Full Year 2026 AI-Media Technologies Ltd Earnings Call

August 27, 2026

[Company Representative] (NWR Communications): Thanks, Mel. Anthony Abrahams, CEO, and Jason Singh, CFO, presenting. Following the presentation, investors will have the opportunity to ask questions. You may submit these questions by the Q&A function. I will now pass to Tony.

Speaker #1: Bernie Abrahams and CFO Jason Singh presenting. Following the presentation, investors will have the opportunity to ask questions. You may submit these questions via the Q&A function.

[Company Representative]: CEO, Tony Abrahams, and CFO, Jason Singh, presenting. Following the presentation, investors will have the opportunity to ask questions. You may submit these questions by the Q&A function. I will now pass to Tony.

Speaker #1: I'll now pass to Tony.

Speaker #2: Thanks, Mel. And thank you, everyone, for joining our FY26 results announcement. I'd like to pay my respects to the traditional custodians of the land from which I'm joining.

Tony Abrahams: Thanks, Mel. Thank you everyone for joining our FY26 results announcement. I would like to pay my respects to the traditional custodians of the land from which I am joining in Chatswood in Sydney and pay my respects to the traditional custodians of the lands from which you are all joining. Our FY26 results have been transformational for us. This is the year in which we really completed the transition from a human-in-the-loop workflow to one that is completely AI native. Ai-Media at a glance, we deliver AI-powered language infrastructure for live and recorded video content for broadcast, governments, and enterprises. Most of our work at the moment is in broadcast. What we will detail for you today is the expansion plans beyond broadcast into government, into enterprise, and away from our core traditional markets in the United States, extending beyond that to the rest of the globe.

Speaker #2: In Chatswood in Sydney and to pay my respects to the traditional custodians of the lands from which you are all joining. So, our FY26 results have been transformational for us.

Speaker #2: This is the year in which we really completed the transition from a human-in-the-loop workflow to one that is completely AI-native. AI media at a glance: we deliver AI-powered language infrastructure for live and recorded video content.

Speaker #2: For broadcast, governments, and enterprises, most of our work at the moment is in broadcast, and what we will detail for you today is the expansion plans beyond broadcast into government, into enterprise, and away from our core traditional markets in the United States.

Speaker #2: Extending beyond that to the rest of the globe. So we did deliver 36 million dollars in annual recurring revenue, which is a 50% increase year on year at an 85% gross margin.

Tony Abrahams: We did deliver AUD 36 million in annual recurring revenue, which is a 50% increase year on year at an 85% gross margin. We have 8,000 encoders in the field. Those encoders represent nodes effectively on our network by which our customers can connect to the LEXI suite. We now operate in 46 countries. While I co-founded Ai-Media 23 years ago, EEG, the business that we acquired, is now over 40 years old, and has a dominant position in providing the infrastructure for closed captioning in the United States and increasingly also other AI language services like voice and audio description that we will talk through. Ai-Media does power the language layer of live video. What we have done in 2026 is invest considerably with a peak in the H1 on delivering an upgrade path from what is effectively a pre-AI infrastructure to an AI native infrastructure.

Speaker #2: We have 1,000— we have 8,000 encoders in the field, and those encoders represent nodes effectively on our network by which our customers can connect to the Lexi suite.

Speaker #2: We now operate in 46 countries, and while I co-founded AI media 23 years ago, EEG, the business that we acquired, is now over 40 years old and has a dominant position in providing the infrastructure for closed captioning in the United States and increasingly also other AI language services like voice and audio description that we will talk through.

Speaker #2: AI media does power the language layer of live video. What we have done in 2026 is invest considerably with a peak in the first half on delivering an upgrade path from what is effectively a pre-AI infrastructure to an AI-native.

Speaker #2: Infrastructure: this has also significantly improved the security of the systems. We will be looking to expand the platform, as I said, not just beyond broadcast but beyond live into recorded media.

Tony Abrahams: This has also significantly improved the security of the systems. We will be looking to expand the platform, as I said, not just beyond broadcast, but beyond live into recorded media workflows, and we have products in market already, LEXI Recorded and LEXI AD, that are getting early traction. Critically as well, though, and I want to talk a little bit about this, is the embedded distribution point. As more of our customers are upgrading their infrastructure, increasingly, they are looking for solutions that are aligned with their upgrade path, and that is increasingly looking to embed LEXI within third-party infrastructure, and LEXI Direct is our product that delivers that. In terms of moving beyond broadcast, we have a lot of questions as to where we see the next big opportunity.

Speaker #2: Workflows: and we have products in market already, Lexi recorded and Lexi audio description that are getting early traction. Critically as well, though, and I want to talk a little bit about this, is the embedded distribution point.

Speaker #2: As more of our customers are upgrading their infrastructure, increasingly they are looking for solutions that are aligned with their upgrade path. And that's increasingly looking to embed Lexi within third-party infrastructure.

Speaker #2: And Lexi direct is our product that delivers that. And then in terms of moving beyond broadcast, we had a lot of questions as to where we see the next big opportunity.

Speaker #2: And outside of broadcast, the next opportunity for us is within the enterprise sector and more particularly within the education sector. And the higher education sector, something that typically AI media had a very good handle on for human delivery, and we're now launching a brand new Lexi Access solution which is a single-click QR code to enable access, not just to the captions, but also to the voice.

Tony Abrahams: Outside of broadcast, the next opportunity for us is within the enterprise sector and more particularly within the education sector, and the higher education sector, something that typically Ai-Media had a very good handle on for human delivery. We are now launching a brand new Lexi Access solution, which is a single-click QR code to enable access not just to the captions, but also to the voice translation for people who are at universities and colleges. In terms of the overall financial performance, this is probably the final year where we have had to mitigate a runoff on high revenue, low margin legacy services business, and that has seen a decline of 35% year-on-year, which contributed to a 7% overall decline in total revenue.

Speaker #2: Translation for people who are at universities and colleges. In terms of the overall financial performance, this is probably the final year where we have had to mitigate a runoff on high-revenue low-margin legacy services business, and that has seen a decline of 35% year on year, which contributed to a 7% overall decline in total revenue.

Speaker #2: But the focus has been on growing the underlying annual recurring revenue engine of which our SaaS revenue being Lexi Text still contributes the most.

Tony Abrahams: The focus has been on growing the underlying annual recurring revenue engine, of which our SaaS revenue, being LEXI Text, still contributes the most. Most importantly, I think, on this slide is that we saw the EBITDA turn around in the H2 after a peak of investment in the H1 to complete the build of our new AI native encoders, which are pulling through a lot of the interest in terms of expansions of the LEXI suite in terms of LEXI Voice, LEXI Audio Description, and LEXI Recorded. The increase in gross margin was largely due to a product shift away from the lower margin legacy services towards the higher margin LEXI suite. Importantly, for product and R&D, we spent AUD 7.7 million in the year, which was an increase of 55%.

Speaker #2: Most importantly, I think on this slide is that we saw the EBITDA turnaround in the second half after a peak of investment in the first half.

Speaker #2: To complete the build of our new AI-native encoders, which are pulling through a lot of the interest in terms of expansions of the Lexi suite, in terms of Lexi voice, Lexi audio description, and Lexi recorded.

Speaker #2: The increasing gross margin was largely due to a product shift away from the lower-margin legacy services towards the higher-margin Lexi suite. Importantly, for product and R&D, we spent 7.7 million dollars in the year, which was an increase of 55%.

Speaker #2: As I said, a lot of that peaked in the first half. Getting ready for these new encoders, new Lexi voice, and the new Lexi recorded and Lexi AD products, which are all in-market now.

Tony Abrahams: As I said, a lot of that peaked in the H1, getting ready for these new encoders, new LEXI Voice, and the new LEXI Recorded and Lexi AG products, which are all in market now. As a result of that, if we were applying the Australian Accounting Standards, we should have capitalized a bit of that, but we are not doing that because our policy is to keep it compliant with US GAAP, which expenses all product and R&D. So our adjusted EBITDA for the year of AUD 2.1 million is after expensing all of that product and R&D. On top of that AUD 7.7 million in R&D, there was also AUD 2 million in corporate IT costs, which were also expensed. Notwithstanding this surge in product development expenses in the H1, we still increased our cash balance. Indeed, we have been cash flow positive now for four consecutive years.

Speaker #2: As a result of that, if we were applying the Australian accounting standards, we should have capitalized a bit of that, but we're not doing that because our policy is to keep it compliant with US GAAP, which expenses all product and R&D.

Speaker #2: So our adjusted EBITDA for the year of 2.1 million dollars is after expensing all of that product and R&D. And on top of that 7.7 million in R&D, there was also 2 million dollars in corporate IT costs which were also expensed.

Speaker #2: So notwithstanding this surge in product development expenses in the first half, we still increased our cash balance and indeed we've been cash flow positive now for 4 consecutive years.

Speaker #2: In terms of the key metrics as to how this high-quality technology business has emerged, we explicitly stated that we are migrating the business towards a consistent annual recurring revenue model but we also said that a large part of that remains Lexi Text.

