Good day. Welcome to the LiveTiles Limited first half 2023 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the star one again. For operator assistance throughout the call, please press star 0. Finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome David Vander, CEO, to begin the conference. David, over to you. Good morning, everyone. I'm David Vander. Thank you for joining us. I'm joined today by our outsourced interim CFO, Chris Cambray, who will be available during our Q&A period. It is with great pleasure and a sense of humility that I provide the detail on LiveTiles H1 FY23 results, my first as CEO. I look forward to a great conversation and a great journey together. It has been a tough environment for the tech industry globally. LiveTiles was not immune to these challenges in H1. We also made some significant changes as part of the operational review in H1 that I'll take you through. As a result, we have taken some tough decisions. Overall, I feel the company has made the necessary changes to our configuration and that our focus will position us well for growth in the future. I would like to start by providing my observations in my first 20 days as full-time CEO of LiveTiles. I'll be turning to slide three in the investor presentation deck. I firmly believe LiveTiles is in a sound business position and is based on some very strong fundamentals. I've outlined these into four main pillars. Firstly, the LiveTiles product is in a market-leading position with over 1,000 enterprise class customers with very high retention rates. Just last week, I was with several of our largest customers in Switzerland, including the largest consumer packaged retail goods company and one of the largest pharmaceutical companies in the world. Their passion, commitment, and energy for LiveTiles is just wonderful. We have a world-class product team with great experience and insight that are committed to making sure our product continues to enjoy strong product market fit. Moving on to the second pillar. The employee experience market is large and fragmented, with many strategic opportunities that we are well positioned to capture. This includes geographic expansion and scope expansion. We firmly believe the tech market will rebound and customers will need to increase their spend. There's increased emphasis on employee experience overall. As a result, as we are the largest and most significant player in the market, we are ideally positioned for this rebound. In the third pillar, I highlight the fact that LiveTiles has a great culture at its core. We will be leveraging all of these positive elements going forward. We are able to out-execute the competition by being faster with higher quality. We are still able to attract high-quality talent. We have deeply committed employees. We will continue to enhance our culture by doubling down on rigor, discipline, and execution. Fourthly, the H1 operational review and strategic realignment has provided us with an opportunity to reset our business, to reduce our operating expenses, and enable us to position ourselves for growth and to capture strategic opportunities. This realignment has provided a great foundation for us to move forward. Now just moving on to slide four. I would now like to tell you a little bit more about myself and provide my commitment to the business going forward. I have over 20 years' experience in global enterprise software sales, having been with Microsoft for over 16 years, where I was the global head of sales excellence for the enterprise software business. In fact, at one point, my personal quota was $32 billion that I had to sign. Driving global enterprise software sales at scale is a core capability for me. Sales rigor and sales discipline at scale is my primary competency. I'm a fact-based and evidence-driven leader with a high degree of intellectual integrity. I don't run on instinct, nor do I shoot from the hip. I value highly the need to be curious in continuously learning and have recently completed my sixth degree. My focus on continuous improvement is the basis for my push to ensure the business moving forward is on a more data-driven footing. I'm fundamentally an engineer and have a deep passion for product engineering. I translate this into always ensuring we are looking deeply into the customer problem that we are solving and continually providing strong product market fit. My commitment to you as investors in LiveTiles is that I will drive a great deal of operational rigor, discipline, and execution with a strong focus on consistent and continuous improvement. Now that we have completed the operational review, we're in a good position to establish and execute upon new standards. On the second of February, we internally announced the new organizational structure that will drive greater levels of accountability and focus. It simplifies our business going forward. Every team will be driven by clear, concise, and transparent operational metrics. We are committed to having the most innovative and highest quality product in the marketplace. We will continue to drive outstanding innovation and customer satisfaction. We've appointed a new head of product. We're committing to a more regular and predictable cadence via three major releases a year. I'm confident we're going to see some tremendous improvements and uptake and new customers as a result. Finally, we are going to be taking a more conservative and fiscally responsible approach. We're going to rely on conservative accounting principles and provide clear and concise reporting. We are hiring a new CFO, and our focus and commitment will be to drive to positive cash flow. Let me take you through the overview of H1. I'm going to refer to slide six in the presentation deck. We have made several changes in our leadership team and our board over the course of H1. In H1, we refreshed our board with Vanessa Ferguson and Kevin Young joining the board and