System1 Group (LSE:SYS1) — Interim Results

0:00 Good afternoon, and welcome to the SYSTEM1 GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the q and a tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll, and I'd now like to hand you over to James Gregory, CEO. Good afternoon,

0:32 sir. Good afternoon. Good morning. Good afternoon. Good evening. I wish you have a time zone you're dialing in from today. Thank you for taking the time to join us for the SYSTEM1 FY twenty five interim results. Today, we'll go through our highlights. Then Chris and I will then take you through some more detailed results. We'll focus on the opportunities ahead, and then we'll finish off with our future growth plans.

0:59 So to kick off with the highlights sorry. So to kick off with the highlights, we've been making great progress this year. Platform revenue was up 53% on h one last year, and total revenue up by 38%. We made a big commitment to The US, and we're seeing that come through in revenue with our total revenue up 79%. New customer is going really well with a 161 new platform clients joining in h one, providing £3,300,000 of revenue, and our net revenue retention is over a 120%. Gross profit margin is high at 87.3% in line with last year, and £2,000,000 additional investment will be spent over the next eighteen months in revitalizing our innovation and winning in America.

1:48 Statutory profit before tax was at 2,600,000, with adjusted profit before tax 2,500,000. Diluted earnings per share were up a 182% at 13.8 p and £8,900,000 cash as at 09/30/2024. So with that, let's do some brief intros too. So my name is James Gregory. I joined the business three and a half years ago and took on the role of CEO two years ago. I'm delighted to to be here at SYSTEM1 and really enjoying the growth journey we're on so far. I'm Chris Wilford. I joined SYSTEM1 four and a half years ago as chief financial officer and, still doing that role. And as we have some new people with us today, we'll just cover two or three charts to bring to life who we are and what we do.

2:37 So our mission is to help the world's largest advertisers make confident creative decisions that lead to transformational business results. We're truly customer focused. We know who our customers are, and we know what we can do for them, which should lead to long term brand growth, short term sales, and overall ROI. The reason why you're here is because there's two fundamental questions and problems that exist, and that's where SYSTEM1 really helps. We know that 51% of advertising has no long term impact on market share growth. We know that 95% of new product launches fail. There are customers out there who are crying for help, and we're the only ones who can help here. And what we do then is we help marketers make smart decisions and care of marketing that provides highly profitable return on investment.

3:28 So what we so who are we? We are SYSTEM1, and we predict and improve marketing effectiveness through a marketing decision making platform. We have a scalable product and platform which underpins everything we do. So we have three offerings for our customers. Firstly, we have our data. These are our predict. So our predictions automatically produced, which provide research results through our platform and our products. We then have data led consultancy, which you can see in yellow, which is our improvements. This is where we give insight and consultancy off the back of those platform and products. And then we then have in gray bespoke consultancy. So this is the old consultancy that used to offered under Brain Juicer. And, also, sometimes it's bespoke work that's required to retain or attract the world's largest advertisers.

4:18 Underpinning this, we have affiliated automated platform. What you can see on the screen is the market research process from left to right from coming up with the concepts you want to be able to test, programming it, sending out to panel respondents, processing the data, and then creating a report at the back of it with some translation into the different languages and project management alongside it. It used to take two to four weeks to test an ad, and as we fully automated every step you can see on there, we can do it within twenty four hours. The same for an idea. What you then have on the right hand side in yellow is our data led consultancy. So this is our consultancy which helps you improve those ideas, improve those ads off the back of our platform and products. We play in three of the most critical marketing space for our customers. There are three big questions they have to be able to answer. That's, is my advertising effective?

5:10 Is my brand effective? And is my innovation effective? And we provide results to our customers through a self serve platform in this case.