Tony Abrahams: In terms of the key metrics as to how this highest quality technology business has emerged, we explicitly stated that we are migrating the business towards a consistent annual recurring revenue model. We also said that a large part of that remains LEXI Text. As we introduce new infrastructure platforms and we add more products to the LEXI suite, then you can expect to see that annual recurring revenue number continue to scale, and for the contribution that is outside of LEXI Text to continue to grow as we build out the products, and as we narrow the product market fit in the market segments that we are chasing around the world. In terms of the revenue mix, there are some very interesting things going on here. Fundamentally, the most interesting thing is obviously the scaling of the SaaS revenue, which is the growth engine for our annual recurring revenue.

Speaker #2: As we introduced new infrastructure platforms and we add more products to the Lexi suite, then you can expect to see that annual recurring revenue number continue to scale and for the contribution that is outside of Lexi Text, to continue to grow as we build out the products.

Speaker #2: And as we narrow the product market fit, in the market segments that we are chasing around the world. In terms of the revenue mix, there's some very interesting things going on here.

Speaker #2: Fundamentally, the most interesting thing is obviously the scaling of the SaaS revenue, which is the gross engine for our annual recurring revenue. That growth of 42% was actually offset by the decline of 37% on our hardware revenue, which was due to the fact that we announced the launch of these new AI-native encoders during the year, but we haven't started shipping them yet.

Tony Abrahams: That growth of 42% was actually offset by a decline of 37% on our hardware revenue, which was due to the fact that we announced the launch of these new AI native encoders during the year, but we haven't started shipping them yet. We have got a backlog of orders for the new generation. As I said, this new generation of encoders is much more secure. We have resolved 37 fundamental security flaws on the old system. We are fully SOC 2 and ISO 27001 compliant. We do expect that that is a seasonal dip in that hardware revenue. We've also introduced the new hardware as a subscription model.

Speaker #2: So we have got a backlog of orders for the new generation. As I said, this new generation of encoders is much more secure. We have resolved 37 fundamental security flaws on the old system.

Speaker #2: We are fully SOC 2 and ISO 27001 compliant. And so we do expect that that is a seasonal dip in that hardware revenue. We've also introduced the new hardware as a subscription model, and Jason will provide some further detail on that in terms of how we're seeing the pipeline for the new technology encoders split between that CAPEX option, which is the traditional option that we have offered, and the hardware as a subscription model.

Tony Abrahams: Jason will provide some further detail on that in terms of how we're seeing the pipeline for the new technology encoders split between that CapEx option, which is the traditional option that we have offered, and the hardware as a subscription model. Finally, legacy services declined 35%, but we are expecting that number now to stabilize at about 20% of total revenue going forward with a managed service component, which will be related to the implementation and customization of our technology solutions, not putting in re-speakers into the mix. As I said, it's pretty simple as to what's delivered that increase in revenue. It's almost all LEXI Text, and that is our core product that's been in market for a long time. A 41% three-year CAGR.

Speaker #2: Finally, legacy services declined 35%, but we are expecting that number now to stabilize at about 20% of total revenue going forward, with a managed service component which will be related to the implementation and customization of our technology solutions not putting in re-speakers into the mix.

Speaker #2: As I said, it's pretty simple as to what's delivered that increase in revenue. It's almost all Lexi Text. And that is our core product that's been in market for a long time.

Speaker #2: A 41% 3-year CAGR, and when you look at the underlying gross of the volume or the traffic across the network, you can see we acquired the EEG subsidiary in May of 2021.

Tony Abrahams: When you look at the underlying growth of the volume or the traffic across the network, you can see we acquired the EEG subsidiary in May of 2021. At the time, only 11% of the total carried across the iCap network, which is all the traffic that goes through our encoders. Only 11% of that was captured by EEG at the time. Now we're capturing 68.5% of a much higher base. Not only are we growing the total network, which is the blue line in the iCap, we're also increasing the percentage of that network that we are delivering with LEXI. In terms of how we see the strategic advantages of Ai-Media, it is about owning the workflow, not any one AI model. We are placed at the edge of the infrastructure of mission-critical workflows.

Speaker #2: At the time, only 11% of the total carried across the ICAP network, which is all the traffic that goes through our encoders. Only 11% of that was captured by EEG at the time.

Speaker #2: Now we're capturing 68.5% of a much higher base. So not only are we growing the total network, which is the blue line, and the ICAP, we're also increasing the percentage of that network that we are delivering with Lexi.

Speaker #2: In terms of how we see the strategic advantages of AI media, it is about owning the workflow, not any one AI model. We are placed at the edge of the infrastructure of mission-critical workflows.

Speaker #2: And we are responsible for delivering access to the world's highest value content. And you can see that from some of the customers that we have on the next page.

Tony Abrahams: We are responsible for delivering access to the world's highest value content, and you can see that from some of the customers that we have on the next page. Ultimately, we have many AI models that we inject into a stream that we get from our broadcast government or enterprise customers. We add our own workflow infrastructure to that, which delivers the encoding solution, the orchestration, the security, and the integrations with third-party systems. Then we deliver that reliably at 99.99% reliability for those top-tier customers. Of those top-tier customers, 73% of our revenue is from global broadcast, the majority of which is in North America. 20% of that total is in enterprise, and that's where the near-term focus is with education and the Lexi Access product. While 7% of the revenue is in government, we do expect that to pick up in the out years.

Speaker #2: Ultimately, we have many, many AI models that we inject into a stream that we get from our broadcast government or enterprise customers. We add our own workflow infrastructure to that, which delivers the encoding solution, the orchestration, the security, and the integrations with third-party systems.

Speaker #2: And then we deliver that reliably at 99.99% reliability for those top-tier customers. And of those top-tier customers, 73% of our revenue is from global broadcast.

Speaker #2: The majority of which is in North America. 20% of that total is in enterprise, and that's where the near-term focus is with education and the Lexi Access product.

Speaker #2: While 7% of the revenue is in government, we do expect that to pick up in the out ears but we do see the nearest term opportunity in terms of those 9 squares, if you like, which is broadcast government and enterprise in terms of the verticals.

Tony Abrahams: We do see the nearest term opportunity in terms of those nine squares, if you like, which is broadcast, government, and enterprise in terms of the verticals, and the three regions being Americas, EMEA, and APAC. We are certainly seeing global enterprises being the opportunity that we can expand into for adjacencies in FY27. We added 9 new territories in the last year to give a total of 46 countries. Of course, we are embedding further into the countries that we already service. I did mention that we spent quite a bit extra in particularly the H1 of this year on building new encoder infrastructure. We have effectively a two-path upgrade path for our existing customers. Most of our broadcast quality customers are on the HD492 on the left.

Speaker #2: And the 3 regions being Americas, EMEA, and APAC, we are certainly seeing global enterprises being the opportunity that we can expand into for adjacencies in FY27.

Speaker #2: We added 9 new territories in the last year to give a total of 46 countries. And of course, we're embedding further into the countries that we already service.

Speaker #2: I did mention that we spent quite a bit extra in particularly the first half of this year on building new encoder infrastructure. The we've got effectively a 2-path upgrade path for our existing customers.

Speaker #2: Most of our broadcast quality customers are on the HD 492 on the left. As I said, it's got a number of security flaws inherent in a platform that was architected in 2018 that now need to be upgraded.

Tony Abrahams: As I said, it has a number of security flaws inherent in a platform that was architected in 2018 that now need to be upgraded. The two upgrade paths are either to the UHD592, which is more a direct upgrade from the 492 with the security upgrades, native 4K, higher processing power, and the ability to do a LEXI Voice channel on that path. Beyond that, there is the AIX-1 or our LEXI Voice encoder, which actually has the capability for doing 5 voice channels into 5 different languages. These encoders are necessary before you can deliver the voice product. Voice is certainly something that we have moved forward quite considerably in the last 12 months, albeit something that is still not quite at the point where we are seeing mass adoption from broadcast customers, but we are certainly a lot closer than we were.

Speaker #2: The 2 upgrade paths are either to the ultra-high definition 592, which is more a direct upgrade from the 492 with the security upgrades native 4K, higher processing power, and the ability to do a Lexi voice channel on that path.

Speaker #2: And then beyond that, there is the AIX1 or our Lexi voice encoder, which actually has the capability for doing 5 voice channels into 5 different languages.

Speaker #2: Now, these encoders are necessary before you can deliver. The voice product and voice is certainly something that we have moved forward quite considerably in the last 12 months.

Speaker #2: Albeit something that is still not quite at the point where we're seeing mass adoption from broadcast customers, but we are certainly a lot closer than we were.

Speaker #2: And the refresh opportunity with the installed base is quite considerable. As I said, we haven't provided an upgrade in these encoders for about 10 years.

Tony Abrahams: The refresh opportunity with the installed base is quite considerable. As I said, we have not provided an upgrade in these encoders for about 10 years. Over 2,200 of the encoders are over 5 years old and out of warranty and out of service. So there are some immediate opportunities there. We also have three next generation AI native platforms, both the 592 and the AIX-1 are hardware solutions, which I articulated on the previous slide. LEXI Direct is probably the most important strategic change that we are announcing today. That is a direct integration with third-party integrated systems like Grass Valley AMPP. The difference between LEXI Direct and Alta is that Alta is a software encoder, but the software encoder still requires the signal to go outside of the customer's broadcast infrastructure and come back, which when we are talking about delivering live video, adds latency.

Speaker #2: About over 2,200 of the encoders are over 5 years old and out of warranty and out of service. So there are some immediate opportunities there.

