Beeks Financial Cloud Group (LSE:BKS) — FY25 Results Presentation

0:00 Good afternoon, and welcome to the BEEKS FINANCIAL CLOUD GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Gordon MacArthur, CEO. Good afternoon, sir.

0:32 Thanks, and welcome, folks. As usual, I'm I'm gonna kick this off. Fraser will come in towards the middle end to go through all the financial stuff, and then we're gonna do some q and a at the end. So we will kick off. Alright. We're gonna go kinda do the kinda quick overview of the company for those who don't really know the story. I'm gonna turn my camera off actually because my hotel Wi Fi is not great. So I'll bring it back on for q and a. Okay. So what does BEEKS do? So we are a cloud computing company. So this focuses solely on capital markets. So we build out cloud environments for low latency multicast trading systems. That's all we do.

1:21 We don't get involved in generic cloud for email, CRM platforms, or ERP systems, anything like that. We are deeply rooted and entrenched in trading applications, working with banks, brokers, exchanges, and funds all around the world. So 2,005 key messages. So we're gonna go through the good, bad, and the ugly, and all of this stuff. So bear with me as we go through it. So, you know, we look back at 2025. We've been on market now for eight years. Historically, we've always done between 2030% revenue growth every year, fairly consistent in that. We achieved that again this year with 23% revenue growth.

2:10 And pleasingly, we signed a record level of long term contracts, which shown in the 19,000,000 of TCV that we signed through the year. If we go back to day one as being a a public company, the majority of our stuff is on months to months recurring revenue that was not committed long term to the business. That has gradually changed through the year, and about a third of our revenue is now kinda long term committed in multiple year contracts.

2:40 So the the the bigger stuff is is really in the tier one domain. So when we IPO ed, we we IPO ed to target the tier one customer base, and, pleasingly, we've made real progress in that space in the last eight years. Significant contracts with exchanges on the in the last year. We signed Mexico, BMV. It's the first one. We signed ASX, the Sterling Stock Exchange. And as we announced a few months ago, we signed Kraken, which was our first exchange in the crypto space. So we had a a decent year in terms of new signatures and and exchange cloud space. Continued expansion with existing clients, including the GSE.

3:29 GSE are almost full again, so we would hope that that contract will be extended for the fourth time in the coming period. And we announced quite a a lot of decent sized wins in the proximity cloud space, which is the single use platform. New stuff, we launched a new product called Edge Intelligence, which we're in a couple of very large active proof of concepts at the moment. Edge intelligence is an AI and ML modeling tool that sits on the market data that we collect through our analytics appliances. Early days for that, and, you know, we've we've been building that for the last eighteen months. We didn't just jump in the AI bandwagon and put AI in front of one of our existing products. We've actually invested, hired a bunch of data scientists, and and our analytics CTO has really led that project. So we're in a couple of very meaningful proof of concepts early days with some big banks and exchanges around the world.

4:33 One of the big talking points throughout the year has been the launch and the and the launch of our our revenue share commercial model on ExchangeClade, kinda has very considerable differences in how we account for it and things that can cover all of that stuff as we go through. Early indications are good. So Kraken were the first client to go down the revenue share route. And Kraken, after a few months, is creeping into profitability on a month to month basis now. ASX and Toronto Stock Exchange are the next two. Australia is a few weeks away from launching. We're kinda finishing the config and then the testing process. The pipeline for Australia is very, very promising.

5:22 A lot of the bigger banks, although they're looking at the platform already, so we got high hopes for that. Toronto, we're just going to start in the implementation phase. So, hopefully, that will be ready in kinda q 'one of next calendar year. But the early signs are very promising as we hoped, and and what we've also noticed is that shortened sales cycles for other exchanges. We will talk about the pipeline going forward. We made, an investment in our technology company startup that, we think has built very interesting technology. They're a they're a provider of hardware. They they make a what's called a network interface card, which connects a server to a network, and there's a lot of latency in there.

6:10 And as far as we can see from what we've done and the the testing we've done on it, their nick is faster than anything else out there in the market. So we made us a a a, you know, a kind of decent sized investment into them for an equity share, but more interestingly, an exclusive agreement to sell that to the capital market space, and we're currently integrating it into a product set. So I'll kinda tackle the elephant in the room now and and and talk about some of the the the one thing that that people want me to talk about. We did mention in our publication on Monday that one of our exchange for the contracts has gone into termination fees.

6:57 I'm still relatively limited to what I can say about it, but I'm gonna try and get as much color as I can without, getting into, you know, legal breach of contracts and and NDAs. So the contract in question was the large US exchange that we signed in 2024. After we announced it, and most people know who it is, I'm not really allowed to talk about it publicly as part of the NDA. After we signed the contract and announced it, there was pressure put on from certain third parties that are listed on that exchange around the relationship that we had started.

