Celebrus Technologies (LSE:CLBS) — Interim Results

0:00 Good afternoon, and welcome to the CELEBRUS TECHNOLOGIES PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using 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 is appropriate to do so. Before we begin, I would like to submit the following poll, and I

0:31 would now like to hand you over to CEO, Bill Bruno. Good afternoon to you. Hi. Good afternoon, and and good afternoon to everybody. Thank you for for taking the time to to join and and listen in to our interim results presentation. I'm joined today by our CFO, Ash Mehta, as well, and the two of us will walk you through the results and some of the business strategy and and hopefully provide you with some, some content that sparks some questions. So please feel free to interact with the q and a tab. We've got that up here on the screen. We'll try to get through as many of the questions as we can here as we as we get to the end. So from a, an agenda perspective, kinda follow the same plan for those of you that have attended in the past. It'll it'll look, a lot like what we've done in the past, with a few small changes. So we'll walk through a little bit. Just a very quick, reminder of sort of the CELEBRUS mission statement and values. And the reason we're doing that is as we're building out the business and we continue to sort of communicate with investors, we communicate with clients, and we set our various strategies across the business and business plans for each division, we really try to align on those values and try to bring that to life. So you'll start to see some of that coming through in all of the materials that we're putting out, and so we'll just do a quick refresher of that. I'll also walk you through some of the operational highlights, that for those of you that had read the the RNS from this morning would have picked up on on on several of those.

1:53 Ash will then walk through the financial highlights and sort of review the balance sheets and several of the common, common views that we walk through in these meetings. And then I'll wrap up with, with some just a view into some elements of the business strategy, cover off on our, competitors, cover off on some of the how we sell, how we go to market, and, provide some use cases as well and just give you a sense of what customer success has been doing globally with our customers and not only helping evolve how we how we grow those relationships, but also in helping us sort of, collect all the stories from the field and make that readily available to to marketing, to sales, etcetera, as we as we try to evolve the business and move forward. So, from a mission perspective, everything that we do with the CELEBRUS platform and everything we do, in terms of the services and the data and the technology that we provide to customers is geared around helping them just build better relationships with with their consumers.

2:52 As many of you are most likely aware, we sort of have two forty thousand foot view, use case segments, one on the marketing, advertising side and one on the fraud. You know, the CELEBRUS platform, the data that we create, the digital identity solutions that we provide in that marketing world are geared towards learning more about you as a consumer and then ultimately helping you do something, buy more products, get you to the content that you're looking for, make the experiences that you're having on that website, on that mobile app, on that kiosk in an airport, much more eventful, much more fruitful, and much, more streamlined. On the fraud side, it's about protecting consumers. Right? And it's more about taking what CELEBRUS knows about an individual on that particular brand website or your banking app, etcetera, and making a very quick decision based on the evidence that CELEBRUS gathers as to whether or not it's actually you before that bank transfer, before that purchase.

3:51 Or, you know, if if if you've fallen victim to to someone gaining access to your credentials, etcetera. But at the heart of everything that we do, it's about being focused on our customers, helping them build better relationships with their customers, and then ultimately making sure that we're innovating along the way and keeping things simple.

4:10 And I'm not gonna read, you know, all of the mission and value statements here that we sort of hold true as as a business. But ultimately, you know, innovation and simplicity is what you're hopefully seeing. For those of you that have been following the brand during the time that Ash and I have stepped in and built the the management team that we have today, hopefully, this is what you're starting to see, particularly for for the for, investors. If you've been to the investor website today, as an example, you probably noticed some changes there as well as we continue to sort of roll in the investor content with the larger marketing site and make it easier for for investors to be able to digest not only what we're bringing out in terms of RNS and interims like this, but also making easy for you to dig into some of the case studies, some of the marketing elements, and some of the more sales focused elements that we're bringing bringing in through our blog posts, etcetera, as well so that you have much easier access to that as we've rolled it all together.

5:02 From an operational, standpoint, the the first thing that hopefully you noticed in the r and s is that that is the broad sort of set of wins that we've chosen to highlight from both during and after the period, including a a large global airline, a UK energy company, which was a new a new sector for us and was the utilization of our Salesforce application and and the integration that we built with Salesforce to their to their marketing cloud and data cloud capabilities. A financial institution in The US, who has been with us now for a year, and has taken on multiple upgrades during that time, sort of validating the land and expand approach that that we've been building upon as we've built out several skills across sales. You might remember the last time that we chatted, we had vertically aligned our sales team so that we had sales team members in sort of our core five, if you will, financial services, insurance, health care in The US, retail, and travel and hospitality.

6:03 Now we obviously have a UK energy company. We also have a telco customer. So there's some sort of, burgeoning areas of interest, including the education sector, but those are largely the five. We brought on a fintech platform. We expanded our relationship with an existing European retailer. We added a bank in Poland, and that was our first time doing business in Poland, which was a a fun process to go through, but one now that that looks fruitful for us given some of the partnerships that we've built in that market and and several new opportunities sort of building in that region for us in, in Europe. And we also expanded one of our health care customers in The US. A customer has been with us for a little over two years and has actually taken on, I believe, it's three upgrades over the course of that two year period.

6:49 Again, showing the ability for us not only to sort of expand that sales capability, our ability to prospect and close business, but also for our customer success team to be able to work with those part those clients once they become part of the family and help them get more and more value from the CELEBRUS software platform. From a marketing perspective, we've really focused on aligning with the sales hunting process and and bringing, and I'll I'll come on to this later on, but really just helping align sort of an account based marketing strategy. We've done a lot of fine tuning, a lot of learning of what's working, what isn't, what's a target account, and what isn't. And we've really brought the sales and marketing teams together, through some recent summits that we've had to really align on that. We've also continued to innovate the platform. For those of you that follow our story, you you know that we do two releases a year.