5:21 And we're a big business as well. So while we might be have been around for a little while, it means that we are truly a scale up, not just a start up. We've got platform and products that are based on our world leading IP, our methodologies, our technologies. We tested almost 200,000 ads, brands, and ideas, over 50,000,000 surveys, and then we've measured 36,000,000 emotions for our face trace technology in over 50 markets. And with that, we'll move on to our results. It's great that we've been able to see our fourth consecutive half year of revenue growth. Total revenue is up 38% year on year, and this has been seen with good performance across all of our regions. The US in particular had total revenue growing by 79% and platform revenue up by a 114%.

6:07 UK and APAC continues to grow strongly, up 3824% respectively compared to the previous year. And LATAM flat on year on year with Continental Europe 4% lower, mainly due to bespoke consultancy revenue being down. And as I mentioned, the platform is what's driving all of this. And with over 90% of our revenues coming through the platform today, you can see within here the blue charts, what I mentioned before, our predictions coming through our platform and our products up 48% versus half one per year.

6:39 And the data led consultancy, how we help our customers truly understand their predictions and improve their product going forward is up 75% for the comparable year. We're also really pleased to see that we've had strong growth of net revenue retention, and you can see up over a 120% year on year. On the left hand bar for real clarity, these are the customers who were in our business in the first half last year and what they spent. And then on the right hand side, those same customers, what did they spend in this subsequent year. On top of that, you can see the new client revenue coming through on top of it. I'll hand it to Chris to take us through some of the more detailed results. Thanks. Thanks, James. Well, this this is a summary of the key financials for the first half this year compared to the same period last year.

7:32 And as you expect in a scalable business, the positive percentages get better as you move down the profit from that loss account, and that's almost the kind of definition of scalability. So our total revenue rose by 38%. Gross profit by a similar amount of the margin was, as we said earlier, broadly in line at 87 and a bit percent. And profit before tax with no adjustments of any sort was up a 176%, and profit after tax, a 180%. And that meant that our diluted EPS was up by a similar percentage, 182%. So that's continuing the trend we've seen in previous periods and that we expect to continue in future periods in terms of the profits growing faster than the than the revenues.

8:25 Just moving on. Thanks, Chris. So with us having a at results, we wanted to take a moment to look at our opportunities ahead. So these are, as we set out previously, remain the same Three big areas for us to focus on and three reasons to believe. Firstly, the big opportunity we have in innovation or idea testing. Secondly, in The USA, the biggest market there is. And thirdly, winning with the world's largest advertisers. So I'll start I'll start off by diving into innovation. Innovation has by far the largest target addressable market. What you can see on here is a total target addressable market of over £20,000,000,000 for us. You can see advertising pretesting, our strongest product performance to date is 2,460,000,000 compared with innovation testing at over 12,000,000,000.

9:21 We know that innovation also used to be the largest revenue driver in the business, and we're focusing on this going forward. What we've done to date is we've really focused on building out the products and our fame. On the right hand side of the chart here, you can see our five star innovation product offering, which is working really well with our customers. And on the left hand side, you can see examples of our fame. So at the top, for example, Joy Evans, our chief customer officer, interviewing the head of innovation at Pepsi, Mario Porcini. And then going forward, we'd we know that we need to continue to invest this to make it a success it needs to be. And the way we're doing this is in three ways. Firstly, we've appointed an innovation MD.

10:08 This is a new exec level role which reports directly to me that we've created to have true focus on the innovation offer. What this person can do is the person who, on a Monday morning, when I wake up and want to know what's going on in the world of innovation, I can pick up the phone to directly, and they're fully accountable for our innovation growth. They'll work alongside the other exec members. Say, for example, Michael Menard, chief commercial officer, or Robin, our chief product officer, who will have innovation experts in their team to go forwards. And that's the second bubble there. So we'll be investing in our sales, our marketing, our product space to truly make sure we have the level of innovation support we need to have business going forwards. And thirdly, we have a model that works. We know how we built out our advertising fame. We've created a world class proposition and products and platform.

10:57 We grow our fame through partnerships in our own channels, and then we can convert new business. We need to apply that same method and tactics into the innovation space, which is what we're planning on doing going forwards.

