Technology One Ltd

I'd like to hand the conference over to your host today, CEO, Mr Edward Chung. Thank you, sir. Please go ahead.

Good day, everyone, and thank you for the introduction. Today, I have Stuart McDonald, our COO, and Cale Bennett, our CFO, with me today. Welcome to our 2025 results presentation for the full year. These materials will also lodge with the ASX this morning. Today, I'm going to take you through the highlights of our results. Kale will then take us through the detailed financials, followed by Stuart, who will take us through our significant achievements. Then I'll provide an update on Build in the Future and our long-term outlook and our outlook for FY26. For the 16th consecutive year, we've delivered record ARR, record revenue and record profit, and we beat our guidance that we set in May this year. Our ability to deliver these results for the last 25 years as a listed company, and in fact since inception in 1987, is due to our clear vision, strategy, culture and ongoing investment in R&D, which is highlighted in our leading average total shareholder return, over this 26-year period of approximately 16% per year, four times greater than the ASX 200 total shareholder return over that same period. We started the year celebrating 25 years on the ASX and finished it off by being admitted to the ASX 50 index. SAS+, our game-changing offering, which combines our vertical-specific and mission-critical SAS ERP and implementation with the fastest implementation times in our market, delivers. It's fueling our growth, together with our significant investments, and highlight for the year was the UK. And our team's grit and determination over many, many years to take on the established players and win has resulted in ARR growth meeting our expectations up 18%. This is in turn enable us to deliver PBT growth of 19% to $181.5 million. Those that follow us know that we surpassed 500 mil ARR in the first half of FY25, 18 months earlier than planned, an incredible achievement for our company. But more importantly, we set a new long-term target, an ambitious target of a billion dollars plus ARR by FY30. I want to remind everyone of our strategy because it's this strategy which enables our strong, consistent growth. We exist to make life simple for our community, and it's very powerful and meaningful to us and our customers. And you notice there's nothing in there about ERP software. It's because it's about what ERP software makes possible. We take the complexity out of ERP and turn it into clarity, and this enables our customers to do their job even better. councils reinvesting in roads, housing and services, universities delivering world-class student experiences and world-class research, and for government, health and community services and asset-intensive industries, all of these essential industries operating better, scaling faster and serving more. Every innovation we deliver puts more resources, more time, more money back to where they belong. Our passion is to solve the complex. We don't do easy, otherwise everyone would be doing it. ERP is hard. Student management of property and rating, which is the mission-critical products for higher education and local government, is hard, and we're one of only a handful of vendors worldwide. Payroll is hard. The power of one is hard. Moving an entire customer base of 1,300 customers customers from on-premise to SaaS without skipping a beat is hard. Rewriting an entire code base four times over the last 38 years is hard. And some people say that SaaS Plus is impossible. My point is when you add it all together, there is no one doing what we do. And we create mission-critical products and solutions that power local government, universities and TAFEs, governments, hospitals, large infrastructure providers. They are our community and our team choose to work here rather than any other company. Our staff work here and they love it because they live and work and play in the communities they serve. They have a really deep connection. Our core beliefs are our non-negotiables, and they underpin our strategy. And our strategy hasn't changed dramatically over the last 38 years, but how we execute this strategy evolves quite a lot as we respond to shifts in technology, feedback from our customers, competitors, and the market generally. And it's this clear strategy that resonates with the market, and it's why we win against our competitors. Once we land a customer, they expand with us over many, many years by taking more products and more modules to streamline their business. It's why they stay with us forever and what fuels our consistent, strong growth. And you see this in our ARR growth. Now, here are the major elements of our strategy. The first is one experience for our customers. We believe in a fully integrated ERP solution. We provide very deep and broad functionality. In 1987, we started with one product. In 2008, we had 11 products. And today we've got 20 products with over 500 modules, and we continue to invest in even more functionality for our customers. All on one platform with one user experience, one upgrade path, one security posture, one source of the truth. No one comes close to our focus and commitment to our vertical markets. We have the deepest functionality for our vertical markets. We are hyper-focused on just a handful of industries, and we're not all things to all people. And we bring 38 years of sector-specific knowledge, which is built into our products and our solutions. We compete and win against the best of breed players. We're ERP, but much, much more. In short, we never follow the standard path. We don't fight in the red ocean. We create the blue ocean by having ERP for core defined vertical markets. And as I said, these are mission critical products and best practice solutions, which power universities and TAFEs, local governments and governments, hospitals, large infrastructure providers. And we're an innovation-driven company, and we believe in evolution. We leverage new and emerging technology at each generation for our customers, and we invest in the range of 20% to 25% of revenue every year into R&D. And this is equated to over a billion dollars of investment into our ERP, into our products, and into our modules. And we have a track record for investing in the future, and the success we're having now comes from the R&D investments that we made over five years ago. Our fourth generation ERP, we call it CIA, is available any device, anywhere, anytime. And as I said, we've successfully re-engineered our whole ERP, not once, but four times over the last 38 years. Think millions of lines of code. And finally, this fourth generation has the highest level of security accreditation in the industry. We provide the most trusted SaaS platform. We are the first global SaaS ERP provider to achieve IRAP protected, no carve outs to any of our products or modules. And we know it's not feasible for any individual organization to keep up with the increasing costs and complexity of cybersecurity unless they've adopted a SaaS-first strategy. We spent hundreds of millions of dollars building the world's most trusted SaaS ERP that's secure, reliable, and efficient. And we're going to continue to invest millions of dollars to set the bar higher each year. Now, with the Power of One, we build, market, sell, implement, and support our SaaS ERP for 1600 customers globally. And for us, the Power of One is special and it's unique. Firstly, it's a big IP engine. At every stage, we get feedback from our staff and our customers, and we make the product better. We have a direct relationship with the customers. We own that customer relationship. And we all know ERP is hard and it's complex and there'll always be issues from time to time. And in the old model or the traditional model of a separate vendor and a separate implementation partner, when things go wrong, the implementation partner blames the vendor and the vendor blames the implementation partner and it's the customers that are impacted. Now, with the power of one, we are 100% accountable for our customers' outcomes, and it's one of the reasons we maintain 99% customer retention over the last 38 years. Now, SAS Plus is a game changer in our industry. For us, it's the next logical evolution of SAS, where Tech One delivers the entire outcome faster with minimal risk and a single annual fee to our customers. SAS Plus delivers faster time to value as we continue to dramatically drive down implementation timeframes, removing the need for traditional long, drawn-out, and risky implementations. Our goal is to deliver ERP in 30 days, not the thousands of days like the traditional systems integrators. And through the power of one, TechOne is the only SaaS ERP provider able to deliver on this compelling proposition because we own all parts of the value chain. With our mission-critical products, our industry-specific IP built up over the last 38 years, and our own in-house, highly skilled and talented consulting team. We've invested over a billion dollars in our ERP today. And the success we're having today comes from the investments we made five years ago. And the success we'll have in future comes from the investments we are making now. And when you think of game changing technology, a few things come to mind. iPhones changed the market for mobile phones. Tesla changed the market for vehicles. Uber changed the market for how to grab a cab. And now we've got AI. And tech one is changing the market. We have two not-so-secret secret weapons. The first is SAS+. No one can do what we do because as I said, we have industry specific and mission critical software that leverages our deep experience and IP in very specific markets like local government, higher education and government, and our own talented in-house consulting team. all in one fee with the fastest implementation times in the market versus the traditional plain vanilla ERP without mission critical software for anyone and the system integrators or the big four who are motivated by billable hours and making implementations longer. And number two, technology is moving faster than ever, especially in the age of AI. We're at the cutting edge and the leading edge of the next evolution of VRP. We launched Plus in our October showcase, and the customer feedback, it's been phenomenal. An independent researcher who we know said to me at one of the showcases that we've totally leapfrogged the competition. With Plus, we know we're onto a winner, and we're going to talk about that later. So when you have SaaS Plus and Plus together, we create significant value for our customers, and that translates into significant value for Tech One. And these investments enable us to continue to double in size every five years. Our addressable market is huge and growing. Today, we have over $554 million ARR, and that new long-term target of $1 billion plus ARR by FY30. And you're going to hear me say over and over, SaaS Plus is a game changer and it's powering our growth. And Stuart's going to get into a lot more detail later. As a result, our outlook for FY26 is also strong. Now, in FY25, we delivered strong profit and ARR growth, beating our guidance. And an increasingly common metric to assess SaaS companies is the Rule of 40. And the Rule of 40 typically measures recurring revenue growth and cash profit margin. However, there's really no strict definition. And in fact, many companies use slight variations of the Rule of 40. And we got some feedback recently that the more correct method is to use our ARR growth percentage plus our pre-tax free cash flow margin. Previously, we conservatively used post-tax, which means our Rule of 40 result is even better. Now, strong profitable growth is nothing new to TechOne, and you can see for the 12 months to 30 September 2025, we recorded a Rule of 40 result of 59. And that puts us in the top quartile globally against our software peers. And because it's a common metric and we're going to be measured on it anyway, we've added it to all of our metrics. And importantly, we expect to remain in top of class, which is above 40. Cale will now take us through the detailed financials.

