Cerillion Plc (CER) Earnings Call Transcript

Good afternoon, everyone, and welcome to the Cerillion Final Results Presentation for the year to September 2025. Presenting today will be Louis Hall, CEO; and Andrew Dickson, CFO. [Operator Instructions] Thank you all for joining today's call, and I'll now pass you over to Louis Hall, CEO. Louis, please go ahead.

Thank you, Gareth, and thank you, everybody, for joining. So I'm just going to spend a couple of minutes talking about what Cerillion does, who we are, et cetera. For those of you who don't know the company or haven't heard from us before. I'll keep this brief because I appreciate that a lot of you know the company and have heard from us before. So essentially Cerillion provides what we call BSS/OSS software to the global telecom market, to telcos all around the world. And that is to about 70 customers in, I think, 40 countries or something of that order. And in terms of what is BSS and OSS, essentially, BSS and OSS software is the enterprise software that sits between telecoms businesses, network infrastructure and their customers. So it's the software that enables telcos to monetize those network assets. And that involves, for example, defining the products that their customers are sold, onboarding those customers either through CRM or through customer self-service or through mobile apps, whatever. Once those customers are onboarded connecting those customer services to the network that they're going to use, once those customers are using those services then charging for those services, managing that usage, putting on to bills, handling payments, receivables, collections, et cetera. And we do this through a suite of modules that the fit into these industry-defined space that this software sits in. And we sell that basically on an as-a-service basis. So we -- our customers subscribe to use our software typically for 5-year term agreements. Part of the deployment is quite a large services project to implement the solution. These are complex solutions. And even though we are much quicker at this than the competition they still take 12 months, sometimes 18 months or so to deploy. So that can be a significant piece of services work. And that's treated as a separate project and a separate deliverable recognize on the milestone completion basis as opposed to a different recognition we use with the subscription side of the deal. Just very quickly, in terms of in terms of how we differentiate. So we have a -- we're in a market where most of the competition is much larger than us and most of the competition is focused on a much more services-heavy bespoke oriented solution. So our main competitors are all delivering much more tailored solutions that take longer to deploy and have a higher long-term total cost of ownership and essentially less flexible because there as opposed to our solution, which is a product and which is designed to be used by all customers regardless of whether they're mobile, broadband, TV, satellite, whatever. We have a 1 size fits all model, if the software works out of the box on day 1. And all customers use the same software, giving them a very clear upgrade path going forward. So that's a differentiator for us in the market, and that's our main USP. So I'm going to -- and actually, I will say a couple of things about the size of the market because I think that's an important reference point for people who might have be aware of this. But this is a huge market. These are figures from IDC. It's not a very fast-growing market, growing around 4% a year. But it's expected to grow to $60 billion a year in 2029. So given revenues we're reporting, if we only have a fraction of this market, we're still going to easily achieve our broadest ambition. So this is an enormous market. And another thing to say about it is that telcos work the same, the world over. It's a truly globalized business. The way that we interact with telecom networks in the U.K. or in France or Germany. It's the same as it's done in the U.S. or in Asia, in Japan or China or whatever. So -- and we're also interfacing to the same equipment in all these different places. So we are able to embrace customers from Armenia, one of the wins announced in '25, three to North America, three to France or whatever, it's a truly global business. Okay. So in interest of time, I appreciate we need to leave time for questions, and Andrew need to spend some time on the numbers. I'm going to drop back to highlights of the year. If anybody has a question about -- more about what we do or the market over there, perhaps we handle that in questions when we get to the end. So just looking at the highlights of the year. So we had a good year from a trading point of view, we achieved new highs across all the key financial measures, but we're particularly pleased about total new orders, which were up 25% and to around GBP 48 million, and that pushed up our back order by 21% to a new record level. And we'll talk more about that later on. Obviously, EBIT -- sorry, Okay, it's not obvious, but the EBITDA margins, margins in general were up dramatically quite significantly again. Andrew will talk about that in more detail, and we'll also talk about the cash generation, which is also strong. But in terms of the new order figure, a couple of points to make here. Within this GBP 48 million number, there were two significant individual deals. One was the $11.4 million contract we won with Ucom, which is one of the national telcos in Armenia. So providing the full range of services to that telco -- sorry, supporting full range of services with that telco. But this is interesting because it's -- this is a new customer for us -- sorry, not a new customer, but a new geography, a new market. And I think this is a part of the world, the Caucasus where -- there are a lot of booming economies into -- because of natural resource wealth. There are some quite big populations, which together sustain some larger telcos. And Armenia is a bit of a [ minor ] in this part of the world, some of the smaller countries. But that's a foothold into that region. And we have prospects in our pipeline that are much bigger than this deal was. And now we have that reference. I think we can do more in that region. And these aren't necessarily the household names of the Vodafones and the AT&Ts, but they still can generate very large deals. The other deal that I want to talk about was a deal with a deal on with an existing European customer which has acquired one of the mobile operators in its home market. And this expansion, GBP 25 million deal, largest we ever signed is to migrate that mobile customer base onto the existing customers, existing [ within ] platform. And that involves not just services but license expansions, managed service expansions and so on. So -- essentially expansion of the subscription agreement. So that was a really interesting example of how an existing customer can drive significant upsell. And I think this is a theme in our development that the more of these larger customers we sign, the great propensity those customers