EML Payments Limited (EML) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the EML Payments Limited Full Year 2025 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Anthony Hynes, Executive Chairman. Please go ahead.

Thank you, Darcy, and good morning, everyone. Welcome to the EML Payments Limited FY '25 Results Telecall. I'm Anthony Hynes, Executive Chairman. It's great to be here with James Georgeson, our CFO, to report our results for FY '25 and provide an update on EML 2.0 progress. Following our presentation, we'll open the call to questions. I refer you to the ASX announcements, which I'm told were just logged issued by EML Payments moments ago, which formed the basis for this call. Darcy, we can -- let's kick off and move to Slide 4. It's been a busy 12 months at EML as we laid the foundations for EML 2.0, the transformation strategy that we presented to shareholders and the investment community in November 2024. It's been a year of progress, and we are working at a high velocity to build a winning culture. And a big part of cultivating that is celebrating important wins along the journey. I want to share some of those with you before covering our normal financial and EML 2.0 progress updates. During the second half of the year, we installed a world-class global leadership team covering both our executive and key senior management. The complex body of work ahead of us now has an experienced, capable and highly collegiate team moving through our transformation agenda at pace. We've delivered an underlying EBITDA guidance towards the top of the range, notwithstanding the freshness of the team and the transformation heavy phase we are in. Our strategy is in large part directed towards doing more with the core, a significant group of clients who are hungry for innovation and a true partnership with EML. In that context, it's been a strong year of customer renewals with 8 of our top 30 renewing, including 2 of our top 5. Our new business and commercial teams have been rebuilt and expanded. Whilst we're not yet at cruise speed, we are seeing the green shoots of both better relationship management and business development. It's great to see the team busy implementing new programs globally. We secured 28 new customers in FY '25 with most of the benefit to fall in FY '26 and beyond. To support our critical technology refresh, the Project Arlo team executed a global partnership agreement with Visa Pismo to provide back-end banking as a service and transaction processing componentry. I'll speak to Project Arlo in a little more detail shortly, but we're delighted to be partnering with the Visa Pismo team to deliver next-gen payments infrastructure with best-of-breed technology providers. Our finance teams also had a productive year with 2 noticeable achievements that provide meaningful support to both the P&L and the balance sheet. With our new partners at Citigroup, we've structured a yield lock-in program for upcoming maturing instruments that fixes bond yields at today's prices, providing income certainty through a forecast down cycle. This covers circa 45% of our float interest income. Our credit facilities have been expanded by $55 million and extended for a further 2 years, which improves the strength of our balance sheet and signals a new phase for EML more broadly. The Shine class action has also been provisionally settled with presentations at the court due in October. Collectively, these achievements speak to focused effort by passionate, capable people driving hard in our transformation agenda. We move to Slide 5 now, please. Financial performance for the period was in line with expectations. Revenue for the period was up 9% on PCP to $220.9 million with customer revenue, excluding slight interest income, up 3% to $157 million. We continue to see growth in our existing customers and are extremely focused on doing more with our existing customer base. We continue to benefit from our well-managed float with interest income tracking to target and the outlook on cash rates remains consistent with our projections. The combination of improved customer revenue and sound float management saw EBITDA increase to $58.6 million, up 13% on PCP. Profitability was impacted by nonrecurring items such as the provision for the class action settlement, Project Arlo costs and nonrecurring items falling to a statutory loss of $53 million. Our cash balance is $59.3 million with a net cash improvement of 46% on PCP. Moving to Slide 6 now, please. As I noted at the opening, 2025, particularly the second half has been a year of significant change. No corner of the business remains untouched by our 2.0 program. What will truly make EML a success is the transformational work presently underway, which will position us as a customer-focused ingenious and high-quality organization, delivering sustainable double-digit growth over the long term. Working through each pillar, I'll start with our global operating model and strengthening leadership. This is underpinned by a new model where functions are aligned to break silos and drive synergy and expertise. Our 2 executives, we've completely rebuilt the senior leadership team with people who know how to run regulated businesses and have deep expertise in our product set. Whilst only 9 months into a 3-year program, I'm pleased to report that the operating cadence, culture and capability of the business is profoundly better than it was 12 months ago. Moving to the revival of our revenue engine. Our new commercial team is also hitting its strides with client renewals and a building pipeline, which is on the right trajectory, up $29 million on the half to $66 million. Product development has started in earnest. As I flagged before, our focus here is on specific verticals, global travel, mobility and embedded e-commerce solutions. in the initial phase of development, and we'll share further details as plans solidify. It's fantastic to see dedicated joint executive innovation groups form part of 2 of our large customer renewals, which is something we hope to make a stable for our customer partnerships moving forward. Our commercial function improvements here reflect proper commercial leadership, expanded head count and new ways of working. And the final pillar, moving to a single platform for our technology environment. Since project initiation in January of this year, the team has largely been built out. We have contracted our key vendor partnership and our engineering sprints are in full swing. We will have our MVP deployed into the U.K. market by quarter end. Moving now to Slide 7. It's important to regularly stand back and contextualize the journey that EML was on, our ultimate destination and really test the program of work to assess whether it remains fit for purpose. We also have a good number of new shareholders and more considering an investment in EML. So I want to take the opportunity to frame our journey to ensure strong internal and external alignment. To use a sporting metaphor, this is a game of 2 halves. Following the Board refresh in '23, there was a program of work focused on a strategic review, solving regulatory remediation programs and general repairing of the balance sheet. This was a critical body of work, but during this phase, little, if anything, was done on the underlying operations of the business. Winding forward to the back half of FY '25, a different group of leaders was required to execute what ultimately will create a sustainable growth company and true shareholder value creation in EML 2.0. In simple terms, this is a wholesale refresh of structure, people, process and technology over the coming 3 years. It will naturally move in phases, and we'll move as fast as humanly possible, pivoting when necessary and adjusting our investment profile to realize gains as early as we can. As you can see from the chart, we've laid much of the foundation in 2025. Investors who spend time with me in either group sessions or one-on-ones will be familiar with my phrase, often we turn over rocks and find more rocks. In many corners of the business, we have a lot of tuning to do, but we're getting through it and progressing our growth agenda at the same time. And this is effectively our key risk, the organization's ability to digest the change program or in other words, to multitask effectively. It's something that the Board and the ELT are monitoring very closely. In summary, we've accomplished a lot in the past 8 months and have a lot to get through. I have every confidence in this team and our prospects of building a winning company in every sense. I'll now hand over to James to take you through the financial details.

