Kooth (LSE:KOO) — Interim Results

0:01 Good morning, ladies and gentlemen. Welcome to the KOOTH PLC interim results investor presentation. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish your responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, we would just like to submit the following poll. I would now like to hand you over to the team from KOOTH PLC. Kate, good morning. Good morning. Good morning, everyone, and welcome to KOOTH's twenty twenty six half one results. I'd like to introduce myself. I'm Kate Newhouse, chief executive officer, and joining me today is our CFO, Sanjay Jawah. Hi.

0:47 So before we kick off and present our h one twenty twenty six performance, I'd also like just to mark a momentous milestone for our company. So it's our 20 birthday year, and it's twenty five years of pioneering accessible early intervention mental health support, really shaping the digital infrastructure that a mentally healthier population can rely on. We're really excited that in line with this milestone, but post the period that we'll be discussing, we have actually successfully launched Soluna that we built for the California contract in The UK. So following 2025, which was a pivotal year in delivering successfully in our four year California contract statewide delivering to all thirteen to twenty five year olds across the state of California, The first half of twenty twenty six clearly demonstrates the underlying power and operating leverage of our business model.

1:41 We have expanded our gross margin to over 74% and strengthened our debt free balance sheet to £23,100,000 in net cash. Today, we will share highlights of our successful operational execution across The US and in The UK. Critically, we'll examine the powerful policy and financial tailwinds that are shaping our market, including the landmark $18,000,000,000 meta settlement over in The US, and show how these sector tailwinds, both policy and funding, are inviting a model of care that KOOTH has advocated and delivered for twenty five years. And given our expertise and experience, positions us at this key inflection point for long term high margin growth. So the headline story of the first half of twenty twenty six is achieving the scale and integration of our digital infrastructure as part of the California behavioral health care landscape.

2:39 We've also added another state win in Michigan and made a significant movement towards a single global product with the successful launch of Soluna in The UK. We have continued to differentiate in the market by our clinical quality and high trust position, which together with our extensive experience and scale, enables us to be extremely favorably positioned for the policy and funding tailwinds that I've mentioned already that we see coming into fruition after much signaling in both The UK and The US. But before I do that, I'm gonna hand over to Sanjay, who's gonna talk through the key financial mechanics over the last six months. Sanjay? Right. Thanks, Kate. So it was a strong first half of the year for us, particularly in the context of first half of last year when our focus was very much on accelerating investments in California in terms of generating users and registrations across the platform. And we're starting to see that as the benefits of that as we see more and more organic registrations in California, friends telling each other about service, for example.

3:47 And that strong sort of focus has really sort of helped push up our margins, profitability and cash across the course of the first six months of this year. Revenue fell back about 1,300,000 to 30,800,000 of revenue and that was predominantly down to two factors. One is FX, which impacted revenue by about 700,000 across the course of the year versus last year. Sterling has continued in the first half of the year and strengthened against the dollar. Around 75% of our revenues are dollar dollar denominated, and so we've seen those reported dollars in sterling decrease. And then about 800,000 of revenue was impacted by our expected reduction in product development revenue from our California contract.

4:42 We're now moving into year four of the contracts, and the product development revenues that were used to fund the development of Slunar were very much front loaded in in in that contract. So we're starting to see those start to tail off a little bit. That was offset by the Michigan contract win. 'll the able weeks. To then in 62,900,000, and, again, there's an FX element involved there. This time, it was actually a tailwind. We we measure ARR at the period end, so at the end of June twenty six versus June 25, and that's based on the period end FX rates. And those rates actually flipped, which gave us a little bit of a benefit to ARR. But again, ARR was, on the one hand, impacted by the reduction in California product development revenues.

