Beeks Financial Cloud Group (LSE:BKS) — Final Results for the year ended 30 June 2026 (FY26)

0:00 Good afternoon, and welcome to the BEEKS FINANCIAL CLOUD GROUP PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Gordon MacArthur, CEO. Good afternoon, sir. Thank you, and welcome, folks. As usual, I'm gonna do the first few slides, hand over to Fraser to go through the financials, then I'll come back again, and then we go to q and a. So we'll crack on.

0:49 So just a quick summary of the of the year. We had a record year in terms of financials. So it was about a tale of two halves. I think we we flagged that half year where we had signed a loan of deals very late in the in the half that didn't allow us to deploy the infrastructure that we'd signed and, therefore, recognize revenue, but we see that flow in the second half. So we were always feeling comfortable at first half despite what looked like no great numbers when we covered that again in the in the previous presentation. So pleased and laid out a good second half. We recognize all the revenue that we had signed in the first half, and we signed some material deals in the second half.

1:37 So Fraser will cover, you know, the kind of in-depth financials, but, you know, a high level, million turnover, underlying EBITDA, 16,000,000 was up 18%, and we made significant investments this year. You know, a lot of focus this this week has been on on cash position, and we'll we'll cover that as we go through. But we signed some major exchange led platforms, probably did more revenue share exchange like platforms in one year than we'll ever do again going forward. So that was part of the significant investment we made, also that and the network that we've nearly announced on Monday, both an anti DDoS network and a wide area network. So Exchange Cloud has done really well in terms of signing of new logos, so we're now up to eight exchanges globally.

2:30 Kraken and ESX moving into kinda OpEx breakeven and then going beyond that. So encouraging early signs. We've got a few more that have just gone live, and we obviously signed Thailand about five or six weeks ago. So that will flow through. Launched Edge Intelligence, our AI and ML trade operations platform, signed some materially large deals in the second half last year, and there'll be more of that to come as customers adopt it going forward. And we've got a strong pipeline going into this year. Our q one is always the summer months, so notoriously slow for us. But I think we're adding some Mondays decent q one revenue, we will pick for the first half as opposed to last year. And and ACMRR grew 15%, which is really the underlying health of the business. Right? So that is sitting at 34,000,000 going forward.

3:32 So an introduction to BEEKS. What do we do? So, again, a lot of you guys have have probably been on these calls for years, so I'll I'll I'll kinda run through this. We have a we have a variety of products now. We announced our two on on on Monday, so our network and our our Solar AI offerings. So going forward after after this presentation, they'll be in there. But, you know, we have a range of products catering to various segments of our market. Private cloud has been the kind of growth engine of the business since IPO. We're lots of deals every month, anywhere between running 20 ks a month, rolling monthly commitments, anything a bit more bespoke. Bespoke has, you know, multiyear commitments attached to And that's still very much part and parcel of us going forward.

4:24 But what you'll see is an overall percentage as the group goes and continues to get bigger. That percentage of overall revenue, private cloud will decline. It will still grow, but the newer products will become a more material part of the business going forward. And I think you've seen that in the percentages over the last couple of years. So Proximity Cloud was our first new product that we built, you know, maybe four, five years ago now, and that's for a, you know, a stand alone organization to run their own internal workloads, trading workloads per cabinet priced. You know, TCV is anywhere between 1 to 5,000,000. It can get much bigger than that depending on the size of the organization. And, yeah, you know, it's it's the... That was the core.

5:12 Exchange Cloud then pivoted from that. So Exchange Cloud is really the the same underlying technology that that that Proximity Cloud runs on, but Exchange Cloud's a multi hold environment that we sell or white label to various exchanges around the world who then house that in their own data centers and effectively become the cloud and sell that via their own contracts to their end members, our our relationship... Commercial relationships with exchange. And as I say, we have now got eight exchanges globally.

5:45 We've got some more in the pipeline, and that will become a material part of the business as we Apologies, ladies and gentlemen while I just, reconnect, Gordon.

7:36 Ladies and gentlemen, please do just bear with us while we just reconnect with you guys. Ladies and gentlemen, please just do bear with us. We're just waiting for the presenters just reconnect. Apologies for the slide delay. Do bear with us, ladies and gentlemen. We do have the presenters just reconnecting, so do bear with us for a couple of minutes more.

9:01 Hi,. Hi, Gordon. Can you hear us okay?

9:09 Just bear with us one second, Gordon. Gordon, if you can hear us, there are some dial... Can you hear us there, Gordon?

9:20 Who said the dial?

