Good morning, everyone. Just to kick off our results presentation, we have two of us on the call, including our brand new welcome, Ken, CFO.
Hi.
Between the two of us, we will give you a brief overview of our results. For those of you new, I will kick off with an introduction to the business. ActiveOps is a SaaS-based global enterprise software provider. We have clients in three regions around the world, and we operate working to blue chip customers in the financial service sector and their associated BPO Business Process Outsourcer suppliers. We provide decision intelligence, essentially, to enable them to run their back offices and administration more efficiently. You can see some metrics on the screen here around the nature of the business, but the key feature is in current times, clearly, being in control is such a critical requirement.
Whether it's the impact of hybrid working, concerns over efficiency, concerns over service levels, the general presentation of the sort of customer offers, control is critical, it's only becoming more so, which is an underpinning the strength of this business. We have our recurrent revenue is around 87%-90% of our gross revenue. We have some services around that, and we're very geographically spread as well. We operate an annual advanced billing model, which also means our cash grows year-on-year. Number of features on the screen there, showing you the sort of outcomes our customers enjoy as a result of using ActiveOps. As we've described, it typically drives productivity, but also service level improvements. There's a variety of ways, if you like, for our customers to cash the check.
As you can see from the screen there, it's all very relevant to the current agenda. In terms of our products, we operate in a number of sort of processes. On the left there, the great point is that it's essentially generic to types of operations, so our customers, like Nationwide or Mercer or Atos, TD, use us across their back offices independently of the process to control operations. We provide three products. We have WorkiQ decision intelligence system, which sits on laptops and effectively provides information on how people are using software and what they're doing on their day-to-day activities. We have a very CaseWorkiQ product, which is new to the system this year, and I'll speak more about that. We have ControliQ, which is our core planning control system.
Just to move into the results for the year, effectively, this has been a really strong year for the business. You can see from the key metrics there, we're growing steadily. We're enjoying increase in our EBIT. We're seeing an increase in our revenue and increase in our cash. That reflects, if you like, the take-up of our product across the board, in all regions. In terms of the key features I'd like to highlight, I mean, there's this core strength of business in terms of our existing relationship. Our net revenue retention has returned to what's effectively in our historic sort of rates at 110%. Just to put that in context, every year, from 90% of our revenue, which is recurrent, we grow it by 10%. Last year was a dip year for a variety of reasons.
This year, we've actually enjoyed a significant recovery. With the cross-selling and upselling available to us through our new products, we've every anticipation of that NRR continuing to improve. I think the fact that we've got the growth in our SaaS revenue speaks to the increased uptake. Just as reassuringly, we're picking up new logo growth in each region. We operate in three regions, Asia, Pacific, EMEA, and North America, and the businesses are seeing sort of consistent performance in all three of those areas. The big thing for us at the moment is the platform. What we're doing is embedding more and more capability into our platform so that our users, Who are typically our operational leaders, are finding it easier and easier to succeed more.
If you think about the world of work, it's getting harder all the time, and so the investment we're making into the AI driven decision intelligence is really starting to come through. I'll return to that in the outlook and strategy, but we've seen the benefit of that come through in the course of this year CaseWorkiQ, a number of elements to the restructure of the product pricing, all of which are going to be significant for driving our revenue. Also important in the past year is the expansion of our strategic partnerships, particularly with Microsoft, which we are receiving significant support with a lot of our major customers in terms of their sort of positioning of us and how we work with them. That's a quick overview.
I will then hand over to Ken just to pick up the financials.
Good morning, everybody, and welcome to my bit. I joined ActiveOps 10 weeks ago, so I can't claim to know everything about all the numbers, but I must say, the numbers, to a large extent, speak for themselves. Richard's alluded to some of these in his introduction, but the four key points are the annual recurring revenue. It's gone up 13% year-on-year, which is a pretty chunky increase. Some of that was currency influenced, but even so, it was a double-digit growth. Net revenue retention, as Richard mentioned, that's a very strong measure of stickiness in the client base, and obviously improved on last year. The highlight really is the move to positive EBITDA.
Some of that was helped by exchange differences. In fact, the second half was quite positive and has given us a good springboard into the now current financial year and beyond to stay EBITDA positive. Last but not least, as the finance guy, GBP 50 million in the bank helps you to sleep at night. It's a nice, stable position as a business, and we are very happy to have that balance sitting there. As Richard said, 87% of the revenues are from SaaS, so they're very predictable, very steady, and they're growing, which is obviously the features you want to have. The other element of the revenue stream is training and implementation, which is quite profitable for us. It's more lumpy. You'll see from the numbers, it moves around a bit.