5:48 On the other hand, predominantly, we had the Michigan contract win come in, and that was around $2,600,000 Gross profit has returned to sort of what we'd expect to be more normalized levels around a margin of around about 74%, 75%. Gross profit itself was $23,000,000 And what was encouraging is that we've been able to increase gross profit within the business, yet keep our underlying operating expenses broadly unchanged. And that's given us quite a significant benefit to the bottom line, where you'll see the profit after tax for the first six months was 2,000,000 compared to a loss last year of 1,300,000. That's also helped us generate pretty strong cash balances and cash finished at the end of June at 23,000,000 versus 15,000,000 at the end of June of last year. We spent around GBP 2,600,000 on the platform during the first six months of the year, and that was predominantly the migration of the Slunar platform to The UK. We'll talk a little bit more about how that soft launch has gone in a few minutes. Thanks, Pete.

7:00 Thank you, Sanjay. And before examining our strategic progress in the first half of the year, I'd like to just ground ourselves in the societal need that drives our mission. So we can see clearly, and this has particularly come across the period that there is a significantly increased use of AI LLMs and particularly for emotional and well-being support. So the stark reality of the current market need is not being met and it's something that we've been highlighting for years. I've said again and again that traditional healthcare systems were built for acute crisis management, not early prevent prevention and not for the need that we see today. Because of clinical gatekeeping and those diagnostic thresholds, you can see as stated here, over 500,000 young people in The UK remain trapped on UK white wait wait wait lists.

7:52 And you may have heard earlier in the week, professor Peter Fonagy was on the BBC, and he was on Radio four. And he's leading, what's being called being termed the prevalence review. So one of the key policy initiatives that's happening over in The UK. And he was trailing his final report that is due out at the end of this week. And he states very simply that support being provided to young people needed to be improved. The NHS, he said, is simply not fit for purpose. He said that there are too many people being left on waiting lists, pointing to figures that show one in three people referred to mental health services were still waiting for help after a year. And I've talked about this before, but we know that in The UK, there's nearly one million sixteen to twenty four year olds that are classified as NEET, so not in education, employment, or training.

8:42 And forty percent of those cite mental ill health as the primary driver for them not being in work, education, or training. And Peter Fonagy earlier in the week highlighted that for all 16 24 year olds, one in four are now struggling with their mental health. And faced with these barriers in the provision that is predominantly being offered to them, young people are taking matters into their own hands. Data shows that one in four young people are actively using AI chatbots and large large language models for emotional well-being support. They turn to these digital tools because they offer immediate availability, confidentiality, no judgment, and support when they then when they are dealing with isolation. Again, we've talked a lot about the importance of recognizing these attributes for young people accessing support.

9:31 However, unmonitored general purpose AI and social media platforms do post severe safeguarding risks. So whilst they show the need for the support and the type of support required, it really underscores the urgent need for clinically governed safe digital solutions. And this is underlined again in another sort of sobering stat that across both The UK and The US, fifty percent of older teens and young adults have used AI instead of humans to talk about their mental health. But the risks of unguided digital exposure are high. So if we look over in England, one in three secondary school students reported encountering self harm content online in the past month, most without ever even searching for it. So this creates an unequivocal unequivocal imperative.

10:19 Digital support cannot simply be accessible. It must be safe, universal, and clinically effective. Again, some of you will have heard us talk about our Northwestern University evaluation of Soluna in California and looking at the significantly statistical sustainable improvement over three months by using, by using, Soluna. And so this requirement really calls for specific designs in the digital support and what that must look like to deliver to that need in the right way. Safe, accessible, personalized, reaching young people where they are, obviously, needs to be effective and available early so you avoid that move into deterioration or crisis point.

11:09 And these six pillars are what Soluna was built on, and they've already been proven effective and, and safe across both California and now as we bring Soluna to The UK, in The UK. And I know that I sound a little bit like a broken record, but as I said, the traditional provision doesn't meet the need. But in order to meet that need, there are both specific product and system design requirements, which I've just mentioned on the previous slide, to be able to deliver that safe, effective, and universal support, but also funding needs to meet that mismatch of supply and demand. However, in The US, this has been met in the transformative macro sort of catalyst for our business in this landmark 18,000,000,000, dollar meta multistate settlement.

