Xref Limited (XF1.AX) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Xref's results and strategy webinar. Thank you for joining us today. If you're not joining us right now and seeing a recording of this, then welcome to you as well. This will go live as a recording after this, this morning. My name is Lee-Martin Seymour. I'm the CEO and Founder of Xref. We're thrilled to have so many of our valued shareholders and partners with us today. Even some of our shareholders that are also employees are with us today. So welcome to you guys. Many of you have spent time with me. So I'm particularly excited to be able to pass the microphone to some of the members of our Board and executive team today to give a chance for you to hear from them directly. Now for those who are new to our community, a wealth of information is available for your review on our new revised investor hub, including today's presentation, the FY '25 investor presentation and previous financial reports, et cetera. What you can also find on there is a library of founder's takes. So on the new investor presentation, on certain slides where you see the button view investor -- founder take, you can click on that and go straight to the video, and you'll get a bit of a deeper insight into my thoughts around that content. We, therefore, will not be presenting the full presentation slide by slide today as we thought it would be really quite nice for you guys to meet our panelists. So without further ado, I'd like to be -- I'd like to introduce our panelists today, our Board members and execs from our leadership team. Tom Stianos joins us as our Non-Exec Chairman; Jake Phillpot, Non-Exec Director; Sharon Blesson, our Chief Technology Officer; and Avi Lewis, our Chief Financial Officer. Today's session will be an interactive discussion covering all of our recent performance, our strategic direction, a little bit of outlook. The presentation speaks to our investor presentation and our -- the highlights from our recent annual report. So to sort of start us off, our platform, the Xref platform now enables clients to perform several key jobs, mission-critical jobs, reference checks, background checks via Trust Marketplace, pulse surveys, engagement surveys, exit surveys and the creation of talent pools. This is all a unified effort to help organizations build better workplaces, and we'll discuss all assets of that at a high level today. Please take time if you haven't already to get through that investor presentation and have a look at those founder's takes because it does walk you through our very clear clearly defined strategy for future growth. And if we do not answer one of your questions today and you cannot find your answer on all of the content on the investor hub, then I ask you to reach out to me directly, and we can have a one-on-one. Now we have an agenda prepared to guide our conversation this morning. We've also allocated time at the end for any questions. [Operator Instructions] To kick things off, I'd like to hand over to Tom Stianos, our Chairman, for his perspective. And some of the questions that I'm interested in, Tom, to kick us off this morning, I'll give you 3, and I'm sure you'll cover this within yours. But what were the most significant operational highlights from the past period, particularly our positive operating cash flow and reduced costs? How do these results align with Xref's long-term strategic vision, especially given the outcome of the proposed acquisition by SEEK and ultimately, failed vote in February of this year? And can you discuss the company's capital allocation strategically moving forward, including the recent placement we did of $3.6 million? I'll hand it over to Tom. Thank you for joining us this morning.

Thank you, Lee. It's certainly been an eventful year for us and our shareholders. In February, as you know, SEEK made a takeover offer via a scheme of arrangement. And as it represented a 61% premium to the prevailing share price at the time, the Board felt obliged to put it to shareholders. And indeed, many shareholders supported the offer but not enough to get it over the line. So subsequently, we secured a $3.6 million placement from a strategic partner, which strengthened our balance sheet and allowed the business to progress its growth plans. And that's turned out to be quite successful. The Board is pleased. The business achieved a $5 million turnaround in EBITDA, moving from a loss last year to a positive $2.5 million, and this was largely enabled by an 8% reduction in expenses, which has led to a positive operating cash flow. Most importantly, for me, our revenue is now largely subscription-based, which we always intended to do and has outperformed the rate of credit usage in past years. On the operational front, a highlight for me was that the company has streamlined its operations to a single technology platform and a single product brand. This has the effect of simultaneously simplifying the Xref technology platform and reducing overheads while allowing the company to exploit growth as the market improves. And regarding that last question, Lee, about our planned debt reduction, our debt facility is now no longer based on interest-only payments, so with each payment, there is also a progressive reduction in our principal. The Board has resolved not to pursue any additional capital raising for the purpose of retiring debt at least, preferring as far as possible to pay down debt from operational cash flow. This avoids equity dilution, and if profits continue to improve as we hope, we will explore the possibility of replacing the remaining facility and with the lower interest debt. The other important thing to note, not so much on operations and finances, that we did add 2 new directors in Jon Newbery and Jake Phillpot. They are already making an excellent contribution to Xref, and I'm certainly delighted to have their contribution to the Board. You'll hear from Jake shortly. Unfortunately, Jon is in England, so we thought not to wake him at 2 a.m. We also welcome new substantial shareholders in [ Vocus Capital ], Richmond Hill, then, of course, Tanda who made a strategic placement. So with that further ado, I think I'll hand over to Jake or back to you first, Lee.

