NowVertical Group Inc.

And welcome to Now Vertical's earning call for the fourth quarter of our fiscal year 2023, which ended on December 31st of 2023. We'd like to first off, thank you for your patience. Our intention was to release this on the 29th and at the request of our auditors for some extra time, as they were working through some of the complexities and volume around our acquisitions in 2023, they needed a little more time to complete their review. My name is Glenn Nelson. I'm the Vice President of IR at Now Vertical. And with me on the call today is Sandeep Mandirata, our Chief Executive Officer and Director of Now Vertical. He's been in his role since 2024. Before joining Now Vertical, he led Acrotrend, for 15 years, which was acquired by now in 2023 and was one of the most profitable businesses within our portfolio with a 35% EBITDA market. He spent 25 years in the data and analytics space and has held key roles in Metric Sphere, Deloitte and Datamatics, sorry. Also with us is Christine Nelson, our interim CFP financial officer. She's been with now since 2022 and previously served as our vice president finance. Prior to joining now, she held the position of finance director at Brookfield Asset Management. And lastly, we have Andre Garber, who is co-founder and chief development officer here with Now Beautiful. And they'll all be with us to answer questions at the end of this call. So before markets opened yesterday, we issued our press release with details regarding our fourth quarter results, which can be accessed on our website at nowvertical.com. A replay of this call will also be made available following the conclusion at the same place. During the call today, we'll make some statements related to our business that may be considered forward-looking. These statements reflect our view only as of today and are subject to a variety of risks and uncertainties that could differ from actual results. A further discussion of material risks and other important factors that could affect our actual results. You can refer to our filings on CETA and also during the course of the call today, we'll refer to certain non-IFRS measures. The reconciliation of those IFRS to non-IFRS are included in our press release as well as our MD&A. After the prepared portion of the call, we'll take questions and answers. And so there's a button at the bottom of your screen that will allow you to put your questions in here. And with that, I would like to turn the call over to Sandeep. Good morning, Sandeep.