Speaker #2: We also have 3 next-generation AI native platforms, both the 592 and the AIX1 hardware solutions, which I articulated on the previous slide. But Lexi Direct is probably the most important strategic change that we're announcing today.

Speaker #2: And that is a direct integration with third-party integrated systems like Graph Valley AMP. And the difference between Lexi Direct and Alta is that Alta is a software encoder, but the software encoder still requires the signal to go outside of the customer's broadcast infrastructure and come back, which when we're talking about delivering live video adds latency.

Speaker #2: And so if we can actually deliver the same Lexi outcome within a customer's own walled garden, then that's going to be beneficial and we have delivered that.

Tony Abrahams: If we can actually deliver the same LEXI outcome within a customer's own walled garden, then that is going to be beneficial. We have delivered that. As I said, the first implementation of that was with Grass Valley. The underlying architecture of the models we are working on is with an emerging broadcast standard called the Dynamic Media Facility, DMF, and Media eXchange Layer, which is an initiative of the European Broadcasting Union, which is one of the largest leading broadcast organizations in the world. It is a move to effectively containerize and put on software all broadcast architecture that previously required hardware. This is a process we have been working on our customers with for some years. It is the next evolution of Alta.

Speaker #2: As I said, the first implementation of that was with Graph Valley. But the underlying architecture of the models we're working on is with an emerging broadcast standard called the Digital Media Facility, sorry, the Dynamic Media Facility, DMF, and MXL, which is the Media Exchange Layer, which is an initiative of the European Broadcasting Union, which is one of the largest leading broadcast organizations in the world.

Speaker #2: And it's a move to effectively containerize and put on software all broadcast architecture that previously required hardware. And this is a process we've been working on our customers with for some years.

Speaker #2: It's the next evolution of Alta. And so Lexi Direct can be seen as a next evolution of that software encoding solution with the objective that we can connect more and more people to the Lexi platform in more and more different ways.

Tony Abrahams: Lexi Direct can be seen as the next evolution of that software encoding solution with the objective that we can connect more and more people to the LEXI platform in more and more different ways. To meet them where they are based on the infrastructure and the workflow that they have. With these two commercial models on top of that, with the CapEx and the recurring revenue subscription model, we believe that we have now got the infrastructure in place to begin to tackle all nine of those squares that we are looking at for the growth. I will now hand over to Jason, who will talk us through, in particular, the FY26 financial highlights. Jason?

Speaker #2: And to meet them where they are based on the infrastructure and the workflow that they have. So with these 2 commercial models on top of that, with the CAPEX and the recurring revenue, subscription model, we believe that we have now got the infrastructure in place.

Speaker #2: To begin to tackle all 9 of those squares, that we are looking at for the growth. I'll now hand over to Jason who will talk us through in particular the FY26 financial highlights.

Speaker #2: Jason.

Speaker #1: Thanks, Tony. As Tony has mentioned before, FY26 was the final transition year for legacy services. Into technology solutions. This has had quite a big impact in our revenue line, declining legacy services revenue by 35% on PCP.

Jason Singh: Thanks, Tony. As Tony has mentioned before, FY26 was the final transition year for legacy services into technology solutions. This has had quite a big impact on our revenue line, declining legacy services revenue by 35% on PCP. It was the first time also in eight years that we have launched an encoder, and that happened in April of 2026. This was the second thing that had quite a significant impact on our revenue line, declining at 37% on PCP. You can see through our balance sheet that we have stocked up parts for our new AI native encoders, increasing our inventory to AUD 4 million from AUD 2.7 million.

Speaker #1: It was the first time also in 8 years that we've launched an encoder. And that happened in April of 2026. This was the second thing that had quite a significant impact on our revenue line, declining it 37% on PCP.

Speaker #1: You can see through our balance sheet that we have stocked up parts for our new AI native encoders increasing our inventory to 4 million dollars from 2.7 million.

Speaker #1: We have in the field approximately 2,200 encoders that are over 5 years old that are right for replacement. And we have offered our customers 2 ways to buy it, either through a hardware as a subscription model as we mentioned in the last update in the half year, or as a traditional CAPEX model.

Jason Singh: We have in the field approximately 2,200 encoders that are over five years old that are ripe for replacement, and we have offered our customers two ways to buy it, either through a HaaS model, as we mentioned in the last update in the half year, or as a traditional CapEx model. In terms of what we are seeing in the demand and the pipeline is we are seeing traditional broadcasters still opting for the CapEx model, and we are seeing the new markets in Asia Pacific and EMEA that are opting for the HaaS. At the moment, our pipeline is showing a 70/30 split in favor of CapEx. We are offering that both to customers, and there is no detriment on either way. We had a very deliberate investment into technology for these AI native encoders in particular, and our LEXI Voice and LEXI suite of products.

Speaker #1: In terms of what we're seeing in the demand and the pipeline is we're seeing traditional broadcasters still opting for the CAPEX model. And we're seeing the new markets in Asia Pacific and EMEA that are opting for the hardware as a service.

Speaker #1: So at the moment, our pipeline is showing a 70/30 split. In favor of CAPEX. We're offering that both to customers and there's no detriment on either way.

Speaker #1: We had a very deliberate investment into technology for these AI native encoders in particular and our Lexi voice and Lexi suite of products. Of that, we invested approximately 2.7 million dollars in additional resources based out of New York.

Jason Singh: Of that, we invested approximately AUD 2.7 million in additional resources based out of New York. We have released a large portion of those resources in the second half, and we have turned around our profitability from a loss of AUD 400,000 underlying in the first half to a profit of AUD 2.5 million in the second half. All in all, in the full year, an adjusted EBITDA of AUD 2.1 million. We have also taken some corrective action in terms of our other costs that we could have taken out. We are entering FY27 with AUD 3 million of less cost following our peak investment in H1 2026. I will now talk through the P&L in detail. Next. Okay. In terms of our cost base, we have got a really disciplined cost management program and targeted investment.

Speaker #1: We've released a large portion of those resources in the second half. And we've turned around our profitability from a loss of 400,000 dollars underlying in the first half to a profit of 2 and a half million in the second half.

Speaker #1: All in all, in the full year and adjusted EBITDA of 2.1 million dollars. We've also taken some corrective action in terms of our other costs that we could have taken out.

Speaker #1: So we're entering FY27 with 3 million dollars of less cost following our peak investment in 1H26. I will now talk through the P&L in detail.

Speaker #1: Next. Okay. So in terms of our cost base, we've got a really disciplined cost management program and targeted investment. You can see that we have deliberately reduced our GNA by 1% on prior year.

Jason Singh: You can see that we have deliberately reduced our G&A by 1% on prior year, and this year we've actually dropped it by 8%. In that AUD 18.5 million, around AUD 1.5 million is of share-based payments and one-off restructuring costs. We've been very careful in terms of how we've invested our funds. We've got approximately 65 salespeople out globally in the market, and we do spend considerable amount of money in the trade shows. So AUD 15.9 million is representative of our sales and marketing effort, up by 3% or CPI. As Tony's mentioned before, we have removed AUD 2.2 million of our investment into product and development, and we'll see that come off in the next financial year. In our P&L, you can see that the SaaS revenue has increased by 42%, which is our main driver of our annual recurring revenue.

Speaker #1: And this year, we've actually removed it, sorry, dropped it by 8%. In that 18.5 million dollars, around 1 and a half million dollars is of share-based payments and one-off restructuring costs.

Speaker #1: We've been very, very careful in terms of how we've invested our funds. We've got approximately 65 salespeople out of globally in the market. And we do spend considerable amount of money in the trade shows.

Speaker #1: So 15.9 million dollars is representative of our sales and marketing effort. Up by 3% or CPI. As Tony has mentioned before, that we have removed 2.2 million dollars of our investment into product and development.

Speaker #1: And we'll see that come off in the next financial year. In our P&L, you can see that the SAS revenue has increased by 42%, which is our main driver of our annual recurring revenue.

Speaker #1: Hardware revenue has dropped by 6.4 million dollars a large part of that hardware number has got support services embedded in there as well. So in fact, our actual encoder sales have dropped by 55% on PCP.

Jason Singh: Hardware revenue has dropped by AUD 6.4 million. A large part of that hardware number has got support services embedded in there as well. So in fact, our actual encoder sales have dropped by 55% on PCP, predominantly because of the anticipation and the pipeline buildup for the new encoders that are due to be available for purchase in Q2. Services revenue, we've seen a decline from the H1, so H2, approximately AUD 6.6 million of services revenue. We're now expecting managed services revenue to make up approximately 20% of total revenue going forward. Our gross margin has improved significantly, a 4% turnaround. As a result, although the revenue dropped by 7%, we've only seen a 3% drop in gross profit. So revenue mix has changed fundamentally.

Speaker #1: Predominantly because of the anticipation and the pipeline build-up for the new encoders that are due to be available for purchase in Q2. Services revenue, we've seen a decline from the first half.

Speaker #1: So second half, approximately 6.6 million dollars of services revenue. We're now expecting services revenue to make up managed services revenue to make up approximately 20% of total revenue going forward.

Speaker #1: Our gross margin has improved significantly 4% turnaround. And as a result, although that revenue dropped by 7%, we've only seen a 3% drop in gross profit.

