NowVertical Group Inc.

presentation and on the presentation materials related to these earnings press release and financial statements that are available on the company's website, Investor Relations section and at .nowvertical.com and on the cedar.com website as -r.com. I'd also like to remind everyone that all dollar figures discussed today are in United States dollars. Leading today's presentation will be Sandeep Madirata, the company chief executive officer, was also joined by Christine Nelson, the company chief financial officer and Andre Garber, the company chief development officer. We will break for questions at the end of management's formal remarks. As a reminder, we're only taking questions to the web portal today. If you're listening over the telephone, please access the web link in the company notice for the earnings presentation press release announced last week. With that said, once again, thank you for joining us. And now I'll turn the call over to Sandeep to begin this earnings webinar.

Good morning, good afternoon, good evening, everyone. Thanks very much, Glenn. And I'm very excited to have you all here to present our Q4 2024 and the whole year results. The reasons for the excitement is very obvious. I'm confident most of you may have already seen the press release. It's been a fantastic quarter and the year. What a journey it's been. And we are here to take you through all of the hard work that's gone in there and the results that we have been able to achieve for Now Vertical. Just as we get into the details of our results, before that, what I would do is just as a refresher for all the shareholders that are joining the call today and some of the new investors who may be looking at our story for the very first time and joining the earnings call for the first time. I'll give you a little bit of a background of Now Vertical, who we are, what we do and how we got here before we get into those numbers and the results for Q4 and the year results. Okay, with that, just a brief background of the market that we are working in. This is the rapidly expanding market of data and AI technologies that's been growing quite phenomenally in the last few years. And the growth rate is only going to be accelerated by all the improvements that are happening in these technologies. What's also happening because of that is there is the increasing challenges and the pressures, especially on the C-suite in these businesses, especially the large enterprises to gain the benefit from these technologies and deliver the return on investments. Now the real challenge for the enterprises where it comes from is all the overlapping complexities that the enterprises have. And these complexities are coming from the growing volume of data complexity. How do you embrace these new AI technologies into the business and how do you embed them into the growth for your business? And also the organizational complexities, which are primarily driven by, do I have the right bandwidth and the in-house capabilities to deal with the change and deliver the return on these technologies? And that's exactly where we come in into the overlapping of these complexities and helping these clients solve many of these challenges. We are working with many hyperscalers and also our own proprietary software. And we bring these technologies to our clients to help them transform their data into tangible business value with data and AI. And we do it really fast for them. What this has resulted in is some of these large businesses that are on our portfolio as our clients. 250 clients overall with Now Vertical, more than that. And the key thing is out of 250 clients, majority of them are the enterprise clients. And we'll talk about those enterprise clients in some more depth. But these are some of the brands that are on the portfolio of Now Vertical. And if you look at the customer lifetime value of some of these clients, we have created really long-term meaningful relationships with these clients, which is then translated into very high degree of the recurring and reoccurring revenue that we get from our clients. Now, how did we get there? The phase one of Now Vertical was primarily focused on growing by acquisitions. And what we have done in a very short span of time between 2020 and 2023, Now Vertical has acquired 12 strategic businesses. This is to gain not just the critical mass on the capabilities, but also the critical mass on the revenue. That's what happened until February of 2023. What we then looked at is how do we really get the real value? How do we unlock the potential of growth from the business? And this is when we brought in the one brand, one business strategy for Now Vertical to integrate the whole business. And this is when I was brought in as the chief exec in January 2024. That's another story of when I walked into the office on the very first day, what kind of different challenges I saw in there. I'll also talk about the opportunities and the assets we saw in the business and how we are exploring them and making them work in our benefit. So how did we do on this one brand, one business integration led strategy? First of all, we brought in the right leaders, the right people in the management seat, people who have been running their businesses successfully. These are the people who understand and know the business really, really well. And we brought them to the table and gave them the right voice so that we can change all aspects of the business properly with the right leadership team in the seats. The other thing was while we were analyzing all the 12 acquisitions, we also realized and acknowledged that there are certain acquisitions that are just not fitting into our future vision and the integration strategy. And we made some tough and difficult decisions, but the right decisions for the business and we divested from those assets. The most notable asset we divested in May 2024 was Allegiant Defense. And I've done a small video on that, which is available on our website for the reasons of the divestitures. What this has also led to is major performance improvements in our business and a cleanup, complete cleanup of the balance sheet. And Christine and I will spend a lot of time in today's presentation going over the results and the hard work that's gone to improve the performance of the business and clean up the balance sheet. But overall, just a phenomenal amount of effort relentlessly executing on this one brand, one business strategy in 2024. So what we have got now is we have had the collection of businesses that were put together. And