Operator
Good afternoon, ladies and gentlemen, and welcome to the PCI-PEL results presentation. To start with, if we could cover a couple of housekeeping items. Before we begin, we would like to submit the following poll, which you will see on your screens. Throughout the presentation, investors will be on listen-only mode. However, questions are encouraged and can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen.
Speaker 0
The company may not be in a position to answer every question it receives today. however the company will review all questions submitted and publish responses where appropriate these will be available via your invest the meet company dashboard finally we would like to remind you that this presentation is being recorded i would now like to hand over to chief executive james barham and chief financial officer ryan marie okay thank you nick hello everybody uh thank you for joining us today for this interims update um from myself and and ryan um really excellent progress in the first half and really just proving execution against the plans that we laid out at the beginning of the year so we're going to be talking a bit more detail to those things but broadly speaking where we want to be we will try to make sure we've got plenty of time at the end for questions as usual which means we will spend a little bit less time on some of the background information you can gain more insight through the IMC website if you want to look at historic presentations or YouTube or CMDs, et cetera. We've done plenty of content that's out there and Edison, I should well call that out too. So let's start off with a bit of background in terms of what we're all about at PCI Power. So we're a software company, fast growing software as a service business, SaaS business. We have a secure payments platform that empowers customers to transact business securely to do that cost effectively and to do it in a compliant way our platform services customer interactions with businesses across every business communications environment predominantly that's the call center or what we call today the contact center space which also includes conversational AI as well but also the unified communication space as well which is more of your back office type functions but everything today has been predominantly based on securing transactions and around payments and those things so and within those communications areas we have various channels that we cover so in really basic sense live voice so phone calls web chat social media, conversational AI as I mentioned, so voice and web chat, bots, these sorts of solutions. We've got everything to cover the whole gambit there. Now in terms of PCI-PAL strategy, three key pillars to that strategy which have stood us in good stead since we started on this journey more than five years ago now. The first on the bottom left of the agency is cloud. To be the leaders in our market in public cloud services. We were the first to market with a public cloud offering, and we have the most extensive multi-tenanted public cloud platform in our space today. And I'll provide some more information on how well that's working for us a bit later. The cloud platform purposely would allow us to access the breadth of our market on a global basis. So what we do is a little bit niche, operating the business communication space, but it's very much a global market actually. So it's a large addressable market opportunity. And being in the cloud allows us to cost effectively access the breadth of that on an international basis. And we've shown that through execution across the last seven or eight years. And then also we leverage a go-to-market model which heavily leans towards partner-led sales. So a channel sales model predominantly selling to customers via contracted resellers that we have and resellers that we are integrated to. More on that to come. We've got a fantastic customer base, more than 750 customers across our platform. We've got some excellent brands that trust us lots of enterprise companies that work with pci pal not always enterprise size contracts depending on their their communications footprint but we do have a number of very large enterprise contact center environments as well we are talking somewhat more than 5 000 seats each having said that though we very much value the commercial to mid-market end of the space that we target. So this is your SMB space. It is the majority of the contact center market in most developed territories, generally taking up around 70 to 75% of the market. And so early on, we set out our stall to really be able to target that voluminous SMB space. And then over the years, we've moved into the enterprise end the market really covering as i said earlier breadth of market in terms of size of customers that we can deal with so really looking to try and maximize the the addressable market opportunity that's in front of us and then on the bottom right you can see some of our partners so i said we're channel business predominantly selling through the channel and that's an example of some of our some of our integrated partners that we that we work with now let's get on to um an update on the on the period so uh very good h1 uh really pleased with where we've got to um i think you know we've we've uh in a really balanced way as well but i think what what really underpins what we've achieved in h1 um is strong new business momentum so great to see we're a growth company that's essential for us achieving our goals in the in the years ahead but also operational efficiency as well also really strong deployment velocity those of you that know us will know that's important because it allows us to get new sales that we make to revenue quicker and longer term we want to become more efficient on that side of things too so that we can create more operational gearing in the business as we move into profitability again next year arr is up 21 key growth metric for us, 25% on a constant currency basis. And it's a record real terms increase for us as well at 3.6 million. Contracted ARR or CAR, as we call it, the difference between ARR and CAR is that CAR includes contracts that have not yet