7:42 We've extended some of our patents and capabilities, significantly over the course of the past year with a significant emphasis on our analytics capabilities, not just reporting in CELEBRUS digital analytics, which we talked about this time last year, but also now building out a self-service analytics application, built around the Metabase technology deployed within all of our CELEBRUS cloud environments,

8:04 which continues to be prominent in all of our deals. In every new logo that we've done in the past two years, only one of them was not a CELEBRUS cloud opportunity. And as a reminder, CELEBRUS cloud is something we started standing up a couple of years ago that we've put quite a bit of engineering and innovation behind, but it's a single tenant private cloud platform that we that we stand up largely with our partner AWS today around the globe. And we also continue to optimize the business. We've done a lot by way of new systems, new processes. One of the areas as part of this cloud transformation was that we took some of the the data centers that were active on our side, and we've consolidated those down now to just a single a single data center. So we continue to find ways to to optimize business, to optimize cost, and to make sure that we're able to free up that money to put towards the things that are more revenue generating.

9:00 Ash? Yeah. Thanks, Phil. So let me just run briefly through the financial highlights, but many of these points will come up in subsequent slides. So I'll go in a bit more detail on those subsequent slides. The key overall message from the financial highlights is that all of the key indicators are up compared to this period last year. So annual recurring revenue is up to 26,200,000. Total revenues are up. But more importantly, underlying that, the software revenues are up. And if you've been following us for the last couple of years, you'll know that for us, software revenue is really a very key indicator. The gross profit margin is up, and I'll talk through why that is. And also, I'll talk through what is more important, which is a software revenue gross profit percentage, and that's also going up in line with previous periods.

9:48 PBT, we focus on adjusted PBT, which is effectively a proxy for cash. So that's up. I think that's our highest h one PBT we've ever reported. And along with that, the EPS is up. Our cash position is healthy. We have no debt, and we're paying an increased dividend for this first half as well. So let's go through the income statement. As you know, we split out the software revenues and the hardware revenues, and the reason for that is that the hardware revenues are generally low margin, and they're also very intermittent. So we still have some legacy customers for whom we supply hardware as part of an overall installation package, But this isn't something we do any longer.

10:33 In fact, there's only a handful of customers for whom we do that. So we separate those out because the real value creator in the income statement is a software revenue line. And what you see there compared to this period last year is that those software revenues are up 22.6%, up to $11,200,000 now. And moving down the income statement, we see a gross profit percentage, which is also up. So me just talk about some of the dynamics behind that. So our software GP percentage is up to 56.2%. And the reason for that is twofold. Firstly, it's about scale. So as we scale up, as we keep growing our software revenue line, there are efficiencies and economies of scale that we benefit from. On top of that, where we add on new customers, whether it's a new logo or whether it's an upsell, the large part of that contract value is license. So typically around 85% of that contract value will be licensed.

11:32 And you will know that from our various revenue streams, license revenue is the most high margin, typically around 85 to 90%. So again, as we grow the business, you ought to expect to see that gross profit percentage for software going up period period on period. There is first half, second half element, so it's best to look at it on a full year basis. So whilst we're hiring this time last year, we anticipate that the full year gross profit percentage for software will also be higher for the full year as well. So it's about scale, but it's also about some of the work that we've done. So as Bill was referring to on a previous slide, we've done a lot in terms of moving our infrastructure into the cloud, and that has helped by lowering costs. But on top of that, as we add on more customers and almost all of our customers now are on CELEBRUS cloud, We're able to extract a lot of efficiencies and automation from the CELEBRUS cloud environment, and that also then contributes to our software gross profit percentage.

12:36 Moving down the income statement, our operating expenses are up quite significantly against this time last year, but that's really a carry through from some of the increases we made in q three and q four last year. So, of course, as we're going through a year, we're not only looking at delivering the numbers for the year, we're also looking at what we need to do for the subsequent year. And so on the April 1 for the next year, being able to deliver the numbers for that year and being ready to be able to do that. So we made a number of investments principally in customer facing roles around q four last year. We saw the cost go up for the full year last year, and we sort of carry through of that into the first half of this year. Headcount currently is just over 160, but the headcount we're adding are principally customer facing. So we've talked previously about how we've built a direct sales team, we've built a customer success team, and how we've invested further into marketing. So these are the main contributors to the operating expense line growth.

13:37 Finance income net, we have healthy cash balances. I'll talk about those on the next slide. But not only do we have those, but we also manage them very well. So we have converted our cash balances from GBP into USD. We did that in the early part of this financial year, and that's all part of the change to report in US dollars rather than GBP. But we manage those well. So we manage them really looking at the interest increments between investing for it overnight or a week or two weeks or a month. And so over the period, we've got 658,000 of interest income. So that brings us down to an adjusted PBT of just over $1,000,000, again, higher than last year and the highest we've ever reported for a first half.