Thank you, Anthony, and good morning, everyone. I'll walk through our financial results during the year and explain some of the key drivers before I hand back to Anthony to cover our full year '26 business priorities and outlook. I'll start on Slide 9, where we show our key performance metrics. As we reported at the half year, the numbers in the presentation exclude PCSIL and Sentenial balances as these businesses have both been classified as discontinuing operations in accordance with accounting standards. Therefore, where we refer to continuing operations, these numbers exclude the PCSIL and Sentenial businesses and comparatives have been restated accordingly. The reconciliation to the prior period reported numbers, including these 2 businesses is shown in the appendix to the presentation. On the financial results for the continuing operations, pleasingly, most metrics have improved on full year '24 and underlying EBITDA, our core preferred measure of performance is up 13% to $58.6 million. This result is at the upper end of our $54 million to $60 million guidance range. Underpinning the improvement was higher interest revenue, which was up 28% from a combination of higher bond yields, the flow-through of our treasury management activities and higher float balances. Customer revenue increased 3% at the group level, reflecting modest growth in new customer wins, which offset the impact of customer losses from prior years. Europe recorded 6% customer revenue growth, however, did benefit from $3 million of nonrecurring revenues in the first half of the year. The Australian North American outcomes were more subdued. Net overhead costs at the group level were up 8% on full year '24 to $107.6 million, reflecting investments in people to deliver the EML 2.0 strategy, higher bonus and CPI payments and higher irrecoverable VAT and GST. This was partly offset by cost efficiency savings, which have started to be realized. Pleasingly, second half costs were only $1 million higher than the first half costs. Our statutory loss after tax for the continuing operations is $53 million, which includes $37.4 million for the shareholder class action settlement. Cash increased 46% across the year, reflecting operating cash flows, partly offset by one-off and nonrecurring costs as well as the repayment of debt post the receipt of the Centennial sale proceeds. Revenue yield, gross profit margin and EBITDA margin all improved from the growth in interest revenue. Margins remained flat once the interest revenue and the $3 million one-off revenues are adjusted for. Moving to Slide 10, where we show results for Europe. Our European segment, which is our largest segment, comprises our operations in the U.K. and across the rest of Europe. We have just under 500 customers across our European segment. From a product perspective, we offer a range of payment solutions across the government, financial services and human capital management verticals with approximately 60% of the business being GPR and approximately 40% being gift and incentive products. GDV or gross debit volume was up 7% to $6.1 billion, reflecting a gradual return to growth now that prior restrictions on our U.K. business have been removed. Total revenue for the Europe segment was $128.6 million, reflecting an 18% increase over the prior year. This growth was underpinned by 6% uplift in customer revenue, principally in the government vertical as growth in the gift incentive products was a little more subdued and a 40% increase in interest revenue. The strong uplift in interest revenue reflects a combination of higher bond returns, the flow-through of our better treasury management and higher float balances. As I mentioned earlier, Europe benefited from $3 million of nonrecurring revenues in the first half. Net overhead costs in Europe were $57.7 million are up 2% on the prior period due to higher intercompany management fees as the global operating model is embedded. In-region costs were slightly lower year-on-year. Revenue margins and gross profit margins benefited from the higher interest revenue and the $3 million of nonrecurring revenue. The underlying customer margins remained broadly similar compared to 2024. On Slide 11, we show the performance of the Asia Pac segment. The Asia Pac segment comprises our Australian and New Zealand businesses, which are predominantly GPR product businesses, i.e., almost 80% of revenue currently, with a large presence in the human capital management vertical. We also offer a range of gift and incentive products in Australia. Across the Asia Pac segment, we have just under 200 customers in the region. This segment achieved modest growth from customer revenue, which is up 2% on full year '24. The 2% uplift reflects good growth in existing customers, offset by a client loss in full year '24, lower gaming revenues this year and slightly lower interest revenue. Existing customer revenue