11:57 Now we are in the early stages of this settlement. So this was announced, over in over the summer. And so we can start to see these incoming funds reach state accounts. They are coming in and you are seeing state legislators, attorney generals, and education departments are in differing ways across across from a state by state basis, but they're actively seeking evidence based population scale digital behavioral health services. Now as I as I mentioned, the funding distribution will vary state by state. So some, it will be funneled through the school district mandates, some through county health budgets or state agencies or through that attorney general funding line. But KOOTH's two years of building that state by state legislative and system relationships and partnerships, together with our flexible alliance model approach, does mean that we are perfectly structured and placed to capture these dedicated settlement dollars and convert them into long term multi payer contracts.

12:58 The growth opportunity is significant, where the scale of the problem to solve is finally being fully recognized. The social media impact, the not in education, employment, and training, so NEETs, and the system structure set up to fail. The policy work is being is calling for a new model of care, and the social media settlement funding in The US has immediately expanded our market opportunity. Our existing experience and expertise are perfectly placed to capture that growth opportunity. So as we dive into a bit of the strategic, excuse me, progress over the last six months, let's have a look at our core geographic markets in both The US and The UK. And these are our clear proof points that will enable us to take advantage of that inflection point for growth that we can see in front of us.

13:50 We can see here that there are clear indicators and we've we've reported back on these sort of month every every sort of six months, and they continue to to come down the line in terms of these clear indicators that Soluna has become established as the official digital infrastructure for California's behavioral health system. Institutional embedding, we reached a new benchmark just last month with Saluna being the only mental health service specifically high highlighted by the governor's office in its official New Year guidance letter to all state school district districts. So, you know, a a page and a half letter, and Saluna has been, specifically highlighted in the welcome back to school to all school districts from, governor Newsom. Now whilst Newsom is moving on and a new governor is coming into post, key state department heads are already fully bought into the sustainable digital infrastructure that Soluna provides.

14:45 You may be aware if you, keep abreast of the news that the predicted successor in in California is Savio Becerra, and he is a prominent advocate of preventative mental health support for youth. He had, a tenure as the US secretary, of health and human services federally, and he's repeatedly emphasized that waiting to treat individuals until they reach a breaking point is unsustainable, costly and dangerous. He's also championed several prevention and early intervention initiatives specifically targeted at children and young adults. In terms of as we are going into year four of the California contract, we are fully on track. We're in advanced contractual discussions, which again are on track to be closed out by the end of the year.

15:30 So this progress from a contractual perspective, with the fact that we are seen as the the embedded digital infrastructure of California's behavioral health and provision alongside the backdrop of a healthy state budget, the fact that our funding line has moved from the general fund into a dedicated behavioral health funding pot, as well as the support of California meta settlements. All of this comes together to support contractual stability over the long term. We continue to show real world data that demonstrates that profound clinical and operational value that Soluna delivers in both California and New Jersey. And we've reported back on some of these before some of these you'll see it as new, showing that we are sustainably still delivering against those significant, imperatives of the of the state funded contract, which is to deliver that, provision outside of traditional hours. So when young people are not at work, not in education, so that they can receive that in the moment support.

16:36 We are seeing that it is having an impact more widely on on their sort of functional outcomes. So looking here, over half of all users report that Saluna helped them remain in education, training, and employment. And we can see the significant trust differential between us and the other digital accessible sort of response in social media or unguided AI. We are we are on track for usage in California. We're ahead in New Jersey. And since launch in early summer in Michigan, we've made great inroads into system and education partnerships, which we know, and I've talked about before, form that critical foundation for trust system integration and then that, flywheel effect for user acquisition.