14:25 Moving down, we've got amortization and share based payments, and those are typically noncash items. And that's why we focus on the adjusted PBT. That's effectively a proxy for cash generation. Below that, as I said, the amortization, noncash share based payments, noncash. And that brings us down to a profit before tax of $250,000. No tax charge for the period. You may remember we had a high tax charge for the previous year, and I did talk at that point about our tax charge coming down principally for the fact that we are we have some tax losses in The US and those will be used up this time around. And also through our further investment into r and d, the utilization of the patent box regime on top of the r and d credits regime will bring our tax charge down

15:19 quite significantly this year. So that $250,000 for the half year translates into an adjusted diluted earnings figure of 2.55¢ per share. So all of these numbers are in US dollars and in cents, and that, again, compares favorably for this compared to this time last year. Thank you. Mhmm. So on the balance sheet, not a whole lot to say. I mean, other than the fact that it's a very strong balance sheet, we have a healthy cash balance, we have no bank debt, of the movements that are up there. Let's look at the property, plant, and equipment. It's moved compared to this time last year, but you may remember from the final results, this was really as a result of entering into two new office leases. And, of course, under IFRS 16, we have to capitalize those and put those on the balance sheet. So that's what that $2,000,000 is, and that will run off over the course of the leases.

16:19 We had some inventory at the full year end, and we have some of that still at the half year end, and that will be well, that has already moved off the balance sheet now. We don't hold inventory. We don't have a warehouse. So this is typically goods in transit or goods in advance of a particular customer sort of hardware day deal. Trade and other receivables have come down since the year end. We continue to collect our cash very effectively. Typical payment days by our customers are forty five to 60. We have very little aging aged debt, and we have no bad debt. And we've not had any bad debt for some years now. Moving on to liabilities, trade and other payables is down from the full year end. And if you remember, we had inventory on the balance sheet that was for a particular customer contract. And allied to that, we had the payment that we needed to make for that hardware, and that's why the cash balance also at the full year was so high. So that is now unwound.

17:20 And what we see now in the balance sheet is much more kind of typical and normal kind of balance sheet if you like. And you'll note within that also the deferred

17:29 income line of around $12,000,000. That's fairly typical. So we build customers in advance of their sort of year of services and license. And so we collect the cash in advance, that's what that figure there represents. It's people who've paid us in advance of the recognition as the revenue. So that brings us down to $37,000,000 of assets, of which 26,000,000 roughly is cash.

17:59 Let me say one thing about the freehold property. It was one of the questions already posed. So in the assets held for sale line, you'll see there a figure of $4,000,000. That is the property we have in West London. That's our UK office. We have had that on sale for some time now. We have an offer. The buyer has put in planning permission, and we're waiting for that to complete before we then get into finalizing the legals. But we anticipate that happening, in the next few months.

18:29 Okay. Thanks, Bill. Mhmm. Okay. And finally, on cash flow. The major point here is really the unwinding from the full year. So at the full year, we had a high level of inventory. We had a high level of cash. We had a high level of trade creditors, and those are now pretty much unwound. And that's why you see that movement in working capital, which covers the inventory and the debtors and creditors outflow of just under $10,000,000.

18:59 We had a high tax charge last year, as I said, and so we paid that tax. That's around $2,000,000. And then the other items of note here, probably the capitalization of development costs. So historically, we've had around 400,000 capitalized. We would rather not capitalize development costs, so most of them run through the p and l, typically around £2,000,000 per annum. However, there is an element which we are required to capitalize under IFRS. The amount has gone up in this period and that's as a result of certain investments we've made into more the development side, rather than the research side, this is all related to utilization of our software on for mobile apps. Lower down, dividends paid typically in a year.

19:46 We'll pay around sort of $1,800,000. So in the first half, we paid the final dividend, which was $1,100,000. We did have a purchase of some shares, so you may remember we had a share buyback scheme. The purpose of that was really to negate the dilutive impact of our share options. It's not for earnings enhancement, and we don't anticipate doing a share buyback scheme in the near future. We have enough shares in treasury, which will cover the dilution from options. So again, as you look at the figures and you look at the adjusted diluted earnings per share, you also need to bear in mind that actually that dilution won't happen at this point in time because we are fully covered for that dilution.

20:32 Okay. And one final point I said at the start, but just to reemphasize in terms of what our key metrics are, ARR is a key metric. That's a figure which went up in the period. Software revenues is a key metric for us as well. Adjusted PBT is a key metric, but probably secondary to the others. So we have a profit target we aim to make, but we remain flexible. And if we did see opportunities to invest, to accelerate organic growth, whether it was a particular vertical or a particular geography, that's something we would consider with some impact potentially on profit. But right now, we're geared towards delivering that profit figure and consequently also paying a progressive dividend period to period. Okay. Thanks, Bill. Excellent. Thank you, Ash.

21:19 So just a a bit about the strategy, competitors, and kind of our approach in the market. You know, again, this this slide has kind of become our our intro slide these days for how we how we talk about the CELEBRUS platform, which is our predominant, what we offer in the market, what we're selling, and and what we're building our strategy around. This is delivered through CELEBRUS Cloud predominantly, as we mentioned before, on a single tenant private cloud instance. And it it's all part of sort of how we how we simplify the story around what CELEBRUS does. And as a a refresher for everyone, brands that are using CELEBRUS to improve those relationships with their consumers are deploying our technology on their websites, their mobile apps, their their kiosks in an airport, their ATMs, etcetera.

22:06 And they're using that to basically build a a compliant profile about you that includes your journeys, your interactions, the things that you're typing, your common behaviors and interests, etcetera. And for the on the marketing side, that then is used to build better experiences, as I mentioned before. On the fraud side, it's used to confirm that it's you to to protect your money, your assets, your accounts. But it's also used to power a lot of of of partner integrations. And we talked a little bit about this in the r and s, and how we've continued to expand some of the integrations. You know, we've had had longtime partners like Teradata and Pegasystems and others. We've had recent partners as recent as a couple weeks ago. We announced a a partnership with Optimizely, an a b, multivariate testing solution and decisioning platform.

