Celebrus Technologies plc

Good afternoon and welcome to the D4T4 Solutions PLC final results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time by the Q&A tab situated in the top right-hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. And I'd now like to hand you over to Bill Bruno, CEO, and Ash Mehta, CFO. Good afternoon to you both.

Good afternoon. Thank you for having us. Thank you to all of you for taking the time today. We're very much looking forward to walking you through the financial results from the previous period and also give you a glimpse into some of the things that we've been up to across the business as well. So generally speaking, from an agenda perspective, we'll start with some operational highlights that I'll walk you through, followed by Ash walking through some of the financial highlights. Then we'll dive into some of the strategy and operations and some of the things that we've accomplished in the past year that we think are important to the strategy and building the foundation for growth that we're looking to do as a new leadership team in the business. Ash will then jump in and talk through some of the systems that we've put in place and some of the things that we're quite proud of from an ESG perspective that we've put in place for a company of our size. He'll then follow on with a deeper dive into the financial results and balance sheets. And then we'll wrap up with a few case studies from the previous financial year, looking at some of our key wins in the CDP and FDP world and touch on the outlook. And please, you know, as outlined, please submit your questions and we'll try to get to as many of them as possible at the end of today's presentation. but jumping in from a from an operational perspective uh i i've referred to this we've referred to this and you've probably seen it in several of our releases if you follow our various rns's throughout the year as a really transformational uh year for the business uh we've accomplished quite a bit from an operational perspective and you know not one of the many things that we've accomplished is obviously the launch of our syllabus fraud data platform so bringing a new technology to the market and building a new revenue stream for the business is a big undertaking in and of itself. But we've actually gone through and fully integrated a previous acquisition in Prickly Cactus to help drive our customer success engagements and to help build our existing customers while also helping us to stand up our direct sales channel. And they've been fully integrated in the business. We've brought in numerous key hires across the leadership team and around the globe to better align marketing and sales and finance and operations and HR to take care of our people, to put our best foot forward as a business, and to ultimately set ourselves up for success because we've launched the fraud data platform. We have the customer data platform. We have our customer data management business, and I'll walk through overviews of each one of those here shortly. But we've got fantastic technology, we've got great people across the business, and we really just need to capitalize on the opportunity that we see in front of us for the business as a whole. As we look to build for that growth, Ash, myself, and members of our leadership team are very acutely familiar with the challenges with scaling a business rapidly. and some of the things that become pain points and pitfalls for those businesses. So we've invested significantly in this past year to put the right systems in place, to build in the right processes and really set ourselves up for scale so that we can free up our people to focus on higher value tactics across the business and less on the mundane things that the technology should just be able to handle for them. And then finally, we've enhanced our corporate governance. We've invested in and generated our first ESG report. And really, it's just been a phenomenal year. As my first year in the seat, I'm thrilled with what the team has accomplished in a very short period of time. We really are excited about the opportunity we have. And it's just been a fantastic delivery from an operational perspective that coincides quite nicely with the financial side of things, which I'll let Ash jump in and give you some of the highlights there as well.

Yeah, thanks, Bill. So on top of all the things that Bill described that we've done in the year and the operational highlights, we have managed to meet market expectations and deliver a financial performance, which is a real step forward and also sets the tone for future years as well. So I'll run through these highlights very briefly and then we'll go into these in a bit more detail in subsequent slides. So the key metric for us is really annual recurring revenue. And that was up 32% in the year, up to 14 million. The revenues were up 7% to 24 and a half million. And later I'll explain the linkage between ARR and revenue and why one is higher than the other. And allied to that, we have a key metric, which is our ARR percentage of total revenues. So that has gone up from 47% to 57% as we've increased the ARR. And the reason why that's important is that this is really a measure of the quality of our revenues. So later when I talk through the different types of revenue we have, all of our ARR revenues like licenses are the highest quality, the highest margin. So getting that percentage up is really important for us. Our gross profit margin came down from 62% last year to just under 52% this year. I'll explain why that is, and I'll also give you an indication of how we think that's going to pan out in coming years. Our adjusted profit before tax was 3.3 million, down from 4.4. And a real driver on that is a continuation of what we described this time last year, which was the investment into sales and marketing, the investment into the launch of FTP, and also the addition of certain key hires that Bill will talk through in a few moments. That then gives us a diluted adjusted EPS of 7.1 pence per share based on the adjusted PBT. And off that 7.1 pence, we're paying out 2.07 pence as a final dividend, making a total dividend of the year of 2.92 pence. And that's an increase of 3.9% over last year. The year end cash position was 11.4 million. That was relatively low. And I'll explain later why that is. And since the year end, that's gone up now to 26.5 million at the end of June. And on that basis, we've decided after a long deliberation that we'll be paying a special dividend this year of 12.5 pence per share. Thanks, Bill.

