Welcome to the 3P Learning FY 2023 results call. Today, you'll hear from Mr. Matthew Sandblom, Executive Chairman, Mr. Jose Palmero, CEO, and Mr. Anton Clowes, CFO, as they present to you 3P Learning's 2023 full year financial results. If you have any questions, we'll have time for questions and answers at the end of this presentation. If you wish to ask a question via the phone, you will need to press the star key followed by the number one on a telephone keypad. If you wish to ask a question via the webcast, please enter it into the Ask a Question box and click Submit. I'll now hand over to the presentation to Mr. Matthew, Jose, and Anton from 3P Learning. Please go ahead. Hello, my name is Matthew Sandblom, Executive Chairman of 3P Learning. Welcome to the 3P Learning Investor Presentation. First, I'll give an overview of the company's performance and our prospects in the year ahead, followed by José Palmero, our CEO, who'll give a more detailed insights into our performance and where we're heading in the next year. Then that'll be followed by Anton Clowes giving a more detailed financial presentation. I'm pleased with the performance of 3P Learning for the 2022-2023 financial year. As I mentioned in previous presentations, this was a year where the focus was on building out a full suite of programs as part of our strategy of having the best possible offering for the key academic skills of reading, writing, and math, the three Rs. We have managed to further increase our investment in these new programs, while also maintaining a good level of profitability and cash flow. This was due to strong cost discipline and some modest increase in sales in both the school and consumer markets. Over the next 12 months, we will release some major new programs and program enhancements that we expect to be the foundations for growth for the next several years. In particular, we are excited to be releasing the first part of our Writing Legends program, which will help students significantly improve their writing skills. We have also launched a math component to our assessment program, Brightpath Progress, and we will progressively release a major upgrade of the Mathletics program over the next 12 months. Our sales focus will now shift from selling schools individual, Instead of selling schools individual programs, to selling them a full suite of programs for all core subjects. We should start seeing the revenue effects of this in the second half of the 2023-2024 financial year, although the full impact won't be seen until the 2024/2025 financial year, due to how revenue is recognized only when the service is delivered each month. To judge the success of the new programs, a key metric to follow will be the increase in ARR, annual recurring revenue. 3P is entering an exciting new growth phase based on having a top-class suite of programs that we think schools will love, our sales and marketing teams are highly energized by all the opportunities they have available to them. I'll now hand you over to Jose Palmero to continue this presentation. Thank you, Matthew. Good morning, everyone. It's been a productive year for 3P Learning, developing and investing in our programs, building stronger sales and marketing capabilities, and introducing a new strategic revenue stream with the acquisition of Brightpath Assessment. I'll cover financial results and product releases in more detail. Let's start with a recap of our products and strategy. Our existing hero programs, Reading Eggs, Mathletics, and Mathseeds, are now complemented by Mathseeds Prime and by our recently acquired programs, Writing Legends and Brightpath Progress. Together, they round up our content solution for the three Rs of learning for pre-K to Year 10 students, teachers, parents, and educators. Strategically, they combine to form a comprehensive product suite designed to significantly improve learning across reading, writing, and maths. We operate in the consumer and the school markets, that is B2B and B2C, across three regions, APAC, AMER, and EMEA. We also offer, in a smaller scale, teacher professional development services for B2B, and are exploring other value-added options for our B2C content offering. We believe this combination of trusted programs, market segments, and global presence makes 3P Learning a compelling proposition in the EdTech market. Let's now look at the highlights from the FY 2023 results. Although we faced some headwinds from the macro environment, particularly in the U.K., we still achieved AUD 107.4 million in revenue, which is 10% higher than last year. Importantly, in FY 2023, the revenue recognition variances stemming from the acquisition of Blake eLearning have washed through, so accounting revenue and annual billings are now closely aligned. B2C billings were 5% higher than last year, at AUD 40.7 million, whilst annual recurring revenue for B2B was AUD 65.4 million, which was 2% higher than last year. On the profitability side, disciplined cost control allowed us to deliver underlying EBITDA of AUD 15.9 