Thank you, Tom. Now -- that was very good. Now a key part of our strategy at Xref is our ability to scale effectively a very exciting prospect for the whole team here at Xref. Jake Phillpot, our Non-Exec Director, has a deep understanding of these market dynamics and has already impacted life at Xref. So thank you to you. Can you share your thoughts on Xref's scalability, our ability to capture these market opportunities? And a couple of things that I would like to ask you, Jake. So how are we positioned for scale and especially with the fact that we are feeling like we're entering a growth market, especially with our new subscription model? What are the key drivers of our user and our client growth especially with the launch of our self-sign-up process? And how then do you think we maintain operational efficiency as we expand the business? Over to you, Jake.

Well, good day, everyone. Thanks, Lee for the introduction. I'm going to jump into some of the numbers and answer some of those questions later. Before I do that, I just want to quickly introduce myself and my background for everyone on the call that hasn't met me or heard of me before. So my background is that I'm one of the founders and the CEO of Tanda. Tanda is a HR SaaS company. We're based in Brisbane, but we have a global presence. We've got offices in Chicago, offices in London and are present in about half a dozen other countries. I started Tanda 13 years ago, so I've been doing this for a while now. I originally got interested in Xref as a shareholder like slightly over a year ago, and I joined the Board after the most recent capital raising. Xref and Tanda have a lot of similarities, in particular, the customer contract values of the same size. So we have similar unit economics in the way that we go to market. I would say that my expertise is in HR SaaS go to market. And Tanda was about Xref's size just a few years ago. So I'm hoping that my experience in taking a SaaS company, an HR SaaS company from about $20 million revenue to a lot more at Tanda will be partly relevant to Xref over the coming years. So that's a bit about me. Hopefully, I can add a lot of value, but I want to talk about some of the results. So I'm just going to talk about 3 things that I'm really excited about at Xref. So the first thing is the transition to ARR. We already spoke about this a little bit, but this is what got me interested in Xref at the first place, so I really want to highlight it. Last year, the MRR number grew 29% to $19.3 million. That's with total revenue growing by 7% to $21.3 million. But I cannot like sort of overstate this enough that the amount of effort and the lift that the team has put in moving from a consumption model to a subscription model has been enormous. We can see the positive results in the numbers here. But everyone just wants to think about it for a moment, the amount of effort that's gone into that and how hard the team has been working and how focused the sales team in particular has been on that over the last couple of years. Most of that's now behind us. So it allows us to refocus on this opportunity we have in front of us to hopefully grow revenue, which brings me to second point. Now that transition's behind us, it's about the focus on new business. We have more time now to focus on getting new customers in the door. And I'm really excited about some of the work Lee and the team have been doing, focusing on getting new leads into the pipeline and turning it into a funnel. So I think the funnel is really exciting, and it's the right way to do it, which is that we have self-sign-on. So anyone who is interested in Xref can come to the website. They can sign up for a trial. They can have a look themselves. There's a team focused on engaging those leads, getting them into experienced account executives who can now close those leads. I think as you get those parts of the funnel working, there's lots of room for optimization and growth. But this is exciting because we have a lot more capacity and effort to work on it now. We have a business that's mostly driven by MRR. And then that brings me to the third point, which is the platform transition, what we call the new -- the employer intelligence platform. So I've done this before, and I can testify it is exceptionally hard to get to $19.3 million ARR, but once you're there, you have a flywheel from which you can expand your product offering, which is exactly what we're doing with the employer intelligence platform. Adding new features should both help us appeal to new customers and broaden the market that we can sell to, but also, this is really key. It will help with retention. As we add more features, more people will want to stay. It will just improve all the metrics of the business across the board. I think we're in a great position to be doing this. Xref has great market share because we got there early, and the market share is also highly diversified. So I just want to highlight that Xref's top 20 customers are only 5% of the revenue. And you can sort of see some early wins here. So 40 of our 600 clients are using this new employer intelligence platform, but there's lots of room to grow. And I want to conclude all that by touching on that point that Lee asked about, which is how we keep efficient as we scale. As you look at all these results and all these sorts of things that are going on and the things we touch about today, looks like we're very busy, which we certainly are and we have been, but it can be a little bit deceptive because what this -- all this is really resulting in is the business is getting a lot simpler. So you think about it. We're going to have one platform, which you can sell what one contract, with one sales team on one code base. And you get the whole flywheel and the whole motion going. I think once we get -- as we get all this working, the business is going to get a lot simpler. It's going to be easier to sell and scale the product going forward. Back to you, Lee.