got to revenue recognition, but it's a really good indicator of future ARR. And we have really very little that drops out between CAR and ARR. And And it's really the car metric that is an important measure of whether we're going to get to the growth objectives that we have in front of us. So to be growing that at 18 percent or 21 percent on a constant currency basis is just where we need it to be. We, you know, what's making up that contracted ARR? So let's talk about new business for a moment. Some of the bullet points on the right and a bit more detail from the interim. So increased run rate. So I mentioned about SMB and that area of the market that's important for us. I've used the term run rate to describe the business that we do with that end of the market. This is our, you know, this is the typical turnover that we see on a quarterly basis of new business that's coming through the door. And we've been very successful in incrementally growing that. And that is effectively our reliable base of business that's coming through. And then on top of that, we're layering on more enterprise business. and that's part of our tactics this year and a part of our longer term strategy is to sell more to large enterprise whilst growing our SMB business at the same time. We want both and we've been successful in the first half. I mean not surprisingly we're seeing more enterprise business coming from the US business. The US business appears to be taking as expected a big step up uh this year it's a substantially larger market than than the uk um we've signed um a number of enterprise organizations we've uh for various various different fortune categorizations that we've referenced in the uh examples given in the interims um but but say fortune 50 insurance company one of the largest insurance companies in the us really successful proof of concept with them, which has then led on to an initial sale that we made in the first half of the year, which is north of £100,000 ACV value to us. We really think there's strong expansion opportunities as soon as H2 with that customer as well. And then healthcare is a sector that those of you that follow us will know we're targeting. It's a key vertical for us in the US. So great for me to see two healthcare technology companies that we signed, and these are substantial organisations. One of them is a Fortune 500. The other one's a global Fortune 500. And also we signed our largest healthcare, i.e. healthcare company deal since we announced the Epic integration. And we are using that integration to deploy to that customer right now. So, you know, we're putting those building blocks in place as we target these verticals and we're seeing good traction in financial services or insurance particularly, plus the healthcare space and we're seeing that reflected in our pipeline as well into H2 and beyond. Revenue on the third one down on the left there, revenue up 7% year on year. It's actually 14% on a normalised basis. So that's really what you need to be looking at is the 14%. Ryan will provide a bit more detail on that, but that's related to the big difference there in the percentages is mainly because of the revenue deferral that we had from FY24 into FY25. So it makes the step up look smaller than it actually is. Ryan can talk to that a bit more. Underpinning the revenue growth is a strong, continued strong customer retention metric. So GRR at 95%, that's remained flat, and we're very happy to keep it at that level, given the scale we're now progressing to. We've continually proven ourselves to be able to keep our customers. We have sticky technology, sticky products, but we also have a great culture. We've got strong systems, processes to be able to maintain those relationships, not just with smaller customers, but also with the very largest as well. and we've had some success in the year as we've mentioned in both the current trading and also prior to that in the first half of renewing some of our largest customers and extending some of those contracts. NRR is a metric that I've set some ambitions around at the beginning of the year where I stated that in the next two and a half, three years we want to see DNR at 110%. Now to be at 105% this year, seems like we're well on the way to do that. It doesn't quite work like that in terms of how you incrementally build to it. But 105% is a really pleasing result for us so far this year. And we'd be hopeful of maintaining there or thereabouts by year end compared to 102% last year. I will say that most of the expansion sales contributing to NRR are from upselling of our secure payment products. I'll talk a bit more about the strong demand we are seeing for those core secure payment products in a moment, but that is where the majority of that expansion is coming from that's driving up NRR. The health of the business, something I often talk about. I think the business feels very healthy right now. The key initiatives that we're working on through the year are progressing either as we expect them to, or we're ahead of where we expect to be. The, I just talked about retention, you know, the quickest thing you can do if you want to lose customers is to have a platform that's not reliable. We have 100% uptime of our global public cloud platform across H1. We, that is not uncommon for us to achieve actually. So whilst we contract five nines to our customers, we regularly achieve 100%. So that's full credit to our engineering team. That is excellent quality. It's also deeply critical for relationships with partners as well. When partners are putting faith and trusting you to resell your services, they need to know they're going to work and they need to know they're going to be up. And so, again, that's even more in focus when you're selling through large technology partners as we did. So, yeah, call out to my engineering team who are doing a fantastic job, fantastic job there. And then just finally on the health of the business point, people, people are key to our success. They're also our biggest cost in the business. We need to make them count. And every hire we make in this business, we don't do that unless we're 110% about the individual. We