7:44 So if you'll if any if you guys follow us on LinkedIn, and if not, you you probably should, you can you can see how exchanges handle the launch and the promotion of Exchange Cloud. You know, Australia, we did a launch event in Sydney where an exchange building, we had a joint presentation with ESX and BKS, Loads of clients, invited a 100 clients in the room, jointly presented it. We've done lots of presales. We've done lots of marketing together. That entire thing was missing in this other exchange engagement. So we really don't believe I had any chance of success. It's not been replaced by a competitor. It's not for any failing in our technology.

8:31 There is a little bit of corporate politics at play, we believe. Their view is there's no demand for service. Our view is if you don't promote a service, there's never gonna be demand. So it's not a material contract. It was between 20 k a month dollars. No impact on our financials at all. But I'm not allowed to talk about I'm not allowed to talk about certain parts of it in the public domain, or I will breach confidential agreements that have been reminded that they are in place between the organizations. So I know a lot here are looking for a lot more color than that, but the reality is looking back a couple years ago, it was it was a great name. Right? And that was there was a lot of excitement about it. And, again, there was excitement. We were excited as we now become the standard in the exchanges, and that's where we believe we are.

9:28 You know, it's, you know, it's probably not as, you know, we're being as exciting now as it was back then. So it's been a difficult one, but, you know, lessons learned. We move on. We're gonna draw a line under it. And as we see in the in the in the publication on Monday, there's another four exchanges globally, some emerging markets, some established markets that are close to contract when they're in the final stages of contractual negotiations with with four of them. So and then there's another wave of exchanges that's sitting behind that. So exchange play pipeline, very healthy. I'm not gonna dwell on it any more than that. Limited to what I can see in the public domain. Unfortunately, that's just the way it is. Last part of this slide is, you know, the the business is cash generating.

10:18 I know it's not the cash flow is not huge, but, you know, that will accelerate over the the coming months and years. And we are still seeing a move to our business model, so we don't see a slowdown on revenue growth or profitability going forwards. So this slide just shows it's a nice slide for us. You know, we kinda go back to 2020, which is far back as as far back as we've gone, and and you look at what you know, total committed contracts. Right? So we used to have a month to month thirty day rolling contract with all of our clients. And back in 2020, 1,300,000 of committed revenue is all we had, and you can see and that was purely the private cloud infrastructure as a service part of the business, which we still see a lot of growth in. But as you can see throughout the years, as promised, proximity and exchange cloud has been released and has gained traction in the market.

11:22 The size of the total committed revenue for the business has grown significantly. Right? And we fully expect that to continue over the next few years. And it gives us a real base where we can model a little bit easier, forecast a little bit easier, manage the business a bit easier as a larger percentage of our revenue every year is contracted. Right? So we will focus now going forward, but it shows a nice steady increase ofcommittedrevenuecom committing revenue to our company. A little bit about what we do. 90% of our revenue is trading infrastructure. Right? We are an infrastructure cloud computing infrastructure company. 90% of our revenue is infrastructure, virtual machines, dedicated servers, network capability, and that's the largest part of our business by a long way. We also have a a WAN product, a way data network product that connects all of the data centers that we operate in so that people can move market data around or whatever they want to move around securely between data centers.

12:32 Edge intelligence, it goes hand in hand with our analytics platform. It's a software product, and we would hope that the software segment of our big business grows in the coming years. As I say, early days for that product, but a lot of work got into it will be a higher margin offering than the infrastructure side of things once we get past a certain stage. So we would hope that the software side of the business grows. And then we've got a very small professional services revenue contribution, which is really implementation fees. We are absolutely never gonna be a services based organization. A lot of you guys will have seen this slide before, but, you know, as we, you know, evolve and build more products, and and that's what we will continue to do.

13:18 We are a product company. We are a an r and d heavy company that build innovative solutions that try and help capital markets participants. And we I think it's useful to to kinda keep this slide to show where the products are, what the rough commercials are around them all, and, you know, you've probably seen them before. So the legacy business is private clouds. We had a good start to this year. We've actually had the best queue whatever, And a lot of that was private cloud revenue. I think we announced about $7,000,000 of private cloud wins in the first couple of months of the year. And private clouds, you know, is anywhere between 1 to 20 k a month, anywhere between twelve month contracts to sixty month contracts. And and that's where the business still large majority of our revenue comes from. Proximity Cloud is a single use per cabinet, a deployment of a private cloud to any data center around the world.

14:19 We've had a lot of traction with it. Pipeline for it is very strong, and that tends to be anywhere between 1 to £5,000,000 TCV per client, per location. And we got a bunch of clients looking at multiple location links with that with us over the coming years. Exchange Cloud, kind of premier products, that's where we see the future of the business. And depending on the size of the exchange, it's really anywhere between 3,000,000 to 20,000,000 TCV. And when we see TCV, we talk a bit over that initial period. Now we've talked a lot this week with all the institutional investors, and I think we've probably not pushed this as as much as we should. Don't look at Exchange Cloud as a foot four to five year deal. Right? If you look at the GSE who are now two and a half years into their contract, We've got so many of their clients on coal two point o as they call it.

