Aussie Broadband Limited (ABB) Earnings Call Transcript

Thank you for standing by, and welcome to the Aussie Broadband Limited Investor and Analyst Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Phillip Britt, Managing Director. Please go ahead.

Good morning, all, and welcome to today's call for Aussie Broadband Group's FY '25 half year results. We'll be using the investor deck as lodged with the ASX this morning when referring to page numbers. My name is Phillip Britt, and this will be my final call with you all as Group Managing Director of Aussie Broadband. Before we get into the results for the half, I'd like to acknowledge the Aboriginal and Torres Strait Islanders as the First Australians, and for their role as the original communicators, connectors, scientists and carers of the land and waters across Australia. We pay our respects to Elders past and present. We commit to working respectfully to honor ongoing cultural and spiritual connections between the Traditional Owners of this country and to building an inclusive Australia together. As we announced earlier in the year, I will be retiring from my role on 1 March to transition into a non-executive and Special Technical Adviser role. I'm joined on this call by my successor, Aussie Broadband CEO, Brian Maher, along with Michael Omeros, better known as Mo, Symbio Chief Executive Officer, and Andy Giles Knopp, Aussie Broadband Group Chief Financial Officer. Before I hand you over to Brian to go through the results, I wanted to provide one final high-level refresher of the Group and what the business has grown into with your support over the years. Let's turn to page 5. Aussie Broadband is more than just a challenger brand now. We have evolved into Australia's Most Trusted Telco, Best of the Best in the industry, and the 33rd most trusted brand in Australia, all according to Roy Morgan. The fact that we have maintained those industry-leading highs, particularly amongst an industry as challenging as telco, is thanks to our incredible customer service teams who continue to lead the way, day-in and day-out. That culture of industry-leading quality and service also drives the rest of the business, which is why we're continuing to see great success across the board. Revenue grew in the half compared to the prior corresponding period by 6.8%. We've spoken a lot in the past about the advantage our infrastructure assets provide, and that continues to be the case with almost 2,000 kilometers of Aussie Fibre laid, and our high margin Tier 1 voice networks with Symbio and NetSIP. More than 4,300 buildings can connect to Aussie Fibre today, and we are continuing to invest in our physical expansion and our digital experience All that work has led to a business, which is increasingly strong financials with healthy cash flow. These fundamentals have enabled Aussie Broadband's growth and investment in our future, which is an incredibly exciting place to be given Aussie Broadband's humble beginnings. We'll talk more about our look to 28, our 3-year strategy, later in the presentation, but for now I'll pass you over to Brian who will take you through the highlights for the first half.

Thanks, Phil. Before we begin the presentation, I just wanted to say it is an incredible privilege to be given the opportunity to lead the remarkable business that Phil and founders has built and led. It's an enormous responsibility and honor to continue to Change The Game in his stead, and I'm incredibly excited for what lies ahead for Aussie and the Group. Let's start now by looking at the highlights from the first half on Page 7. The half has been strong for the Group, with the business recording robust organic growth across our core segments compared to Half 1 FY '24, with improvements in gross margin and underlying EBITDA. The addition of Symbio has further diversified the Group's revenue, with residential share reducing from 64% to 56%. We've also made great progress in delivering the operational efficiencies and synergies that we discussed at our full year results. We have continued to bolster our reputation for high speeds and high quality by adding 43,652 connections in the half. More than half of our broadband connections now are over 100 megabits per second. That's a huge advantage for Aussie, and it positions us well to take advantage of the multi-gigabit future that will be enabled for Australian households later this year. Speaking of successes, I wanted to highlight the excellent contribution of Symbio. Mo and the team are delivering higher gross margin thanks to growth in the core business. Symbio is on track to deliver its expected $38 million EBITDA contribution for FY '25, a 30% earnings growth year-on-year. You'll hear more from Mo about how Symbio is tracking later in the call. We have made a significant CapEx investment in the half, strengthening our technical foundations by investing in a new internal cloud platform and increasing our voice capacity. We have also identified opportunities to acquire additional IP addresses and incremental enhancement of inter-capital and subsea fibre optic capacity. These investments will continue to ensure our network will be enhanced to support our future growth. We've maintained a strong balance sheet, giving us the flexibility to make a special announcement today. The Board has declared a fully-franked interim ordinary dividend of $0.016 per share, along with a fully franked special dividend of $0.024 per share. Now, let's look at the core numbers for the half on Page 8. We've continued to lead the way in high speed residential NBN plans, adding more than 43,000 new connections. That has grown Aussie's market share of on-net NBN services to 7.8%. We also maintained our status as the Most Trusted Telco and improved to become the 33rd most trusted brand in Australia, according to Roy Morgan's brand research. We've continued to grow our Aussie Fibre network, with another 165 kilometers laid over the half. That brings our fibre footprint to 1,886 kilometers, with 691 connected buildings and more than 4,300 buildings now able to connect. Our voice business has grown as well and mobile services have increased across the Group to 204,000. We now also host 7.5 million phone numbers between our 2 Tier 1 Voice Networks in Symbio and NetSIP, with over 4.3 billion call minutes across our networks for the half. With that, I'll pass over to Andy who will go into our financials for the half.

