DUG Technology Ltd

Welcome ladies and gentlemen to Doug's interim financial statements for the FY25 year. Today we have Matt Lamont, founder and managing director and Daniel Lamont, who's acting CFO joining us. They're gonna take us through the financials. Just a bit of housekeeping, your research analysts are free to ask questions at the end. You can do so via the Q&A function or by raising your hand and you can ask them live. And you can ask those as you go along the way. Handing over to Dan and Matt.

Thanks, Dave. Let me share the presentation. It's my pleasure to be with you again today with Dan. And I think it's exciting times for Doug, although the results are not quite what everyone would have hoped for. We're really excited. So let's get on with it. So the highlights of the year is the Audible. It's now growing again and it's growing on the back of the MPFWI. Very strong forward momentum. The software revenue is up 22%. I've been sort of talking about that over the last few releases, saying that we're really excited about software and finally we're starting to see that deliver and I think we'll continue to see that accelerate. Revenue was down a little bit as we flagged it six months ago. We were going to be flat and unfortunately we ended up slightly down on flat. But an EBITDA was soft, but we've been investing a lot because it's sort of like being... two worlds for us, you know, very disappointing on the, on the share price side, but internally everybody can see what's happening. Everybody knows our technology. You can see our customers and our excitement and everything that's going on. And so it's, it's been a funny, funny six months in that regard in such excitement and, and drive and everyone's facing forwards internally, but, but it's uncertainty in the share market. Um, And the Elastic MBFWI projects do look really good. We have eight that are underway, a couple that are nearly finished, and we've had follow-on awards now. So it's going great. It really is. You know, just rethinking who we are and how we get that message across. Again, we are numerical physicists. You know, we're global physicists. We work for those global technology leaders in several different ways. We've made breakthroughs in geoscientific computing, in algorithms like elastic multi-parameter FWI, first in the world by far. We work on the most complex of data. We work geographically all over the world. We've got some of the best supercomputing facilities and some of the most energy efficient cooling systems for data. You know, to sell, to maximise our growth, we have to sell across the entire planet. And so we're now Open Abu Dhabi, so we're now on five continents and we're committed to delivering what we do globally. We're global to our core. So just as a reminder, services is where we do turnkey projects for mostly oil and gas companies, but also for companies carbon capture and storage for wind farms and for several other things. But most of the majority of the revenue comes from oil and gas. And that's where the Elastic NP-FWI revenue mostly comes from. It does come from software as well. The software is in 40 odd countries. It is around big data analysis, big data storage, big data mining. And yeah, we're really proud of the software. It's a modern, broad software suite that sets it apart in the industry. HPC as a service, although in its own right is disappointing and we've been relying on just a few clients and as they change internally, the one we lost that affected the results in oil and gas didn't go anywhere else. They just changed their policy on what work they were doing internally. But it supports and is a key part of the whole software story as well. Multi-client, this is a change. We've been doing multi-client for a number of years, a long time. We work for 12 multi-client companies. The change now is just that we all have our own multi-client assets. We've taken risk on multi-client projects before, but now we will have our own multi-client assets ourselves. It's a really big market and a really profitable market, and one perhaps we should have changed our strategy in a little while back. Doug Nomad, we're really excited by it. We haven't sold any, but we're very excited. It is genuinely mobile data centers or genuine edge data centers. It's different to... What's it different to, Dan? It's different to modular data centers. You know, modular data centers is what you'll see most everywhere else are like dongers. You know, you take them to a mine site and you get a builder in and he sets them up on stumps and then you get a plumber in, you get an electrician in and so on and so forth. And ultimately, a month later, you have a data center that's ready to go and it's very good and useful and a good thing to do. Ours are different. Ours you can turn on while they're on the back of the truck if you've got the power. You can sling it under a helicopter turned on. You can put it in the back of a Hercules turned on. It uses our immersion cooling. It's very cool, but it is differentiated. It isn't the same thing. It's genuinely mobile. And then, of course, there's the BAC licensing of our... of our patent and there's a really cool movie that they've put out about how that fits into what they do. And we'll highlight that link to you a bit later on. You've seen this slide before. It's our geographic spread. So you can see orange are the countries we've worked in. So we've worked most everywhere. They're genuinely global. And then there's our offices and our compute facilities. Of course, the new one on the block is Abu Dhabi. And then our dotted line is our global fiber, where we transport data and access to supercomputers and so forth around the globe. But one of the highlights, I sort of touched on it a little bit in that the excitement that is within Doug, because we can see the position that we're in and our guys are getting those interactions with clients. And because of that, and because we believe that we can have a period of sustained growth, we've been investing strongly for quite a while now. very strongly in the, in the elastic multi-parameter FWI pilot projects. They've taken a lot, you know, we rolled out a big chunk of technology and initially you get little issues and things you didn't expect and you work your way through that, which is why the pilot projects are important. But the results have been really great. Um, they're not, they're not, I think I expected incremental results for one or two reasons. We're not seeing incremental results. We're seeing quite startlingly better results. Middle East is important. We're getting access to some really big opportunities there now. And I think that's going to grow into a pillar in the Doug world. Again, if you see what you have, the aspirations that we have for sustained growth and the belief that we have that we can do it. and become a very significant player in the market, then you need the business development to support that. And that's what we've been putting in place. You need the conferences, you need the travel, you need the interactions. And so we've been investing in that strongly. Our R&D team is exceptional. You know, you don't lead the world in technology and license out your patents unless your R&D team is exceptional. And so it's made up of one percenters, what I like to call one percenters, and they're hard to hire. We've had a bit of a really great year last year. They're hard to hire, they're slow to hire, but we actually hired five last year, which is quite incredible. That's a fabulous year. And then in infrastructure, we raised money, as you're aware, to do the infrastructure upgrade, but an infrastructure upgrade was already underway as well. That is now complete and that gives us 20% headroom. And I think we'll talk about the other, the further infrastructure to finish off the rest of the room is now underway. Well, the planning for it is underway. The goalposts moved a little bit. The new computers are just so... energy rich, they're using so much power that they produce a lot of heat. And so we're having to up the ante on how much power we're providing to that new part of the data center and how much heat rejection we're putting into that new part of the data center. I'll pass now to Dan to do the financial slides.