Excellent. Thanks, Ash. So I'll speak a little bit about the strategy and the operations side of the business to kind of give you a glimpse into how we're positioning the company, how we're building upon the products that we've brought to market and how those interrelate as well. I think first and foremost, the important thing to point out is, as Ash has called out, we've invested heavily in sales and marketing. That includes revamping how we position the brands. It goes down all the way to the websites that have been refurbished. And redone in addition to the D4T4 investor experience, which went live yesterday, just ahead of the results publishing. So if you go to the D4T4 website, you'll see a new complete investor experience that we're quite proud of as well. But at the end of the day, we're all about capturing and connecting data together to power analytics, data science, customer experience, fraud detection, et cetera, for businesses. And we do that across three areas. Three product lines. So we have our Sellebris customer data platform, which is a technology that D4T4 Solutions acquired back in 2015. And that platform is focused around capturing and contextualizing data for marketing and customer experience use cases. Partners in that world include Teradata, Pegasystems, SaaS, as well as several consulting partners and solution integrator partners as well. The Sellvers Fraud Data Platform is new. It's about a year old now. We launched it last June. We brought it fresh to the market based on the fact that customers had been trying to use the marketing data sets for fraud purposes. And we saw an opportunity to invest in ourselves and invest in product development to bring this platform to life. And upon bringing this to life, we now have two paying customers, one that closed back in December and one that was just announced last week, one in the financial services sector and one in the retail sector. But the sole purpose of this platform is to provide the depth and granularity of data capture and machine learning across all digital channels to help catch the fraudster before the fraud occurs to protect consumers and protect the money from exchanging hands from a fraudulent perspective. And then the third part of our business is customer data management. When you think of the first two platforms creating a lot of data and you think about an organization, like a bank or an insurer or a retailer, they have a lot of different systems with data. They've got customer databases, loyalty databases, purchasing systems, merchandising systems. And various analysts and data scientists and other business users around the business need different bits and pieces of those data sets in one place so that they can do their jobs better, whether that's for reporting and analysis, for data activation, et cetera. And so our customer data management division is the division that builds those environments. And you will have seen in the wind announcement that we put out back in December that we've been able to upsell one of our CDM customers most recently into both the CDP and the FDP. You'll also have noticed in our win announcement last week that we mentioned the Sellebris Cloud, and that really speaks to how we deploy the customer data platform and the fraud data platform for our customers. And it's a blend of both the software and D4T4 IP, as well as with the software and IP of the CDM business so that we can deploy those in a meaningful way quickly and streamlined in a single tenant hosted environment for each of our individual customers and only each customer on their own environment so that we can focus on adding value in the first 90 days. But it's a great blend of an opportunity for us to cross sell across all three of these products. Looking across just from an investment case standpoint and thinking through just the market leading software, the sectors that we operate within are high growth sectors. They're the ones that are the most talked about when you think about digital transformation, data activation, building a positive customer experience. There's seemingly a new survey every day or a new report or a new blog post out every day about the importance around that. And that's an area that we live, eat and breathe when it comes to the customer data platform. There's also a significant number of challenges in that industry around deprecation of third-party cookies, browser regulations, the changes from Apple, the changes that are coming from Google. And that all impacts digital identity and your ability to build individual profiles about people in a compliant manner for marketing purposes. And I'm happy to report that our customer data platform is completely unimpacted by any of those items and any of those regulations or changes by the nature of our intellectual property, our patents, and how we go to market. The other sector being fraud detection prevention and largely regulatory analytics is one of the fastest growing concerns around the globe. In the UK, there's considerations being made now within parliament for protecting consumers who fall victim to scams and having the banks having to compensate them for their losses. And it's a growing challenge around the globe that we happen to bring a very unique solution to the industry that displaces some of our competitor platforms and offers us the opportunity to add a considerable amount more value to clients by way of helping them identify more fraud. And I'll come on to that when we walk through some of the case studies towards the end. We're deployed in 27 different countries. We work with three of the top 13 global banks as an example. So our customers are international. Many of them are multinational and it's a blue chip customer base. We've completely restructured the management team, obviously Ash and myself being new to our seats. I've been in the business now for four years, having started as VP of North America. But we've put our operations