growth was 5% on PCP, adjusting for the client loss in 2024. Pleasingly, active benefit accounts within the human capital management vertical increased 6% across the year, which underpinned the growth in customer revenue. GDV was 7% lower, reflecting a change in the customer and product mix with the loss of a higher volume, lower-margin customer being replaced with a sizable client where we do not include their GDV in our reported metrics. Continuing clients GDV was up 7% once taking this dynamic into account. Gross profit margins were impacted by several one-off additional operational costs, largely shown in selling costs in the first half of this year. This totaled approximately about $1 million. Excluding these one-offs, the gross profit margin would have been approximately 67% and the EBITDA margin would have been approximately 26%, with both measures being slightly lower in full year '25. Overheads increased 7%, largely due to an uplift in intercompany management fees and higher regional employee costs. The higher regional employee costs reflect investments to drive improved sales and commercial outcomes. Turning to our North American segment shown on Slide 12. The North American segment comprises our U.S. and Canadian businesses, which operate predominantly in the retail gift and incentive vertical, which is approximately 75% of total revenue. These products are distributed through shopping malls and in corporate programs typically. In addition, the North American business operates in the financial services vertical, predominantly via our VANS product, which is a high velocity digitized expense payment offering. We also do target the gaming vertical in this region. Across our North American business, we have just under 500 customers currently. Underlying EBITDA for the North American business was $6 million lower in full year '25, reflecting subdued customer revenue growth and higher selling and overhead costs. The prior period did benefit from a $1.8 million doubtful debt provision release that did not repeat in 2025. More specifically, total revenue was down 3% on full year '24, reflecting lower breakage, which includes the impact of some assumption changes for lower assumed future breakage rates and soft incentive product performance, but this was partially offset by shopping mall growth. Interest revenue was slightly lower, reflecting lower U.S. interest rates as the Fed Reserve started to cut rates through the year. Net overheads increased 14% on full year '24, of which approximately 60% relates to a $1.8 million benefit in the prior period from the lower doubtful debt charges. The other increases in full year '25 relate to higher intercompany management fees and higher irrecoverable GST. GDV has grown strongly at 10%, which is predominantly due to our increased volume from our VANS product, which is a high-volume, low revenue yield product. As a result, you will have seen the total revenue yield was slightly lower period-on-period. Gross profit margin and underlying EBITDA are lower on prior periods, mainly reflecting the higher marketing spend in selling costs and higher overhead costs. We are addressing the reduction in customer revenue by revamping our go-to-market strategy to improve customer retention as part of the EML 2.0 strategy. We've already started to see some early customer wins from the team. Moving to Slide 13, where we show our overhead costs. Underlying overheads net of cost recoveries increased 8% versus the prior period. Pleasingly, though, second half costs were only $1 million higher than first half costs. This steadying of overheads is in line with our guidance at the AGM in November last year, where we stated that we are targeting a flat cost base across the next few years as we reshape the business by driving operational efficiencies as well as investing in additional sales and customer activities. Overhead costs are net of cost recoveries from the PCL business as accounting standards require the amounts to be grossed up, yet the costs are managed on a net basis operationally. The 8% or $7.7 million increase in net overhead costs reflects a few drivers. There's $3.5 million of investments in people, which reflect the refreshed executive team and associated supporting hires that Anth talked about earlier and our targeted investments to deepen the commercial team. There's $4.4 million growth in costs related to higher CPI-linked salary increases and higher performance incentive payments in this year. There's a $2 million impact from higher irrecoverable GST and VAT charges, reflecting a shift in the mix of the way we use the external and internal costs and part year prior catch-up. Pleasingly, this was offset by $5.9 million of efficiency savings in ICT costs and professional fees. The negative intercompany amount in the chart shows -- it reflects the impact of lower recharges to discontinued businesses, i.e., PCSIL and