9:32 Thank you for bearing with us, ladies and gentlemen. We are just trying to get Gordon to reconnect now. Gordon, if you can hear me, there are dial in details in the invitation. That would just simply be the phone line if you have that to hand.

12:57 Okay, Sharma. Thank you very much for your patience. We are just trying to reconnect the presenters who have had a Internet outage locally. So do please bear with us. We are just trying to reconnect them. I will give you an update very shortly, and thank you very much for your patience.

13:21 Thank you, Gordon, for just clicking on that link. Let's just bring you through. Thank you very much indeed. Hi, Gordon. Can you hear me okay? Hi, folks. Can you hear me now? I can... Hi, Gordon. Can you hear me? Yeah. Can you hear me? Yeah. I can hear you now, sir. Do you want me just to turn off the camera just to preserve your bandwidth? Yeah. I don't think it was a bandwidth issue. Think that we just sent to that to the police ground. No problem. I'm just gonna try and reconnect Fraser as well. Just bear me one second, and then what I propose is there we go.

14:04 Hi, Fraser. Can you hear me as well? Yes. Yes. Lovely, sir. So if I ask you just to mute yourself at the bottom of the screen just by clicking on that icon. Yeah. I don't I don't know what slide you're up to, but, of course, we're on... You can never... Renavigate back to the to the slide and then allow you to take it from there. Thank you, everybody, for your patience. We'll be in the background, Gordon, in case there's any other issues. Yes. Thank you. Sorry, folks. Me and Frey are in the same location overseas, and our our Internet seems to have dropped. So I don't know where we dropped out, but I'll crack on to to slide six. I'm a I'm a little over on a little bit if need be, so apologies. So investment case, you know, the the the business IPO was eight years ago now.

14:52 We were turning over £4,000,000 when we IPO ed. We're now up at 40. EBITDA has grown every year as well.

15:01 So, you know, we've we've tenfold increased the revenue of the business, similar story with with EBITDA. So we have a a, you know, track record of growth. We are... We have done what we said we were gonna do with the IPO, and the whole point of it was to try and tackle the tier one market. And now we have more than 30 tier one financial institutions that we contract with directly and indirectly. And clients stay with us for a long time, right? You know, we have one percent, just over 1% churn annually. So when we win clients, they become very, very sticky. And and the market's still moving to the cloud. Right? You know, as we have evolved products and built products, you know, our latest product is a... I think a sovereign AI offering, which we'll talk about a little bit.

15:56 You know, we we are we we are on the right side of IT in terms of where people are directing us spend and where the strategic initiatives are moving to. Recurring revenue grew to 34,000,000, up 15% on a constant currency basis. Most of that is now underpinned by... A large chunk of that is underpinned by multiyear contracts, you know, and I think it was almost, you know, almost the the largest increase in ACMMR we've ever had, you know, anyway, certainly one of the highest. And a lot of our business comes from extra spend from existing clients that we won. So, you know, that 34,000,000 of recurring revenue is is existing clients. You The gap between that and what we will do in new revenue, about 50% of the new business we sign is genuine white space wins and then another 50% is growth from existing clients.

16:53 We we innovate as a client... As a... As an organization. Right? We we don't do debt fueled m and a. We build IP into our organization. We build products. We... We've kinda shied away for any any meaningful m and a and really used the money to invest in our products in the last twelve months into contracts that will become revenue streams for the next ten to fifteen years, and that drives the pipeline going forward, right? But if I look at our product development over the last four, five years, we are miles ahead of any competitor, right? We are very good at building products that solve problems for our customers. And I'll ask the latest two of winners in Monday, we'll continue that.

17:41 We'll continue to do that. Right? We are an IP company. We come up with ideas and we build products in the back of it.

17:51 Globally, we have grown. A lot of the contracts some of the contracts we won in the last few years have been in South America, which is a new territory for us. So we have expanded headcount in Central And South America to match that growing opportunity. North America has always been a strong area for us. TMX, sixth largest exchange in the world, new revenue share exchange client, just gone live a few months ago. Africa, you know, our big client here is GSE. It's been, you know, eminently successful. I think the latest rounds of clients moving on to Exchange Cloud, I mean, 20% to 25% of all the flow going on to the Exchange now comes from our infrastructure. So a huge success story has led has meant that we have won business from clients in South Africa outside of South Africa on direct contracts, and we hope that it gets replicated with all the other exchange clear deals we've won. And then APAC, you know, ASX, Thailand, the recent announcements, the the team were in Thailand this week actually with the exchange.