added some individuals to the leadership team, onboarding those in the first half of the year. a CISO new chief information security officer we added at the back end of FY25 and we added a new CMO in Q1 this year so she's been with us about six months now both of those hires are going really well and I feel that we're taking a real real step forward there and then underneath that you know the culture of the business I think it's relevant to point out that you know in the early days of PCI power it wasn't quite growth at all costs but we were super aggressive around growth we're still a growth business no doubt but you you would have picked up and if you attended the cmd or watch the videos you know we very much want that balanced growth and profitability story going forwards and so we're shifting our culture to a degree as well from this you know more of a growth at all costs approach to more of a a rule of 40 culture if you like and we're talking about that very much um within the business so that's all happening that maturing is happening but while While we're doing that, we've got employee NPS scores in a very good place. Employee retention is very high. So for me doing my role, I've loved building this team, but to see the strong execution that we've had in H1, but at the same time see the culture that we have here that will support us as we drive to those ambitious targets we've set ourselves over the next two and a half years is really quite pleasing and really good to see. let's dig a little bit more into the kind of operational updates on the partner ecosystem side very briefly for those that are new to the story so the vast majority of our business comes through our partner ecosystem we've got an extensive partner ecosystem which is split between those three categories in the top left that you can see there typically we say 75 to 80 percent of our new business will come via resellers actually in h1 this year it was higher than that so it's actually 83 percent of contracts came through resellers and also an increase to the value contribution of those new deals to 71 percent now i've that's a trend that we have expected and the reason that trend that increase in value via partners is being seen is because um ccas organizations are doing more and more enterprise business now you know not all enterprises have shifted um their communications to the cloud yet okay in fact there's some pretty big numbers out there if you listen to some of our partners earnings calls about what's you know what's remaining so you've got that shift going on but then you've got the fact that pci power is working more deeply and more broadly with those those partners and for those that sell to the enterprise we've built up trust with those organizations for a number of years with many of them now and so we're being offered into those very large customers so therefore the average value coming through partners has been increasing which we referenced in the in the interims it's worth adding that you know the the the channel business itself we don't just play at it it was a key part of the strategy from the very beginning you know if i think back to when we were 10 15 people we've had a hiring strategy on the trajectory that we're at now the the always looks at anyone that's involved with customers or partners must have experience of working through the channel you know we need that so they understand how those relationships work and hiring has been an important important part of that and you know we consider it a real strength of the business in terms of highlights for the period to talk about so i've talked about incremental growth in smb coming by partners and also increasing enterprise opportunities via partners this goes back at the beginning of the year i said one of the key strategies this year is to work more deeply and more broadly with the existing partners we've got you know yes we want to sign new partners but we must make the most of the ones that are you know right on right in front of us as well um how do we do that some of that work is more commercial relationship led product enablement marketing enablement but also we're working on um you know more deeper technical integrations with these partners so we've enhanced a number of the platform to platform integrations that we've got with key partners across this year some of those have completed some of those are going through different phases and the sort of result of these you know these enhancements improvements that we're making could be that they aid increased deployment velocity for instance so actually we can get their customers to using our services somewhat quicker because of the enhanced nature of the integration that we've got it could be that we're giving them access to pci power within products that we don't do we haven't done historically so we have a partner for instance who has integrated their video capabilities pci power secure payment swing we are working with a number of partners at the moment to integrate our secure payments products into their conversational ai products some of those are live and some of them are going through through deployment and through integration at the moment. And a lot of this work, you know, it's deepening that competitive moat that we have with these partners too. Just back to conversational AI for a moment. A trend that we are seeing with our partners is that there is a trend with the CCAS vendors to either be building their own conversational AI products or partnering or acquiring, excuse me, acquiring conversational AI solutions. We've seen that with NICE acquiring Cognigy, for example, and we've seen several other partners of ours, such as Zoom, for instance, launching or planning to launch their own virtual assistant or chat and voice bots. And so actually, you know, that supports the positioning that PCI Power's got, because we are the ones who have those relationships with those partners. And so we will work with those partners to incorporate and make available all the value that we give through the secure payment suite that we've got. MCP is something we've announced through the trade that we plan to launch