Thanks, Ed. Once again, we are incredibly proud of the results we've delivered in FY25. SAS Plus continues to resonate with the market, driving a strong top line with ARR up 18% to $554.6 million after surpassing the $500 million mark at the half. We've also delivered another strong sales result in the UK with UK ARR up 49% and UK new sales ARR up 52%. SAS and recurring revenue is up 19% to 553.2 million. Recurring revenue represented 91% of total income in FY25. At the PBT line, we beat our guidance of 13% to 17% to deliver 19% PBT growth to record $181.5 million in FY25. With such a strong result and great confidence in our future, our Board has determined a final ordinary and special dividend of $0.30 in aggregate to take the total FY dividend to $0.366, up 63% year-on-year. More on that shortly. In all, we have met or exceeded our expectations across all metrics in FY25, an unequivocally strong result. I'll now take you through the financials, beginning with the income statement. Profit before tax has increased 19% to $181.5 million, another record for the business and ahead of our guidance, given at the half of 13% to 17% growth. SAS and recurring business grew 19% to 553.2 million in FY25. Total income was up 18% to 610 million for the year. Traditional new project consulting revenue was up 6 million in the year as our team continues to deliver on the backlog of T&M work previously sold. Total expenses grew 18% to 428.5 million, primarily driven by SAS platform costs and investments in people. We have undertaken modernization efforts during FY25, which has necessitated increasing infrastructure costs as we ran new and old side by side. We did not expect similar run rate increases in future periods. Our net capitalized R&D costs are up 28% or 6.9 million as our R&D team pushed hard into Showcase, getting plus and in-product AI use cases live. When we began the SAS Plus transition, we indicated we would be mindful of the impacts on profitability. With SAS Plus now being our default go-to-market motion globally, the investment in our long-term strategy has equated to 2.7% of margin in FY25, which is the equivalent of $17 million of revenue foregone. This has resulted in a PBT margin consistent with last year at 30%, but we remain convinced that our SAS Plus strategy will deliver in the long term, and our focus on increasing the PBT margin to 35% remains unchanged. In the meantime, as previously communicated, we will continue to deliver profit growth. While profit before tax was up 19%, net profit after tax was up slightly less at 17%. The effective tax rate for the year was 24%, up from 23%, primarily driven by the growth in our R&D tax incentive claim being lower than our profit growth. Given the quantum of profit increases, we believe the tax rate will trend towards an effective tax rate of 25% in future periods. Turning to the balance sheet, cash and investments have increased 15% to $319.6 million over the last year. This strong cash uplift year on year was despite an outflow of $44 million for the CourseLoop acquisition and $30 million spent acquiring 750,000 shares on market for the Employee Share Trust. As I mentioned at the full year results last year and again at the half year results, cash flow was assisted in FY25 by creditor payments brought forward into FY24 in the order of $20 million. That is evident in the increase in trade payables change year on year. In all, a strong uplift in cash during the year. Deferred revenue has increased by 48.1 million, consistent with our business growth and annual in advance billing schedule. Net assets have increased 71.4 million over FY25 to 450.7 million. Throughout our history, Technology One has consistently invested in R&D to enable us to deliver the most impactful products to our customers. As anyone who has attended our showcase knows, FY25 was a special year. We invested 25% of total revenue or 153.7 million in R&D in FY25 with 55% or 84.4 million capitalised. This is at the top end of our optimal range as our R&D pushed hard to deliver our artificial intelligence product enhancements and plus for Showcase. This was in addition to continued product development and investments in SAS Plus and ERP in 30 days. Our acquisition of CourseLoop also added to our R&D spend as we integrate their operations. Going forward, we expect to target R&D investment in the 20% to 25% of revenue range, which we continue to believe is the optimal investment level. Onto the cash flow now. In FY25, free cash flow generated was 184 million, up 65 million or 55% on the PCP. In addition to the increase in our profit before tax, our working capital position improved by 46.8 million due to our annual in advance billing growth and the benefits of the pull forward creditor payments into the previous corresponding period. This hasn't been repeated in FY25. This provided a tailwind to our Rule of 40 in the order of five points. Our income taxes paid have increased in the year in line with our tax rate and profit growth from previous periods. The investment and financing activities includes both the cash outflow for the Corsloop business of $43.7 million and $30.4 million paid to acquire shares in the Employee Share Trust, a capital management initiative announced last year. TechOne's balance sheet is very strong, with no debt and a significant cash position. High levels of recurring revenue, strong cash flow generation, and a strong new business pipeline provides us with confidence in the future. In FY24, we outlined three paths we are taking to improve certainty and evolve our approach to managing our capital base. Firstly, our dividend payout ratio was set to 55% to 65% of MPAT. Secondly, we reiterated that we were looking at IP-related acquisitions and acquired CourseLoop, a class-leading curriculum management solution to build out our One Education offering. And finally, we announced that we will begin purchasing shares on market through our Employee Share Trust to satisfy staff equity issuance requirements. In FY25, we spent some $30.4 million purchasing 750,000 shares, and we expect to spend more in FY26. As our business continues its positive path, we will evolve our approach to capital management, maintaining a disciplined approach to balancing the needs and opportunities of the business with rewarding shareholders. Given our outstanding year, confidence in the future and significant capacity on our balance sheet, the Board has decided to reward shareholders by determining a special dividend of 10 cents per share in addition to the final ordinary dividend. With confidence in our trajectory and healthy cash generation, the Board has decided to lift the ordinary dividend payout ratio from 55% to 65% to 65% to 75% of MPAT in future periods. We are incredibly proud of our results in FY25. Our board has determined a final ordinary dividend of 20 cents per share, in addition to the special dividend of 10 cents per share, both of which are franked at 65%. This puts our total dividend up 63% for the year to 36.6 cents per share. We are extremely pleased that our ongoing success enables us to continue rewarding our shareholders incrementally. I'll now hand over to Stuart to take us through some of the notable achievements in FY25.