17:25 And we have continued to build our independent clinical accreditation moat. This really sets KOOTH apart from an unvalidated digital recent sort of entrance. And this has been strengthened in the period with the American Psychological Association's Digital Labs Gold Badge. We achieved the top gold status, and this really confirms an independent evidence based evaluation of our digital technology. So jumping over the pond back to The UK. So as I mentioned at the top of the of the session, h one twenty twenty six marked a historical operational milestone for our UK business, and we have successfully soft launched Soluna in The UK. This was timed specifically for the start of the new school year, and we have safely migrated all existing UK service users to the unified Soluna platform.

18:22 Going able to that. Be be all of our users from the KOOTH platform into the Soluna platform in September in line with the school year. And so we can see that we've recorded over 7,000 new registered users in the first two weeks post launch, which is nearly double the level of registrations in the same period of last year. So this is the unification of The UK and The US technology into that single global stack, really does significantly scale internal engineering efficiency, our marketing velocity and our product development.

19:08 And then in terms of its configurability, its enhanced usability and design, that enables us to be well positioned for some of the policy tailwinds that are coming down the line in The UK to be able to meet increased growth and new opportunities. So what does that mean in detail? And I have flagged some of these before, but I think one of the changes since we last met is around, obviously, the change in Prime Minister in The UK. And this really reflects both our founding story and our growth story in The UK, and that we were founded in Greater Manchester in Manchester. Sorry. And we have we have we deliver both our youth and adult whole population product across the whole of Greater Manchester and built that over the last decade. So we deliver our services to everybody in the area across over the age of 10.

20:15 And this was a, core priority for Andy Burnham, in his mayoral, position. He knows KOOTH well, and he has youth mental health as a core priority for his government. He also recognizes the need for that open access, nondiagnostic support. So in the work that we do at a policy level, we can draw on our deep roots that we have in the region, the fact that we were founded there, the fact that we have delivered the proven population model for over a decade, and that we are very well established and integrated into the system across health, education, and community across the whole of Greater Manchester. That then coupled with three of the key kind of there's been a number of consultations in, in government in the first half of of twenty twenty six, but three really important ones are coming to fruition over the next few couple of months culminating in the sort of budget outlay at the end of October.

21:12 That is digital by default. So this is leaning on those original priorities set by Starmer a couple of years back in terms of really prioritizing in health prevention, out of hospital care and digital. This is this coming into fruition from a digital perspective, expected this autumn to mandate digital as a primary delivery channel across public services. This is then coupled with the prevalence review that I mentioned earlier. So this is professor Peter Fonagy's led consultation, where in his interim review and as he set out at the beginning of this week as he trailed it, in the media, the importance that, the traditional, provision is falling short and is not meeting the need of young people.

21:58 And then in addition to that, we have Alan Milburn's not in education employment and training. So those neat recommendations. So the Get Britain Working review where they're in the interim report, again, there was a call for easy access mental health support at scale, which reaches young people where they are. And this is a line threaded line through those three key policy initiatives that are coming to fruition over the next six to eight weeks then culminating in in in sort of budget allocation towards the end of this year. So we've looked at the execution in in The US and and in The UK. And then if we look forward, I've started to indicate what that might look like from a policy perspective in The UK as well as a funding settlement perspective over in The US.

22:44 So what does that mean for in terms of what what we do? So as we look ahead to the end of the year and into 2027, our strategic priorities focus on two primary growth engines. Obviously, securing this California renewal, as I said, we're fully on track for that and ensuring that we accelerate our pipeline conversion. This is not only a couple of opportunities that have not gone away still to work on in our 2025 pipeline, starting to look go into the procurement stage for our 2026 pipeline. Some of you remember that we we track the state budgeting, calendar, and so, funding ring fencing budget and sort of legislative action happens in that kind of July end of year budget for the following year, and then procurement on the back of that will kick off in kind of October to May the following year. So really full focus on making sure that we can accelerate and convert that that pipeline specifically and very targeted leaning into the meta opportunity as well as moving from activation to execution of the alliance model that we have also previously mentioned, which is expanding our payer contribution.