our MCP server capability in the second half of this financial year fairly soon, actually. And we announced that we were accelerating the development there. Now, we're not seeing a lot of volume coming through conversational AI situations or use cases as such. We're seeing a fair amount of interest, but we don't think the sophistication is there yet. So a lot of what we're doing is positioning ourselves for readiness for the future and to take advantage of what we believe will be significant increases in conversation volumes going through these business communication systems. and we think we're very well positioned to uh to to capitalize on that we've seen a trend in the year which is really very interesting around ucas so this is unified communications as a service so this is your back office phone systems we have a number of key partners who have large uc businesses as well zoom do ring central eight by for example, and so we're seeing increased opportunity levels for UCAS use cases and we've made a number of sales in that regard in the period. And we actually think as we move more towards a self-service capability, which I'm going to talk about more in a moment and I've talked about in the past, we think that will create a more cost-efficient way that our services can be deployed into UCAS scenarios as well. And then probably finally to wrap up is our business development effort around new partners we are very targeted about identifying potential new strategic partners and then how we go about trying to win partnerships with those organizations sometimes it takes a very long time particularly if you know we're convincing that partner for the first time that this is a good thing to do and we can add value we may have to displace a competitor that's not something we come across commonly but when we do it's something that we can go after quite aggressively and in the period we've been successful in moving a number of these opportunities along so much so that a week or so ago we announced that we'd signed a major new strategic partner and that partner will be completely standardizing with with PCI pal and we'll be doing a trade a trade PR announcement with them in the next month or so maybe two months and at which point we'll be able to to name them publicly but this is all part of our plan i mentioned earlier about working more deeply with existing partners it's also about adding incrementally more partners those that suit our model working really closely with them adding value providing a great service and helping us to drive that growth momentum going forward so all in all good health of the partner ecosystem at the moment and the continued
Speaker 2
progress we're making there i'm going to pause for a second and i'm going to hand over to ryan uh for the uh financial update and i'll you can control the slides ryan if you like i think thank you james um i think we'll start with having a look at the core metrics that define really the health and the trajectory of the business so we exited the first half 20.3 million ARR, I'd say up 21%, and it really demonstrates the continued demand for our offering. Along with that, the contracted ARR is up 18% to 24 million, and really that provides strong visibility into ARR conversion over the coming periods, which really supports the confidence in our continued revenue progression. I think importantly, actually underlying all of that is this growth has been experienced across all of our regions, EMEA, North America, ANZ, reinforcing the global reach of the business as well. Retention remains again a structural strength with the GRR at 95% and the net revenue retention at 105, reflecting the stickiness of the platform and our ability to expand with existing customer relationships. Really validating the land and expand strategy and you know we're winning the customers retaining them at high levels and gaining um a greater share of their of their wallet as as they um a greater share of their wallet um looking at the revenue we delivered 11.3 million in the first half and it seems referred to there was just under 700 000 deferred from fy 24 into the first half of f f f y 25 so when we normalize for that that gives a underlying growth of 14 it's really important to look at that to understand uh the trajectory of the business and it's uh reflects the steady execution that we had planned. Importantly, the revenue is made up of 93% of recurring revenues, up from 91%, and highlighting the continued quality of our revenue and also provides strong visibility and durability of revenues into the future. An ARR converts into revenue through, or sorry, contracted ARR converts into revenue. We focus on the time to revenue and the duration that that's taking. That's down to about five months at the moment, and we continue to focus that and refine that area. And this really is financially important because the faster implementation the contracted ARR moves to revenue, the quicker EBITDA contribution will accelerate and we'll start to see more operational leverage and every time we get these improvements we'll rule them out across our partner ecosystem and get them embedded into the systemized but if you look back over the years our compounded growth has been over 30 percent in both arr and revenue and that combined with the arr growth improved nr and predominantly recurring revenues really reflects a quality business model turning to profitability and margins as i refer to our revenues up 11 points up to 11.3 million but that delivered a gross margin the period of 87 percent compared to 90 percent in the prior period now this movement is really due to a revenue mix and as timing related the recognition of our license revenue which has a higher margin is dependent on deployment timing and ultimately which is dependent on end customers and the timing effect weighed modestly on our H1 margin in the period. We expect that to start to unwind H2 as the full effect of the H1 deployments are felt are delivered through revenue and also with the furthering deployment of contracted ARR which has been secured in H1. In the period our administration expenses increased to 9.6 million and