Good afternoon and welcome to the Calnex Solutions final results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged, and they can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO Tommy Cook. Good afternoon to you.
Thank you, Hannah, and good afternoon, everyone. Thanks very much for coming along today to listen to an update on our results for FY 2025. I guess before we go into the results, let me just take a couple of minutes to just remind people or introduce Calnex to those people that are not so familiar with us. Calnex is established at the forefront of the global test and measurement industry. Our portfolio enables our customers to validate the performance of critical infrastructure associated with telecoms and computing networks. You can see on the right-hand side some of our key customers that we sell to. We sell to the telecoms equipment vendors. You see people at Cisco, Ciena, Ericsson. We sell to the telecoms operators, the AT&Ts, BTs of this world, and the component manufacturers, Broadcoms, Qualcomms.
We also sell to the data cloud computing sector in the world, the Google, Apple, Microsoft, NVIDIA. We have quite a diverse set. In all cases, they're using our equipment to prove performance of their networks or prove performance of their equipment to ensure that it's standards compliant or that it's going to work in all real-world operating conditions. We have a global footprint. We sell in 68 countries around the world, and we use a lean business model where we outsource our manufacturing, and we use a global distribution channel to access our customers around the world. In terms of when you look at test and measurement and where it fits in in the life cycle, it fits in everywhere. Where we really focus is that stage called design validation conformance test.
This is where R&D teams are developing new products, and they're going through prototype tests, early beta testing, and then full conformance testing before release. The important area, the reason we focus on this, is because this is very much an area where customers spend, because if you have the right tools at the right time, you can get that new revenue stream from your new products started as quick as possible. It's not just about doing the test quickly. It's about doing it robustly to ensure that once it's in manufacturing, you don't have a yield problem. Once it's deployed in real-world networks and all the various topologies around the world, you're not going to have customer satisfaction problems because the equipment doesn't work correctly.
It is very much an area where you can command a high price if you have the right product at the right time. That is very much the area we focus on. The one other area we focus on is more that maintenance monitoring on the far right of the slide. This is where after a network is up and running, either you have to continually monitor to check for situations arising, or the maintenance is more that kind of high-level maintenance, not the initial maintenance, but the simple repair exercise of swapping units has not fixed. That means there is something more complex wrong in the network, and you need to use some of your more highly trained engineers to go out and understand exactly what is going on. That high value is very much what we focus on. How have we done in FY 2025?
It is very satisfying to be back in a growth position after the previous year. We did a revenue of GBP 18.4 million for the whole year compared to GBP 16.3 million the year before. We had a profit of GBP 0.7 million compared to a loss of GBP 0.4 million the year before. The cash position there looks slightly down, but Asleigh will talk about it later. Pretty much year on year, we were pretty much flat, which again, is an important situation that we are retaining cash and managing our cash situation. We plan to propose our dividend this year of GBP 0.0062, which is the same as what we had as a final dividend last year. In the last year, there has been a number of key things that has led to that success. We had a couple of really important releases from our R&D team.
In difficult markets, it's not that our customers don't have money. They just have limited money. It is important to get new capability out because it's much more easy to unlock that access to that limited capital spend when you have new products. We released a new 800 gigs , which is industry-leading in the lab site Paragon-neo product. That had really good success through the year. We also launched a 400 gig capability and an ANAA platform, which was successful. We have also seen some of the areas because we've really focused on our marketing activities in the last year as well, especially on ANAA in terms of creating marketing collateral and positioning of the products that really puts it in the terminology that the customer understands.
Rather than presenting a general toolbox, you kind of present it very clearly, what the value is and how they can get value from the product. Again, into the enterprise, defense sector, satellite sector, that extra focus we have put on in the marketing is starting to pay dividend, and we are starting to see success from that improved approach to our go-to-market. We also had quite a change in our channel partner network in the last year. This time last year, I think the last one I reported that we have had a long-term relationship with Spirent, where we used them as a reseller for us. When it was announced that they were getting acquired, we decided to terminate that contract and go to use a whole network of partners across the world.
We've had a fairly successful transition across to that, and we're still actually working with Spirent at this stage, which has allowed us to have a very smooth transition to the new network of partners and ensure it didn't impact the business. Overall, in the industry, we see the telecom sector still remains subdued. I guess from experience, when we go at the telecom sector has gone into this sort of period in the past, it doesn't come out quickly. It comes out slowly. There's definitely improved engagement from the telecoms customers, which is good to see. During this time, we haven't sat back and just waited. We've been really focused on these other sectors and other verticals where we believe there is a chance to gain market share through what we're doing. As we said, into the data centers, etc., that's where we're looking.