24:03 So those who fund our contracts in The US outside of that direct state department funding line, but including school districts, county health departments, as well as Medicaid, payers and providers in in, each each of those, states where we're we're working and building those relationships. Over in The UK, having delivered that successful transition of Soluna, we need to turn our attention to meeting those policy recommendations as they come down the line. And in parallel, executing the AI road map to in to continually enhance our product, deliver more across the care continuum. And we'll do this through both selective partnerships and building that in house capability, which leverage our key data assets that I have referred to before.

24:52 So to summarize and conclude, we look at five key pillars of the KOOTH investment thesis. So I hope again today, I've illustrated that there is significant unserviced demand, the traditional care models cannot scale, in the way that they're set up are not effective to meet the population demand as it as it is is evident. That we have that clear growth potential, So over a $1,000,000,000 addressable market in The US. Again, it's early days as we look through the meta settlement opportunity, but we think that that has doubled our addressable market over in The US. And then that, equally significant, opportunity in The UK. We do have a leading market position with the largest digital mental health provider in The UK. We've got proven population scale in The US, which is really important and helpful as we move into that metal sets meta settlement opportunity.

25:49 And we have that trust credibility and experience in both markets. We've got a differentiated clinical base, twenty five years of safety experience, and then more recently, the accreditation with the APA gold certification and that proprietary ethical AI underpinning our capability to evolve our platform. And this is all underpinned with that strong financial base that Sanjay took us through. So 74 plus percentage gross margins, 100% recurring revenue, and that very strong solid net cash and zero debt base. Thank you. So that concludes our presentation for the h one twenty twenty six, and we're now open to questions. I'll pass you over to Sanjay who is going to share us on the questions.

26:36 Thanks, Kate. Okay. We've a few questions in. There's a couple of questions Sorry? There's a couple of questions around the meta settlement funds. The meta litigation could potentially lead to substantial additional funding for youth mental health programs at state level in The US. How material can this be for KOOTH in terms of the potential increase in government spending contract opportunities? So as I said, I think it's it's early days for specifics in terms of exactly how that might change our medium term outlook. It is a significant opportunity for us both within our existing pipeline where we are looking to convert, but also in in new states. We are leaning into that opportunity, and we can come back with more specifics in due course.

27:26 Right. A sort of follow-up question, which I think you've partly answered. Are you having any discussions with existing states or other states about proceeds being used to fund good services? Both. Great. Okay. One question, which I think is for me, a slightly technical question. It's a question about the EBITDA margins for The UK versus The US. And are they a fair comparison of the geographies? I think what the question asked for is looking at here is one of the notes in our financial statements, provides a segmental analysis of EBITDA between The US and The UK.

28:14 Those numbers are provided on a statutory basis. And so the The UK effectively owns the intellectual property of the group and therefore receives from The US an underlying royalty transfer pricing royalty. So probably not reasonable to look at those numbers as reflect purely reflective of the the the sort of trading position of the businesses, which I think are broadly, you know, similar. Okay. I can offer I can answer the Neats one while you have a look at those. So there's question that says, how do you see the NEETs DWP opportunity developing, scale and differences to existing Soluna offering?

29:04 Really good question. So I've I've talked about the the policy due. So so so the kind of recommendations due from the Allen Melbourne over the next six to eight weeks. We we strongly believe that that will come with a funding settlement for opportunity to deliver more support for that cohort. There are existing funding lines that that go to support that cohort down into the local level, but we feel that the, Alan Milburn work will refresh, renew, and uplift those opportunities. So we already have three contracts in the employability space with our existing product. So one most notably co funded between NHS and DWP in the West Midlands, and that's when we we secured that early in h one and went live late in h one. So that will that will provide a key, a kind of foundational model for further growth, cause we're also delivering some employability support in addition to your into our our core behavioral health or mental health support.