have to generate more revenue and that becomes a self-perpetuating growth cycle. The other -- the final point on the orders is that out of GBP 48 million of orders, only $11.4 million or around GBP 8 million was with a new logo, so nearly GBP 40 million of that GBP 48 million was with existing customers. So again, strength of the customer base, particularly as we start winning larger customers is key to growth going forward. So we come to the point because of our confidence in not just in the order book that we've got, that we have achieved in '25, but our confidence in the pipeline going forward, we've increased the dividend by 17%, which is higher than the top line revenue growth, but that reflects our confidence. And the fact that we do feel we're very well positioned to achieve the '26 numbers. And our guidance to the analysts has been to maintain '26 consensus. We were very confident that's all possible. So the -- moving on to -- sorry, press one button. Some operational highlights. We completed two new implementation projects in '25. Firstly is Virgin Media Ireland. So Virgin Media, very interesting for us, and it's worth a couple of minutes on this. So this is really a Tier 1 implementation environment. And quite different in many ways to the environment we worked in the past in that is involved working with a major systems integrator, a company called Infosys, one of the world's biggest and they are present in a lot of the world's largest telcos, so very influential. And essentially, we provided our software with our industry standard APIs. And the integrator Infosys, with a team of about 70 people did most of the upstream and downstream integration themselves. And that's important for two reasons. One is that we have a proof point and we can work in these big Tier 1 environments that are much more complex and involve other parties, but also within Infosys, that they were able to do that work relatively seamlessly without much support from us and deploy a team of 70 people onto that job. So for them, they can see that working with Cerillion they get to lots of services work and make lots of money, whereas if they were working with some of our more services-heavy services-focused competitors, they would get a lot less of the services work. So that I think is an important project to have been involved in. We also completed the project in Southern Africa with Paratus. So Paratus were completely different kind of customer. They have a growth business. They have a territory covering seven Southern African countries, South Africa, Namibia, Botswana, so on and so on. And they provide satellite communications, they provide broadband to business and have just launched a terrestrial mobile network in Namibia which is what triggered the need for a new platform because the existing stuff they had would not support mobile. So that gave us a foot in the door. So we've implemented Namibia. We're now looking to roll this out with them to other territories as time goes on. On the operational side, we've also invested quite a lot in '25. So we've expanded the sales team, bringing in some heavy hitters from the competition, some people with lots of experience to help us try to better access some of these larger telcos. These are quite expensive resources. But what we're targeting is people coming from competitors who have networks who know customers that could be contacted might be priced away and essentially come with some level of pipeline. And we've seen this work quite powerfully, for example, this was how we won that deal we're talked about earlier in Armenia. Also, there's been a lot of investment into R&D. So we've increased R&D investment by about 30% in '25. And that generated 17,500 or so mandates of work or in a team of 80 people working constantly just on R&D. A lot of the focus has been around AI recently. Last year, we were doing AI work around helping our customers staff to be more efficient. This year, the focus has been much more on enabling better customer service and more efficient customer service to our customers' customers, particularly through Agentic AI and the use of things like build query agents and so on to do the work of a customer service person, but much more effectively, much faster and without the person so that you have a cost saving and a better service. Also, we've been working on creating a much more flexible environment in which our customers can use AI to make it easy for them to use our AI agents or other AI agents, provided by other third parties or things they want to build themselves. And also got to work with any of the LLMs, the language models that are out there. And it was interesting -- actually an interesting article from our product manager, which is out in the website. today on this particular area. It's a rapidly evolving space. And what we're doing is trying to build as much flexibility in future proofing we possibly can so we can offer real product solutions to our customers. rather than a service as heavy bespoke play in each scenario. Great. Sorry, while we roll through the slides. Ok, probably take a little bit of time to get to the right next place. Just finally for me, a few words on the competitive landscape. I won't go through this in a lot of detail because that will take too much of the time that we have available and I want to constantly leave time questions and time for Andrew to talk about the numbers. But there have been some changes in our competitive landscape in the last year. So one particular pretty important changes that our #2 competitor a company called Netcracker, which is owned by NEC, the Japanese Conglomerate. They're buying our #3 competitor, CSG from the U.S. that's very positive in that not only does it take one of the top 3 competitors out of the market. So when it comes to tenders, there are the top 3 and out of top 2. So obviously, it's easy for us to compete. But also the fact that CSG have been absorbed into net cracker means that a lot of the CSG customers we won will be assuming that, that product line is end of life and wondering what the future is and Netcracker is an expensive organization. It costs a lot of money to own that solution. They're not going to want -- or want to move on to that solution. And we'll start looking at other options. So that opens up a whole lot of new prospecting for us. And it also puts people on the market. So we're already receiving CVs and people who are not looking forward to being part of the NEC Netcracker world. Another smaller competitor, a company called Optiva recent announcement last few weeks that they're going to be acquired by another smaller player in Finland. So that takes -- a company to be fair, is much smaller and it's been languishing for a long period of time, but there's now another base of customers that are even more disgruntled, will be even more disgruntled, some of which are already in our pipeline. Other others will enter it, I'm sure. So those are quite interesting changes. So I'm going to hand over now to Andrew to come for the time, he'll talk about the numbers in some more detail.