what we have turned that into and what we have created out of this is a business that's one now vertical, one business. And what's that allowing us to do now is to help us execute on the organic growth strategy in our enterprise accounts, especially and all the growth markets that we are embedded in. Our initial short term near term milestone that we have been talking about is the 50 million US dollar revenue run rate and a 10 million US dollar event run rate. That's what we are aiming to get in the near future. So that's a bit of a brief about now vertical and how we got here where we are. We are now in phase three, very clearly in phase three, and the whole management team, everybody in the business is executing on the organic growth. Okay, so let's talk about what the strongest quarter in the history of now vertical looks like. Very proud to be bringing these numbers here, but I must say, I'll probably keep saying this time and again, this is a phenomenal management team effort and everybody involved in the business as well. Just to look at, you know, what the revenue and the EBITDA numbers look like here for us. This growth has been incredible as compared to 2023. The quarter over quarter growth is we clock 10.9 million US in the revenue for Q4 in 2024, which is well ahead of our expected growth targets that we had, which is 50 million run rate revenue. So we are already at 43.2 million of the run rate revenue after Q4. The EBITDA numbers have already surpassed our targets and the goal that we had set, which was $10 million of the run rate EBITDA. This is 2.6 million of our EBITDA number is very strong representation of how much change that we have brought about in the business. So if you look at it from year over year growth, it's just a phenomenal number. But at the same time, what is that percentage of the EBITDA that we have delivered in Q4 that's standing at staggering 24% last quarter after Q3. I said, you know, 19% is already best in class. 24% is over the top. And when I came in as a chief exec, this is what I said, you know, I had sold my business to Nowhatco, which was doing 35% EBITDA. Of course, that was in a smaller private company setup. But this is what I said, you know, this business has got so much of potential to increase the EBITDA and become best in class performance wise. This is what we have been able to deliver in Q4 and demonstrate that what we said and what we thought is available in the business for the growth potential is actually being executed on. The other numbers here about the gross profit rock solid 52%. You know, we said we want to work on 50% gross profit and 20% EBITDA margin roughly that space. And we are already above those targets. So really strong 52% gross profit. But the most important thing is we are properly a profitable business. So that's reflective of, you know, in the net income metric, which is such a massive change from where the business was a year ago. So in 2023, we were incurring losses and now we are properly profitable business with positive net income. That, in my opinion, is just a demonstration of some really healthy positive financial metrics on the business. Year 2024, all over all these results from Q4 and even Q3, they are all reflecting on our yearly numbers as well for 2024. The revenue has been clocked back 39.4%, which is 21% increase. This is despite we were going through a lot of transformation in the business. So not only we have been able to achieve the transformation, we have also been able to put the growth on our revenue on the table. And at the same time, the EBITDA levels again, you know, the improvement on the EBITDA has been throughout the year. Quarter over quarter, we have been improving that. And Christine is going to take you through how we have really got there. But the EBITDA percentage of 18% for the whole year is a very healthy metric for our business, our kind of business in our industry. And this is, again, a massive growth over the last year. Similarly, on the gross profit again for the year as well, we are clocking 52%, very healthy gross profit margin. We just need to make sure we sustain that. We keep it there. We lock it there. And that's going to be a very healthy metric for the business going forward. And again, on the net income side as well, 1.6 million of positive net income, which is just dramatic change from where we were as a loss making business in 2023. All these numbers are excluding the divested businesses. And just I just wanted to give you the flavor of apples to apple comparison. You know, this is our underlying business of net of all the divestments. And this is the business that we are taking forward. So these are the real numbers of the business that's getting forward, you know, since Q3 and Q4 last year. So what are the key drivers for the growth? You know, where we really brought in that growth in the business? Firstly, big shout out to the management team, the leadership team here, who has really executed this strategy at an accelerated pace. And that's why we are where we are with such a brilliant financial metrics on hands. But one of the things, you know, I said, I walked in, I saw many different types of challenges. But at the same time, I spotted the assets and the opportunities that we could unlock in the business. And one of the key area was I mentioned about the enterprise grade clients. We call them in our jargon, we call them as strategic accounts. And this is one of the key pillars. If you remember, when I had brought in this one brand, one business strategy, this was one of the key pillars of having the discipline and the focus on growing these strategic accounts, because there is just so much of headroom and potential that that we could identify. And this is exactly what we have done. So just to give you some idea on the metrics here, the top 30 accounts of Now Vertical bring in about 60 percent of our revenue. So that's quite significant. And hence, the strategic accounts are quite significant for us in 2023, 2022 and 2023. When there was really little or no focus on growing those strategic accounts, we grew them only by three percent or less. However, when we brought in that focus and discipline and the mindset and the management team sat behind this particular focus of growing these strategic accounts, we grew our strategic accounts, our top 30 strategic accounts by 19 percent. And that's the testament of what a discipline focus can do for unlocking of the potential of growth in the business. Not only that, in 2023, there were only three accounts within Now Vertical who were giving us