board in place. We've established better governance and strategic inner workings of how the city board operates with our internal leadership team and operations boards. And we're stable and growing. Annual recurring revenue as Ash will walk through and has already alluded to is a key metric for our business. For us though, what I will call out just from a more strategic perspective is explaining that annual recurring revenue for us is not the month to month software as a service model that perhaps you've seen with other organizations. For us, it's multi-year commitments from customers with no cancellation. Generally, what we're putting into the market for both the fraud data platform and the CDP our three-year agreements with non-cancellable on an ARR basis. Our churn rate over the last several periods has been less than 2%. Last year, for those of you that attended, we'll make note that we lost an airline customer for obvious reasons back then. We're hoping to add them back in now that things have gotten to be a bit more normal. But we're happy to report that in this last reporting period, we did not lose a single customer. And what you'll see as Ash walks through the financials is that we're profitable, we're cash generative, we have a clean balance sheet. And not only are we dividend paying, but we're bringing the special dividend out this year as well as a result of the cash balances that Ash already walked through. When you think of our strategy and differentiators, we're a software business. It's to increase our software sales. It's increased the adoption of Sellebris Cloud for customers to drive our CDM in combination with selling CDP and FTP licenses. It's annual recurring revenue as a basis for all new contracts. And it's our goal of converting all legacy contracts, which we've come quite a long way in doing. It's consistently innovating our products as a result of input from our partners, input from our customers through the various advisory boards that we have, as well as just executing on the roadmap and the industry challenges that we see that we feel we have an opportunity to uniquely solve for. And those are things that we continue to identify to patent and protect our capabilities, and we'll continue to do so in further releases. We generally release two main updates to our platforms each year. one around this timeframe and then one towards the end of the calendar year. We continue to build for scalability, and Ash will walk through some of the systems that we've put in place or are about to put in place across the business to do this. But we believe we have an opportunity to be a high-growth organization. That's what we're building towards. We think the opportunity is there, that the market trends are in our favor in all the areas that I mentioned previously. And so to help guide that, we've diversified our route to market. We've invested in sales and marketing and restructuring the business and bringing in key talent. But to not only sell direct, but to also expand our partner relationships, to find new partners, and to really build go-to-market campaigns with each of those partners that add value to customers in the marketplace. Things like the Always On Insights program that Pega has recently launched in conjunction with the Celebris CDP. And at the end of the day, it's all about our people. We could have the best technology in the world, but we'd fall short if we didn't have the right culture, if we didn't bring empowerment in the organization, if we didn't have the right people in the right places with the ability to lead and guide this company forward into the future. And so we've spent quite a bit of time on ensuring that we've done just that. And Ash will speak to some of those things as well. And just in terms of the key hires, here's just a few. But behind this, it's a restructuring of the business that we've largely completed as well that has set up the business for better scale, for better teamwork and orientation across all of our global offices. We've aligned sales underneath our VP of global sales. We've brought in a head of HR, people, and culture. We've restructured the marketing team and have brought in a VP of marketing based in the US to guide that team and adjust our messaging and to make it a bit more American in marketing. We've brought on a director of managed services, which oversees our entire extremely important division on the CDM side of the business that adds considerable value to our business and to our customers. And we've brought that person in to help standardize our practices around the globe to help better enable the Celebris cloud initiative that I mentioned before, and to make sure we have the right people in the right places, the right processes in place, and that we're finding efficiencies in systems so that the team is best served spending more time adding value to clients and less time on doing some of the things that perhaps could be better automated across the business. And then last but not least, it's a Chief Security Officer. It takes security and compliance very seriously. It's a key differentiator for our business and always has been. And as we've established the Celibris Cloud, as we're growing as a business, as we're hosting more environments for our customers, we wanted to bring in the Chief Security Officer in addition to all the things that we already do, such as maintaining our ISO 27001 compliance, the independent code audits we go through for each and every single code update that we make to our products and our software, et cetera, et cetera. So overall, this is just a sort of a high level view into some of the things that we've accomplished while also achieving city results. But I'd like to also turn things over to Ash here to not only walk through some of the systems, but take you through a deeper dive into ESG, which we're quite proud of, as well as some of the financial results and balance sheets initiatives as well.