19:06 I was meant to be there, but obviously doing the best of road shows, so that will roll out over the next few months. So, you know, we we win and we do very well in emerging markets, but Europe and America are still the lion's share of our revenue. So I'm gonna... I've kinda covered a lot of this. Right? So we've got a lot of slides, so I'm gonna skip through this. So, you know, we... We've now got eight exchanges globally that are that are using the the the ExchangeClip platform. Still have both models, both classic model and more display over the last few years, has been revenue share.

19:52 So the revenue shares are performing as we would expect them to. I know if you look at the financials, it's not a huge portion of our revenue from last year, but really that was only really Kraken and Kraken has been successful. Kraken contributing to that. So again, there'll be a higher revenue portion this year, but some of their revenue shares will still not be live in revenue generating by June. Things like Thailand, if it launches March, you're not going to see much revenue in a year from them, right? So I think we'll I'm guiding investors to look at, you know, 2,500,000 to 3,000,000 ACMRR addition every year incrementally, every year as we go forward from our revenue shares. So, yeah, roughly where I expect us to be, you know, if we say more exchange, obviously, we'll we'll increase that a little bit. But 3,000,000 ACMRR, and these are... Again, to reiterate this, because I I I think there's a real lack of understanding here, These are ten to fifteen year engagements.

20:54 Right? Johannesburg is is the first client. They will they will renew with us in the next year or so because it's been so successful and and so much of the flow. We are now we're now, you know, a very important part of of the exchange. Right? The the infrastructure supports so much of the flow. That means that this relationship we have will extend for a long period and and and that should match all our exchanges.

21:24 Again, a little bit on the on the revenue share. So, you know, we we made that conscious decision. And and and, again, to go over why we did... Made decisions to do this, shortened sales cycles a lot, Actually, more profitable for us on long term on long term. Okay. We we invest the initial CapEx. I think there's been, you know, a lot of a lot of chat about how much we've spent here, but, you know, we spent maybe $33,500,000 on exchange, cloud, upfront, infrastructure deployments, and I would I would do that every year. I've got no regrets. You know, that will lead to ten or fifteen years of multimillion pound revenue streams for us going forward. So in the general scheme of things, it's not a huge amount of money, okay.

22:14 Depleted the cash balance, but we will return to cash positive this year. Very little debt in the company. You know, we've got some asset finance that we use for some infrastructure. So, you know, I understand the cash balance looks a little bit low, but that's as bad as it'll get, and we will be cash generative this year and that will increase going forward. So I'm fairly relaxed about it. And the honest answer is if we get three other revenue share exchange clients in the next year that want you to do the same thing, I'll do the same thing. It's just part of our business. We're an infrastructure company, and some things we need to invest and invest.

22:59 So... Yeah. Edge intelligence, you know, we we... I think we're pretty honest. You know, we we built a product. It wasn't until we got it into the hands of customers and got their data flowing through it that we know how whether it was gonna work and do what we expected it to to do, but, thankfully, it has, you know, exceeded our our expectations and and that of our clients. And late in the year, we signed $4,800,000 commitment with a very large bank, and that was phase one. You know, we are already working on phase two with that with that bank, and it's been very well received. The software is running in multiple locations and given the real business insight and real value. So that has been a very good first engagement.

23:45 And then we're saying, you know, an exchange operator who is looking at predicting and forecasting infrastructure capacity requirements going forward. Again, live, client happy with that, and then a smaller one with the financial services organization in London. So edge intelligence has gone well. Pipeline is strong, we will continue to build on the back of it. So, yeah, we hope to have more wins announced over the coming year on edge intelligence and, hopefully, an expansion with the the banking question. But, again, all the deals come down to timing, and it depends how quickly they move to to go into phase two.

24:31 So I'm gonna hand over to Fraser here. Thanks, Gordon. Good afternoon, everyone. Fraser McDonald, CFO of BEEKS, and I'll be covering the finance slides. So Gordon's touched on this already, but, you know, those that follow us would have followed us at the interims. You know, we did flag at the interims that despite the the the numbers that we released, it actually was a good half in terms of signings. But, you know, as Scott mentioned, we we, you know, we didn't deliver those, products until the the second half. So we knew we're gonna be second half weighted. We we we always are a second half weighted company as a recurring revenue, but, you know, more pronounced than it's ever been. So, you know, I thought it'd be helpful just to put up some of the the h two progression that we that we that we said we're gonna do, and and we did deliver. So, you know, the shape of year was really driven by when the deployments went live because we can only obviously recognize the revenue when when proximity exchange cloud analytics actually go live.