Thanks, Brian. Let me talk through the first half financials for FY '25. Let's turn to Page 10. The comparable financial results on the page are pro-forma numbers, incorporating both ABB and Symbio's first half results for FY '24. The Group has enjoyed a strong performance for the half, with growth in our revenues, gross margins and underlying EBITDA, despite the ever increasingly competitive market, inflationary pressures and the challenging cost of living environment. Revenue is $588 million, which is a 6.8% growth on the pro forma prior comparable period, and a 32% increase on a statutory basis. At a segment level, we saw double digit percentage growth in Residential, Business, Enterprise & Government segments as well as Wholesale, after reflecting the migration and loss of the white label customers. Gross margin grew by 7.5% to almost $218 million, while our underlying EBITDA grew by 8.9% to almost $66 million. Operating cash flow before interest and tax declined to $49 million, down 25.8% in the half. This was primarily affected by the timing of working capital cash management, and I expect this to recover over the second half. Finally, and as previously announced, the Board has declared a fully franked interim ordinary dividend of $0.016 per share, along with a fully franked special dividend of $0.024 per share. Let's turn to Page 11 now for our EBITDA bridge. At the full year, we bridged FY '24 to FY '25 guidance. Following this format the chart outlines the first half FY '24 proforma EBITDA to the reported first half reported underlying EBITDA and the key factors that have played into the half. There are really 4 key messages. First, the direct contribution of Origin, after direct customer service costs, was $7 million lower half-on-half, although the final contribution for FY '25 was $1 million more than forecast due to the migrations of customers being slower than the initial period. Second, thanks to the implementation of several productivity initiatives and maintaining tight controls on spending, we were able to deliver greater cost efficiencies than expected. Third, the core business grew by 22% through the period and this was at the top end of our expectations, but timing of SAU price changes in the 2 halves is important to note. Finally, our net investment in Buddy was as anticipated with a half year impact of $5 million. Let's turn to Page 12 now for a summary of our operating cash flow and leverage position. Our operating cash flow declined to $49 million, and as a result the cash conversion was sitting at 74.9% for the half. As indicated before, the lower operating cash flow and cash conversion ratio was driven entirely by the timing of working capital movements. Indicators such as debtor days and bad debt provision percentage have improved in the period, which goes to the quality of the cash generation, and I expect for the full year to be in a much better position. The operating cash flow is before interest and Tax. The Group is now in a tax paying position having utilized the historical tax losses and the incremental reversal of the 100% tax depreciation concessions that were available during COVID. With the significant cash balance, we repaid $120 million of borrowings during Half 1 and that facility remains available for redraw. At December, we were well below our net leverage ratio target range 1.75x to 2.5x at 0.72x. In line with the capital management framework, we communicated in November our intention to commence a share buyback of up to 10% of the share capital over a 12-month period. And today we've announced the fully franked special dividend of $0.024 per share on top of the interim dividend Let's turn the page now to look at our CapEx in greater detail. The Group continues to maintain a disciplined approach to CapEx making investments in core growth, customer growth, lifecycle replacement, incremental capability and our Aussie Fibre infrastructure. We are announcing a revised CapEx guidance for FY '25 of an increase of $20 million to between $75 million and $80 million, inclusive of Symbio. The increase is down to the decisions we made in the first half to take advantage of opportunities to invest in our capacity and resiliency to unlock greater potential and greater savings in the future. Some of the significant spend has gone towards migrating multiple technology environments and their associated applications into a new, strategic internal cloud platform. This will eventually become a single platform across the group. Our increased guidance reflects our ongoing investment in long-term growth. $4 million of the new CapEx guidance will go towards securing more IP addresses to ensure no more capacity is needed through to FY '28. We are also making a $5.7 million, 15-year commitment to inter-capital and subsea fibre optic cables, strengthening our capacity to handle increased bandwidth across our inter-capital and international links and improving our gross margin in future years. It is important to note, our internal capitalized software development cost has also remained in line with our original forecasts. I will now hand over to Brian to discuss segment performance in more detail.

