Catapult Sports Ltd

Good morning and welcome to Catapult's investor conference call for our first half FY26 results. I have with me Bob Cruikshank, Catapult's Chief Financial Officer. This morning, Bob and I will present our results, our strategy and outlook, and then take questions from participants on the call. It has been a momentous six months for Catapult. Just half a year ago, we reported outstanding FY25 results, meeting the high bar we had set for ourselves and building on the clear inflection point we had achieved in FY24. Since then, we've continued to accelerate this trajectory. Five months ago, we announced the acquisition of Perch, the global leader in velocity-based training, shaping the future of athlete monitoring in the weight room. And just last month, we welcomed Impact, the world's foremost innovator in soccer scouting and tactical analytics. whose end-to-end intelligence platform delivers insights unmatched in the game. It's been an extraordinary stretch, one defined by progress, purpose, and performance. And today, with another strong set of financial results, we reaffirm that same commitment to innovation and to the promise of what's still ahead. As you can see in slide three, the first half brought another milestone. Our customer base has now grown to more than 5,000 teams worldwide, an increase of 400 teams in just six months. While our focus, as many of you know, remains squarely on our professional teams, it's encouraging to see this broader growth. It's a reflection of how Catapult continues to define the global standard for performance technology trusted by athletes and organizations across every level of sport. Now turning to our results, and before I begin, I'd like to outline that all figures I reference today are reported in U.S. dollars, unless otherwise indicated. And to provide a clearer picture of our underlying performance, year-over-year growth rates are presented in constant currency to remove the noise of foreign exchange and reflect the true trajectory of the business. The first half of FY25 was another period of strong performance for Catapult, building on the momentum we had created and progress we made in FY25. As you can see in slide 6, we continue to advance against our North Star, the Rule of 40, reaching a new high of 33% at the end of the half, up from 31% a year ago and a full 12 percentage point improvement compared to where we stood just two years ago. This metric is powered by two core drivers, the pace at which our subscription base is expanding, reflected in the growth of our annual contract values, and the amount of operating profit we retain, measured through management EBITDA. Our top line continues to perform exceptionally well, with ACV now up 19% year-on-year at the end of the half. But what's even more encouraging is the leverage we are generating as we scale. Our ability to keep more of every dollar of revenue is growing faster than revenue itself. Management EBITDA reached $10 million for the half. That is a 50% year-over-year increase, delivering an operating profit margin of 14%. That result would have been even stronger were it not for an unexpected payroll tax expense of roughly $2 million, which is tied to the strong performance of our share price, something Bob will speak to shortly. Turning to the next slide, our 19% ACV growth has lifted contracted subscriptions to a new record of $116 million. Our total revenue, which includes some non-recurring items, grew 16% year-over-year to 68 million US dollars. For those of you who think more naturally in Australian dollars, this marks an important milestone for us. It is the first half in which Catapult has generated more than 100 million Australian dollars in revenue. To put this into perspective, when Catapult first lifted on the ASX, our full year revenue was 5 million Australian dollars. The distance between these two numbers says a great deal about just how far we've come. Catapult's SaaS engine remains in excellent health, as shown on slide eight. Our ACV retention rate once again exceeded 95%, placing Catapult firmly among the most successful enterprise software companies in the world against this measure. It's a testament to the quality of our product, the stickiness of our platform, and the value we are delivering to our customers season after season. ACV per protein, our core ARPU metric, grew 8% year over year. And as in prior periods, the primary driver of this increase is the continued expansion of customers adopting more than one solution, most often adding a video product from our TNC vertical to wearables product in our performance and health vertical. The number of these multivertical customers rose 26% year-over-year, underscoring both the differentiated breadth of our product ecosystem and the value customers unlock when they integrate wearables with video, a combination that remains unique to Catapult in the market. Turning to slide 9, you can see the depth of operating leverage in our subscription model and the strength of our unit economics. When excluding the unexpected payroll tax expense in the first half, our incremental profit margin is 56%, meaning we kept 56 cents of every additional dollar of revenue as profit from an operating sense. Bob will discuss further how the payroll tax is primarily at first half expense and our treatment of it going forward. But before I hand it over to Bob, I also want to touch on some of the innovations we've delivered to our customers in the first half, as we outline on slide 10. The rollout of VECTA 8 has been a primary focus in the first half of FY26. While we are still in the