more than a million dollars in revenue per year. We have grown that to eight strategic accounts that are now giving us one million dollars revenue or more. And there is no reason why we can't do that with all 30 accounts and more. Remember, we have got 100 plus strategic accounts, enterprise grade accounts on our portfolio. So there is so much of headroom that's available. And B, what we have done in 2024 is proven this particular strategy. And this is working. This is the right strategy for Now Vertical to focus on. And really proud about what management team has been able to deliver with this in this area. At the same time, I just want to mention that this growth in our revenue and in the business is not coming at the cost of our profitability on the EBITDA margins. The EBITDA margin has been growing as well. We have got it to 24 percent. And if you look at the trajectory of how we grew our EBITDA, that's just quite a phenomenal effort and hard work from the whole team. So we have come to a level which is way beyond the threshold of this is really an exceptional EBITDA margin within our industry. And really glad to have this kind of a performance. This is also underpinned this kind of an efficiency and the performance improvements that we have brought about to deliver this EBITDA is also stemming from how we are now operating our delivery operations. We have got India and Argentina as our delivery powerhouse. And that's now able to serve all of our clients across the globe, which is now also reflecting in how we are improving our EBITDA margins and profitability in the business. My next challenge for the business is to ensure that we are commercializing our solutions and services properly. We are not selling these high value solutions and services properly across the business. We are selling some of these solutions and services really, really well in one part of the business. We need to be bringing that to all parts of the business. And, you know, all of this requires the right kind of investment into the business as well. And I have been around long enough to know this is not a simple path. This is not a straightforward journey. You always want to make sure that you are building the sustainability and the consistent revenue and profit margins into the business and also making it resilient from any kind of storms that we need to weather over a period of time. Any bumps that we see on the road. And what we will be doing is investing some of these profits that now we have put on the table back into the business so that we really bring that sustainable growth into the business and maintain really good profit margins. For me, as you know, coming from the solutions and services background in the data and analytics space, 15 to 20 percent of EBITDA margin is really healthy business. And our aim is going to be to keep it in that range, strong, robust EBITDA margins in the range of 15 to 20 percent. But make sure that you are investing the profits back into the business to make it grow further. Some of the other key highlights in the business. What has evolved in the last year? If you ask me one metric that I'm so proud of and that actually infuses the confidence, the biggest metric that infuses the confidence in the business is the management buy-in. And we have been able to see that shift in the mindset of our management team, the confidence they have on the business. We have seen the shift of our equity going from 7 percent to 27 percent in 2024. And this is just that reflection of it's not just a reflection of the commitment that the management team has, but they have the belief in the growth of the business. They have the belief in the vision and the future of the business. And this is what we are now 27 percent block of the equity within the management team, which is just phenomenal in my opinion. What we also have is we have now integrated our markets quite nicely. So North America and EMEA and Latin America, two markets. That's where we are operating. And it's one unified team that's working together. We all are completely abreast of what's happening in one part of the business. What do we need to do in the other part of the business? How do we need to collaborate and what not? And this is a growth discussion. I'm meeting with my management team all the time. We are discussing growth. We are discussing what are the how do we evolve the strategy? How do we unlock more and more potential in the business? We are bouncing off all the ideas as that one unified team. And this is going to be resulting in certain changes that we bring about in our in our trajectory of growth in the business in the in the coming quarters. Technology partnerships we recently announced. We are premier partners with Google, which is the highest tier of the partnership within Google. And as we know, only three percent of the partners really get there. And we are now bringing that partnership relationship across the whole business. Google is one example. We are also working with Microsoft on Azure platform. We are working with Click. We are one of the top three NSP's of Click in Brazil. So that's that's really one very good credential that we have. Snowflake, AWS and Anapland. And these are the other technologies. So these are six technologies that I mentioned, which bring in about 60 plus percent of our revenue right now, which we absolutely intend to grow further in the coming quarters and years. Solutions and services focus. We are we are building the solutions and services culture in the business. We are underpinning all of our products and our own software within our solutions and services so that they become more valuable and can can offer bigger benefits to our clients. That's the shift, which is also now bringing in one catalog of solutions and services, which are really high value for our clients. They impact the businesses in massive ways. And this is something that we are going to be amplifying in the near future as well. Strategic accounts. I talked about, you know, I talked about only the top 30 accounts. We are now expanding the focus from top 30 accounts to top 50 accounts within our vertical in 2025 to bring in even more accelerated organic growth. And you will see some of the results coming up in the next quarters as well. But these are the areas where we are going to be investing into the business, some of the profits back into the business so that it brings in that sustainable growth and give us more profit in the future. With that, I will hand it over to Christine to take you through some details of the financial metrics.