Jesse Todd becoming its chair. Karl Redenbach has transitioned his role as CEO to now just Managing Director. I look forward to collaborating and harnessing the insight and the energy the board brings to the business. We've also made several key leadership changes, including my appointment as CEO, but also Darren Pruscino has joined us as Director of Finance globally. Darren has a very strong SaaS background, and he's already having a tremendous impact in his first month with the company. Kim Sørensen, who has been with our business for many years, has been promoted to Head of Product. Kim's passion for great design, high-speed innovation, and people leadership is infectious, and I believe he's gonna take our products to the next level. I'm also pleased to have Cameron Smith, who in a former company was a CEO and COO, now being promoted to our Head of Operations, driving the operational rigor, discipline, and productivity for the entire group. As mentioned earlier, we are looking to recruit a new CFO, and we'll also be seeking to recruit a new head of marketing. I believe we've got the right leadership team and structure in place to take LiveTiles into the next chapter. I'll now move on to slide seven and provide an overview of the results. Overall, we had a very challenging half, impacted significantly by market conditions, but also by the operational review and the redundancies. EBITDA and underlying EBITDA was impacted primarily by market conditions and the exiting of several R&D relationships. That has impacted our top-line revenue as well as our cost base. On a positive note, we have had an overall 26% reduction in operating costs, which again, will put us in a good position for growth going forward. LiveTiles was also able to address some operational challenges in caps collections highlighted in Q1, but nonetheless did impact H1 overall. Gross profit margin continues to remain strong at 74%, although a slight decline on PCP, and again, provides us a sound basis for going forward. I'll be going through the financial details and, the financials in detail in a moment. Suffice it to say, these are not the headline results we should be expecting going forward. I'll now move on to slide eight and go through some operational highlights. Despite the challenging environment, the operational review has given us the opportunity to review our portfolio and our go-to-market approach. From a product perspective, we launched three new products in the market that will enable us to extend and enhance our core employee engagement offering. From a strategic opportunities perspective, we completed the acquisition of My Net Zero and appointed Atlas Technology Group to explore strategic opportunities. From a talent perspective, we reduced our headcount globally by 32 employees in H1. We've realigned our organizational structure, we've moved certain roles to now low-cost locations according to our new footprint. Finally, the operational review has put us in a great position for growth going forward, with all of these changes resulting in annual savings of AUD 6.48 million. Let me take you through the detailed financial summary, and I'll refer to slide 10 in the investor presentation deck. The LiveTiles performance was impacted by the challenging global market conditions across the SaaS and digital landscape. Overall operating revenues decreased 32% on PCP, primarily due to market and execution challenges. Is also impacted by the exit of several R&D partnerships. Underlying operational revenues decreased by 14% as a result of market and execution challenges. Total operating costs improved by $5.2 million on PCP, which is an improvement of 26% due to the operational review and restructure. As a result of the operational review, several one-off costs were incurred and have impacted our net operating profit in the third quarter. Management has also taken a conservative accounting view via an impairment cost of $16 million. Management are firmly of the belief that the underlying value of these assets remains strong and will create significant returns in cash flow and profitability. There's also been a significant reduction in sales and marketing expenses attributed to overall reduction, including headcount, the exiting of R&D partnerships, and the absence of an aggressive brand campaign in which we had in the prior period. Our net profit and loss after tax is significantly impacted. Moving on to the balance sheet on slide 11. As per our 4C announcement in January, our cash position is at AUD 9.7 million, this remains sufficient to fund our operation and growth activities. As I mentioned earlier, the primary focus will be to drive to a positive cash flow scenario going forward. Non-current assets have decreased primarily due to the AUD 16 million impairment charge, the company also drew down the remaining AUD 4 million loan facility from OneVentures in H1. Let me just quickly touch on our customers. From a customer perspective, we continue to enjoy strong support from our existing customers, and we were able to add new customers. In H1, net revenue retention was 92% versus 86% in H1 FY22. As mentioned earlier, I'm pleased with the market position with our existing customers. I feel we have a tremendous opportunity to be able to attract new customers going forward. We'll be focusing on operational rigor and discipline to ensure outstanding upsell and cross-sell at renewals, driving much greater adoption and usage of our solutions, as well as a more aggressive, coordinated, and consistent sales and marketing campaign to attract new customers. Let's talk about strategy and outlook and the roadmap for our business going forward. It's a new era for LiveTiles. We've taken the opportunity during the period to reset our business and focus on the way forward. Our business fundamentals remain strong. We have strong product market fit and customer acceptance of our value proposition. The operational