reflecting the deliberate investment in engineering platform capability, our product marketing and our broader go-to-market capacity. And this is really targeted investment to support ARR scaling and long-term operational leverage. All of that delivered an adjusted EBITDA of 0.2 million versus just under 1 million in the prior period. But I think it's really important to contextualize the comparison. The prior period EBITDA has benefited from that deferred revenue from FY24. So when looking at adjusting for that timing benefit, looking at the underlying year-on-year movement, it's really the growth that we have experienced that we've reinvested back into the business. So overall, we're sustaining the ARR growth at over 20% while being EBITDA positive turning to cash and cash remains a focus a real central focus for us especially during our our growth investment period and you'll see that underlying operating cash remains positive before working capital movements the net cash and operations in the period just um was just under 600 000 reflecting the time time related utilization of working capital rather than a structural cash burden we did invest 900 000 in our capitalized development expenditure and this was targeted focused on our platform and deeper partner integrations and this is strategic r d designed to really maintain and strengthen our competitive advantage and support future arr growth at the end of the period we uh we had cash of 2.6 million on the balance sheet but in addition to that we still retain full access to our undrawn um three million r rcf facility so i think it we're utilizing our cash in a in a controlled manner to drive value accretive investments um and as arr scales and margins expand we expect operating cash conversion to strengthen progressively turning to the balance sheet uh intangible assets increased to 4.6 million consistent with our continued investment in the product and aligns with our strategy to reinforce long-term competitive positioning our deferred income stands at 14.5 million at the end of the period which again provides clear visibility into revenue recognition over the coming periods importantly our liquidity remains controlled and overall the balance sheet really supports organic investment and execution of our growth strategy without near-term capital requirements looking ahead to h2 and beyond the focus really is around execution against a defined profitability trajectory in the second half we expect a strong revenue delivery supported by license record license revenue recognition and continued deployment of those contracted customers that i referred to earlier and as the revenue mix normalizes we expect gross margins to to improve and it's a timing issue rather than a structural issue operationally we have strengthened the model by focusing on different aspects such as standardization and other improvements to drive our time to revenue and we remain focused on reducing this further so for fy26 and we are the revenue and adjusted ebay remain in line with expectations but i think more importantly the significant value inflection is really sits beyond fy26 and at which point is expected to be driven by arr reaching reaching the scale operating expense growth normalizing relative to revenue growth and the standardization and future investment and automate automation of the platform flowing through so as long as we stick our priorities of growing organic growth which we've targeted ourselves 18 to 20 percent range and driving operational leverage this should ultimately translate into increased margin expansion further operating cash generation and really strong growth profitability throughout 27
Speaker 0
and beyond that james i'll hand back to yourself thank you okay thank you ryan um so uh products and platform overview now so really this is about the importance of our platform going forwards and how we intend to capitalize on what we've built today the positioning that we have through our partner ecosystem the technology integrations that we have whether they're with resellers or whether with third parties that we work with and leveraging that go-to-market motion to continue on the current growth trajectory, but also create new opportunities for PCI Pal as well as we go forwards. So to start that off though, I think it's really important to emphasise the demand we are seeing for our core secure payment products. That is driving all the momentum in the business today, and that is as we had expected it to. So whilst we do have an eye on some new product developments, I'm going to talk about those more in a moment we're not developing those products because we feel that our core of secure payments needs to be replaced if anything it is it is growing in terms of demand that we're seeing and that's really exciting because um these are these are mature products they're products we've added to um and uh and they're they're just as relevant today and will be in the future as they were a number of years ago in fact if anything we're seeing an uptick in demand in perhaps some the regions where it had taken a bit more time to connect. So particularly in the US, for example. Now for those more new to our story, those three key products that we have underneath the banner of secure payments are key to pay, click to pay and speak to pay. And effectively what these things are doing is PCI PowerX is a payment facilitator. So first and foremost, we're making a payment possible across any communications channel by using key to pay click to pay or speak to pay and that's any of those channels i talked about earlier it's whether it's within a contact center a uc environment or whether it's in conversational ai we are making the payment possible in a way that's completely embedded and integrated to that conversation that carries value in itself but we also act as a secure data transmitter as well and so this actually is where the original value proposition came from it's why we're called pci pal because that related to pci compliance around credit and debit card data but you do get that too with what you do with pci power but today it's more like table stakes so if you use our solutions