22:57 We've done the same with Braze, with Salesforce, with Snowflake, with Databricks. And all of the new technology partners are generally driven by a client need. So we're not we're not building things and hoping that they'll that people will show up. We're using what clients are asking. So for example, one of the financial, new logos that I mentioned early on in The US uses Databricks as their data platform, their cloud based environment. And so we had to build an integration with Databricks, and then that that facilitates a great value discussion, a mutually beneficial discussion with someone like Databricks about how we might wanna do that elsewhere and how we might wanna bring that to market. And so we're building these integrations based on client need, and then we're aiming to have these partnerships and these integrations become fruitful in the coming years.

23:47 So it's a way of us building more and more pipeline. We also invested heavily in analytics over the last two years, and this is this is something that that just made sense for us. We've had clients wanting to just build visualization and reporting on our data, and it's become quite cumbersome for them to to have to do that in another system. So it's quite easy. I say easy because we're blessed with an unbelievable engineering team, but, it was quite easy for us to stand this up based on the data model and all the structure and thought that has gone into the CELEBRUS platform and all of the various patents that we've maintained for years now and how this platform operates to really bring that together. And so we've really started to round out the platform. I know there's a couple of questions, that I can already see popping in kind of around the acquisition targets as we've talked a bit about our acquisition strategy.

24:37 As we think about the first acquisition, you know, that that that could come to pass, and there's nothing imminent, but it is something that we've invested in and that we're exploring and and evaluating companies, it's really about rounding out this platform, making it more business friendly, adding new features and functionality. And so that first acquisition is gonna be focused on being a bolt on capability that we can bring into the CELEBRUS platform and cross sell to their customers, to our customers, and and and continue to to innovate in the market is is sort of the thought process there. From a competitor standpoint, as we've rounded out the platform and continue to to to evolve, the the competition does change in based on kind of four high level categories. On the marketing side, you know, the bread and butter that, you know, CELEBRUS goes back to 1999.

25:26 Right? My first interaction with it was 2003 when I was a consultant at the time in The US. The the marketing side, the main competitors are Adobe and Telium, for those of you that are familiar. On the fraud side, the main competitors there are are folks like Biocatch or BehavioSec or organizations like that. A lot of them start with the letter b, whatever reason. In the analytics world, it's things like Adobe Analytics, Google Analytics, and a few others like an AMP parity or or things like that. And then we broadly get kind of thrown into the CDP arena, I suppose, as well. It's a a common nomenclature, but in my opinion, it's become very confusing because everyone claims to be one. And the definition of a CDP is kind of it's kind of expanded a bit and and and lost its way, if I'm if I'm, you know, pontificating for a moment.

26:19 But we do find ourselves against some of the technology in that in there, like a segment or perhaps analytics or things like that. And so the competition does vary based on what we're selling, based on who we're selling to. And we have sort of different battle plans for how we approach that based upon that particular sales situation, based upon the existing marketing technology stack that a brand might have. And we are very much on the front foot of of really trying to sell a story with two sides of the coin. One is the value story of what CELEBRUS will bring to an organization, and I'll show you some examples of that shortly. The other is cost savings. You know, candidly, if we're talking to someone who's perhaps frustrated with their analytics platform, you know, we're not talking about making that platform better. We're talking about moving them to ours. And that's something that we've been very successful in doing over the last couple of years with several of our of our of our key clients.

27:17 From a market approach standpoint, you know, as, again, those of you that have been following the journey and and and, you know, meeting with Ash and I, you know, we've stood up a direct sales function that includes hunters, that includes farmers, that includes customer success. We've stood up a marketing function that we continue to innovate around the globe. We have our partner team, and we've really evolved our partners in terms of not just technology partners, but also consulting partners. And the three of them sort of formulate our prospecting funnel, if you will. So when we're going out to the market, trying to find opportunities, trying to turn those opportunities into new customers, you know, the sales team is obviously managing the lion's share of that, but marketing and partners are feeding it with the the activities that they're doing as well. As we land and expand those clients, you know, then we have, in essence, three growth funnels to think about as a business.

28:06 You have our customer success team who's focused around the globe on helping clients get enabled on the platform, making sure that we have happy customers, making sure that those customers understand the value that we can bring and and the the art of the possible, etcetera, etcetera. But we also have two other growth funnels. One is professional services, managed services, you know, the teams that are on the ground standing up the environment, working with clients to to to enable the use cases. You know, from a customer first mentality standpoint, to go back to our to our values, every interaction that we have is an opportunity to improve satisfaction, to be easy to work with. And the more and more that we focus on that across the business, the easier it is to upsell our customers because they want to do more business with us.

28:53 You know, getting feedback from customers that we're the only vendor that actually cares about them or that has delivered on everything that we've promised, which is feedback that we've gotten, means a lot to what that team is doing on the ground. And then finally, the the marketing team. We've started to spend a lot of of of thought and put a lot of strategy into how we better enable and continue communication with clients as well, sort of through things like an ongoing newsletter, enhancing the way that we support our customers, updating the portal, updating a lot of our our web content, investing in some research around the use of AI and our our technical brochures and and and how to guides to make it easier to digest for customers. And so there's a lot there, the growing the growing use of YouTube as a channel for us to show videos and capabilities of CELEBRUS in a meaningful way. And so this is how we talk about the business. This is how we think about our field teams and how we think about not only the market and winning business, but then also retaining customers and growing them in in their usage of the platform.