11:11 The second opportunity is winning in America. We know that The US is the biggest spend in market research. You can see here over 55% of market research spend happening within that region compared to, at this point, it was 29% of our revenue to date. We've really strengthened out our team in The US, and you can see that coming through in the results. It's absolutely great to be able to see the year on year, as I mentioned beforehand, total revenue up by 79% and platform revenue up by a 114%. We strengthened out our go to market team in The US with Mike Pelman, our chief commercial officer. And then Alex Banks, our head of Americas, Vanessa Chin, our head of marketing, both based in The US. We'd increased our fame through using events such as the ANA and partnerships such as the Effie's, and we have a full flywheel support across operational roles.

12:07 And as we go forward, we're going to continue to invest in this even further to be able to build this out. We saw, for example, that Scott Galloway, the interview we did with him was the biggest traffic engagement we've ever done as part of our system on growth. So expect more of that those kind of events to come up in the same space. I mentioned under partnerships, Effie's, and new into the fina the new financial year next year, you will see us being able to come out with some research. We're working closely with them in there. And we're also working with big local providers. We have US presence such as TikTok, and, again, watch out the thought leadership and partnership in that opportunity. And then in go to market, as I mentioned, alongside those people I mentioned beforehand, we've increased we're going to be increasing our headcount in marketing and new business in The US to continue the growth we're having there.

12:55 And finally, into the world's largest advertisers, we know that there are target audience. We know that they're the people who have the capacity to be able to spend with us in the way we need to, but also the capability to be able to use the data and the insights we provide them to make their innovation and advertising true world class. A few examples you can see on your screen here in the different markets where we've bought in some true world class customers. For example, in The US, in California, a California based multi billion enterprise software company, in The UK and Europe, a global social media platform and over in APAC, the Australia's leading out of home advertising company. So knowing there are three big opportunities, I wanted to touch on future growth.

13:40 I think this is really important for us to be able to continue the momentum that we have to date. What we we believe that the value opportunity is greater with accelerated investments, and that was the investments I mentioned upfront. I'll comment to the detail in a moment. What you can see on the left hand side here on this illustrative growth scenario, again, for real clarity, this is not a profit forecast, but an opportunity we believe we can go after. You can see that we could be growing towards 30% EBITDA over the medium term and the long term. We also truly believe that if we increase our investments, discretionary investments, we can grow the revenue significantly faster, also growing our EBITDA to the range of 20 to 25%. And at the longer term, we truly believe that would be 30%, but 30% of a much bigger revenue pots.

14:31 We've then broken down the revenue to try and bring to life sorry. The we've then broken down the investment to try and bring to life this discretionary spend and what we think we will be doing. What you can see on the left hand donut here is over 2,000,000 additional discretionary spend over the next eighteen months. In pink, you can see an innovation about half of that spend. So this is linked into the names and the roles I called out earlier for innovation investment. We also don't want to take our eye off the ball in advertising, so we need to continue to grow our fame and our sales presence in that space. And then in the blue, this is as we continue to scale with the business, we need to continue to professionalize and really step up and step change the caliber and quantity of people we have in the business. So some of our central functions, for example, legal or finance will require additional heads as we scale.

15:22 On the right hand side, you can see the areas of discretionary investment. So we again, that same number, £2,000,000 broken by the type of spend. What you'll see on the pink is the people. So these are the incremental roles we're building in the innovation space as well as a few more incremental in the in the advertising space. What you'll see in yellow is additional marketing, so growing our fame to be able to grow our conversion of new customers. And then in blue, incremental spend on IT development. So as we want to be able to build out our TIA proposition in broader than just TV, for example, we'll have additional spend on that space. And I'll hand it to Chris who will take us through the what this means across the medium and the long term for us. Yeah. Thanks, James. This is a

16:10 a rework of a of a slide we've shown before at investor events, and we've added a new column. So previously, we've indicated the goal at scale. So that's what the shape of our business and our profit and loss could be when we are, you know, more than twice the size that we are now. And in the previous, slide that James talked through, we were showing what we could get to, for example, 30% EBITDA margin sooner than we're currently proposing to by just focusing on that and current just focusing on the current growth cycle and not the next one. So if you think about the s curve, we want to make sure we can continue to grow and not taper off in a, you know, in the short to medium term.