25:34 And most of that landed h two, you know, actually towards the end of h two. So H2 revenue was up, it was £25,000,000 which is up 73% on the first half and 26% on H2 this time last year. And again, you can see the impact on the margins, so the gross margin going from 30% to 47% in H2 as we delivered that hardware and licenses into the customer deployments. And then, you know, again, obviously, going in the same direction. H2 EBITDA, 12,000,000, up over half on this time last year, and from an H1, a small loss. So we delivered, as we said, we did in H2, which is obviously pleasing.

26:21 Just going on to the next slide. So recurring, we are recovering recurring revenue business, and, you know, we've still got about 70% of our our revenue, as recurring, which is still the foundation of the group and still one of our most important metrics that we measure the business by. And as Gordon mentioned, the graph on the right, so our annual committed monthly recurring revenue is up 13% or 15% if you if you take currency fluctuations out of it, to just under 34,000,000, which gives gives us strong visibility going into to the current year. Infrastructure as a service, our private and public cloud, again, good steady growth in that part of the business and still the core of the group, still around 70% of of the overall revenue.

27:07 Proximity and exchange, another good year. It contributed just over 9,000,000 of the 40, so just under 25%. You'll note that the... You know, we have point in time against point over time for proximity and exchange cloud. So the point in time revenue is actually down slightly. It's just over 9,000,000 from '10, but that's really driven by the change to the exchange rev share model. So under the the classic contract, had we, you know, deployed those revenue share contracts, we would have recognized another 3 or 4,000,000 because it's a fixed price that we have to take about half upfront. But because of revenue share, we don't, book that upfront, which is actually, as Gordon explained, the reasons we're doing it is not for revenue recognition, but that's an added benefit. So that will actually come through as as as recurring revenue over time. So you can see, year on year, our over time revenue more than doubled, from just under 1,000,000 across proximity exchange to over $2,000,000 a year.

28:09 And as we look into FY 2027 with the four revenue share models growing, we expect that to really add to the annualized committed monthly recurring revenue. So two of those exchanges are now live and profitable. Kraken really took up the majority of that, revenue recognition, being the first one to go live ESX, just went into monthly profitability just at year end. And when we talk about sort of, you know, monthly profitability, what we mean by that is, you know, does the customer billings offset the CapEx investment, which they are both at that level now, and Kraken's above, and ASX is just slightly above. So, uptake in line with what we talked and expected, which is which obviously positive.

28:59 And then another good year for analytics, obviously, as Gordon said, so launched this year and going from just over $05,000,000 of revenue to 4,400,000 in its first full year with three of those contracts signed and delivered in the year. So really, really good year for analytics in the business. And that included also Tier one bank as part of that. So again, just looking at the, you know, the overall metrics in the year, as Gordon says, best of our year, you know, dollars 40,000,000 revenue. We're now 10 times our IPO levels, and, you know, we've been pretty consistent over that period, to deliver that growth. All the margins moving in the right direction, I'll talk a bit about EPS and cash, Gordon touched on it. But all the other all the other, key metrics, as I said, really go in the right direction.

29:53 We get asked quite a lot about operational leverage when, you know, when we expect to see that kick in. You you know, you're seeing a bit of it this year. So our admin cost grew 5% against 11% revenue growth, and EBITDA margin rose 2.5 percentage points to to 40.3%. And, you know, as we scale the business, we believe that there is more operating leverage still to come. Gross margin was held at 40% just over 40%. And you'll know that we had an extra £1,500,000 of depreciation charge. So we always build capacity ahead of revenue, but we still maintain that gross margin level at just over 40%, which we've been fairly consistent with over the last number of years.

30:42 Underlying EPS flat, that's really mainly due to the swing in the tax. So we had a $600,000 tax charge against the 200,000 credit last year. So if you take tax out of it, that's worth about 1.1p of EPS. And really, the pretax underlying PBT, profit before tax is up 15%.

31:09 Again, Gordon's covered part of this, in terms of the cash, so this is the biggest year we've ever had in terms of investment. We invest ahead of revenue. So our net our our net cash went from 7,000,000 to to 600 k, you know, but that was a deliberate choice, and we're comfortable with it. We do generate cash as a business. Our cash generation, was 17,800,000 operating cash flow before working capital, which I'll I'll come on to. So we do we do generate cash and, you know, that deliberate investment, so just almost £8,000,000 of CapEx, You know, almost half of that went on those revenue share contracts, you know, which, as Gordon said, is a a ten to fifteen year annuity, you know, from the customer. So, you know, we would do it again.