Thanks, Sandeep. And hi, everyone. I just wanted to start off briefly by mentioning our segment note, which is in our financial statements and our MD&A. You'll notice that we made a change from prior quarters and prior years. So previously, we were kind of breaking out our P&L and our segment note by the individual acquisitions that we were doing. And as Sandeep mentioned, you know, one of the biggest focus in this year was integrating the business. So we have integrated all of our markets. We restructured management with the MD&SBAs to align with our strategy of one brand, one business. You know, our client offerings are consistent globally. And so we have updated our segment note just to be aligned with how we are managing the business and how we're looking at it internally. So now you'll just see, you know, operations, right? So you will no longer see those individual acquisitions that we used to have because we were really just not managing the business that way. Just wanted to start with that. Now we'll go into the revenue performance. And as you can see, we've had consistent revenue performance growth year over year. So we went from 5.7 million to 10.9 million year over year. That's excluding our divested businesses. So that's an increase of 94 percent, including that even including the divested businesses. We had an 8 percent increase in revenue going from 10.1 to 10.9 million this year. Now, it is important to note, you may remember, in Q4 2023, we had an unusually low quarter due to the devaluation of the Argentine peso in that quarter. Which resulted in a 2023 year to date revenues. Just wanted to note that. So not only do we have our year over year growth, we can see the revenue performance of the company is consistently improving quarter over quarter. Even in Q4, which, as we've mentioned before, we do have a bit of seasonality in Q4 when many of our clients actually shut down their businesses for a couple of weeks in December. So normally we would kind of expect a decrease in Q4. We were able to buck that trend this year and actually saw an increase in Q4. So we're incredibly proud of that. And, you know, this growth in revenue quarter over quarter, this consistent growth is a testament to management's commitment to focus in our strategic account growth. It's also related to we also had quite a strong year for our reseller revenue as well. So now we'll talk about EBITDA performance, which is, you know, very similar to revenue. We're seeing an increase quarter over quarter throughout the year, not only in the dollar value, but in our EBITDA margin as well. So we've gone from 0.5 million in Q4 2023 to 2.6 million in Q4 2024. That's excluding the divested businesses. It's a 420% increase. And we also even including divested businesses, we went from 0.8 to 2.6 million year over year, a 79% increase. This is a really important measure for us that not only EBITDA, but the EBITDA margin. This is a key metric that all of our management teams and our markets are working towards. We're always working towards a best in class EBITDA margin of about 20%. You know, the industry standards range from about 15% to 20%. And you can see we've now hit that for the last three quarter. We have hit our targets. And this, of course, is a direct result as our increase, obviously, in revenue is contributing to this, as well as that move to the operator first model, which we have spoken about before. But it's really allowed us to drastically reduce our costs, focusing on capitalizing on the existing expertise that were already existing within the markets. So not only reducing, say, corporate overhead, but also we were able to reduce admin costs in the markets themselves, capitalizing on expertise that are existing globally. And we're capital links. And when we're integrating, we're able to capitalize on those costs. Next, we'll look at operating performance. So we're going to be looking at a few metrics on this slide, but we're going to start with admin expenses. So just really speaking to them, that previous slide that moved to the operator first model has allowed us to drastically reduce costs. So going from 4.9 million in Q4 2023 to 3 million in Q4 2024. That is a 40% decrease, almost $2 million a decrease in costs. So this has been a huge focus of management this past year, is to reduce our overhead costs, reduce costs wherever possible, make us more efficient. And the ability to do that, to do this, and this increase, this, sorry, this decrease in costs, has speaks to the commitment of both corporate and the markets of that move to that operator first model. And this is one of the key factors that we're seeing an increase in the EBITDA margin. And this, this really important to highlight here that our reduction in admin costs has not come at a cost to our operational performance. As you can see, admin costs are consistently going down and our gross margin, which, of course, does not include any admin, it's just revenue and cost of sales, is increasing. So it goes to show that this decrease in admin costs is not only allowing us to sustain our operating performance, it's allowing us to improve our operating performance. And it shows that going forward, we can handle this lower admin overhead run rate and still perform well and still meet our growth targets. And you can see that this is obviously the reduction in costs is hitting a direct impact to our income from operations. Where last year we had a loss of 0.8 million, this year we have a gain of 2.7. Next, I'm going to talk about our reduced debt. So as Cindy mentioned previously, you know, one of the big focus was to improve the balance sheet this year. And a big, what we really focused on is reducing our debt. So what are we looking at? What is the debt in this picture? This includes our long term debt that's held with banks, our convertible don't, and any consideration owing to prior shareholders that were related to the acquisitions that we've done over the past few years. And when they say the liabilities for the acquisition, it's just the cash liability. So you'll see that we have about 1.4 million of equity payable on our balance sheet. That's excluded from the 16.9 here as that was settled in shares and it's already been settled in shares in Q1 2025 as mentioned in our financials. So we started the year with about almost 29 million of debt and we ended it with about 17 million. It's a 41% decrease. So how do we get here? How are we able to do this? So there's three things. Number one, we had cash flow from operations this year, which is absolutely fantastic. We had 2.8 million of cash flows from operations that we were able to generate. Number two, we have the allegiance sale. Total consideration was about 12.5 million. However, this year we realized about 7 million of that in cash inflows, the remainder of which will be is deferred consideration that will be received over the next couple of years. And number three is the amendments of the .A.s, which were really key to not only reducing our and improving our debt position, but also to that one brand, one business model that we previously spoke about. So with the amendment of the .A.s, we were able to do two crucial things. Number one, lock in earn outs. So previously with associated with these acquisitions, we have earn outs, you know, a business would meet a certain EBITDA target and they would have an earn out based on that. And so you'd see the liabilities fluctuating year to year, quarter over quarter, based on how well these individual businesses are doing. So this year we are able to lock all those earn outs in so they're fixed. So which helps us manage our cash flows. We know when they're going to be due. There's no fluctuation in the balance sheet quarter over quarter. And number two, the prior shareholders who are currently in part of our management team agree to take settlement in shares, which is a big reason you saw that increase in management buy in. And that's that Sandeep just presented as well. And so these these three things were helped us reduce our debt this year. They allowed us to pay down three point four million dollars in cash for acquisition related to consideration. We paid down five point five million in long term debt payments. So about two point seven of that was the alleged debt that we paid on the close of the alleged sale. The rest are principal payments. We issued about one point four million of shares related to those SBA amendments. And then there was some revaluations related to those SBA amendments as well. So this huge decrease has had one huge impact, an improved leverage ratio. So we have gone from a debt to equity, sorry, a debt to EBITDA ratio of about from five, five times to one point six times. Sandeep, you just maybe go to the next. Thank you. And so this improved leverage ratio has put the business in a much better spot to handle our debt. And we're now in a very strong position to service our debt using our operational cash inflows. However, it is important to note we do have the convertible debt that's coming due in October. And we are continuing to explore options to even further reduce our debt burden. But overall, we are so incredibly proud of the work that we have done on our balance sheet this year. I'll hand it back to you, Sandeep.