15:17 A large part of the volume on the GSE exchange is now originating from our platform. So we've got two and a half years left of of GSE to run. They will extend it more, we hope, actually expect. But at the end of the five years,

15:31 we don't that that we don't think there's any way that they will discontinue the product because they're gonna have to go back to a bunch of clients and tell them to go and do it themselves again. That's not a good look. And, you know, it's been a very successful project for them. So Exchange Cloud should really be looked at as a ten to fifteen year fifteen year annuity revenue stream for us. Doesn't matter whether it's a classic contract or it's a new revenue share model. Exchange Cloud will guarantee growth for the company for a very long period of time. And I think we've probably not been as clearly that as we should have been in the past, but as it grows and, you know, more and more clients use it, it becomes stickier and stickier. Market edge intelligence with analytics offering, new offering, you know, anywhere between 500,000 to 5,000,000 TCV as a software product. So kinda sits right in the in the in the middle of of our kinda commercial product offerings.

16:32 And depending on you know, as I see, we've got a couple of very big meaningful POCs out there at the moment that could become another exchange cloud like opportunity for the organization going forward. But with a lot of things in AI, there's it's early days. Right? And then we need to prove adoption and prove value there. So we'll be working on that over the coming months and years. Next slide just shows some of the exchange cloud that we've clients we've got on a map. So as you can see, we've been very successful in The Americas with BMV. ICE were the original client. Never a massive contract with them. We're never expecting it to be. Toronto have now taken up, and we've got high hopes for a very large exchange, good relationship there, there, and and and we will move that forward as they get regulatory approval on their site.

17:30 Kraken, the first crypto exchange, GSE, and then we've got ESX. So you as you can see from the the map, we've still got a long way to go in terms of geographies that we can win within with new Exchange Cloud clients.

17:48 So this slide, again, just kinda goes back to the changing commercial dynamics of the organization. We've got very different we've got multiple commercial models, multiple products, and I think the market's not quite understood some of the intricacies and the differences between the Exchange and Cloud traditional model and the revenue share model. So we just wanted to spend a lot of our time getting over it. So, traditionally, we would charge 20 k per month ish depending on the spec of the rack per cabinet per month for an exchange, and they would commit to that for five years. So we didn't care whether that exchange had any clients on it, really. We were still getting paid. So on day one, when we turn it on, we get paid 20 k per cabinet per month.

18:42 Same all the way through the contract. And it became it's become very apparent that we now know when and how this fills. Right? We know how to sell it. We know how to fill it. We know what we need from an exchange. We know how to market it. And, you know, this came the revenue share model came on the back of the Mexican win last year where they wanted to do it very early on in the sales cycle, but they didn't have budget, and they had to wait till next financial period because it was quite a a chunk of you know, it was a it was a decent commitment from them. So we've come up with a revenue share model in certain situations, and we will use both models. Right? Prime primary reason for revenue share is to short sales cycles, and we've seen that already with some of the ones we already had and the ones that we will announce over the the coming period. But also in the long term, if the cabinet's full or fill up, it's commercially more advantageous to BEEKS.

19:41 We get a bigger share of the revenue from the cabinet than we do on the old school model. However, our argument and discussion with exchanges, we are taking a commercial risk. Therefore, we want a bigger slice of the rewards, and that is not a difficult argument or discussion to have. So we will use revenue share when we think the situation is right, and we'll use a traditional model again when the situation is right. But we've shown already that it massively reduces sales cycles, and we are confident with the revenue share of ones we've already got live and going live in the pipeline that we we see on them, that it will be commercially successful.

20:28 And I think there was legitimately a little bit of nervousness about that. It's got an impact on how we account for it, and I'll let Fraser cover all of that stuff. So as I said, Kraken has had a very good start. Kraken and moving the matching engine, physically moving it to a different country. That'll be live in November. So we've had a bit of a soft launch for them. Once they get the the the new matching engine live in November, we've got an environment that's sitting beside it. They're gonna do a bigger launch and offer out to a larger section of their their trading community.

21:02 And ESX have got a very strong pipeline going forward, so we are happy with the revenue share model early signs. I wanted to use a slide. I mean, it did a little bit work in the slides, but I wanted to use a slide as an example of what we're seeing. Right? And I'm gonna use GSE as an example here. You know, I I refer to GSE a lot, but that's because they're the most mature and ex Exchange Cloud journey. And what we are seeing with GSE, we hope we replicate with other exchanges. So we have a very close relationship with GSE. There's 20 or 30 touch points between GSE and BEEKS every day, whether that's an executive level, project level, engineer level, onboarding level.