31:59 And the BEEKS network, which was, again, was about a million pounds, so significant investment in the year. We invested in stock, ahead of some of the well publicized component price increases for stock at the year end. It was built up just under $4,000,000 so $3,700,000 of stock that we will use for current year deployments. And one of the, you know, the big numbers on our balance sheet to call out is our contracted cash still to come, which is the far right of the chart, so just under $18,000,000 So effectively, that has contracted revenue with the CapEx already made on those investments. And that $18,000,000 will come through free cash flow over the next four years. Effectively, that's accrued income, on on contracts where we have to re... Recognize the revenue in advance.

32:48 And that doesn't include the four revenue share contracts still to come. So, you know, as we as we look forward, as Gordon says, we we anticipate, you know, the the the free cash flow to start significantly increasing across the business over the next couple of years. You know, as these as these revenue share contracts, fill up as the customers come on board, and this is the, you know, this is the... This should be the lowest point because we start a revenue share from zero, right, when it's when it's a replacement CapEx in four or five years, we'll be starting from full racks. So, you know, this this should be the low point of the the actual, you know, cash position. And then again, our balance sheet, we still have very low levels of debt. You know, as Gordon says, we are point three times our EBITDA.

33:35 We have a... An RCF facility in place, so £5,000,000 should we need it, you know, to... If if we do have to further, you know, finance some of these investments ahead, but we are looking to to do some of these revenue share deals, with with with cash in advance as well. So it'll it'll be a mixture. So I guess in terms of our tweaks and cash drivers, really, you know, the key ones are the collection of the contractor assets. You know, we we won't invest as much in stock. We will we will run some of that down, and then the revenue share income from these contracts as they grow with the CapEx already investment haven't been made. All right. Thank you, Gordon. Thank you, Fraser. I'm trying my camera on again, so we'll see we'll see how we go.

34:24 So new product offerings. So, you know, the the the network, we we did this... We first did this to increase our anti DDoS protection. Right? So about a year and a half ago, we got a pretty major DDoS attack into New York, and it and it... You know, we've got we've got pretty big capacity into New York and and various other sites, but it made us take stock of where we were from an anti DDoS point of view. We see them all the time. Right? And we mitigate them regularly all the time, but this one was was was at a scale we've never seen before. So we basically had to make an investment to ensure that as DDoS attacks get bigger, we had enough capacity globally to mitigate these. So we made a decision at the Board to invest about £1,000,000 in CapEx and some OpEx to increase our defenses globally across all of our sites, and, know, we've done that now so we can handle even the largest attacks.

35:33 And and as a byproduct of that, you know, it allowed us to build out a bit of a way data network that we can plug connectivity into that. So, you know, our partner, IPC, is still a big part of that, and we bought some undersea cable capacity to add on to the the core IPC capabilities. So the DDoS stuff is not revenue generating. It's it's more that allows us to sleep at night and the clients, but the the way data network will bring some incremental revenue. I think the the the much more interesting one from a potential new revenue point of view is the sovereign AI offering that we're in some Monday in partnership with. So I'm gonna spend a lot time here.

36:19 So Omnify is a a startup that is in beta production, and they are an agentic AI for trading capital markets. And I've been a beta tester on the platform. The reason I started BEEKS is I build well on the algorithms I have done for twenty years. I understand how difficult it is to do it. It takes months of designing an algorithm, specifying it to developers, getting the codes, testing it, changing it, getting it back tested, you know, optimizing it. All of that takes months. And I've been playing with the Omnify platform, which is an LLM and a back end model built for... Solely for capital markets.

37:08 And I've, you know, got five new algos trading in the space of two months. It's it's blown my mind. So it's an LLM. Now we've made a we've made a... The Omnify guys have a a really good retail offering that they are going to be launching in Q1. But I think jointly with OmniFi and BEEKS, when you add our solutions together, it actually has a really resonates with our institutional clients. It's a very similar story to BEEKS, right? We started the retail world and we pivoted into, you know, Connect to you on the financial world. So Proximity Cloud was always a CPU based deployment model. We have now got a GPU enabled version of Proximity Cloud.

37:58 So that allows us to put AI infrastructure into client sites. Right? So banks, brokers, exchanges, all the big guys are not really allowed to put market data into chat GPT and CLOUD. There's so much customer sensitive information in there. It just breaks all the security protocols and privacy protocols. So there's an AI demand in trading, but at the moment, it's very difficult to be met. So we've put together a sovereign AI offering and, you know, the interest in it, even in the very early stages, is more than all of our previous product launches combined. So big sovereign AI powered by Omni. To go back to the OmniFi thing, you know, I set a challenge. I said, I wanna trade. I wanna build me a silver trading strategy, trade in CME futures, risk 2% per trade, be flat at the end of the day, and give me some options. I didn't think it would work. Right? But it came back with five different strategies.