Thanks very much, Prasen. Wonderful metrics there. I'm hopeful you all will agree where we have got the business all from the performance improvements perspective as well as the balance sheet perspective. It's a completely different world from what we saw a year ago. And I've had many conversations where our shareholders and investors, they have been concerned about the stress on the business because of the balance sheet. The cash flow was another problem. The performance of the business was another problem. So it was really a very difficult decision for any of the lenders to even look at us as the business. What we are now seeing is because of the leverage ratio and how much improvement we have brought about in our balance sheet, we are getting some really nice conversations at the table as well as to how we can manage this even better going forward. What I want to just lay out here for you is how are we looking at the future here now? So if you look at our foundation now, I consider these metrics as really positive metrics for the foundation and becoming the bedrock of the business. So even the margins 24 percent, but we talked about where we really want to be and investing in the business. Twenty seven percent management ownership. The management team has completely invested and committed to the business. So if you look at the business, you want to see positive net income. You want to see business in our industry really generating cash, positive cash flow. That's where we are already and it will keep improving. And our leverage ratio is at one point six sweet spot to the debt. With this foundation in place, what we are also now looking forward to is what are our growth drivers? And these are some of the growth drivers that I've also talked about in the presentation. But just as a summarized view here, enterprise account headroom, we talked about the strategic accounts. We are embedded in the key growth markets. We are in the US, in the UK, in Brazil, in Argentina, growth markets, other emerging markets in Latin. We don't need to fish for newer markets. There's enough headroom for us to keep growing in these markets. We are already existing in high value client contracts. Some of our contracts are in the in the region of five hundred thousand dollars to a million dollars. And it's not just one of the exceptions. Many of the contracts are like that. So we offer high impact, high value engagement to our clients. And I talked about the operational scalability with our delivery powerhouse in our operating model. We are working together, Argentina and India, working together to offer that scalability, the flexibility. And whenever we want to ramp up the projects, whenever we want to ramp down the projects, right kind of intellectual capital available there, the human capital available there, we are sorted on our scalability aspects. And we are working on the critical technologies like Google, Microsoft, Anaclan, Click, Snowflake, AWS, as I mentioned. But the important aspect here of the technology is that we have got our own proprietary software as well. That's embedded within our high value solutions and services. So these are the growth drivers that we are going to be focusing on. But what you would see in terms of our actions where the organic growth is going to come from is these three pillars. One is the account integration, cross sell, upsell, bring the solutions and services we are selling really well. In one part of the business, bring them to the other. That's where the growth is going to come in. And you will see the actions happening there, which we have also demonstrated in the top 30 accounts. Partnership integrations. I talked about the technology partnerships. We are deepening those relationships with them. Premier partnership with Google. We want to make sure that we are nurturing all the other partnerships and becoming and positioning ourselves where we are going jointly to the market with these technology partners and the capability integration, which is how do we ensure that we are bringing the best delivery capabilities that are existing in one part of the business to the others. And we are able to serve the clients across the globe nicely. These are the three areas where you would see the right actions as the strategy develop. And this is the impact that we are going to see. These are just the near term numbers for us. Fifty million of the revenue run rate. As you can see, we are not far away from that EBITDA run rate. We have already surpassed it. We will do everything to make sure that we are sustaining these kind of margins. What I also want to bring in as another metric now that we are operating as a business is the 10% of our revenue should come from the integration activities, which are cross-selling of the solutions and services, embedding our own software into the solutions and selling it in different markets. This is where all the integration revenue is going to come from, which then improves the organic growth potential that we already have by bringing this collection of businesses together. With that, I'm just going to say one thing that you are now part of as a shareholder. You are part of this business that's now profitable, that's completely transformed, has got a management team that's completely invested into the business, is generating net income, positive net income, and has got massive potential for growth. We are just getting started right now. I'm so glad that we are already here much faster than expected, and we are into the growth mode as a business. Just with that, I just want to thank you for all of your support in the business. When you made this choice to invest in this business, hopefully for a change, now you can really pat yourself on the back for that decision. With that, I'm going to open up the questions and answers, and we all are going to be available here, myself, Christine, and Andre, to answer any of the questions you have.