A couple of times there, you mentioned flywheel. I think we'll just -- we'll take that, and we'll keep using it through the year. So thanks ever so much, Jake. I think that was brilliant, nice and succinct in 3 key points, and I think we'll -- might take your snippet and list those 3 points and put it on as a separate video because I think it told the whole story. So thanks ever so much. Let me just get down to my notes here. So our future -- as a nice onward from what Jake was saying, our future is intrinsically linked to our technology. So I'd like to introduce you to Sharon Blesson, who has led our technology at Xref for a very long time. I think we're nearly 10 years, Sharon, yes?

We're nearly 10 years.

Sharon is our CTO. Sharon leads our whole technology business, including development, testing, project management, DevOps and data -- and our data science team. And so Sharon has a direct hand in shaping our technology future. And so I've got 3 questions for you, Sharon. Hopefully, you can walk us through, and there's an awful lot to unpack in even down to the technology that we've recently delivered. So what technologies or features have we recently released, such as talent pools and AI summaries? What does the product road map look like for the next 12 or 24 months, particularly with the transition to a single platform and what that means? And how does Xref plan to use or is using AI and machine learning to enhance not just the user experience on the Xref platform but also internally to make sure that we're shipping code and far more efficient in the way that we bring things to market? Thanks for joining us this morning, Sharon. Over to you.

Thanks, Lee. Thanks for the questions. Okay. So some big questions there. So we'll start with product innovation. At Xref, we've successfully launched, as Lee just spoke to, talent pool tools and AI summaries. We've also launched a new permissioning products and sign-on for all new customers. We're seeing a significant reduction in our infrastructure costs due to our One Platform strategy, which involves consolidating all of our technology assets. This approach also is reducing our subscription costs as we thin out the number of third-party platforms the business uses. The company is implementing, as Jake spoke to, a One Platform strategy to integrate all of our technology into a single unified platform. We're also focused One Record strategy, creating a continuous profile for our users -- sorry, individuals from candidates to employee to ex-employees. Our new AI products don't just benefit our users. They also make our internal development processes faster and more efficient, allowing us as a team to ship high-quality code and new features much quicker than before. We've strategically leveraged our offshore development team in Lahore. This has been a key factor in our team's ability to deliver new products at a lower cost, increasing our development velocity and operational efficiency. We're also continuing to expand our Trust Marketplace by adding new vendors and checks. This is a low-cost, low-risk revenue driver because the providers provide the service, and we're simply taking a margin on each check sold. We're also focused on new integrations, especially with our new metadata API, and we've been working on exciting projects with new partners this year. Future road map. We plan to continue the momentum of releasing our new products through AI-driven technology upgrades, including the use of an AI support agent and a planned AI survey builder and advanced engagement tools throughout 2026. There's a lot there to unpack, and I look forward to questions at the end. Over to you, Lee.