Perfect. Thanks, Matt. So I think we touched on revenue at the top. So revenue is down 4%. We had services down 3% through the half. But we had a really good result through January with $13.4 million of awards, giving us a closing order book of $42.2 at 31 January. And this really sets us up for a strong FY25 half two. Software revenue was up 22%, which Matt's touch was a great result for the team and driven by customer renewal rates, success licensing our processing imaging toolkit, which is something that's relatively new for us as a business. and increased adoption in the offshore wind market, which is companies using our software to decide where they're going to place offshore wind turbine pylons. HPC as a service revenue fell 46% on the half, which as Matt touched on was a disappointing result, it's really important to highlight that the HPC as a service offering really helps us drive software sales. So the two together really interlock and work well for us as an overall offering to the market. we had employee benefits increased by 10% in the period. So a large part of this was due to the hiring of the technical team in the Middle East, which occurred mainly through July and August, 2024. And so those costs were carried through the period along with some relocation and training costs. We also undertook a restructuring initiative during the half relocating shared services from Australia to Malaysia and right-sizing some other teams. So that was a 0.7 US cost to us in the half with annualized savings of 0.9 moving forward. We had other expenses fall by 7%. So important in this fall was no third party computer. So over calendar year 24, we've had the arrival of our new Intel and then our new AMD computers, including some that arrived in July 2024. And this has given us great capacity to remove the need for third party computer. We see these new computers come through in the depreciation and finance expense lines with the step up there being associated with the new hardware and then the associated asset financing that goes with it. So at 31 December, we had 17.3 million of cash on hand and 24.3 million in debt. So this debt is predominantly asset financing, but contains some other smaller amounts as well. So that left us with net debt of 7 million for the period. Obviously in October 2024, we had the successful capital raising. So we raised 31.4 million Aussie. So just giving a brief update on how those projects are going and the use of funds. So we raised 19 million for the data centre infrastructure upgrades that Matt referenced earlier. So these upgrades are progressing through design and planning stage at the moment. We've had six and a half million for the Middle East expansion. So we've hired the team there. We found the office and the fit outs underway now. So it's working and moving along well. And Doug Nomad, we raised 3 million for. So we've had an early sales and engineering teams have been put in place. We've established the Malaysian supply chain. And we've also attended a lot of really key industry conferences there. is contract assets. And so what we're seeing as we move into new jurisdictions and we work with different organisations is we have less of an ability to negotiate payment terms and payment cycles. And so what we're seeing now is a lot of our new contracts are coming through as milestones rather than monthly progress billing. So what we had at 31 December was just a few of these milestones lining up such that it caused a material uptick in the contract assets at the end of the calendar year. So most of these material milestones are due to be unwound in the first quarter of this calendar year. We also have PP&E that's flat over the period and it's just worth highlighting there that we had the last delivery of AMD nodes in July 2024, so while we had some depreciation come through the books, that number's flat due to those machines arriving. So into cashflow payments to suppliers rose and it's mainly a timing thing as opposed to anything else. So the third party compute that we utilize over FY24, we were able to negotiate payment terms that stretched over a 12 month period. So we had the last of those payments come through an FY25 half one, albeit that we used the third party compute in FY24. We also had 6 million of cash invested over the period. And so the most of this is related to the final delivery of the AMD nodes that I referenced earlier in July 24. And then also the first round of infrastructure upgrades that Matt referenced. So then the final big item through financing is the 19.7, which I touched on earlier, which is the USD equivalent net of fees that was raised in that October 2024 capital raising?