Thanks, Bill. So as Bill was saying, we spend a lot of time talking about scalability. We believe we're on a certain growth path. and having worked in growth companies we know the growing pains that companies go through and so what we're targeting is to address those potential growing pains and mitigate them in three ways and one is obviously having the right people with the right experience in the right roles and bill talked through the various changes that we've made certainly at the operations board level but we've made changes throughout the organization and in many cases bringing on board people who are of a higher level or caliber than we previously had in certain roles So that's been really key. Another aspect to all of this is the systems. And then another aspect I'll come on to talk to in a few moments is the culture as well. So those three things are what we believe makes the business scalable and mitigate some of the growing pains. So as far as systems are concerned, we've already in the last nine months put in place four systems and there's another core system to be put in place. And these are all designed around automating the business, providing certainty, but also providing some more visibility as well. So if we take them one by one, the first one is the contract management system. This basically gives us granularity to all of the complexity of our contracts and amendments and upsells. And it allows us then to better manage the contracts in terms of service levels and delivery, as well as ensuring that we can harmonize new contracts to be in line. And of course, part of that scalability is all around having consistent contracts that are easier to manage rather than having different terms for every single customer. We've implemented a CRM system. So this is called HubSpot. And this does everything around the sales cycle right through from lead generation and campaigns all the way through to closing a contract and storing the contract. And this has been really vital in terms of understanding our pipeline better in terms of What's in our pipeline? How quickly is it progressing? Do we need to change tactics on certain customers? Are we applying a consistency of approach in terms of different types of customer into different geographies of different sectors? So this is already providing us with a huge amount of insight, which is then fine tuning our sales approach. We've also implemented a software license manager. So as Bill touched on, we often are selling in use cases for our customers. So it might well be that a customer buys our software for one or two use cases, and then as they get accustomed and are satisfied with it, they ask for more functionality. And this license manager effectively enables us to provide the right kind of license for the functionality that they require. almost instantaneously. So again, it's about speeding up the customer interaction and customer satisfaction. Next item, just gone live in the last couple of weeks, is our HR system. So this is a system called HiBob, and this does three key things for us. Firstly, it acts as a repository of all of our HR information, and that might be contracts, policies, validations, background checks. And that's important for us, obviously, centrally, but it's also important for employees to be able to access themselves as well. Secondly, what it does is it automates a lot of the HR processes. So again, we're talking all about efficiency and scalability. And what this does is basically automate the key processes that you'd have in HR. And those might be some of the more normal day-to-day processes of pay rises or recruitment as part of that we're also implementing an application applicant tracking system which will link into our new careers page on our website and that again is all about streamlining the process And the third part of the HR system, which is as important, if not more important, is the fact that it increases employee engagement. And I think in a world which is post-COVID, where hybrid working is here to stay, I think it's been a real challenge for many companies to have that same level of engagement. Whilst we have hybrid working and people are coming to the office, albeit not five days a week, this provides another ability to engage with employees. And we can do that on a geography basis, on a team basis, on a department basis. And this is not just about us communicating to employees. It's also about employees communicating to each other. And so the sort of water cooler moments that people used to have in the old days of standing around and chatting, part of the functionality within Hyborg. is that you can set up interest groups where people can huddle around and talk about F1 or cricket or fishing or whatever their interests might be. And that sounds quite trivial, but it's quite important in terms of just ensuring that we've got relationships still building across the organization and embedded because that, again, improves productivity and efficiency. Finally, onto the finance system, that's going live in October. And it's easy to think of a finance system as being really just a matter of record and recording historical performance. But we're implementing Oracle NetSuite. This is a system which will really help us in terms of seeing forward and be able to forecast correctly or better. And part of that will be the linkages that this has into the HubSpot CRM. So all the opportunity data and the pipeline data we see in HubSpot will feed into the finance system. It'll allow us to forecast. And again, one of the challenges that growing companies have. is just getting the balance right between investing sufficiently to grow the business, but not investing so much that profits are eaten into. So that's a delicate balance that we're mindful of. And I think the new finance system will help us do that. Moving on to ESG. Now, there are still people who are thinking of ESG as very much a box ticking exercise. We've gone to a lot of effort over the last year. We found it very very powerful actually in terms of how the business is run, how we think about the business. But more importantly, again, around employee engagement. So we set up a committee around a year ago. We had about nine people interested at that time. Since then, the committee has grown to 20 people, providing some really valuable input across all of our four locations. And that's then really guided us over the last year in terms of the sorts of activities that we've been doing on ESG. And so during the year we have you'll see in the appendices, we've done three particular initiatives in the year focusing around vaccination, food banks and a cycle ride for a cancer charity. And then also another key thing we did during the year was that we appointed external auditors to effectively do a carbon audit. And that's provided a huge amount of insight in terms of what our carbon emissions are and what they relate to. So, again, in the appendices, you'll see a breakdown of that. in terms of whether it's infrastructure or facilities or commuting or whatever else it might be. And also we have a breakdown into our scope one, two and three emissions. So we can see the scope one and two and control them because they're under our direct control. And the scope three emissions are all about our supply chain and our employee personal emissions. And so part of what we'll be doing is having a training session this year, which will help employees better understand how what they can do in their private lives to reduce their emissions and so this has really had a very good level of engagement during the year and again during a period of hybrid working this is another way of engaging with employees during the year another initiative was to have an employee survey where we talked around Well, we sought feedback around what employees really care about from an ESG perspective. And we then used that to refine what we'll be doing in the next financial year. So part of that was identifying which of the four UN strategic sustainable development goals we were going to focus on. So again, in the appendices, you'll see which four were prioritized by our employees. And again, these days, it's very important. especially for younger employees, to want to work for an organisation which fits in with their values. And that's something we're trying to embed now by having that level of employee engagement. OK, so moving on to the actions in this coming year, the carbon audit showed us where we're performing well and where we're not. There is a target of 1.5 tonnes per employee per annum. we came out at 2.29 so clearly there's some work we can do what we did find through the granularity was that in the uk and the us we're very compliant being below that level but in india where we're above that level and the reason for that is that in the us and uk we've already taken action to source um green sources of energy but in india that's a little bit more difficult but we're looking at ways as to how we can do that Other things we'll be doing this year, as I said, we'll be looking at the UN SDGs