Thank you, Sharon. I think there possibly will be some questions. In fact, we've already had a few in, so that's great. Thank you ever so much. So from Tom, we've talked this morning about our corporate headlines. We talked about -- Jake around scaling, Sharon around technology. Let's turn to the numbers. The path to profitability is a major focus for all of us. I'd like to welcome Avi Lewis as our CFO. Now Avi will walk us through the financial results. We have obviously just released our annual report and ninth successful audit. We -- in February, we've been on the ASX for 10 years, so our ninth successful annual report and our 18th successful audit. So let's pass on to Avi next. Let's get that out there. And I've got a couple of questions for you, Avi. Can you explain our progress towards EBITDA profitability in detail, including the -- as Tom talked about, a $5 million turnaround in FY '25 to the $2.5 million EBITDA figure? What are the primary drivers behind our improvement of our financial health, such as revenue growth, cost management? What is the company's outlook in terms of revenue and cost management for the next financial period? Welcome, Avi. Thanks for joining us. Over to you.

Thank you, Lee. Thanks for the questions, too, and good morning to everyone on the call today. I'll start with the EBITDA result for FY '25. As you may have noted, we have achieved a significant 235% -- 237% increase in EBITDA over FY 2024 moving from a negative result of $2.4 million to a positive $2.5 million. That in itself is a remarkable result. What it means for the financial health of the company is that the company's net loss after tax narrowed by 61% to $2.2 million. Now this was driven by a 7% increase in total revenue to $21.3 million, as was noted by the earlier speakers and a net 8% reduction in total expenditure. Now what -- in terms of cost management to reduce overheads and ensure a lean operating structure, we've made some strategic adjustments to our physical footprint, and this includes moving our head office in Sydney and our Toronto office to more cost-effective service environments. The business also had to absorb significant one-off costs during FY '25, so basically, SEEK, which is the strategic review that we were talking about, cost us $700,000. And in addition to that, there was approximately $500,000 in redundancy payments, which were a part of our cost management -- the cost reduction program in FY '25. Now we expect to see the full benefits of these reductions in the upcoming financial year, as our 2026 budget does not include these one-off strategic costs and redundancies, and we enter the year with a new renewed FY '25 exit rate, which has adjusted all these one-off costs to a more business-as-usual run rate. In terms of operating cash flows, on our cost management initiatives, transition to SaaS model and the receipt of a $2.3 million in R&D incentive funding through the ATO tax system were the primary drivers of the increase in EBITDA for the year, which resulted in a net positive cash generated from operations of $1.3 million substantially funding investments into R&D. Now that would have been a prettier picture if we didn't have to incur $1.2 million in one-off costs during the year, as you would note. As for marketing, we are meticulously planning our marketing spend, ensuring every dollar drives positive ROI. As we see a positive return on investment from our self-sign-up platform, we will continue to strategically raise our marketing investment to fuel further growth. Last but not the least, the main driver of our cost head count. So I want to be -- briefly touch on one of the most critical achievements in the past year, the dramatic improvement in our business efficiency. Now by strategically reducing our head count from 102 to 74 employees, we've seen our revenue per employee jump from $163,000 in FY '24 to $217,000 in FY '25. Now this significant leap in productivity demonstrates the effectiveness of our streamlined operations and our team's ability to drive growth with a leaner structure. I think that's about it from me. Over to you, Lee.

Thank you, Avi. I think, on that note, we're not shy. And I think if you've been a shareholder of Xref for some time, you know that we, as a group, are not shy of making hard decisions. I think if you go back in history and have a look at the releases, we certainly -- it's certainly been the hard decisions that have liberated this business. And over the last -- particularly over the last 18 months in terms of our head count reduction, our head count's reduced actually 40% over that time. And as Avi alluded to, we measure RPU and how efficient the business is running. But that does put some stress on our employee group. But also we've asked our client set to not only move from one business model to another. We've asked them to move from one platform to another without seeing that traditional sort of valley of death going from one platform to another, losing clients on the way. We haven't seen that. So next week, you're going to actually see an interview between myself, our Chief Customer Officer, Dr. Louise Parkes; and our Head of HR and Payroll, who lead our people and culture at Xref, Melanie Seymour. And we talk about the 2 most important groups within our business, and they are our employees, who -- we measure our employee engagement using our own platform and our customers, who we measure on our own platform for customer satisfaction data. And we're going to interview those 2 to talk about, yes, we've made the hard decisions, yes, we've pushed the business through a tremendously hard period of transformation but actually, how have we done that to make sure that we retain incredible people, some of which you've heard from this morning, but also how do we retain the clients through that journey as well. So keep an eye out for that webinar, and it will be posted. It has already been recorded. It's on the editing room -- in the editing room at the moment. So that will be released next week and a great conversation to follow up our webinar this morning. So I've been pretty average at switching the slides this morning, but this slide deck will be appended to the webinar. It concludes the sessions from the guys this morning, and I think there were some really nice nuggets to walk away with. But the main goal this morning was to hear from Tom and Jake and Sharon and Avi. We have had a few questions that have come in, and I am going to point those to the relevant people.