Speaker #1: So revenue mix has changed fundamentally. Overall, our top total operating expenses has remained flat once you take out the one-off expenses and share-based payments.

Jason Singh: Overall, our total operating expenses has remained flat once you take out the one-off expenses and share-based payments and one-off expenses and restructuring costs. Share-based payments, we have a five-year long-term incentive plan in place for the company. Of that, approximately 45% of that has been taken up as an expense in the first year. So we will start to see that come down over the next few years. Strong operating cash flow. We still have a cash conversion of 114%, similar to last year. My last slide is cash flow. So our cash flow has remained strong. We've got AUD 2.4 million of operating cash. We've gone from AUD 14.7 and a statutory EBITDA loss of AUD 300,000. Non-cash share-based payments and one-off restructuring costs of AUD 2.5 million. We've collected a considerable amount of accounts receivable, which has given us a favorable working capital of 2.2.

Speaker #1: And one-off expenses and restructuring costs. Share-based payments, we have a 5-year long-term incentive plan in place for the company. Of that, approximately 45% of that has been taken up as an expense in the first year.

Speaker #1: So we will start to see that come down over the next few years. Strong operating cash flow, we still have a cash conversion of 114% similar to last year.

Speaker #1: My last slide is cash flow. So our cash flow has remained strong. We've got 2.4 million dollars of operating cash. We've gone from 14.7 and a statutory EBITDA loss of 300,000 dollars.

Speaker #1: Non-cash share-based payments and one-off restructuring costs of 2.5 million dollars. We've collected a considerable amount of accounts receivable, which has given us a favorable working capital of 2.2.

Speaker #1: Deferred revenue due to timing has unwound at 2.2 million dollars versus PCP. And we've spent 400,000 dollars in CAPEX and have got unfavorable FX due to the bulk of our cash being in US dollars.

Jason Singh: Deferred revenue due to timing has unwound at AUD 2.2 million versus PCP, and we've spent AUD 400,000 in CapEx and have got unfavorable FX due to the bulk of our cash being in US dollars. So overall, we've landed at AUD 15.9 million. We enter FY27 with a strong balance sheet, strong recurring revenue, new products out in the market, and a much lower cost base. Thanks. I'll now hand over to Tony to talk about growth.

Speaker #1: So overall, we've landed at 15.9 million dollars. We enter FY27 with a strong balance sheet, strong recurring revenue, new products out in the market, and a much lower cost base.

Speaker #1: Thanks. I'll now hand over to Tony to talk about growth.

Speaker #2: Tony, sorry, you're on mute.

[Company Representative] (NWR Communications): Tony, sorry, you are on mute.

[Company Representative]: Tony, sorry, you are on mute.

Tony Abrahams: How about now? Thanks, Mel. Can you hear?

Speaker #3: How about now? Thanks, Mel. Can you hear?

Speaker #2: Yes, we can.

[Company Representative] (NWR Communications): Yes, we can.

[Company Representative]: Yes, we can.

Speaker #3: Excellent. Thank you for that. So this slide really is the uplift. Of the new AI native encoders. So what's changed is those Lexi encoders in the middle have been upgraded for the new technology system.

Tony Abrahams: Excellent. Thank you for that. This slide really is the uplift of the new AI native encoders. What has changed is those LEXI encoders in the middle have been upgraded for the new technology system. What we have done off the back of that is we have continued to scale LEXI Text, as I said, which is by far the bulk, 90% plus of all of the SaaS revenue that we delivered in FY26 remains LEXI Text. Most of that has been in US broadcast. We are developing these other applications that we understand have much bigger total addressable markets than just LEXI Text. By locking in LEXI Text and ensuring that the other elements of the LEXI platform can be delivered through these exact same LEXI encoders, with zero extra button pushes by our customers, that is the key to the architecture of this ecosystem.

Speaker #3: And what we've done off the back of that is we've continued to scale Lexi text as I said, which is by far the bulk 90% plus of all of the SAS revenue that we delivered in FY26 remains Lexi text.

Speaker #3: And most of that has been in US broadcast. But we are developing these other applications that we understand have much bigger total addressable markets than just Lexi text.

Speaker #3: But by locking in Lexi text and ensuring that the other elements of the Lexi platform can be delivered through these exact same Lexi encoders, with zero extra button pushes, by our customers, that is the key to the architecture of this ecosystem.

Speaker #3: So the four growth priorities for this year first, scale Lexi text. This is the one that's going to have the biggest impact. So what about the 31.5% of the ICAP network that's currently not being delivered with Lexi, we're chasing that.

Tony Abrahams: The four growth priorities for this year. First, scale LEXI Text. This is the one that is going to have the biggest impact. What about the 31.5% of the iCap network that is currently not being delivered with LEXI? We are chasing that. We are also looking to grow the iCap network by expanding broadcast adoption across EMEA and APAC, and as I said, extending into the education vertical with the Lexi Access QR code solution. Secondly, as Jason said, we are pretty underweight in FY26 on our encoder sales because we announced to the market that we are coming up with a brand-new encoder solution. There is a lot of holdback from customers until we can ship those. Our customers are migrating from that hardware system to computers off the shelf.

Speaker #3: We're also looking to grow the ICAP network by expanding broadcast adoption across EMEA and APAC. And as I said, extending into the education vertical with the Lexi access QR code solution.

Speaker #3: Secondly, as Jason said, we're pretty underweight in FY26 on our encoder sales because we announced to the market that we're coming up with a brand new encoder solution.

Speaker #3: So there's a lot of holdback from customers until we can ship those. But also, our customers are migrating from that hardware system to computers off the shelf.

Speaker #3: And so being able to deliver a software solution to meet our customers where they are has been critical with that Lexi direct. And then offering CAPEX and hardware as a subscription means that we can compress the pipeline cycle and meet the customers where they are with their capability to pay.

Tony Abrahams: Being able to deliver a software solution to meet our customers where they are has been critical with that LEXI Direct. Offering CapEx and hardware as a subscription means that we can compress the pipeline cycle and meet the customers where they are with their capability to pay. As Jason said, and this is probably a shift from where we were six months ago, we are expecting still 70% of those new encoder sales now to be CapEx. We estimated 50/50 six months ago. That is an important piece of market feedback from those early customer conversations since launch and before shipping. The third focus is commercializing LEXI Voice. We have had some really, really good early customer validation of that, but we need to convert that into a compelling business model for customers and ultimately recurring revenue.

Speaker #3: As Jason said, and this is probably a shift from where we were six months ago, we're expecting still 70% of those new encoder sales now to be CAPEX.

Speaker #3: We estimated 50/50 six months ago. So that's an important piece of market feedback from those early customer conversations since launch and before shipping. The third focus is commercializing Lexi voice.

Speaker #3: And we've had some really, really good early customer validation of that, but we need to convert that into a compelling business model for customers and ultimately recurring revenue.

Speaker #3: And then looking to extend the Lexi platform within our existing customers particularly to Lexi recorded, Lexi audio description, and Lexi insights. We have got some product demonstration videos that we will be putting up on the Investor website.

Tony Abrahams: Looking to extend the LEXI platform within our existing customers, particularly to LEXI Recorded, LEXI Audio Description, and Lexi Insights. We have got some product demonstration videos that we will be putting up on the investor website today that looks through LEXI Audio Description and the new encoders, and we will continue to update the market with new product availabilities as they come to hand. More particularly, it is only four weeks till our AGM. We have got an early AGM. We will also have a product day in collaboration with that. You can expect some more updates between now and the AGM on those product features. As I said, we think about the world in terms of nine squares, three regions, and three verticals. Americas, EMEA, and APAC in terms of the regions. Broadcast, government, and enterprise in terms of the verticals.

Speaker #3: Today, that looks through Lexi audio description and the new encoders. And we will continue to update the market with new product availabilities as they come to hand.

Speaker #3: But more particularly, it's only four weeks till our AGM. We've got an early AGM. We'll also have a product day in collaboration with that.

Speaker #3: And so you can expect some more updates between now and the AGM on those product features. As I said, we think about the world in terms of nine squares.

Speaker #3: Three regions and three verticals. America's EMEA and APAC in terms of the regions, broadcast, government, and enterprise in terms of the verticals. What's important is that although broadcast is 73% of the total globally, actually 55% of all of our revenue is just in North American broadcast.

Tony Abrahams: What is important is that although broadcast is 73% of the total globally, actually 55% of all of our revenue is just in North American broadcast. That is the most demanding market. It is delivering well over 100 million minutes a year of very specialized, high availability, high accuracy captioning. Extending that into government and enterprise with new encoding solutions, is what we invested heavily in, particularly in the first half of this year. We really do now have the platform to grow and to scale, and that is the strategy. In particular, it is looking at selling the entire of the LEXI suite, which is LEXI Text, Voice, Recorded, AD, and Lexi Insights across all regions and across all markets.

Speaker #3: And so that is the most demanding market. It is delivering well over 100 million minutes a year of very specialized high availability, high accuracy captioning.

Speaker #3: And so extending that into government and enterprise with new encoding solutions is what we invested heavily in, particularly in the first half of this year.

Speaker #3: But we're really do now have the platform to grow and to scale and that is the strategy. In particular, it is looking at selling the entire of the Lexi suite, which is Lexi text, voice, recorded, AD, and insights across all regions and across all markets.

