Intercede Group plc (IGP) Earnings Call Transcript

Good afternoon, ladies and gentlemen, and welcome to the Intercede Group plc investor presentation. [Operator Instructions] 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 will publish those responses where it's appropriate to do so on the Investor Meet Company platform. Before we begin, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Intercede Group plc. Klaas, good afternoon, sir.

Good afternoon, Jake, and indeed good afternoon, everyone. My name is Klaas van der Leest. I'm the CEO for Intercede. I would like to welcome both existing investors, potential new private investors as well as analysts to this session, which will cover our full year results for the year ending March 2025. During the session, I'm joined by Nitil Patel, who is our CFO; and Allen Storey, who is our Chief Product Officer. We look forward to providing you with an update in the coming 45 minutes. And whilst this presentation is [ us ] presenting to you, we do look forward to your questions but also feedback after the session. So without further ado, let's make a start. Right. So content slides, I'll give a quick company introduction. Nitil will then talk about progress report financial review. Allen will talk about product and strategy, and then we'll provide a summary and outlook. And there are a few appendices for those who want some further information. So company introduction. I'm not going to go through the entire investment case here, but a couple of points to highlight here. What we do is we provide business-critical authentication software in the cybersecurity market. Now we stress business critical because this software is not used for discretionary purposes. It is used to protect in effect, the crown jewels of our client base. So even in economic downturns, the software typically does not get turned off or is subject to license reductions. And particularly in the current climate where clearly, there's a lot of flux, both here in North America and other countries, we see no license reductions at all. If anything, we see good license usage going forward. From a business perspective, clearly, we're a software play. We've proven out over the last 3 to 5 years. It's scalable. We own our IP. We've owned our IP for well over 20 years. It's very well established. We've got a proven operating model with a very recognizable client base, always referred to small company in [indiscernible] to work, but a client base to die for. Many of the clients we can't publish on our website, but those who can give a very good impression of the kind of client base we're dealing with. Our management team is very established. We've all been working together for quite a while. And from a growth pillar perspective, we've got two key growth pillars. Pillar #1 is double-digit organic growth, and we've been successful in achieving that over a period of time, and we'll report against that a bit later on. And our second growth pillar is that of M&A, so inorganic. But we will only do that when we think it's interesting IP that will actually be accretive to the business. From a market perspective, particularly at the high end of our authentication pyramid, we definitely are recognized as the global market leader in our space. We don't just say that ourselves, but it's also the market analysts report on it, and it's further supported by the very large wins that we've achieved over the last couple of years. We do have a very strong competitive advantage, and we love to get in a competitive bake-off because we know we've got a very good product set. Pipeline-wise, over the last 3 to 5 years, we definitely diversified our pipeline. Sometimes we've been accused of being completely dependent on North America. But actually, you will see in the results, as Nitil will present that in the last report. We've actually got some very good uptake in what we call our Rest of World business. Allen will talk about the authentication pyramid and how we've gone from a single product company to a multiproduct company. And our target account market is growing very nicely in terms of product itself, geography, but also our go-to-market model. For those who are new to Intercede, our go-to-market model is predominantly indirect. Over 95% of our business is contracted through channel and distribution. And again, last point on this central box is regulation. We like regulation and indeed, we love regulation, particularly in the North American market, there is regulation that is very kind for our type of software, but we also see regulation now appearing in other countries and regions. And again, in the product update, Allen will talk about that. I will not go into any detail now on the financial side. Nitil will talk about the KPIs that we report on. And -- for context, I'll provide a little bit of an update on the market conditions, and we're providing 2 slides here. One slide is on the situation in North America. The second slide is around the situation in what we call Rest of World. So after Trump's announcements recently about tariffs, there was a lot of noise on the chat boards. And indeed, we got inquiries from institutions about, what is the impact of tariffs on indices. Well, I'm pleased to report that from our perspective, we haven't noticed anything. If anything, digital goods like software are excluded from tariffs. So we haven't really been impacted by the tariffs. So the second point on this slide refers to Dodge. Again, lots of noise in the press about the cuts they're making and the savings or the elect savings they're making. I think in time, we'll find out what that actually amounts to. But from our perspective, we haven't really seen any direct impact of those activities in our client base. So we don't expect there's going to be much disturbance. The cuts that have been rumored on the Cybersecurity and Infrastructure Security Agency are very much on the outside of the agency. So this agency goes back to Mr. Trump's first tenure, where he set up the agency to focus on critical national infrastructure. Then under the Biden administration, this agency ballooned to take on many, many more different responsibilities. It's now being cut back to its core. Now, when we take a look at what's happening in Iran at the moment, clearly, protection against critical national infrastructure is key. So the cuts that have allegedly taken place in this area, we