29:59 As we're doing that, we come across, basically, when we're prospecting, three different types of personas that that we've we've kinda simplified it down to and based on the persona, sort of determines how we engage. So if we're at an event and we're sitting at a booth or maybe presenting on stage and talking to people afterwards, what we're trying to do in basically three three to five questions max, you know, think of it as you're you're in the elevator, you've got thirty seconds to catch someone's attention, is figure out where they're at on the journey, where that person is and where their organization is. You know, the key persona for us is someone who's very frustrated, been let down by other technology, and is trying to do something that our platform can enable. That's our holy grail. Right? That's who we're searching for.

30:44 The second persona is a more open minded person. Maybe they know that there's a better way to do things, but they need to be educated or convinced. And that there is more of a sales and a marketing play. And we're going back to kind of the funnels of how we educate and how we really bring them on a journey to to become part of the family here. And then the third persona is the c u next year folks. It's a bit tongue in cheek. Right? But they're the they're the folks that think they've got it all figured out. Maybe they haven't hit the level of maturity yet with their platforms to realize that there's gaps and problems, and that is purely a marketing play. We're just gonna stay top of mind, reach out to them through our newsletters, email marketing, etcetera, and hope that they graduate to either persona one or persona two over time. What we're selling is also kind of been simplified.

31:32 You know, again, if you think about the platform slide that I walked through before, we're really trying to sort of bucket the stories, and that really coincides well with how we've vertically aligned and specialized our sales teams so that we have use cases and stories for marketing, for fraud, for advertising, for data science. You know, artificial intelligence, you can't you can't have a presentation without saying that word at least three times. It's just a it's just a rule these days. Around our digital identity verification, which plays in both marketing and fraud, analytics, etcetera. You know, this is this is what we're selling. When you think of when you're looking at the balance sheet, when you're looking at the revenue breakdown that Ash walked you through, the the software revenues, they are made up of this. Our services and our capabilities and our software and our and our IP.

32:19 And, ultimately, what we're finding to be the biggest source of business for us in terms of top of the funnel entry in our pipeline, so when we think of prospecting in the true sense of the word, if I'm going to have a conversation with a brand and I'm at an event or I'm out at a networking thing and I've got a few seconds to really capture someone's attention, it's gonna be focused around one very simple theme, which is how well do you know your consumers when they're not logged in? Generally speaking, that's why Salesforce reached out to us to build the app that we built. That's the integration we have with Pega. That's the integration we have with Optimizely. You can go down the list. Every time we're building an integration, it's because the profiles and the identity solution that we offer for how we build a profile about a consumer is quite powerful. And when you marry that up with technology that could that needs that data, it generates some unbelievable results for customers.

33:15 It also helps that in the sort of cookie apocalypse or however you wanna refer to it, there's so much clickbait out there around, you know, first party cookies, third party cookies. The way that we've architected our platform as a single tenant private cloud platform combined with the intellectual property and IP that we've built around this means that the way that we're interfacing with consumers as you're browsing websites and apps is the most compliant and the the most respected version of a cookie and how we identify individuals, and it does give us a leg up on the competition in terms of how we manage that across all the different verticals that that we ultimately operate within. And what that ultimately has done is it generates results. And this is you know, I'm I'm such a fan of our customer success division and our our VP of business development that we brought in to help really guide how we engage with customers and how we build a robust value story for our customers.

34:12 But one of the added benefits outside of just upselling and the revenue and the ARR that comes with that is that we've been able to consolidate a bunch of stories. And these are stories around how clients are using our data to generate real results in the field, focused on improving those relationships with their consumers. And you could see things here like cart abandonment, you know, in the in the retail sector and being able to to get people to come back and reengage and purchase those items. Things like marketing attribution that if you do a cursory search for because of the deprecation of third party cookies has made it very difficult for marketers to understand where their dollars are going and how well it's working. And it then also makes it very difficult for them to understand their customer acquisition costs, which is something that's gonna be scrutinized on every balance sheet for every marketing count, department in every vertical that we operate within. And you'll see things like decisioning.

35:06 You know, you really can't build a a decisioning program using a system like Pega or Salesforce or others or Optimizely without knowing who the customers are. It's really easy when they're logged in. But when you unlock that power and you bring something like CELEBRUS to the table and can now start to build profiles from the very first time someone loads a a page or a screen on their mobile device, that can become quite powerful. And to kind of bring that kind of further, you know, we'll just drill into one of these examples. But media and advertising has been an interesting exploration for us. It's something that I always felt like CELEBRUS should play a much larger role in, for many years. And through partnerships like Merkel and others, we've really found ourselves in the forefront of helping guide brands on how to best spend their money and how to avoid wasting spend.

36:02 When I was at, my previous employer, you know, the and we did a lot of media auditing. There was, we came across a a common trend. Marketing and advertising budgets, particularly media, was one of the largest line items on a balance sheet, larger than r and d in most organizations as well, which means even a 5% savings in when you're talking about the the that sort of magnitude of spend can make a huge difference on the bottom line for an organization and free up funds to be able to to put that elsewhere in improving their relationships with consumers. And you'll see that here in this example where because of the data that we were providing and the digital identity solution we were compiling and the ability for them to build better models and and make better decisions in their advertising because they had data that was timely, accurate, and complete without any gaps, they saved 40% on their paid media spend in that first month and saw an increase in activity. So not only were they saving money, but where they were placing the ads was generating better results.

37:07 And that's the two sides of the coin I mentioned before. The the value story of increasing the the the throughput or increasing the value of of that particular campaign, but also saving money along the way. And I don't think it in in today's market, you can do one without the other. You you have to be able to show your ability to to save them money and make them money at the same time. Similarly, on the fraud side, a lot of what we're doing in fraud for customers and a lot of the cross sell and upsell and even some of the new the the new logos that we've brought in on the fraud side have been very focused on this specific use case. You know, there's a lot of legislation in The UK around scams. At the end of the day, you're someone's either gaining access to your account pretending to be you, or they're trying to guide you to doing something that you're not sure you should do or that you shouldn't do in the first place.