16:55 And therefore, to support to be to give some helpful

17:00 guidance around that, the consequence of the of our decision to spend an additional discretionary 2,000,000, on investment, next year is that the, adjusted EBITDA margin will stay close close to the range it's been in for the last six to nine months. And so we're guiding over the next three years. It will be between 1520% typically.

17:32 And the other and platform revenue growth, which has been, as you've just heard, north of 50%, we're saying that could be on average over three years between 2030%. Obviously, it's currently running a lot faster than that. And then if you take the sum of that platform revenue growth and the EBITDA margin, we still, even in the worst scenario where we're at the bottom of the EBITDA margin range and the bottom of

18:02 the platform revenue growth range, under our rule of 40 score would still be 35. And and, obviously, we'd hope to be at or above 40 throughout this throughout this period. At the moment, we're above above 60, so we are, at the moment, growing fast. I mean, the the main contributor to that is is revenue growth, but actually the margin is has been growing as well. So this just, I hope, gives you an idea as to the time scales that we're talking about. So we're not going to get to that, you know, based on the previous chart, you know, more than doubling of revenue and doubling the margin in the next three years, but we're gonna make some progress. And our and our belief is that everything we're doing, all the investments we're making will produce a return substantially above the cost of capital and will be, therefore, accretive to shareholder value in the near term and will support greater shareholder value in the long term.

19:04 Thanks, Chris. And and with that, that takes us to the end of the the presentation and time for questions. Thank you. I can see there are lots of questions in our q and a already. If you have any more, please do enter them in, Chris and I will go through and tackle them with as much openness as we we can do across the piece here. So thank you for those questions so far.

19:24 I think I can see three questions on innovation, which are very similar. So let me try and tackle those if I can first. I think the first question is says, why innovation? Why why not just communications and maximize the growth in there?

19:39 There was then a question around what we've been doing over the last year because we have been talking about innovation for the previous year. And a question about also how we can how we can use our existing comms thing builders such as John Evans to build innovation and a bit of a bit of question about some of the the spend on it. So they probably all overlapped slightly, so let me try and tackle those as best as I can. I think the first thing that we've recognized on innovation and something we've been talking about in this space is that innovation used to be the biggest it was the lifeblood of the old company Brain Juicer. When Brain Juicer transitioned to become SYSTEM1, the first product it built out was advertising, and the first growth and go to market engine it built out was in advertising too. So on that journey, we're in, say, year four, and what we're seeing is it working really, really well. It's been working really well in The UK, and that's now truly scaling to The US with the focus we put in there.

20:34 What we've recognized is that we need to have the same level of focus in innovation to truly make it happen. Back in 2014, it used to be £40,000,000 of revenue. So we know that it can be very large, and we know it's also the largest target addressable market. What we're conscious of is we don't want to distract the people who are doing the comms and the advertising piece. So we need to be able to do both at once, and that's been one of the challenges over the last year. So we've talked previously about our flywheel, and what that means is that's our our model for growth. What we say is we build out our platform and our proposition. We amplify it through pet fame, and that allows us to win new customers and to scale them up and make them sticky. And then we then reinvest that invest back into

21:14 the into the platform and proposition, and this is a true example of that. So we're reinvesting the growth we're having in advertising across both advertising and innovation. We are we spent the last year, as we say, truly building out the platform and the products. So we do have a world class product in that space. What we now need to be able to do is then focus on building out the full leadership, the validations, and the fame alongside it to be able to help it grow. We can use our comms team for that. So I think the slide I showed showed John Evans, for example, interviewing the head of innovation at Pepsi. So that's a great opportunity where there is true overlap, where we can reach the advertising audience who are also often at times the innovation audience as well through the same channels we have. But there'll be other times where it doesn't work. For example, if we have a partnership with ITV about advertising, that won't necessarily lend itself to innovation in the same way. So we'll need to find the the right platforms to partner with to truly promote innovation too.