So growth drivers. You know, what's going to drive us forward? Why are we all so excited internally? First of all, the ecosystem in Doug, the integrated solutions is going to underpin everything that we're doing. So it's the proprietary immersion called data centers, right? We say 51% of the power bill, Great for environmental, but really great for the back pocket as well. It's the science. It's the modern geoscience software underpins everything we do with all its workflows and analytics and leading algorithms and everything. and an expanding multi-client library. And I'm really excited about where that's going as well. For those that don't know multi-client, it's where we build up an asset and then we can sell it multiple times to multiple clients. We only do this in a very risk adverse way. So we won't be taking on liabilities there. And then of course, underpinning everything is Nomad to get us into places. We don't want to build data centers, but you can't take data out of the country. and the immersion cooling. I put out a video recently on the Elastic MPFWI and I would encourage everybody, if you haven't had it, to have a look at it. You might want to have a look at it in pieces, and I think we're going to put it out again in pieces because you probably want to just take a piece at a time and understand it. But it walks you through what we're doing and what that competitive landscape looks like and why it's so important both to Doug but to the industry as well as what we're doing. And the key, of course, about this is just how much a well cost to drill in the oil and gas industry. And so expensive geophysics is well worth the investment and getting better results and getting them sooner is really valuable. And that's the key to MPFWI in general. It replaces traditional processing imaging. provides better results and provides it in a much shorter calendar timeframe, less manpower, more compute. And so the results that we're seeing from the elastic MPFWI, as I've said, are really something. And we're going to, it's going to be big news. We're going to see big things coming from this. If you look at the pictures on the right, I'm not going to get into it, but I just highlight the right hand side, sort of a quarter of the way through, a quarter of the way down, if you put your imagination in place, you can see a reef. It's actually a buried reef type structure there. And you can see at the top picture, you've got this sort of quite rough top to that reef. And at the bottom, the top of that reef is quite resolved. I mean, that's significant. And that's what you're seeing. That's just an obvious one, but that's what we're seeing throughout the elastic results. We're getting it cleaned up. we're getting more resolution and we're getting it better. All the companies are excited. So the growth driver. As we've been saying, it is the next generation size imaging. Leading the way is the elastic, but also the acoustic as well. Terribly exciting. Those pilot projects are going well. As I said, you're rolling out a big chunk of technology, so you have little issues, which is why you do the pilot projects. We're cleaning those up. The results look tremendous and we're already getting follow on contract awards on the back of those. So that's part of why you sort of saw flat, flat, flat, flat awards last year. And then suddenly you're starting to see momentum built this year. It's around some of those those results starting to come through. And multi-client, as I said, is a high margin, repeat licensed business, and it can bring great returns. And we're looking at several really great projects. Now, it can be risky, but we're doing it in a very non-risky way in that we need every project to be underwritten before we do it. And so we're not taking a risk. The software, you know, I've been talking about software for a year or two now, and we're finally starting to see, you know, the numbers come through. I've been saying that we've got a new lady running it who we're all just fantastic. She's doing a great job. She actually worked for us for a long time. She left and went to Santos. Now she's come back with a bit of being up on it and just doing a great job. So I believe we're going to continue to see software sales accelerate. And that's including sales of interpretation software to oil companies, but also processing and imaging, which goes hand in glove with high performance computing, to small competitors. So doing projects that really we don't want to do, they're a bit smaller than we would ideally like to do, or they're in regions like the Stans or other places where we don't have a footprint, we don't do much work, and the projects tend to be smaller and more difficult. We are working on a great strategy around interpretation, which is around getting into the large oil and gas companies, as well as getting the processing and imaging software out there in the broader marketplace. It is