Thanks, Glenn, and a very warm welcome to everyone. I'll just run over the agenda and the four key areas that we are going to be covering today in this webinar. For the people who are joining us new, I thought it would be a good idea to cover the overview of NowVertical and just give you an idea of what we do and how our clients experience the work we do for them. The second area is going to be 2023 financial updates. And Christine, our interim CFO, is going to be taking us through the detailed metrics from the 2023 financials. And then 2024 financial strategy. What I specifically want to cover here is our cash position as the business coming out of 2023 and how we are dealing with that in 2024. And finally, just wanted to give you some color on how the operating strategy that we are bringing into 2024 is shaping up. That's the agenda. And with that, I'll go into the now vertical overview. Just addressing what is the market that we are operating in. If you look at the prediction, the AI market is expected to grow pretty large and fast. It's over 35% category in the next five to six years, which is phenomenal. This is, in our opinion, one of the largest waves of the technology transformation that we are experiencing and about to experience. Now, what's happening because of that technology wave that we are having, and this is about to disrupt pretty much every industry and every market that we have on this planet, And because of that, what's happening is there is a lot of pressure on the enterprises. There's a lot of pressure on the CEOs. And as we see here, 70% of the CEOs, they have already heavily invested in regenerative AI. And they see that for their own industry as a competitive edge in the future. So that's quite an interesting metric. And because of the pace at which the technology is evolving and it's changing the industry, the pressure also is on the CEOs to demonstrate the return on their investments in next three to five years and demonstrate the value to the shareholders as well. So that's what we are riding. But as it happens in any kind of technology transformation, the enterprises are overwhelmed. Most of the times they struggle to really maximize the value and the return from the technology. And that's what is happening in the data and AI space as well. And to be fair to the enterprises, they are focused on running their own business and taking care of their own business model. Data and AI may not necessarily be the core focus for them. And what we are experiencing is about 36% of the AI projects fail. They fail to deliver any results or ROI. And 85% of the AI projects are slowed down by the organizational limitations. And these limitations actually stem from different areas of the business. But the point is, how do these enterprises look at the AI projects and move them into their core strategy drivers of the business? What we see is the data is growing. There are data complexities in the business. Data is growing in volumes and complexity. And the rate is about 39%. And because of that, the other problem enterprises are facing is about 73% of them are struggling with the data silos. So that's the data complexity that all the brands, all the businesses are facing in the world. And whenever we have the technology adoption, there is always very large emphasis on how knowledgeable or what kind of skills and expertise do you have to go through that transformation with the technology. And what we are experiencing is about 82% of the organizations do not have the expected knowledgeable staff to work on the big data projects and manage and handle that data. And even in the cases where the organizations have the capability, a lot of them are already overwhelmed. 97% of the data engineers and the data scientists are already burned out. And this presents different level of the AI complexity as well as to how enterprises prepare themselves to leverage the technology transformation that we are going through. And at the same time, the AI and the data transformation, they are also changing the way in which organizations operate and structure themselves, right? So that brings in the organizational complexity, not only from the knowledge base they need to carry, but also how do they structure themselves and leverage the technology properly. And this is where we operate. Now Vertical brings in the capabilities to solve the data complexities, the AI complexities, and the organizational complexities together. And we are right at that intersection where we are capable of bringing in the return on investment from their AI investments. How we do this is we help our clients transform their data into business value with AI. And we do it really fast. Why we are able to put in this claim that we do it fast is because we have done it for many different industries. We have delivered different kinds of results. We have worked with different departments and functions in various industries and geographies. And we have the proven method, we have the proven track record of delivering successful projects, helping the businesses either through their transformation, maybe a large transformation, or just helping them build the capabilities and stand with them strong so that they can see the success from their investment. Some of the examples I just want to bring up from the large set of clients that we have. Adobe, for example, a giant in the technology industry, we have done some work in their marketing department and it delivered 39% increase in customer lifetime value. For the size of Adobe, that's massive. Raisin, one of the large energy companies in Brazil, what we have been able to do for them is creation of their internal data market, if you like, which helped them democratize all the insights and created the foundation for the AI projects to be delivered on that data market. Nuranka X, you know, this is in Argentina. We delivered 80% effectiveness on the next best action prediction. Blinds2Go, a very large global online retailer of the blinds. And we have been able to impact their customer services department by improving their customer experience and bringing cost-effective operations to the forefront. The Economist, as you know, is a media giant. And we have done a lot of work over more than three years with The Economist. And one of the things we delivered for them was 27% increase in first-year subscriber retention. Technocom in the manufacturing industry, 40% reduction from the computer vision solution from their 4T production. These are just some of the examples of how our clients experience the work we do for them, which is quite phenomenal. And in many cases, it's quite mission critical for their growth and in some cases, the cost reduction as well. Just a certain insight about how Now Vertical has grown. We IPO'd in July 2021, and since then, in the last three years, we have acquired 12 really phenomenal businesses across the globe. That has brought us more than 600 people across five continents. So very strong team, very strong capability, and it's coming from various acquisitions that have done, so brings in some great assets to the business. We have been working with some of the industry standard cloud platforms like Azure, AWS, Snowflake, Google Cloud, and there are many others. What we have got as base is a portfolio of 250 plus clients across our business, which is really a significant portfolio for our size of the business. Out of that, we've got about 100 plus clients that are key accounts, as we call them, and they are the enterprise large brands. You see some of the names on the slide here, Sky, Disney, NHS, LATAM, Airlines, Informa, GlaxoSmithKline. These are some of the clients that we have worked with. So I'll stop here and just hand it over to Christine. I'm here to answer any question about Now Vertical later on, as Glenn mentioned in the Q&A section. But I'll hand it over to Christine right now to take us to the 2023 financial update.