Thanks, Gail. Our strategy is delivering exactly as we expected. By offering 20 best of breed products within the world's only true SaaS plus platform, purpose built for the verticals we serve, we've created a competitive advantage that continues to resonate deeply with our customers. As you can see from this slide, our growth is broad-based and accelerating. Every vertical is performing well, with three delivering double-digit growth. And our two largest verticals of local government and higher education are leading the charge, growing at 22% and 24% respectively. And what makes this particularly powerful is that our market penetration in any single vertical remains below 15%. That means there's still significant headroom for sustained expansion. We are only just getting started. At the half year, I promised to put the UK front and center at the full year results. And I'm proud to say that the team has delivered beyond our expectations. The UK achieved 52% new ARR growth, an extraordinary performance that reflects not only strong execution, but also the strength of our brand, our platform, and the people that are in this market. That momentum is being driven by a fully localized team of 185 exceptional people, achieving some of the highest employee and customer NPS scores across the entire company. The UK also holds the largest number of referenceable customers of any region, a clear signal of deep customer trust and satisfaction. The UK's relentless focus on customer outcomes is exactly why we pioneered SAS Plus in this region three years ago. That decision has reshaped the entire business. SAS Plus is now our global standard. It is clearly the competitive edge. No other vendor in our market can match the certainty, speed, or success we are delivering with this model. The combination of the team's discipline, world-class delivery, and the technology that is years ahead of the competitors is elevating our brand to be the benchmark others are trying to chase. I'll share with you two key wins shortly in the UK, but the message is very clear. This isn't just another strong year. It's another step in building a foundation of sustained, compounding growth well into our future. Out of the more than 250 wins at the Hoth, I'd like to highlight three briefly. Our strategy has always been consistent. Start small, prove success, and build momentum into larger, more complex customers. In the UK local government sector, we began with the counties and the districts, becoming the partner of choice by consistently delivering successful projects. About four years ago, we took this momentum and began working with the unitary councils, bigger, more complex organizations. And today, I'm pleased to say we now have more than 10 unitries that are SAS plus partners. The final stage of this strategy has been reaching the London boroughs. And not because of their size, but because of their purchase power and their sophistication to choose the best. I shared with you at the Hough that we won the London Borough of Islington, the largest borough in London. Now, less than six months later, I'm proud to announce that we've continued this momentum, winning the Royal Borough of Greenwich, with more than £300 million in annual revenue and one of the largest growing boroughs in all of the UK. This steady, deliberate approach, starting small, scaling up, Staying focused on vertical-specific SAS Plus continues to validate our model as proof that a disciplined growth and exceptional delivery is much better than any hype and complexity over time. If you look at the University of Hertfordshire, they've been a long-standing partner for more than 15 years, utilizing our finance and timetable and scheduling solutions. They were also one of the early partners in helping shape our new Plus platform. Early this year, they went to market to replace Lucien, whose product couldn't deliver the functionality and reliability they needed for a university of their size. With more than 32,000 students and among the fastest growing universities in all of the UK. We are proud to confirm that we've now been selected for the student management solution, not just for its depth of capability, its defense and depth security, and its technology, but because they saw the strength of our roadmap and the power that comes from a full ERP integration. That decision makes Hertfordshire our sixth university in just two years, and it's another clear signal that the scale and success of our SASBUS model in the higher education sector is accelerating fast. Now, if we look at local government in Australia, Central Coast Council in New South Wales is a great example. It was a council that was under financial distress for more than four years, running multiple disconnected solutions, including Infor. They went to market looking for a single, consolidated partner to modernize their operation and stabilize their organization. And we were the clear choice. Winning a $4.8 million annual recurring revenue contract that brings together the majority of the products under their stack to support both their recovery and their long-term growth. Our history is defined by bold, aspirational targets that drive our focus and underpin our success. The two metrics that show this clearly reflect our strategic focus and how we measure performance. Best practice in our industry for net revenue retention ranges between 115 and 120%. And once again, we are firmly within this benchmark, achieving an impressive 115% this year. It's important to note that sustaining an NRR of 150% annually over five years alone doubles the size of the company. Highlighting this metric is a critical component of an ERP strategy. Secondly, and I think most impressively, our churn rate is 1.2%, remaining within our target range and continues to be one of the lowest globally in our industry. Once again, it validates our strategy, focus and investments, and the executing are all working. For more than six years, we've been leveraging AI within our product suite. And we've said for many years, we've been actually using AI inside our products for a long time. As previously highlighted, we've been using AI to benefit our community. We've been leveraging cameras on buses and garbage trucks to look at variations of the field to generate work orders. We've also been providing for more than six years products inside our software suite that are leveraging AI. For an example, our expense claim suite. We've never really highlighted the fact of using AI because we didn't see the need to do so. But as a result of the work we've been doing for the past two years, we've looked at new ways of both leveraging our end products as well as building new products that can leverage this AI. We looked at how to leverage AI in two phases. One, leveraging the 19 products we have, finding better, more efficient ways for which our customers can achieve outcomes. And then we looked at ways of leveraging AI tools across the full operations ecosystem. We've evolved and grown our products from one product in 1987 to 11 products in 2008 to 20 products today. Each product has over 20 modules. That's well over 500 modules in total. As we announced in Showcase in October, we will be embedding AI functionality within the 19 products we serve with the release of our 26A. That will be the start of the release that will continue for years to head. There will be a point where every single product will have AI included inside them. Therefore, enabling faster outcomes, more efficiency, and greater cost effectiveness for our customer base. At Showcase, we introduce something truly transformational. Our 20th product, PLUS. Plus, it isn't just another feature or module. It represents the future of enterprise software. The beginning of our fifth generation of ERP. It's the first system designed not just to record a report, but to think, learn, and advise. It understands every aspect of the customer's organization, their people, their process, their performance, and it responds in real time. It identifies trends, highlights risk, and recommends actions before they even surface. It's a digital twin for the enterprise. one that supports leaders every day through natural conversations, no screens, no clicks, just a conversation. With PLUS, we're not just redefining ERP, we're re-imagining how an organization works. This is the next frontier in enterprise intelligence, built entirely within the Tech One ecosystem, a world where the systems finally work for you. Our goal with Plus was simple, to put in the hands of every technology one user. We wanted every customer to experience the power of this product, to dramatically improve the efficiency of their operation, and in turn, deliver better outcomes for their community. To achieve this, we've commercialized Plus different. We removed the complexity that is holding many organizations back from embracing AI, particularly the confusing token-based model dominating the market today. In most AI platforms, usage is priced per token, effectively a syllable, which means costs are unpredictable for large, complex requests. That doesn't work well for our customers. Governments, universities, hospitals, and essential infrastructure providers, they need clarity, predictability, trust in their commercial agreements. And so we created a whole new model. For a plus, we price on conversations. And for end product, we price by interactions. Whether the interaction invokes 10 tokens, 10,000 tokens, our customers are charged a single fee, predictable amount, seamlessly bundled into their AR contract. This model is unique to the market. It removes all that commercial risk. It encourages widespread adoption and has been exceptionally well received by our customer base. It's simple, elegant, way to make AI real, accessible, and valuable at scale. Our diversified strategy is delivering exactly as intended. With our mission-critical software, SAS Plus, ERP in 30 days, and our continued investment in R&D, we're not just delivering growth. We're shaping the future of the enterprise software. Products like Plus demonstrate how deep our sustained innovation translates directly into performance and the confidence of our long-term growth. These R&D investments are long-term strategic commitments. They power both new customer acquisitions and net revenue retention, enforcing the durability of our model. And none of this would be possible without our world-class R&D team. a group defined by creativity, technical excellence, and the unrelenting drive to solve the hardest problems for our customers and community. Their work is the engine behind our growth, and we are enormously proud of what they continue to achieve. I'd like to hand back to Ed.