an exciting strategy, and I think watch this space. And of course, the third growth driver is the non-oil and gas stuff, which is Doug Nomad and the immersion cooling. I'll start with the immersion cooling. I'd really encourage everybody to look at BAC's Cobalt new YouTube announcement. It is interesting and it really gives you insight into how our immersion cooling goes hand in glove with their big external cooling towers. And you can see how it simplifies the whole data center. It's really worth looking at. Of course, Nomad, we are really excited by. It is the mobile data centers. And I've said this before, but I'll say it again. There's a really big demand across all sorts of areas for Nomad. And some of it is being kicked off by when Russia went into Ukraine, the first thing they did was bomb out all the data centers. They did that to knock out communications. And that's one of the big focuses on Nomad and that's where it comes from. So, immersion calling, whether it's in the Nomad form or inside your data center via BAC is very compelling. It's really compelling and we believe it will be the way data centers are built going forwards. There are a couple of hurdles to get over, but it's extremely exciting. And of course, as I've said, to bring this all together and to maximize our growth potential, we need to have a global footprint. And that's exactly what we do have now on the back of opening Abu Dhabi. But we've also pushed into India and into Brazil. I think all the paperwork signed for Brazil, isn't it, Dan? It's painful to get set up in Brazil. I think we're just waiting for that paperwork to and agreements now to get registered and we're away. And in India, we're doing it. Now, both of these are different to the Middle East. In the Middle East, we actually started with the same sort of strategy, put in a BD front to find more work, see what we could find there. But in Middle East, we got swamped with opportunities and decided to put in a proper business unit. In India and Brazil, we don't intend to do that. It is a BD front that we're putting in. The Indian work will be done in Malaysia mostly and the Brazilian work in the Houston office. The order book is growing and certainly the signs are that it will continue to grow. We're excited by it and we're seeing the pilot projects convert. We just continually cover the ground. We now see our competitors are now saying, yes, we're going to do NPFWI. Yes, we have it, but they're years behind. It's a really good place to be now. And now we're just getting our HPC in order, you know, to cut off, maybe answer a question that's coming. No, we have no plans to buy compute right this minute. We have headroom in our compute, but we've got to get our data centre ready to take, because if Elastic takes off the way we believe, we are going to need more compute. But for the moment, we don't. The order book as it stands, what we're seeing, we have the... the headroom in the compute to do what work we've got. Yes, and we're seeing opportunities come from all the new markets. So why invest in Doug? And to summarize it, this is the last slide. Game-changing technology in the MPFWI. Significant global pilot projects done to prove up that technology and great interest now from everybody from the super majors down. Modern geoscience software package, broad, modern. Broad is important because it means if you go with other software, you've got to have different software applications and there your data is moving from one to another. With the dud package, it's one package that goes from one thing to the next to the next. Tier one client base, as I've said many times, it's much simpler to tell you who we don't work for in the oil and gas space than who we do work for. patented immersion cooling license right and that's we still believe we're going to see some revenue from that this financial year we believe we're going to see nomad sales this financial year order book is growing um it's it's back really strong and growing We've got the cash in the bank. We don't need to raise money. We've got the capacity in the data center to put in more compute when significant growth occurs and we need that new compute. There's no plans to do it right now. We have a fantastic culture. We have, you know, everybody's excited. Everybody's looking forward. Everybody sees what's happening. It is an exciting time internally in Doug. And we're now really reaching into most corners in the world, certainly all the corners of the world where we want to be. We've got a lot of travelling down into Africa going now. We have no plans to start up permanent, any permanent people or offices in Africa. But we were in, for example, we attended a Nigerian conference in the last few weeks and came back with a whole string of opportunities that look great as well. So thanks, everybody. That's my quick run through the PowerPoint or our quick run through the PowerPoint. Thanks, Dan.

