to 13% of revenue, right? We're sticking to that. If you do the numbers, to get the greater than 20% cash margins. I think we just want to make it clear again that month internally is all about cash margins. And it's stated that labor cap is a big component in that and those guidance remain, but will drive cash margins and through operating leverage.

Then just in terms of the accelerated amortization of acquired intent, like so the IT Vision thing, can you talk about how we should be thinking about, you know, that component going into FY '25, please?

Yes, sure. So it was a $2.2 million accelerated depreciation because we bought some of the assets that we integrated with Open Office. It's ahead of the plan. In fact, on that point, also the earnouts were paid ahead of time. So it came to around $11.2 million for '24. We expect that to reduce to around $10 million acquired next year, and then it's a step down the year after. It's more of a timing thing way. We just had to bring that forward because due to the integration between Open Office and IT Vision.

Then just the last one for me is just on Slide 16, when we talk about the enterprise customers, can you just give us a bit more flavor on what is the upside -- upsell opportunity into the enterprise customers? is it any different from the non-enterprise customers?

I think that generally part of the reason, I think we like the enterprise space so much is that the clients tend to be larger and they have larger technology budgets. I think at times you can find in SME that you get tapped out in terms of the technology budgets that may be available. So the majority of our products have a backbone system, which is often the core system of record, but have many additional modules. I think we've proven over the last few years that as we move into the enterprise space, we can land and expand with different opportunities. By way of example, we have in the local government space, most of our ERP customers will take the property and rating solution, but then we may be able to offer them things like planning and things like procurement has been a really key upsell opportunity. So yes, certainly, confident as we land more enterprise customers that will move share of the wallet up over time and grow revenue within those customers.

Your next question comes from Sinclair Currie at MA Moelis Australia.

Congratulations on the result. I guess just quickly want to understand, and apologies if this has been disclosed before, with IT Vision, I think on Slide 15, you speak to 3 to 4x uplift in ACV. Could you give us an idea of what the ARR impact is and essentially how you get to that ACV uplift overall?

Yes. So we acquired the IT Vision customer base. They have around roughly 170 clients. They are predominantly -- they are weighted towards Western Australia and South Australia. And these customers are on an older technology. So we really acquired this business for the customer set. These customers, many of them bought the software many, many years ago. They're on a maintenance contract. And as we offer them for these customers to move across to cloud, they're not only move to a cloud and an improved platform and a more modern platform, they also move to subscription for the first time. And when they do and they move through the different modules of that system and adopt the modules that are available, we see ACV grow 3 to 4x from an average of an ACV of around $60,000 to when we acquired the business to around $180,000 to $240,000 as they move across to subscription. In terms of progress there, we now have just over 25% of that customer base who have committed to the cloud journey. They tend to move through that in modules. There's 5 modules altogether. We're moving through that well, and we have a very significant pipeline of further upgrades to come. It's a multi-year process to move through that transition and also increase that ARR. But obviously, for us, I feel very good about the very strong value that's trapped in that customer base within IT Vision. I hope that answers the question.

Just one last question for me. I'm interested in the Avondale win, we will be interested to understand the next steps in terms of what that implementation and roll-out looks like, whether you're using an integration partner and how it sort of scales over time?

Yes. This is our first university win. We have one private higher education providers before, but this is a university. There's 42 universities across Australia, albeit this is at the smaller end of universities. This is a major breakthrough. Obviously, winning our first TAFE some years ago. It's harder to win as your first one. But look, we are predominantly running this onboarding exercise directly. There is minimal implementers in this space. And -- as we did for the first TAFEs, we do run a phased implementation. So rather than a big bang approach, we moved through multiple phases of the system so it helps to unlock value earlier, de-risks the implementation. It's around 18 months is the full onboarding process. And we're very confident we have the capacity and the capability to have a very successful project. A good win here from one of the incumbent players in the space and I think it unlocks many other opportunities in universities on the time also on this incumbent legacy software.