21:50 We our customers their customers are our customers, and we treat them accordingly. So what that does is it builds a relationship. Right? And what we're seeing with GSE now is other strategic opportunities that are outside of Exchange Cloud. So Exchange Cloud has gone into GSE, grown like a weed, will continue to, but we're now seeing other conversations develop. So we are talking to GSE about and this may or may not come to fruition, but we're talking to them about using Proximity Cloud for some of their internal workloads. I the GSE are using it Proximity Cloud for some of their internal applications, I e not selling it to end clients. Whether there's a network opportunity there with them that we're jointly working on where there's a ability to put a network in that will connect Johannesburg and their their Doctor data center out to the wider financial ecosystem that sits in New York and London, and there's a conversation around that.

22:54 One of the most interesting things, and we always hope this has happened with Exchange Cloud, is Jesse, you've now got a bunch of clients using the platform very happily. Right? It's been a a major success for them. But these banks and brokers don't just have infrastructure in Johannesburg. We are hoping to close in the first, you know, in the next quarter or so, our first direct contract with a major South African bank for infrastructure outside of South Africa. So they'll contract with that with BEEKS directly rather than through the GSE for infrastructure in New York, London, or or Asia Pac, and and we've got a couple of these conversations at a very advanced stage.

23:41 We'd always hoped this would happen. Like, people get familiar with the platform. They get familiar with the support model. They don't want to do infrastructure themselves. People want cloud for everything. We are starting to see that on the some of the larger banks in South Africa. And if we can replicate that in the other exchange regions as we go forward, that gives us another material commercial opportunity that sits outside of Exchange Cloud but as a as a as a direct result of the successful implementations we are doing in these exchanges. I will hand over to Fraser to talk about some of the financials. Good thanks, Gordon. Good afternoon, everyone. Fraser McDonald, CFO.

24:28 So I'll cover a couple of slides on financials. And apologies. I'm gonna put my camera off as well because, I'm in the same hotel and the network's not great. So Gordon touched on this earlier. You know, we've been fairly consistent, since since IPO in terms of sales growth. So another really good year. So we're 26% up on on prior year. So sales were just under 36,000,000 from twenty eight point five in the prior year, and the big driver within that was proximity and exchange cloud. So as Gordon referenced earlier, we'd our biggest ever year in terms of new wins. So we had about 19,000,000 of total contract value wins

25:12 across proximity and exchange. And the vast majority of that was delivered within the financial year. I mean, a small part of BMV, slipped into the current year, but most of that was was delivered. So when we deliver a proximity and exchange cloud deal, to the customer, we we we have to take about half of that revenue upfront, and I'll I'll I'll kinda come on to that. But, as as the the revenue share deal, things are gonna be different there. But, you know, we take about half upfront, so that's about 10,000,000 of that 19,000,000 TCV to be signed. So really good year in terms of proximity exchange cloud.

25:50 Private clouds, bit more modest growth. It was up 5%, and we talked about in the RNS about some some legacy churn. That was us moving of our legacy clients. Their server license and ex estate was was chain we we changed that. And that project is now finished, so, you know, that that that did allow us to experience some churn, but, you know, that's that's it's legacy. It's one off. We still have very high client retention. It's still around 96. So,

26:20 not as healthy as previous years, but as as Gordon mentioned, earlier on, we've had our best start to to the the first quarter of the current year. So our our our recurring revenue is now up again to 31.5. So, you know, back to kind of previous, growth levels, which is encouraging. In terms of profit, so I think when I presented this time last year, we talked about, you know, focusing on, bottom line growth as well as top line growth. So and how we're doing that is controlling the cost base, and and it's good to see that we've done that. So, you know, one and a half percent profit margin improvement year on year, has has been good. And we've done that whilst investing as well. So, you know, the the market edge intelligence, product that we've been developing over the over the period, we we've expensed in the p and l. So we've improved margins whilst investing, which, again, is also positive.

27:16 And, again, if we're looking ahead, we believe there is scope, across gross margin and operating margin. So, you know, the the revenue share deals for us,

27:27 as Gordon says, when we fill the data center space, we we get, a bigger chunk of the revenue on the same cost base. So, you know, obviously, the risk is on customer uptake with us. But, know, when we see that customer pipeline and we have visibility and we can see that the, you know, the the demand is there, then, you know, we expect to get a a, you know, a bigger chunk of that profit margin across those.

27:52 That's that's healthy in terms of margin. Think it's maybe worth touching on the, you know, the revenue recognition. So, you know, traditionally on our public and private cloud model, we always just had recurring revenues. So as we deliver the product to the customer, you know, we recognize it monthly, that, you know, you don't have this upfront, that we do with Proximity and Exchange Cloud. So, you know, we've also had that nice, smooth recurring revenue profile. Proximity Exchange Cloud, when it's a fixed price, we have to do

28:24 an element upfront. On the new Exchange Cloud revenue share, it it pushes us back to recurring revenue. So, again, you know, it's a softer benefit of doing it. You know, we're we're we're doing it for the right commercial reasons, but it it will help with that, you know, with that upfront element, which, you know, ultimately, we have to recognize because that's how accounting standards dictate that we have to. But, as we do more of these revenue share deals, it should hopefully give us a smoother revenue profile going forward.