review has put us in a good position for growth, and we have a significant opportunity to focus and deliver on operational excellence. There remains significant market opportunity. We have seen very significant increased attention to focus on employee experience and attracting and retaining talent in this current marketplace globally. We also feel that the market will experience a rebound, which we will be well positioned to capitalize upon. We have many strategic opportunities, including ensuring our product strategy and vision aligns to our growth opportunities. The appointment of Atlas will help us evaluate strategic opportunities. In H1, we also were the target of an unsolicited proposal, which did not proceed, but does, however, highlight the attractiveness of LiveTiles. I firmly believe we've got the right leadership in place to provide a step change in our business. We still have the new CFO to hire and a new head of marketing to complete the structure. Each of the leadership team has clear roles, responsibilities, alignment, accountability and focus going forward. The enhanced board also provides us further accountability to our investors. In summary, on slide 15, H1 FY23 was a significant challenge for the company. I believe the operational review and the decisions that were made and the leadership changes are putting us in a good position for growth. I'd like to conclude by highlighting some of the fundamental successes from this half. We have a 26% reduction in OpEx. We are able to capitalize on our acquisitions and drive better integration and alignment. We have a new CEO and a refreshed leadership team and board. We have a reinvigorated product team focused on high quality innovation and more predictability for our customers. Our appointment of Atlas will enable us to explore further strategic value-enhancing opportunities. Fundamentally, the whole company will be focused on rigor, discipline, and consistent execution to drive LiveTiles towards profitability. With that, I thank you. Now I'll open to questions. Over to you, Paul. Thank you. At this time, I would like to remind everyone, in order to ask a question, press star, then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster Your first question comes from the line of Michael Muncasov, an investor. Your line is open. Yes, good morning. I wanted to better understand the drop in revenue. It's quite a significant drop in revenue, so I presume that is, or at least half of it, I think you said roughly 14%, I think I heard you say, was due to challenges which I presume means loss of customers. And I also am presuming that you have reviewed why you lost those customers. Can you share with us what was it that the customers decided not to continue with LiveTiles? Yeah. Thank you very much for your question. Very good question. 14%, so just almost just above a third of the reduction in operating revenues was as a result of market and execution challenges in H1. We did lose some customers. We also added some net new customers. I would say that that execution had to do with primarily the way in which we're servicing our customers and that we're driving upsell and cross-sell at that renewal process. The bulk of the operating revenue decrease was through the exiting of several R&D partnerships. Going forward, my responsibility is going to be to drive a lot more rigor in sales, discipline and execution and reactivate the partner ecosystem and start to drive more rigor, particularly around customer servicing and upsell and cross-sell at renewal. Okay. Can I ask then, who would you consider to be your top one or two competitors? Yeah, good question. There is several competitors that have niche SaaS service offerings that compete in parts or a subset of what we offer. There is no real competitor that has the comprehensiveness of our portfolio other than, I would say, Microsoft in custom development, that customers would choose to just go vanilla or do custom development. We compete with the niche SaaS players on a point-by-point basis. In terms of a high-end enterprise class service delivery, we have a very comprehensive and unique market position in that space. As a final question, can I ask, and, yeah. Can I ask that, do you have within your sort of employee engagement tools a, you know, a video link type tool such as Zoom or Teams? Do you have that or is that something that you're not playing in? That is a capability that we leverage the Microsoft platform for. We are a very strategic Microsoft partner, and so we would leverage the Teams platform for video conferencing capability. We are able to integrate to the other platforms as well, but we natively integrate into Teams. Okay. Thank you. Thank you for your question. Next question comes from the line of Peter Sowerby. Your line is open. Hi. Can you hear me? Yep. Go for it. I'm quite confused. You've dropped the ARR terms and, you know, a lot of the SaaS metrics. You've talked some in your talk about SaaS and employing people with SaaS background and reference your own background. You know, LiveTiles has always been predominantly a SaaS company. You know, value on SaaS metrics, the whole presentation of the proposition was based on SaaS going, now you're not publishing it, haven't published it for six months, and are kind of moving away from it. You know, would you look at it a SaaS background or just revenue? There's been a very large drop in revenue, probably AUD 5 million or AUD 6 million based on your churn numbers that you've given there. It's probably around AUD 15 million-AUD 20 million revenue that has decreased. I understand the SaaS world, you're not always collecting everything straight away. From my perspective, just a tremendous amount of confusion now about your actual investment proposition. What is it? Yeah. Thank you very much for your question. You are right, we aren't reporting ARR. The reason for that is we are actually reviewing