37:57 Either way, you're behaving differently. And, ultimately, that's the common use case of what we're solving, and it's rooted in the same things that we do in marketing. It's rooted in our ability to understand digital identity, and it's rooted in our ability to build a profile about you as a consumer as you're interacting with your bank across your various devices, as an example. But in this case, we're building an evidence profile, and that evidence profile is ultimately what the brands are using in real time to stop the fraud before it happens or as marketing likes to say, outfox the fraudsters as they've started to use, all of these these animal images, which interestingly enough is we practice what we preach when we're spending on our advertising and we're we're advertising on LinkedIn and in Google and elsewhere and bringing the brand out there with our with our with our marketing. For whatever reason, these animals in funny sunglasses and suits, etcetera, behave get way better click through rates and interactions than anything else that we're doing. So you're gonna see a lot of these animals probably in our annual report as well. So just, I guess, consider that a warning.

39:03 And and finally, before we open it up to questions, from an Outlook perspective, the pipeline continues to grow. For us, we know exactly what we need to do as a business. We know how much more we have to sell. We still have four months left in our year. We had a strong first half as Ash just walked you through, and it underpin we are confident in our ability to achieve, this year's results. There were some slowdowns. We mentioned that in the outlook statement in RNS. I'm sure some of you have questions on that. It was related to two things. We had a a couple of clients in The UK that were sort of waiting to sign pending some of the budget decisions that were being made. Those have come through since then and and and closed. They were supposed to be first half deals, though. And we had a couple in The US that were sort of waiting on the election cycle as an example, which obviously still leaves a bit of uncertainty in The US. But from our perspective, the pipeline continues to grow. We're seeing some fantastic efforts from the team and not only growing the top end of the funnel, the prospects, but also finding our way through that funnel and and and getting ink to paper and closing deals. And so we've got work work ahead of us as every business does at this time of year, but we're continuing to plug away at it. And and we're really happy with the growing pipeline, the visibility, and the the the new wins that we've brought in, particularly post the period as some of those ones that we were waiting on started to come through and the dominoes started to fall. So, ultimately, that's brings us to the to the q and a. I really appreciate everyone's time today, and we'll we'll jump over

40:35 the questions. If you do have questions, please submit them to the to the panel there, and, we'll run through a few of these here and try to cover as many as we can. The sale of the old premises, we've we've covered that. Yeah. Who are our competitors? We've we've covered that. You've mentioned exploring acquisition targets. Well, it jumped on me. Could you share more on the specific types of technologies? So I talked a bit about the acquisition strategy and the bolt on approach and kind of what we're looking for. In terms of capabilities, it's more on the activation of data. So it would be, in you know, personalization is a common term that I would throw out around that, marketing automation. The fraud world, it would be called intervention.

41:22 But it's really you know, if you think about our platform, we've rounded out the analytics and the reporting, the machine learning. We've we've got the data collection and the digital identity capabilities, so we know who the consumers are. We know what they're doing. We know what they're interested in. It's a structured dataset that can plug into any technology as we've proven through our various partnerships. And it's really about finding some technology that we can plug into, but this time in a more formal, you know, acquisition type relationship that brings value to our customers and gives us something else to sell in in the market as well. Anything you mind to add on that, Ash? Yep. No. I think it's okay. Yep. Alright. What gives you comfort in achieving the PVT f y '25 forecast? You wanna talk through maybe the second half weighting and kind of some of the margins that come in through that, Ash? Yeah. Sure.

42:08 Well, the first thing to remember here is that when we sign a customer or when we renew a customer, it's typically for a three year term or a non cancelable deal. And what that means is that when we go into a financial year, it's not as if we have to sell that amount of our revenue for that year because a lot of it was already in the backlog, and we know how much it's gonna run off over the course of the year. So we monitor that on a month by month basis. So at the start of the year, it might be a certain amount. Obviously, during the course of the year, we'll sell more upsells, get new logos, and that sort of amount already kind of banked, if you like, for the year will increase. We'll know what renewals are coming up for the year. We'll put them into our pot as well, although they're not certain, but we have high visibility if there are any customers who aren't gonna renew.

42:57 And what that effectively leaves is a kind of a gap, if you like. And that's the gap we need to fill, which is through new sales and upsells. And that's the number we track month by month well, week by week sometimes, in fact, to keep an eye. And the comfort in filling that is based around the fact that that's the number that goes down month by month. And on top of that, we see our pipeline and how that's grown, and Bill talked a little bit about the further investments we've made into marketing over the last sort of six months or so. So we keep a list of all of those deals that are coming up in the pipeline and their close dates, that's effectively how we monitor it. Now, historically, we have had an imbalance between the first half and the second half. The reason for that is that, historically, we sold principally through partners who had a December year end, and so a lot of our renewals and anniversaries are in the second half.

43:53 So if you were to split out our ARR of $2,526,000,000 dollars in terms of does it come for renewal or anniversary in the first half or the second half, the bulk of it would be in the second half. So when we go into the second half and we've already reported the numbers we have reported and we look at what still to do, a large part of that is already covered by the ARR for the second half and on top of other service contracts that we might have as well. So that's what gives us that level of comfort and the systems we've implemented over the last couple of years or so in terms of a much better CRM system, a much better finance system. There's a sorts of tools that we're using in terms of monitoring this. Thank you, Ash. What is the average deal cycle length, and how has that been affected by recent market conditions?