do not believe will impact businesses like Intercede. Final box on the top right-hand side, GOTS to COTS. GOTS is an acronym for government off-the-shelf software. I think most of you will be familiar with COTS, commercially off-the-shelf software, commercially off-the-shelf software is software like the ones we provide with MyID. What's been very, very common in North America, particularly in the government sector is that those agencies wanted to own their IP. So for decades, they instructed, they funded system integrators to write bespoke software. A, that's expensive; b, it typically takes a long time and it's also very, very expensive to maintain. What we're seeing at the moment and what we're hearing and what's being documented is that they really want to make a move away from GOTS into COTS. From a COTS perspective, we believe we're very well positioned. Then if we move to the bottom row, a lot of noise around spending decreases. But the flip side of that is we also see areas where there are spending increases. So defense -- Department of Defense is definitely one of the areas, where there are significant increases in spending being allocated. And then the second point we're stressing here is border security. We all know that Mr. Trump wants to close the border with Mexico, that means they need resources, and we're very much aware of big recruitment activities, particularly within the Department of Homeland Security. All this, by the way, is public domain information. If you go on to the DHS website and go and look on the careers, you probably find references to recruitment events. Now what does this mean? Does this mean that we're going to get orders from our selected clients this afternoon? Probably not. But what it does mean is over time, they probably need additional licenses, if and when they need additional licenses above the ones they've already committed to from a commercial perspective, then there may well be upside. Purchasing review is an interesting one. We're balanced on that one. Hence, you'll see the question mark in that box. What's been announced recently is that U.S. government is looking to establish more direct relationships with vendors. Now for those who have been following Intercede for a couple of years know that our model is very much indirect. Why is U.S. government looking to build more direct relationships? Because it's pretty typical that there are multiple supply chain components involved in the supply, for instance, of our software. And clearly, they all take a margin in the process. Now what does it take for a direct relationship? Well, first of all, you need to be listed on the GSA Advantage price list, which we are. Secondly, you need to be available on the contract, the contract vehicles that the U.S. government buys through. That's a tick in the box for us. And the final point is we're setting up our own Intercede NSS, National Security Services instance in the U.S. We've been sponsored and we've been asked and we've been subsequently sponsored by one of the larger U.S. agencies to set up a clear facility. Currently, we can't hold our security clearances for our staff, going forward, we can. We're well down the track on it in that process. And because we're foreign owned, we need to go through something called mitigation, but we fully expect within the next 6 to 12 months, we will get full clearances. Final point and focus is on state and local. There's been an executive order signed by Mr. Trump in March, where he used one of his famous [indiscernible] to basically warn and prewarn state and local that there is a risk of increased cybersecurity threats in that space, and we fully expect there will be legislation to follow. Again, legislation is good for us. So whilst there's been lots of rumors -- lots of noise in the press about the impact of the changes in the U.S., I'll be very open and honest with you. We've contracted very normally. Our Q4, if anything, was much stronger than we had anticipated as a management team. Hence, you've seen a number of upgrades coming through. And also, if we look at Q1, we're now towards the end of our first quarter, with very much trading in line with Board expectations. So no real negative impact from the changes in the U.S. If anything, we can see some positivity in some of the changes that are currently being made. However, U.S. is not the only part of the story. We also actively pursue business outside of North America. We call it Rest of World. If we start on the right, we've been growing our activities in particularly Asia Pac. Singapore plays quite a central role in that region. And the interesting bit about Singapore is that they have very high security requirements. They're very similar to those we see in North America. Hence, our software is a very good fit for those government agencies, and we've made a number of announcements and indeed wins in that area. We also see increased activity in Australia and New Zealand. And whilst we can't confirm this is the case, we fully expect that may well be related to the Five Eyes collaborating more. So that's Asia Pac. If we look at Middle East, through acquisition, we've got a much stronger presence in the Middle East. We've got around 40 to 50 customers now in the Middle East. We're continuing to grow that channel. We'll continue to work and recruit new channels, and we're expanding in the region, and we're signing new logos. So Middle East, again, is contracting very, very normally for us. Finally, on the left-hand side, U.K., again, we see, still ongoing activity with U.K. government. We know for sure that it's Five Eyes related. Then if we look at Continental Europe, there is more and more regulation coming up like NIS2, like DORA in the banking world, and we fully expect in the next 12 to 36 months that, that legislation will actually help to position ourselves, i.e., our software into the opportunities that may well come to market. We're already working with our partners on the continent to position particularly for the NIS2 regulation. And on that note, I think I can only conclude that from a market perspective, we see no real change. Our business has been motoring very, very nicely in the second half and particularly in Q4, and we see that same kind of momentum moving into Q1. So on this point, I will hand over to Nitil, who will talk about the progress report and financial results. Nitil, over to you.