it's going to allow you to be secure and allow you to be compliant and the three different methods really cover different channels so key to pay is effectively typing in card data using telephone keypad and you can do that whether in conversation with an agent or a bot or whether you're using a fully automated system via a bot or an ibr system which are very quickly becoming bot systems themselves and this is where the technology known as dtmf masking comes into play and we have some patterns related to the way that we deploy our voice solutions as well it also acts as a protection in some of the technology integrations that we have with our partners in a very light touch platform to platform way we then have click to pay and speak to pay so click to pay is where we're really opening up the opportunity for digital payment methods click to pay uses a secure web link which is sent to a customer i mean that's in very basic terms it could be fully embedded into our customers own systems that they're using it could be a notification in an app there's all sorts of different ways you can facilitate this web payment form effectively and in that form it works in a similar way in that pci power is capturing all sensitive data but also we can facilitate lots of different payment methods there as well so it's not just credit and debit card we can make any kind of e-commerce type payment methods available to customers to consumers at that point and so our own customers for example it's very common to to include digital wallets in that so apple pay google pay etc buy now pay later is relatively common as well so if they use Klarna on their website they can news planner with PCI power in their contact center or on their web chat environments or a firm, things like that. And we have open banking too and a variety of other different digital payment methods that are available. And then speak to pay is speech recognition. So this is AI powered speech recognition. We're on our second iteration really of the speak to pay solution and it's super reliable. It still typically gets used more in accessibility situations where you might have callers who may have a disability and for one reason or another can't use the keypad or prefer to speak details in which case we can use enhanced speech recognition to do that and also this will come in this comes into play with voice bots through conversational AI as well which are effectively using AI speech recognition as well so we can seamlessly integrate into those conversation flows as well and we're seeing excellent momentum across this area of secure payments however you know we are adding to to what we do from a product perspective um and i want to give you our sort of balanced view on what that looks like so today i will add to this um this was a graph that we a chart if you like that we shared um at cmd or certainly something very similar to this you've got the current product suite which by vast majority revenue wise is the secure payment suite and then also secure data collection as well because we can use the secure payment suite to capture data rather than payments so we have customers that use it for social security numbers that use it for setting up direct debits and bank account details any sort of sensitive information we can actually use those solutions to collect that so that there's less so what is useful but it but it is available in terms of secure data collection and then we have the fraud management piece as well and with that we launched a fraud screening solution which we launched in in july at the beginning of this year it's fair to say we launched that that very early so we've been going through a process to roll that out to our partners and we've got a number of those that are being on boarded right now with the fraud risk screen capability we've got a number of new customers direct customers coming through a contract process for that so i'd expect by the full year to have you know some customer base there that we'll be talking more about um but effectively what's happening here with the fraud risk screen is that we're doing a check a fraudulent check prior to taking a payment and then we use the intelligence that we get back to drive the payment method that we offer to the customer and so rather if it looks like it might have some fraud risk associated to it then we may not offer a credit or debit card payment we may offer a payment type which has additional authentication such as a digital wallet payment because when you make a digital wallet payment the consumer has to have face recognition to authenticate themselves, which therefore means the merchant taking the payment is more protected. And so therefore, if it is a fraudulent payment, it's highly unlikely that they're going to get a charge back in that situation. That's what we're trying to avoid. Now, longer term with the fraud management piece, we'll use it outside of the context of just the payment point in the call. You can actually also use it earlier on to assess whether there's any fraud going on, but that's very much in our plans longer term with that. And then in the center there, you've got analytics and data. So this is really around the reporting capabilities. We launched a new version effectively of our data analytics capability and reporting suite earlier this financial year. We're continuing to improve what we do there. we have a company-wide sort of data consolidation project going on at the moment which isn't just about reporting externally it's about all sorts of things efficiencies use of AI within the business but that will contribute to our ability to provide better insights to customers and partners around you know improving customer experience increasing revenue reducing chargebacks and all these sorts of things so that these these three or four things are all available today and in the direction of travel we're taking with products and these sort of adjacent areas we've talked to you about customer authentication before and we we expect this is coming soon and so we plan in h2 to be announcing a new product capability around customer authentication so effectively we're helping