Thanks very much, Sandeep. First, I'll just jump right into the Q&A. As a reminder, there's a Q&A box. You can write your questions in there, and we can address them. First question, and a compliment, incredible and brilliant work. Congrats, team. Your objective of $10M EBITDA and $50M in revenues run rate in 2025 seems prudent, given the 4Q 2024 numbers. Do you expect the margin to decline or overhead to increase the next quarter compared to Q4 2024? I think we've kind of addressed that, but Sandeep or Christine, if you want to touch on that briefly.

Yeah, I think we are going to be very cautious about, you know, this is what I have said always. Make the business sustainable on the financial metrics. Make it best in class in terms of the performance, and then you operate with the other levers in the business. And what you're going to see is the margins, we will make sure that they are in that really healthy region of 15 to 20 percent. But invest any of the surplus. What we have done is we have first brought the profit on the table, gone above the threshold. And now we are going to be investing into the business rather than doing it the other way. So we have proven that this business is capable of delivering that profit. We will absolutely make sure we are sustainable with it. Admin expenses, Christine has already mentioned, you know, our growth has not come in at the cost of any of those changes that we have brought about in any negative ways. So it's really healthy business that way. But, Christine, if you want to add to that point, please go ahead.

Yes, exactly. So we are when it comes to those reduction of admin costs, these are permanent changes that we have been making as well. So we're not expecting huge fluctuations in the admin costs going forward. So we're expecting to see a lot of consistency in 2025.

Great, thanks. So just a couple more revenue questions here. We've seen a noticeable uptick in revenue from other countries. Could you elaborate on the reasons behind this?

So we like Christine said, we are not we have now consolidated everything. You know, the segment reporting is not going to be one business. That's who now vertical is going to be. If we if you are going to look at the growth in different regions, you know, the regions are in certain ways quite self-sufficient in delivering the organic growth. And we are offering any kind of support for the cross and upsell in those regions. So you will see from our results, you will see growth across the business. For us, the growth markets I already mentioned, it's the US, it's UK, it's Brazil, it's Argentina. And there are there are some more emerging markets within Latin that we are working on. We are also exploring Middle East. But like I said, we don't have to go outside of these four regions of the countries to grow. And we are getting growth opportunities in all of them.

Great. So can you please talk about what is driving the significant momentum in Argentina, whether that was an impact of the effects? There's two parts to that question. Do you want to do want to answer that one first?

Yeah, I think Christine touched upon that aspect of, you know, when you see the explosive growth in Argentina, especially between twenty three and twenty four, that growth is primarily because of all the devaluation theory that Christine was talking about. Christine, do you want to just paint more color on that, please?

Yes, for sure. So in Q4 twenty twenty three, there was a new government in Argentina that that unnaturally devalued the currency. So there was a, you know, unnatural decrease in Q4. But when you're looking at it year over year, what that devaluation of the currency did for actually for our business is quite benefited. So generally in Argentina, the inflation rates are, you know, increasing steadily quarter over quarter. And historically, the currency has been devaluing. So really kind of they have been out, you know, kind of almost canceling each other off. Well, that huge devaluation in twenty twenty three has stabilized the currency. So when inflation has been increasing, you know, the value of the contracts are also increasing. And, you know, as inflation increases, we have, you know, structures in place with our clients to increase the values and the rates that we're charging and same thing with our costs as well. And so we're really benefiting from that stabilization of the currency.