39:01 Here they are. Here's the backtest. Here's the walk forwards. Here's the Monte Carlo analysis. Which one do you like? I picked one. I said, okay. Let's optimize it. Spent a couple of days optimizing it, and then, okay. Build a deployment code and go trade it against this broker. It was done in a week. Right? That would take me months. So hugely beneficial for the buy side. Right? Even institutional buy side who are looking at at... It found the alpha for me. That's the bit that is really interesting. Right? It found the alpha. I did not design the the algorithm. So when you put when you put that onto GPU enabled proximity cloud with our analytics capturing clients' market data and order flows with Omnify sitting on top of it, able to make AI type number crunching and decisions for institutions.

39:57 We think we have got a real unique offering to the market where we will provide... Because the model... This is one of the other key things. Because it's only a trading model, you don't need a chat GPT or CLOUD like model. It's trying to answer every question that everyone in the world is going ask. The models can be relatively small, so we can run the model on the GPU infrastructure within the proximity cloud so the data is never leaving the bank or the exchange environment. It's a local AI that understands trading. Nothing else out there that does this. You know? And so people don't do that. Chatty, PT don't do it. That's all gone up into these centralized models where who owns the data, you know, it's a bit of a gray area. It's a bit of an area of concern. So I'm really interested in one, and and the level of meetings we've booked, the sales team we've booked, the incoming we've had in the last ten to six hours dwarfs all of our previous product releases combined.

40:58 So the only five guys have been really good to work with. We've taken a strategic stake in the business. They're going to be live for the retail offering in in q one, and we're building out that institutional offering with a lot of interest from both existing and new clients. So I've given you high hopes for that, and if you get that right, this is going be a very material revenue stream for the business going forward. So this year ahead, so we get strong visibility into the year, 34,000,000 run rate. The revenue shares, you know, a couple of them are now live revenue generating, a couple of them still to go. So they will they will make a contribution.

41:42 The the the big challenge we've got is, and it doesn't really sit well with the public markets, right, is timing of deals. You know, some of these bigger deals, some of these bigger financial institutions move very slowly, especially with what we're doing. This is mission critical infrastructure that we build and support. Right? And we can't force people to work to our timelines even with commercial offers. Right? So the biggest challenge we have is is timing of deals. And, you know, you've seen in half one last year, right, where where they were late and then we had to deploy them. So for the first time, and this is the back of... On the back of some of our larger investor feedback is we've put a range out in the market, 43,000,000 to 48,000,000. And it's quite a wide range. We understand that. We get that. That will narrow as we go through the year.

42:31 But that's a symptom of us not under... You know, in the in the early start of the year, know, looking at timings of the of the deals over the next twelve months, EBITDA margin will increase, you know, between thirty and forty two to 42. So as we go through the year, we will hone that down. And, hopefully, as contracts come in, we will we will be more accurate when we're gonna end up for the the full year. So I think that's us in terms of the formal presentation. I know we... We're probably over a little bit. There are a lot of questions. So we'll just go through them.

43:26 So in the past, Gordon suggested the price we sell the company. This this still remain the case, has the price changed at all?

43:34 Yeah. It still remains the case. Sorry. Fraser today has now dropped. You can join me. It still remains the case. Has the price changed at all? Not really, but I'm not gonna go into any more than that. What's the biggest opportunity for BEEKS to go forward in five years? The fact that we've got a track record, the fact that there's so many MSAs now with tier one organizations, the fact that we have got unique products in the marketplace, we genuinely have. We are the best in the industry at releasing products and building products, and I I I... I've got no qualms about seeing that at all. So, you know, we need to just need to exploit some of these products we've got in clients. If seeking upfront hardware payments is a tactical pivot from a pure revenue share model, does this shift...

44:22 Does shifting this capital funding onto clients then lengthen your sales cycle?

44:27 Yes. It does. Yes. It does. You know, we've got one exchange cloud contract that if it was, you know, a revenue share would have been done a year ago, but we are insisting on CapEx upfront. So, yeah, that's, you know, that's why we introduced revenue share. We were comfortable to take commercial risk because it's short on the sales cycle and it gets these things out earning quicker, but that's a rub. Right? You know, I think, you know you know, the criticism that we spend cash on this stuff. Okay. Well, we'll we'll go back to more classic contracts, it elongates the sales cycle massively because you're asking clients to go and budget for millions and millions of pounds of CapEx and and exchanges really do not link CapEx spend, so that's just an extra beast.