Thanks, Stuart. So to wrap up the result, quite simply, SAS Plus delivers. We achieved a year of record ARR, record revenue and record profit. Total ARR up 18% to $554.6 million. UK ARR up 49% and new sales ARR up 52%. The flywheel continues to turn. Profit before tax. to $181.5 million, up 19%, beating the guidance we set in May of 13% to 17% growth. This has enabled us to continue our strong R&D investment for future growth of $153.7 million, up 20%. And with a strong balance sheet, strong results and confidence in the outlook, a record total dividend of $0.366 per share, up 63%. Now, let's bring our focus to the outlook. Our focus is to maintain our strong momentum well beyond the 500 mil ARR and to continue to double in size every five years. It's why we invest in R&D for the long term, to continue to build platforms for growth, new products, new modules and new offerings. We achieved our last goal of 500 mil ARR 18 months earlier than planned and we set a new long-term goal of 1 billion plus ARR by FY30. And we're well positioned for future with multiple platforms that drive consistent growth and to meet our targets. We have a total addressable market of over $13.5 billion and it's growing. We will deliver strong net revenue retention with our 115 to 120% target. As Stuart said, at 115% alone, we can continue to double in size every five years. We have significant white space in our existing customer base. Once we land a customer, there are many, many new products and modules that we can provide to those customers. We license in a number of ways, and we see continuous growth in our rateable properties and student charges under our agreements, together with built-in annual CPI increases for all of our customer contracts. And we continue to win new logos in both APAC and UK. SAS Plus is a game changer, and from a growth point of view, replaces traditional one-off consulting revenue with high-quality annual recurring revenue, and will continue to invest in R&D. We also continue to target acquisitions in a very disciplined way that adds new IP to the business, such as CourseLoop. The leverage we're delivering in our business provides us with significant headroom for inorganic growth. We've got a great vision and a great platform for the future of ERP with Plus in our in-product AI. And when we add IP acquisitions to this foundation, the value to our customers and to technology one is exponential. At every stage of our evolution, we provided more and more value for our customers. We started as an on-premise company, as a licensed business that provided value by automating and streamlining our customers' operations. Then we moved to the cloud, and we said cloud was war. And as we moved people to the cloud, our customers would seek to consolidate vendors, and we've seen the benefit of that. And customers have seen the benefit by consolidating vendors. They have removed the complexity in their own operations. Then we moved to SaaS, with multi-tenanted SaaS, the world's highest level of cybersecurity certification. And on SaaS, all products and modules are available and visible for our customers, which has enabled our customers to take up products seamlessly. The next evolution of SaaS was SaaS Plus and ERP in 30 days. Even more value has been created for our customers as the need for long, complex, risky traditional implementations has been removed. And finally, we released Plus at Showcase recently. Unanimous feedback from our customers is the amount of efficiencies and savings in their organizations that we presented at Showcase was in fact conservative and would be at least two times, three times, perhaps even 10 times more. So at every stage of our growth, at every stage of our generations of software, we deliver more and more values for our customers, which means more and more value for Tech One. Our strategy, our investments, and our resulting moat before AI and Plus was already strong. verticalized software, mission-critical applications that only a handful of vendors in the world provide, software built for complex industries with strict compliance requirements. Some have said that the power of one was a handbrake on growth, but with SaaS Plus, we've flipped the switch and we've removed the buying and implementation friction for our customers, and with ERP in 30 days, we can scale even faster. We have industry-leading customer retention and we have a track record of delivery. Now with AI enabled products and plus our moat is even wider, even deeper. It's evident to our customers and prospects that more data from taking more of TechBond products and modules equals more learning, equals more augmentation and more insights, equals more value. Plus, with no clicks, no screens, just a conversation, it's the Trojan horse for taking more of our products. It has a low price, has no implementation or training, which drives more product and module take-up in our customer base. An additional piece, as our customers take on interactions and conversation bundles, this AI transaction-driven pricing will drive additional ARR from each of our customers. Now, let's zoom in and focus on the outlook for FY26. The markets we serve are resilient, and TechOne is not impacted by any of the current geopolitical issues. TechnologyOne provides mission-critical software with deep functionality for the markets we serve. Our customers have independently verified cost savings of 40-plus percent by moving to our SaaS. And our global SaaS ERP, now turbocharged with AI and Plus, allows our customers to innovate and meet the challenges ahead with greater agility and speed without having to worry about the underlying technologies that makes life simple for them. Plus will drive net revenue retention. SAS Plus is driving significant opportunities for us and the pipeline for FY26 is strong. And we'll continue to benefit from the improving margins because of our significant economies of scale of our single instance global SAS ERP. You know, we talk about heartbeats and rhythms all the time in our business. And for as long as I can remember, our heartbeat, our rhythm, it's been 10% to 15% profit growth. And we were able to do this because we've been disciplined, focused, and have a history of delivering. And as we transitioned to a SaaS company and now a SaaS Plus company, we've been able to carefully and surgically increase that heartbeat and that rhythm. We started firstly with 10 to 15%, then that accelerated to 12 to 16%, and then 13 to 17%. And you can see we've got a track record of delivering or beating the top end of guidance. And our outlook for FY26 remains strong. And talking about rhythms, just like we've always done, we'll provide another update on our guidance at the AGM in February. Our discipline, our diversification, execution, and visibility of the business gives us the confidence to continue to drive strong growth. In FY26, we introduced our groundbreaking AI platform, and it's set to deliver a generational leap forward. As a result, TechOne's sales pipeline of opportunities for FY26 remains strong, which positions us for strong, continuing growth. We've got this energy, this momentum in the business right now, 20 products, over 500 modules. Our addressable market is huge and it's growing. We've made and will continue to make significant investments in R&D, in new products, in new modules. And because we follow the road less traveled, we have invented SAS Plus and set a very ambitious goal of ERP in 30 days. And with our game-changing AI-enabled products and Plus with no clicks, no screens, just a conversation, we maintain our strong conviction of a billion dollars plus ARR by FY30. As I said at the outset, our people have a deep connection with our mission because they, their parents, their brothers, their sisters, their family, live, work and play in the communities we serve. They live and breathe the Tech One way. They create and deliver the mission-critical products and solutions that power our customers. None of these results would be possible without the talented and committed people who make up Tech One. Our people, they're in a role. They have this energy and momentum. Since 2017, we measure employee net promoter score. It has grown from minus 17 to plus 43. We would all like to thank each and every member of the TechOne team across the globe. We'd also like to thank you, our shareholders, and our community for your continuing support. Can we now hand back to the moderator for any questions?

Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to queue for a question, please press star followed by one on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star followed by two. If you would like to submit a question online via the webcast, please type it into the ask a question box and click submit. Edward, we will now start with questions from the phone call. Your first question today comes from Kane Hannan from Goldman Sachs. Please go ahead.

Morning, guys, and thanks for the questions. Maybe just starting on that ANZ ARR growth, I think it slowed for around 19% in the first half to sort of 15% in the second half. Can you elaborate a bit more on what drove that slowdown and some of the changes in ARR that came through and whether AI launches coming next year delayed some things on your side we should be thinking about?

I think thanks, Kane, for your question. Firstly, we're very proud of all the results we delivered, including our ARR growth. If I look at it at multiple levels, we've got multiple platforms of growth. Our goal is to obviously hit the profit for the year, but also hit our ambitious goal of $1 billion plus ARR by FY30, and we're very confident on track for that. We also balance all of our metrics and all of our delivery. I think... when we look at with the parrot one we have to deliver consistently for our customers and so you might have heard me talk about heartbeats and our heartbeat is set in a way that we don't stuff it up and we don't stuff it up for our customers that's first and foremost so every piece of ar we deliver we sell we have to deliver and so we're very focused on that and kane was there a second part to your question

I had a couple of different ones, but it's just more, you know, the slowdown. But just I think about, you talk about setting the platform sustained compounding growth in the UK. I think the UK was about 20% of the incremental ARR growth, you know, for the year. Is that the sort of level we should think about going forward? Do I think about that sort of trending higher given the successes you're seeing? Or just how do you frame the UK momentum from here?

Yeah, I think what we do is we set our, obviously, profit goal, then we set our total ARR goal, and UK is part of that. I can't actually picture the 20% thing you talk about. ARR in the UK grew at 49%. We expect it to compound quite strongly. I don't know if we'd commit to 49% year on year on year, but within the context of all of those ambitious goals, the UK will continue to be strong over the next three, four, five years.

Yeah, sorry, I meant sort of share of revenue growth, but yeah, that's helpful. And then just lastly, the changes in the divvy payout and obviously the special dividend. Is there anything we should read into that in terms of appetite for larger M&A that we've seen a bit of across the tech space down here? And just how do you think about the M&A landscape at the moment?

Yeah, I think... We obviously are at a point where we're hit leverage and we're, for lack of a better word, churning out a lot of cash. One of our long term shareholders said, if you keep going on the trajectory you're on, Ed, you probably have a billion dollars cash by FY30. And, you know, if we do, we probably will. So one, it's a good problem to have. Two, you saw this year we made an acquisition in Course Loop. We did a share buyback to neutralise the staff equity and we also gave a special dividend. So with our confidence in the future and a whole lot of cash generation, we could do that. We think that with the platform we have, plus an AI with the strong cashflow generation, which we'll continue to see, that there will be opportunities for us to make M&A but we'll always do it in the discipline way that we've always talked about, you know, having great IP in the verticals we serve, in the regions we want to follow. So we think there's lots of opportunity, Kane, and we think that we can take advantage of that opportunity, but I just want to flag that it's always in that discipline way.

Thanks very much, guys.

Thank you. Your next question comes from Waysin from Jefferies. Please go ahead.

G'day, Wei.

Hey, Ed. Hey. Great presentation, great set of results.

Thank you.

My first question is just in regards to SAS+. So Kel mentioned before that, you know, we're seeing kind of like a $17 million revenue headwind from this. I've done some, like, modelling on unit economics, and, you know, I think SAS+, started around 2022, if I remember correctly. So should we expect, I guess, these... head heartbeat that you talk about.

Thanks.

Yeah, I guess they will definitely become a tailwind at some point. That is kind of the whole point of the strategy. But in terms of being really granular about when that sort of nadir is, I guess we're not too clear on that. It does feel like we're getting closer to it. There is plenty of momentum in the SaaS Plus strategy. The teams are all executing well on implementation. Yeah, look, we're getting there, but I don't want to sort of put a firm date on it. But you're right, there is a point here where what we've sold is generating more revenue than the cost of us implementing what is currently in front of the team.

And I think going to Cale's point, it is a long-term strategy. And when we come out of that, I don't know, low point, as you put it, expect margins to accelerate. We just got to get there first.

Yeah, okay, that makes sense. Some of the, I guess, concern from the results this morning I've heard is just that NRR number being at the 115, which is definitely still world-class, but at the bottom end of the range. I was just wondering in terms of, I guess, the number of products per customer, is that a way that we should think about it and are you able to give us any kind of color as to, you know, the average product per customer right now and, you know, in terms of your highest penetrated customer, what they look like just to understand, you know, what would you see the potential outcome as you continue to, you know,

penetrated to your existing customer base i think there's multiple levels here i might start and then and then hand over to stuart i think um firstly way uh you're right nrr 115 is is awesome it's at top of the range if we continue to do that alone we double in size every five years which is sort of that high level commitment and strategy we put out there to the market One thing that we should probably all just look through is when you look back a couple of years in the COVID years and in the sort of post, you know, when we had those supply chain issues, CPI for some of our customers were running at 6.5%. So my signal is to look through the last couple of years. CPI has returned to normal now, which is probably 1.5%, 2%. So that's a lot of probably the delta. But Stuart, going to...

the next point we don't measure products or modules per customer anymore because it's a little bit nonsensical but do you want to no it's it's completely a fair question the issue that we have is it's not apples for apples so we break it down to 20 products in the 19 traditional products we have they all have a different amount of modules so if i look underneath the covers of just financials it has somewhere in the region of 25 to 30 modules And I can't think of a single customer that's actually got all 30 modules. So it's very hard to actually give you a metric that's meaningful that says the average customer has 6.25 products because there's no apples for apples comparison against other customers because it's other verticals, it's other regions with other product sets. So what we really look at is the graph that I spoke to in the presentation is the ARR growth per customer. And so that's trying to be a mix of everything to show you, but we don't look at... any customer related to the total bomb potential and then the average of. We have what we call an Eldorado map. So we see the white space of every product that we have that they don't and we target them, but we don't look at it as a whole cohort because it doesn't really work. It's not a measure that adds value.