Sentenial post the exit of these businesses. Whilst intercompany charges eliminated at the group level, given the results on this slide are for the continuing business, they are shown grossed up. Driving operational efficiencies will continue across the next few periods as part of the EML 2.0 strategy. As previously guided, the cost of Project Arlo, a single platform technology solution are excluded from net overhead costs and underlying EBITDA. The costs incurred in full year '25 were $2.8 million. On Slide 14, we show an overview of our interest income and store flow balances. Interest income is a conscious and key source of revenue for EML. During the period, interest revenue increased by 28% to $63.9 million. This reflects the flow-through of our yield work, higher float and higher returns on investment -- on our reinvestment of our bond portfolio. Second half interest revenue was slightly lower at $31.1 million versus $32.8 million in the first half, which reflects the seasonally lower float balances and a part impact from Central Bank rate reductions, which have already been announced. Customer stored balances increased from $2.1 billion to $2.35 billion across the year. Most of the growth came from Europe, which benefited from a strong pound and euro versus the Aussie dollar. For full year '25, our annualized yield was 3.6% compared to only 2.9% in the prior year. As indicated earlier, we've started to see a softening in our earn yields following the recent central bank reductions, and our exit yield at June was 3.3%. We do expect interest rates to moderate further across full year '26 given rate reductions, which are expected from a number of central banks. However, given the weighting of float to GBP and AUD where the rate outlook is more stable and the size of our U.K. government bond investments in our European segment, the impact on interest revenue is likely to be somewhat tempered by these factors. In particular, our bond portfolio makes up 45% of the group's total interest earning float balance and is currently earning approximately 3.8% and has an average duration of 1.8 years at the 30th of June. As I mentioned, we are implementing a bond lock program to further extend the duration of the portfolio to approximately 3 years, maintaining that rate at 3.8%, meaning almost half the interest revenue will be locked in for the next 3 years. On Slide 15, we show the movements in our cash position. Overall cash increased by $16.2 million across the year, reflecting the sum of operating cash flows, partly offset by the one-off and nonrecurring costs and the repayment of debt post the receipt of the Sentenial sale proceeds. From an operating cash flow perspective, the underlying EBITDA of $58.6 million generated $16.7 million of net cash inflows across full year '25, and this is shown in the waterfall on the slide. Excluding the impact of class action and other one-off and nonrecurring costs, the underlying EBITDA cash generation was $42.2 million or 72% of underlying EBITDA. The 72% EBITDA to cash conversion rate is higher than our long-term average, given we had lower tax payments and lower capitalized costs in the period. The large timing adjustment of bond interest receivable at the half year reversed as expected in the second half. Overall, the strength of the balance sheet and now the net cash position has improved materially post the sale of Sentenial and a number of other initiatives. The $39.2 million of net investing cash inflows primarily reflects the net cash received from the sale of Centennial, less the associated disposal costs and cash exited on deconsolidation. These proceeds were used to pay down $39.9 million of external liabilities, including the second tranche of the PFS vendor loan notes. The result of improvement to a net cash position of $5 million from a net debt position of $48 million across the year shows the extent of the balance sheet improvement. As Anth referred earlier, pleasingly, post balance date, we've increased and extended our borrowing facilities by adding an additional $55 million of capacity and increasing the tenor on our revolving facility by a further 2 years. These changes allow us the flexibility and capacity to fund the EML 2.0 strategy as well as close out the final large legacy matters of the shareholder class action and the repayment of the PCSIL loan. Stepping back, the full year '24 results have improved across most metrics and reflect the further stabilizing of the business. The execution and completion of the actions to exit PCSIL and Sentenial and result in repayment of debt have improved the financial performance and the balance sheet of the business. Our underlying EBITDA was up 13%. Our cash generation is improving, and we've locked in more certainty for interest revenue into the future. I'll now pass back to Anth, so he can cover our full year '26 priorities and our outlook for the business.