There was one that came in around approaching international expansion. And if you have known the business for a while, I will actually personally take this one, particularly international expansion in new markets. We've always had clients from overseas purely because our history is in reference checking, and the sheer nature of reference checking is that if you do reference a candidate and they are and most commonly in Australia, they are from overseas, their referees are from overseas. So when we actually ask those referees for feedback on that candidate that has just arrived in Australia, we're actually showing the platform and the benefit and the value of the platform to people overseas. So we always tend to have this viral marketing effect of our platform. And those referees walk into their HR teams' offices and ask why they are still doing references the old way and why we shouldn't look at something like Xref. So we've always had a level of global business. I think in the COVID era as well as the follow-on reduction in the employment market, we've seen those -- we've seen our efforts globally withdraw for cost pressures. But actually, now we're seeing them, all those lights light up again in those areas. Now I'll give you this to walk away with this morning. When we originally built Xref as in the original reference platform, which is all but replaced now with the new platform, but the original reference platform was built for companies that didn't have HR teams, and it would give them enterprise-level HR technology but for the SME. We couldn't have got it more wrong. In fact, Xref was then used by predominantly enterprise clients. And for the last 16 years, we have sold into the enterprise around the world. When we launched the employer intelligence platform with all of the tools and whistles and bells, we built it for the enterprise. And in fact, internally, the project name was actually Xref Enterprise. We've had to replace that, and we now call it the employer intelligence platform. But in fact, what we're seeing and not just in our home territory but overseas, seeing that this lineup of this one record on one platform for hire to retire of talent within businesses, the mid-market is getting very excited about this prospect. So in fact, we got it wrong again. We built a platform for the enterprise, but in fact, we're really finding some fun in selling in the mid-market. What does that mean for international expansion? Well, actually, at home, it means an awful lot to it because there's 5,000 enterprise clients within Australia and 70,000 mid-market. So what it means is that we can go far deeper in our revenue growth within our home market, but it also means that we can play a scale game within new territories and using the partners that we have around the world, background screening partners, ATS partners, job board partners. We can also hang on to other coattails and offer a far more enriched platform in those markets. Hopefully, for the person that asked that question, I sort of answered it there. But I have one here for Tom. Given the current economic climate, what do you see as the biggest risks and opportunities for Xref?

Tom, I think you're on mute, mate.

You're on mute.

Thank you. I should [indiscernible] do that, didn't I? Thank you, Lee. Look, I think the biggest risk is actually behind us because, as has been alluded to, the biggest risk for companies doing what Xref has done is basically losing business [ and ] transition. It's not to be underestimated. When you move from what we had to a subscription model, you're actually changing buying patterns. You have to change your incentives to start your business processes. And invariably, business declines and you -- I think Lee mentioned valley of death you could go through. Well, we've been through it, and Xref has come through at a time when there wasn't a strong demand. There was actually a declining recruitment activity. And we've maintained and slightly grown revenue. And we're now out through the other end with a fantastic product. And I don't think we've yet seen the benefits of the auto sign on. This is people signing on as customers without human intervention, without salary cost and the auto renewal where we don't have to go back and resell a subscription. So I think that's just still beginning. So I'm feeling optimistic about that. In terms of other risk, I mean, there's always risk of competitors coming out with something fantastic that disrupts, but if you lie awake worrying about that, you never start a business. So I'm not seeing anything that could possibly be more challenging than we've just gone through. I mean the management team was distracted with the strategic review and the SEEK deal, which cost us dearly, I mean, in terms of direct expense, paying advisers and lawyers. And Avi mentioned some of the one-off costs there. It's gone through a process where we thought we're going to have to do a massive ongoing capital raise to pay down that debt. We're now in a position where we don't think we need to. Certainly, we're not going to embark on issuing more equity under current circumstances given that we can see the light at the end of the tunnel in terms of generating cash to pay down debt. So yes, I worry about will sales fall off. But I'm encouraged with the extra insight that Jake's brought in to the business in terms of his mention of the flywheel, but perhaps it's all up from now. So obviously, we'll watch. If we need to take other action if the market deteriorates, we will. But I'm very buoyed in my time in this company. I've never felt as good as I do right now, and part of that is the additional strength brought on to the Board. You've heard from Jake, but Jon, who you didn't hear from today, is also a fantastic contributor. He's taken charge of the Audit Committee, a very solid guy. He's been CEO and CFO, a chartered accountant of listed companies. So he's been a real benefit to us. So I think our biggest risks are in the past. There's any number of risks. If you read the annual report, it talks about what they are, and we'll face those. So I'm not sure if that answered the question fully, Lee.