and focusing on those that were chosen by employees. And also another factor we'll be undertaking this year, we'll be looking at our workforce diversity. Now, with offices in the US and the UK and in India and Australia, we have a fairly diverse workforce, but I think there's some work we can do in understanding how that workforce is split down in terms of seniority in the organisation, gender pay gaps and factors like that. So moving on to the financial results. We have a number of key performance indicators, but the ones you see in the top row are probably the most important to us. As I already said, revenue is key. I mean, obviously, but ARR is probably the most important metric because that's what really drives shareholder value creation. And as I said earlier, this is really if you have annual recurring revenues, it's a higher quality of revenue because typically it will be contracted for three years. when we sign up new customers. And of course, it's very high margin as well. So we track that. We also track the percentage of revenues, which are ARR as well. So our objective here is to take this figure up from 47% last year to the 57% for the year we're now reporting on. And we think in the medium term, that figure will go to around 65% of all of our revenues. So again, a higher mix of quality revenues within our overall revenues. Profit before tax, of course, is important. We are profitable. We're cash generative. We pay a dividend. We intend to continue doing that. And this relates to what I was saying earlier about just getting the balance right between investment and profitability. So you will see in that chart that the PBT is down from last year. And that was a conscious decision on our part to invest more into sales and marketing. and into systems. We will see that coming back now in this financial year. And again, even in this financial year, there'll be a further discussion around the balance between investment for the future and the profitability we want to record for this year as well. The dividend is key. It's a steadily growing dividend. The baseline dividend grew by 3.9%. And I'll come on to talk about our plans for the dividend in future. So going into a bit of detail on the income statement, I've already mentioned the revenue increase of 7.3%. I've mentioned the ARR increase of 32%. Let me just talk about how those two numbers are related. So why is the ARR higher than the revenue increase? There are a couple of reasons. Firstly, all of the contracts we're now winning and all the contracts we're quoting for are done on an ARR term license basis. So when we add 7% of revenues, not all of that is ARR, but a substantial part of it is. And of course, with ARR being 57% of our revenues, a 7% increase in revenue will be more than a 7% increase in ARR. So that's one factor. Another factor is that we still have existing customers who we've been converting over the last few years when we announced our ARR drive. And whilst we've converted a large part of them, there are still a few still to convert. And so We have done some of that conversion in the period, and that's why the number is as high as 32%. So we will continue with that. It's almost a complete job. There are a few more customers that we still need to convert. So I think in future periods, you should also expect to see the ARR growing by more than the revenue growth. Gross profit in the period was down, down from 62% roughly last year to 52% this year. And that's really driven by the mix of revenues. So we have probably four different revenue streams in our P&L. We have licenses, which are the highest margin. Behind those, we have support and maintenance, which have a high margin, but slightly lower than licenses. Below that, we have our professional services, where our people are working on implementations or upgrades, and that obviously has then a lower margin still. But then the lowest margin revenue stream we have is where we sell third-party hardware or software. not in its own right but part of overall upgrade packages that we're doing on existing customers so these come up periodically they're lumpy revenues um and alongside those hardware software sales we'll also be selling additional services as well so it's still worth doing even if it's low margin but of course it does then bring down the blended gross profit percentage down to roughly 52% this year. We expect that to increase in time up to 60% and above. But of course, it depends each individual year what the mix is of hardware and software and the overall revenues. Our OPEX in the year was well controlled, staying stable at around 11 million. We did increase headcount during the year. We have invested in key roles, as Bill said, and much of that was done in the second half of last year. So what you will see is although OPEX was stable last year, as we look at FY23, the OPEX will be going up because what we'll see is the full year impact. of all of those headcount we brought on board. And so that's part of the reason why the costs will grow. Obviously, the investment into systems is another factor. And within our costs for this year, we are also expecting to invest on sales and marketing further. That will be dependent on the success of our campaign so far. So right now, as Bill said, we've seen an increase in pipeline. So we anticipate investing further in sales and marketing on top of what we've already invested last year. So those increase that lower GP percentage basically on a stable OPEX gives us a lower profit before tax and a lower adjusted PBT. Again, this was planned. This was what we expected to deliver. So as I said, we've delivered on the high end of market expectations. And that 3.3 million of adjusted PBT translates to a diluted EPS of 7.11 pence per share. And of that, we've chosen to pay 2.92 pence for the full year. That's an increase of 3.9% on last year and still leaves us well covered in terms of dividend cover for the year. Moving on to the balance sheet, probably two things to draw to your attention here in terms of changes from the last year. Goodwill and other has gone up by about 750,000, and that's as a result of our acquisition of Prickly Cactus. All of the acquisition costs went into Goodwill. That will not be amortized. It won't hit future P&Ls. That will simply stay in the balance sheet. And then the other major changes in the balance sheet were the increase in trade debtors and trade creditors. And this was as a result of contracts we signed in our second half last year. which we were in the midst of implementing at the year end. So we had done some of the work, we'd build some of the work, but we hadn't been paid for it. And equally, some of that related to third party hardware. So again, we bought the hardware, we hadn't necessarily paid the invoices for it. That is all now reversed and the debtor and creditor positions are back to more normal. And as a result of that unwinding, what we find now is that we have a cash balance at the end of June of £26.5 million, up from the £11 million at the year end. That's free cash, so that's cash less the final dividend we've declared. It's also less any further trade creditor payments we need to make for some of the hardware. And on that basis and with that cash balance, the board has had a lengthy discussion about the uses for cash. And we have talked about M&A, which we keep a constant eye on in terms of looking for acquisition opportunities. There's nothing on the horizon, but we maintain our search. So for the time being, we feel comfortable issuing a 12.5 pence per share special dividend that will account for about 5 million of that 26.5 million of cash, leaving us with around 21 million. that's still ample cash for our working capital investment requirements and of course this year we anticipate being profitable and cash generative again so this is a decision that we'll keep under constant review in terms of the use of that cash and whether it's buyback of shares or whether it's dividends or whether it's further investment and finally on the cash flow i think i've covered most of these points I think the key thing here is that we don't have a lot of requirement for investment. So we invest into PPE, so office equipment and IT equipment. It's not very significant, a couple of hundred thousand last year. We also invested into the acquisition of Prickly Cactus. We paid 250,000 at that time, 200 in cash, 50 in shares, with another 500 to be paid based on an earn out, which concludes in September, 2023. And then the other significant items in the cash flow, really the dividends. So we paid around 1.2 million pounds last year. We also spent just under 400,000 on share buybacks. that share buyback program will continue for another three months at least and we use that share buyback to hold the shares to use for our share option program so this is for the benefit of shareholders because it reduces the dilution we're buying shares what we think is a good price now for future delivery when employees choose to exercise their share options so less dilution for existing shareholders Thanks.