45:17 With share based payments flat at 2,500,000 annually and suppressing statutory EPS, what is your road map to reduce this option run rate? None. None. None. It's part and parcel of our compensation to our staff. It drives behavior. It's a few percent per annum of dilution. I don't think it's material, but it's a material driver for our staff, so... It'll become less material as our profits increase, so, you know, it's a bigger percentage just now, but it'll become smaller. But it's also dependent on the share price issue, so whilst the, you know, the the volume might change, the volume will stay the same, the price will be higher. I think we've always been very clear on that. It's it's... I I've never done a share... I've I've had zero share options as part of...

46:02 Since we've been at IPO. Right? I've retained my shareholding, but I have never given myself a single share option. It's it's given to staff, and it drives behavior, so it will remain... And we've been very clear on that. So next one. With net cash at GBP 600,000 and a focus on converting current contract assets into cash, how much financial headroom do you have to grow? Are you actively pausing or slowing down your customer acquisition to avoid overstretching your working capital? No. We will never do that. So, you know, as as I said earlier, we are expecting to be, you know, free cash positive this year. We will use asset finance. We have a a debt facility that we can call on, but, you know, we can... If we need to come back to the market. But, you know, we would never pause or slow down customer acquisition. We are, you know, we are reasonably well funded. We have access to capital. We won't slow down our growth.

46:58 Will the company commit to outlining a clear five year plan including revenue targets during this? No. Like, I can't do five year crystal ball gazing. I don't I don't think that's... No. I'm on the next one. So can you describe the return you see on proximity and exchange cloud deals? How much CapEx is a 1,000,000 TCV deal?

47:25 How long does it take to pay back on cash? What do you expect return on a five year deal? Yeah. So I think they're all a wee bit different, but broadly for a million pound exchange cloud deal will be 25% to 30% CapEx. Know, depending on the compute, you know, it's a little bit different, but that's a kind of guideline across Proximity and Exchange Cloud. And margin levels, roundabout our gross margin is 40%, you know, we'd like to do a bit better, but, you know, we'll be consistent in terms of that. Headcount, you have gone to head count 215. Where would you like to end the year if you can find the right people?

48:08 I mean, we we we will increase a little bit. I... We've not had any real material increase in headcount for the last few years. Right? It's it's always been it's always been... It's kinda been around these levels. We have opened a Filipino technical center of excellence to... Around the the NOK in Glasgow. It just has become increasingly difficult to get high quality engineers who want to work night shifts in The UK. So... And our and our, you know, customer base is truly global, so we have started our first well, first tranche of Filipino staff has started in Manila to do APAC hours support.

48:54 And we're... So we'll be up to about 15 by the end of q one over there, but, you know, not material difference. Edge Intelligence, can you share any feedback on the go lives, how happy are our clients? I think we've done that. It's gone really well. You know, what size of business do you see as being a stand alone in three years' time? We've asked that a lot this year... In the last... In the roadshow. Three years, again, just ball gazing. It's very difficult. 10 to 20,000,000 run rate business in the next three years, we'd hope. Please, can you explain in layman's terms what the new products do? I think we've already done that. Other revenue share exchange contract scaling to plan, again, covered has progressed with Kraken prompted further crypto exchange instead of the pipeline.

49:44 We're not really focused on crypto at all. Kraken has been a great contract. They're very institutional type exchange. Most of them focus on retail. Kraken are Kraken are kind of top tier in terms of how they view their infrastructure, a lot of them are. So crypto, we don't, you know, we will stick to the more classic asset classes. Will the 9 to 14,000,000 of revenue that you need to find on top of the ACMRR largely be from Proximity Cloud and Software Solutions? Yep. Yeah. And hopefully, some of the new stuff that we've announced. Although, you know, how much will we get that in the year, I don't know. But, yeah, that's the reality. Proximity Cloud, Exchange Cloud, revenue sharing additions, and mark analytics and edge.

50:37 GSE is a poster child for BEEKS. They are. I mean, we've got a great relationship with GSE. Are other exchanges developing to be sustainable success? Yeah. Again, I think we've covered. Right? The... Some of them are starting strong. You know, some are more commercially aggressive with it than others. Right? It depends on on various factors. But, like, as I said, exchange line revenue share is is progressing as we as we progressed. Given that signed exchange rate contracts will only add 3,000,000 to ACMR, why does your corporate broker, Canaccord, only have 3,000,000 total revenue growth? I don't think they do. I think Canaccord are at 45, 46, which is Okay. 46, which...

51:22 So I'm not quite sure if that's an accurate question. Well, be prepared to raise funds by way of share offer to keep the upfront sales investment going on well with our retail offer. Absolutely not zero intentions of doing an equity raise. We've got bank debt if we need it. We don't think we need it, but zero plans are coming to market for equity to increase cash balance. There's one on the guidance as to our... You know, we also, for the first time, put a a range in our in our forecast. Question around is, you know, it's quite a wide range, which mitigates the possibility of, you know, not hitting the the range. Why?