Thank you, Dan. Thank you. And thank you everyone for joining today. So I'm going to start off by just going through some select highlights from our Q4 2023 and fiscal year 2023 results. So in Q4, our revenue was 10.1 million, which is a 20% increase over Q4 2022. And gross profit was 6.3 million, which also is about a 62% gross profit margin, a 75% increase over Q4 2022. Adjusted EBITDA was $0.8 million, which is a 358% increase over Q4 2022. For the fiscal year, we had $51.7 million of revenue, which is a 91% increase over 2022. Gross profit was $26.6 million, which is about a 52% profit margin and 130% increase over 2022. And adjusted EBITDA was $5.4 million, which is about a 378% increase over 2022. Obviously, we're all proud of all these large increases year over year. However, we do want to address our revenue numbers for Q4 2023 and for the fiscal year. just weren't as high as expected. And there are some specific reasons for that. And we just wanted to hit them right off the bat and make sure everyone was aware of these. So the first situation we had is in 2022, we acquired 4BI, which for the majority of it, the revenue is from Argentina. And Argentina is a hyperinflationary economy. So we expect a devaluation of their currency every quarter. which we which we include in our forecasts and generally it's offset by an increase in their inflation. However, in Q4, there was a major change in the government there, and this resulted in a 131% decrease in the Argentine peso from Q3 to Q4. So it went from 349 in Q3 to 805 in Q4. Now, under IFRS, they require us to restate our prior quarter results So anything that's in within the same fiscal year. So that means we had to restate Q1 to Q3 results using that Q4, that December 31st exchange rate. And we're also required to record that entire adjustment in the current quarter. So we can't like push it back and restate the prior quarter results. So when you see the 10.1 million, we just wanted to highlight that this is not representative of our real run rate because it does include a 4.5 million FX revaluation related to Q1 to Q3. So without that and pushing that pro forma back into the actual quarters that it relates to, really our run rate for Q4 would have been 14.6 million. Then there's another adjustment as well to address the $51.7 million. So in 2023, we acquired a company, ATEN, which operates in LATAM. And a significant portion of their revenue is reselling licensed subscriptions. Now, when we had acquired this company, management had determined us to be a principal under IFRS guidelines. which means reporting revenue growth and advertising it over the period of this description. Well, throughout the year, we really dug in deep into the contractual arrangements and also through conversations with EY or auditors, we came to the conclusion that actually we're an agent. And this means two things from an accounting perspective. It means number one, you recognize revenue at the point of delivery because we don't own the IP or the key. As soon as we deliver it to our customer, even if the subscription agreement is 12 months long, we record the revenue right then and there. And the second impact, which I'm addressing in the slide, is that revenue has to be reported net of costs. So we had a 5.9 million reallocation related to, you know, the entire 2020 year from costs of revenue to revenue. So this has a nil impact in our actual bottom line. So gross profit doesn't actually change. It's just moving the amounts from cost of revenue to revenue. And so without this reallocation, revenue would have been about $57.2 million. And then if you look at both of these adjustments in aggregate, so assuming there was no Argentine devaluation in Q4 and prior to adjusting this cost of revenue to revenue, our revenue would have been about $62.1 million. So next, I want to just walk through revenue quarter over quarter. So what you're looking at here is the dark blue is the reported revenue that you'll see in the MD&A. And then in the light blue, you'll see performer revenue, which has been restated for that Argentine devaluation in Q4, which I just spoke about. So we've essentially put the devaluation into the quarters that it actually relates to. And as you can see, as a result, our consolidated pro forma revenue is really trending positively. Every quarter it is increasing, which we just wanted to really highlight here. Next, I'll go over the same thing, but just with our adjusted EBITDA. So adjusted EBITDA is a non-OIFRS measure that we use to measure the performances internally of all of our business units. And so similar to the last slide, The adjusted EBITDA in dark blue is what you see in the MD&A, and then the adjusted EBITDA pro forma is adjusting that FX impact into the appropriate quarters. So really similar story with revenue, but really trending positively, going from a 0% margin in Q1 up to 13% in Q4. And overall, we have a 10% EBITDA overall throughout the whole year. So Q3 was a little bit of a big, a little bit increase there. We had a larger contract that occurred, but overall trending really positively. And, you know, the impact, you know, one of the focuses that managements have and continues to have is reducing overhead costs, both corporate and at the BU level. And as you can see, like the work that we've done is really, we can be shown this in our EBITDA analysis here. And there's even more opportunities for us to do this. And we're really focusing on this in 2024. We want to focus on increasing these margins, reducing costs wherever possible. Next, I just want to just kind of just address quickly kind of our revenue mix, what it looks like, what markets, what it's made up of. So we are in primarily two markets. About 62% of our revenue is in North America and MEM markets, and then about 38% in LATAM. In North America, this also does include a significant portion of U.S. government contracts as well. As for what we're offering to our clients, about 80% of our services and solutions, and then 20% is licenses, maintenance, and other SAVs. And so this 20% includes that license reseller revenue that I spoke about previously. It also includes our SAV sales of the product that we've actually, you know, we own the IP, we generate internally. So that's included there as well. And with that, I'll hand it back to you, Sandy.