22:15 And that's why we said with that flywheel, the reason we are investing is exactly the same way that we're investing in advertising continually going forward. We believe we have a revenue growth engine, and we believe that's what's driving lots of value for the business. And the faster we grow the revenue, the faster we'll grow the profit as well. I'm hoping that's answered most of the the innovation questions there. There's one on scaling. Shall I have a go at that? Yes. Go on. Thank you, Chris. I'm just fine there. Question is, can you expand on the gearing of the business from here? When you see the profits materially scaling, what revenue profit can the current cost base support? And in the in the near term, you could have a situation where

23:02 if you take current year consensus the current year, let's say that's 37,000,000 of revenue, arguably, we could add 10 or 15% to that without increasing the overhead cost base. So in the near term, we can service inbound revenue opportunities with very little additional overhead, but then potentially run out of steam because where you need the overhead is in winning new business and in actually

23:37 developing and farming the business you've won. And that's where we've been investing both in what we call land and expand. So in the short term, yes, we're and and all this expenditure is discretionary, and that's what the whole investment debate is about. So we're we're making sort of decisive move to invest in the business for the long run. I mean, the other way to look at it is is, again, James is on the record as having said a few times that we could potentially double the revenue of the business with the customer base that we have. And, again, that would be a relatively lower cost alternative, but probably a lower chance of success than of doubling the business than the, the plans that we're currently proposing.

24:30 So we are yeah. I I don't think any business is infinitely scalable at no cost. I think what we're saying is the cost of the next million pounds of revenue is typically 15% of that revenue. It's just the cost of fulfilling that piece of work. So we're trying to be a little more strategic about how we're looking at the cost base and how we I guess it's a sign of greater ambition in the business and more explicit greater ambition to be something much bigger than we are today and bigger than double what we are today, and we can see we can see a read through. Thank you, Chris. The there's a question on The US asking about the exceptional growth and how we plan to penetrate it further.

25:20 So the thing about The US is we aren't even touching the sides on the growth there. I think what we've recognized is we've done really well in multiple sectors, and we want to be able to use them almost as case studies to be able to build out in those sectors or those

25:33 regions and then grow from there. So if you take, for example, we've done very well in auto, in pharma, in US as a quick service restaurants, in grocery, in booze, so multiple sectors we have in in financial services. When our product isn't limited to one sector, but what we want to be able to do is if you if you try and scattergun too broad, you probably won't have any growth. So we are deliberately building out sort of case studies based on the clients of whom we're winning and then able to grow out across those sectors alongside going into new sectors as we go forward. So we're trying to to focus on that. I mean, what's great is that when you do it in The US, you can win a really big ticket item as well, which is really helpful from revenue growth going forwards. Yep. Actually, another one on scaling. Can I have a go at that? Yeah. Take care.

26:21 About the the scenarios that we put up, you know, the the one that's focusing on margin growth and the one that's focusing on total value growth. And and the question is, how can 2,000,000 accelerated investment generate? I mean, someone's obviously estimated what what the height of the bars are. An extra 55,000,000 revenue in the medium term and 90,000,000 in the in the long term. And I don't think it's correct to associate just the extra 2,000,000 with that growth because we've got an existing cost base and it base an existing investment that are also contributing to growth from last year's 30,000,000 to

27:05 where where we suggest we we'd like to get to in those in those charts. And I think we've disclosed previously, typically, we we invest typically 2 to 3,000,000 of cash a year in developing the product and growing the business either through external marketing spend or internal business development spend. So this extra 2,000,000, you can assume would raise that to between 4 and 5,000,000 for FY '26. So that is a pretty chunky investment. I mean, in terms of details, I think we're not really in the business of, you know, sharing detailed business cases externally because that would be, on balance, a bit too helpful to our competitors. Yeah. Thank you, Chris. And I think if I can just reflect on some of these scale scaling questions as well because I think they underpin some of what was new news within here today in terms of our investment going forward.