Great. So congratulations on the good results for twenty twenty five. I'd like to know what are the plans of FTE hirings and what is the FTE workforce turnover at Now Vertical? How easy is it for Now Vertical to get new hires with the required skills, be it offshore, near shore or on client side projects?

One of my favorite questions, actually, you know, some of these businesses that we have acquired, they have been operating for, say, 15 years, 18 years, even 20 years. There are some mature capabilities that are embedded, expertise that is embedded to hire talent, retain talent, nurture talent in our business. And we're learning from one another, which is phenomenal. Hiring plans are completely based on our growth plans. They are completely reflective of how we are growing and they are going to be proportional to the revenue growth plans and what we want to do with the business. In certain parts of the business, you know, sorry, what was the second part of the question, Andre?

No, I think I think you've actually kind of hit the question already.

Yeah, but you know, the attrition, sorry, the attrition was another point there. This was one of the insights that I just want to share with everyone, which is in North America and EMEA market, we had only one person lead the business in 2024. That's the kind of attrition we have. So attrition is not a problem, not at all a problem. However, in Latin, especially in Argentina, we have seen much higher attrition. It's it's primarily because of the economic situation and the political situation in the region. We are doing way better than the market trends there already. And most of the people when they leave the business, they are not leaving us as a business. Most of the time they are leaving Argentina and hence we see the attrition there. We are putting in so many different measures in place for that retention to go up as well. And what Christine was explaining about how the economy and the political environment is stabilizing in Argentina, that will have another level of positive impact there. But at the same time, we have created very nice scalability, flexibility and elasticity in our delivery powerhouse. That's where we have spent a lot of time and energy to bring in those synergies between Argentina and India so that we can scale. We can be very elastic when we have to when the demand on our solutions and services goes up.

Great. Thanks very much. Now that you're generating significant cash from operations, how are you thinking of allocating those dollars? Just general thoughts on capital allocation would be helpful.

Commercialization, commercial engine, as I call it, which is more about what are our commercial teams? How are we taking our solutions and services, which are high value solutions and services to the market? We are going to be focusing a lot on growing our revenue streams and our traction within the North American EMEA market. We are right now running on a very thin line in terms of our capabilities within North America and EMEA, especially for the commercial engine capabilities. This is where we are going to be investing. Latam is a little bit more self-sufficient from the commercial engine perspective and the capabilities. But this is where the commercial engine, the go-to market, making sure that we become very customer focused, very client focused when we are delivering this growth. This is where most of our investment is going to go. The other part of the investment is we always want to stay two steps ahead of our clients in the data and AI technology evolution. This is a growing market. We want to be leading our clients on these technology evolution and the transformation with technology. So one of the areas for us to invest in is making sure that we are creating the right infusion of the data and AI technology within our solutions and services.

Great. Can you provide some insights onto the seasonality of the business? I know we touched on it a little bit in the presentation, but should we expect any seasonality trends that could impact Q1 2025 performance compared to Q4? Or do you expect Q1? I'll leave that part of the question out. But can you comment on the seasonality?

There is really the only type of seasonality that we get. They are basically the holiday period. While we are working with our clients, Q4 especially during the Christmas holidays in North America and EMEA has got a higher impact on our revenue stream because the clients are shut down for some time. There's cold freeze. You cannot deliver the projects at that time. So you see a bit of the seasonality there. But that's primarily because of just the holiday calendar holidays and the Christmas holidays that people want to enjoy. Q1 has got similar kind of holiday pattern in Latin America. And you see some of that revenue dropping in Latin for Q1. Other than that, the only other seasonality in the business, which is a positive seasonality, I would say, is when we have got a lot of renewals happening in a particular quarter for the software that we sell, our own software or the reselling of the software like Click and Google. But other than that, there is nothing else that we have in terms of the seasonality in the business, which is quite positive. Thanks

so much. So can you shed some light on the lower share of SAS revenue or just touch on the revenue distribution between SAS revenue or portion of total revenue?

There are two sides of our revenue. So one is 80% of our revenue comes from solutions and services and 20% of our revenue comes from selling our own software as well as reselling the industry standard software that I just mentioned. The 20% is completely recurring by the nature of it anyways. There is a high degree of reoccurring revenue we get from the solutions and services as well because there is managed services, which by nature is reoccurring and we have a strong history and long history of getting those contracts renewed time and again with our clients. We are also embedded in multi-year transformation programs with our clients that could be running for three to five years, sometimes even longer than that. And you see the cycles of these transformations happening in these enterprises. We have clear visibility. If it's a five-year transformation program, we have a clear visibility of what this revenue stream is going to look like over the five-year period. Our clients may not sign a multi-year contract with us on those transformation programs. They will only go budget as per the years, as the calendar is done. But we have very good visibility because of our relationship, because how we are embedded in the business and because we understand the roadmap where the transformation roadmap is going. So high degree of reoccurring and recurring style revenue in the business.