No, I think that's brilliant, Tom. What you've just said is our biggest risks are behind us. We have a line of sight to generating cash. Our focus is on improving revenue through new business and all the things we're doing there. And we are not entertaining adding to equity through a raise because we were on to a good thing. So hopefully, that summarized what you just said. Thanks, Tom. There's a couple of questions here. What does Xref, i.e., XF1 do better than its competitors? And what services does it provide that are difficult to replicate for competitors? And I will take that one. I will take a bit of the stage this morning. But I think if you have a look at how Xref stacks up in G2, which is an external reference site, we are #1 globally for reference checks. And have a look at how we rate across Google, Capterra and all of these sites that rate what we do in market, and that pretty much tells you how we differentiate. But to really sort of clarify, yes, we do references the best in the -- the way we do them is the best in the market. And we keep innovating, which keeps putting us ahead. But now if we spoke to a client, this is our conversation with a client, a new client. If you join us today, you're going to get an immediate value because within the next 24 hours, you're going to be able to reference a candidate a lot faster and get far more insight than you ever have. You're going to identify fraudulent candidates. You're going to get -- you're going to be able to benchmark those people against all the other people you've ever hired. You're going to be able to add background checks from some of the best vendors in the world on our platform against those references. So in the next 24 hours, Mr. Client, you are going to get some super value. However, let's think about the conversation that we're going to have with you in 12 months. We're going to hire better. Therefore, when people come into our organization, we're going to run pulse surveys and engagement surveys and identify through org metrics where in our business we should focus our efforts to improve the environment of our organization. We're going to make sure that when people leave us, which they do -- 15% of employees leave the business in any 1 year, so we are going to run exit surveys on those. We're going to encourage those candidates to come back to the business. And through all of what we do throughout hire to retire, we're going to measure feedback, and we're going to build talent pools from candidates we never hired, from referees that gave our candidates feedback, from exited staff that feel that they would like to come back at some stage in the future. Now we turn all of that into insight, which is why we called employee intelligence. We want to track talent all the way through from hire to retire. In terms of the market and where we sit on the market and where we compete to round out what I've been saying is that most applications out there that are mission critical focus either on a candidate or an employee or an ex-employee. And they are tending to be ATSs, HRISs and payroll systems. And not an awful lot is being done around identifying one person as each of those personas. We bring all that together in one platform. And I think that really is our current focus, is obviously we're #1 in what we do in referencing, but in the future, in terms of lining up all of those personas on one platform and bringing it under one profile for that individual is going to be our next #1 position. So thanks for whoever asked that question, but if you go to the founder's takes, there's a little bit more information on that forward.

Lee, you mind if I just add one thing to that, that I think might be a little a little subtle for someone who's not -- doesn't have a background in HR SaaS, which is compared to other enterprise applications, polish is very important. When you're selling HR SaaS, you have really 2 sets of customers. You have the person who buys the product, person who comes and buys Xref, but then you have the people who are completing the references, the HR managers who are using it every day. So the incremental improvements that you build on a product over time to make it easier and more polished and easier to use are very important and very hard to do. Those things take like a decade to make those incremental improvements to make it really good. It would be possible to go and make another platform that -- on any HR SaaS platform where you can check off all the requirements next to each other, but it's kind of like comparing a 2015 iPhone to today's iPhone. If you put them next to each other on a side-by-side comparison with check box, they're going to look very similar. But the new one is a lot more polished and a lot more refined. I've spent a lot of time looking into this before we came on the cap table. And my view is that Xref is the most polished and most refined, and that's reflected in the G2 ratings and how people think of the product.