Excellent. Thank you, Ash. So I thought what we'd wrap up with are a few of the case studies that we thought were worth sharing from this previous year. And then we'll wrap up with some outlook and open up to questions. I see we've got a couple of questions starting to funnel in. So please feel free to use the Q&A portion of the framework here to submit questions. And we'll try to get through as many of those as we can at the time that we have allotted. The first case study is relatively straightforward, although there's some nuances here that I like to call attention to. So this is a bank that we work with. around the globe in several markets. And their use case was simple in writing, but difficult in execution. And it was simply to deploy personalization based on interests or behaviors that people were exhibiting for opted-in individuals across their websites and their mobile apps. And they struggled in a few ways with the technology that they had before they brought us in. The technology that they had before us It was very tag-based. It was very difficult to get any meaningful data out of it in a way that was usable. The timeliness of the data was terrible. It was hours, if not days, to get information that they needed. And as you all know, as you're using your mobile devices or your laptops and you're traversing websites or mobile apps, there's not a whole lot of time to intervene as a brand to try to get more value or to try to help you in whatever it is that you're trying to accomplish in that particular session on that particular journey. The other thing that they struggled with was a holistic view of the customer with the deprecation of third-party cookies, with all the regulations from Apple and the various browser restrictions, and the difficulty that typically exists in a lot of the technologies we come up against in the ability to bring web data and mobile data together. All of that just opened up a door for us. From a cellular CDP perspective, we solve for identity with our product enhancements and identity graph and data model better than any other vendor in the space. It's completely unimpacted by any of the browser regulations or the changes from Apple or any other vendor for that matter. We don't do tag-based collections. So our data capture is streamlined. It's efficient. It provides a data model that makes it easy to use. It uses that same data model across web and mobile. And our data is available in milliseconds, not minutes, not hours, not days. and so for this particular customer you could see some of the the dollars here in terms of for this one use case what the profit numbers were and what the the revenue generated from a single campaign for this use case was you can think of the use case as something simple you you go and you look at a mortgage on the banking website maybe you leave maybe you come back a week later They wanted to be able to remember that. They wanted to be able to move you through that process. And there was so much time invested in their previous technologies that they actually saw a reduction in cost and time to the tune of about 85% by bringing Celebris CDP in to solve for all of these issues and create this opportunity for them. And it's extremely common for us. Not only are we generating value in what we provide, but we're also generally saving businesses money in data management costs, in people time. They can reallocate their resources to the more fun things that generate more positive experiences, so on and so forth. The next example is from an insurance perspective. And I really like this one because it shows how our data is used beyond digital. This particular insurer had an application process that they wanted to make more efficient. They wanted it to be self-service and self-sufficient. They wanted it to generate a positive experience and they naturally wanted to make it more competitive. In regards to that, they also wanted to save money. They wanted customers or potential customers to not feel the need to call into a call center. They just wanted them to be able to self-serve through the process. And so by using our data model, by using our integration with their call center applications, they were able to not only increase conversion rate and overall customer experience, they were able to generate more profit for the business, create more loyal customers, and most importantly, significantly decrease cost in terms of call center volumes that were coming into their call centers. The last one that I wanted to bring up is on the fraud platform. There's obviously a lot of excitement both internally and externally around the fact that we've launched this fraud data platform. And now that we have two paying customers, we're really excited about the momentum and the pipeline that we're building here. And this particular story is one that we're hearing quite a bit as we've gone out into the market and we validated what we thought we had when we brought it to market a year ago. And as we've built the partnerships and the pipeline and the proofs of technologies with several customers. But in this particular case, it was intimated to us that by using our data set versus some of the competitor solutions that the customer currently had, that they could identify about 20% more fraud in a given month for a particular use case than they had previously been able to do. Now, when you think of the scale of that, most fraud cases for particular use cases can range anywhere from let's say 15 to 30 or 40 million in losses in a given month. So being able to identify an additional 20% before it happens to protect that money, especially given the stat that on average, if you lose the money that's lost, only about 25% of that's ever actually recovered from fraudulent activity, you're talking about a massive win. for our brands that we partner with, but also for their consumer. And what that's led to with many customers is that they see the opportunity, they see the value, they're able to prove the value of what we can do, but they're also identifying other use cases where our data model and the data that we're providing can be beneficial. In this case, it was four additional use cases that they wanted to explore over the course of the next month. But for us, it's just a positive sign holistically that what we've invested in building and bringing to market is filling a gap that exists in the market that we perceive to be there. And we're really excited about the progress that we're making. And I suppose that brings me to the outlook. I mean, from our perspective, the focus maintains on driving ARR growth across the business, building more repeatable, non-cancellable revenue in a multi-year format for both the CDP and FDP. At the moment, we've got a very, very strong pipeline with great visibility into what we need to deliver for this year. We think the market conditions are absolutely in our favor, whether that's the marketing challenges that businesses are facing, the fact that fraud is growing holistically around the globe, the fact that regulations are being reviewed, kind of similar to the GDPR for privacy and compliance in the fraud world, both in Europe as well as here in the States. um we'll continue to make an ongoing investment in sales and marketing um as things are working uh the goal is to then put more money into it to have it work even more for for us as a business um we're expecting and and have full confidence in our strategy and our ability to deliver on to deliver on market expectations this year as well and hopefully you've picked up on Not only the progress that we've made in the last year with Ash and I new in the roles, but also just some of the things that our products are bringing to market and some of the differentiators that we've had and some of the things that we're doing to try to really set the foundation for what we hope will become a really fun and exciting growth period for the business in the coming years. So with that, we'll go ahead and open up to questions. I see some of them flowing in now. So let's kind of scroll through a few of these. I'm going to go in order of submission here. So we've got one coming in that said, do you have any new products that you're looking to release to customers and what drives or influences your tech roadmap? I think we've got plenty of product and fantastic sort of world beating technologies, particularly in the CDP and FDP. And we're particularly passionate about how we've underpinned that now with our CDM business and the expertise and the intellectual property and software that we've built there. So I don't think we're at this point in time. Never say never. But at this point in time, I think we have what we need. It's just a matter of. build or buy as we identify new opportunities within those technologies. And that just becomes part of our ongoing monitoring of our M&A strategy that Ash alluded to before. Now, what drives or influences our tech roadmaps is three things. One is our customer advisory board. So we have customers that are signed on as early adopters that review new features that provide feedback to us on a quarterly basis. We do the same with partners and we continue to enhance that feedback loop for both. But we also have monthly meetings internally where the field teams get together with engineering and talk about what we're hearing, what we're running into in the sales field, what questions we're running into, what challenges customers seem to be trying to solve for. And all of that then creates more feedback to engineering for consideration about where we might take the products next. The next question is, do you see the company making further acquisitions post Prickly Cactus and what would you look for? I think Ash covered this a bit when he was walking through what we do with the cash and the special dividend. At the end of the day, we've expanded into Australia and APAC. That's an area of opportunity that may prove to be an area where acquiring a smaller business like a Prickly Cactus might make sense as we get more traction in that market. We're also looking at our product roadmap and some of the features that we're excited to announce throughout this calendar year and some of the things that may or may not make sense to potentially bolt on to the platform. And so that's something we'll always look at as well. But to be quite honest, when it comes to the technology side of things, it's a bit difficult. We're very sort of regimented with how we do product development with the audits that we do of our code by independent companies, the ISO 27001 certification. et cetera, et cetera. It's the reason why we chose to build the fraud data platform versus looking to acquire something that was already in the space. We have a phenomenal engineering team. We have a phenomenal path for innovation and we continue to deliver upon that. So it would have to be something really special and it would have to make a lot of sense for us to sort of proceed with that. The next question, don't worry, Ash, it's your turn.

