Catapult Sports Ltd

Thank you for standing by and welcome to the Catapult Sports FY26 results conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Will Lopes, Chief Executive Officer and Managing Director. Please go ahead.

Good morning, and welcome to Catapult's Investor Conference Call for our full-year FY26 results. I have with me Bob Kruschenk, Catapult's Chief Financial Officer. This morning, Bob and I will present our results, our strategy, and FY27 outlook, and then take questions from participants on the call. FY26 was a transformational year. Catapult increased its ACB base by 28%. while delivering a record 18% on management EBITDA. We executed three acquisitions, doubled the size of the company, launched a number of new products, while maintaining focus on our customers. That combination of scale, discipline, and execution is what this business has been built on. FY26 was also a year when we significantly grew the number of teams on Catapult's platform. We increased our total team count to over 5,500 teams globally. While our focus remains squarely on professional teams, which we'll touch on shortly, that represented a increase of approximately 1,000 teams year over year, exceeding 20%. This reflects the global demand for Catapult solutions and our ability to expand our footprint into more and more teams around the globe. It's clear, more than ever, that Catapult is categorically the global standard for performance technology, trusted by athletes, teams, and organizations across every level of sport. And there is no greater near-term example of that trust than the upcoming World Cup. More than half of the national teams competing in this year's tournament are customers of Catapult. And when it comes to the biggest tournament in global sport, we are there supporting the very best teams, and athletes on the planet. Now turning to our results, before I begin, I want to be clear that all figures I reference today are reported in U.S. dollars, unless otherwise indicated. To provide a clearer picture of our underlying performance, year-over-year growth rates are presented in constant currency, removing the noise of foreign exchange and reflecting the true trajectory of our business. One of our most significant achievements of the year is our performance under Rule of 40. As demonstrated on slide 6, Rule of 40 is defined as the sum of annual ACV growth percentage on a constant currency basis and management EBITDA margin. In FY26, we hit a new record high of 36%, excluding acquired ACV, or 46% inclusive of it. This reflects a powerful combination of annualized contract value growth and a record 18% management EBITDA margin. That is the amount of operating profit we retain. This breakthrough confirms that we are not just growing, but we're growing with a discipline and leverage characteristic of the world's best vertical SaaS business. The next slide breaks this down into more detail. And these numbers tell a story of disciplined, profitable growth. Our ACV grew to $134 million. This was the key driver of our top-line growth, where we saw revenues reach $141 million, a growth of 19% year over year. Translated into Australian dollars, we actually reached a new major milestone, $200 million Australian dollars of revenue for the first time. Our management EBITDA, the key measure of our operating profit, grew by $10 million year-over-year to reach $25 million U.S. dollars. We continue to deliver top-line growth at the same time as we are dropping more operating profit to the bottom line, consistent with our strategy and the hallmark of a great scaling business. Slide 8 shows that Catapult delivered an ACV retention rate of 96.1%, an outstanding performance. Catapult sits in an illustrious company in delivering retention rates of this magnitude, and it is yet another validation of the quality of our product and the integral role we play in accelerating the performance of the best athletes and teams on Earth. ACV per protein, our core ARPU metric, grew 10% year-over-year. As in prior periods, the primary driver of this increase is the continued expansion of customers adopting more than one solution. Historically, this has been adding a video analysis to our equitable solutions and performance and health vertical. However, as our product suite expanded to include Focus Live for game day and practice, Hub Pro, as well as the acquisitions of Perch and Impact, we are now successfully cross-selling within the verticals and improving our opportunities to expand ARPU. Given the change in our ability to sell more solutions in and across verticals, we introduced a multi-solution metric to better reflect our efforts in cross-selling. On the right-hand side of the slide, you can see how we are expanding the number of proteins with multiple solutions. which increased by 62% year over year. Bob will cover more about this in a moment, but this reflects excellent cross-sell progress and the growing breadth and sophistication of our platform. Perch and Impact are early in their contribution to this metric, which gives us confidence in the runway ahead as we scale cross-selling in our sales organizations globally. Turning to slide nine, you can see