44:42 So, it's a it's a good question. I'll give you I'll try to give you a succinct answer here because there's a lot of analysis that we do as we win or lose deals. We do a bit of a deal review, which includes a bunch of metrics that we capture in HubSpot around how the deal flows, the timelines, how long they're in each stage. We've got a five stage pipeline, and sort of an amount of activity that's happening with the client at each of those stages, which generally shows how good the engagement level is with those customers. And you can start to see what's working and what isn't and and and start to see some patterns. So our our VP of global sales has kind of revamped our sales process. So very early on in a deal now, we're getting quite a bit buttoned up in terms of commercials and, the costs and kind of all of the basics of the thing that you of what you'd want before you start the legal process.

45:32 The legal process is the longest part. Our average deal cycle, it it it sent it kinda averages out around six months, but types of deals seem to have different timelines, you know, that factor into that average. Holistically, it's about six months. But if it's a partner led deal, it's usually a little longer. And that's because when we're selling direct, which the timeline is shorter, we do a lot of prequalifying that we're still trying to help educate partners on how to how to approach that. So when we're direct, it's shorter than a typical partner timeline. We've initiated, over the last year, CELEBRUS alumni program. So people that have used CELEBRUS that perhaps have gone on to other organizations, we've noticed that in those situations, it's a much shorter timeline to to close those deals. So we are we it averages out about six months, but we're looking at it. Hopefully, that gives you a little bit of insight. We're we're looking at how that's impacted based on the lead source, the type of deal, the use case that we're selling. And now that we're, frankly, closing more business and generating more new logos, it's giving us a good amount of data to to dig into and really use that use that to learn.

46:40 The cash balance over the next twelve months, how will we use that? We've, Ash, you can speak to some of these things. I'll I'll just, you know, kind of refer back to the comments I've made around acquisitions. I'd also mention that we're not thinking about this as a one off, scenario. This is something that we want to have as part of the strategy. We think it's prudent to constantly be evolve monitoring what's going on in the in the market and look for opportunities that might make sense to to bolt on to the business. So, you know, while there's nothing imminent, it also isn't something that we're planning on doing, acquisition, celebrating that, and then stopping that process. That being said, we also and Ash alluded to this. We're looking toward looking at how we might invest in some of the things that we're seeing working as well, different marketing campaigns in, different types of events.

47:29 PR, has been a big driver of business for us, and and we've made some new investments in that. So it's constantly a conversation at the board level. It it any decision that we make to invest will be based on on on strong analysis and data to support that. And but, ultimately, those those are some of the things that we're evaluating. And, Ash, do you wanna talk through maybe buybacks and kind of our general views there? Yeah. Sure. So as I said earlier, we we don't anticipate another share buyback program. We don't see any value in it right now. It was for mitigating the dilutive effect of share options. We will pay you the dividend, of course, in the second half. We don't have a lot of CapEx. We did have some last year because of the office moves that we did. Particularly, we don't have a huge amount of CapEx. There's not a lot of cash outflow there either.

48:19 We do capitalize some r and d and that's required, but effectively, that's cash that would outflow anyway as part of our OpEx. It's just moving from OpEx into CapEx. So really no significant outflows of cash other than, as Bill said, the investments into anything we might make for organic growth or potentially for an acquisition. Excellent. Thank you, Ash. How significant has the contribution of the solution integrator partners been to your revenue growth? So as I mentioned, you know, the partner element in prospecting does play a key role in lead generation for the sales teams. And we've built some strong relationships with with solutions partners. We've got we've done some great business with Accenture in a few markets through Europe. We've built the global partnership with Merkel and Dentsu.

49:07 We also have some smaller niche partners, like a DCS here in The UK, or IQZ over in in The US. Lot of three letter words or three letter, company names. But, ultimately, my background was in consulting. I built a a, you know, vendor agnostic consulting firm that I eventually sold to a different UK business. And when done right, they become an extension of your sales team. They help you with scale because then they become part of your services arm, and they can start to deliver services for your business. We've got a big vision for how those partners fit into the fold long term, And it's all starting with how we enable them and and and train them, which is something that we're working on right now and launching an entirely new online sort of training platform, a very cost effective approach, so that it doesn't need to be instructor led training so that we can certify partners based on the services that they want to deliver.

50:03 So, again, these are things we're making investments now. We're building these relationships now. We're actually engaging them with some of our existing customers to help us out as well. So it's a two way street, and they're bringing us in to to organizations. And so these are things we're doing now that are building for future success. That's that's the way the way that we look at those. What are the forecast of increase in cost due to the recently announced UK budget? I think I'll you know, I thought about it, but I thought maybe I'd let you touch on that one if you don't mind. Yeah. Sure. So, essentially, what this is, the the main factor is the change in employees' NI, which has gone up by 1.2% of your payroll cost, but it also applies then above a threshold, which used to be above 9,000 roughly and is now above 5,000.

50:50 So there are two whammies, if you like, in terms of that cost increase. We have around 70 employees in The UK, and they are typically on more than average salaries, the average UK salary. So this does impact us. The calculation we've done as a result of those two factors gives us an increase of somewhere around £600,000 per annum. Thank you. That's exactly what I was gonna say. Yeah. Yeah. Perfect. How many customers have you lost on renewal? And if any, why? So for those of you that have gone through sort of the annual annual report, you'll know that we we provide an ARR, waterfall each at the end of each year because it's a complete picture then. It's much more helpful than a half year view.