28:57 And then in terms of cash, so, you know, we mentioned earlier on, you know, we a couple of years ago, we, you know, we year on year, we would actually we we were eating into cash. The last couple of years, that's that's shifted. So we didn't make a huge amount of cash in the period. You know, it was it was largely breakeven. However, these proximity and exchange cloud contracts, you have to look at those over four years, four, five year contract length. So what you tend to have with Proximity and Exchange Cloud is you have roundabout 30%, CapEx upfront. So what what we're seeing is you have that initial investment. So years two, years three, years four, years five is when the cash starts flowing to to the bottom line. So, last couple years has been healthier. And then as we look forward the next two or three years as we do more of these contracts and they they enter into the, you know, the later years of the of the contract, that's when the cash actually starts improving.

29:55 So year on year, we did improve operating cash flow. Looking at the actual we we can see quite a pronounced, movement in our working capital over the period. So the 4,200,000 outflow in the slide. So what what that is really, and I think there's some questions on this, which, again, I can cover. When we recognize revenue in advance, and that's the, you know, the the 10,000,000 or so, That that actually, is accrued income, so you have an increase in a contract asset. So that that's a movement of about 6,800,000 in the period. And then offsetting that, we had about 2,000,000 just over 2,000,000 of proximity and exchange clouds CapEx investment post year end. So that was a movement in the in the payables. So quite quite a pronounced movement in the period.

30:41 And as I said, you know, over the next three to four years, that as that cash is collected on those deals, then, you know, that will start unwinding and and deliver more cash to the bottom line. Looking at investment again, probably similar to to last year. So, you know, we're always, we're always buying infrastructure in advance, and and and we put that into the data centers that we have across the across the world. So similar spend to last year, about 4,500,000 on on capacity, infrastructure, and then the intangible assets is is largely that cost of our internal, development team. So we have a,

31:17 we have a a fairly light large, software development team where we develop the products, in house. As as Gordon talked about, we are a a product, company. So further investment into proximity and exchange cloud, is what you see in there.

31:32 And then, again, from a from an overall cash point of view, we we in the period, we we repaid some asset financing. We we really have very little debt in the business. So the debt we have is about 400,000 in asset finance. So we're in a net cash position, of of 7 just under £7,000,000. Again, so, you know, as we as we look forward, you know, we we potentially can, if we need, take on additional debt to to support some of these proximity and exchange cloud contracts. But we will as we start generating cash and and potentially using debt, you know, we we we should have enough, to fund the the the year's growth, the next couple of years growth ahead. So, you know, from a cash point of view and an overall company margin point of view, we are in a we're in good financial health.

32:26 Back over to you, Gordon. Can you I'm muted. So apologies, folks. Right. So, you know, what we're focusing on in the year ahead. We've we've been talking to investors, and, again, we referenced it quite heavily in the in the RNS and the and the update on Monday. The pipeline is at record levels across every business unit within the group. So we really are conscious of as a year of conversion. Like, we we don't need to find any more opportunities to, you know, you know, have a a material year and go beyond the kind of forecast that are out there in the market. So we are not a software company for the majority of our business. Like, when we sign a contract, we have to deliver before we recognize revenue.

33:23 So it's not just about signature. It's also about delivering the revenue before the end of the year, but the pipeline is is substantial. We're looking to get the first clients signed up to Edge Intelligence. As I said, there's multiple proof of concepts on the go, some decent sized ticket sizes on that as well. And, hopefully, you know, when we do the next presentation, we can give more color and and some of the wins that we would ex be expect it to flow through by then. We'll continue to develop product. You know, we are one of the few people in our world to innovate. Right? Most of our competitors just acquire to grow. We don't do that. We build products that put IP into our business that are innovative and add value to our client base. So it's core part of what we've done over the last seven or eight years since we've been in the public domain, and we'll continue to do that. That, you know, that includes product development continuing on the core products of proximity exchange, analytics, and their edge intelligence, and we will have new products that we will release over the coming years.

34:31 And then we are looking at, you know, the bottom line. Right? So one of the the key things we've got in our control is headcount. Right? So we are on an automation journey. Right? Instead of continually hiring engineering resource or technical resource, we're putting a lot of effort into automation of repeatable tasks so that we can manage that headcount. I think if you look at the headcount over last year, it's pretty flat. You know, we've hired a bit of experience. Right? There is well, there's maybe upped overall wage bill a little bit, but we'll probably hire another 10 or 15 people over the coming twelve months to cope with the demands of the growth of the business, but, the key to increasing the margins is to control that headcount. And we can only do that by automating and being clever about how we use technology.