million, which was 21% higher than last year, and underlying cash flow from operations before tax of AUD 10.8 million, to finish the year with cash balances of AUD 27 million and no debt. Overall, a good year. The closing cash balance includes the acquisition of Brightpath and product development costs of AUD 28.2 million, of which AUD 25.6 million was expensed in FY 2023. We have exceeded the AUD 100 million revenue milestone for 3PL for the first time with strong business fundamentals, investing in our product suite for the future, and serving more than five million customers globally. Looking at segment performance, in the consumer market, that is B2C, billings grew 5% across all platforms to AUD 40.7 million. Billings also grew in the APAC and AMER regions, EMEA, mostly affected by performance in the U.K., was steady compared to financial year 2022. ARPU in FY 2023 was AUD 134.80, that is 9% higher than last year, with net billings contribution margin of 51%, including direct sales, marketing, and platform commission costs. We introduced a price increase for new customers in January 2023, separated our literacy and numeracy offering, which gives customers more subscription options. This also gives us more options to upsell and cross-sell individual and bundled products. In the schools market, or B2B, revenue was AUD 66.4 million, which was 15% higher than last year, but this was mostly due to the revenue recognition changes I mentioned earlier that affected financial year 2022, and which have now washed through. More meaningful was the increase in annual recurring revenue to AUD 65.4 million, which was 2% higher than last year's AUD 64.4 million. Mathletics revenue declined about 7%, but this was compensated by a 25% increase in Mathseeds from a lower base, so in dollar terms, the decline in numeracy was minimal. Brightpath is now contributing AUD 1.6 million in revenue, and overall exit ARPU increased 1% to AUD 12.50, despite Brightpath having a lower ARPU. In terms of product releases, in the second half of financial year 2023, we launched a new maths module for Brightpath Progress and Mathseeds Prime for year four, both in Australia. We also released new features for Reading Eggs, including the new reading journal, teacher library controls, awards, and certificates, while Mathletics now features a new avatar system and M coin to help motivation and engagement. In financial year 2024, we will launch Writing Legends and Mathseeds Prime for year five in APAC, new student center, teacher assign and review, and the first new courses for Mathletics, and the read aloud feature for Reading Eggs. Brightpath Progress will also start being rolled out in AMER and EMEA. The next 12 months will be full of releases, new programs, and new and improved learning experiences, all with our tried and tested better ways to learn approach. I will now pass on to Anton for more details on the financials. Good morning, everyone. Thank you, Matthew. Thank you, Jose, and welcome to 3P Learning's FY 2023 results. I'm gonna go through in a little bit more detail our results for FY 2023 and some cash flow information. Looking at the P&L for FY 2023, a record revenue year, AUD 107.4 million, up 10% on FY 2022. Split broadly, B2B, AUD 66.4 million, up 15%, which is primarily owed to the change in revenue recognition, which is washed through now. B2C, AUD 40.5 million, up 3%. Good disciplined cost control with total expenses up 9% and an underlying EBITDA of AUD 15.9 million, up 21% on FY 2022. Sales and marketing costs up AUD 5.1 million, partly due to increased investment in digital marketing to drive B2C retention and growth, and additional B2B new product marketing costs. Product and technology costs up AUD 3.5 million with additional investments in employee costs and software. Moving to the B2C performance metric slide. Gross billings improved 5% in FY 2023, driven by strong parent subscriber base while increasing ARPU. Net billings have grown 5% after commission deducted by Apple and Google. B2C ARPU increased 9%, while licenses declined 4% on the prior corresponding period. Our net billings contribution margin remains steady and strong at 51%. From an accounting revenue perspective, revenue is up 3% to AUD 40.5 million, and our contribution margin is steady at 43%, compared to 44% in FY22. Moving on to B2B performance. ARR up 2% to AUD 65.4 million. The Brightpath acquisition contributing AUD 1.4 million of ARR. Exit ARPU increased to AUD 12.50, despite Brightpath having a lower ARPU. Churn is steady at 14%. From an accounting perspective, B2B revenue up 15% to AUD 66.4 million. This is primarily owing to the change in revenue recognition in the prior corresponding period. This is now washed through. Moving to the cash balance bridge. We started FY 2023 with about AUD 31.7 million in cash. We generated underlying cash flow from operations before tax of AUD 10.8 million. We spent AUD 4.1 million on plants and equipment and intangibles. Just under AUD 1 million was spent on net rent, refund of deposits and foreign