Great. Lots of questions flooding in. We'll try our best to get through them in the time allotted. A question came in about what your thoughts are on the global AI and technology competition, specifically from China. Could it have an adverse impact on the business in the future?

I think the way AI technology is evolving, we are still at a much earlier stage of the maturity curve of this technology. So are we worried about all the happenings in, say, the AI world in China and all that? In my opinion, it's always going to be very healthy and useful and beneficial for us as well as for our clients and the whole planet, in my opinion. What you definitely want to see is we are not creating those LLM models, for example. We leverage these technologies, these heavyweight LLM models that are being created. We then take these LLM models or these AI technologies and we tailor it for our clients based on their own data, based on their technology landscape, based on their objectives and how they want to use for their own competitive advantage. We have got, after all of this AI evolution, if anything, we are getting more and more demand on our solutions and services. So I see this as a very healthy pattern. And I believe we just need to be ready for all of this evolution to happen across the globe. It doesn't matter whether it's coming from China. It could tomorrow come from Portugal. It could another day come from Mexico, Canada, Argentina, wherever. It doesn't matter. We just need to be much better prepared to handle it.

There was an ancillary sort of corollary question here about tariffs. Are you affected by the tariffs or kind of confirming that we're not? And are our clients affected by these tariffs?

Thankfully not. Not a single client. So yes, we absolutely, when we got the news, we scanned through all of our client landscape. But the nice thing is none of our clients are in the industry of building the electronics and importing and exporting the electronic goods or some of the some of the goods that are affected by the tariffs. So we have seen no impact whatsoever on ourselves, our business, or our clients' business because of the tariff changes.

Excellent. Question, couple questions on the M&A sort of divestiture activity. We hit on this earlier, but some additional color on what to expect from cash outflows to payments with regard to the remaining acquisition liabilities.

Yeah, I'll paint up the acquisition liabilities. If you look at our strength in our financial position now, Christine took us over where the debt levels are, where the cash position is. Because of that, we feel so confident in our cash flow as well to take care of the acquisition related liabilities, which are primarily going to be over by the end of 2025. One thing that I would like to just address here while we are just talking about the liabilities, we have got a convert loan, which is due in October 2025, and we are actively working on it. We acknowledge it, we realize we have got a few months to that. But again, just because of the way our cash position and our financial position overall, the balance sheet has improved. There are going to be different strategies and options that we are going to be deployed and we are already looking at them. So yeah, it's something that we are actively working on.

And also you can also refer to note eight in the financial statements as a piece that lays out those liabilities. And then I'd also want to highlight as well our news release from January 2nd, which further reduced those liabilities as prior shareholders agreed to take additional shares in lieu of cash payments as well. So two things to look at as well.

Perfect. We did get a question about raising capital at these prices being detrimental to shareholders. And it wasn't said you would plan to raise capital, but maybe we should just clarify that.

Very simple answer. I have been saying this very clearly since I came in as the chief exec. There is no plan for capital raise right now. There is no need in the business. Our financial position has made all of these answers or the questions to these answers much easier. Anyways, we don't need to raise capital right now. We are cash positive. We are profitable business. We have got a lot of other strategies in play to really get the exploration around our organic growth. We are not out in the market to raise capital.

Okay, great. Maybe just time for one more question. We did get a couple of these at the same time in terms of a NASDAQ up listing. So I think question on, you know, from the capital perspective, what does that vision look like?

We would no active conversations right now and there is no active need in our opinion. I think we have got such a wide array of the investor base that we are still going to be reaching out to. We have got Bristol on board. Glenn is here. He talked about his introduction. He introduced himself in the beginning. We are looking to, first of all, capitalize on our positioning on DSX V and get as much of our story out in the market with our existing credibility and the resources we have on hand. You know, once we get to a particular size and there is the right reason for us to go on to NASDAQ, absolutely. And we have met with the people at NASDAQ and NYSE as well in the past, but we need to find the right time to do that. So no rush on it, but it's definitely at the back of our mind.

Thanks. I think we are over time. So with that, we will conclude our webinar here. Thanks very much, everybody, for attending. Sandy?

Thanks very much, everyone. And thanks very much for your support. It means a lot to us. It's been a tough year. It's been a challenging year for us. The management team has been working relentlessly day and night and weekend. And I just want to say thank you for your continued support in the business. It means a lot to us.