Thanks, James. We can move to Slide 17. As we look to the year ahead, we're guiding to underlying EBITDA being in the range of $58 million to $63 million. This factors in an uplift in customer revenue growth, including new business, offset by historical client terminations and runoffs that were notified in '24 and weaker interest rate income. FY '26 will be a bridge year with almost all of our restructuring, commercial team build-out and internal toolkit deployments in this regard, think CRM and HR systems are completed. Project Arlo will naturally continue through to the present forecast to the end of FY '27. We expect to grow our pipeline to $90 million plus by December '25 and have a better sense of conversion dynamics as we progress. Our internal teams are advancing the establishment of a global operations center in Europe to optimize productivity, teamwork and our incremental cost base as we return to growth. Project Arlo will be in production in our European market and transition planning will be completed during the year. We will have at least one new product solution in market and validated several others that the team are presently assessing. Move to Slide 18, please. Given the many moving parts of EML, I want to remind our shareholders of the criticality of Project Arlo to our future efficiency, speed and growth aspirations over the medium term. This is our most important deliverable. We're moving from a world of 3 systems, 3 tech teams, a plethora of partners and all the complexity, duplication and cost this creates to a single global platform built for speed, consumption-based utilization, lower total cost of ownership and extensibility to support our growth agenda around new products and services. We'll also make our service teams magnitude more responsive and deliver high-quality insights to our customers. We will design, build and own the components that create value and underpin our competitive advantage, which is essentially the presentation, business logic and data layers of the platform. We will selectively partner with proven global providers for provision of commoditized high-volume componentry, which is where Pismo fits in. And our vendor selection process will be completed in H1 this financial year. The bulk of the work will be executed over calendar year '25 and '26 with transitions running into '27 as appropriate. Project Arlo will simplify our operations, digitize many of today's manual processes, move configuration into the hands of our product and implementation people rather than having to write code and allow for the global deployment of features and products simultaneously. It widens our addressable market with expanded feature sets and will help our customers grow faster and more effectively into the future. We will share updates on Project Arlo as the work program and planning advances in earnest this year. Before opening the floor to questions, I do want to take this opportunity to thank our hard-working team, our customers, our partners and, of course, our shareholders for their continued support of EML. Thanks for listening to our presentation this morning. We're happy now to take questions. Thank you, moderator.