Great. Thank you very much, Louis. So as you can see, 2025 was another year of very strong financial performance with all key metrics up at record levels. Revenue increased by 4% up to GBP 45.4 million. And over the last 5-year period, the compound annual growth rate has been 17%. At the same time, adjusted PBT grew by 10%, up to GBP 21.8 million. Part of the reason for the very strong growth in the year was a proportion of higher license revenue. So as I think most of you are aware, any incremental license revenue drops through to profit 100%, so that's very beneficial when it comes to supporting profit in the margin. And we also saw an increase in the services day rate. We talked about this at the first half results. And this, again, this strong increase again continued in the second half of the year and was again very beneficial for overall profit. So this has meant that the adjusted EBITDA margin increased by 3.5 percentage points up to 50.9% for the year. So this is very strong financial performance. If you see the margin over the past 3 years has been above 45%, which is very good for us to see. I think going forward into 2026, the analyst consensus is still at 45%. Whilst performance has been very strong over the past few years from a margin perspective, we are flagging that it could potentially be a little bit lower in 2026. For example, if the license mix changes. And that could be that if the services revenue could grow faster than license revenue in '26, which could lead to a slightly unfavorable mix impact. Secondly, in 2025, we have benefited to a small degree from favorable FX. So it was about 1 percentage point on the margin. So clearly, we can't benefit from favorable FX. In every future period, so it could be -- it could move against us in future periods. And finally, we have been investing very heavily, both in recruiting new sales heads. So there was a net increase of five sales heads in 2025, and we're expecting a similar increase again in 2026. So these are expensive people. and there can be a gap between making the initial investment and seeing the return come through. But we do believe given the strong growth we see in the market, we do believe it is the right thing to invest in the sales force in order to make sure that we can deliver on our potential. At the same time, we have been recruiting more expensive delivery heads. So as we win these larger more complex projects, we need to make sure that we've got the right people in place to retain the high quality of the work that we are undertaking. In terms of recurring revenue, the graph at the bottom left-hand corner, the graph -- the dark blue graph reflect recurring revenue that has been reported in the financial year. So this is made up of support and maintenance managed service and third-party hardware and hosting revenue. For the first time this year, on top of that, we have also given an annualized term license impact. So although our revenue recognition policy is to recognize license revenue upfront for the full term when it's available for use. The metric in the light blue here shows a proxy for recurring annualized license revenue. So effectively, taking the total revenue by customer over the full contract term and dividing that by the term length. And I think the key point here is -- you can see that has grown very strongly over the past 5 years. So this total recurring revenue metric has been growing at 21% on a compound annual growth basis, which is higher than the 17% increase to revenue. You can see cash increased strongly again, up to GBP 34.4 million and I'll talk about that in a bit more detail on the future slide. And this has enabled us to increase the dividend -- so dividend or the total dividend for the year, up 17% to 15.4p per share. So in terms of the financial highlights, you can see the back order book was up 21% against last year to GBP 56.9 million. This is made up of two components, GBP 47.4 million of orders that have been contracted but not yet recognized. We're flagging that we estimate that about 33% of this balance will be recognized as revenue in 2026. On top of this, there's GBP 9.5 million of annualized support and maintenance revenue. So taken together, we think that the backorder provides very good cover for revenue both in 2026 and also in future years. In terms of the revenue that we delivered during the year of GBP 45.4 million. This slide here shows that most of the growth was driven by services, which reflected the increase in the services day rate, on the key implementation projects that we generated during the year. At the same time, software revenue has remained robust at GBP 24.4 million and included a higher proportion of Cerillion license revenue, which was partly offset by lower-margin third-party license revenue. As I said before, the adjusted EBITDA margin has increased up to 50.9%. This includes the impact of favorable FX higher day rates and implementation projects as well as the favorable impact from license revenue mix. Okay. Open side, in terms of cash generation, the table at the top shows a reconciliation of adjusted EBITDA down to free cash flow, you can see that in the year, there was some build in working capital with -- and that was mainly driven by accrued income, which increased by about GBP 6 million on the prior year. This increase is linked to the way that we recognize the license revenue. So license revenue is recognized upfront when the software is available for use. But the customers typically pay on a quarterly basis throughout the term of the contract. Hence, when we recognize the license revenue, accrued income builds up on the balance sheet, which then unwinds over time as the cash comes in. I think it's worth flagging, we do have a very good track record of being paid by our customers. what we're selling is mission-critical software, and we do have the ability to turn the software of if the customer doesn't pay, and therefore, we do have a very good track record of that accrued income converting into cash over the term of the contract. Finally, the graph at the bottom shows a reconciliation of opening net cash to closing net cash. The key point here is that the free cash that we generated during the year was much higher than the amount -- the outflows, the dividends, the small amount we paid for employee incentive shares and lease payments. So this is a story getting to closing net cash of GBP 34.4 million. In terms of the detailed income statement, a couple of additional points to mention here. Firstly, as Louis said before, we do continue to invest in R&D. So we invested about 17,500 days in R&D over the year, which is up over 30% on the prior year. Of that, we capitalized GBP 1.8 million of development costs, and this balance made up about 70% of the total gross spend. Operating expenses at GBP 16.7 million remained broadly flat with the prior year. So whilst we did continue to invest in heads and payroll inflation, the impact of this was offset by higher capitalization of development costs as well as favorable FX. Over the slide to the detailed balance sheet I think the key point here is that the balance sheet remains incredibly strong. We still got net cash of GBP 34.4 million. There is no debt. And during the course of the year, there was an increase in net assets of 23%, up to GBP 59.6 million.