Wait, can I add that I was talking to someone earlier and they said something to me, something to the effect of, if you hit a billion dollars ARR by FY30, is that slowing growth? And I smiled and said, no, no, it's a billion dollars plus ARR by FY30 because we're not indicating slowing growth, number one. Number two, we invest... in more products, more modules for our customers. So we expect NRR to stay in that 115% to 120% range going forward. And I might also say that we launched Plus, which we've been investing in for a couple of years. And Plus is like the Trojan horse for more NRR. Do you want to talk about that, Stuart?

Yeah, so the goal of Plus and what we've built with Plus is to give true visibility of your organization. But it only can give you visibility of the information that we provide, the data lake that we're supporting. And so when we started looking at early adopters and getting feedback, every single one of them said, we need to expand our footprint of tech one so we can get a more wholesome understanding and review of our business. And so to Ed's point, we think of it as a Trojan horse because we've made it in such a cost competitive position where we want them to consume it and use it. Because really what we want them to do is buy more products underneath to leverage it. And so we're already seeing that play out. So we released Plus about three and a half weeks ago, I think. Our average sales cycle for an enterprise product is about eight to nine months. If it's a new customer, it's probably nine to 12 months. We have sold eight plus deals in three and a half weeks. And the exciting part of that is they are paying for something now. They're so excited about it, and they won't actually get the access to it until March. So they can see the value. They can see where they want to go. And now they're coming back to us and saying, can we start consolidating some other products so when the plus is available, we're ready to actually leverage that data lake. And at the same time, the beauty of what Plus does, it doesn't start from day forward. It actually looks at all your data going back to the first time you were starting to use DataStream software. Sorry, DataStream. TechOne software. So it really does value your whole enterprise from day one all the way forward. The market is unbelievably excited by it. Can we elaborate on that phone call we had on the Thursday night before we even launched Plus with a customer? Sure. We did quite a bit of research before we released Plus, and we wanted to make sure that the excitement that we saw, others were seeing. And so we had a very large university, and we had the full SLT on our side with their full SLT, and we gave them a full demo. And the first reaction was from the registrar of that university said, this is a game changer, this changes everything. And so we asked them the question very early up and said, how would you price this? How would you value this? And they said, from this very simplistic demo that we've seen, we can get, we can, reposition at least two analysts inside our university just from the very simplistic view so it pays for itself very quickly and then the cio said yeah but we need to get your hrp system so we can really get that full understanding of our operation that same conversation has happened with three universities in the span of four days that's the conversation we want to have we are still an erp company we want to sell erp we want to sell the value of our products and plus as a way of delivering it at speed and at scale

Thanks, Wei.

So it sounds like, yeah, I mean, the pipeline's definitely accelerating right now. One last cheesy one, and I'm guessing you did it by design, but slide 32, the RPMC data, any possibility we can get what that number's looking like at this point in time?

I'll take that one. When we've shown the graph related to ERP in 30 days, it's quite a linear graph. And although I would love it to look like that, it won't. Because as we've talked about in the past, we really look at getting to ERP in 30 days in two ways. One, it's our processes and our methods and just being fostered and more intelligent related to the way we deliver software or deliver solutions. but then we also get the technical benefits. And so we've been working the background for about two years, getting ready for what will be the drops of 26B and 27A, and we'll see massive improvements through that. So you'll see a relatively smooth linear line with massive drops as we go through. And so we're on track, but to give you a number, It's a bit of a misnomer related to if I drew a straight line, how would we get there? Because we're going to see huge improvements in the release of 26B and 27A. The summary is we are on track. We will deliver ERP in 30 days and FY28.

Excellent. Thanks, guys. I'll let someone else have a go. Thanks, Wayne.

Thank you. Your next question comes from Paul Mason from Evans & Partners. Please go ahead.

G'day, Paul.

Hey, how you doing? Could I just ask on some of the AI features and the pricing that you guys discussed at the product day, could you maybe talk a little bit about how that's expected to initially flow through into ARR? Should we actually think about that having like a couple of points of accelerative benefit or is it a bit early to sort of call that?

Definitely early days, but I'll hand it to Cale to colour that in a bit for us, Paul.

Yeah, thanks for the question, Paul. It is early days. We don't really know how quickly the take-up is going to be and obviously it's As Stuart spoke to, as the strategy evolves, as the product evolves, the utility of the product will further evolve and as our customers broaden their ERP usage, as does the utility increase. In terms of how it will flow through, there are two elements. They'll both show up as ARR. One is a sort of more licensed access and the other is really transaction-driven ARR. And as that utility and as that usage increases, as will that ARR, at the moment, even our forecasts, they're really sort of pie in the sky at the moment. So hopefully as FY26 evolves, we'll have a much better... much better view of how that's going to unfold.

Can I take a little bit? And there's two ways to look at it. So our whole price book has been lifted by 10% to capture the benefit of the products that have been enabled with AI. And so you're looking at two things, the traditional AR uplift just from the product side, and then that transactional pricing that we're learning from. But the market really loves the way that we've built it. So it's that simplistic view of not worrying about tokens and complexity of a question. It's really the usage of it. So it's been resonating very well with the customer base.

We should be clear, though, that we've uplifted the price book for new sales going forward. Yes, yes. Not the back book. We don't uplift the back book, yeah.

So maybe I summarise all that stuff. for if you're an existing customer using financials and we've enabled AI you get that for free if you're a new customer that wants to buy that same financials the price book will be uplifted by 10% and then there's also this thing which is conversations or interactions and we call that transaction driven ARR now We haven't factored that into our forecast. That's upside for us. And what it means is as the customers use their allocation of conversations or interactions, they can buy in bundles and that bundle will uplift their ARR. And when you piece it all together, it's quite an elegant way to price. It's quite an elegant way to capture value for demonstrate value for our customers and capture value for us. Thanks, Paul.

Just the second one for me was just a quick modeling question, so probably for Cade. Your receivables management looked like it was unusually exceptional. Should we use the current sort of ratios of receivables to sales as an indication going forward or expecting a normalization there?