Thanks, Matt. Thanks, Dan. We might now move to questions. Just a reminder, if you're a research analyst and would like to ask a question, please raise your hand. We have a few questions online. Jack Daly at Shore and Partners, if you could please ask your first question.

Hey guys, hi Steve, hey Matt, hi Dan. Thanks for taking my question and congrats on the result. I think first one from me, good to see the, I guess, project awards that you called out in January. I guess when we think about the rest of the second half, is that obviously 13.4 is quite considerable. How should we be thinking about the awards moving forward in the short term and kind of building off the pipeline?

Yeah, we're seeing it continue. We're still winning work. Thank you for the question, Jack, by the way. We're seeing the BD pipeline is strong. We're seeing opportunities and tenders coming through and we're still winning projects. So it's a really exciting time.

I think you mentioned that both kind of across acoustic and elastic is what regions are you seeing the most success at the moment?

Um, London and KL, not KL, London and Houston is where we're seeing the best uptake of, of this. Um, and Middle East is just a bit more cautious. We've got several pilot projects in the Middle East and some generating some massive excitement. And so I think you'll see Middle East joining them, but the projects that have been awarded have come so far come out of Houston and London.

And I guess just on the, um, I guess if you want 13.4, it probably implies about four mil services revenue in January. Is that broadly correct? And I mean, is that just a function of January being a bit quieter and you'd expect that to step up?

I think January was six mil revenue, wasn't it?

So yeah, you've done your maths correct, Jack. So for services work in January, that is, you know, it's the opening order book plus the, plus the wins minus the closing can tell you what we booked for services only in that period. And what we see is those awards through January ramping up really quickly. And so we expect that number to lift through the second half. It will lift through the second half as these projects come online.

But January is a very strong software month, Jack.

Okay.

There's lots of renewals of software. So January, software goes strong in January.

Okay. So it was probably four services and then two software it will take. Yeah. I remember, I think you had the strong software second half generally.

And I remember the exact number for revenue in January, to be honest. But it wasn't a weak month. It was a strong month.

Okay. And then I guess just on the HPC as a service, Um, it looks like, I mean, it's obviously don't know what the first quarter number was, but it looks like it's drops quite significantly. Are you able to give, obviously you kind of called out, um, they went from, they changed their way of kind of building. It sounds like one of your biggest customers, are you able to give a sense of what that looks like moving forward?

Well, it'll build from here. I think, um, I was sitting in a meeting late last night with all the software and HPC global sales team, and we're looking at lots of opportunities. And I think the problem But that business, both in the non-oil and gas and the oil and gas, has been we had early wins and they come and go. They use more sometimes, they use less others. And that's what we're seeing come through the numbers. We just don't have the broad base of clients so that they all stack up to give a smooth result. There was nothing ominous about that result in oil and gas. That company just changed its policy. They didn't move anywhere else. So the opportunities are there and we're broadening that client base. So I certainly believe you'll see it growing from here. And it is very important to the software sales as well.

Sure, I appreciate it. I'll jump back in the queue. Thanks for answering my questions.

Thanks, Jack. Alan Franklin, you've asked a few in the chat. I'm assuming you might want to ask those verbally. If you could go ahead with your questions, please.

Guy Coward- yeah happy to thanks Steve hey matt and Dan. Guy Coward- Just a bit of detail on the elastic workloads I think there's been touched on a little bit already, but just in terms of the type of client that is looking to. Guy Coward- turn a pilot into into real workloads really only for the scale of the of the super majors and or is it reprocessing reprocessing work or more sort of explore exploration on new assets.