early stages of the process, we are already improving the technology and introducing new features as we go, a pace made possible by the new hardware platform that we introduced. Enhancements that once took months on our previous system are now being delivered in just a matter of weeks. In addition to getting devices and docs into the hands of our North American football customers, we are now extending the rollout into more sports and geographies. And we're also delivering major upgrades to our web experience, including faster editing, more streamlined report creation, and time-saving performance analysis. The feedback has been excellent, and the rollout will continue through the second half of FY26 and well into FY27. Similar to Vector 8, not only did we launch HUB Pro in the first half, but we have also started to expand its features with a new remote workflow that syncs in real time seamlessly with in-office teams, unifying communication, analysis, and a in the world. In the first half, as I mentioned, we acquired Perch. And while we've been very focused on the early stages of integration, of integrating their velocity-based training technology into our ecosystem, I am pleased to also say that in a very short period of time, the team has introduced Perch Assist, new performance scores, and a new enhanced gym analytics, deepening the sophistication of the technology and strengthening our leadership position in gym technology. We also continue to invest in our game day and sideline solutions to better support teams and leagues in real time. During the half, we expanded Focus Live beyond game day and into practice, giving teams the same real-time analysis capabilities during training that they rely on during competition. And in recent weeks, we acquired key IP assets from Isolinks, a local positioning system provider whose patents were licensed for the use in NFL game day tracking, and whose technology has been white-labeled by another wearable company as their own LPS solution. When combined with our existing solutions and IP, we believe that this acquisition not only strengthens the backbone of our live operations, but also effectively gives Catapult control of the global patent portfolio required to operate an LPS system for tracking athletes and balls in live competition. And across our product suite, we're beginning to see the real benefits of artificial intelligence. AI-driven tagging, data cleaning, and content generation are already saving coaches time and helping teams reach insights faster. And while we're only scratching the surface, our uniquely rich first-party data spanning performance, tactics, and now global recruitment gives us the raw material that makes AI truly effective. This foundation will allow us to usher in entirely new solutions and unlock new value for customers, something I will touch on a bit more later. In summary, we've entered FY26 in excellent shape. We are delivering strong top-line growth, demonstrating meaningful operating leverage, and giving our customers the best tools and solutions to help them perform at their very best. With that, I'm going to hand it over to Bob to walk you through the financials in more detail.

Bob? Thank you, Will, and good morning, afternoon, and evening to those of you joining today. I'm very pleased to present what are another great set of results today. I'll begin with an overview of our key SaaS metrics before taking you through our financial performance in more detail, and then I'll hand it back to Will to comment on our strategy and outlook. I'd like to reiterate that unless I state otherwise, the numbers I'm about to talk to are actual reported numbers in U.S. dollars, and that our growth rates, which compare our performance year on year, are in constant currency, removing the impact of fluctuations in foreign exchange rates. Starting with the drivers of some of those great numbers Will presented earlier, I will begin by focusing on our primary metric on slide 12, our annualized contract value, or ACV. In the first half of FY26, we delivered 19% constant currency growth, finishing the half at $115.8 million. When normalizing for the one-time impact of closing our Russian business in the second half of FY25 and the ACV that we acquired with Perch, This was an 18% growth rate. Our strong growth has again been driven by the performance of both core SAS verticals, which can be seen on slide 13. I'll start with our P&H vertical, which includes both our wearables and perch solutions. This vertical continues to be a reliable and predictable growth engine. It yet again delivered an excellent growth rate, growing by 21%, driven particularly by success signing more soccer teams in every region, and American football in the United States. P&H was again where we felt the impact of exiting Russia, as our business in that region was almost entirely in this vertical. Going forward, that impact will drop out of the FY25 comparative period when we report our FY26 results. We remain very pleased with our P&H growth and the continued global expansion we are seeing from our P&H vertical. Our T&C vertical, which includes our video solutions, generated 16% ACV growth. This was underpinned by continued growth from new and existing customers in soccer in Europe and supported by Catapult's expanded product suite of video solutions launched in early FY26 in American football. Going forward, TNC will also include the ACV from Impact, which we're obviously very excited about. Not only because it's a standalone product, it has the potential for strong growth, but because it will also help us unlock more growth from