[Operator Instructions] Your first question today comes from Jack Lynch from RBC Capital Markets.

Congratulations on the positive result. Just in terms of the second half, it looks like Europe GDV accelerated. We saw a pretty significant acceleration in Asia as well. North America a bit softer. Just keen to get any thoughts about the demand coming from these regions and the way to think about it heading into FY '26.

So Jack, let me have an answer to that one. So in the Australian vertical, we -- sorry, market, we do see a bit of seasonality in the second half of the year, given the FBT year is April, March, April. So we do see a lot of velocity of spend in that period. We also see a bit of float reduction off the back of that as well. So that will be the main thing driving Australia. There's obviously some new business start to come on as well. But I think the seasonality probably mainly underpins the Australian movement period-on-period. In Europe, it's actually probably the other way. Look, we've seen our government programs grow reasonably consistently across the period. We have brought on a couple of new clients in the second half that added to GDV, which has been strong. And we probably also benefit a little bit of currency benefit in the second half out of Europe given the strength of euro and GBP against the Aussie. But we definitely started to see some good new wins that An sort of called out that we started to see in the second half. That will probably more come through in '26 rather than '25.

Perfect. And maybe just one around the guidance. You've given the range of $58 million to $63 million, top end sort of being higher than the market. Just in terms of the overheads, they're looking flat. What are the big swing factors on the top line to sort of get to the bottom end or the top end of that range?

Look, I'm going to say it's the elements of the P&L being revenue and costs. I think we've -- for the first time, we're starting to see some growth at the top line in our numbers. So what achieves the top end of the revenue target is obviously winning the clients we think we've got in the pipeline and then onboarding them. Vice versa, if we don't win to the degree we do and/or onboarding is slower. So that's from the revenue perspective. The cost base is flat, but I think as we've said over the last 12 months or so, we are reinvesting in the business. So we are looking for efficiencies in our operational and technology and other areas and looking to reinvest in sales. So just the risk there is the speed of that churn in the cost base. We feel confident the plans we've got and the actions we've got are well underway even this early part of the year. So look, they're the key swings, Jack. Interest rates, as I just sort of said, we've got some good work we've done on the bond portfolio. So the interest rates for almost 50% are fairly immune to further central bank rates. But if there was a real collapse in interest rates for cash, that could obviously have an impact, although, again, not seeing that in all of the things that we look at as sort of indicators of the future.

Your next question comes from Liam Cummins from Petra Capital.

Yes, congratulations on the result and outlook. Maybe just to follow on from those questions. Just sort of thinking about that top line growth piece. Can you give us a sense of what the market growth rates are in sort of your main verticals and what you think it's going to take for you to get back to sort of at least match the market growth rate? Sort of I know that this whole EML 2.0 program is about sort of getting back to beating the market in terms of growth, and there will be a period to ramp up there, but maybe giving us a feel for what those growth rates are now and what it's going to take to at least match them to start with?