Thanks Andy, this now brings us to our performance across our various segments starting with residential on Page 15. We've continued to gain revenue and market share within our residential segment, with revenue totaling $327 million for the half, a 15.3% increase on the prior corresponding period. Our gross margin grew by 19.3% to $102 million, while our gross margin percentage improved slightly to 31.3% from 30.2%, thanks to the changes in the wholesale pricing. The margin for the half declined modestly against H2 of FY '24 due to a timing mismatch between when wholesale prices came into force on the 4th of July and when that flowed through to our ABB customer billing. We also saw a higher-than-expected movement in our customer mix towards 100 megabits per second products as well as greater network costs being allocated to the segments after the migration to white label customers. Aussie Broadband has also maintained its position as a preferred provider of high-speed broadband plans. More than 54% of Aussie's connections are over 100 megabits per second, an increase from 40% in December 2023. This is an excellent position for the group to be in ahead of the release of NBN's new plans and products in September this year, which will unlock additional speed and new tiers for users on full fibre and HFC connections. In addition to that, residential mobile services are now exceeding 64,000, which represents our continued growth and presence as an MVNO operator. Maintaining momentum through the Fibre Connect program, particularly given NBN's decision to extend the rollout into 2030, will be a key focus for us for the remainder of FY '25 and beyond. We'll also continue the good momentum in the mobile sector by continuing to grow our footprint in that market. We'll also look to continue to increase our broadband market share by scaling Buddy Telco, both through additional product offerings and targeted marketing. Speaking of Buddy, let's turn to Page 16 to look at how Buddy is performing in greater detail. Buddy launched in 2024 -- July 2024 and it has seen a particularly strong response in market from competitors with a lot of significant price-based promotional activity, although Buddy's always on pricing remains highly competitive outside of those promotional windows. To-date, the competitive response has impacted sales volumes and Buddy's net growth trajectory is lower than our initial expectations. It is important to call out that we are proud of how we've been able to establish Buddy thus far with a small support staff based out our Perth office. We remain committed to our original target of securing 100,000 subscribers by the end of FY '27, and we're excited to see how far Buddy can grow throughout the rest of the year. Let's turn to the business segment on Page 17. The top line growth is strong with a 12.7% jump in revenue to $54.1 million, which is a higher growth rate for the first half of FY '24. The gross margin improved by 6.9% to $23.2 million, although the gross margin percentage declined due to the net impact of wholesale price changes. The team focused on growing their digital presence in the space in the first half, while also revising the operating model to streamline support for customers and driving efficiencies. Looking forward, the team will leverage our Group's brand image as Australia's Most Trusted Telco to increase awareness within the segment, while building on the higher attachment rate of business customers to multi-product offerings. On the next page, we'll look at Enterprise & Government. Our E&G teams have maintained good momentum with new business wins. The team has onboarded major strategic clients in the half. That includes the deal with Bunnings, where Aussie will supply connectivity to more than 350 Bunnings sites across Australia. Almost 200 of those sites have already been completed in the first half, and we expect to complete the rollout across the remaining sites in the second half. Those deals have helped the segment's revenue grow by 13.2% to $47.2 million. Average gross margin percentages come under some pressure in the half due to the mix of new revenue being weighted to data and price increases from U.S. technology vendors in the cloud space. For the second half of the year, the E&G team will be leveraging the growing Aussie Fibre Network as part of a land and expand strategy. The team will be focusing further on our expertise in data, while simplifying the product offering to better match the demand of E&G clients. We'll also be working to accelerate and reduce friction in the Aussie Fibre sales process to better unlock the competitive advantage it provides. Next up is our Wholesale segment on Page 19, which has been refocusing on new partnerships and driving growth to our Tier 1 voice networks in Symbio and NetSIP. The segment recorded a higher-than-expected revenue contribution in the first half due to the phasing of the white label onboarding. Organic growth, excluding this for the wholesale team grew by 20.2% in the period with a 35.9% increase in connections. The team will continue to add more wholesale partners going forward, adding to the 58 partners that were added during the first half, and we have an exciting pipeline of partners that we'll continue to explore through the second half. The team will also continue to drive more sales of voice products by improving the alignment between our Symbio and NetSIP Tier 1 voice networks and the opportunities they provide. Next up is Symbio. And for that, I'll hand over to Mo.