our own pro video suite. As you can see on slide 14, our ACV per protein continues to expand, primarily driven by our success in cross-selling. Average ACV per protein increased by 8% year over year, meaning that our average ACV is now exceeding $28,000 per protein. This is very encouraging to see and entirely consistent with our strategy whereby we have a midterm target of growing this number to $40,000 per protein, which you'll learn more about from Will in a moment. The chart on the right of this slide expands on our cross-selling success. In the first half of FY26, we experienced a 26% year-over-year increase in the number of proteins using products from two or more of our verticals, which up until now consisted almost entirely of wearables and video. One of the pillars of our strategy is to maintain ACV retention rates above 95%. As you can see on slide 15, we delivered an ACV retention rate of 95.1% in the first half, the inverse of which being a churn rate of 4.9%. It is important to note that this includes the one-time impact of our exit from Russia, which represented around a 1% point impact to this number. This continues to be on par with the best retention rate seen among the world's most successful enterprise software companies. We're incredibly proud of this performance and expect to continue delivering retention rates better than our 95% target. And slide 16 now provides a good overview of the SaaS metrics we have spoken about today. These are the leading indicators of our future growth, and they present a very positive picture of the health of our business. There are two additional numbers to also call out on this slide. First is lifetime duration, which has increased from 7.6 years to 8.1 years, a 7% increase during a period in which we added approximately 600 new teams year over year. It's a great sign that even though we are signing new teams, we're building longer and longer tenure into our customer base. And second is our protein count, which increased 12% year on year, an acceleration from the 8% growth we experienced in the first half of FY25. We now have more than 3,800 pro teams as customers, a significant global footprint. And as a reminder, the pro team count is different from the 5,000-plus total teams mentioned earlier by Will, which includes non-pro customers. Let's now move on to our financial results, and you can see on slide 17 the impact that our strong top-line growth has had on our P&L. Fast revenue, derived from our ACV balance, grew 16% year-over-year. Recurring revenue, which is comprised of both SAS revenue and revenue from our media business grew by 19%. As it implies, our media business has had another very strong half of growth with 41% growth year on year. And finally on that slide, recurring revenue as a percentage of revenue has been consistently above 90% for some time, finishing at 94% in the first half of FY26. Now moving to our cost base, and as you may know, split our cost buckets into variable costs and fixed costs. Let's start with variable costs on slide 18. You can see the trend of our variable costs compared to the steady growth of our revenue over the last two years, and how these costs are declining as a percentage of revenue. Variable costs are the costs of growth, which are made up of COGS, delivery, and sales and marketing expenses. These are the costs that will continue to grow in absolute dollar terms as our revenue grows. while also declining as a percentage of revenue as we gain efficiencies in our business scales. As you can see, we continue to make progress on this metric. While our variable costs increased by $2.6 million year-over-year, they declined as a percentage of revenue from 52% to 49%, corresponding to an improvement in the contribution margin from 48% to 51%. The increase in variable costs was almost entirely COGS-related, which increased by 16% and was closely correlated to the growth from our media business. Outside of COGS, our sales and marketing and delivery costs increased by just 4%. This is a tremendous achievement from our team. It means that we are now only four percentage points away from reaching our target of 45% of revenue. Now moving on to fixed costs on slide 19. Fixed costs, which reflect our G&A and R&D teams, both expensed and capitalized, increased by 18% year-over-year and were flat as a percentage of revenue at 37%. Our fixed costs were impacted by the larger than anticipated payroll tax expense from the vesting of share-based payments, driven by the catapult share price, which has risen significantly over the last two years. Fixed cost growth was also impacted by the addition of R&D operational costs that came with the acquisition of PERCH. Both of these items occurred in the first half of FY26. Excluding the payroll tax and the PERCH impact, fixed costs otherwise rose by 7% year over year, which is in line with our expectations. And if we exclude the tax impact only, the non-recurring cost, our fixed costs would have been 35% of revenue, showing that our core trend of seeing fixed cost leverage with revenue growth is on track. We expect this trend to continue as fixed costs rise modestly in absolute dollar terms, while declining as a percentage of revenue as we continue to make progress towards our 25% target. And these concepts all come together on slide 20, which highlights how our operating leverage is accelerating the growth in our profit margins. You can see the gap that is now opening up between our revenue and our OPEX as a percentage of revenue and the impact that is having on our profit margin at the bottom of the chart. We have now delivered $28 million of positive operating profit margin, management EBITDA, in the last two years, and we are making great strides towards getting to our targeted 30% profit margin, delivering a 14% margin in the first half of this financial year. As revenue grows and our variable and fixed costs continue to approach their targets, our operating profit margin is expected to increase. And on slide 21, you can see the ongoing improvement in our free cash flow position that has come about because of these increased efficiencies we're delivering in our cost base and are leading to our expanding operating profit margin. Free cash flow increased 3.4 million year-over-year to 8.2 million in the first half when excluding transaction costs. which consists primarily of the $3 million cash component of the purchase price related to the acquisition of PERCH, along with related advisory fees. Including this, our cash flow was still a very healthy $4.3 million. It meant that at the end of the first half, Catapult had a net cash position of more than $11 million in the balance sheet and with a fully repaid debt facility. Finally, moving to our profit and loss summary on slide 22. We've already touched on many of these numbers, so I will make a few observations on those we have not. The increase in share-based payments is primarily due to the year-over-year increase in our share price, which has an impact on the expense recognized due to changes in the accounting valuation methodology as outlined in the FY24 result. This increase is not reflective of an increase in dilution. Incremental depreciation and amortization, or DNA, includes around $2 million of accelerated expense of F7 devices and thunder as they approach end of life, along with $1 million of intangible asset amortization related to the perch acquisition. And finally, the change in interest taxes and other is primarily due to a tax benefit, lower interest costs due to lower utilization of our line of credit, and reduced foreign exchange losses year over year. I want to call out that going forward, we will be separating out the payroll tax related to share-based payments from our management EBITDA. This expense relates to our employee share plan and is unrelated to our operating profit. We fully expect to continue delivering for shareholders, and if our share price keeps rising, payroll tax will continue to create timing noise in management EBITDA that has nothing to do with the underlying performance of the business. For that reason, we'll be making this adjustment going forward. In closing, we've started FY26 in excellent shape. Our key metrics and targets are world-class, and our financial performance continues to go from strength to strength. We are consistently delivering strong, profitable growth, progressing even further on the Rule of 40. With that, I will hand it back to Will to discuss our strategy and outlook further. Thanks, Bob.

Before we wrap up, I'd like to take a moment to reaffirm the scale of the opportunity in front of us. the strategy guiding us, and why we remain so energized about Catapult's role in sport for many years to come. Slide 24 highlights the global market opportunity. The professional sports technology market is expected to exceed 71 billion U.S. dollars by 2030, effectively doubling over the next five years. Live sports remains one of the last true pillars of real-time entertainment. And that enduring demand is driving unprecedented levels of investment across leagues, teams, and performance infrastructure. Slide 25 illustrates how our platform strategy is delivering true differentiated value. Our unified SaaS platform is designed to help teams make faster and smarter decisions. It saves time, adds context to the data they rely on, and fits naturally into the rhythms and workflows of high-performance environments, turning information into an advantage and an advantage into a competitive edge. On slide 26, you'll see the breadth of the solutions we now offer, including Purge and Impact. With each addition, we are becoming an even more integrated partner across the full spectrum of performance and coaching workflows. And across this platform, the deeper impact of artificial intelligence is just beginning to come into focus. Our greatest strategic advantage lies in the quality and the scale of the data we create. Petapool generates and manages a uniquely comprehensive body of athlete information, over five petabytes, from gym and on-field performance metrics to the custom tactical tagging done by our customers and now the most extensive global data set in soccer recruitment. Because this data originates in our hardware, flows through our software, and is enriched inside our analysis tool, we hold something rare in professional sport, a vertically integrated foundation of first-party data that AI can uniquely refine and learn from. This foundation is already creating meaningful value, as I've mentioned, AI-driven tagging, data cleaning, and content generation are saving coaches time and accelerating insights across our products. In Formula One, our computer vision technology delivers real-time track limit detection. In the weight room, Purge is redefining velocity-based training with a computer vision system unmatched in the market. And across our broader ecosystem, machine learning has long powered player and sport-specific algorithms built on top of data no one else can access. These capabilities help elite teams uncover patterns and insights that previously required hours of manual analysis. And they increasingly make high-quality performance intelligence now accessible to new types of