Thanks very much, Christine. Just before I go to the other slide, which is now going to be the 2024 financial strategy. And I know there have been a lot of questions. I've spoken with so many of you in the last 114 days that I've been in this position. There are a lot of questions about what is the feasibility of the business from the cash position and how is the management team going to be managing this? And one of the things that was very clear to me when I took over as the chief exec role and brought in the new strategy, which was primarily driven by the organic growth and profitability, I knew one thing for sure that we needed to take care of one critical aspect within the business and the financial strategy, which is our cash position. And Andre and I have worked relentlessly, countless hours, nights and weekends. And we have done a lot of work in the last hundred days to impact that cash position and bring in a substantial difference on that cash position. So I just wanted to mention that, you know, there has been a lot of work that's gone in there and I'll show you where exactly we have brought in that impact in the business. Here it is. So the very first part here is on the debit payments. What I mean by debit payments is these are all the liabilities which is in tune of $5.1 million. That's what our starting position was in January, 2024. We had $5.1 million of debit payments which are primarily associated with the acquisition liabilities. And what stood out for us was we definitely had to manage this part, right, for us to really have the future strategy for Now Vertical. What also stood out for us was 60% of this 5.1 million was really coming out from the two business units that we had acquired. One is Code BI in LATAM, and the other one was Acrotrend, which I was the CEO of Acrotrend before we sold it. And what we have done is a lot of work with all the shareholders and the stakeholders here to understand how we can move this liability for the business. And what I'm glad to share is that we have agreed with Core BI to move more than 1 million of their liability, which was 1.375 million on 1st of June. First of Jan 2024, we have agreed to move it to 2025, over $1 million of that liability. And I really want to give a big shout out here to all of our leaders, you know, Santiago, who facilitated a lot of these conversations, Leandro and Mauricio, who were the previous shareholders of Core BI. And they have really demonstrated their commitment towards the business and agreed to get on this journey with us. They are in operating roles in the business and completely committed. And this is one of the agreements that we have had with them. And at the same time, From the Accrotrend perspective, not only we have been able to move the liabilities to 2025, but one other thing we have been able to do is invest a lot of our hard-earned cash through the earnouts and holdbacks that were already linked with the acquisition into the stocks. So we are buying significant amount of stocks with that cash. And I just want to call out Shailesh who has been very supportive and completely committed to the business and has agreed to support the Accrotrends restructure of the SBA. which not only reduces the liability on the business, but at the same time, carves out the path for the integration as well, a proper integration, because now the earn-outs are not going to be linked with Accrotrend's results. Now the earn-out, the future incentives, if you like, are going to be linked with the results and the performance of the business. So that was one of the areas. The second area was, so this has moved $2.6 million into 2025, which is substantial for us. The other part, as you know, the corporate cost was quite high and that was aligned to the original strategy of now vertical of the roll-ups and the acquisitions that were being done. But now that we are more moving into the organic growth and the integrated strategy that will be driven by profitability, we thought the corporate cost was quite high. So we have been able to do a lot of work there and Andre and Christine have been helping me to reduce that corporate cost quite significantly. Another area that we had identified after all the analysis that we had done was our now vertical software group was, although it was generating really healthy revenue, it was not profitable for us. And this is one of the shift that we have brought about. The product group is now restructured completely and it is going to be driven by profitability and customer centricity rather than the traditional product development or the software development that requires huge capital investment. And this is where our EVP of tech and technology and products, Mostafa, has been really helpful. And big shout out to Mostafa as well, who has agreed to restructure the Smartlytics SPA and align his earn-out as well completely to the integrated now vertical. So this has resulted in $3.1 million of annualized savings. The product group is completely restructured. The corporate costs have been brought down. The third part is the EDC, who is our senior lender. But I would like Andre to talk about this, because this is the relationship that he has fostered so nicely and has been working around some of these challenges so nicely with us. Andre, would you like to just give some updates here?