Good, very, very good point. Thanks, Jake. Sharon, I've got one for you, the biggest technological challenges Xref faces and how are we addressing them today.

Yes. I think the challenges that we're facing are challenges that every business out there are facing at the moment. It's the rise of AI. So what are we doing at Xref? We're focusing on making sure we're building responsible, ethical innovating and ensuring that our AI features are enhancing our customers' decision-making without introducing any bias or risk to their processes. That's the take for our customers internally. We're using them to streamline development processes, which is helping us ship new features quicker to our customers, the releases that we've been making over the last 6 months. And I spoke to them earlier in my products, innovation update, talent pools, AI summaries. It's really helping us get momentum and to be able to listen to our customers and deliver to our customers much quicker.

Yes. Great. Thank you, Sharon. Avi, one for you. Someone's asked, provide a little bit more color on the company's cash flow position and runway. Obviously, we've got to be careful that we're not forecasting, but probably also add to it the kind of metrics that we're going to focus on during the year when we do report and the metrics that are important to us most.

Thanks, Lee. Look, I think I probably have a very simplistic response to that. In terms of cash flows of the business, well, we have rightsized the business and we've exited FY '25 with a cost structure that is something that the business can sustain. And therefore, like we do have -- we do expect positive operating cash, by and large, throughout the year. And that's something that we would track very closely as -- in terms of KPI reporting, and we would track how cash progresses on a month-on-month basis against the background of sales performance. And as Tom mentioned, the sales performance is critical in modeling cash. Apart from that, in terms of runway, I think we exited FY '25 with $5.2 million in cash. And that's quite a bit of money, and that's going to last us for a while. So in -- as we've just finished the FY '25 audit and we were subject to a grueling growing concern examination as in every auditor would do and then we kind of provided an assessment of growing concern and that -- which clearly demonstrated that the cash -- that the business has a cash runway of 12 months with the amount of cash that we exited FY '25. Unsure if that answers your question. I know it's very high level, but getting into details, possibly not the intention of this forum. Over to you, Lee.

I think it's -- yes. Thanks, Avi. I'm just checking that you guys can hear me because I think we've got some bandwidth issues maybe. You can hear me, Avi?

Yes, I can hear you clearly. Yes.

Excellent. All right. Yes, great. Look, I think the high-level message is that back to Tom's comment that we're ultra focused on generating cash, and we're in a great position to do that. I think in terms of -- there is a question around are we -- have -- are we going to continue to cost cut? I think we're in a position now where we've turned around EBITDA $5 million within -- from period to period from FY '24 to '25 in a period where we've undergone so much transition and not forgetting, of course, that we've grown revenue by 7% in a market, in a recruitment market that every other recruitment provider is publicizing that it's 20% underwater because people are just not hiring. And we can see that within our own usage metrics that the recruitment market is just not where it should be. So I think in a tough market in an area of transformation and considering the strategic review and the destruction of the SEEK's potential acquisition, we had a tremendous outcome of FY '25. And I think we are best placed in FY '26 to report on our horizon goal of generating cash. What we do with it when we get there, I'm sure we'll clarify whether we invest in product or marketing to grow or to reduce debt off our balance sheet. All of the above apply. And I'm sure, given the team that we've heard from this morning, we're in great company. So I think we haven't got any more questions to answer this morning. If we didn't answer something that you would like to ask, please come straight through to myself. Always happy to have a one-on-one and add any color. That concludes our Q&A session this morning. A huge thank you to Tom, Jake, Avi and Sharon for their contributions. Most importantly, thank you to our shareholders for your ongoing support and for joining us today. We look forward to connecting with you again soon. As I said, keep an eye out for more posts on our hub and come through to us at investors.xref.com. Apart from that, thank you very much, everybody. Have a great rest of your day, and that concludes our webinar.

Thanks Lee.