No, we have an amazing receivables team. Shout out to Kate. She's done a great job for her team. If you look back over the last couple of years, that team has gone pretty well. So there's nothing sort of super unusual. They did have a good year, but there's no kind of big one-offs in that performance.

Can I play off that for one second, too? I think it also highlights that we're selling well and delivering well. And so we know our wheelhouse, we know what our customers want, and we're delivering. So all parts of the business are performing to be able to achieve that. Exactly.

Awesome.

Thank you.

Thanks, Paul.

Thank you. Your next question comes from Gary Sheriff from Royal Bank of Canada. Please go ahead.

G'day, Gary. Yeah, hi, Ed, Cale, Stuart. Quick question on that government vertical. Are there any changes in the customer buying or feedback from federal or state government? Because the growth does appear to have slowed materially in that second half. Like, if I look back the last few periods, it looks like you did about 41% PCP growth in the second half of 24. You then did 28%, so still super strong in the first half of 25, but it looks like it's dropped to about 9% in the second half. of this year and I just want to check, is there anything changing there that we should be aware of or just any feedback from that federal or state government vertical?

Yeah, it's a great question. The strategy that we've position for federal and state is the same as I would have mentioned for local government in the UK. It's slow and steady, and we go further and further up the food chain. And so we've got a strong foundation of referenceable customers in the federal government, and that's allowed us to win things like Department of Ag and the Department of Veteran Affairs. And we're being pulled into larger, more complex departments. And the problem is we don't have the ability to really change their buying cycle or speed or the velocity of which they go to market. And so we're doing exceedingly well. We've got to wait for that machinery of government, that process to come to fruition, and then we can capitalize on it. I wouldn't read into anything other than we're at the whims of the government and the process they go through in those very big, complex accounts to make sure that we're there first. But we've got a very strong track record. Our win rate is exceedingly high. And now because we're on the panel for government related to SAS+, that win rate is improving. But again, we have to wait for those projects to come out.

Probably the final piece, Stuart, is the pipeline is very strong.

Yeah, not only strong, but expanding at the top end. So we're being brought into the largest departments now. And so that's very exciting. Again, it's that validation or a strategy to start small, build out. It really is resonating well. We've just got to wait our turn as we wait for those contracts to come to fruition.

Excellent. Got it. I guess the FY26 guide, I mean, the market seems to be looking for a bit more concrete understanding on how that's shaping up, given you've got almost 95% of your revenue being recurring now. I mean, is there any steer you can give to us rather than wait until Feb? I guess the market should first ask questions later at the moment. So, yeah, maybe just anything. Give us a sense on that 26, or do we have to... wait another few months to hear more.

I think you have to wait a few more months. We talk about rhythms all the time and we have this rhythm and heartbeat in our business. It's very strong and you can almost see the trajectory you're on in that guidance slide, Paul. So if you could just hold for a little bit, we will keep to our rhythms, keep to our techniques and we will deliver for our customers and therefore our shareholders.

Can I try a different tack for you for a second? I'll give you another metric that we haven't highlighted. So we did showcase event two and a half years ago. And we had a sellout for what we expected. We just finished our showcase events for Australia and New Zealand. And we had double the attendees. Double. So in two and a half years, our brand, the want to understand where we're going and be part of the journey of Tech One, there's double the amount of people in the room in each location. That's in Wellington, Melbourne, Sydney, and Brisbane. That's a testament to where this brand is going, how it's resonating with the market and the excitement behind it.

Thank you. Thank you.

Thank you. Your next question comes from Josh Kanarakis from Baron Joey. Please go ahead.

Hi, guys. Thanks for taking my questions. Just one quick one. I know you've still got some customs converting from CI to CI Anywhere. When you're talking about Plus and obviously all the features and functionality of that, do they also need to shift to CI Anywhere to get access to that? And if not, maybe just talking about if that is a potential accelerant in terms of that transition bring forward of adoption of the CIA Anywhere platform?

It's a really good question, Josh. It's a really good question. The answer is we can actually service customers that are on CIA with the technology we've built, so we can do it, but we want our customers to move across to CIA. And so we have the opportunity, but we want that customer adoption to move across. the customers are moving across to CIA at rapid speed. So we're very happy with the speed at which people are coming across, but the technology, the underlying technology can service the point you're making, but we want it for our customers that have moved across.

And I guess also to that point, for those customers, and if you've got anything, Stu, just around what maybe proportion of the customers are on CI Anywhere today, but obviously those customers that are doing that, I think historically we've found have also taken more product. Is that correct as well?

Absolutely. So it's kind of all part of the mix of the strategy. So it's really hard to answer the question of customers that are wall-to-wall CIA, but it's in the hundreds, right? It is very high. And I believe there will be a point where we call a date related to CI as a product and we move everybody across and we're getting closer and closer to that. And absolutely, as customers move more and more into the CIA space, the adoption is higher because they can see where all of our investment is. The only investment we do in the CI product is really our obligations related to bugs and obligations related to regulatory and governance. All of our effort is in CIA. The customers are moving across at rapid speed. We've made it really easy to get across now. So the speed at which we can move them across is much faster than it was even a year ago. So the momentum's there. Momentum's there.

Okay. That's helpful. And just a second one quickly. Just on M&A, obviously a lot of cash sitting there, as everyone's referred to. When we look at some of the product sets and, you know, gaps, obviously you've talked previously about, you know, we've talked about revenue and benefits in the UK as one area, but I guess the structure of the boroughs and the different government structures over there mean that, you know, there's sort of a broader remit. Like, is there other alternative areas outside of maybe what we traditionally see as your hunting ground in Australia that you may be able to move into or any adjacencies?

The simple answer is yes. And we try to explain a little bit of this at the Investor Day. We try to explain the complexity that sits underneath a council of our 18 or 19 products, depending on the vertical we're in. There's probably 80 products that are running a council. There's probably more than 100 products that are running a university. So we have the ability to look at what's there. But at the same time, as Ed said, for us, we need the right IP. And we need that also, those people to come across with that scar tissue and understanding to what we look at is one to one equals three. We need to make sure that when we bought CourseLoop, it was added not only from an AR standpoint, but our messaging as an ERP. And that's where we get the excitement. So simple answer to your question is absolutely. There's things that we're looking at all the time. And there's a lot of great companies out there. We just want to make sure that it supports the whole portfolio.

Okay, I'll leave it there. Thanks, guys. Appreciate your time.

Thanks, Josh.

Thank you. Your next question comes from Cameron Holcutt from Canaccord Unuity. Please go ahead.

G'day, Cameron.

Morning, Tim. Quick one if I can go back to Plus. Ed, you've made comments in the media before around the potential adoption of Plus within the first year of being around 10% to 15% of your customer base. Yeah. Anything you can sort of comment to around that stat now that you've done showcase, any sort of post-showcase feedback, how that sort of evaluates and compares to that state you've provided before?