exchange impacts, and merger-related VAT payments and Brightpath acquisition costs, net of cash, amounted to AUD 10.6 million. finishing the year at AUD 27 million in cash, which is made up of AUD 14 million statutory cash, AUD 7 million in short-term deposits, and AUD 6 million in restricted cash, all outlined in the financial statements. We have no debt. Looking at our EBITDA cash flow bridge, underlying EBITDA in FY 2023 was AUD 15.9 million, on after working capital adjustments of AUD 5.1 million. Our underlying cash flow from operations generated before tax was AUD 10.8 million. Significantly, AUD 10.6 million was spent through the year on merger-related VAT payments and the Brightpath acquisition, net of cash. In total, we utilized AUD 4.7 million of cash, leaving us with AUD 27 million at the end of the period. I will now hand you back to Jose. Thank you, Anton. To wrap up, we provide market guidance for FY 2024 as follows: Revenue range: AUD 112 million-AUD 115 million, including growing annual recurring revenue with the new B2B product launches. Underlying EBITDA range: AUD 15 million-AUD 17 million. We aim to generate cash from operations before tax and investments at levels higher than financial year 2023. As we have shown today, we have invested significantly in our product suite for the past two years. Our focus now turns to implementing our go-to-market sales and marketing strategies. The key metric to gauge the success of our product investment will be annual recurring revenue. We will keep the market updated on our progress. Thank you to our shareholders, our customers, and the 3P board for supporting our efforts. Special mention, of course, goes to our talented and dedicated team for all the hard work during the year. That concludes the presentation today, so I will now invite questions from the audience. Thank you. Thank you. If you wish to ask a question via the phone, you'll need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type it into the Ask a Question box. Your first phone question comes from Piers Flanagan with Barrenjoey. Please go ahead. Morning, Matthew, Jose, and Anton. Thank you for your time this morning. Just a couple from me, firstly, just on, on the product development, and how we should think about that in FY 2024. You sort of spent AUD 22 million or expensed AUD 22 million, in FY 2022 and then AUD 26 million in 2023. How should we think about that profile in 2024? I'll take that, Piers. So for us, you know, the key thing to remember is that we've achieved peak product development costs in 2023, so we shouldn't expect that growth to grow. We'll probably keep it steady for 2024. The key thing to note then is the increase in Annual Recurring Revenue, because for us, it's all about increasing the, the, the margin and the profitability and getting return on that investment. Now, most of that will start showing in the last quarter of financial 2024, because, you know, when we sell to Australia, for example, the sales get recognized from February to June, so there's just an accounting recognition thing there. So you won't see the full effect in 2024, but we should see it from 2025 and beyond. The key things to note then, peak product development costs reached, count steady, and then focusing on profitability. Thank you. Then maybe just on that and, and looking at 2025, and I think there was a, the comment, talking about just sort of a, a Rule of 40 in the annual report. Just be able to sort of break out how you're thinking about the composition then maybe on the longer term, view around just revenue growth and, and margin expansion? In general, I think for 2024, up until now, B2C has increased faster and higher than, than B2B. I think in 2024, we'll see a flip of that because the 2025, because the intention is to start releasing the products now. We've already started releasing some in B2B in the schools market. We should start seeing bigger growth from B2B than B2C. For contribution margin, in general, we've kept headcount steady. Our salary increases have been modest this year, around the 3.6% mark. It's all about increasing revenue and increasing margin. Yeah. Thank you. Just a final one, just on, on B2C, and I think you'd, called out previously just some of the headwinds in the UK. Can you maybe just talk through what they were and just how, trading conditions have been over July and August? In general, as we all know, around the world, we've seen cost of living expenses increase. In the U.K. specifically, we saw a little bit more of that earlier in the piece with the geopolitical situation as well. My sense in general is that the U.K. was probably more affected than other countries. I just recently came back from a sales conference there, and it's still palpable, the, you know, the cost of living increasing effect on, on spending power. Overall, we've kept revenue at the same, so I, I still think, I don't think anyone has a precise answer to this, but I still think there's a few months of, of that uncertainty, economic uncertainty in the