I know.

Yeah, it's a long one. So bear with me while I read this. So your working capital cycle looks like it absorbs a lot of cash with year-end debtor days of 111 and year-end creditor days of 25 days. I appreciate this was skewed by some year-end events. Even if normalized, there's quite a gap. Have you considered options to reduce the working capital cycle? And if so, what were your conclusions, please?

Okay, so then... Our general approach to this is to be a good corporate citizen. So we pay in line with our suppliers' terms and we expect our customers to pay us in line with their terms or our terms if we can enforce them. The mismatch comes around because most of our creditors, suppliers, won't pay within 30 days or sometimes 60 days. And then our customers typically will have standard terms that they impose on us, which are 90 days. And that's obviously a function of the balance of power, if you like, in terms of our customers being large multinationals and us being a company of 170 people. So there's very little flex around that and that's what creates some of the mismatch. So there's probably little we can do about that. Now, in terms of what we could do, factoring and stuff like that. But I don't think it makes sense of paying fees and setting up schemes when actually our cash balance is healthy and our working capital is manageable right now. So I think if we were to get tighter, we'd probably look into that. But right now we pay and we receive in line with sort of standard terms.

I think it's also probably worth mentioning, too, that kind of confounding some of this was that it seemed to be the year of the new payment systems and many of our partners as well. And so there was delays and challenges with that as well, which I suppose we could sympathize with as we rolled out four new systems ourselves and are in the process of rolling out a new financial system. But there were some elements there, too, that were a little bit out of our control. But again, it's good that we do business with companies and partners that pay their balances and that we've never had a bad debt issue with regards to that. Next one up for you, Ash, of the 32% growth in ARR. How much was from converting existing customers and how much was truly new?

Okay, I've got that. So last year was about revamping our sales and marketing function. And so... That's now operating well. We've seen an increase in the pipeline. So I think going forward, I think we'll see a much larger percentage of the ARR increase being new sales rather than existing customers. Over the last year, we were still in the process of converting existing customers. And of course, that's now coming to an end with a few more customers to convert. So last year, I couldn't give you the exact numbers, but I think in broad terms, probably about 80% of that increase was existing customers and 20% was new. I think we now need to get to a situation where we flip that around. And it's 80% new and 20% existing. And of course, with existing, it's not just about converting, but it's also about the additional upsell opportunities that we have in existing customers as well, where, as Bill said, we might start with a single or a couple of use cases and then upsell additional use cases, which then also increase the ARR.