Thanks, Klaas. I'll be obviously -- obviously aware of timing. Hopefully, everyone on the call has read the RNS we released to the stock exchange. It will be on the left-hand side the progress report. On the right-hand side, we've got a few key highlights that were achieved during the year. As you all know, revenue was slightly down compared to last year. We did flag and have flagged previously that we had an exceptional nice order from a large U.S. federal agency, perpetual license order of circa 8 million, including S&M in December '23, which skewed the numbers slightly. And I'll show you a slide later for a like-for-like basis comparison. The good news is that we had good revenue growth compared to what [ Calendish ] had in the market for [indiscernible] at 16.1. We are profitable at 4.6 million, and we've continued to invest in our product. On the right-hand side, we've brought 4 versions of our product out in the year, and we brought MyID [indiscernible] to that same cadence and now bringing out their versions every quarter as well within a month in a releases. The other thing that we did was in the year, we launched our new product, MyID Secure Vault. And again, Alan will describe to you why we did this, how we came about and the impact it's having on us and our revenues and our expectations for revenue going forward. The good news is we've already got made in sales against that. We continue to invest in our R&D. We expensed 3.6 million into the income statement, 2.3 million from last year, and we had to capitalize for the MyID Secure Vault. Now this is not a change in policy. It's the application of the policy. MyID CMS is flagship has continued -- all R&D expenditure on that will continue to be expensed in the income statement, but identifiable separable assets with their own pricing strategy and stand-alone capability, means that the standard requires us to match revenues with costs, and that's what we're doing with MyID Secure Vault. The good news is that we're only capitalizing 0.3 million in the year, and we're aggressively amortizing that over 5 years. We've also had an exceptional professional services income this year, and we flagged this in two ways. One was obviously the exceptional order we had in 2023. The client had an aggressive timeline and set that timeline and did not move it. So the client, including the prime and us and our other supply -- with our suppliers within the consortium, all moved to deliver at that aggressive timeline. And the good news is that we've achieved it, it's deployed. But a consequence of that is they've used a lot of our professional services, hence, you've seen the increase in income from PS to 5 million, whereas our normal run rate is circa 3 million to 4 million. And obviously, we've got the other POC, which we had last year, where they're continuing to employ 2 of our full-time employees and they continue to do so. The POC is now moving to a semi deployment stage. It's still a long way, but we're going in the right direction, and they're consuming PS from us. On the right-hand side, as Klaas has mentioned, a good sale for us in December in the APAC region. It's a good beachhead for us in that region. It's a flagship deployment and well recognized in the countries around that area. The good news for this was that it was a CMS sale as well as MyID SecureVault sale. And MyID SecureVault is only sold on a subscription basis, and they booked 2 years in advance, which is good news. We continue to sell in the Middle East, as Klaas has mentioned. We're not just selling to governments, but also to airlines and banks as well. And then the bottom is just to highlight that although federal tends to -- U.S. federal tends to buy perpetual licenses, we're seeing movement now in the first sale that we've had in subscription in a semi-autonomous federal agency in America. Moving on, I'll be quick on this, financial highlights, revenue breakdown. Just to show you on the top left, the key metrics we focus on are support and maintenance, the 10.2%, that recurring element. And why is it important to us? Because it's sticky, right? Clients do not want to be not supported by us and they tend to renew every year -- 12 months in advance and pay us in advance. Included in here, there's a question obviously and we'll answer that is what is that made of? And I'll answer that later in the Q&A. As I mentioned, the PS, the 5 million is a really good result for us. Probably our natural run rate will be between 3 million to 4 million. And if you add that, our repeatable revenue to the support and maintenance revenue of 10.2 million, we're covering more than 90% of our operating expenses, which is really good news because, any sale -- extra sales on our license income, be it subscription, the way we recognize the income or perpetual extra PS, then it's all highly, highly accretive to us. As Klaas mentioned, we've had good growth in the rest of the world. We obviously had some really good sales in the APAC region. Our geo-diversified pipeline continues to work in that manner. And although federal is big and the defense contractors in America are big and will continue to be big, we're glad to see the growth in these areas. The adjusted EBITDA and PBT to show you a close correlation