Thank you, Andrew. So looking forward again into '26, we're very pleased to see our overall unweighted pipeline. This is new logo, new customer pipeline increase a bit to GBP 275 million, and our weighted pipeline increased to GBP 65 million. But I think the most important thing we've been flagging to investors about this pipeline is the quality of the pipeline at the moment, and the proximity to closure and maturity of some substantial deals. And I think we do expect to see some traction on at least some of that relatively soon. And without saying more than I'm supposed to say, that's one of the main drivers of confidence in terms of why we think we'll achieve consensus '26 numbers. And what -- 2027 looks good, too. So that is something we've been flagging. So finally, let's hopefully -- here we go. In terms of the -- just summing up, Andrew has relayed the numbers. We're very pleased to hit those new highs again. New orders up 25% really important in terms of this year and next the pipeline I've just spoken about, is strong and quite pregnant, shall we say. And we've talked about the financial profile dividends, all in all, I think we're well positioned for '26 and we're very confident. So Gareth, back to you.

That's great. Thank you very much, both Louis and Andrew, it's all very good. I will now move to questions from the audience. [Operator Instructions] We've already got quite a lot of questions queued up. I'll try to cluster a few of them together, but generally, I'll just take them in the order that we've received them. First question that came in was one of your competitors -- you talked about M&A a little bit. The first question is one of your competitors recently acquired Digitalk in the U.K., what's your view about that acquired company? And why are you not currently pursuing that kind of acquisition?