Thanks, Sandeep, and good morning, everyone. Really just hats off to EDC, you know, Export Development Canada for being such a big supporter of the business. You know, since we've even started working with EDC, we felt like it was a natural fit being a Canadian headquartered company, putting down global roots as well. So really just working with EDC and EDC supporting our integration strategy and plan for growth into the future, EDC has agreed to defer over $1.25 million. Everything's in USD, obviously. of aggregate principal into November 2028, which is a huge support and a great buy-in from them as our senior lender. So thanks to EDC for that structure.

Wonderful. Thanks, Andre. Hopefully, you'll get some more sleep now in the coming weeks. What this has resulted in is almost $7 million of our cash position shifted. And that's massive difference for us. And this is quite substantial for us to operate the business quite differently and apply that new strategy and give it proper runway while we are building this new plane to take off from that runway. One of the things I wanted to also mention is I was made aware of some of the sentiments within our shareholders and investors. I spoke with many of them as well when I took over as chief exec. And there was some skepticism about our cash position and our need to raise capital immediately. So much so that people were thinking that we may have to raise the capital by January or February this year. The positive news is we are in May without having raised any capital and we are sustaining. And I must also mention a little thing that we do not foresee any need for any equity capital financing in the near future. One of the things that we are really cautious about is protecting our shareholder value. And we just want to make sure that we are operating the business in a way in very efficient and profitable ways and the way it should be done. And this is what I believe in completely, as I said in the January webinar as well. I really believe in running the business in sustainable ways and deploy all the methods that are possible to make it profitable. And what I see here within our business is massive headroom. We are operating at about 7% adjusted EBITDA from 2023 numbers. And as you know, Accrotrend has been operating at 35%. And there is no reason why we cannot take now vertical on that journey in that direction. Of course, it's not going to happen overnight, but we are absolutely committed here. The whole leadership team is quite invested and committed to deliver those results and bring in those metrics to now vertical. That's what our new strategy is going to be residing on, you know, sustainability, profitability, and an integrated world that has a lot more potential than what we see right now. And just a bit of the context on where this new strategy is, I think, moving. And there are these key pillars we are moving from. the roll-up and acquisition-based strategy, which was very cash-intensive and always was reliant on the capital raise. And it has brought in some really good assets to the business. If you look at all the acquisitions that we have done, they are all phenomenal. And we have got $51.7 million revenue, phenomenal portfolio of the clients. We are right at the center of In the AI transformations for our clients, you have seen some of the results. And what we are now transforming that into is the new sustainable, profitable, integrated business that is now going to be done on these four pillars right now, which are the strategic account growth opportunities, like I said, you know, 100 plus strategic accounts within the business. And there is so much of headroom for us to grow there when we bring in all the propositions together from all the business units. Integrated business units is going to bring in not only the efficiencies, but it will also bring in the right assets. We are also creating next wave of the leadership. I'm so amazed at the talent we have got in the business. We are already working towards creating that next wave of the leadership in the business that is going to help us grow the business further. Unifying our global design and strategy, this work is almost complete. I would like to come in front of you in a couple of weeks' time and give you more updates on how we are consolidating our into one solution and services catalog and how the product strategy is going to play in that solutions and services proposition for our clients. And then, of course, the stronger proposition mix Christine already showed how our revenue is distributed within the license software sales and the maintenance and the SaaS software and how it's distributed on the solutions and services side. Again, we have got such a massive potential there of moving that mix and bring about more profitability and much better engagement with our clients. So what I see here is what is really energizing for me is that there are so many ingredients in the business for us to really leverage and create something fantastic out of this business. And just wanted to mention that I'm completely aligning myself and my objectives with yourselves. I'm investing quite heavily into the business. I'm buying stock. And I think it's a fantastic opportunity that I saw where this is that juncture where we are bringing up about phenomenal changes from significant changes, most needed changes into the strategy. And from here, the cash position is going to get much better and better. The growth potential is going to get much better and better. So with that, I'll just stop here and I'll open it up for any questions.