between them is making obviously indicate that we don't have many adjustments. And this year, actually, our PBT is higher than our adjusted EBITDA. And the reason for that is obviously interest income. Our cash and equity is going in the right direction. I'll give more color to the cash element as well. Our income -- sorry, to give you a guide on our growth analysis, I'm going to show you for a kind of like-for-like normal comparison of what our trajectory of growth is on our revenue. So you can see that the 13.3 million was the original calendarish forecast for us in the market for that period. Obviously, we came in at 20 million. And the equivalent forecast at that point in time was 15.8 million for FY '25, and we've come in at 17.7 on a normalized like-for-like basis. Now of course, no one is going to say no to an $8 million perpetual license. But the good news is that we are growing at double digit. We have a slightly different forecast for FY '26 that's just to reflect the current uncertainty in the market, but that's not to say that we don't see revenue growth coming through, not just in the United States, but also in the rest of the world. Income statement, again, a very clean income statement. I won't go into details about this. The main thing to note is, obviously, the new IFRS 18 is coming. It won't have much of an impact on us, because we have a clean statutory report. The main thing to note is obviously operating expenses have gone down. There's two reasons for that. One, obviously, last year, we had a larger bonus and commission sales because the revenue was higher. But also we've got a slight different way of accounting for R&D tax credits going forward, and I'll explain that later. Again, you'll see that impact of the adjustment we made in FY '23 tax of the tax payment we made during H1 and probably into H2 of this year for repaying that FY '23 tax -- R&D tax credit. Financial position, again, a very, very clean balance sheet. Although we did capitalize MyID SecureVault, the impact is not that huge, 0.3 million. And if you look at it, it's in other intangible assets, and we're amortizing the contracts that we capitalized on the acquisition at 10 years and MyID SecureVault is 5 years. We've increased equipment. Again, we are upgrading the internal infrastructure of the group and again, moving that into zero, making more -- making sure that more resilient and capable of expanding quickly into the future. The key KPIs on the balance sheet that we focus on are trade and other receivables, cash and deferred revenue, all in the right direction. Of that 5.8 million, most of that has been converted into cash. And as at 31st May, the group had 21.3 million in cash. And obviously, deferred revenue is really, really important to us. So why is that important? Because it gives us visibility into the year, of what revenues we can already book in and also the long-term contracts that we're winning gives us even more visibility into years 2 and 3, as you can see from the deferred revenue in our noncurrent liabilities. We'll continue to focus on that. I mean there was another question about how the pound is affecting us with the strength in the dollar. It is. It's a weaker pound is better for us, because 80% plus of our revenues come in dollars, and most of our expenses are in sterling. What do we do about it? We're not a sophisticated finance department in the sense that we don't have that many people. So we don't hedge. What we do is as soon as we know that the money is coming in, we'll look at what the rates are and convert quite quickly. What we do, do is we keep 3 to 4 months of our operating expenses in dollars to meet the obligations either in creditors suppliers and also to keep our payroll in our Reston office in Washington. So I just wanted to give some additional color to some of the things that happened on the income statement and to kind of give you an idea of what's going to happen going forward. As you know, we did capitalize MyID SecureVault. That obviously did not have an expense into the income statement went straight to the balance sheet. And then last year, we -- our advisers have opened the tax comp for FY '23 because we moved into a profitable zone. It was better for us to take the arbitrage on the R&D tax credit at 14% in FY '23 and the corporation tax liabilities that we'll pay in the future at 25%. So we repaid that tax credit we got, and that's why you saw the payment flow out in the income statement. This year, the government has changed the rules again. They brought the concept of a large corporation R&D claim. You make a claim an assessment, you assess that estimate, you put that estimate in either other income on your income statement or as a credit into your operating expenses. We've chosen to do the latter. We're matching our expense into the income statement. It's an estimate. We'll make our claims in the year, and then we'll adjust accordingly. And you'll see that now consistently being applied across the years coming forward. And obviously, last year, I just wanted to highlight that we did a share buyback in October to December '24. We spent, including costs about circa GBP 0.5 million. And again, adjusting for all the things above that we've mentioned, the like-for-like