Thanks, Brian. As you can see on Page 20, Symbio has continued with the strong momentum since being acquired by Aussie Broadband with some solid results in our gross margin and core business growth. The slight decline in revenue by 1.3% to $103.8 million is related to some one-off and expected decreases during the half. The retirement of Cisco's HCS on-prem platform resulted in a $3.7 million reduction, while the expected drop in international minutes from our Exchange, formerly TNZI business, reduced revenue when compared to the prior period by $1 million. Excluding those elements, Symbio's underlying growth was 5%, and we are well positioned to continue that moving forward. Symbio's contribution to the group remains strong. Our Singaporean operation is now profitable, which is a huge milestone for the business. And we're also celebrating our significant win with the extension of our partnership with MEDION Australia. The MEDION Australia deal will run for another 5 years, and their reach makes Symbio one of the largest mobile virtual network enablers in Asia Pacific. For the second half, our focus is on delivering the 30% year-on-year earnings growth and our expected EBITDA contribution of $38 million. We will continue to drive greater voice, mobile and data growth through a greater alignment of Symbio and Aussie Broadband's combined advantages. And we've already made great headway in delivering on the synergies we committed to in previous calls, with the business on track to deliver $8 million to $12 million of synergies by the end of FY '26. That's it for me. I'll be on the call later if you have any questions. But for now, I'll pass you back to Brian, who will talk through our aspirations for FY '28 and our outlook and guidance for the coming financial year.

Thanks, Mo. Let's turn to Page 22 now. For the full financial year, we're happy to announce that we're upgrading our guidance for underlying EBITDA to a range of $133 million to $138 million based on the strong trading performance to date. Underlying EBITDA excludes significant nonrecurring costs related to acquisitions and restructuring, but includes share-based payment expenses. Our CapEx guidance has also been revised upwards by $20 million to a range of $75 million to $80 million, as we outlined earlier on this call. By way of a trading update, since the half year, the business has added 14,129 net connections this quarter as of the 21st of February. And of those net additions, Buddy contributed 2,131 connections in the quarter to date. Beyond the current financial year, we've been working on a refreshed strategy to better reflect the Group's ambition for the coming years. A summary of this is on Page 23. This is just a high-level overview, but the focus is recognizing and building on the strengths in our core telco business. We have 5 strategic priorities as we look to '28. First, we will continue our legacy of long-term growth by maintaining our focus on diversifying revenue across all segments to deliver strong margins. Next, we'll continue to grow our Aussie Fibre footprint to better control our own destiny, while growing our share of on-net connections across the group. Thirdly, Aussie is known for its industry-leading customer service, but we can always do better. And we'll do that by adopting and building digital tools and portals to make our experience even better. Next, having the right foundations is key. We've already begun the work to simplify and uplift the capability of our systems to truly unlock the potential of our people and our future growth. But this is something that we'll continue to do through to FY '28. Finally, there's also the most important foundation of all, security. Hundreds of thousands of Australians rely on us to keep their data safe. That trust is the absolute bedrock of our business, and we are constantly focusing on security through every facet of Aussie to ensure that that foundation is as rock solid as humanly possible. We will share more detail on our look to 28 strategy and our growth aspirations at our Investor Day on 10th of April at Sydney's Parliament House. Registration is now open, and it is a chance to hear from our broader executive team, catch up with them and members of our Board over lunch. We look forward to seeing many of you there. On Page 24, as we reach the tail end of today's presentation, I wanted to take the time to acknowledge our Group Managing Director and Co-Founder, Phil Britt, who will be retiring from his role at the end of the week. Phil isn't saying goodbye just yet. He will remain with the business as a Non-Executive Director and a Special Technical Adviser for the next few years. Phil has been the cornerstone of the business for 21 years and has been a significant player in the industry. We congratulate him on what he has built and wish him well with Rural Fibre Co. As I step into Phil's shoes and as we look to '28, the Group will be realigning some of its business units and making some executive changes. The changes will move us from a purely functional model to a divisional model, enabling end-to-end accountability for the experience of each of our customer groups and just as importantly, financial performance. From FY '26, we will have 3 operating segments: Residential, Business Enterprise & Government and Wholesale. Each segment will be led by a group executive. I'm pleased to announce that those executives will be Jonathan Prosser, our current Chief Strategy Officer, will lead Residential; Aaron O'Keeffe, our current Chief Growth Officer, will head up Business, Enterprise & Government; and Michael Omeros, who will expand his role as CEO of Symbio to include responsibility for leading Wholesale for the group. These changes will come into effect from 1 July 2025 and as a result will not affect financial reporting for FY '25. With that, I will now pass you back over to Phil for the last time to sum up our main takeaways from the first half.