Speaker #3: But most particularly, the initiatives that we have invested in in FY26 that will accelerate sales in FY27 are around the new hardware encoders which is HENX, hardware encoders for broadcast, and Lexi direct.

Tony Abrahams: But most particularly, the initiatives that we have invested in in FY26 that will accelerate sales in FY27 are around the new hardware encoders, which is Henx, hardware encoders for broadcast, and LEXI Direct, which is plugging the LEXI signal into an established workflow like, for example, the Grass Valley system. And then, as I said with enterprise, it is the Lexi Access solution, which is a QR code, single-click entry for captioning and voice in education. As well as using LEXI Direct to plug directly into third-party education systems such as Echo360 or Panopto, to deliver the functions of LEXI natively within the platform where our customers are. In terms of LEXI Voice, we have had quite a few positive commercialization proof of concepts. We have City of Sacramento, who are doing about 30 meetings a month of live English captions, plus real-time Spanish voice translation.

Speaker #3: Which is plugging the Lexi signal into an established workflow like for example, the Grass Valley system. And then as I said, with enterprise, it's the Lexi access solution which is a QR code single click entry for captioning and voice in education.

Speaker #3: As well as using Lexi direct to plug directly into third-party education systems such as ECHO 360 or Panopto to deliver the functions of Lexi natively within the platform where our customers are.

Speaker #3: In terms of Lexi voice, we have had quite a few positive commercialization proof of concepts. We've got City of Sacramento, who are doing about 30 meetings a month.

Speaker #3: Of Live English captions plus real-time Spanish voice translation. Of course, we're looking to then replicate that across other cities of. And the first real broadcast partner that we had turned out to be in Taiwan.

Tony Abrahams: Of course, we are looking to then replicate that across other cities. And the first real broadcast partner that we had turned out to be in Taiwan, which was delivering English to traditional Chinese translation together with real-time Mandarin dubbing. And certainly within the workflow in Taiwan for news, this has definitely reached a commercial proof point. So what we need to do now is extend beyond these and some of the other proof of concepts that we have previously spoken about, like Bayer Pharmaceuticals, who are using this across their internal network. And of course, the interesting thing about Voice is that it considerably expands the total addressable market, just about doubling it. And then once we layer in all of the other LEXI services, then we can begin to tackle that much broader market for all language services, which is around AUD 70 billion a year.

Speaker #3: Which was delivering English to traditional Chinese translation together with real-time Mandarin dubbing. And certainly within the workflow in Taiwan, for news, this is definitely reached a commercial proof point.

Speaker #3: So what we need to do now is extend beyond these and some of the other proof of concepts that we have previously spoken about, like Bayer Pharmaceuticals, who are using this across their internal network.

Speaker #3: And of course, the interesting thing about voice is that it considerably expands the total addressable market. Just about doubling it. And then once we layer in all of the other Lexi services, then we can begin to tackle, sorry, that much broader market for all language services which is around 70 billion.

Speaker #3: A year. So in summary, we enter FY27 with a higher recurring revenue business. We've got a durable workflow moat most importantly, we have lost none of our top 20 customers in the last five years.

Tony Abrahams: In summary, we enter FY27 with a higher recurring revenue business. We have a durable workflow moat. Most importantly, we have lost none of our top 20 customers in the last five years. And in fact, they are spending more with us. And the reason they are doing that is because we have embedded AI into their broadcast workflow. And then in terms of what you can expect going forward, we will report on these metrics going forward, which is recurring revenue growth, the revenue quality, earnings conversion, and platform expansion. We will provide ARR guidance for FY27 in a month at the AGM. And with that, I think, Mel, we can hand over for questions.

Speaker #3: And in fact, they're spending more with us. And the reason they're doing that is because we have embedded AI into their broadcast workflow. And then in terms of what you can expect going forwards, we will report on these metrics going forwards.

Speaker #3: Which is recurring revenue growth, the revenue quality, earnings conversion, and platform expansion. We will provide ARR guidance for FY27 in a month. At the AGM.

Speaker #3: And with that, I think Mel, we can hand over for questions.

Speaker #1: Great, Tony. Let's start our first question with Nick Harris. And Tony, you touched on this in terms of the upgrades of the hardware and the launch of the new encoder.

[Company Representative] (NWR Communications): Great. Thanks, Tony. Let us start our first question with Nick Harris. And Tony, you touched on this in terms of the upgrades of the hardware and the launch of the new encoder. But Nick has asked, I believe you had 7,948 encoders in December 2025. You have mentioned 8,000 in June 2026. I thought sales of your new encoders commenced in April 2026, so you should have seen a pickup in encoder sales in Q4. Am I looking at that correctly, or has there been some delays given that you have not begun shipping them? And when do you start shipping new encoders, and could you provide maybe some details on the pipeline for new encoders?

[Company Representative]: Great. Thanks, Tony. Let us start our first question with Nick Harris. And Tony, you touched on this in terms of the upgrades of the hardware and the launch of the new encoder. But Nick has asked, I believe you had 7,948 encoders in December 2025. You have mentioned 8,000 in June 2026. I thought sales of your new encoders commenced in April 2026, so you should have seen a pickup in encoder sales in Q4. Am I looking at that correctly, or has there been some delays given that you have not begun shipping them? And when do you start shipping new encoders, and could you provide maybe some details on the pipeline for new encoders?

Speaker #1: But Nick's asked, I believe you had 7,948 encoders in December 25. You've mentioned 8,000 in June 26. I thought sales of your new encoders commenced in April 26.

Speaker #1: So you should have seen a pickup in encoder sales in Q4. Am I looking at that correctly? Or has there been some delays given that you haven't begun shipping them?

Speaker #1: And when do you start shipping new encoders? And could you provide maybe some details on the pipeline for new encoders?

Speaker #3: Yeah, great question Nick, thank you. Yeah, so we launched the new encoders in April of 2026 at the NAB show in Las Vegas. We did not start shipping the new encoders.

Tony Abrahams: Yeah. Great question, Nick. Thank you. Yeah, we launched the new encoders in April of 2026 at the NAB Show in Las Vegas. We did not start shipping the new encoders in April. We launched the new encoders. What that effectively did is it put our customers on notice that we have a new version of the encoder coming out, which meant they obviously didn't want to go and buy the old version of the encoder, which is what we wanted because we want them to upgrade to the new encoder. We will start shipping these units in Q2 of this financial year. We will start shipping in October. There will be some shipments in H1, but the bulk of the shipments are not going to occur until H2.

Speaker #3: In April. We launched the new encoders. So what that effectively did is it put our customers on notice that we have a new version of the encoder coming out, which meant they obviously didn't want to go and buy the old version of the encoder, which is what we wanted because we want them to upgrade to the new encoder.

Speaker #3: We will start shipping these units in the second quarter. Of this financial year. So we will start shipping in October. There will be some shipments in the first half, but the bulk of the shipments are not going to occur until the second half.

Speaker #3: In terms of the mass, whereby we were slightly under 8,000 and we're slightly over 8,000 now, keep in mind there's a useful life of five to seven years of these things.

Tony Abrahams: In terms of the maths, whereby we were slightly under 8,000 and we're slightly over 8,000 now, keep in mind, there's a useful life of five to seven years of these things, so some of them drop off and some of them renew. But we were considerably down year-on-year in terms of hardware renewals because people are waiting for the new iPhone.

Speaker #3: So some of them drop off and some of them renew. But we were considerably down year on year in terms of hardware renewals because people are waiting for the new iPhone.

Speaker #1: Great, thanks Tony. Kerry has asked why have there been delays in shipping or selling the new encoders? Could you just confirm that?

[Company Representative] (NWR Communications): Great. Thanks, Tony. Kerry has asked, why have there been delays in shipping or selling the new encoders? Could you just confirm that?

[Company Representative]: Great. Thanks, Tony. Kerry has asked, why have there been delays in shipping or selling the new encoders? Could you just confirm that?

Speaker #3: There haven't been delays. This was planned. So we launched the encoder at the biggest trade show in the year, which is in April. We got feedback from the market on that.

Tony Abrahams: There haven't been delays. This was planned. We launched the encoder at the biggest trade show in the year, which is in April. We got feedback from the market on that, and then we made some tweaks, and we put that into the build. Effectively, what you're seeing is some holdback on CapEx purchases while people are waiting for the new model to be delivered. But there are certainly no blockers.

Speaker #3: And then we made some tweaks and we put that into the build. So effectively what you're seeing is some holdback on CAPEX purchases while people are waiting for the new model to be delivered.

Speaker #3: But there are certainly no blockers.

Speaker #1: Great, thank you. And Ken has asked, given your cross 46 countries now, could you tell us the value of your top 10 customers or top 10 regions by market?

[Company Representative] (NWR Communications): Great. Thank you. Ken has asked, given you are across 46 countries now, could you tell us the value of your top 10 customers or top 10 regions by market?

[Company Representative]: Great. Thank you. Ken has asked, given you are across 46 countries now, could you tell us the value of your top 10 customers or top 10 regions by market?

Speaker #3: They're very different things. What I can say is that 55% of our total revenue is in North American broadcast. And that our top 20 customers remain over 50% of our revenue.

Tony Abrahams: They are very different things. What I can say is that 55% of our total revenue is in North American broadcast, and that our top 20 customers remain over 50% of our revenue, and that we are extending our spend with all of those top 20 customers.

