DUG Technology Ltd

Thanks everyone for joining us for our FY26 half one results presentation. So we're going to get underway now. We've got a pretty good quorum in. We're going to run through the presentation first and then we'll open up to the floor for questions at the end. Over to you Matt.

Yeah, good morning everybody. It's great to be with you and to present these results this morning. Let's get going. So the numbers are starting to reflect the Malaysian Software as a Service and HP as a Service contract that we signed last year. So that came on a little earlier than we expected, so that's terrific. We have had a record half-year financial performance, hitting over $40 million in revenue and a significant, a very significant uplift in the EBITDA. And we're really seeing the service business continue to deliver and NPF WA imaging really being at the forefront of that for us. And the pleasing thing is that, well, that revenue is coming out of our new offices now. So just looking at some nice graphs, the revenue as we touched on is up 40%. And again, you can see that we've got some really nice year-on-year-on-year growth pattern coming through. And we certainly have no reason to expect that to stop any time soon, that growth pattern. EBITDA is up. The first half of 25 was not a great year. And so that... is not very representative of what the business can do. So it's a really nice result and tells us, you know, starting to show what the business can actually deliver. And super pleasing, the cash is really up. And this is, make notice at the end of January, we're at 21 million US, all the numbers are US dollars, of course. And so we've got a lot of cash in the bank relative to what we often have. And so hopefully that puts to bed any thought that we're going to need to raise money because we're cash generative. We won't be spending money. So services revenue, which underpins everything, is up 30%, which is super. and uh software revenues up 16 so again both of these are year-on-year growth and of course the hbc revenue expects very significant growth given the malaysian signing um of course the ebitda was normalized because of a ongoing court case which is which is still in play and uh It's been sort of an interesting result with me, the party, really winning. This is our timeline, just a quick look at it. And so, you know, in 24, we opened our Abu Dhabi office. Or more what we did in 24 was we put a leader into country and we started hiring people. We actually opened that office, which is pictured on the screen here, opened in 25. So we really, but we had an office, temporary office there up to that point in time. And Rio de Janeiro opened last year and is really delivering really well. And so that's the latest of the new offices. And we're not seeing any reason to open any further offices at this time. So everything that we do in DAG and everything we've ever done in DAG is all related. And it's all about this key component. key offering around numeric physics, you know, data processing. And if you're processing data, then you need software, and that's why we've written our own software and have done from day one. And you need high-performance computers, and that's why we've been building high-performance computers from day one. And then you need a business, and that's what we've been, you know, R&D, generating software, generating algorithms, running high-performance computing. So it's all part of doing the same thing, and including NOMAD, which is just HPC in a container, which we needed ourselves for countries where we can't take the data out of the country and we don't want to open a traditional data centre. So all of these things are related, but we're going to look at it in terms of these three areas, imaging, software, and the HPC backbone. So in terms of imaging, we're leading, we believe, the world in elastic NPFWI imaging. We're significantly ahead of our competition. We started on it a lot earlier. We believed in it very early on and we got a team on it and we've been pursuing it for a long time now. And we're increasing our team and we're getting after it more and more. So Although others are now offering NPFWI, they're a long way behind where we're at. And it is really delivering. And Elastic is just fantastic technology because we go from field data straight to the Elastic Rock properties. And the Elastic Rock properties are very important for oil companies and other companies to look at what the rocks and fluids actually are. MultiClient has been new and has been a really terrific addition to our offerings. Again, it's based on what we do. We earn a lot of, you know, it's around our service offering. We've got partners doing it, and you would have seen that Equatorial Guinea is a new project which is looking really well. Software is the heart and soul of everything, you know. It's so important. It's not stuff that can be developed rapidly. It takes years and years. You know, everybody, just as a sidetrack, you know, everyone looks at NVIDIA. I had this discussion about NVIDIA and saying, you know, and everyone's going, how good is the hardware? The main thing about NVIDIA is their software. What separates NVIDIA from AMD is their software toolkit. It isn't the hardware so much. It's the software. And software is so important, and software cannot be reproduced overnight. It takes years and years of really strong temps. So we're seeing this accelerate, the software. We're using the software for our own services. We're selling the software on top of our HPC, and we're also selling the software for use in on-prem. It's also used for interpretation and as well as we're selling it to competitors, if you like, that use the software to compete against us. which is really nice because they're often picking up work that we actually don't want. It's a bit smaller than really moves the needle for us, or there might be other reasons why it just doesn't quite fit us. So that model is working really well, and we've really got a strong roadmap ahead for software, which fits into our strategic business model. And then there's the HPC, which has been exciting. You've seen the deal we did in Malaysia. And just having strong expertise in HPC is really important. And now, of course, it's very important for AI. And we should touch on our AI strategy while we're at it because we've had a very strong AI strategy for a long time now. You know, machine learning was in the first ever code we wrote. So it predates that approach. in terms of our expertise and what we've been working on in our own individual lives before we came into Doug. AI is part of our imaging toolkit. AI is part of our business. We've rolled out AI in our finance teams, in all our different commercial teams, and we're pursuing an active AI role as things are really moving rapidly in that space We've also got AI Toolkit coming out in, or is out in our software where we can help users of the software progress really much more rapidly with their interpretation and other things. So AI is extremely important to us. And of course, AI runs on the big computers and on the NVIDIA chips in particular that we've just purchased. So we're really excited about how we can transform or how Doug is being transformed by our AI capabilities. And then there is all our immersion cooling, which is the backbone of how we do compute, and Doug has been very important for us. We are, of course, our map now shows that we've got a really nice geographic spread. from the middle east to asia to london can't call it europe anymore i guess to the americas including rio de janeiro which is the new office which is really really kicking those um and of course we've got our global fiber that varies a little bit how we do it um over time that connects all our offices except for Abu Dhabi, by the look of it. We need to update our map with Abu Dhabi, Dan. And Rio. They're all on that fibre, by the way, everybody. We just haven't updated the map. So now I'll hand over to Dan for financial performance.