28:00 We spent a lot of time debating this. We had a I I think there's a quite we talked about in the AGM. We had a board strategy day when we were going through the options going forward. What we truly recognize is that the value of this business is to continue to grow the top line while also driving out the bottom line as well. What we realize is we don't want to focus just on the bottom line in the near term and cut off the the growth capability. And these are gonna be incremental sort of decisions that we need to make going forward. So today, we have a plan, and we and as Mike Tyson once says, you would have a plan until you get punched in the face. So we'll go forward with it, and we'll learn. We'll make sure that what's working really well, we do more of. And what we're not seeing works so well, we will change. And that's been the way that we've approached the business going forwards.

28:48 So we truly believe growing that top line will drive will grow the value of the business alongside growing the bottom line too. Yeah. There's there's an easy one, James, that you can probably answer once we're looking at the answer another one about who who our competitors are. Not that we're gonna obviously gonna comment on any of them. Yeah. There's I mean, it's interesting. When you look across the market research space, there are quite a few people who are in the market who can do an advert test, who can do an idea test, who can track brand. And I guess what none of them can do is look at how emotion drives real world results, be that brand growth, be it short term sales, it long term profit. So there are some big brands out there who people will know the likes of Kantar, Ipsos who are in the press at the moment, for example.

29:36 And then there are smaller players out there as well. There are people who have a platform service who might be able to say they can compete with us on offering a similar level of speed or price. But, again, they don't have twenty years of behavioral science underpinning the IP that we do as well. So we do believe we are truly uniquely positioned in that space offering a platform and products based on true behavioral science IP that uses emotion to underpin it. There's a question on Europe from about there was down 4% overall and flat at constant exchange. And the reality is that all products group product groups were pretty flat within that, you know, including including ad testing. Yeah. And and I think just on Europe as well, again, for context for people who may be newer, we've we said over recent years that our biggest area of focus for growth would be in The US and then The UK. Now we serve globally, but if you look at where our new business, where our marketing, where our partnerships are based, they're across those two regions.

30:37 So we always know that we're expecting those two to grow at a faster rate than we would see in Europe, in LatAm, or in APAC. That's a conscious decision. We need to operate in those areas because when we serve the world's largest advertisers, they are global businesses. So they want to also be able to test in those regions and have local sales and consultancy teams who can support them. But when you look at the areas of growth, it will be across The US and The UK. As a question I think sort of two questions. One one was around the biggest challenges in meeting your medium term goals. And I guess another question which is similar about so you've been successful in CYA, but why less so in innovation and brand? I think one of the things that we've done really well and that we need to be able to do still going forward is have focus.

31:24 We've really had true focus on who our customer is, how we serve them really well, how we build the world class products which meets their needs, and then how we give them great levels of service off the back of it. We truly focus in the first instance in advertising. That was the an active decision we made, and we are now actively deciding to do the same in innovation as well. The the challenge for myself and Chris and the management team is to make sure we don't take our eye off the board in the advertising space while we do this. There's no point raising one line of revenue, while at the same time you decline the other. So we need to make sure they are both growing, and they're both gonna be adding to the pot. And I I think keeping that focus, what we have in broader remit is probably the biggest internal challenge we face. And then there's lots of external challenges that we talk about when we publish our annual reports, talk about lots of these.

32:12 I mean, there's obviously big changes in the landscape in The UK and The US with change of government. There are regulation changes which change various various industries. There's the opportunity or the threat of AI, which we feel is actually beneficial for us as it might allow people to create more ideas, more advertising more quickly, or it might also provide us with different sample which we can use to help scale our products if there is synthetic respondents, for example, we can plug and play into. But we don't feel like there is a big external threat which we so we haven't covered from that space, we aren't sort of looking at defending against going forward. Question on the proportion of our ad testing revenue that's through platform. And not surprisingly, it's incredibly high. It's over 94% now. So, yeah, it's basically a platform product.