our customers be confident that who they are talking to is who they say they are so we've got several features planned to how we achieve that and we'll launch an initial iteration and then we'll add to that in the months following that as well and the customer authentication tool can be used at any point during a conversation so we're not just engaging here at the point of payment we're engaging at other points in the call wherever our customer wants to use that solution but the important thing is because customer authentication is not new. The important thing is we're leveraging that and we're doing that from the integration point that we have in that conversation. So we're doing it from our USP of being integrated to that conversations, that communications platform. And that's the uniqueness to it. We're not trying to do this for the first time, but we are trying to do it from that perspective for the first time. Now, we've also got identity verification on the list as well, which is planned for the future but particularly i want to draw investors attention to self-service onboarding which in itself might sound um a little unimportant but actually i think to investors that know us well they're starting to realize how important this is for pci pal and for a number of different reasons and just to be clear it is a product initiative so um adding this self-serve capability to what we do is a product initiative for us and an engineering um workload that we that we have to resource um you know some of my biggest challenges in the business today are which opportunity do we go at the hardest um these are mostly good problems for us to have um but that tends to be the sorts of discussions we're having to have within the business right now but in terms of self-serve and self-serve onboarding what this means for pci pal um so we are working towards this so it's not a light switch moment it's building blocks towards this and we expect that by the end of FY27, we will be able to sign up customers through our website who can sign up, contract, pay, gain access to, and use our services entirely via our website. And we're aiming for MVP stage within 18 months, unless we decide to try to move that faster potentially. Now, the building blocks towards it mean that we actually get some operational gains too. So I've talked a bit about standardisation in our interims. I've talked about that in full year and so actually when we're onboarding some of these smb customers um we're we're able to leverage some of this standardization more out of the box um for our products and so that means there's less professional services involvement on our side less custom development work so that means you know increased operational gearing longer term which clearly is something we want to see more of now we think we're going to start seeing that anyway just by nature of what we're doing and our ambitions around rule of 40 within the next two and a half years um but this could be you know a real catalyst for that um not longer term as well um and and the the sort of biggest strategic point around self-serve is that it opens up another go-to-market motion for pci power and this is something we're very much very much targeting right now is it creates a product-led growth stream which is more of a true SaaS type growth stream where we can sell our services entirely digitally we can market and sell them entirely digitally any anywhere in the world and that will change the or add an additional go-to-market model for the business in that time as well so you know when we think about the growth trajectory of the business out to fri 30 and beyond we very much want this to be part of part of that and so the self-serve piece is really quite important so i just know sometimes when you talk about products uh people's eyes do tend to light up about some bright new shiny new product actually we've got some excellent products that already exist and we can make them better we can make them more available we can access more of our market and self-serve is one of the key ways that we're able to do that so So it's for Ryan and I to make sure that we move that along at the right pace. Just before we wrap up, underpinning all of this is a public cloud platform. I'm not going to spend much time talking about this slide at all. Please feel free to look at it separately. But, yeah, excellent platform, as I've said already. But that secure engagement platform that we have today, you know, we have the platform. platform. We have this ecosystem of partners underneath it. Some of those are resellers, some of those are integrations. We've got more than 130, 140 payment service provider integrations, some of whom we aggregate across, and then we have all the CRM integrations that you could need, et cetera. And then effectively our platform is sitting on top of that. And so that's the direction of travel that we're taking in terms of anything new that we do. we are then able to take via our current go-to-market model. And then with the emergence of self-serve capabilities and that full sort of PLG approach to things, that will create a new track for PCI-PAL, more of a true SaaS sales play in the longer term, which we think is really quite exciting for us. So just before we go to questions, to wrap up on the outlook, work. We have made an excellent start to H2. Q3 is often our strongest quarter at PCI PAL, just because of where partners' year ends tend to fall. But yeah, as expected, we've had a strong start to this third quarter. Continued sales momentum, particularly in the US, and continued seeing strong traction across insurance and healthcare. We announced That's the major new partner that I mentioned earlier. And also we've referenced that we did extend one of our largest customer contracts in that time as well. So that's also been secured since the end of H1. And really our focus right now is the same as it has been this year as any investor that's spoken to me one to one. We're focused on execution of the plan this year. We want to beat our numbers this year. that's where we want to get to I don't want to set new expectations above the ones that are there you've