the depth of the operating leverage on our subscription business model and the strength of our unit economics. As many of you know, our target is to keep at least 30% of every additional dollar of revenue we generate as profit. And I'm pleased to say that in FY26, we continue to benefit from the improvements in efficiencies across our cost base, and we exceeded this target with a 41% incremental profit margin. And that is despite the addition of cost that we inherited from the acquisitions we made. In fact, when you exclude the impact from the acquisitions, our incremental profit margin would have been 48%. Now, before I hand it over to Bob, let me also take you through some of the innovations we delivered for our customers this year on slide 10. This year, we introduced Vector 8, the world's most powerful athlete monitoring system, faster, more accurate, and built to save coaches time where it matters most. The product is out and in the hands of the best pro teams on earth. Even though we acquired Perch less than 12 months ago, we've also already delivered a brand new camera system. The Perch P2 has a 37% wider field of view and a frame rate twice as fast than the original device. Coaches today will get a richer and more complete data from every training session. Impact is now live on the Catable platform. And as a reminder, Impact is an end-to-end intelligence platform covering player scouting, opponent analysis, and internal benchmarking, all built on data that Impact collects and owns. They are the leading innovator in soccer analytics, and their proprietary packing data gives teams a unique perspective on player performance. And with impact now in our platform, rich match data and video analysis are now unified in a single workflow for the first time. On Match Tracker, we've gone further this year with a new automated aggregation service. We are now prepackaging event data, positional data, and multi-angle view for every team in a league. hosted, synced, and ready to analyze at the end of match day. We are also actively bringing AI to our product suite. In January, we relaunched an AI-powered automatic shift detection in ice hockey. Our wearable device now detects active player shifts based on movement patterns, giving coaches instant automatic workload insights. No manual tagging required anymore. This has materially extended our leadership in pro ice hockey, and it's opening doors for new customers. And that same capability is expected to come to more sports this year. And finally, Focus Live has moved beyond game day and is now live for practice. American football teams get the same real-time insights on the training field that they've always had on the sidelines. We now have teams across the SEC, other NCAA conferences, and the NFL using it, which further strengthens our position as the gold standard for video analysis across the pro-American football market. FY26 is a year I am genuinely proud of, not just for the growth numbers, but for the discipline behind them. We scaled, we acquired, and we expanded margins simultaneously. That's the compounding model we've been building towards, and with that, I'm going to hand it over to Bob to take you through this with more details.

Thank you, Will, and good morning, afternoon, and evening to those of you joining today. I'm very pleased to present another excellent financial result from Catapult today. I will begin with an overview of our key SaaS metrics before taking you through our financial performance in more detail, and then hand it back to Will to talk about our strategy and outlook. I would 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. As always, I'll begin by focusing on our primary metric on slide 12, our annualized contract value, or ACV. In FY26, we delivered 28% constant currency growth finishing the year at $133.8 million. When normalizing for the acquired ACV from Perch and Impact, this represented 18% constant currency growth, another strong year. It's worth pausing for a moment to reflect on this achievement. In a year where we executed several strategic acquisitions and kept organic sales and marketing headcount relatively stable, we still maintained an organic growth rate of 18%, even on a larger base. This is an outstanding outcome and represents another year of delivery for our shareholders. Breaking down our overall growth rate across our core verticals, we yet again saw a healthy balance of growth in both P&H and T&C. On P&H, which includes both our wearables and perch gym solutions, we generated 23% ACV growth over the course of the financial year. And this vertical now exceeds $84 million. A small amount, around $2.5 million, was acquired with Perch. So you can see that this was overwhelmingly organic growth that delivered this outcome. We continued to experience success signing new teams in soccer across EMEA and Central America and growth across college sports within North America. We actually added 460 new pro P&H customers in FY26, underscoring the significant greenfield growth opportunities remaining in this vertical. Our T&C vertical, which includes our video analysis solutions and now impact scouting solutions, generated 40% ACV