What we're seeing so far is not the supermajors, although we have one or two tenders in from the supermajors now for elastic MPFWI. It is, as per normal in our world, the early uptakers of technology is the big independent companies, especially the American ones. And that's what we've seen in a big one and the the projects are tending to be more on the production side than on the exploration side for the elastic. The acoustic is tending, which is what we expected. We're seeing the elastic on the production side a little more than the acoustic on the exploration side. Some of the most excited clients though are in the Middle East as well as Houston and London. So the pilot projects are spread all over the world, but the early adopters, uh, um, is a company in, um, a big independent in, um, or two in big independence in London. And then, and then a handful in, uh, a couple in, um, out of Houston and more money in Houston.

helpful. Thank you. Just on the on the sort of cost base, you know, relatively flat through the second half, sorry, through the first half, just how to think about any, any additional items to think through the second half, I assume Middle East office comes on, but what other sort of lumpy cash growth, sorry, cost growth items should we think about?

So because of the way of lease accounting, we signed that lease commencing 1 July. So the lease cost is actually coming through the books because although we had a rent free period due to lease accounting, it's smoothed out as well as the staff there were mostly hired in July also. So most of those costs, there shouldn't be a big step up there, obviously, hand over the mat.

And some of the costs that we've incurred in the last six months is we've moved the shared services teams now completely up into Malaysia and we're building them there. So that cost of redundancies and so forth are now behind us. We'll still be restructuring always, but the big chunks are gone. So unless you, and we've got enough compute to do workload that we have, as I mentioned earlier. So unless we see accelerated growth, which is certainly what we're believing in, it's unlikely we'll be ordering more compute this financial year.

I think it's probably also worth highlighting, Alan, those Middle East staff, through the period we're getting trained, they're all working productively now. We've been putting a lot of resources into the eight pilot projects. So on the staffing front as well, we feel like we have good capacity now globally to service an uptick in revenue.

Yeah, I might just drop in one query on BAC. Just to what extent do you think they've actually formally live launched the product now? And just to the extent of how you think the first couple, what sort of type of project the first couple of clients might be? Are these going to be more retro? retrofit type solutions or clean new builds that they might be pushing for.

i think they're we don't have perfect insight i think the early revenue will be probably more likely on the refit side just because those projects are quicker to get up but they are targeting big new builds that is what they're talking through and they've presented the solution now to hyperscalers as well we got confirmation so they've Alan Fekete- You know it's a mix, I just think, because of the time taken for a new build to come online it's more likely that we'll see refit as the early sales and and new build as the. Alan Fekete- The tail. Alan Fekete- The follow on the phone.

Matt Constable, All good, thank you for that helpful.

Matt Constable, Okay, thanks Alan Alan Ross barrows to go ahead with your question, please.

Yeah, great. Thanks, Steve. Hi, Matt, Dan. Just to offer some clarification around the elastic offering. So if a new client explores elastic and starts a trial, that's fine. It's clearly all incremental. But with an existing client, when they undertake an elastic pilot, is that incremental spend on top of their current spend? Or is there some kind of cannibalization from their existing revenue they might be spending with you?

Yeah, it's a good question, Ross. They... So I'm thinking of one particular client here. They had a project with us in the Middle East and we're working the project, it's going well, and then they just... And it's a significant client that can be a humongous client and they will just say, we would love to see Elastic on a part of the project that we're working on. And so there's no... We don't get paid for it, but we're very keen to show it. And we also don't want... You don't, in the early stages, you don't actually want production projects because you still just want to run a few projects through and sort out any issues that arise. So you want a little less pressure. So it's like that. It's most of the opportunities are like that or they're standalone elastic little trials where you do get paid something, but you don't get paid very much. But they're set up differently. They're not set up as production projects, but now we've got the production projects coming through.

Okay, thanks. Let's do other ones. They're both related, I guess. You mentioned now that you're planning to or preparing to fit out the balance of the foreface in Houston. You've been quite clear today that you don't expect that to be fitted out anytime soon, but things could change. But given the density and the capacity that you have put in recently is kind of orders of magnitude more capable than the existing installed base prior to that. But you to kind of chew through and work through, you know, that orders of magnitude bigger compute with, I guess, the growth you've got to then, you know, expand the fourth base by 20% and then deploy even more must imply that you've got, that would have to be, you know, contractments of a very meaningful size to justify that final fit out.