we would have had an extra GBP 1.4 million in cash as of 31st March 2025. And finally, from my side is just to show you consolidated cash movements and [indiscernible], I probably should have shown this slightly better regarding the [ wordings ], we'll adjust that for next year. We're cash generative. We have no debt. You're obviously going to ask us questions what we going to do with our cash. Klaas will mention a bit more about what we're doing with our M&A strategy later. But you can see the cash movements there, mostly fixed assets and upgrades on the infrastructure, final repayments, and final payments on the acquisition that we did 2.5 years ago, and then the movements that I've just discussed. And we've ended up with a good cash generative position, good launchpad for us to continue our M&A strategy, but also continuing to have the ability to invest in our products going forward. On that note, I'm going to pass you over to Allen, who's going to move on to products and strategy.

Thank you, Nitil. So a quick reminder about what we do. We protect our customers against data breach. We do that by taking weaker credentials, typically passwords and replacing them with stronger credentials. Packers, bad actors break into systems by stealing credentials, either by phishing campaigns or they're being leaked on the dark web and breaking into systems with them. Looking at what we can see online at the moment, that's the most likely cause of the recent Marks & Spencers and co-op attacks. So we help our customers deploy stronger credentials. We do that securely. So for example, in compliance with U.S. government regulations, which drive a lot of our customer base and are very much seen as the gold standard of identity around the world and at scale, 10,000 to 100,000 millions of users our platform scales to. This is our authentication pyramid. So we use this to describe the level of security of your authentication, passwords down the bottom being the weakest, PKI public key infrastructure, authentication based on cryptographic keys at the top of the pyramid, also known as phishing-resistant authentication. So something that can't be stolen or compromised. Historically, we've only played at the top of the pyramid. So our MyID credential management system, our flagship product still generates the majority of the revenue, very much plays in that space for high assurance customers. Just over a couple of years ago, we made our first acquisition of an organization that brought in multifactor authentication and password security management. So that allows us to move down the pyramid and cover the whole pyramid, basically be able to say to customers, how secure do you want to be, and we can help them on that security journey up the pyramid. Those products that we brought in by acquisition are now completely embedded into the organization. So we have joint development, joint sales, joint marketing, et cetera. and we take those to market now as MyID products. So MyID has become a product family. There's one new product Nitil mentioned at the top end of the pyramid, MyID SecureVault, and I'll explain what that is in the next slide or two. Our customers typically are customers who have something to protect. So government defense intelligence agencies, we have lots of logos. I would love to be able to put on our website, but we're not allowed, but these are protecting U.S. citizen information, military helicopter plans, U.K. defense codes, et cetera. So really at the top end of the security, which gives us a very high level of credibility for any customer we approach. The credential management system is that high assurance product, so that will register people, capture fingerprints, facial biometrics, check passports, driving licenses haven't been faked, prove they are who they claim to be, walk them through background checks so we make sure that person has a social footprint on society. They're not a terrorist, no fly list, then it will issue them digital identities to a range of form factors, smart cards, phones, USP tokens that they authenticate into applications with so that a network so that the organization could be sure that person is who they claim to be. New product SecureVault. So this came out of a customer we're working with in the Asia Pacific region who is using PKI. PKI is based on keys. When you use those keys to decrypt e-mail, if I'm decrypting this on my laptop, I will take a smart card, put it in my laptop, enter my pin. I will then be able to decrypt and read that e-mail. If I want to do the same thing on my phone, I need to get the same private key onto my phone. So we need to secure place to store these keys that systems like our credential management system can recover them and put them on to the phone. The challenge the customer was facing was that it's the PKI vendor, the people who provide the certificates who are looking after those keys. And what tends to happen is customers want to move between PKR systems every few years, because it's coming in commodity and they can get better prices. But the fact that, that PKR vendor was holding on to the customers' keys made it very difficult to migrate. So the customer approached us and said, interest, you understand security, you understand key