So Liam, let me take that one as well. So I think as we said at the November strategy release last year, the markets we play in are running at CAGRs of 10% to 12%, maybe even slightly higher than that percentage. We think we should be able to get back to that level of growth in our business. We've always said that will be multiyear. So I think that's -- by '28, we said we would have 10% to 12% revenue growth across those years. We know that in '26, it will be less than that given the team has sort of come on board and been refreshed, as Anth talked about in the presentation. We're starting to see some great early wins, but that takes some time both to build that team and then to onboard. So we will sort of see more growth in '26 -- back end of '26 and then into '27. So that's sort of our trajectory. We think we'll be able to get to that share of market. That should be the best -- the least we can do. Hopefully, that gives you sort of a feel. But yes, it will phase into that growth rate over the next couple of years for us.

Yes, makes complete sense. And maybe to sort of follow on from that, and maybe I'm being a bit too much of an analyst, but I know we're sort of targeting a pipe of circa $60 million for this time of year, and we're sort of sitting at $66 million. Is that sort of indicative that you may be running a little bit ahead of what you were thinking? Or is the opportunity a bit bigger? Or am I just sort of reading too far into it?

Liam, I just think of it as we're on track, mate. The -- we're still trying to work out a thematic in the conversion. We've actually had a bunch of things convert faster than we might have thought in this part of -- or the start of this year. But I wouldn't start thinking that that's going to shoot the lights out. We think of it as being on track, mate.

Yes. No, that's perfect. And then maybe last one before I jump in, it's probably -- I don't know if it's easy to answer or not, but just I know that this is a -- you mentioned that this is a bridge and there's a real focus on executing against Arlo. But can you give us a sense of maybe some of the bigger lumps that you need to get through and when they roughly fall through to the year to -- just to help us sort of keep focused on the important things for that transition?

In terms of Arlo, I think the next big hump, and to be honest, my job is to try and make it smooth. The next most important piece of work is to finalize the transition plan. So that -- and by that, I mean, at which point do we lift and shift customers off each of these platforms and how do we do that. And that's not something that we're in total control of. I'll give you an example in Australia, one of our larger customers is itself going through a transition. So we'll need to work really closely with them to figure out timing. So that's one hump to answer your question. The rest of it I'd say to you is, look, I've been in this seat for 8 months. I can't tell you the amount of nonsense that we've encountered and that we've had to clean up. We're not finished. There's more to go. But I do think that progressively and as aggressively as possible, we will complete this tidy up. And I don't really see humps or lumps in that. I just think it's a day by day, we just keep getting rid of the rocks and getting rid of the dead wood and as we keep doing that, we get clearer path ahead of us. And I can tell you, I'm looking forward to talking to everyone in February.

[Operator Instructions] Youur next question comes from Ross Barrows from Wilsons Advisory.

Just had 3 questions actually. First one is just on the breakage comment you made, you called out that you revisited some of those assumptions. Was that just the U.S. or the whole business? And maybe can you just elaborate on some of those assumption changes and any impacts from that?

Sure. So it was Canada this time that we adjusted -- we actually adjusted the U.S. ones last year and the full year '24. Look, we do a regular review of the experience we're seeing in the plans. We do use third-party actuarial consultants to model all of that in terms of our programs as well as market data. The adjustments were quite -- maybe $1 million, $1.5 million actually reflect that we're seeing a little bit more spend on cards later in their life, where we're typically sort of seeing most spend was done and completed by -- within 4 years. We think we need to push that out to 6 years based on industry and data and our data. So that's a small change there. We're not seeing any material overall additional spend on cards. It's just a little bit later, which means we recognize revenue a little later. So we had to sort of derecognize some revenue we'd accrued up to now. So that's the main change. So we've now done that both across Canada and the U.S. through the last sort of 18 months, Ross.

That's clear and helpful. Second one, just on customers. You just mentioned there was either one or a couple of customers that left the business. Just any color there, again, from region, segment or size?

Look, nothing other than what we've sort of said previously. The one I called out in Australia that sort of impacted the numbers was a sort of a fintech start-up client that was -- that sort of left us after the end of the first half of '24. That sort of is really the main one I called there. And look, there was a couple across the gifting business through the back end of '24 that we've called out over the last year or 2. But nothing material of note in the last 6 to 12 months. And we feel kind of confident on that perspective.