51:37 And we always include sort of FX changes and and losses there. In this current period, the the interims that we're here talking about, we didn't lose a single renewal. And through the the whole of this year, in terms of our current forecast, I believe we've now locked up every single renewal that that was in in place for this year. I don't I don't believe we have any that are outstanding. We did have a couple of losses last year. Those were partner led losses where the partner lost the deal. They lost the relationship at the client. And because they were the reseller, you know, we now find ourselves in a position where we have to kind of renegotiate as a separate entity to try to win those customers back. There's not any more of those, because we've now engaged. It was just one market that was a little bit difficult and not as partner friendly despite being led by a partner.

52:24 I'll protect the names and and and not and spare the spare that for keep them, keep them out of this. But, ultimately, we don't have any of those anymore. And, you know, our goal is to not lose another customer. I know that that's overly optimistic. You'd expect me to say that. But how we think about how we engage with customers, everything that we're doing to teach our team as part of the culture and that customer first mentality is one of our core values is to try to ensure that we don't and to make sure that we're doing everything we can to make clients successful, and that the team's going above and beyond to do that. You know, at the end of the day, we're we're selling software. We need to make sure that software is delivering value. And so the best way to avoid that happening, to avoid losing a renewal, is to listen, and engage with our customers and be willing to admit if we're doing something that incorrect.

53:17 We've started to adopt. I mentioned deal reviews. One of the other things that we're starting to adopt, it was actually quite a good idea that that our our our new chairman, Tom, kinda brought into the mix in in some recent meetings, but it it's around the concept. It's a it's a military framework, but it's kind of around, you know, how you come to the table to to evaluate a project when it's complete. One of the airlines that we work with, they call it an after action report. But it's it's in how you sort of take a look at a project, look back and and be and look inward and say, what could we have done better before you critique the entire thing? And so we're starting to put a lot of processes in place to to really make sure that we're looking at things holistically and that we're being honest about what we're doing well, what we're not doing well, and where we can improve.

54:05 And the management team has really bought into that. We've built a phenomenal management team. Beneath that management team, we've got a line manager team that that HR has done a great job in getting them trained and giving them the tools of the job to really carry forward these values throughout everything that we do. And I know it may sound kinda touchy feely, but that that's really important, you know, that that that culture element and that way of thinking, that customer first mentality is honestly how you avoid, you know, digging holes and instead you build mountains. Right? And that's that's what we're what we're trying to focus on as a business. I think we've got time for one more question. Just scrolling through here. Let's go with this last one, I guess. What do you see as your most significant risks in the short and medium term? I have a couple of thoughts, but did you have anything you wanted to to chime in on there? You got it. I think I'm not gonna make this a a political political discussion, but I think for me, as I'm thinking about the business, obviously, there's a political climate in The US and a change there that is a has a bit of uncertainty for how that will impact certain verticals like health care.

55:13 So for us, it's about how we diversify. We've been undergoing a lot of discussions as a management team. We're in the midst of our business planning for next year and the years out from there. And one of the things that that I'm really, know, working with and pushing the team to think about are things that we should be doing now because it's easier to do now than it will be when we're twice the size we are. And so kind of looking out to the horizon and thinking about when we're that big, what does what would what should we do now to avoid a risk or avoid something going wrong or making sure that we can scale appropriately? And let's put that in place now. Right? An example of that, just to be tangible, is around how we've structured the CELEBRUS cloud team. You know, we talk about CELEBRUS cloud.

56:01 You know, it's now second nature. We say it, you know, every other word, but we just launched it two years ago. It's a significant growth driver for us in terms of ARR. It's part of every opportunity except for one that we've closed in the last two years, and it's its own business unit. Despite the fact that it's a smaller amount of revenue right now, that it's going to be a significant amount of our ARR in the future. And so we've made some some adjustments. We've financed partnering with the cloud teams. We've put some structure around this business unit. We've put some ongoing analysis and controls around this business unit to just make sure that everything that we're doing, the decisions we're making now to optimize that are being done for the long term. So for me, there's a lot of things that we can't control, and there are things that we can control. And for the stuff that we can control, we're trying to think two, three steps ahead.

56:51 One of my executive coaches years ago used to say play chess, not checkers. And that's that's kind of the way I think about it when we're meeting as a management team and how we how we overcome that. Ash, anything you wanna add on that? Yeah. I think we're almost out of time, but what I would say is if you've been following the story for the last few years, you'll know that our customer base used to be primarily banks and financial institutions. So the work we've done over the last three years in diversifying that out into five principle first calls, including health care and leisure and retail, provides us with some sort of mitigation of portfolio risk in the portfolio of customers that we've got in the if they were a banking downturn, we still have a substantial customer base in other sectors. That's a really important thing. And then the other thing, just to echo what Bill said, is just the growing pains that companies go through.

57:41 So Bill and I have been through that in other companies, and that's why we have invested so heavily in systems and people and culture. Those are the sorts of things and training, and that's the sorts of things which will help manage some of those growth pains, which companies inevitably go through. We'll go through them. We have we have some, but we manage them. But that's a real focus for us right now. Thank you, Ash. That's great, Bill. Ash, thank you for addressing all those questions for investors today. And, of course, the company can review your questions submitted today, and we'll publish those responses on the Investor Meet company platform. And, I was just gonna ask you for some closing comments to wrap up the meeting. Yeah. Just a simple thank you, like always. Thank you for taking the time. Thank you for those of you that have invested in the company. Thank you for for putting your faith and and good money into trusting in our vision, and I hope everybody has a good rest of your day.

58:36 Fantastic, Bill, Ash. Thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of CELEBRUS TECHNOLOGIES PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.