It's a good question. That's not what I'm aware of to be honest. So unfortunately, I can't really comment. Have you come across that one, Andrew?

No.

And not certainly not a competitor that we would see. So I'm not sure if that -- is that a competitor or not a BSS vendor that we know. If everybody can forward more detail, we'll take a look at it.

Yes. I thought it was Hansen Technologies.

So Hansen took over -- so well, we know Hansen are much more of a competitor in utilities. So it's much more a player utilities that you don't really see them an awful lot in telco. They have a telco billing business and a much bigger business in utilities billing. And I guess we used to see them from time to time that we haven't seen Hansen for a long time. They have got some legacy business in the U.K. market. For example, Tesco Mobile, probably dates back probably 20-odd years. So Digitalk maybe involved in that stuff. Yes. But I'm afraid I'm not aware of that, that acquisition. Hansen do acquire a lot of companies, so I'm not surprised.

Fine. Okay. That's great. I've got a couple of questions also sort of M&A related but more on the multiple side. So one question is, would you say that the M&A multiples in the sector are still on the high end. And then a separate question, but I think related and maybe you can take them together is, how do the multiples of the two competitor acquisitions compared to your own valuation.

So I don't -- I think that the one that's disclosed is the CSG one. So I think that multiple is about 2.7x EV over sales. I could be on my memory is that sort of order I think at a -- sorry, EBITDA over sales over revenue multiple, it's around 20-ish. So that's a bit lighter than we are. I think someone else have to help me out what our current EBITDA over revenue multiple is but it's sort of in the ballpark. Obviously, we trade at a much higher EV over sales multiple. I mean, we're around 7 or 8, I think, on sales, but that's because of the high margins mean that we're not as expensive at an EBITDA multiple level.

Sure. Okay. Another question, what's the minimum IRR that you're targeting for your AI-related product developments?

So just on that piece, I should point out that -- sorry, CSG was trading at a much lower multiple as a public company because it has much, much lower margins. I mean I think 12% EBITDA margin compared to 50% and it was barely growing for the last few years. So that -- we would expect to see a premium over that.

Quite different, yes?

Sorry, what's -- so I think the thing about AI investment is we will see some incremental additional business with existing customers and the product we're building in AI is licensable. So you need to buy a subscription to use those products and services, essentially we're selling them a SaaS product. But this is incremental really to the main -- it's not going to be 50% more than you're already paying. We're talking about incremental bits of functionality. And I think the thing -- the way to think about AI, and it's more about staying at the front of the pack and making our product set more attractive than the rest such that AI is not a reason not to buy Cerillion, we want to be the most flexible, most open most powerful user of AI in the BSS/OSS space, and that's why investing the money in. But it's not going to be something which we double our revenues on, you see what I mean. It's just going to become -- all of the front runners are working on this stuff. And anybody who wants to stay in this business, we'll need to have these features.

Understood. A question about actually your personal share sale, Louis, your recent GBP 46 million share sale was your first since 2017. How should investors reconcile this significant reduction in your holding with your stated ambition to double the company's size and your long-term conviction in its growth potential?

Yes, that's a fair question. Well, I mean, to put it in perspective, I reduced the holding by 1/3. So I'd still retain 2/3 of that. And I think that at the end of the day, we do live in an uncertain world. We don't know what's around the corner. Lots of geopolitical uncertainty at the moment. And I've been doing it for 25 years and at some point, it's just sensible to diversify to some extent out of one main core asset and I'm sure that you guys on the call would all want to do the same thing with your investments, you will know everything in one stock. And whilst I firmly believe that we will double the size of the company, it's really just about a little bit of diversification. But there's -- I have no plans to sell any more stock. I didn't need to sell the stock particularly. It wasn't that there was a particular driver and in a way, there's never a good time. But it's something that has sort of been on the agenda for a number of years, really, it's just a case of at what point does it make sense? And I'm sure you understand that dynamic.

Okay. Thank you. We've got three questions, which are also related to revenue or the performance during the current year. I'll ask all three and then you can work out how to maybe split the answers. First one is it looks like recurring revenue declined by 3% in the second half. What's the reason for this? Then another question, your record GBP 48 million -- sorry GBP 47.6 million in new orders contrasts with 3.7% revenue growth and your 12-month backlog conversion forecast has slowed from 45% to 33% and what gives you confidence to reiterate a goal of doubling the business in 3 to 5 years? And should we expect a material reacceleration of revenue in FY '26? And or our longer implementation cycles and capacity constraints, the new norm? And then separately, a third question about the weighting of revenue growth in 2026 between H1 and H2, which might be related to those two.