[Operator Instructions] Your next question comes from Claude Walker at A Rich Life.

I apologize if one's already asked it. I just had a question regarding the revenue growth outlook accelerating to low to middle double digits. I just wanted to, I guess, understand better what low to mid-double digits means? I guess the way I conceptualize that would be anywhere from, I guess maybe 15% to 40%. Is that kind of right? I mean is mid-double digits 50%, so low to mid is somewhere from 40% down to 10%?

Yes. Look, I think we've done a 10% growth. And in the past, we've said around mid-teens. So there's always a low to mid-double digits in our view. So we did 10%. We've in the past, we've done about 13%, 14% organic revenue growth. So we are between [indiscernible], that's where we are.

It's more low to mid-teens rather than double digits as -- you're not thinking of double digits. Is the range double digits, 10% to 20%? Or is double digits 10% to 99%?

It's more the former, and that's probably there, yes.

Your next question comes from Brendan Carrig at Macquarie.

Just one more from me, please. Just on the composition of the enterprise pipeline, are you able to just sort of flesh that out a little bit more and sort of separate out those 4 opportunities that you mentioned. So obviously, one of them is already landed being Avondale, so that sort of brings that 31.8% down closer to 30%, just above 30%. And so then yes, the remaining 3 opportunities, what proportion of the pipeline do they make up? And then from a segment perspective, where some of that pipeline is spread across?

Yes. Thanks. Worth noting that Avondale was closed before the pipeline amount was updated. So that's post the signing of the Avondale contract of 31.8%. So give you a bit of color on that pipeline. You've got roughly 45% of the pipeline is in Education & Work Pathways; 40% Government & Justice; around 15% in Workforce Solutions. What makes that up is first year subscription and first year implementation. And of that, around 55% would be services revenue and 45% would be subscription. A lot of high-conviction opportunities in that pipeline. I probably wouldn't want to put an absolute number on how much of that is within those opportunities that got shifted. But certainly, a number of high conviction opportunities. I think it's the conviction in those that really underpins this confidence in the acceleration of revenue growth that we anticipate for the year ahead.

And just to clarify when we mentioned this pipeline, it's first year subs and services, not total contract values. So when Marc mentions 55% services and 45% is subs, it's only the first year subs, annualized subs.

Understood. And then one more for me. Just maybe sort of a follow-on from Sinclair's question. Just as those customers are converting over to the cloud. Some of your competitors in the industry, I guess, had somewhat, I guess, forceful tactics of migrations of their clients from on-prem into the cloud and whatnot. So just in terms of how those discussions go and how the delivery of that transition happens and the customer satisfaction during that process?

Yes. That's a really great question, well-informed question. I think that, first of all, we try to do this in a very customer-centric way. I think from a customer culture perspective, we think it's important that the customers are moved to the cloud when they're ready and not forced to. So I think that, first of all, I would say there's very strong demand for the cloud-based system. I'm sure you can imagine some of the more legacy technology is somewhat limiting and certainly have some limitations in the ability to, for example, offer things like self-service to citizens in the local community space. So the demand is very strong. I think that as we have stepped through the first numbers of implementations, many of the customer base who act as the community themselves and certainly self-reference and talk and discuss sort of look for evidence and case studies that the implementations have gone well. I think that's certainly the case. I think that's why we expect to see an acceleration over the next couple of years across that. There may be a time further down the track where we may pursue the upgrade opportunity a little more aggressively, particularly as you get to the back end or the tail of those customers. But at this stage, we're very happy to be more customer-led in that demand.

Thank you. That concludes our question-and-answer session for today. I'd like to hand back now to Marc Washbourne for closing remarks.

Yes. Thank you. Thanks, everyone, for joining today. We're certainly excited about the year ahead and certainly excited about continuing our growth journey. We look forward to meeting many of you on our upcoming road show and have a great rest of the day.

Thank you. That concludes our call for today. Thanks for participating. You may now disconnect your lines. Thank you.