customers who lack the resources to uncover those insights today. AI is also reshaping how we build. A meaningful share of our production-level code today is now generated through AI, expanding our engineering capacity and allowing teams to focus on the inventive, high-impact work that pushes our platform forward. In short, our unified, vertically integrated system, one that creates and owns the data, enriches it through AI and transforms it into actionable insight, continues to strengthen as AI's role in sport only grows from here. The value of AI ultimately depends on the richness of the data beneath it, and that foundation is uniquely Catapult's. This integrated system and our ability to generate differentiated data are also what fuels our excitement around our recent acquisition. URCH strengthens our leadership in athlete monitoring, by bringing weight room intelligence into our performance and health portfolio. Strength training is the foundation to athletic development, and PERCH bridges a long-standing divide, enabling us to build a unified view of athlete performance. While we are early in the integration, we are already seeing the impact. PERCH has already moved beyond its American football roots, helping us win competitive renewals in Europe, break into new verticals like Elite Volleyball in Asia, along with also helping assign new customers here in Australia. It's a clear evidence of its broad appeal and immediate commercial traction. Impact, even just weeks post-transaction, is also expanding our platform advantage. It adds a scalable, data-rich scouting solution powered by proprietary PATHI metrics that meaningfully elevate decision-making for teams. Impact strengthens our cross-sell engine in soccer, deepens our share of wallet, and unlocks new growth opportunities for our video products. And like Perch, the acquisition is immediately accretive to our progress in the regulatory. Now, turning to slide 27, you can see how the pieces of this strategy come together. Catapult has built a competitive moat that is wide, deep, and genuinely defensible. Our one-stop platform, our proprietary data stack, our global scale, and our multi-sport intelligence are unmatched in the industry. And as the first half demonstrates, through the strength of our platform, the sophistication of our technology, and the growth of our customer base, the moat is only widening. We are expanding our advantage at the very moment the market itself is accelerating is exactly where we want to be. Slide 28 outlines our focus go-to-market approach. We land on performance and health. We expand with video and now scouting analysis through tactics and coaching. We retain more than 95% of our customers annually, and we drive cost efficiencies as we move towards a target of 30% profit margin. Slide 29 details the economics that supports this journey. We've built an enviable global SaaS business designed for profitable growth at scale. The ability to drive our contribution margin through cross-sell and product innovation allows us to improve unit economics while leveraging a stable fixed cost base, yielding higher profitability as we scale. Slide 30 brings us back to where I started today, and that's with the Rule of 40. It is how we measure our success both internally and for you, our shareholders. At the heart of this framework are five key drivers, each critical input powering our ACV growth and management EBITDA. Together, they shape not just our financial outcomes, but the discipline behind our scale. First, pro team count. With more than 3,800 pro teams today, we continue to see greenfield opportunities across leagues, regions, and sports. Second, ACV per pro team. We are increasing ARPU through upsell, cross-sell, pricing, and product expansion, especially as we convert single vertical teams into multivertical customers. And this is where new solutions like Persian Impact will play an increasingly important role as we unlock their potential through our global-scale sales organization. Third is ACB Retention. We're maintaining retention above 95% by consistently delivering value, service, and innovation. And as we add new solutions, we deepen the role we play in helping customers make better decisions, strengthening the stickiness of our platform, and the trust they place in us. Fourth is the variable cost efficiencies. We are scaling smart, supporting growth while driving productivity and lowering marginal delivery costs. And lastly, it's fixed cost discipline. With our foundation now in place, we are positioned to grow without layering in equivalent fixed overhead. Turning to our outlook in slide 31, our objective remains to deliver on our strategic priorities with a continued focus on profitable growth. As we communicated last month in FY26, we continue to expect ACV growth to remain strong with low churn, continued improvement in cost margins towards our targets, and higher free cash flow, excluding transaction costs, as our business continues to scale. In closing, we've had a great start to FY26. We continue to deliver strong, profitable growth with a SaaS engine that is driving us forward with a team that is hitting on high expectations that we set for ourselves. With our all-in-one SaaS platform built exclusively for sport, now strengthened by perch and impact, we stand alone in our ability to help teams, athletes optimize their performance. I remain confident in the path we're in and in the vital role we play in unleashing the potential that lives inside every athlete and team on Earth. Thank you all for listening, and I will now turn back to the operator for questions.