got to meet the numbers but really where I want to be is beating those key numbers that are out there building that trust with our investors and proving that this pathway that we're on and the adjustment we made at the beginning of the year was the right decision and plotting that long-term path to not just keeping the scale the scaling going but making that profitable as well and on time with what we're expecting that to look like over the next over the next year or so so we've set ourselves very up very well up for a strong h2 and to achieve those things so thank you for listening let's take some questions which I was going to manage I did pick up some when I wasn't talking so we'll see if any more no we've not actually so just a few questions in here bear with me so so we've got with large percentage of new contracts secured via partners how concentrated are the top partners and what visibility do you have on a forward basis so taking partner concentration first we have we actually have a good spread of business that comes via our partners both in terms of new business and in terms of revenue within the business I would say that there's a top there's a top seven or eight and then it starts to tail off somewhere from there but you know it's typically that top seven or eight we do have some who have a particularly strong quarter but then you know maybe quieter for the remainder of the year but yeah in general there is there is not significant partner concentration risk as such We're very careful in how we forecast business as well, so it's almost impossible to forecast the very largest deals, so we have to be careful with that and we try and just forecast based on run rate if we can. The other question was about forward visibility, which I assume relates to pipeline. We work very closely with partners, you know, it's all about building that mutually beneficial relationship with them and we put a lot of effort into that. We invest heavily in it as well, both in terms of time, engineering resources. We also give we try to make it interesting for them from a commercial perspective. And if we do all of those things really well and we look after their customers well, we've got good uptime, et cetera, then the relationships on the ground are easier to manage. And so we will potentially get more insight into pipeline and get a bit closer on that. So actually, we, from a sales perspective, we've been very successful for the last, at least last six quarters in forecasting, opening quarter, expected sales delivery for the three months ahead, if that makes sense. So, yeah, we've got good insight. Sometimes you're one step removed, but generally we've got good insight. Another question. So there's a question about the UK bank's initiative with MasterCard and Visa, which relates to setting up new card rails in the UK, which was in the news recently about a risk that if Visa and MasterCard's networks were turned off, would that be a major issue for uh uk companies which the uk government think it would be a major issue not just for companies but for the whole whole country um i think it's i think it's very unlikely but um we're very aware of that i don't think you know there's no immediate opportunity that we can accurately identify with that the question is do we see it as an do we see it as an opportunity um one point i will make is that we do know from operating in mainland europe that mainland europe to a degree are ahead on some of these things um and so there are a number of new alternative payment methods which are used in countries like France, Netherlands, Spain and these are alternatives to using the MasterCard and Visa payment card rails and these are quite prevalent and some of them have been around for a number of years so they're somewhere ahead of what we're doing in the UK but the UK I believe is setting up new card rails which is somewhat different to an alternative payment method but I would add that we do support most of those certainly the top two alternative payment methods in France and Spain, and that's been part of our mainland Europe push that we've got. So certainly don't expect that to have a negative impact on PCI-PAL. And then finally, a question on model context protocol for conversational AI services. How would we describe it for PCI-PAL, I think it means? So very simple terms, we'd describe it as an open source standard to connect AI platforms to third parties, whether they be other AI platforms or platforms like PCI Power's platform. And for us, I think long-term MCP will make it easier for us to, for other platforms to consume our services, I would say, particularly after we've integrated, introducing new products and services to those organisations that we're that we're partnered with. I think we're quite some way off where we will have bot platforms just coming to us to consume our services, but we're making sure we're ahead of the game so that when that does come, we are ready for it. We've got a mature model to deal with it and we can take part in the volume of transactions going on rather than be a victim of it. One other question, which is about mountain business that's come from one particular partner. I'll make the point here, we're very careful about specifics that we reference, both in terms of what goes into the results, but also on these presentations. We are the only publicly listed company in our space. We think we're moving faster than anybody else, and so we think there's a lot of eyes on us right now, so we're super careful about what we share that could be competitively So I'm not going to be able to answer that question, I'm afraid, but we think that's best interest as shareholders. Okay, I don't think there's any more questions, so yes sorry thank you both.
Operator
Can I ask investors not to close the session as you will now be automatically redirected for the opportunity to provide your feedback. If there are any further questions or you would like additional information on PCI-PAL then please get in contact via PCI-PAL at walbrookpr.com. Thank you everyone once again and hopefully you'll see the team present again shortly. Yeah, thank you everybody. Thank you.