Speaker #3: And that we are extending our spend with all of those top 20 customers.

Speaker #1: Thanks Tony. Stella has asked, when did Channel 7 and Channel 9 convert from the legacy service model to SaaS? And how much did that contribute to the technology ARR and SaaS revenue growth?

[Company Representative] (NWR Communications): Thanks, Tony. Stella has asked, when did Seven Network and Nine Network convert from the legacy service model to SaaS? How much did that contribute to the technology ARR and SaaS revenue growth?

[Company Representative]: Thanks, Tony. Stella has asked, when did Seven Network and Nine Network convert from the legacy service model to SaaS? How much did that contribute to the technology ARR and SaaS revenue growth?

Speaker #3: Yeah, great question. And I think Stella, this is probably the key to a lot of people's modeling, which is how much of the runoff, if you like, of humans delivered services from those long contracted customers like Channel 9 and Channel 7 goes across to Lexi and recurring revenue.

Tony Abrahams: Yeah, great question. Stella, this is probably the key to a lot of people's modeling, which is how much of the runoff, if you like, of human delivered services from those long contracted customers like Nine Network and Seven Network, goes across to LEXI and recurring revenue. That transition was completed in FY 2026 for both Nine Network and Seven Network. All of the reductions in services revenue with the conversion to SaaS are effectively now baked in. Typically, customers would save about 70% to 80% in making that shift. That has obviously been part of the revenue decline, but also part of the earnings improvement.

Speaker #3: That transition was completed in FY26 for both Channel 9 and Channel 7. And all of the reductions in services revenue with the conversion to SaaS are effectively now baked in.

Speaker #3: Typically, customers would say about 70 to 80%. Making that shift. And that's obviously been part of the revenue decline. But also part of the earnings improvement.

Speaker #1: Thanks Tony. And if we just quickly jump back to the Haas model and encoders, if broadcasters are looking at CAPEX rather than Haas, does that mean revenue recognized in Q1 in FY27 should be significant as they take up the new encoders?

[Company Representative] (NWR Communications): Thanks, Tony. If we just quickly jump back to the HaaS model and encoders. If broadcasters are looking at CapEx rather than HaaS, does that mean revenue recognized in Q1 in FY 2027 should be significant as they take up the new encoders?

[Company Representative]: Thanks, Tony. If we just quickly jump back to the HaaS model and encoders. If broadcasters are looking at CapEx rather than HaaS, does that mean revenue recognized in Q1 in FY 2027 should be significant as they take up the new encoders?

Speaker #3: We are not shipping the encoders in Q1. I said we will ship them in Q2. So there'll be no revenue in Q1 from that.

Tony Abrahams: We are not shipping the encoders in Q1. I said we will ship them in Q2. There will be no revenue in Q1 from that, but we should start to see revenue grow again from Q2.

Speaker #3: But we should start to see revenue grow again from Q2.

Speaker #1: Thanks for clarifying. If we switch to Lexi voice, you launched it at NAB 2025. TEXT is still a big part of your SaaS the uptake of voice?

[Company Representative] (NWR Communications): Thanks for clarifying. If we switch to LEXI Voice, you launched it at NAB 2025. Text is still a big part of your SaaS revenue. Has there been any issues with the uptake of voice, or can you speak to the sales cycle and when you anticipate traction in the voice product?

[Company Representative]: Thanks for clarifying. If we switch to LEXI Voice, you launched it at NAB 2025. Text is still a big part of your SaaS revenue. Has there been any issues with the uptake of voice, or can you speak to the sales cycle and when you anticipate traction in the voice product?

Speaker #1: Or can you speak to the sales cycle and when you anticipate traction in the voice product?

Speaker #3: Yeah, I mean that's actually a kind of question that we grapple with as an executive team every single week. And the key graph that we really kind of focus on for this is the Lexi TEXT scaling graph.

Tony Abrahams: Well, that is actually a kind of question that we grapple with as an executive team every single week. The key graph that we really kind of focus on for this is the LEXI Text scaling graph. When you look at saying, okay, well, we launched LEXI Voice in April of 2025. Well, yeah, we launched LEXI Text in June of 2017, and for the first four years, it had still only got to 11% of the total. We therefore need to be realistic about what the uptake is going to be of a brand-new service for broadcasters, which is translating the content into different languages automatically. The good news is, I don't think it is going to take as long. It is not going to take four years, but it is not going to take four weeks either.

Speaker #3: So when you look at. Saying, okay, well, we launched Lexi Voice in April of 2025, well, yeah, we launched Lexi TEXT in June of 2017.

Speaker #3: And for the first four years, it had still only got to 11% of the total. We therefore need to be realistic about what the uptake is going to be of a brand new service for broadcasters, which is translating the content into different languages automatically.

Speaker #3: Now, the good news is, I don't think it's going to take as long. It's not going to take four years. But it's not going to take four weeks, either.

Speaker #3: And so a year and a half in, to something that took the sister product of Lexi TEXT four years to do, we're tracking ahead of where we were with Lexi TEXT at the time.

Tony Abrahams: A year and a half into something that took the sister product of LEXI Text four years to do, we are tracking ahead of where we were with LEXI Text at the time. We still are several halves away from seeing LEXI Voice really kick. Certainly, we can say that we are at the cutting edge of the vendors who are capable of delivering this product. We are not seeing a competitor product that is better than ours. We are not seeing our customers take up competitor products. We are seeing customers evaluate the automatic translation and automatic dubbing, then take that back to their business units to see if they have got a business case to proceed.

Speaker #3: But we still are several halves away from seeing Lexi Voice really kick. But certainly we can say that we are at the cutting edge of the vendors who are capable of delivering this product.

Speaker #3: We are not seeing a competitor product that is better than ours, we're not seeing customers take up competitor products. We're seeing customers evaluate the automatic translation and automatic dubbing.

Speaker #3: And then take that back to their business units to see if they've got a business case to proceed.

Speaker #1: Thanks Tony. While you're on that page, for Jack, can you just confirm how many million minutes did ICAP do this year?

[Company Representative] (NWR Communications): Thanks, Tony. While you are on that page for Jack, can you just confirm how many million minutes did iCap do this year?

[Company Representative]: Thanks, Tony. While you are on that page for Jack, can you just confirm how many million minutes did iCap do this year?

Tony Abrahams: Those are the millions of minutes per month. You would multiply, effectively 14 million minutes by 12 to get you to the end run rate.

Speaker #3: The those are the millions of minutes per month. So you would multiply effectively 14 million minutes by 12 to get you to be end run rate.

Speaker #1: Thank you. And Daniel has asked, why was hardware revenue up on the first half given customers were holding off on purchasing encoders?

[Company Representative] (NWR Communications): Thank you. Daniel has asked, why was hardware revenue up on the H1 given customers were holding off on purchasing encoders?

[Company Representative]: Thank you. Daniel has asked, why was hardware revenue up on the H1 given customers were holding off on purchasing encoders?

Speaker #3: Hardware revenue was down year on year. That's the key point. I mean, we've been talking to our customers about the new refresh cycle for a while.

Tony Abrahams: Hardware revenue was down year-on-year. That is the key point. We have been talking to our customers about the new refresh cycle for a while. We launched it in April. I would not make too much of the difference between H2 and H1. It is just a lumpy hardware refresh cycle, which is part of the economics of selling CapEx technology.

Speaker #3: We launched it in April. I wouldn't make too much of the difference between H2 and H1. It's just a lumpy hardware refresh cycle, which is part of the economics of selling CAPEX technology.

Speaker #1: And Tony, is it safe to assume that FY26 was the trough in the revenue transition and that we are likely to see overall revenue grow in FY27?

[Company Representative] (NWR Communications): Tony, is it safe to assume that FY2026 was the trough in the revenue transition and that we are likely to see overall revenue grow in FY2027?

[Company Representative]: Tony, is it safe to assume that FY2026 was the trough in the revenue transition and that we are likely to see overall revenue grow in FY2027?

Speaker #3: Yes.

Tony Abrahams: Yes.

Speaker #1: Great. Tony, if we just switch to Amir, technology and services declined year on year in Amir. Obviously, services is due to the phasing out.

[Company Representative] (NWR Communications): Great. Tony, if we just switch to EMEA. Technology and services declined year-on-year in EMEA. Obviously, services is due to the phasing out. Can you talk to why technology revenue dipped, and what was the cause when other regions showed growth?

[Company Representative]: Great. Tony, if we just switch to EMEA. Technology and services declined year-on-year in EMEA. Obviously, services is due to the phasing out. Can you talk to why technology revenue dipped, and what was the cause when other regions showed growth?

Speaker #1: But can you talk to why technology revenue dipped and what was the cause when other regions showed growth?

Speaker #3: Yeah, I mean, sorry, Mel, maybe if I just take that and if you've got a follow-up, I'll take the follow-up as well. It's actually a really great question.

Tony Abrahams: Yeah. Sorry, Mel. Maybe if I just take that, and if you have got a follow-up, I will take the follow-up as well. It is actually a really great question. I am not sure who asked that question, but thank you for the question. It talks about the difference really between technology revenue and recurring revenue. That is why we are moving towards a recurring revenue model because the old technology revenue conflates CapEx sales, which we did a whole heap of in Europe in FY2025 ahead of the need for the broadcasters to get up to speed with the European Accessibility Act that were a legislative requirement. The difference between buying a series of CapEx encoders for AUD 15,000, and then buying LEXI Text or LEXI Voice at AUD 20 or AUD 30 an hour, is that the FY2025 numbers were heavily skewed by the CapEx. The SaaS has not fallen in EMEA.