30:15 And so then that leans into your sort of second part of your question around, is this different to the existing Soluna offering? So it will be built off the Soluna offering. And as I said, the configurability and the way in which Soluna has been designed is much more flexible as a product to be able to, enable us to deliver that. But it will be a kind of enhanced product specifically for that cohort. But as I said, not a significant heavy lift from a product perspective because of the way that we built Soluna to better meet the needs of that specific population. Thanks, Kate. Okay. One one for me. You have indicated that you're broadly in line, with expectations. What has caused this? And that that that's predominantly down to the impact of FX, particularly on revenue, but also impacting EBITA as well.

31:11 Okay. One for UK. What is international expansion plans beyond The UK and US? What is the barrier to entry to other territories? So we are kind of well net networked from a from an international perspective. So as a as a kind of market leader and sector leader, we are often involved at that kind of policy and kind of government level in international conversations. We do have good connectivity into a number of markets. I would say that our our focus for growth in the immediate term is is definitely in The US and in The UK, capitalizing on bringing Salina back to The UK and the significant, kind of growth tailwinds in The US.

31:57 We continue to look at international opportunities on an opportunistic basis given that we do have that those good connections and kind of influence as a sector leader. So no immediate expansion plans, but certainly, is in our our in our purview. In terms of barrier to entry, which is the second part of your question, to other territories, again, I think our experience and expertise of going from one territory to another and then back again with Selena back to The UK, I think we're pretty well versed in some of the core kind of barriers to entry, which are regulation and technical kind of sort of replacing, as well as recognizing what the differences are from a kind of clinical quality safety expectations.

32:51 So those tend to be the barriers to entry and then being able to to be part of the policy conversation as they're looking to meet the needs that are emerging from traditional mental health provision not meeting the the kind of current population needs as they stand. Thanks. Two or three questions about cash and use of cash. As I indicated earlier on, we we have a cash balance at the end of June of around twenty three million sterling. We also have an undrawn working capital facility of just under $10,000,000. We we we remain predominantly a growth company, and so we still see very significant opportunities in The US in terms of thinking about investing significantly in our business development efforts there, that the meta settlement has effectively doubled our total addressable market, which, you know, we've about over the last few years as being, you know, up to billion dollars and with $18,000,000,000 coming into those states over ten years, that does increase quite substantially.

34:03 So so we will continue to look at the opportunities to accelerate business development. We're also seeing a bit of sort of m and a come across our desk, well funded sorry. What companies that have got very strong products that were perhaps well funded from VCs and private equity, but haven't quite reached revenue traction yet, and those are in sort of perhaps a slightly distressed way. So so we we continue to look at those opportunities. And equally, you know, capital allocation and in the form of perhaps some sort of share buyback would be something else that is what we're currently assessing. You know, clearly, it's important for us to continue our contractual discussions in California to try and get get see see a resolution through to that and, you know, potentially an extension to that California contract.

35:02 K. One for you. Please discuss incremental functionality that Soluna provides over the prior UK solution. Yes. So I think this falls into kind of three buckets. One is specifically around the usability and design. So it is much more intuitive. It is more engaging in terms of how you navigate from one part of the service provision to another. It is definitely not clunky. It is very and it's specifically designed with the kind of modern expectations of a digital solution. So that is one where it's an absolute step change from our legacy KOOTH product.

35:50 And the second part of it is around the the the kind of way in which you navigate through through the service. So it is more personalized in terms of recognizing what the need is as as you're coming into the platform. And together, when you have an interaction with one of our with one of our coaches, ensuring that, the follow-up support or the integrated support that happens is is much more, comprehensive and, consistent. The level and sophistication of some of the self help tools and activities, are again, a step a step up, in terms of and we can see how relevant that is from the effectiveness work that has been done over in California, with the evaluation from, Northwestern University and how significant that has been. So really thinking and thoughtfully about sort of clinical and design effectiveness of how you deliver some of the non practitioner led parts of the platform, are significant. And then from the practitioner side, the the way in which it's designed so that the coaches and the counselors delivering the service have a much more, again, simplified and an effective way to support users on the platform in terms of how information is served up to them in a very kind of easy and effective fashion, the

37:22 the way in which they can then move on to if there's needs needs for sort of safety escalations, all of those kind of operational ways of working for our practitioners have been significantly enhanced with the with the move to Saluna. And just a quick follow-up question. What does does that launch in The UK? You how do you think that'll impact UK revenue? So I think on on this comes hand in hand with the policy work, which I've I've obviously talked about already. I think there are three ways it will impact revenue. So one is on our existing base. So given that it is a much more engaging product product and we can see in terms of the the user acquisition in that sort of even that just that two week year by year comparison is significant.