As Richard said, customers build in advance, typically annually, in ActiveOps case, we had a very strong year-end cash position. In fact, post-year end, that went up further. In terms of the detail of the numbers, you can see there how they actually work in practice. The SaaS revenue of GBP 22 million and the TI revenue of 3.4 gave us GBP 25 million. The first time we've reached GBP 25 million plus of revenues. Nice, healthy gross margin, slightly up on the previous year, and the OPEX gone up by just under GBP 1 million, giving a nice adjusted EBITDA of +0.7. I guess the key thing to note there is the operating leverage.
If you can maintain double-digit revenue growth and single-digit operation cost growth, you don't need to be a mathematical genius to work out that that's going to give you an increasingly positive contribution to the bottom line. If we can keep the cost base steady and keep the revenues growing positively as they have been, we should produce, you know, a good profit over the next two or three years. That's, in fact, being described in some of the analyst forecasts that are out this morning. The EBITDA bridge, just to show us this more graphically, this is all about movement on the previous year. It starts off with last year's -0.3, this year's + 0.7, and this really describes how you get there.
I guess the one standout there is the customer delivery and relationship management spend increase. It's probably partly to do with the increase in NRR that we've shown in the year. That's meant our customers have become even more sticky, although they were still pretty good already. We did capitalize some labor. We don't love doing it, but we have to. That's the rules. We did capitalize GBP 700 this year, that was an increase from last year, but it's still a fairly modest amount compared with our peers. We obviously spend a lot more on R&D than we capitalize, that's, I think, a healthy place to be. The cash flow bridge, one of my favorites, obviously, started life out with GBP 13.8 million, it was a pretty good start to the year.
The main thing is the continuing operations contribution, GBP 2.7, which, with the other bits and bobs, allowed us to end the year with GBP 15.4 million sitting in the bank. As we speak today, that's pretty much unchanged. It is a second-half loaded billing cycle. The cash does tend to rise towards the year end. There's no reason why that cash shouldn't continue to grow in the coming years. Just in summary, 10 weeks in the job. I think these are my observations. The balance sheet is very healthy and a very strong platform to build from. Recurring revenue, I think, is a very nice place to live, where you can start off in the 1st of the month knowing that the month's revenue is pretty much done, apart from just top ups here and there from new business.
Very cash generative, as we can see. Lots of expansion opportunities, which Richard will describe further, but there's plenty of opportunity there. I think we're in a very strong place from a financial point of view, I think the exit runway just shows just the potential for the coming years in terms of keeping that all going. I'll pass you back to Richard.
Thank you, Ken. I think what I'll just focus on is where I started a moment ago, which is just the world of work is not getting any simpler. A combination of our customers being beset by operational risk challenges. I mean, look at Silicon Valley Bank, for example. You imagine the practicalities of what happened, totally external to the running of the business in terms of dealing with that changeover. Skills development, the fact of hybrid working and the realities of that means that it's harder to have people sitting by other people, which means skills and the complexity of having the right people in the right place. As you can imagine, it's only getting harder. We're all reading in the press plenty of commentary by usually chief executives suffering because of productivity paranoia.
They're worrying that people aren't working as hard as they can. How do you get people back to the office? The mechanics of hybrid working, getting the right work and so on to the right people at the right time. Now there's this looming discussion around the world of work in the context of the impact of AI, for example. How are organizations going to mobilize, how is that going to impact their delivery models, their customer expectations and so on. You know, that's a big, complicated picture. Against that, an immediate sort of risk, generally, sort of, you know, whether you call it recessionary or not, the pressures on enterprises to reduce cost is getting stronger.
There is a real sort of vice in the center of these sort of businesses by that requirement to be more agile and do more, whilst at the same time, the wellbeing and keeping the staff happy, which creates a very, very complicated world. Interestingly, it's coming through in our metrics because we have universal data across the world in a standardized format, and I'll return to that. One of the interesting things we publish is a tracker of how well in control organizations are, and generally, we do see that the European markets lead other sectors. We're seeing in the UK and EMEA, that downward trend of the solid white graph there, that essentially what that tells us is that operations are becoming less controlled.
The complexities over time are really challenging organizations in terms of running with the teams and the processes they have. That, I think, speaks to the fact of it's getting harder, which of course, does mean organizations need better tooling, better control, and better structure to how they do these things. ActiveOps, what we are now really starting to leverage is that universal data set and deploying with the benefit of access to the kit in Azure and Microsoft environments now, our own, if you like, unique understanding of the business of operations to bring advanced decision intelligence to our customers. There's the sort of analytical data, finding things in the big pools of data.