Remember Elastic uses a lot of compute and brings big dollars with it. And so you're just looking at a different world where a lot of compute is deployed, but it does bring big dollars with it. And so, yes, you can't win in a project unless you can win a project without the compute in place and then scramble like crazy to get the compute in place, you cannot win a project without infrastructure in place. So we believe strongly in where we're going and we believe we will have accelerated, sustained accelerated growth. We really do. And therefore you've got to get that infrastructure in place because it cannot be done quickly. And you cannot, you know, you've got to put it in as part of your strategy. You can't put it in as part of winning projects because you're just way too late.

Guy Coward- Just just to finish that thought to to have enough work to go through the capacity of recently deployed that then want to put more in. Guy Coward- would mean considerable visibility on demand.

Well, yeah, we won't put more computing until we really need it. That's been our mantra forever. But you've got to have the infrastructure in. And, yes, we believe we're going to need it and we believe we're going to grow. We are a growth company. We always grow. We do have flat spots from time to time, but we always grow. And on the back of the technology we have and what we're seeing in the market and the update from clients, we believe very strongly that we're going to have sustained accelerated growth. And we're going to need that capacity in the data center now. But we don't need it right now. We've got enough headroom in the compute we have right now. But as I said, when you need the compute, it's too late to put in infrastructure. It's all over. Then you have to go to third party and we know how painful that is.

Yeah, for sure. And just a really quick follow-up. You mentioned earlier about managing the extra heat that's coming off or being generated by the compute. Can you just quickly talk about, I guess, how you're mitigating that and any costs that might be associated? Thanks.

Well, the AMD, the new AMD machines, you just have a lighter load in each tank, so you can't fill up each tank. or you spread them around, you spread those new nodes through tanks of all the old nodes so that you average it down to what the tank can manage. In the infrastructure upgrade that we've just finished, there is a kilowatt upgrade to each tank, but we were restricted because we already had a lot of electrical equipment and stuff in place for that. There was more electrical equipment put in, but we had the power boards on the wall in place. We didn't have the distribution or the PDUs in place, but we had the power boards. And we also had all the plumbing and subfloor plumbing in place. So we were a little restricted in what we could do with heat rejection and power there without throwing it all away and starting again. But they are, I can't remember, there might be 30 kilowatts now, so they are upgraded, might be a bit more. In the new bit, it's not where we've got a little bit more of a blank canvas. It's not difficult, you know, You put in bigger heat transfer units and you put in a different oil and you feed it more power and you put in more chillers outside, more cooling towers outside. So the cost implication is not. Remember, the infrastructure costs are small relative to the compute costs. Mm-hmm. You know, if we roll this out, this will be a really big deal revenue-wise because these are big things we're looking at.

Very helpful. Thank you.

Okay. Thanks for your question. Lindsay, if you could go ahead with yours, please.

Yeah. Thanks, Steve. Hopefully you can hear me all right, guys. Thanks, Lindsay. Brilliant, brilliant. Question, I mean, it feels like everyone's kind of trying to pinpoint this capacity question. I mean, I know it's not this simple, but If we just have a look at maybe Doug historically, like I think the most you've probably ever done in service revenues is $30 million and a half or something. Is there like a dollar figure or a dollar range that we could think of? Like your current capacity is sufficient to support X dollars worth of revenue, just so we can kind of frame it. Is there a simple answer you could give us?

No.

Even if it's not correct? I figured that'd be the answer. Okay.

We get asked that question every time. Sorry, there's no simple formula. It depends. It depends on the projects and what you're doing and the client and And whether you're, you know, you know, the part of projects, clearly we're not getting a, um, we're getting less revenue than a production project or sometimes none. Um, we, we're certainly aiming and on some of the one projects we're getting, um, more, you know, we're getting a premium. Um, and then, and then if the machines sit idle, we run crypto, we're, you know, not at the minute, cuz everything's really getting busy now. But at the tail end of last year, we're making a hundred grand a month, roughly from crypto. So it depends on where that revenue stream is coming from as to, as to, you know, is it traditional processing and imaging? Is it elastic? Is it, you know, what is it that's, or is it, is it some AI work? Is it, is it crypto? What is it that's producing that revenue? They all have different revenue profiles.

Yeah, no, that's, I figured that would be the answer, but I thought I'd ask anyway. And then just, I mean, the $13 million in contract wins, like that's a, it's a pretty big number for a short space of time. I mean, we've seen this in the past, like if we go back to say last July, I think you had nearly a $20 million contract. There's a $13 million in new wins. Is that like a big contract and some smaller contracts? Is that like a good spread of medium-sized contracts? How should we think about the makeup of the $13 million?