management. You have some of these features in your product already. Could you enhance those and put them into a separate product, so we keep control of our own keys. We've now done that. We've built that product that was deployed for the first time earlier this year. We've made 2 sales of that. We're now taking that product and position it into the U.S. market, because that is a challenge we see our U.S. customers having as well. So that's a brand-new product in the portfolio. Multifactor authentication is very much positioned at customers who don't want to use their authentication in the cloud, particularly in the Middle East, there's a region where they're not comfortable having their authentication in the cloud or in the U.S. cloud. So this gives them an alternative to keep control of their own authentication. And password security management is very much if you have a compromised credential, we will know that we have the world's largest database of compromised credentials online, managed by a team of ethical hackers, and we help protect our customers. So if you try and log on with a compromised credential, it will force you to change it. So I'm just going to move on a little bit and talk about a little bit about innovation and then the strategy about where we're taking the product set. So the first one is in the password security management product. So passwords generally are not stored in a clear, not in Playtech that a human being could read. They're scrambled or hashed. So if you look on the top, you'll see that long string of numbers. That is a hash. So that's how they're actually stored. What happens is bad actors try and crack those hashes. So they try and work out what is the Playtex password from that hash. Once that's cracked and that's available online, people will break into systems with it. So most of the security system in this area will say, is this password already known to be cracked? Is it compromised? So for example, one [ love ] running 25, it's known to be compromised, it's not safe. What human beings do when they're asked to change a password is typically put a different number or a date or an exclamation mark on one end or the other. So for example, one love running 25 would become one love running 26. Next year, one love running 27. So human beings are involved here and they make decisions. And the bad actors know that. So they're using algorithms, they're using AI to predict what people will change their password to. So not only is this -- has this password known to be compromised, it's could it easily be compromised. What we're doing is building that intelligence into our product, so it will actually warn you, well, this password, I love running 25 isn't already compromised, but it's highly likely to be compromised. It's a bad password, it's easily guessed. So we're adding more intelligence around the product to differentiate it from the competition. Another innovation here is around mobile ID. So we have a good footprint in mobile ID. We do the mobile identity as well as smart card identity for the National ID of Kuwait. So we have millions of smart card issued and millions of mobile identities issued. But there are other opportunities for technology. This particular one is one we're working with an innovation on a partner within the U.S. to position into the U.S. market. So as an example here, on the left, we have a plastic ID card. If you're a military worker, you get a smart card, a chip-based identity to authenticate yourself to systems. If you're a dependent of that military employee, you get a plastic-based card. That plastic card allows you to walk on the military base to access some cheap provisions in the store, for example, but that's not particularly secure. That card can easily be faked by anybody online. So what we're doing is using the mobile driving license technology, deployed in the U.S. at the moment. So if you get stuck by a traffic cop in the U.S. and you asked to show your driving license, unlike the U.K., you want to a plastic card, you show your phone with an app on it. And what the traffic cop can do is scan that with their phone. That will do a digital handshake. It will perform some cryptography. And it knows that, that license is genuine. It's not being tampered with. It was issued by trusted authority and it's still current. So we believe there's an opportunity there to take that type of technology and bring that to the mobile device, so we can have a smart card level of security on a mobile consumer platform, which increases the security, but importantly, reduces the cost. The other one I want to talk about briefly is use of AI. So we use AI artificial intelligence within Intercede. We find that at the moment, it doesn't code for us, but it gives us greater efficiency in coding. So we're not using it to look at replacing people. We look at it to getting more out of the people we already have. Same in the coding environment, same in testing, same in marketing. There's a couple of areas I wanted to highlight in the product where we're looking at bringing it into the product. And again, it's a similar pattern. It's how does it help people use our product. So one of the features of our product is report designer. You can write your own