There's predictive data, which is, "This is the thing that might likely happen, based on evidence I can tell you," or and this is the really powerful piece, "This is what you could do, because that works in other times, that this is situations where there isn't." Put more and more ActiveOps as tooling, it's not just supporting you as an individual with information that you can make your own decisions on, it's actually moving to Prescriptive AI, where it says, "On the basis of. You know, you should know that Sally in accounts is having a bad week." If you did the following things, that's likely to change it, or Sarah over there has had the best week she's ever had, and giving her some recognition is a good time to do it.
All that is doing is systemically, when you've got 10,000 people in your back office, raising the bar hugely in terms of your capacity to run your operation better. This is the kind of tooling that ActiveOps is bringing to our customers in the immediate term, both in our releases, I'll talk more. One aspect of that CaseWorkiQ. for those of you I've spoken to before, forgive me, but one of the challenges is the world of work is getting more complicated, it's less transactional, and Casework was our response to that in terms of giving our customers a way of managing complex activities happening across multiple teams in some kind of sequence, but not necessarily in the same software.
There's plenty of workflow tools out there, probably too many workflow tools, even in one customer, and the problem they have is aggregating that information, we solve that problem by providing that CaseWorkiQ is absolutely going gangbusters with our customers in terms of seven out of the top 10 now have got active trials or been paying for it. We've got GBP 1 million of ARR that's growing nicely, and it just provides that kind of complexity. The standard cases in Anti-Money Laundering and KYC processing in one of our customers, but it's also being used for mortgage processing between branches and their middle and back offices, there's a whole variety of other use cases that are now growing.
We're very excited CaseWorkiQ, and as we've spoken about, what that does is extend the footprint of addressable work in our customers for ActiveOps software. That's a significant expand opportunity that we're working quite well. On the other way around, we've also got WorkiQ product, and now we've actually got customers, TDs highlighted here, who have now got all three products. One of the things with new products is there's extent to which you're going to suffer cannibalization of one to the other. What we're really pleased with is the extent to which that is not the case. In fact, if anything, they're actually reinforcing each other.
There's a nice video on the Internet of one of our customers in TD talking about how the impact of WorkiQ and ControliQ, WorkiQ is showing the desktop intelligence, and ControliQ is the planning and control intelligence between the two of those acting together to really support. And in TD's case, they've now CaseWorkiQ as well. So all of these products acting in tandem, all expands the authority of ActiveOps' software to be the kind of central pin around how organizations are managing their work and their capacity. And I think, you know, that speaks to my point earlier on about the net revenue retention. The expansion within our existing customers is at, you know, at an excellent level, but I think we've got a lot of potential to go with that.
For example, we're releasing Service Indicators at the moment in the latest package, which is a way of predicting not just, are you in service and/or did you fail, but more importantly, on the basis of your current organization of your teams or work, you are likely to pass or fail your service. It's predicting around service level. We have been beta testing and about to launch Smart Planning. Now that, just to give you a little flavor, the process of producing a plan is critical to being in control, knowing what you think is going to happen, and acting accordingly. It clearly, if I can bring AI to that so that I don't have to do that work, like Google Maps, it just tells me where I'm going to be, I can act on that more easily, and that's what we're doing with Smart Planning.
Clients so far have seen about a 4% uplift in productivity on the back of that improved performance in their planning systems, where they've had ActiveOps for some time. That is, again, hugely compelling financial ROI for jacking up the price. Smart Skills. A conundrum for organizations is individuals are individuals, and therefore their skills vary. What the challenge has always been, mapping and understanding those. Well, with our technology, we can effectively deduce and infer skills from people's actual performance, develop learning curves, so it becomes predictive when new people join, whether they're on the right learning curve or indeed falling off. Back to my point about prescriptive, giving team managers the opportunity to say what they could do to respond to that skills.
I mean, this is really leveraging both the processing capacity of these, of the AI systems, but applying ActiveOps' unique data set, which is proprietary to us, and our deep subject matter expertise on the business of ops management. You overlay those three elements together, suddenly we have a unique offer, which really is becoming more and more, you know, effectively, the central hub of any organization. The final one there is employee experience. We're putting a lot of work into making it such that people. Essentially, the biggest cause of stress at work, AKA wellbeing, is uncertainty. The way in which we present data so that individuals know what's expected of them, it has a massive impact on attrition, on learning, and ultimately, the retention of business.
A big part of our push in marketing is now making sure the HR functions of organizations are also leveraging the full potential of this data set, which they would not have had access to before. There's a huge amount of excitement in the business about that. How does that translate into revenue? What we've recently been doing is quite a detailed study of our pricing and using some external experts on this, and that's been really quite interesting. Firstly, the ability to make sure the value is well articulated.