52:09 I mean, it's difficult. Right? You notice the difference between h one and h two when we sign and deliver, and because we have this upfront element, particularly with Proximity Cloud, if we sign or deliver it in... On the June 30 or July 1, can have a massive swing, which fundamentally doesn't impact our business. But from a market point of view, it it obviously does with expectations. So that's the main reason that we put the range out because we have this potential lumpiness when it comes to delivering and signing. That's not that's not trying to mitigate a miss. I mean, like, crystal ball gazing is difficult. You know? As an investor, I would ask you to tell me what your portfolio is worth in twelve months' time to 2%. And if you don't, then you've missed. Like, that's that's what we get asked.

53:01 Anyway, what's the what's the approach to accommodate the price escalation for chips and compute? It's a raw material. It goes into our pricing. Right? We take raw materials, and then we add our margins for support, etcetera, on top. So, you know, it's not eating away our margins even though the the prices are increasing. Same to your question. You... Well, you need to enhance the hardware with a fifteen year fifteen year... Yeah. Yeah. We we do. Right? So this is an exchange like contract question. We're talking about fifteen years. Like, the initial contract we signed is five years, right? At the end of that five years, we go to the exchange and say, do you want to continue? Sorry, after four years, do you want to continue? If you do, we will refresh all the hardware, we'll pay the CapEx again, but you extend the contract for another five years. So if you look at that fifteen year cycle, then there'll be two or three hardware refreshes in there.

53:58 Initial client contracts tend to be fairly short as the relationships develops. You have the opportunity to lengthen. What's the optimal contract length? We like five years. You talked previously about European exchange to possibly close by year end. Is that still in play? We hope so, but again, we're at the mercy of budget and board sign off, but we still hope so. Please discuss the decision making process behind when to use asset backed finance, when to use cash, when to use capital. I mean, we'll...

54:45 Yeah. We look at we look at the bank balance in in reality. We look at what we have coming up over the next quarter and we want to maintain a reasonably healthy bank balance, but that's the decision, how much do we need over the next three to six months and do need a buffer and that's really the main reason. I'm not even sure about that. There's a couple of questions with Nasdaq. Like, I don't know how many times we need to cover this. We no longer have a contractual relationship with Nasdaq. As CapEx on new contracts impacts heavily on cash flow, is there an optimal number of new contracts in each accounting period you're willing to undertake? No. We'll take as many as we can. Read the exchange that we'd have signed a year ago. Why are you only willing to sign them with with the old model? It's a worry that the main market peaks well enough to clients.

55:39 If it's a big exchange, would it more... It won't make more sense to do a revenue share? Listen. We we... We've made a decision that we are going to ask clients, so we're gonna mandate some client clients to put some skin in the game. Right? You you you know, and no matter what way we go here, right, we we get criticized for being all the revenue share and putting all the cash front, and then, you know, why don't we go revenue share to shorten the sales cycle? I don't know. I don't know how we went here. I think there's one about our infrastructure hardware in terms of how we write off. I think that's the question. Five years we have for our hardware, we we, you know, rate that off of over five years or so less. Do the forecast incorporate potential revenue contribution for the new products? No. We've not put anything in. New products are hard, right, because you don't know all when, like, we're we're on the... It's all in the AI stuff we're building out, the the proof of concept labs for the clients to come and test them, right, so, you know, a big bank, you know, a big exchange will take some time, you know, smaller buy side firm could move quicker. But no, to answer the question, there's nothing to forecast.

56:54 What drives you to get up, out and win? God. Money. What kind of money? No, I mean, listen, know, going back to the share option thing, you know, it seems like criticism, like our staff work very hard. Our staff have built the business. This is not the Gordon Road show, right, it's everyone around the world that contributes and they contribute and they work very hard. And one day, they're gonna get paid and rewarded with a very nice exit that will hopefully change their financial future. So that's what makes me... And deal... You know, I like the stuff we do, right, building new products is interesting, You know, constantly challenging to find new stuff that helps our customers and helping our customers.

57:41 The feedback we get from our customers, right, are all are all driving, but, you know, also also building the business. I know we've done it. I think I'm done. So... And last apologies for the the connectivity issue of your folks. Me and Fraser are are not in The UK, so we were beholden to an errand return abroad. So apologies. But, yeah, thanks for your time, and, yeah, we'll talk to again in six months. That's great. Thank you for updating investors today. Please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, and I'm sure be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to you all.