There's some good spread, but there's some bigger projects in there and a good spread.

Okay, brilliant. And then on Nomad, I mean, you raised some money. You've talked about building out the sales and marketing team. I think in the past, maybe you yourselves haven't been that clear on just the revenue model.

uh for the nomad business like is there any more color you can give us there as to how that's progressing you know is it going to be a sale leases those sorts of things we're really disappointed that we don't have a sale yet but it looks amazing it does look really really great um and the the model is you know our ideal model is we lease the lease the nomad full of compute with all our software on top and manage it remote and manage it for them But then there's other leads, significant leads, where they say, no, no, no, for security reasons or whatever reason, we want just to buy the Nomad itself and no compute and nothing else. And so in practice, it'll end up being a mix of those two.

All right. Brilliant. I think that's probably it for me. Thanks, guys. Cheers.

Okay. Thanks, Lindsay. A question in relation to Elastic and the work that's been done over the first half. Did the focus on Elastic perhaps result in some of the slower pace of revenue being booked in the remainder of the quarter or the second quarter?

Yeah, it did. We didn't consciously do that, but you've just got a very exciting new piece of tech and a lot of client focus on it and a lot of questions being asked, or do we do elastic? What's the price point? Should we continue with our acoustic? Is it time to switch from traditional processing imaging? So there's a lot of noise being generated, a lot of focus, and so it did take away some of the – some of the revenue and you've also got a lot of people working on those pilot projects and so forth. So a lot of support going into those pilot projects. So you would have slowed down a little bit the other projects, but it's all for the exactly, absolutely. Would you do it any differently if you did it overnight? It's all for the right reasons.

Okay, Jack, returning to you if you have any further questions.

Thanks, Gus. You kind of flagged the multi-client, I guess, expansion into that kind of market. It would give a sense of, I guess, the sales capacity required, what the investment is from your side. I guess, how does that work potentially cross-selling or leverage your existing relationships and when kind of revenue contribution might look like for that?

Yeah, thanks, Jack. So first thing, we've been in doing multi-client for a long time now, but our strategy has been to take a little piece of other people's projects. So we work for 12 multi-client companies and we will take risk on the processing in order to get upside. So that's been our take on it. And there's an obvious flaw with that model that you have to be very careful with is if they've got a well underwritten, really exciting project, then they won't give us a share of it. They'll just pay proprietary processing and imaging fees. If they got a project that's a little more risky, then they will probably give us a share of it. So we decided to do it ourselves as well as work for them. And that's working really well. The key here though, is that when you do a multi-client project, you don't just go out, grab some data, process it with no clients, and then go and try to sell it. you build up a project you generate a project you document it you say what you're going to do have all your plans in place and then your sales guys go out and show it to the oil companies and try to get what's called pre-funders so we're looking at several projects um one in particular i've got i've got on my mind is we need two pre-funders before we kick off the project. And those two pre-funders will cover our costs. So once, so we don't have a risk here. We're not taking risks. We're not going to be making big investments into this business. We're going to be wheeling and dealing to get really lovely upside, but without putting capital at risk.

All right, thank you.

Guy Coward- Thanks jack Lindsay I think you have one more question.

Jack Coldrick, No, I don't think so off my hand up it's because it's a mistake.

Guy Coward- No problems. Jack Coldrick, Thank you, I think we have addressed all of the questions, unless there are any that I have missed matt would you like to make any closing remarks before we. We leave and before I hand over to you, I would just like to remind everybody that Matt and Dan are in Melbourne and Sydney next week. Melbourne on the Tuesday, Sydney Wednesday, Thursday, Friday. If you would like to arrange for a one-on-one meeting, please get in touch and we will make that happen. Matt, any closing remarks?

Yeah, look, I'd like to thank all our investors who have stayed with us through quite a trial over the last six months. We are working very hard. We have everything we need for sustained growth. And I hope you hang in there with us because I think it's exciting times coming. But thank you very much for hanging in there with us over the last six months. And hopefully I look forward to meeting a lot of you next week face to face.