Thanks Matt. Hey everyone. So I guess starting off at the top on revenue, services was a really great result. So just to provide context there, 30% both on same half last year. You know, that was really driven by good order book, good productivity, and the teams really getting through projects. So that's a really exciting result for us. And it doesn't include anything from Epic. So that number is kind of Epic exclusive or non-inclusive rather. And so it's a really great underlying, you know, performance. When we moved down into software and HPC, we had pretty good growth in both of those business lines, you know, excluding Epic. And then what we've had through the Q2 was, I think as we framed it, an earlier than anticipated ramp up. And so what ended up happening was we were able to, firstly receive some storage equipment sooner than we were expecting and then we also managed to mobilise equipment from the US and what that allowed us to do was to combine with existing equipment in KL and get the project started earlier than we were originally anticipating. And so that's driven a lot of the growth now in what we're seeing in software and HVC and really helps the overall revenue growth. So through employee benefits, we've got a little bit of growth through there as we kind of ramp up in Brazil and we ramp up in certain regions where we're getting, you know, that underlying services growth. And so what we're seeing is adding headcount but not adding headcount at the same speed as we're growing the top line revenue, which is significant. what we've been pretty consistent with over the last few years and what we expect to continue going forward. Other expenses, we had a 48% increase inclusive of the MP2. It's around 25% increase if we ignore that provision for the normalised EBITDA. So what we're seeing in other expenses is we've got a big part of the step up is related to Seagal. So for Seagal, our partner in the Epic deal, we've got their portion or their cost for delivery coming through other expenses. And so that's come through in this half as we've managed to keep the project off earlier. And then we've also just got a general step up in IT facilities and some subcontracting as we got that project up and running. And so when we get down to EBITDA line, we've got normalized EBITDA, so excluding the one-off provision, up 161%, which... was a really great result for the team. And the 34% EBITDA margin, I think, is a really great stake in the ground. And so what we're seeing now is the result of Epic and software and the growth in revenue, you know, and not the same growth in our cost base. And we're just getting really great operating leverage come through the business. So as we move a little bit below there, depreciation amortization lowered in the quarter, lowered in the half rather. And so what we're seeing there is some of the equipment that we purchased a few years ago starting to roll off and have been fully paid for. A lot of the EPIC equipment was delivered in late December, early January. So we'll start to see that coming through the accounts in the second half, both through depreciation and finance expense. So to move on to the balance sheet, we had cash of 14.3 at the end of the quarter. We had really good receipts through January. So as we disclosed earlier, 31 January cash balance of 20.7 came off the back of really good receipts through January. And so what that meant was with the 14.3 of cash at 31 December, we had net debt of 0.3. We'll bring those new assets online and the new asset financing online. We'll see it come through in the second half. So that number will shift a little bit, but it's a really great result. And it's just an indication of the kind of performance of the business. Trade and other receivables was up. That's as we started to issue our first EPIC invoices which got paid in January. So we're seeing that number kick up at the end of the year and that's then come through to cash. Contract assets rose. We've just got a few more milestone projects in certain regions and then also some e-invoicing timing. So the e-invoicing is just creating a balance that carries through the end of month, but it gets reversed in the first week of the following month. So it's creating a sort of temporary increase in the contract assets balance, which makes it seem a little bit overstated. Contract liabilities is up. That's a result of the EPIC contract where we're able to invoice for the full year in advance. And so as we start to recognise that revenue from EPIC, we'll be slowly pulling that contract liability balance down each month. Trade and other payables is up. As I mentioned earlier, a lot of the new equipment was delivered right at the tail end of December and so we've got that coming through the books here. But that will all be settled with the financings all settled, and we'll see that all kind of correct itself through the second half. And then finally, the provisions, as discussed, there's further detail in the MP2 matter in the release we made yesterday, but we've got that provision coming through our provisions in our current liabilities, and so that's driving the change there. on the cash flow is a really good result once again so 7.4 million in cash generated from operating operating activities really driven by higher receipts from customers so it was a really great result and good cash flow for the quarter. As we mentioned, cash flow from investing and general capex is probably a little bit lower than people expect, but it's just a timing. So what we've talked about in the past with the epic capex will come to bear in the second half. And so we'll see that full year number kind of be in line with expectations. And similar for financing. Once we get the financing, we'll come through the books as the equipment kind of goes on to financing in the second half as well. So hand back over to Matt to wrap this up.