38:12 So we've talked we mentioned at annual results that 54% of all of our UK contracts uplift on renewal. We would expect that to increase and move move to kind of 75%, would be our target there. And the, the level of which that the the value is expanding would be more. Again, that is, kind of hand in hand with funding expansion based on some of the policy work as well. The second place where we see, UK growth revenue is in the configurability of the Soluna platform, us to deliver to the neat population in a much more timely and streamlined fashion and following the policy recommendations that, again, coming down the line in the next few months.

39:02 So, again, being able to move into a more diversified product strategy with the configurability of Soluna and meeting the needs of NEETs is the second piece. And the third one is around us being able to deliver more within our clinical within our clinical product. And so, whilst we then, with more need required for for the user, we may refer out of our Soluna platform, into more acute services, looking to be able to build that into Soluna, which then means that we could look to secure revenue from an an a different funding pot, for example, in The UK CAMS, by delivering more to users within our base without referring them out. In terms of profitability, a couple of things.

39:50 Having one platform globally, we we will certainly see some cost efficiencies and benefits as a result of that. And what it's it's early days, but what we've seen in The US is that usage of the Sooner platform, a lot of our users get more of the help they need from the self help or the community tools within the platform as opposed to requiring professional support, and that may also sort of give give us some sort of operational leverage as well. There's another question here, Sanjay. How many distinct contracts do you have in The UK? Are they all annual? What has contract churn been? Are renewals on hold waiting for these new policies? Yeah. Good question. In The UK, we have over a 100 contracts.

40:38 We contract with each of our clients very separately. They're all annual, so a 100% recurring revenue. Net revenue retention has been typically between 95% and a 100%, as Kate indicated, around half of our contracts to increase in value at at the time of renewal. And And they're not on hold waiting for these new policies. And and and whilst they are annual, Sanjay, they're also we do have bearing in length. Right? So, typically, they'll be between two to five years. Yeah. Yeah. We we also have a lot of contracts as well. Yeah. Okay. Let's just see. We're coming towards the end of the Yeah. I think we are. States first receive meta funds? Not sure we know the answer to that.

41:28 It will be within months, but it will be variable from state to state. Okay. Question about the investment in California registrations. And is the current 74% gross margin representative economic from a mature state contract? So 70 to 75% is the gross margin that we that we target across the whole business. It it does vary across contracts. We have over a 100 contracts, as I indicated, across across the business. I've got this question. So I don't understand our contracts both annual and two to five years. I think what we're trying to say there is many of our contracts are annual, but some of them are longer than one year. Yeah.

42:17 Right. So I think that is it. Perfect, guys. If I may just jump back in there. Thank you very much for your presentation and for addressing all of those questions that came in from investors this morning. And, of course, if there are any further questions that do come through, we'll make these available to you afterwards. But, Kate, perhaps before really now, just looking to redirect those on the call to provide you their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments just to wrap up with, that'd be great. Brilliant. Thank you. Yeah. So thank you to everyone for coming. So as we kinda close our operational overview, we celebrate our 20 birthday. We see we've delivered significant foundational strength in California. We've reestablished that strength in The UK with Soluna and those sector tailwinds that I've mentioned.

43:02 We're perfectly poised to accelerate growth based on the key pillars that I outlined in the summary investment case, and we look forward to updating you in due course. That's great. Kate, Sanjay, thank you once again for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback? On behalf of the management team of KOOTH PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.