35:25 So it's a big focus for us going forward. You know, I've couple of slides to wrap it up. You know, we're at sitting at 31,500,000 ACMRR at the end of September. We've also got a couple of million of NRCs that have rolled over from last year. So, you know, put us in about 33 and a half after the first quarter, which is about 85% of the way to the full year numbers. So with a very fast start to the year, pipeline's at record strength.

36:00 And the market is moving in our favor. Right? We are becoming the standard in exchanges. We are now getting exchanges approaching us, and it's not to talk to us. It's to buy the product. Right? And that is a major shift in 2.5. So that you know, we we've still got a lot of exchanges that we will sell this to. And as I've said before, it's a fifteen year annuity revenue opportunity for us. So, you know, we're early in the year, but given the strength of the pipeline, given what we've closed already, we are confident that we'll achieve expectations. Sorry. Somebody's looking through.

36:53 Yeah. So we're we're we're confident that we will achieve our expectations for the full year. And why be interested on it? So I think, listen, it's not been all smooth sailing. I don't think we anyone would ever see that at all. But I think there's very few companies out there that have achieved between 2030% totaling growth every single year for the last eight years. So, you know, that has been a pretty major achievement. You know, we we IPO ed a 3,000,000 turnover. Right? We are hoping to do 40,000,000 plus this year. We're still not the biggest company in the world, but we have now a track record of delivering that top line growth, and we are now focusing on driving the bottom line to match that. We generate cash.

37:38 I know you want us to generate more, but you even look at the hyperscalers. They they bled billions of dollars for years, and then all of a sudden, they start generating huge amounts of cash. So we are concentrating on trying to generate a little bit more cash as we go forward, but we're still a growth company. A growthcom an IT company, a cloud computing company that has a very market leading global market leading position from The UK that generates cash is a pretty unusual position. Right? The track record, but I cannot overstate. You know, when it comes to competition, we now have track record of delivering these mission critical systems.

38:23 And even if someone comes up with a competitor in the exchange cloud, why would anyone take the risk? Why would anyone take the risk of the billions of dollars that flow through our platforms every month, every second, every minute of every day that's trading's happened to go with a company that has no track record? So it is so important, and it is now being proven in multiple exchanges. And, you know, we are looking at and embracing new technologies constantly, hence, the AI and ML side of things, and cloud computing is still a growing area. So we are in a good space, and we're confident of prospects going forward. So I think that's all the slides we've got.

39:09 Fraser, Gordon, thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation, along with a copy of the slides and the published q and a, can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Now please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Right. There's a lot of questions. Okay. I'm gonna just start from the top. Edge Intelligence, delighted you at its launch. Can you provide an update on the gross and EBITDA margins you anticipate? I mean, that's a hard one. Right? We've not we've not sold the product yet, but it's software. Right? So it will be a much larger margin than the infrastructure side of business. Because every every infrastructure deal we do, we have to go buy CapEx compute network for it. There is a little bit of infrastructure in deploying edge intelligence, but, I mean, it's it's it's tiny compared to the the legacy part of the business. So I can't give you an exact figure, but, you know, look at an average software company, you know, it's it's 80% margins, at the gross level, I think. So, hopefully, up there somewhere.

40:32 Bigs recent contract wins on revenue share deals. Will these contracts increase the gross margins, and what are they? Fraser, I don't know if you wanna take that. Yeah. Yeah. I mean, we we hope so. So as as Gordon talked through, the the cost base on these revenue share deals is the same. So, you know, going from a a fixed price of, I think, example was 20 k, to when the rack is full, 30 k. It's just a question of the timing. Right? Can we get it filled, you know, quick enough? So and we we fully expect to do that, as we said, if if we see the pipeline. And if it's not filling, then, you know, we give it twelve months and we and we take it back. Right? But there's definitely scope in that in that gross margin because, let's say, 30 k from 20 k on the same cost base.

41:22 Next one, are there other exchanges of the four other exchanges you mentioned are likely to say before Christmas? I love questions like these because whatever answer I give like, I'm not in control of this. Right? We would hope we would get at least a few overlay before Christmas. But I've done this before when I said I think we will do something and I, you know, I I can't control when a client signs it, and then you get a yeah. You get it thrown back at you. The reality is I would hope I'd be hopeful of at least a couple of overlaying for Christmas. In terms of contract signed, right, we still need to deliver it. Right? So, you know, the the next four, you should be looking at material contributions to next year's numbers, not this. Right? That's the reality of it. What are the benefits of having Uber next switch? So I'm I'm not gonna go into huge detail on this because it's it's it's quite technical.

42:17 So the net or the network interface card that connects a server to the network stack, the default card at the moment, low latency card, is from a company called Solarflare, and we use it extensively. Right? But as over a certain capacity, Solarflare starts dropping packets. UberNick doesn't. It's faster. It's a low latency card by default. It's FPGA based, but you can get to full line rate. I e, that means you can go to whatever the port speed is on the on the on the connection between the server and the and the and the switch without dropping packets. So dropping packets in our world is is not great. So even in our experience, in our infrastructure, in certain workloads we've had to move away from some of their cards and put up with increased latency increased latency from a non latency sensitive card because that's preferable than dropping packets.