33:05 Yeah. There are a couple of quite detailed questions, which I don't think we'll probably get to answer about sort of what proportion of ad testing is through through the platform. But I think I'm sorry. Just answered that one. Yes. Sorry. Okay. Sorry. Trying three questions while listening at the same time and failing the math. Apologies. I guess maybe Gross profit. Do you want to just like the other gross I mean, we we don't disclose gross profit margins by segment, but but but we do give, I think, sort of helpful guidance, which is as follows. I mean, across the product areas, innovation, and ad testing are pretty similar gross profit margin. Brand tracking tends to be a bit lower.

33:50 It's a longer term contract. It's a bit more commoditized as a as a as a product. And then there are some geo the the the main thing we see is pretty geographically. LATAM is just a more price competitive market than the other territories we compete in. So gross profit margins tends to be tend to be a little bit lower there than the rest of the world. But, again, the rest of world is pretty much in line with the company average total. And then in terms of service offering, the way we do that, actually, the the gross profit margin on the consulting revenue is incredibly high because the direct costs include only really third party costs, not in house costs. And therefore, by far, the biggest, cost in the in the direct cost line is the, panel costs that are associated with a test rather than any costs associated with the insight or suggestions for improvement that we might provide on that test. So the products that have super high margins are, yes, the data like consultancy and actually the subscriptions related to the database.

35:10 Thanks, Chris. And we only have one question left in the database. So if you do have any other questions, please do submit them so we can tackle them too. There's a question about our percentage win rates on new business pitches. I mean, again, we we won't provide the explicit percentage, but we win more than we lose. So about 50 north of 50%, you can read from that. The challenge we've had historically is just getting onto the actual roster for pitches. And I think if you then look at The UK in advertising, that was always the one where we were very present. We're now building ourselves in The US, so we are getting invited to more. Again, that's why we need to build our fame, our case studies, our thought leadership in the innovation space so we can be invited to more pitches as well. So the questions are coming in now. There we go. Jake, can I ask the one on the waiting?

36:00 In the the last couple of years, sales have been h two weighted. Is this structural? And the the rather glib answer is, yes, it is when you're growing at that rate. Almost inevitably, sales are gonna be higher in h two if you're growing really fast as we have been. However, we can't promise that we're going to do that in h two this year yet. Thanks, Chris. I'll take on the one on subscription products. I mean, Chris, maybe you can do cash. Yep. So we have as part of our advertising offering, we test every ad that has in The US and The UK overnight. So what that means if you're if you're operating in a region and you want to know how your competitor's doing with the new ad that launches, you want to have the answer before your boss says, hey. Have you seen this ad over here? What do you think? How should we react? We have a subscription product so that you can then look at it by category, by region, etcetera in that space.

36:57 That historically has been about sort of 5% of our revenue, and it continues to actually grow in similar lines in that space. It's it's it's one where it does more than just provide revenue as well. So it's really worth me saying that. So if you look at the people who buy this product, they are in our top 20 or our strategic customers because they're the ones who truly buy into our methodology and our service offering. It also underpins everything we do from both the marketing and the thought leadership perspective as well. So we are the only people out there in the industry who have an open database of ads, which of which everyone is tested. If you look at our competition I mentioned earlier, while they might test a bunch of ads, they do provide that data to customers for what the competition is doing. And if we then do is when we are, for example, at Christmas in The UK, on a daily basis, we're able to put out how those ads are comparing our marketing, which is really growing our fame. We did the same in Super Bowl in The US, but it also underpins those new business pictures I mentioned as well. If we want to go into QSR or quick service restaurants, for example, in The US because we test every advert for every brand there is in that space.