growth. Adjusting for FX, at the time of completion, we added $8 million into our T&C vertical from impact, and the remainder of our growth this year was driven organically. Strong demand from global soccer teams for Catapult's Pro Video Suite, as well as increased adoption of new solutions in American football, were the key sports and solutions driving this growth. Our TNC vertical is now approaching $50 million in ACV, and that represents fantastic progress given TNC ACV was less than $28 million only two years ago. On the next slide, the first of these two charts will be familiar to you, our ACV per pro team. In a reflection of our successful land and expand strategy, whereby we are growing our share of wallet after we have successfully landed with a new team, This has grown again in FY26, and at the end of the year, it exceeded $30,000 for the first time. Growth in this metric will be crucial as we work our way toward our mid- and long-term growth targets. The chart on the right of this slide shows the multi-solution teams, a metric we introduced at our Analyst Day held in March and included in the presentation we uploaded onto the ASX. With the expansion of our platform in FY26 from the addition of Perch and Impact, we are now actively cross-selling different solutions to customers within the same vertical, as well as cross-vertical. As such, we believe this metric is a great indicator of our success. On this chart, you can see that we added 506 new multi-solution pro teams in FY26, a 62% increase year-over-year. And importantly, over 80% of these new multi-solution teams were the result of a great cross-selling effort from our sales team. with only a small component coming via acquisition. One of the core pillars of our strategy is to target ACV retention rates greater than 95%. Slide 15 demonstrates that we are successfully delivering on that target. In FY26, we delivered an ACV retention rate of 96.1%, the inverse of which being a churn rate of 3.9%. This continues to be on par with the best retention rates seen among the world's most successful enterprise software companies. And as we continue to add solutions to our product suite, this will provide for an environment whereby we can continue to deliver retention rates of this quality. Let's now move on to our financial performance. Slide 16 details the composition of our revenue. As this chart demonstrates, the growth in our SaaS revenue is overwhelmingly driving the growth in our overall revenue. SaaS revenue growth, which is derived from our ACV balance, grew by 21% year over year. And this grew of overall revenue growth of 19% year over year. Positively, our media business, which is licensed to sell American college football video highlights, continues to benefit from the growing interest of global video streaming companies in producing pro sports content for their platforms. And that business continues to grow at a healthy rate. Moving now to our cost base, which we group into variable costs and fixed costs, let's start with the variable costs slide on slide 17. Variable costs made up of COGS, delivery, and sales and marketing expenses are now within two percentage points of our long-term target. These costs ended FY26 at 47% as a percentage of revenue, just shy of our 45% target. This also means that our contribution margin has increased from 49% to 53%, which is a very strong performance and reflects a disciplined approach to how we manage our cost base. Variable costs are the cost of growth, and we'll continue to grow in absolute dollar terms to support our revenue growth. And I think it's worth reminding everyone of the journey we've been on related to our variable cost base. In FY23, as we exited a period of investment, subsequent to the acquisition of SBG, our variable costs were 66% of our revenues, which meant that our contribution margin was 34%. It was at that time we set ourselves a target to get our variable costs down to 45% of revenue and a 55% contribution margin. Over the last three years, we've been disciplined and resolute in working towards this goal, and I'm pleased to see that we are now within touching distance of achieving our long-term targets. Now, moving on to fixed costs on slide 18, which are our G&A and R&D costs, including both expense and capitalized R&D costs. These costs declined as a percentage of revenue by two percentage points to 35% in FY26. Absolute growth in fixed costs was primarily driven by the addition of acquired costs into the R&D and G&A functions from impact and perch. We continue to target a reduction in fixed costs as a percentage of revenue while rising modestly in absolute dollar terms. Now, these concepts all come together on slide 19, which highlights how our operating leverage is accelerating the growth in our profit margin. 