Speaker #3: So I'm not sure who asked that question, but thank you for the question. And it talks about the difference really between technology revenue and recurring revenue.

Speaker #3: And that's why we're moving towards a recurring revenue model, because the old technology revenue conflates CAPEX sales which we did a whole heap of in Europe in FY25 ahead of the need for the broadcasters to get up to speed with the European accessibility requirements that were a legislative requirement.

Speaker #3: The difference between buying a series of CAPEX encoders for 15,000 dollars and then buying Lexi TEXT or Lexi Voice at 20 or 30 dollars an hour is that the FY25 numbers were heavily skewed by the CAPEX.

Tony Abrahams: The difference between buying a series of CapEx encoders for AUD 15,000, and then buying LEXI Text or LEXI Voice at AUD 20 or AUD 30 an hour, is that the FY2025 numbers were heavily skewed by the CapEx. The SaaS has not fallen in EMEA.

Speaker #3: So the SaaS has not fallen in Amir. In fact, the SaaS has continued to grow. But because this was the first legislation in Europe where people needed to have live captioning for the very first time, people needed to ensure they had an encoder.

Tony Abrahams: In fact, the SaaS has continued to grow. Because this was the first legislation in Europe where people needed to have live captioning for the very first time, people needed to ensure they had an encoder. The most important thing was in FY25 that we ensured that those broadcasters were on the iCap network, not on somebody else's network. That was why selling that many encoders in FY25 was so important for EMEA. Then what we tracked is how much LEXI is going through each of those encoders, but we are not going to replicate the success that we had on a one-off implementation of a brand-new technology with European broadcasters every single year.

Speaker #3: And so the most important thing was in FY25 that we ensured that those broadcasters were on the ICAP network, not on somebody else's network.

Speaker #3: And that was why selling that many encoders in FY25 was so important for Amir. Then what we tracked is how much Lexi is going through each of those encoders but we're not going to replicate the success that we had on a one-off implementation of a brand new technology with European broadcasters every single year.

Speaker #3: But what we should do is we should start to see that Lexi revenue attached to those encoders as the targets for delivering more and more content with accessibility increase.

Tony Abrahams: What we should do is we should start to see that LEXI revenue attach to those encoders, as the targets for delivering more and more content with accessibility increase with the legislation. Sorry, Mel, you had a follow-up question, I think.

Speaker #3: With the legislation. And sorry, Mel, you had a follow-up question, I think.

Speaker #1: Yes. It was just in terms of the sales cycle in Amir and the sales strategy. Will it be different to potentially other regions? Or will you be using roadshows, trade shows, and customer feedback?

[Company Representative] (NWR Communications): Yes. It was just in terms of the sales cycle in EMEA and the sales strategy. Will it be different to potentially other regions, or will you be using roadshows, trade shows, and customer feedback?

[Company Representative]: Yes. It was just in terms of the sales cycle in EMEA and the sales strategy. Will it be different to potentially other regions, or will you be using roadshows, trade shows, and customer feedback?

Speaker #3: yeah. What we've found is actually while there are specific elements of regional kind of sales muscle in the sense that you have to go through certain resellers in certain countries because those resellers are the ones who have the trust of the broadcasters who are putting in end-to-end broadcast systems.

Tony Abrahams: What we have found is actually, while there are specific elements of regional kind of sales muscle, in the sense that you have to go through certain resellers in certain countries because those resellers are the ones who have the trust of the broadcasters who are putting in end-to-end broadcast systems. That is probably the only thing that is different. The rest of it, as you say, Mel, is very consistent across that marketing spend being trade shows are hugely important. Everyone coming together, talking to each other, seeing what is new. Of course, the pace of change with AI is now month-on-month rather than year-on-year. Security is really what we are hearing from our customers. That is really what we have done the heavy lifting on, off the back of the AI native encoders, both the hardware units and the software units.

Speaker #3: That's probably the only thing that is different. The rest of it, as you say, Mel, is very consistent across that marketing spend being trade shows are hugely important.

Speaker #3: Everyone coming together, talking to each other, seeing what's new. And of course, the pace of change with AI is now month on month rather than year on year.

Speaker #3: And security, security, security is really what we're hearing from our customers. And that is really what we've done the heavy lifting on off the back of the AI native encoders, both the hardware units and the software units.

Speaker #1: Thanks Tony. We've just had a few questions on costs on a go-forward basis. So you've mentioned cost savings of 3 million dollars going into FY27.

[Company Representative] (NWR Communications): Thanks, Tony. We just had a few questions on costs on a go-forward basis. You've mentioned cost savings of AUD 3 million going into FY26. Should we expect your operating costs to go down in FY27 relative to FY26, or are you planning to lift OpEx and investments in FY27?

[Company Representative]: Thanks, Tony. We just had a few questions on costs on a go-forward basis. You've mentioned cost savings of AUD 3 million going into FY26. Should we expect your operating costs to go down in FY27 relative to FY26, or are you planning to lift OpEx and investments in FY27?

Speaker #1: Should we expect your operating costs to go down in FY27 relative to FY26? Or are you planning to lift opex and investments in FY27?

Speaker #3: Jason, you want to take that?

Tony Abrahams: Jason, you want to take that?

Speaker #2: Sure. Yes, good question. I think we came into the second half where, like I said before, we released our contractors that we had hired out of New York.

Jason Singh: Sure. Yes, good question. I think, we came into the H2. Like I said before, we released our contractors that we had hired out of New York. So we have moved approximately AUD 2.2 million worth of those resources. They've been let go. Their last month was around about the April position. So we won't see those reoccur, and we've also taken out another AUD 800,000 annualized. So our cost base going into FY27 will be lower than it was in FY26. Also, our non-cash share-based payments will also be materially lower. So we should see an improvement in OpEx in FY26 and a growth in our revenue based on our projected hardware sales and the stabilizing of services, turning from legacy services into managed services, which were guided to be 20% of total revenue. So I think we enter FY27 in a much better position.

Speaker #2: So we have moved approximately 2.2 million dollars worth of those resources. They've been let go the last month was in sort of around about the April position.

Speaker #2: So we won't see those reoccur. And we've also taken out another 800,000 annualized. So our cost base going into FY27 will be lower than it was in FY26.

Speaker #2: And also, our non-cash share-based payments will also be materially lower. So we should see an improvement in opex in FY26 and a growth in our revenue based on our projected hardware sales.

Speaker #2: And the stabilizing of services turning from legacy services into managed services, which were guided to be 20% of total revenue. So I think we enter FY27 in a much better position.

Speaker #1: Thanks Jason. And while I have you, can you talk to the contract liabilities and deferred revenue? They're down in FY26. Is this seen as a good or bad trend?

[Company Representative] (NWR Communications): Thanks, Jason. While I have you, can you talk to the contract liabilities and deferred revenue? They're down in FY26. Is this seen as a good or bad trend? Has there been a shift away from pushing prepaid LEXI minutes?

[Company Representative]: Thanks, Jason. While I have you, can you talk to the contract liabilities and deferred revenue? They're down in FY26. Is this seen as a good or bad trend? Has there been a shift away from pushing prepaid LEXI minutes?

Speaker #1: Has there been a shift away from pushing prepaid Lexi minutes?

Speaker #2: No, that's still our model, prepaid Lexi minutes. It's cyclical. So it depends on when some of these larger contracts are due and depends on how long they take in terms of whether it's annual or whether it's bi-annual or even three years in advance.

Jason Singh: No, that is still our model. Prepaid LEXI minutes is cyclical, so it depends on when some of these larger contracts are due and depends on how long they take in terms of whether it is annual or whether it is biannual or even three years in advance. Yes, that was predicted that deferred revenue or contract liabilities will reduce. But we will see this balance out over the period. As we sell more of our products, we will start to see that increase because we are selling it annually in advance. So there has been no change in our model. In fact, as we get 30% of our encoder sales come in as Hardware as a Service, we will also see that increase as well, as well as the ARR.

Speaker #2: So yes, that was predicted that deferred revenue or contract liabilities will reduce. But we will see this balance out over the period. And as we sell more of our products, we will start to see that increase because we're selling it annually in advance.

Speaker #2: So there's been no change in our model. In fact, as we get 30% of our encoder sales come in as hardware as a subscription, we'll also see that increase as well as well as the ARR.

Speaker #1: Thanks Jason. And Daniel has said on his rough calculations, Lexi TEXT usage grew less than 4% half on half. And circa 24% year on year.

[Company Representative] (NWR Communications): Thanks, Jason. Daniel has said on his rough cat calculations, LEXI Text usage grew less than 4% half on half and circa 24% year on year. Are these roughly right, and what is the better leading indicator for SaaS growth going forward?

[Company Representative]: Thanks, Jason. Daniel has said on his rough cat calculations, LEXI Text usage grew less than 4% half on half and circa 24% year on year. Are these roughly right, and what is the better leading indicator for SaaS growth going forward?