38:08 When we're going and pitching for new business, we can talk not just about the business we're pitching to, but also the competition and how they compete in comparison. Because what matters isn't just the advertising you do, it's whether it's better than the competition because that's what allows you to grow market share. So from my perspective, it's always the gem in the crown, and if it can bring in money which will allow it to be self funding even better. Yep. Question from Maynard on cash and interest. Not surprised to this question, Maynard, because it was issue was raised in your blog. The the reality is that there are three or four points to make here. One is we are spread around the world, and our banking relationships are spread around the world.

38:53 And we have our biggest cash centers will be Brazil where we have quite a big operation and we employ a lot of people, The United States, UK, and Switzerland. And of the 8,000,000 of cash that you mentioned in the first half at any one time, typically, between a quarter and a third of that was on an interest bearing account, and the rest was on-site accounts so that we could use it to meet our obligations day to day. I think second point I'd make is the point that James made is, you know, we're a we're a fast growing SME with ambitions to be a bigger business and to have a a treasury function that's actively managing the cash in the way that you expect in a larger multi multinational business like I've worked in before.

39:49 You'd need some you need the to professionalize the function more and bring, you know, skilled more skilled people in the business who where it makes sense to pay them to manage that money. And with the level of deposit we've got and the size of this we are, we're we're not at the level where I think that's a good business case because you'd spend all the interest you could gain on, paying someone to manage it. So that's reality. So we, we tend to be very selective of how we deposit. We're trying to repatriate as much foreign exchange as we can back into Sterling, and then we deposit it from there to deal with the kind of volatility we're seeing particularly in cable over the last few months. I think we're we're getting towards our last questions again. So if you have any more, please do ask. A question on the wide acting advertising market.

40:42 Do we expect any strengthening or weakening of ads of the market to impact growth? I mean, I joined the business three just say three years ago. When I joined, the conversation we were having was in COVID. It was off the back of COVID. We were still in COVID times. How do you grow during a recession? And what's great about our offering is two things. Number one, because we focus on return on investment, we work really well in a downturn. And if you believe in marketing theory, you should spend more during a downturn. We should make at least maintain your spending in a downturn so that when there is a pickup, which there would always be in a market, you are going to be the one who will come out to the top. Secondly, when there is more marketing spend, then we should also benefit from that just as well. So we will do well whether there is upbeat or downbeat markets, and that's what we've seen. As I said, I mean, I joined in COVID.

41:30 There was then the the Russia and Ukraine war. We then had other challenges with brands, etcetera, and it feels like that's a consistent challenge for the economy we sit in, but onwards and upwards as we may go. And then finally, I think there was a question on a particular auto brand you've put out some new advertising and branding recently. And I think my only comments on there is we like to celebrate the success of our customers and help everybody make world class advertising, which we'll continue to do going forward. So if you want to know more about our in-depth thing, if you look on LinkedIn, you can see myself, other people in the business from SYSTEM1, John Evans or Andrew Tindle or Vanessa Chin who post on a daily basis with our views on particular customer areas too. So we can probably confirm that we did not advise that particular company.

42:21 Yeah. Sorry. I've already said yes. So, yeah, we we yes. We haven't been advising them, but let's see in the future where we go. SYSTEM. Well, thank you. Think we've answered all of the questions there. Chris James, thank you for answering all those questions you can for investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, James, could I please just ask you for a few closing comments? Yeah. Thank you very much, and thank you everybody for the the time to dial in, live or also be listening on record. I'm delighted with the results we've seen today. Long may they continue, But to ensure that they are, we are investing in the three big areas going forward. That is growing innovation, growing in The US, and winning with the world's largest advertisers, and we'll continue to do so. So thank you for your support, look forward to speaking to you soon.

43:15 James, Chris, thank you for updating investors today. Can I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This may only take a few moments to complete, and I'm sure it'll be greatly valued by the company. On behalf of the management team of SYSTEM1 GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.