Absolutely, absolutely. And another question here is, are the two FTP customers in line with your initial expectations for the wins when you launched a year ago? What expectation do you have for FTP customer numbers a year from now? So I think that's a really good question. From our perspective, if we were not a publicly traded company when we launched the fraud platform, we would have waited. We would have signed a bunch of customers. We would have done a big launch like you've seen other organizations do. we took a different approach the product was ready we knew it was ready to go to the market we wanted to learn and so we just made it public and then we learned throughout this past year from from our expectations and my expectations i would always love to have more paying customers but the fact that we had one within six months of launch and two within a year of launch i think is fantastic progress especially when you look at the partners that we've added in like to the likes of quantexa The fact that we've been presenting on stage at conferences with the likes of folks like Ernst & Young, the awards that the platform has won from the InfoSec and cybersecurity worlds, et cetera, et cetera. I think we've come a really long way. And I think more importantly, we validated that there is a gap in the industry that we perceive to be there and that we're capitalizing on. And the pipeline that we've built is fantastic. The conversations that we're having with new customers, existing customers, and even some of the RFPs that we've started to receive. are all very promising that what we're doing from a marketing, branding, sales, and PR perspective are working. From customers a year from now, I would love to have a considerable amount of new customers. In looking at the pipeline, it's reasonable to think that we should be able to make some additional announcements throughout the year. And it's a focus for us, is to grow the FTP. Obviously, we're not taking our eye off the ball because both platforms and the CDP and the FTP have unique market opportunities in front of both of them. So it's about balancing and making sure we're putting the right people in the right places and investing in the right spots as well. And that's why we put the systems in place to measure what's working and what isn't so that we make sure that we do just that. Do you anticipate FTP wins to mainly come from the financial services sector? Well, so far, we've got two and two different sectors. The most recent win that we announced last week was in retail. Financial services was the win in December that we announced, our first paying customer. We're not restricting ourselves in terms of verticals. Fraud is everywhere. Obviously, financial services is bread and butter for us, so you can suspect that a large part of our pipeline for existing customers falls within that remit just based on pure probabilistic But we're expanding beyond that, as many of our partners do as well, because when you think of retail as an example, a lot of fraud in that world that's impacting the day-to-day business. So we'll pick and choose our spots. We've developed what we call our ideal customer profiles for both the CDP and the FDP as part of our revamped marketing approach and alignment with sales. And we're using that to guide so that we don't waste our time. Ash, coming your way. I've heard the explanation of the fall in GPM, but it is very acute and it appears to be based on falling sales contribution of your own IP revenues, which fell heavily. Why and will this reverse? So it's probably worth, I think, an explanation of ARR and how that works, Ash.

Yeah, that's right. So we've been on a path over the last two to three years of converting perpetual licenses to term licenses. But we have still been selling perpetual licenses. And so part of the fall last year is as a result of in the prior year having sold. some licenses where we recognize the revenue in its entirety upfront. Obviously, as Bill said, with a typical ARR license of three years, we'll recognize that in equal tranches on signing on the next anniversary and the next anniversary. But of course, over a period of time now, we do expect that stream to kind of stabilise and be going on an upward basis only because we won't have these one-offs that we've had up until last year. As I said, all of our quotes now are going out on an ARR basis. So it does look odd. I agree with you on that, but it's not something we expect to see going forward.

Excellent. Thanks, Ash. So can you talk about the maturity of the market for customers buying CDPs? Is it the case that customers don't always know what they're buying? And doesn't that make it hard to convert sales? Well, this is the exact conversation we had in our weekly sales meeting yesterday. So great question. It's almost like you're listening into our calls. The CDP market is extremely confusing. A lot of vendors prey on that, if I'm being quite honest. We're not one of them. We try to simplify the sales. So we focus less on the moniker of CDP and more on the features and the value that our features provide to a business that truly cares about what they're doing digitally. You have a lot of CDPs out there that focus on just bringing together a lot of other people's data. The problem with that is then they're just trusting that that data is accurate and they're spending a lot of time trying to bring it together. The way we approach the market is fundamentally different, right? We become the digital sensory system for an entire organization, you know, solving for identity, providing data capture and contextualization, which many of the other CDPs don't provide, and then offering the ability to send bits and bobs of our data to any system or any environment of your choosing as many times as you'd like in real time. So it really just becomes down to the sales process. It's not making it hard to convert sales. I think there's been plenty out there now that show that most traditional CDP projects, which probably fall in the assembly CDP category for those that maybe read the CDP Institute's blogs and classifications, are failing. And that's because they're largely just becoming massive master data management projects. And the problem with that is there's no way in God's green earth you're going to make that happen in real time. So for us, it's about differentiators. It's about helping educate during the sales process and it's finding the right fit for our business. Who do you see as your main competitors in the market? It varies naturally across the different platforms. On the CDM business, where we're building the environments, the largest competitor there is internal IT teams. For the fraud data platform, it's the likes of BioCatch, Behaviosec, and solutions like that. And on the CDP side, it would be the likes of Google, Adobe, Telium, vendors along those lines. But again, we've spent a lot of time building out our differentiators. It helps that I worked with many of these solutions in my previous life as well. So with the team, we've been able to put together strong sales tactics and messaging so that we know what we're up against, what those vendors typically say and how to differentiate what we do. And we spend a lot of time on that because it changes by day. And so it's really important. And that's why we've built such a strong alignment between sales, marketing, and PR. And that's why we're making the investments that we are and why we're starting to sell direct as well as having built out that capability because it just allows us to get out there to put our technologies into the sun because they deserve that moment and to really just let our people get out there and educate the world on why what we do is different from everybody else and why there's a lot of value in it. And as you saw in the three case studies prior, Prior to this slide, there's quite a bit of value that we can provide to a customer who takes a chance on our technology. Looks like that is the last question. So I think I'll throw it back here to do the wrap up.

Bill, Ash, thank you very much for that. I think that actually addressed all the questions that have come in from investors. And of course, the company will review all questions submitted today and will publish those responses on the InvestorMeet company platform. But just before redirecting, investors provide you with their feedback, which I know is particularly important to you both. Bill, could I just ask you for a few closing comments?

Yeah, I just want to thank everybody for your engagement today. Thank you for taking the time. Thank you for trusting us with your financial investments. For those of you that are investors, we take that very seriously and appreciate your time today. Hopefully you've enjoyed what you've heard. As always, reach out if you have any questions. I know many of you do reach out to me on Twitter and I always do my best to respond to that as well. But we're always here to respond to the investor community and we really appreciate you taking the time today.

Bill, Ash, thanks once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of D4 T4 Solutions PLC, we'd like to thank you for attending today's presentation and good afternoon to you all.