different regions, but a little bit more in the U.K. I don't know whether that's gonna be six months or 12 months. We've, in our forecast, we've sort of, put a steady increase, in B2C. We see the price increases washing through quite well for us, for new customers, but that will take a little time, to fully realize because we just need to turn all the existing customers into new customers, to realize that, that price increase that we put in place in January this year, yeah? Trouble. Thanks, thanks, Jose, that's all from me. The next question comes from James Bayliss with Morgan Stanley. Please go ahead. Hi, guys. I just wanted to start with really simple question. The balance sheet doesn't appear to balance now for FY 2022 or FY 2023 in the annual report. Can you maybe help us understand the restatements for FY 2022, and how we should think about that reconciliation into 2023? sorry, James. What's, what was the question in relation to the balance sheet? Well, the net assets isn't the same value as the equity. I'm gonna have to take that offline. I'm just looking at it now. What's going on here? Can I come back to that, James? Sorry. Okay, sure. Then, I guess, is the other sort of item that we sort of struggled a bit with was, it seems to be related to the deferred tax balance, is the best that we can gather. Is that related to the income tax benefit in the P&L for FY 2023? What should we extrapolate in terms of tax rate into FY 2024? Yes, there was, there is a bit of a, a large credit to the P&L in, in relation to the tax benefit. That's essentially has come from the unwinding. We've, we've changed our transfer pricing policy, and it was an unwinding from the old policy into the new policy in FY 2023. It's, the unwind has created a, a sort of significant one-off benefit, but we don't expect that to. You know, that's not gonna carry on into FY 2024. I think a normalized, a normalized effective tax rate for the group is anywhere between 5% and 15%. What helps us, from a tax perspective is the R&D credits, which, you know, we obviously, we spend, a significant amount in product development, so that, that generally helps us lower our, our, the tax we pay. Okay, got it. It does seem to appear that if things go to plan in FY 2024, you are able to drive an accelerated growth rate in ARR in the second half. Can you maybe help us understand what to expect in terms of revenue and profitability splits between first and second half for FY 2024? Whether that creates a bigger second half skew in 2024, or the real revenue and earnings impact is basically a 2025 phenomenon rather than feeling the impact in 2024. James, I think, you should see some skew in the second half of financial 2024. Effectively, our biggest market is still Australia. We invoice schools around February, that means that we start recognizing revenue. Typically, we invoice for a calendar year, calendar year 2024, and we recognize revenue from February to June. You should see a higher skew in second half 2024. Now, of course, in 2025, then you get the full effect of that for the full year. Yeah, a bit of that in 2024, more of that in 2025. If that helps? Yep. No, that is, that's helpful color. Then, I guess one more from me, the AUD 5 million in working capital movement in FY 2023, can you help us understand what drove that? The guidance seemed to allude that that sort of normalizes or at least goes away in FY 2024. How should we sort of think about those movements? I think essentially, we had a little bit of headwind from a working capital perspective. I think the two sort of call-outs, in relation to, in relation to receivables, as set out in the financial statements, there's a, there's a AUD 1.1 million receivable from a third-party distributor, Apple, which we received on the 6th of July. We should have received it before the 30th of June, but that's, that's had a, a headwind effect, from a working capital perspective. Then I think from a, from a payables perspective, we paid FY 2022 bonuses of about AUD 2.5 million in August last year, which wasn't in the comparative. That's, you know, that's created a, I guess, a timing difference from, from a working capital perspective. Is that something that is gonna be repeated again this year, or was that a one-off? Well, the bonus is not, not, certainly not at that level. You know, I, I think rather than pick individual cash items each period, you know, we, we'll, we'll either, the working capital headwind should normalize. I think, you know, if, if you, if you took those sort of exceptional items into, into account, you're looking at a underlying cash flow from operations, more like sort of AUD 13 million-AUD 14 million. On ARR, you basically called that out as the metric that the market should be most focused on in the next 12 months for the B2B division. On an organic, constant currency basis, that declined by AUD 1.4 million in FY 2023. What sort of magnitude should we be expecting the improvement for FY24 to be? I think that's a little bit harder to predict, given that we've got new