Okay. So let me take the first one on recurring revenue. First of all, you might have to repeat the second question. So I've captured it. So you're right. I mean, there has been a decline in recurring revenue in H2. Just to reiterate, I mean, the way we calculate recurring revenue is essentially to take the final month of the year, and then annualize it. So clearly, there can be changes from period to period just due to the timing of revenue dropping in. So whilst we have benefited from new customers coming on board, and we have continued to benefit from indexation, as you would expect. There has been some decline in revenue just due to other amounts dropping out. So that's not unusual. But I think the long-term trend that we expect is that the recurring revenue should continue to tick up into the future, particularly because we have additional customers that are poised to come on board in 2026, which should drive additional revenue coming through.

Okay. And the other two are, your record GBP 47.6 million in new orders contrast sharply with 3.7% revenue growth, and your 12-month backlog conversion forecast has slowed from 45% to 33%. What gives you confidence to reiterate the goal of doubling the business in 3 to 5 years? And should we expect rather a material reacceleration of revenue in FY '26 or our longer implementation cycles and capacity constraints, the new norm?

Okay. So let me start on that and then maybe I can hand over to Louis. I mean clearly, there is a difference between winning orders in the year and recognizing revenue. So you're absolutely right. Revenue was up 4% in the year, but orders have been up significantly to 25%, up to GBP 47.6 million. So first of all, I mean, the increase in orders has been very helpful because it has meant that the back order book has closed at a record level of GBP 56.9 million, so that was up 21% on the prior year. So that gives us a huge amount of confidence coming into 2026. We do have a high level of revenue that's been underpinned, both in '26 and in the future years. I think it's also right to say that the proportion of the back order that we expect to unwind in '26 is slightly lower than it has been in previous years. We are flagging that of the GBP 47 million, about 33% of that is expected to be recognized as revenue in future years -- sorry, in 2026. But of course, the rest of it will be unwound into future years, which is very positive, taking a longer outlook. In terms of why we continue to feel positive about 2026, if we look at both the unwind of the backlog and we add on the impact of the support and maintenance run rate, and then adding on the impact of indexation, we think that gives us about 50% coverage of the analyst consensus in 2026. So we feel that, that gives us a very good starting point. Now of course, on top of that, there's a number of things which aren't included in that number. First of all, every year, we do get term license renewals coming through. Now those term license renewals and extensions aren't included in the backlog because our accounting policy is to recognize that license revenue when those renewals and extensions are signed. So we would expect that to give us some boost on top of the sort of the 50% coverage that I've talked about already. On top of that, every year, we do get a lot of services revenue, which is upselling to existing customers. So for example, in 2025, we generated GBP 13.4 million of account development revenue. The previous year, it was a similar number, GBP 12.6 million. So we would expect to generate sort of a similar number of -- similar amount of account development revenue in 2026 would be on top of the backlog amount. And then finally, the amount that is missing on top of that is any impact from new customer wins. So as Louis was saying before, the prospective customer pipeline is at a record level. The quality of the opportunities has gone up. So we're feeling very confident about signing new customer contracts in the near-term future, and that should deliver a significant amount of additional revenue on top. So that is the way that we view our prospective revenue for 2026. And that is why at this point in time, we're feeling confident.

Great. And then the last section, you sort of touched on parts of this already, but could you talk about the weighting of revenue growth in 2026 between H1 and H2?

No, absolutely. I mean it's a good point. So in 2025, we experienced a stronger H2 versus H1. And we are expecting a similar trend in 2026. So we think the first half will be about 45% with 55% revenue in the second half of the year. And that is really driven by the expected timing of license revenue dropping through. So if we were to sign a new contract, a new customer in the first half we wouldn't recognize any license revenue in the first half because it typically takes about 6 months between signing a contract and recognizing revenue. But naturally, therefore, we would expect to recognize a bit more license revenue in the second half of the year, for example.

Okay. Got some more general questions perhaps for Louis here. First one is you mentioned the sales heads increase of five people. This is coming off an existing base of how many sales heads?

Around 20.