reports, you can get information out of our system. It's very flexible. Our customers like it. But you really need to go on a training course before you can use that product. You need to understand the database schemers, how to write queries, et cetera. What AI is very good at is understanding complex data structures and putting a human interface on the front of them. So for example, once we have the designer assistant in the system, I could ask that report designer assistant, build me a report that looks at the last 6 months, who's been issued smart cards, who's already got a mobile and how many of those are in this particular region. It will write that report for you. So it starts to make the product more usable. Second one on here is translation. So our product is sold around the world. It's designed to be translatable into multiple languages, but we don't actually provide the translations out of the box. We provide the tools to do the translation, and we rely on our partners to drive that language-specific translation. It would be easier for our partners if we could provide that language-specific translation out of the box along with the product release, which we release every 3 months. Historically, when we've done this, when we use tools to do the language translation, it doesn't really understand context. So it doesn't produce a language file that's accurate. AI is very good at understanding context. So we can ask AI to create -- translate this application into Japanese, Arabic, Spanish, whatever that language may be in the context of digital identity management, we find it gives very, very accurate translations. So again, that just does allow us to get more productivity out of the existing team. Moving on to the strategy of the product [indiscernible]. [indiscernible] within each of the 4 products in the family, what are we doing with them? The credential management system is at the top of its game. It's the market-leading product in large PKI programs and PID, that's the personal identity verification, that U.S. standard that U.S. government and supplies into U.S. government have to follow. And we're starting to be seen as the gold standard for identity in a number of regions, specifically Asia Pacific. So we want to maintain that, so we will keep investing in that. One thing we're seeing in that area is FIDO passkeys, which is a consumer standard coming into the enterprise space. And we see this as an area we want to maintain market leadership on. So you may have seen some of the announcements we've been working with Microsoft, some of the press releases. We were invited by Microsoft to be an early adopter of their APIs to allow us to manage FIDO passkeys that then work with Microsoft Entra ID. There's a webinar coming up just next month where I'm presenting a webinar with Microsoft on usage of this. So that Microsoft relationship is key to us. We want to maintain leadership in that space. There's also interesting opportunities around mobile in the U.S., which I talked about there and with the upcoming EU Digital Identity Wallet as well. SecureVault, I spoke about the product set there. There are opportunities to manage a wider range of secrets in the organization, such as biometrics. But really, the key there for us is to position that into our existing U.S. market because we believe they face the same challenges. A couple of points on multi factor authentication password security management. We've been working with a partner in Germany to make our product capable of working in a managed service provider environment. So that partner is a managed service platform provider whose product is used by multiple end managed service providers. So we've now completed that technical work to make that product multi-tenant capable to make it automated and API-driven. And we're now starting to roll that out. We've got the first users on platform. So we're looking at how fast can we roll that out. Are there other partners we can take that to a managed service offering. The final one is really a combination of multifactor authentication and password security management. So we're seeing an opportunity in the space to manage the credentials that you can't single sign on to with a Microsoft application today. So the ones that support a password or a passkey that don't support federation into a Microsoft environment. And those are dealt with by enterprise password managers. What we see is those products coming from a consumer background. For example, so they will learn passwords and they will replay them at the application. What they tend to do is say, hey, Allen, your password is compromised, you should change it or this application now supports passkeys, you should swap from a password to a passkey. We believe with the skills and knowledge and the building blocks we've got in our existing product, we can create a product in that space that will say, hey, Allen, your password is compromised. We have changed it for you. This application now supports passkeys, we will migrate you automatically from a password to a passkey. So really to give enterprises policy and control over that space. So hopefully, that gave you a feeling of where we are with the product set and the opportunities we have for growth in each set.