43:16 UberNIC does not drop packets at load. So that's a very high level explanation. You can go into the meter of this stuff. It's it's very, very technical. Nick, think next one next one's a question around the the contract assets. So it's note 14 shows 4,800,000 of contract assets, only a million of those invoiced. Why is this? And do you expect the remainder to be invoiced? So, again so I think, yeah. So that that's effectively accrued income. That is us recognizing revenue in advance when we deliver. Right? So that's the upfront element of Proximity Exchange Cloud. So it's revenue. It's not cash. So the cash catches up over the life of the period. So so that's what that is. It's an addition to a contract asset. I think the next one's similar. It's this I think it's the same question.

44:05 So I'll miss that one. Typical time to get to full capacity on revenue share deals, Gordon. So, I mean, I think the the graph shows us twelve months, but I don't know if we've got a different view. And and it depends. Right? You know, some exchanges will go and market before it's announced, before contracts are signed. Some won't. Right? So I I mean, I I I years a long time. Right? I would expect it to fill quicker than that, but it'll be different depending on exchanges. Some of them will potentially be filled, you know, very early because they've they've generated pipeline, and one bank can take their initial, you know, implementation in one go. So that's a hard question to give a a a definitive answer to that.

45:00 Fraser, do I take the next one? The next one's asking about a return on CapEx being low. Where can I get to? So I think so typically for us, on a million pounds TCV exchange cloud contract is about 300 k CapEx. Right? You know, depending how if it's on a you know, if it's on the traditional model, it's it's over a year to pay back. If it's if it's revenue share, it depends how quickly. But Exchange Cloud is CapEx heavy, but it's OpEx lighter. So just now, on our p and l, about 25% of our cost base is on the data center cost, power space connectivity across our data center estate. With Exchange Cloud, it's goes into the customer's data center. So it's it's heavier on the CapEx, and it's lighter on OpEx. So, again, with that, slightly longer payback, but, again, as I was saying, years two, three, four, five is where, you know, we get the we get the additional, it flows through to bottom line and and cash.

46:06 How long does the equipment that you place exchanges for an exchange lead contract last before this needs replaced? Five years. Five years. Next one. Net I think next one's again. It's presubmitted on networking capital swings. I think I've explained that. Alright. That would be the next one is a bit more about have be useful to have a bit more color on your hardware strategy. To what extent are your server racks you place sorry. People keep going. This is moving. Place with Exchange is built in generic off the shelf technology. In what extent do you see them move self moving into proprietary hardware? I mean, we won't move any proprietary hardware.

46:51 Right? It's we will continue to use some of the vendors we use. We're not gonna start building our own compute nodes. But, you know, I get it. Like, some of this is pretty sensitive stuff. It's not something to talk about in an open forum. For the next twenty years, we covered that. So, again, a similar cash payback, on revenue share deals. Again, depends on how quick you know, somewhere in the region of twelve to fifteen months is is is difficult to predict. It it depends how quickly what as we do more of these, we'll have more MI to to to share in later years, but it's a bit of a guesstimate just now if we're if we're doing it, so we're not sure. Your largest customer contributed 30% of group revenue, and declined slightly. Is that something to worry about is the reality of the question? No.

47:45 I think it's mostly to do with the swing in the the dollar rate. Yeah. It's it's it's an FX swing. So we don't really look not really looking to grow that contract. We are we've never really wanted to have customer concentration risk. So, you know, we're looking at external sources for revenue growth rather than that large existing client, but that will continue for a long time. As a 19,000,000 TCV figure you quoted for 2025, the total of new committed orders in '25 was an order backlog. New committed orders. Okay.

48:32 Fair enough. Fair enough. Enough. Fair There's another one about volatility figure for executive compensation. Not quite sure we can go through that. You mentioned that an early stage idea would you would, which you said could become another Exchange Cloud like opportunity. Yeah. That's market intelligence. Right? We're very interested in period with the the AI stuff is all over the data. Right? Can we recognize patterns of customer data? We are recognizing them in the data that we have, but it's it's in customer trials, and there's gonna be some very interesting output. I will know more over the coming months. But if that if it works as we expect it to do, then it can be a material opportunity for us.

49:19 I'll take next one. Next one is calling out this sort of low exchange cloud recurring revenue. Yeah. I mean, it's still it is still quite low right now. It's still in its infancy. So you've got the the JSE, as Gordon said, is the most established. What you've got in the recurring elements was that you've got half upfront and the remainder over the term. So on a million dollar contract, 500 k is taken upfront, and the remaining 500 k would be, you know, over the next four years. So and and, actually, g GSE, typically, the upfront is about 50. GSE was was actually more than that because there was quite a low there's a low OpEx cost in it. So if there's low OpEx, you you actually take more upfront. So, you know, it's still low. But as as we said earlier on, looking over the next two to three years, we expect that to be much higher as a proportion of our overall recurring revenue.