product launches starting this month. We just, you know, the key question here is: How well have we invested in our product development? To know that, we need some more data points from the market. That's why we'll keep updating the market on any progress on annual recurring revenue. One thing is to say, "Yep, we've got this wonderful product." Initial feedback from the people that have tried it, and the features that we have released, and I'm happy to cover that later on when we present to you guys, is very positive, but of course, that needs to translate into invoicing. There'll always be a bit of a free trial period in term three, before we actually start going a bit harder. When, when I say term three, I mean school, school term three, which is between September and October, yeah, August, August to October, before we start actually selling and then invoicing in February, yeah? That's sort of the way to think about it, yeah. Perfect. Thanks for your help. I appreciate it. No worries. I don't think we have any more calls. I don't think we have any more phone calls, but we have some web calls. The first one is, are you expecting stronger ARR growth versus revenue, which seems to be mid-digits, given the second half-weighted benefits of the new product launches? I think that's similar to what we just answered with James. The answer is yes, typically because we invoice in our biggest market, which is still Australia, in around February, when the school, when it's back-to-school period, then we recognize the revenue from February to June, even though we're actually invoicing for a full calendar year, 2024. Next question was: Can you provide a geographical outlook? Which regions do you sense have the most opportunity, and which regions have tougher market conditions? I'll answer that in two parts. For B2B, I think the biggest opportunity for us is in APAC, because most of the product launches will happen in APAC first. Typically, we started launching already, and more launches from next week here in APAC. In AMER and EMEA, we'll start seeing that from January next year. From B2B perspective, the biggest opportunity will be APAC, without a doubt. For B2C, I think it's still pretty steady. I still think we'll do well in APAC and AMER, especially because we're focusing more on the homeschooler market in the US, in which we tend to do very well. I still think EMEA still has some more headwinds to, to go through. If I were to rank it, I, I would think EMEA still has some more challenges, but overall, I think we'll do okay. Next question is: Are there any M&A considerations for the near future? In general terms, as you know, we've made two acquisitions in the past two years, Writing Legends and Brightpath Progress. That pretty much completes our product suite. When I think about the company and our products and services, we have reading, writing, and math, and now that's well covered in terms of content, and most of that will now be organic, because the acquisitions need a bit more work, but that'll all, all that will be done with, with our resources. If I look at anywhere, in terms of acquisitions, will be the, the grayed out areas where, where we show our strategy on a page, that'll be in the teacher professional development areas for B2B. We do some of that already, with Brightpath, here in Australia and in the US, with all our products, except for Reading Eggs, which, as you know, is, is, still distributed by Edmentum. So in that sense, I think there's, there's some opportunity there to, to expand on teacher development, services, professional development services. For B2C, we have experimented with some more, paid premium-type, value-added, solutions, and we're still exploring that. Whether we continue to develop that organically or we look at acquisitions, I haven't seen anything yet in the market, but that's pretty much the two areas where we would focus on B2B and B2C, yeah? Next question was: Further on the price increases, do you expect further price increases in 2024? I think given the current economic climate, price increases that we put through in January are pretty much as far as we'll go for this financial year. Obviously, we'll have to see how the market responds. So far, we haven't had much pushback on the price increase from the new customers for B2C, so that's been okay. for B2B, there's always small price increases in, in the different regions, but the key thing is that because we are now focusing more on solution selling, i.e., instead of selling you an individual product, we sell you the bundle for reading, for example, or math will be Mathletics and Mathseeds. That's the most popular package we have at the moment, and that is a bundled price. Typically, that is- that means a higher ARPU because you're selling two products for higher than you would sell the individual products, right? But it's not quite the value of the two products, yeah. Hopefully, that answers that question. I don't think we have any more questions, but happy to entertain any more if, if you guys have.