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. Our operating profit margin has now expanded 4x in the past two years, a 13% a 13 percentage point improvement, demonstrating the operating leverage of our model at scale. We continue to make great progress towards our targeted 30% profit margin, delivering an 18% profit margin this financial year, and we feel very positive about this trend going forward. And in slide 20, you will see our free cash flow result. Free cash flow, excluding transaction costs, was $6.5 million, slightly less than the $8.6 million we reported in the prior year. As we communicated in March, the year-over-year comparison reflects the timing of our second half FY26 collections, which were impacted by the acquisitions, which paced temporary capacity pressure on our finance and collection functions. This deferred a portion of receivables into the first half of FY27, which is reflected in our increased trade balance of $20 million at March 31st, a $10 million increase from where it ended in FY25. That is to say, this is a timing matter. and there's no change to our underlying cash generation. As we announced this morning, since the end of FY26, we have collected the majority of this outstanding balance, with the remainder expected to be collected in the coming weeks. And finally, as you can see on that slide, we ended FY26 with a cash balance of over $53 million in the balance sheet, and we have no outstanding debt, which is a great position to be in. Now I'm moving to slide 21, which is our operating profit and loss summary. We've already touched on many of these numbers, so I will only make a couple of observations on this slide. Our gross margin performance primarily reflects the growth in Catapult's media business, which I flagged earlier. While our media business has a very high operating profit, its gross margin is lower than the rest of our business. In fact, if we remove the media business from our P&L, our gross margin would have been nearly 85%. And our management EBITDA increased by nearly $10 million year-over-year to $24.7 million. This was a 67% increase and resulted in a management EBITDA margin of 17.6%. It's important to reiterate that we removed the tax-related share-based payments from our management EBITDA, and this expense is unrelated to our operating profit, as we've previously mentioned. And finally, our operating profit as it translates to net profit on slide 22. I'll make a number of points on the slide as we're presenting some new information here, but overall I'm excited that our operations continue their strong performance as we just discussed. But we can also see that this is translating to strong EBITDA and net profit progress when excluding non-operational and or non-recurring items, such as the accounting impacts of acquisition accounting. The increase in capitalized development primarily reflects the capitalized component of the addition of Impact's R&D team into Catapult, which we added in the last five months of the financial year. The increase in SBP, or share-based payments, for employee compensation and related taxes reflects the impact on employee share-based compensation of the increase in the catapult share price, as well as payroll taxes incurred related to that increase over the last several years. As a reminder, this does not reflect an increase in dilution from share-based payments, which has actually been trending down in the last two years. And you can see that EBITDA, before any acquisition charges, reached $25 million, improving by 33% year-over-year, another measure demonstrating the operating success we continue to achieve. Acquisition-related charges include the non-operating effects from the acquisitions we completed this year. Specifically, this includes the non-cash accounting impact from both acquisition contingent consideration and the adjustments to fair value of feature consideration. and it also includes the fees paid to advisors related to the acquisitions. The increase in depreciation and amortization reflects increased subscription units, effectively as a result of our growth in the wearable business, and also amortization of our capitalized R&D. Amortization of acquired intangibles ended FY26 at $7.4 million. This was lower than we had initially projected in March and reflects the outcome of that independent assessment that we referenced at our analyst day. FX loss and other one-time adjustments consist of an FY26 non-operating FX loss from the valuation of certain assets from a weakened U.S. dollar and an FY25 one-time deferred tax credit. And finally, interest in other primarily reflects the interest in our debt facility, which we subsequently paid down after the October 2025 capital raise. I also want to make a point here that while we do have deferred tax losses on the balance sheet, We are not expecting to be able to utilize these in the short term, and therefore they should not be modeled into our future P&L at this stage. You can find more detailed breakdowns and reconciliations of some of this information in our financial statements and our analyst pack, both of which are available on our investor website. In closing, we finished FY26 in excellent shape. Our team has delivered another world-class performance, and our business continues to go from strength to strength. Catapult has never been in better financial health as we create an even greater experience for our customers and drive our business forward as a platform for global pro sports teams. With that, I will hand it back to Will to discuss our strategy and outlook further.