Thanks, Brian. Before handing over for questions on Page 25, I wanted to make some final remarks about Aussie Broadband and the business that we've been able to build with your joint support over the years. Aussie Broadband has always strived to change the game and leave behind a lasting impact. We started by connecting Morwell, and Latrobe Valley and the greater Gippsland region. Our presence and reach now extends throughout Australia and beyond. We've always faced difficulties and challenges, and every time the team has rallied to find a solution and a path forward. Having managed a significant migration of customers over this financial year, Aussie has still gained market share, grown its revenue, improved its margin and now upgraded its EBITDA guidance from the original figures. The same can be said for Symbio. The business is on track to achieve earnings growth of 30% year-on-year and a $38 million EBITDA contribution by the end of the financial year. The combination of Symbio and our Wholesale team is truly game-changing when we consider the products and services their combined powers can offer. This represents an extension to our revenue diversification strategy. Our foundation is strong as is our balance sheet, and this has allowed us to accelerate investments to enable even greater growth as we look to '28. That discipline has allowed us to deliver sustainable return for shareholders with an interim dividend this year, a share buyback announced in November and the flexibility to take advantage of opportunities as they arise. The best years of Aussie are well and truly to come. The business is in incredible shape with an excellent pipeline, a clear 3-year strategy and an experienced leadership team that knows how to deliver. It's been an incredible journey. Thank you all for your support. And for the very last time, that concludes our investor presentation, and we're now ready to take your questions.

[Operator Instructions] And your first question today comes from Jonathon Higgins with Unified Capital Partners.

Congratulations on the results. Look, just firstly, I just wanted to say congratulations to you, Phil. 20-year journey. You leave the company in a strong position. You've got leading challenger market share status. You've got improved earnings, a good balance sheet, great culture, plenty of prospects. So congratulations to you and also to you, Brian, just for taking over. So all the best moving forward for the role. So congratulations to you both. Just a couple of questions for me, just firstly. Just #1, just around just the NBN, you spoke about sort of the environment that you're sort of expecting into the second half. I think, Brian, talking towards the NBN is going to be making some changes and sort of looking to promote people on just some higher speed tiers and the like. Can you just sort of talk us through just how that's likely to affect you and just how you're placed in the broader challenger environment with the 2 brands now?

Thanks, Jon. I appreciate the kind words as well. Yes. So for that September, mid-September, there's a number of new speed tiers coming in, which essentially amounts to full speed upgrades for customers. So those on 100 speed will be automatically getting 500 speed services depending on their technology their on. And so we see this as a real positive for Aussie. We're very, very strong in the high speed end of the market, and we think we can take advantage of these changes. And we're actually really looking forward to it. It's quite a significant piece of work. We've got a significant project team working on preparing us for that change. And yes, we're very optimistic about what that might do for us.

Just another one for me. Just in regards to the costs, I think you've called out sort of $5 million of costs removed in the period. That seems like a little bit ahead of expectations. Obviously, you're losing the Origin earnings into the second half, but still a pretty strong annualized number into sort of second half in FY '26. That looks a bit ahead of expectations. Can you talk us through just what's driving that? Is it productivity? Is there more to come here? And maybe if you can just weave something in on segment-based responsibilities, what that means moving forward in this context?