the key metrics for our business going forward, and ARR may not be the right metric for us to be focusing on. I will say that, you know, from an annuity revenue perspective, we've actually delivered on 88% of our revenue is actually annuity revenue. We have several new lines of business that is high quality annuity revenue, but not necessarily license-driven revenue. We wanna be transparent and clear with those metrics, and we'll be reporting on the progress and evolution of that view going forward. As you rightly point out, there is strong, you know, there's some consistency in some of the SaaS metrics. Not every company report on ARR, and some companies actually use, quite confusing or custom terms, such as, Remaining Performance Obligation and other terms. We're going through a review of what those metrics are, and we'll report out in due course. Okay, thank you. One, one last question on R&D partnerships. You've mentioned that a few times and reduction of revenue due to that. Could you just clarify for me why LiveTiles historically used partners as in reselling partners, and at one point, the former CEO said about 50% of new clients actually come from reselling partners. Now, I don't think that's what you're referring to. Can you just explain what R&D partnerships did do and how they generated recurring revenue that you referred to as decreasing? Yeah, thank you very much for the question. Let me start off by just touching on the partnership, part of your question. Partnerships are an important part of our go-to market, and that's not just value-added reselling or any other reseller arrangements, but that's also a lot to do with the employee experience and employee engagement consulting or SI efforts, that occur in the marketplace. And we are seeking to reinvigorate that channel to be more than what we've, what we have experienced in the last couple of years. And that number is less than 50% nowadays, and we want to get that number back up to where it should be. The R&D partnerships are more unique in that sense, in that there is a shared technology roadmap and footprint. There are research activities that we work on together. That research activity has a two-way relationship and that, in some cases, there was even a potential opportunity to get R&D funding or grants associated with that. Those relationships, we have exited, and we will be looking for making sure that we reinvigorate our partner channel going forward and away from the R&D partnerships. Okay, thanks very much. Thank you. Before moving to the next question, I would like to remind everyone, in order to ask a question, please press star one on your telephone keypad. Your next question comes from the line of Peter Johns from Morgans. Your line is open. Hi, David. I just wanted to ask whether you are looking to build out your employee wellbeing sort of offering. I know it's a competitor. Well, not a competitor, but someone that's in a parallel, I just think industry Limeade. They're also a listed company, they have revenues in excess of LiveTiles's focus roughly in the employee wellbeing space. I know some time ago, you were building out some functionality. I think it was called Vibe or something like that, it looked like it was fairly basic. Given its improvements with your fairly large addressable market, just wanted to see whether you had any plans to evolve that product line, I guess to kind of compete with these guys. Yeah, Peter, thank you very much for the question. You're absolutely correct. The employee wellbeing marketplace is a large marketplace that's to be addressed. We did make some efforts around Vibe and our activities in and around wellbeing. I will like to take your question on notice and look into it and get back to you. I'm not specifically familiar with all of Limeade's offering. I'm generally aware of what they do and how they do it. We are probably more focused in a general term on the total employee engagement footprint and not necessarily just programs and offers associated with wellbeing, which is often a referral type of process. Please let me take that offline, and I will get back to you. Yeah, no worries, David. I think it's a strategic opportunity, just given it's an adjacent product. You could easily roll it out to your existing client base. It's, yeah, be great to hear, perhaps in the future about what you're doing in that space. I agree. Thanks, Peter. You've got a further question from Michael Muncasov. Your line is open. Yeah. Thank you. Just to follow on from some of your previous answers there. On R&D, your R&D costs went up this half. How do you see with you, with you dropping out of these partnerships, it's not clear to me where those costs go or where those revenues are and so on. How do you see the R&D costs sort of going forward? Are they going to maintain at the levels like, AUD 6.8 million, for example, in this half? Are they gonna maintain at those sorts of levels, or are you gonna see a significant change in the R&D costs? Thank you, Michael, for your question. I would like just to make some observations in that, I probably need to take this offline and get back to you with a more detailed answer. Let me just say that I believe the R&D line to be in effect our internal efforts, and we would seek them to maintain, if not increase slightly, particularly as a percent of revenue going forward, an increase in R&D, which is largely our internal efforts. The R&D partnerships that we exited were external efforts. Okay. It'd be good to know the answer to that. Thank you. Yeah. Thanks, Michael. We'll get back to you on that. There are no further questions at this time. I turn the call back over to David for closing remarks. Yeah. Thank you very much, Paul, thank you everyone for your time today. I appreciate your questions and your continued support, I wish you a pleasant rest of your day. Thank you. This concludes today's conference call. You may now disconnect.