Perfect. Thank you, everyone. So at the bottom of your screen, you'll see the Q&A button. Please feel free to ask a question and we can address those as we go. First off, we have someone here from an investor. Do you think it's necessary to make a capital increase to be able to face 2024? I think we've addressed that a little bit. Did you want to? Put some more color on that tending, possibly.

Sorry, I just had a small glitch here. I just lost you for a second. Glenn, could you just repeat that question, please?

Yes. It says, do you think it's necessary to make a capital increase to be able to face 2024? I think we've addressed that a little bit already.

Yes.

Yes.

And I think I was expecting that question. I was expecting many people to be asking that question because I had those questions when I took over as the chief exec. And that was one of the things I wanted to reflect to everyone, that this is one of the key areas of our financial strategy that we are solving. And as you saw, we have shifted our cash position quite substantially. And many of those payments as well that we are dealing with, that you see in 2.6 million from the deferred liability, a lot of that is going to be paid in the second half of the year. So we are buying time for our strategy to be in flight, in action and delivering some results to us on the efficiencies and then the payments come on board. So really glad, really glad to share that we are in a much better position on the cash and it's just going to get better and better. But yeah, we do not need, we do not foresee any immediate needs for capital raise.

And this question is from Oliver Kent. Can you touch, please touch base a little bit on the leadership compensation and how it's correlated to the financial success of now?

No, that's wonderful question. And just so you know, you know, every business unit that was onboarded, that was compensated on the performance. There was a threshold that was mentioned to them, and then over and above, there was the rewards that everybody will take away. That's exactly how the compensation structure is going to be going forward as well, although we are becoming more and more integrated. But even now, while we are creating that new leadership team and we are evolving our structure, every role is going to be compensated based on the performance. And we will disclose more and more of that in the future. But I'm a big fan of performance-driven compensation, and that's exactly what we are bringing into the business.

This next question is from Rob Goff. It says that you noted a positive move with EDC. Can you provide an update regarding MVB?

Sure. Thanks. Just touching briefly on it. Our facility with MVB is at one of our operating company levels. That facility has both a term loan and a line of credit that has $2 million USD on it. And we're currently drawn about a half a million of that or so on that line. So we have access to about the rest of that 2 million. And that's just cashflow based.

Great. The next question is also from Rob Goff. Christine noted the focus on improving EBITDA margins. Do you also see moves to increase gross margins?

100%. Yes, Christine, I can take that particular question if that's okay. And please add if you want to. So our reported EBITDA margins for 2023 are at 52%. And in some parts of our business, it's more than 52%. In others, it's a little bit less. And we are taking a very critical view as well of how the business is getting integrated, what's integratable, what's our core, what's our non-core as well. And all of that deep dive and analysis is happening. A lot of that has happened. A lot of that is happening going forward as well. But as the technology consulting and solutions and services business, you know, we would like to aim for this metric to be around 60% going forward, you know. I'm not giving any guidance for the next quarter or two quarters. This is over time. But there is no reason that we cannot be aiming for the improvement on the gross margin. However, I would say for 2024, somewhere around, say, 55% to 56% is going to be more reasonable.

Awesome.

GP.

OK. The next question is from Julian Luke. Do you expect double-digit organic growth in 2024?

Would love to, Julian. That's exactly what the game is going to be, 100%. But where we are right now, as you can appreciate, we are going through this transformation and transition phase. Integrating 12 different business units that are across five continents is not a small task. We are not overwhelmed with that. We are really on track on integration strategy. But one of the things that we would first want to make sure is that our foundation is right. And we have proven with some of our quarters numbers, our results, that we are able to demonstrate the growth with that new strategy. And then I think we will get into the guidance stage to the market that, you know, can we grow 15 percent? Can we go 25 percent? Can we go above that? So not yet, but absolutely is going to be the key thing. Organic growth is going to be our key strategy anyways.