Yeah, so the slide you're referring to is the one that says maybe fastest uptake of ARR. I think if we take a big step back, When we attended Showcase and gave that presentation, the unanimous feedback was that the customers expected AI, but no one expected Plus. It has literally changed the game for ERP. I was standing beside a researcher, economic researcher, independent from Tech One. He's done work for Tech One, but he's done work for all ERP providers. And he said something to the effect of, you have just leapfrogged the entire competition with Plus and that's the feedback we're getting from our customers. Now, if you then fast forward to that moat slide and join the dots with some of the things that Stuart explained is that Plus with its conversational nature gets rid of a thousand screens, literally a thousand screens in our software and with no clicks, no screens, just conversations and no training, it makes, it literally changes the game. No one has done or thought about what we have delivered for the showcase. Now, join that together with when I'm using that as a user, if I only have financials like this higher education customer, now I need to have your HRP because I can see the value. Now I need to have your student management because I can see the value. It is a game changer. It will accelerate. It in itself will be the fastest uptake of our products. And do you want to add anything to that?

Yeah, so just to give you a little bit of insight too, just to give you some... understanding of our confidence in it, right after the showcases, we built a schedule for demos. And so we built a whole scheduling system for the allotment of getting demos to our customer base. We were oversubscribed within the first week. And so the want to understand it, the wanting to see that, the wanting of the teams to see it throughout this whole organization, I think Ed's actually demoing it as well. Yeah, till next week. So it is what everybody's asking about. It is bringing up the level of the conversation, and it's very exciting.

Yeah, thank you. Second one is just, there's obviously been questions around the net revenue retention, but just by nature of its definition, upgrades are the biggest component of it. Given you've got the price increases coming through before I believe it's March 31, should we expect that net revenue retention at least coming into the following half, we are available to say at least anyway, should be at least 115%, particularly given potentially to avoid some of that price increase if people procure earlier?

Maybe the answer is yes, Cameron. We don't look at it that precisely. We go 115 is our goal and we'll deliver that with all the platforms and all the levers we have. So it's just not that precise, Cameron. But we'll add to the conviction and the delivery of that number.

Sure. Last one very quickly for Cale, just around R&D guidance. You mentioned that there's been a bit of a pull forward, I guess, arguably, to get everything ready pre-showcase.

um with the range still at 20 25 is that something we should probably consider probably more drift towards the middle of that range in the next few years rather than continue to be at the top end just given that before you mentioned before yeah look i think uh as time goes on just the weight of the business uh growth um will will see that number drift towards the middle um i think importantly for us um that we don't it doesn't go below that range because we need to make sure that we're investing for the future um but i think that's a reasonable conclusion um you know we continue to find plenty of interesting things to uh to set our r d people's uh minds to uh and they they find it themselves so uh look we'll continue to invest but uh in the range but you're right the you know revenue revenue is growing pretty quickly so um and and that r d investment is primarily people yeah all right thanks james well done again thanks aaron

Thank you. Your next question comes from Bob Chen from JP Morgan. Please go ahead.

Hey, morning, guys. A couple of questions for me. Just in the UK, obviously really strong momentum there. I mean, just how important are the Greenwich and Islington sort of contracts as a reference case for future customers? Do you have potential sort of pipeline looking at those implementations before they sort of pull the trigger?

The simple answer is it's huge. So... If you look at the boroughs, they have the purchasing power to buy whatever they want. And so they're always looking for the first person to really be that early adopter of that new concept, which was SaaS Plus. And Islington being the largest borough doing it first was a natural progression to Greenwich. And there's a lot more behind that. So we're really excited. And getting the biggest ones, the best brands up front is very, very exciting. Stuart where Bob might have been going and correct me if I'm wrong Bob is do we have to wait for go live for those no no no no so we got Greenwich within six months of the award of Islington and we will continue that momentum so the momentum's there the pipeline is strong they'll be paying attention and the beauty of the boroughs they all talk to each other so it's actually the success of its implementation that was a validation for Greenwich to move forward and that continues

Yeah, perfect. And then in terms of when you're thinking about resources or manpower to tackle that sort of pipeline, like how does that sort of compare in the U.K.? ?

Yeah, it's a really good question. So we've built a concept of a slot. So we have looked at our goals for FY26 in the UK and we've stratified it based on its profile of financial, supply chain, EAM. And then we've looked at it from a local government and an education. And so we can see for more than a year now. related to the resourcing we need to achieve the goals we want. And so we're really playing that far ahead. And we can see that all the way through. And I was on a call last night with the team looking at FY27 in the slots we need. So we can see that far ahead now.

And Stuart, can I add also that one that's amazing, and that was learned from our SaaS transitions, the concept of slots. But when you match that with ERP in 30 days, we can do... four slots today just making that up tomorrow we can do six slots the day after that we can do eight so we get more and more efficient and we can scale um with without adding people bob so it's quite exciting times in the delivery part of our business as well

Perfect. And then maybe just a quick one for KL. I think you mentioned earlier just some duplicate infrastructure costs. Could you sort of quantify what that impact was to your earnings this year?

Yeah, so we won't sort of fully disaggregate that. It's a bit of a complex piece. So, I mean, the team are working hard to modernise our infrastructure to make it more scalable, more performant for our customers as we continue to grow. I think what I said a little bit earlier and what we'll stick to is the rate of growth won't be as high as it was this year. This is a bit of a step up year as we duplicated some stuff temporarily. Great. Thanks, guys.

Thanks, Bob.

Thank you. As there are no further phone questions, Edward, we will now pause briefly and take questions from the webcast.

Thank you. Do we have to read these questions?

Your first question from the webcast comes from Cheryl Lam. Cheryl asks, all customers now transition to SaaS. What gives you confidence that churn will remain low? NRR in second half seems to have showed down relative to the first half of 118%. Can you provide some color on what drove this? any changes in operating environment in second half to first half.

So a little bit of clarification, so we're on the same page. All of our TechOne traditional organic customers have moved to SaaS. When we acquired CNT about two and a half, three years ago, there's still a few outliers there that are moving across. I just wanted to be fair. And the churn is fantastically low. Our customers are resonating, as we've said they would from the very beginning when we started the story almost 10 years ago now, that when they came across to our SaaS world, And we coined the phrase, which is cloud is war. We would help them consolidate the rest of their outlying applications into our systems. And that's what's playing. And that's why the turn remains so low, because they're actually taking more products, not looking to offset products.

Thanks, Stuart. The second half of the question is about NRR and does it look like it's slowing in the second half? I think we manage the business on a full year cycle and we manage the business within all of our metrics and the heartbeat. So I don't read into first half, second half. It depends where big deals happen. Perhaps like we talk about government all the time, they're very lumpy. Higher education has very lumpy deals. We manage the business over a full year, number one. And we're very happy with the result in NRR. And second part is our heartbeats are very important to us. We have to deliver for our customers as well. So all the metrics you saw met all of our expectations. Thanks, Cheryl.

Thank you. Ladies and gentlemen, there are no further questions at this time, which concludes our conference for today. Thank you all for participating. You may now disconnect.