Sure. Yes. So we've done a considerable amount of work in the first half looking at our management structures and we've seen management structures and we've made a number of changes in that regard broadening spans of responsibility. And you can see from the restructuring cost line, we had to do quite a bit of work there and it's a one-off cost that obviously won't recur next year, and that's made a significant difference. We've also done a lot of work in our call center operations, significantly improving the ratio between customers and numbers of staff. And we do think we've got some more work we can do there as well, but the team's done a great job. And our aim still growing very strongly, our aim is to be able to grow our revenue at a slower -- faster rate, sorry, than we're growing our cost base, and that's really the focus going forward. And that's part of the driver for the changes in segments, as you touched on. Well, the primary driver of moving to this divisional structure is to have end-to-end accountability for the customer group so that each executive has a single-minded eye on how do we attract customers, how do we bring them in the door, how do we keep servicing them well for their lifetime and even how do we make sure they have a good experience leaving so that when they look to shop again, they'll come back to us to be handled it so well. And so we think that's much better handled in a divisional approach than that previous functional approach, which did an amazing job in getting us to where we were. But equally, it also means the end-to-end financial performance accountability for that division as well. And so that's somewhat harder in a functional model to have a number of people focused on financial performance, and that's the main -- that's the secondary benefit of this change. So it's accountability of the customer experience end-to-end, but also financial performance.

And last one for me, just on cash flow is probably best for Andy. You sort of spoke towards, I think, the terminology move was recovery -- recover some of the first half. Can you sort of be more specific on that? Does that mean better-than-average cash conversion into the second half, like a really good number? Or does it sort of mean over the average number? What should we expect in the second half? And if you've got any year-to-date sort of update, that would be great also.

Yes. No, Jon, I think in terms of the operating cash flow and the conversion, I'd expect to see the conversion ratio back to between 90% and sort of the 100% for the full year. Largely, if you look at the balance sheet, when you get the chance to do that in more detail, we paid down quite a lot of the creditors and other creditors in the sort of 6-month period just with timing and the way that the sort of year ends and the half year fell. So I'm not concerned. I won't update in terms of the last couple of months. But yes, I'm very confident that by the full year, we should be back to a very good cash -- operating cash flow and also conversion.

And our next question today comes from Hamish Frazer with E&P.

I've got 2 questions. My first one is on the Aussie Fibre rollout. I know you spent $10 million on fibre CapEx in the first half. And I was just wondering, given the increase in CapEx guidance, what your expectations are for the Aussie Fibre for the full year? And I know you've previously spoken about a $20 million margin benefit from your Aussie Fibre rollout. Now given the increased CapEx, do you think -- where do you think this margin benefit can get to over time?

So I don't know if Andy can pick up the first part of that question on the CapEx in the second half is fibre, but certainly in terms of the $20 million benefit, it's not a number that we'll continue to monitor because it's just BAU for us now. But certainly, as we grow, that benefit just continues to grow. If we had to you could probably increase it just proportion to connections really. If we have to grow -- we have to go and purchase that capacity from third parties, that would be an operational expense that we have to incur. That $20 million would continue to grow quite significantly as we grow our connections into the future.

Yes. And Brian, just picking up on the first part of the question. So we'll probably be expecting to see another $5 million to $6 million in the half 2 for Aussie Fibre. And again, a part of the increase is to recognize that the rollout has been going well and the customer demand has been stronger. So again, there's a few factors, but that's partly the increase, but about another $5 million to $6 million in half 2.

Okay. And my second question was on residential churn during the first half. If you could provide any context on resi churn and also how the launch of the Buddy brand may have impacted churn during the period?

Thanks, Hamish. Yes, residential churn has stayed relatively consistent. There are some sort of peaks and troughs around promotional periods, where we also get the benefit of additional sales particularly Black Friday, a little bit of additional activity during that period because improved offers in the market, but relatively consistent over the last 12 months or so. In terms of the impact of Buddy, so certainly, initially, we had sort of -- the initial round of Buddy join us with quite a few of those were coming from Aussie. That's now settled down to what we would expect as normal. And if you look at the net growth of the combined brands, we think that's a pretty solid result and is providing a very good outcome for the group as a whole.

And your next question today comes from Ian Munro at Ord Minnett.

Congratulations, Phil. Congratulations, Brian. Just looking at the enterprise business, you called out just some cost pressure from some of the cloud service providers. Can you just perhaps give us a sense of whether this is ongoing and whether, I guess, the GP margins you've reported in the first half are representative of what we'd see going forward? I guess trying to get -- trying to understand really the trend of the margin pressure and whether there's more mix shift to come through.