Okay, thank you. And the next question is from Rob Goff. Can you update the expected cash to be received from audience?

Yeah, Christine, do you want to take that one or Andre? I mean, just very, just very briefly, you know, there's as part of, of, and, and there's also another question, uh, looks like from Jack cutting in on, uh, a video, uh, revenue decrease. So just explaining that, um, in on May, uh, May 9th, I believe 2023, we had sold, uh, assets from a video, um, to Audience Limited, a company based out of the UK. And so, Jack, that's sort of that kind of marginal revenue decrease explained there in terms of what we sold off that was not core. And the proceeds that we're expecting to receive is 2.2 million. from May 9, 2023 to May 9, 2025. And that's just going on a payment schedule. And so that's all happening within the next 12 months.

Great. The next question is from Hernan Gomez. Can you shed some light on the 810 revenue? When the acquisition was announced, revenue was expected there was about $23.5 million. And it looks like it's coming in about at half of that.

Christine, do you want to take that, please?

Yeah, I can take that. So this is made mostly to do with the reseller changing our accounting policy from principal to agent that I spoke about previously. So the revenue for 2023 was about $12.6 million. And then we had the adjustment of $5.9. So previously that was the $5.9 million was allocated to cost of sales. Now it's reducing revenue. So that brings us up to about $18.5 million. And the other missing portion is there was two impacts I spoke about. Number one was you have to recognize revenue at the point of sale, at the point of delivery. And previously we had, you know, deferred revenue and deferred costs set up at the opening balance sheet. Then we were recognizing throughout the year that related to this reseller revenue. So we had to actually reverse that. Now it was, you know, there was a, it's a non-cash impact, but that did reduce the overall revenue as well.

Great. Thank you. Next question is from Gareth K. I'm interested in understanding a bit more of the operations in Argentina, whether most of the work undertaken by Core BI team in Argentina is primarily from Argentinian customers or serving other customers.

Yes. So, yes, we are already shifting that strategy. But yes, a lot of that, you know, majority of that revenue right now would be in Argentina, I would say probably about 80% of that revenue is coming from the Argentinian customers, but many of them are global in nature as well. With this new integration strategy that I talked about, what you would also see is Argentina has got fantastic asset on our technology expertise and the kind of services they deliver for their clients in that business, in that geography. And this can be leveraged across the rest of the business quite effectively. And we already have got the examples of one of our large clients in North America that's leveraging our expertise in core BI as well as in India. This is now a nicely blended delivery model that we have created. And just to give you an example on that, we have got 55% increase in our margins just from without changing any kind of contractual agreements with our clients. We have been able to get about 55% margins increase in that one case, if you like. And there are others. So we are building on that strategy where Argentina capabilities can be leveraged in the other parts of the business, which not only addresses our integration focus, but it also hedges us from the devaluation of the currency to an extent.

Right. And part of that is the currency, if that clients of Core BI in Argentina, what currency are they typically building?

Yeah, so like I said, for the Argentinian clients, it will be in pesos. And for some of the work that is happening outside of Argentina, of course, it's in US dollars or it will be in Great British Pound. There are clients in the UK as well or in euros. So some of that is already happening. But right now, I would say roughly 80% of that currency is being built in. The clients are being built in Argentinian pesos.

Right. And how did we deal with the salaries of Argentinian employees? Was it adjusted with inflation in the region?

Yeah, do you want to take that, Christine?

Yes, they are. The salaries are adjusted in line with the government requirements on an ongoing basis to reflect their inflation there. Yes.

Perfect. The next question is from Brandon Turner. You eloquently outline the opportunity afoot here for now and the scale of opportunity in the market as a whole. And I'm interested to know if you fully scope the headcount talent growth you're going to need in order to execute on this. Is there an attraction strategy being developed for now? And are you seeing success hiring the sellers and engineers from a competitive landscape that we need to capitalize on this position? 100%.