What we're doing is packaging our software into series, where you have to have a base levels of functionality designed to take people more quickly onto our platform to reduce the barriers to entry, in introducing those roadmap features I'm talking about into sort of series three and a series four, both of which have a quite a different price point, proportionally are still expanding in terms of their ROI for our customers. These are all opportunities then to leverage and actually drive up revenue proportionally to the value we're creating. This is a process we are deploying.
It's a three-year program in effect with some of the contracts we have, but again, it's all part of taking that historic user base, getting everyone onto a current model of pricing, but also, as we now have technology which can drop in these new advanced features, we can fully monetize those in the way that we know is appropriate. Quick commentary on the business from an ESG perspective. We previously said when we came to the market, we would be implementing a Global Reporting Initiative, and we have, you know, continue on that journey. It's only recently that we've had effectively got the data to do the baselining. For example, on the carbon reduction, you know, we have to develop some baselines, but we're on that. ActiveOps is an incredibly, you know, globally diverse organization.
We're 190-200 people. We are spread across a lot of different countries. We've always taken a lot of pride. I personally have a lot of pride in the diversity inherent in the business. Clearly, as companies evolve, you've got to be very progressive about making sure not make too many assumptions, and particularly COVID. Whilst we were always a hybrid working company, post-COVID, again, we don't convene in our offices as much we used to. We, like every other company, has to pay more attention to giving people the time in the business to, you know, to feel part of ActiveOps.
We're doing an awful lot of work with our sort of on the culture side, to make sure the integrity of the business and the values we hold are sustained. Worth noting, because it is non-trivial, is this SOC 2. A lot of companies now, from a customer side, require us this SOC 2 compliance, and it's a combination of standards associated with data security, but also operational business processes. We, you know, our KPMG-led audit the other day, we were absolutely clean on that. Very, very good result from that perspective. That all adds up to our kind of enterprise authority when we are dealing with some of the biggest organizations in the world. Looking at full year 2024, you'll see a continuation of themes.
There's nothing in here that essentially is new news other than we need to keep on doing them and do them better. Our turn towards growth and profitability is continuing, Ken's alluded to, but the second half of this year, the underlying profitability of the business, you know, continues to get better all the time, so we're very positive about that, and associated with that is just the revenue and the cash as well. I think really the long-term value of the company comes from our ability to leverage our unique knowledge of back office operations and the challenges of running in the modern environment, and I've spoken a bit about that.
I think one of the things that ActiveOps has always been, you know, we've been sort of slightly humble at occasions with what we do, and one of the things I've been doing over the last year is focusing a lot on our marketing messaging. For those of you who track us, you'll see a big change in tone over the next three to six months as we go out with quite a different message, around how we position ourselves, based on, frankly, a real level of confidence in the value we add and the innovation we bring. I think behind that has always been driven by our results in terms of our customer loyalty and our customer sort of almost enthusiasm, and I certainly don't.
You know, we are investing in our customer service management and our customer relationships to sustain that. Ultimately, you know, our organization requires it needs to be efficient in that sense, so we are holding our ops cost pretty tightly. We. The main focus of growth is to drive revenue to the bottom line, so we are continuing to work on our internal systems such that we can be more effective without necessarily raising our delivery costs. Just give you a quick update on the Q1. The headline is in line with expectations. The world of enterprise selling is never going to get easy. The processes that organizations put in place, especially in economic times when costs are under scrutiny, is ever more sort of rigorous.
That said, we have the benefit of being a type of product which does well in recessionary times. We absolutely hit the sweet spot of gaining more from what you already have, and that's our. I mean, if you look back at the sort of recessionary times in 2008 to 2011, that was our period of stellar growth historically. I think the context for our software has never been better. We've got a lot of it, good expansion in existing accounts, two new logos already this year. Our pipeline in multiple dimensions of both regional and also product, is as healthy as it's ever been, and quite a lot of it, you know, super scale type opportunities that need developing and there.
I think, in general terms, as we sort of sit at the end of the Q1 looking at the half, we're as confident as we ever are about our sort of offer. I suppose the overall tone, though, I'm seeing, is just a potential for our exit ARR. I think we've got a lot of interesting opportunities that could scale quite strongly, particularly in the US, which is less impact on the current sort of revenues in this year. As I look forward to next year, I can see some exciting opportunities that we will look forward to taking forward. That's the quick summary. The business is as strong as it's ever been, with some really excited and differentiated products. Thank you very much, as ever, for attending.