Speaker #1: Are these roughly right? And what is the better leading indicator for SaaS growth going forward?

Speaker #2: SaaS growth has gone grown at 42%. And that was not really to do with the transition, only to transition from services to tech. A very small portion of that was in relation to that actual transition.

Jason Singh: SaaS growth has grown at 42%, and that was not really to do with the transition, only to transition from services to tech. A very small portion of that was in relation to that actual transition. Our expectations for SaaS growth was 35%, as we have done previously. So we have had a very strong growth in SaaS. Basically, our compensation structure for salespeople have changed also and veered towards recurring revenue. So we are seeing a much stronger drive towards SaaS recurring revenue.

Speaker #2: Our expectations for SaaS growth was 35% as we've done previously. So we've had a very strong growth in SaaS. Our basically our compensation structure for salespeople have changed also.

Speaker #2: And they're towards a recurring revenue. So we're seeing a much stronger drive towards SaaS recurring revenue.

Speaker #1: Thanks Jason. Just in terms of customers, do you have an idea of how many new customers you signed in FY26?

[Company Representative] (NWR Communications): Thanks, Jason. Just in terms of customers, do you have an idea of how many new customers you signed in FY2026?

[Company Representative]: Thanks, Jason. Just in terms of customers, do you have an idea of how many new customers you signed in FY2026?

Speaker #2: We have I can take a well, not exactly customer numbers, but we have had some large customers that have come on. I think our strategy really is to expand the share of wallet with our existing customers.

Jason Singh: Well, not exactly customer numbers, but we have had some large customers that have come on. I think our strategy really is to expand the share of wallet with our existing customers. As you can see, we have a series of blue-chip customers, and they have different requirements within their own environment. We have basically grown our product portfolio, grown and amalgamated ourselves into their workflows, and become more and more relevant to their day-to-day operations.

Speaker #2: As you can see, we've got a series of blue-chip customers. And they have different requirements within their own environment. So we have basically grown our product portfolio grown and amalgamated ourselves into their workflows and become more and more relevant to their day-to-day operations.

Speaker #1: Great. Thanks Jason. And Tony, you touched on this in your presentation that your top customers you haven't seen any churn. Alex is asking, has there been any broader churn across FY26 off your tail of other customers?

[Company Representative] (NWR Communications): Great. Thanks, Jason. Tony, you touched on this in your presentation that your top customers, you haven't seen any churn. Alex is asking, has there been any broader churn across FY2026 off your tail of other customers?

[Company Representative]: Great. Thanks, Jason. Tony, you touched on this in your presentation that your top customers, you haven't seen any churn. Alex is asking, has there been any broader churn across FY2026 off your tail of other customers?

Speaker #3: No, in fact, what we're seeing is probably a bunch of customers that had reduced their spend with us in 2021, 2022, and 2023 who migrated from human captioning at $100 an hour to free captioning that was embedded within the tools.

Tony Abrahams: No. In fact, what we're seeing is probably a bunch of customers that had reduced their spend with us in 2021, 2022, and 2023, who migrated from human captioning at AUD 100 an hour to free captioning that was embedded within the tools, now coming back to us and saying, "Actually, this free stuff isn't really good enough. Can you offer us a LEXI solution that's going to be a fraction of AUD 100 an hour, but we're still prepared to pay something for it?" That's really kind of behind the education push with Lexi Access.

Speaker #3: Now coming back to us and saying, actually, this free stuff isn't really good enough. Can you offer us a Lexi solution that's going to be a fraction of $100 an hour, but we're still prepared to pay something for it?

Speaker #3: And that's really kind of behind the education push with Lexi Access.

Speaker #1: Yeah, great. And then in terms of you talked about growing your share of wallet with your blue-chip customer base. Are there any other key wins in FY26 you'd like to highlight us, Alex?

[Company Representative] (NWR Communications): Yeah, great. In terms of, you talked about growing your share of wallet with your blue-chip customer base. "Are there any other key wins in FY2026 you'd like to highlight?" asks Alex. "Could you provide an update on pitching for work with the United Nations?

[Company Representative]: Yeah, great. In terms of, you talked about growing your share of wallet with your blue-chip customer base. "Are there any other key wins in FY2026 you'd like to highlight?" asks Alex. "Could you provide an update on pitching for work with the United Nations?

Speaker #1: And also, could you provide an update on pitching for work with the UN?

Speaker #3: So I can definitely provide an update on the UN. So the UN, again, is one of those customers that have looked at the concept of AI delivered voice and have said that this is something that they want to incorporate into their future RFPs.

Tony Abrahams: I can definitely provide an update on the UN. The UN, again, is one of those customers that have looked at the concept of AI-delivered voice and have said that this is something that they want to incorporate into their future RFPs. They haven't yet issued an RFP for it, but they've made that first step of saying, "We're prepared to move away from humans," which is a really good sign. Obviously, the UN is not one organization, but there are certain elements within the UN that are moving in that direction and the nonprofits kind of generally in that NGO space in Geneva. In terms of big customer wins, I just want to reinforce what Jason said here. We're not looking for any more logos in particular on this page. We have every large broadcaster in the world as a customer.

Speaker #3: They haven't yet issued an RFP for it, but they've made that first step of saying we're prepared to move away from humans, which is a really good sign.

Speaker #3: And there's obviously the UN is not one organization, but there are certain elements within the UN that are moving in that direction. And the nonprofits kind of generally in that NGO space in Geneva.

Speaker #3: In terms of big customer wins, I just want to reinforce what Jason said here. We're not looking for any more logos in particular on this page.

Speaker #3: We have every large broadcaster in the world as a customer. What we're looking to do is get them to spend more with us. When we acquired EEG, they were only buying encoders.

Tony Abrahams: What we're looking to do is get them to spend more with us. When we acquired EEG, they were only buying encoders. Now they're buying encoders plus LEXI Text. Now we want to sell them LEXI Recorded, LEXI Audio Description, LEXI Voice, and the new encoders. The revenue of our top 20 customers is USD 1.5 trillion, right? Getting more logos is not the issue. Getting a greater share of wallet from these existing customers who've had decades of experience with us managing the entirety of their video workflow is the opportunity for us. That's why we spend so much time on the trade shows. That's why we invite our top 20 customers to our annual conference in Palm Springs as a thought leadership event. It's about understanding how we can use the position that we have with the encoders sitting effectively at that final point of broadcast.

Speaker #3: Now they're buying encoders plus Lexi TEXT. Now we want to sell them Lexi recorded, Lexi audio description, Lexi voice, and the new encoders. The revenue of our top 20 customers is 1.5 trillion dollars, right?

Speaker #3: Getting more logos is not the issue. Getting a greater share of wallet from these existing customers who've had decades of experience with us managing the entirety of their video workflow is the opportunity for us.

Speaker #3: That's why we spend so much time on the trade shows, that's why we invite our top 10 our top 20 customers to our annual conference in Palm Springs as a thought leadership event.

Speaker #3: It's about understanding how we can use the position that we have with the encoders sitting effectively at that final point of broadcast, put a GPU in that device, what else can we do with your broadcast, right?

Tony Abrahams: Put a GPU in that device. What else can we do with your broadcast, right? These are the conversations we're having. There is no other NFL. There is no other NBA. There is no other Amazon Web Services, right? If there's a big brand that's missing from this page, I'm not aware of it. But we're not getting enough money from those customers as we can based on the ability for us to deliver AI-powered language services that we certainly will be able to in the next 3 years.

Speaker #3: These are the conversations other NFL. There is no other NBA. There is no other AWS. If there's a big brand that's missing from this page, I'm not aware of it.

Speaker #3: But we're not getting enough money from those customers as we can based on the ability for us to deliver AI-powered language services that we certainly will be able to in the next three years.

Speaker #1: Thanks, Tony. That brings us to the end of our Q&A portion. So I'll hand back to you for final comments.

[Company Representative] (NWR Communications): Thanks, Tony. That brings us to the end of our Q&A portion, so I'll hand back to you for final comments.

[Company Representative]: Thanks, Tony. That brings us to the end of our Q&A portion, so I'll hand back to you for final comments.

Speaker #3: Thanks, Mel. And look, thank you everyone for joining. I think as Jason said, the peak of the investment is past. We've turned around the cash flow in the second half.

Tony Abrahams: Thanks, Mel. Thank you everyone for joining. I think as Jason said, the peak of the investment is past. We have turned around the cash flow in the H2 while continuing to grow both the share of wallet with the world's biggest and most trusted media brands. What we are looking to do now is extend the success that we have had in American broadcast into the rest of the regions and across into enterprise and government, with a particular focus this year on education, while continuing to improve earnings and cash flow as we go. Thank you very much. I will be on ausbiz this afternoon. We have got a few more webinars over the next few weeks. We will keep everyone updated on LinkedIn and on InvestorHub. Thank you all for your time.

Speaker #3: While continuing to grow, both the share of wallet with these the world's biggest and most trusted media brands and what we're looking to do now is extend the success that we've had in American broadcast into the rest of the regions.

Speaker #3: And across into enterprise and government with a particular focus this year on education. While continuing to improve earnings and cash flow as we go.

Speaker #3: So thank you very much. And yeah, I'll be on OZBiz this afternoon. We've got a few more webinars over the next few weeks. We'll keep everyone updated on LinkedIn and on InvestorHub.