And all of that, do we need to address our talent strategy? Yes. The good news is all of these acquisitions and our business leaders, they have also brought in their talent acquisition strategy. So there is a lot of that already happening because if you appreciate some of these businesses that have been acquired, they have been operating for years. very successfully and they understand the nuances of the local talent market as well. So there is a lot of that understanding that already exists and, you know, operationally we are moving ahead quite nicely on that talent strategy. Having said that, With the growth projections that we are going to have and the potential we have, we will be investing in some of the other capabilities as well going forward. And as the AI technology space is evolving, our eyes are absolutely on hiring the best talent from the market in various geographies. That's happening as well. At the same time, we are also going to be looking at strengthening our commercial capabilities that are, you know, from the sales, from marketing perspective, from account management perspective. And again, we will be looking at our competitive landscape to hire some of the best talent from there. So yes, some of this is already addressed and some of the other things are going to be addressed as we go, but it's 100% on our radar. Great.

Thanks. The next question is from Jay Colombo. And we do hear this from investors fairly frequently. And so why have we chosen not to be press releasing new client acquisition announcements since January 24th?

I think I would take responsibility on one of the things, which is we have not been as communicative to everyone in the last 100 days or so, if you like. And there have been some of the reasons for that, which is, like I showed you on that particular slide, where we were doing a lot of foundational work so that we can really make this business stand on a sustainable platform. And that's the reason why we have not been as communicative, but now we are going to be shifting the gears. We are going to be communicating with you all the good things that we are doing. As I mentioned, I'll bring up the whole integration strategy and the change we have brought about, the impact we are having with our clients as well. And I'll bring in all those new things and the story to the market. Along with the leadership team, there are some phenomenal things that we are doing even within our product group and the solutions and services catalog. We'll bring it all to you. In terms of specifically around the client acquisition, there have been new client acquisitions, absolutely, in the last 100 days or so. But that's not our key focus right now. If you look at our strategy, the four pillars, the screen that you have got there, our key strategy is the organic growth, first of all, looking within our key accounts. And these are our strategic accounts. And there's so much of headroom that we have got there. So there are new acquisitions that we have absolutely done within the business, but the focus is a lot more on growing our key accounts and the revenue from there. But going forward, you will see a lot more communication and news in this regard.

This is from an investor. Any future plans for FX hedging in Argentina and pesos with it being so volatile?

Yes, there are some techniques that we are already putting in place and Christine can talk more about that. So there are some of the hedging things that we anyways do, but there are some of the other strategies that we could deploy as well to hedge ourselves from that devaluation challenge. and the volatility in the market, if you like. So those things I talked about, how we can operate differently and how we can utilize the expertise there, but the revenue is recognized outside of Argentina. And there are a couple of other strategies, but our short-term goal is to really create that right foundation, leverage the capabilities across the business, and then we bring in some of the other strategies into execution as well. So 100% on it. This is not going unnoticed and it will be actioned.

Right. So I think probably lastly here, any insights on future contracts or large contracts being renewed or grown?

Oh, yeah. I mean, just to give you an idea, we have already got secured revenue in the range of 60% of our 2023 revenue already. That's the secured, signed secured revenue. that we already have in the business. So that's quite massive. And that's only in a little over four months into this year. So that's a nice foundation of the secured revenue. And at the same time, we have got some really healthy pipeline, both from the government as well as the public and the private space. So that pipeline is pretty strong and we have got this whole rest of the seven little over seven months to make sure that we not only hit the target, but we go over our targets.

Great. Well, thank you. I think that concludes the questions that we have here. If there's any more, please feel free to, we'll give it one more minute to add any others. All right. Well, Thank you very much. And I'll pass it back to you, Sandeep, just to complete.

Thank you very much, everyone. We really, really appreciate your time and all the support that you have shown to us in the last few years. And we hope you'll keep supporting us. You know, that support means a lot to us. And I'm really confident that we are building a business that we all are going to feel really proud about to be engaged with and having a piece of. So thank you very much. And we will be in touch soon on the Q1 results for 2024. And like I said, there will be more updates we will come up with as to how our integration strategy is going and what are those new things that are shaping up.

Thank you.