50:13 Alright. As the LMS investment from request from a specific client actually, no. It was us. Like, we went out and started looking at technology and realized what they have. So it wasn't a client that come to us and said they wanted it. We were looking at ourselves for some of our use cases. What are the key risks that keep you awake? Security, people. I never expected to have a business of a 100 and however many people we've got. That comes with its challenges. Uptime, security, managing our internal people. These are the things that keep me awake at night.

51:00 Fraser worries about numbers. I don't particularly worry about numbers. Have you do manage to enter your new exchange contract before during q two? Will would that be enough for you to reach your forecast? We won't we won't raise forecast in the back of exchange cloud wins because the reality is they're probably not gonna hit numbers until next year. You know, it takes twelve to sixteen weeks to get them delivered. So even things we say in Christmas, if a revenue share, the revenue starts for next year. So and classic contracts, proximity claim contracts, private claim contracts, the other things that will move this year's number. When do you expect of your first sale of Edge Intelligence? And do you expect it to reach a new type of client? It's new stuff. It's new clients. I mean, you know, it's the banks. It's Edge Intelligence is in a tier one domain. Right? We're not gonna be selling this to smaller firms.

51:59 I'm not gonna answer when I expect our first win because, again, I just need to like, I found if I give an opinion, people say it's a fact, and then I I get hung for it later down the line, but there's there's there's there's some really interesting proof of concepts out there in the moment. How much time do I spend in Scotland as opposed to working remotely? Too much. That has changed dramatically over the years. Like, because of our customer base now, I spend my time everywhere. I'm not even gonna say it would have been the last because it kinda gives away some of the pipeline. But I I keep joking that one day we get big enough for these on these two, sign off on a private check because I've had enough of the millions of emails that I've got and sleeping in airports and on planes and all that stuff. So a lot of time away. A lot of time away.

52:57 Where is the next one? Is the what was that? Sorry. This keeps moving because things are going on. It was the fifteen I think if somebody's asking if part of the business is a fifteen year annuity, what happens after that? I don't care. We're all retired by then. I don't know. I don't have like, I I can't maybe it's twenty years. Maybe it's twenty five years. I think a fifteen year view is is pretty spectacular. After fifty years, who knows? It's Gordon's pry Gordon's pry's in his head that he would sell the business for at least two times market cap. Yep. Not giving the number. Not giving the number. How concerned are you that the cancellation has effect on other contracts? None. We've we've covered it with all our existing pipelines of exchanges. They all absolutely understand what has gone on, what went on, and why went on, and I don't think it'll have an effect.

54:00 Can we get more color? Last few questions because we have to wrap up, folks. I think we are coming to the end of the question. So can we have more color on the proximity pipeline? Proximity pipeline's good. I mean, what we haven't been focusing is the big banks. We've got a lot of we've got a lot of clients who will buy a cabinet or two cabinet, but what we've been working on is the banks that will buy a cap couple cabinets at a time, but then do over 10 or 12 locations, right, over a mult over a you know, have a multiyear rollout plan and how we've a number of the conversations on the go. The proximity client pipeline is as big as it's ever been. We've got both new and existing clients. Right? The big bank that went live, UK based bank that put their global bond trading platform live with Proximity Cloud in London, live over the summer that that will roll into new locations.

54:53 And we've got a number of large tier one banks talking to us about global rules that roll out approximately. So it's strong. Yeah. The last question you like? Ask me the last question. What's stopping you from signing the LSE? The LSER, I've I've given up. We I've and I would keep going a full rant about the LSE, but it's pointless. But I've given up. I've just given up. Like, they they offer us no support as being the only provider of exchange technology on their exchange. Seems completely meaningless to them despite repeated attempts to work with them. They continue to try and get us to talk up how good it is to be a PLC, but we will have given up on them.

55:43 So, like, that's that's a mini rant. So, yeah, I'll I'll leave it at that. Yeah. I think that's that is that there's a lot of kind of repeat type questions here that we've kinda covered. So I think we'll leave it at that, folks. Gordon Fraser, thank you for answering all those questions you can from investors. And, of course, the company can review all questions submitted today, we'll publish those responses on the InvestoMeet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Gordon, could I please just ask you for a few closing comments? Yeah. Sure. So thanks for the time, folks. A lot of noise around these these results, a lot of, you know I hopefully have explained as much as I can, but the business is in a great position. We had a good year.

56:32 Pipeline is great going forward. We have the best products in our class, and we'll continue to develop them and deploy them and add value to our customers. And by doing that, the biz the business will continue to go for a long period. So we're excited about the years ahead, and thank you for your time. Gordon Fraser, thank you for updating investors today. Can I please ask investors not to close this session? I shall now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure be greatly valued by the company. On behalf of the management team of BEEKS FINANCIAL CLOUD GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.