Okay. If we then move on towards a summary. If we start on the right-hand side, we've been very, very clear for the last couple of years that the objective for Intercede is to deliver sustainable and double-digit growth. And we want to do that initially through organic growth, i.e., drive it through our existing platform. And as a secondary objective, as and when we can find the right kind of acquisition, we will layer on additional IP. But the starting point is double-digit organic growth. How are we going to achieve that by focusing on a key number of items here. The opening of this presentation was very much focused on what's happening in the market, what's happening in the U.S., what's happening in rest of world. And within those geographies, regions, we focus on the market drivers. It should come as no surprise that we like countries and regions with regulation, because it means they need to use software to be compliant with that regulation. We've already seen that for many, many years, not decades. In North America. We're now really pleased to see that some of these regulations are starting to appear in other regions like the European Union. Yes, it will take a bit of time, but we do believe that might have a similar kind of impact as what we've seen in North America. Second point is we need to have the product or the product portfolio. It's not that long ago. 3 years ago, we were a single product company. We would only have MyID CMS as one product and it's the only product we would take to market. We've acquired IP. We've acquired MyID MFA. We've acquired MyID CSM, and we've added this year through our own development, MyID SecureVault. So we'll continue to expand the product portfolio so we can upsell, cross-sell and indeed find net new logos to drive incremental revenue. That's obviously linked to the pipeline. Again, in the past, we've been accused of being a single-trick pony, you're only selling the U.S. Well, over the last 3 to 4 years, we've very much been working on diversifying our pipeline, geo diversifying it. And as we've seen in the results this year, our Rest of World revenues were significantly higher than the year before. And also if we look at the pipeline, we do see significant opportunity out of North America. That doesn't mean we do not see opportunity in North America. Our pipeline in North America is very strong, and we'll continue to focus on North America. But it's good to see that we can also be successful in other regions when we focus on market entry and then for market entry, go to expansion within that country and hopefully within that region. With Nitil on board and obviously, with Andy Walker, our previous CFO, there's always been incredibly strong focus on margin profitability and indeed revenue, and that continues to be the case. And our liquidity has been very, very good in recent years. There's plenty of working capital. We use it sensibly. We have strong policy and some of these funds will be made available for M&A. Final point is balance sheet. Balance sheet is pretty tidy. There aren't many companies like ourselves who can show a balance sheet that is as clean as what we're presenting. So we believe we're in a very good position. So what does the outlook say then? Well, first of all, we do believe we've got a very strong market position, and we want to capitalize on that. Whether we like it or not, geopolitical instability in different regions actually gives more demand for cybersecurity solutions and particularly in the areas we're playing in. So we think we're well placed. We talked about regulation. We talked about financial strength. When talking about expanding global footprint, again, those who have followed us for a while know that we predominantly sell indirect. So we use distribution channel resellers in order to go to market. Yes, it takes time because we need to find them, recruit them, onboard them, train them, do the first deal, do the second deal. But after the second and third deal, these guys become pretty, pretty self-sufficient. And therefore, the upfront investment actually pays off in years to come, and we see this actively happening. Obviously, final point here is we still see robust growth, not just in the year under consideration, but also in the periods ahead. So we're actually looking at a pretty, pretty positive outlook going forward. And then finally, a few thoughts on what might happen if we take a view and an assertion that in the next 3 to 5 years, we each on this call and indeed globally might actually end up with a personal AI agent, then if that is a world we're going to live in, it's incredibly important that these agents, these AI agents are secure. So let's talk through a scenario there. Klaas has got the personal AI agent. Klaas has got GBP 100 to invest and instruct his AI agent to go to the Internet, go and search through some search engines and find me the best savings rate for my GBP 100. My agent will then communicate with other agents, and it will probably come back with some answers and say, hey, Klaas, there are a few accounts available that offer 3%, 4%, 5% depending on how long you want to fix. I then give my agent, an AI agent an instruction to actually move monies from my current savings account into a net new savings account. But in doing so, we need to make sure that, that is incredibly safely managed. So in effect, we're still managing digital identities. Now if that's a world we're going to live in, we believe that Intercede is incredibly well placed because we've got the credibility and proven scale to basically fulfill that opportunity going forward. So hopefully, we've given you a decent view on the last 12 months. We've given you a view as to where we're heading and perhaps a little glimpse of what the future might look like. So on that note, I'm handing back to Jake.

Perfect. Klaas [indiscernible] thank you very much indeed for your presentation this afternoon. [Operator Instructions] Just while the company take a few moments to review those questions that were submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard. Guys, you can see that we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions, but guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so and if I pick up from you at the end, that would be great. Thank you.

Thanks, Jake. Right. I always have the pleasure of reading out the questions, and then I'll dish them out as I see fit. So here we go. The first one is actually a pre-submitted question. So I don't know who submitted it, but it's a very good question. So it starts with thank you for the great results. Our subscription revenues included in the support and maintenance or software licenses. Does that mean that the ARR of 10.6 million is the S&M revenue of 10.2 million plus 0.4 million of subscription revenues? Or does it include a recurring element of professional services? Nitil, this one is for you.