We believe going forward, while the macroeconomic uncertainties remain out there, that what we have in terms of our new product programs and our increased focus on particular segments in terms of go-to-market, that we can continue to generate growth moving forward. Our fundamental drivers have not changed. We basically look at that build-out of the mobile network for the telecom space and also the impact of the data centers, both the infrastructure and applications that are running on them. They are all interlinked to one another because in some ways, a data center, very simplistically, is just a big network in a building. A lot of the technology that is used in the telecom space is actually being used in data centers as well.
What it means is that the developments we are doing by presenting them slightly different to different sets of customers, we can generate market share in different verticals. We see in both these spaces, obviously, the data center world through the impact of AI has just increased its acceleration in terms of growing and looking at new ways to be more efficient and increase our bandwidth. We still firmly believe the mobile network needs to continue to get investment in to build out to support the smart cities of the future and all these new services that are coming along. Underneath what we're doing, we still see the fundamental market drivers there, and that will remain our focus moving forward. As I said, we changed our partner network quite considerably over the last year.
This time last year, while about 64% of our sales went through Spirent, we did have a partner network of another 40 partners, fairly small niche partners. We have now moved to 64 partners, and we still work with Spirent to a degree, albeit it has reduced significantly over the year. Obviously, we have to wait and see what happens with Spirent once. The part of Spirent that we work with is a bit that will eventually be bought by Viavi. Once that goes through, we will speak to Spirent because we would like to keep working with them. They have got some great relationships with customers, and it would be beneficial to us to keep working with them. We cannot have these discussions from a compliance point of view until Viavi has actually completed that acquisition.
That's something that will evolve and be able to give you an update in the next time. We've made sure we're prepared to, if it doesn't work out, that we can go-to-market without Spirent or continue to use them, whatever's required in the future. We've also taken the opportunity to look at the way we manage partners in terms of our internal processes. There's been a lot of focus on our go-to-market, our partner management strategy, our onboarding to make sure we're far more efficient and effective at bringing on board new partners because it's not a matter of setting up a network and then it's finished. A network this big will continue to have churn in it where some partners are not doing so well and we replace them.
Also, as we go into these other verticals, we need to bring on other new partners that have better connections into these other verticals. We very much see this as a living organism that continually needs to get managed. We have invested in terms of our headcount, very much focused while we're managing expenses very closely. We have put an extra channel manager in, recognizing that there is more work to be done there, and brought other salespeople in, very much focusing some of these verticals where we believe we can get a return. At this point, I'll hand over to Asleigh, who will go through the financial review.
Thanks, Tommy. Just before I take you through the detail of the P&L and cash flow, I thought it would be useful to briefly remind you of our revenue model, as I've done in previous presentations. As you know, we've got two revenue streams. One revenue stream, which we call bundled hardware and software, and the other one, which is software support program revenues. A typical customer will purchase one of our hardware products with a number of software options included at the time. That invoices one bundled sale to that customer. That same customer can then come back for upgrades or additional options that are then added to that existing hardware that they bought previously through the provision of a license key. We can also sell these upgrades as standalone software sales from an invoice perspective as well.
Bundled hardware and software sales pricing can obviously differ from order to order because it depends on what they've bought from a hardware perspective and what they've chosen as their software options at that point in time. Each customer obviously purchases a different combination of software options each time they buy a hardware product, just dependent on their need. As a result of that variability, the average revenue earned per bundle can vary from order to order. That revenue for that revenue stream, which is our main revenue stream, is recognized on delivery to the customer. Whether we're delivering a hardware product or a delivery of the software license key, that's a standalone software option. That makes up the majority of our revenues, which you can see in the top left-hand side of this slide here.
That's the dark blue element of that chart there. Each of our products comes with a standard warranty period, which can be extended for an extra fee. We also sell software support programs, and that makes up our second revenue stream. That revenue is recognized over the life of the product that the customer purchases. If a customer purchases a support package that spans over two years, then the revenue associated with that package that they bought will be recognized over those two years, with, in the first year, some of it deferred on the balance sheet. The graph on the top left here shows you how those two interlink with each other. Up until FY 2023, the trend in previous years was approximately 90% bundled hardware and software and 10% support revenues. That tracked fairly consistently year on year.
Last year, we saw growth in the percentage of support revenues coming through. The proportion of those revenues to the total was 23% in FY 2024. That trend has largely continued into FY 2025, with 21% of revenues coming from support and 79% coming from bundled hardware and software. That increase in support programs, both in the proportion to the total and in absolute terms, reflects the fact that while CapEx budgets may still be constrained slightly at the customer end, OpEx budgets are still available at our end customers. It also just demonstrates the value our customers place on ensuring they can continue to receive the support on their existing Calnex products that they already own. Just moving across the top of the slide to the middle chart here.
As you'll know from previous presentations and from the R&S, our revenues are generated across our global customer base and partner network. We have three geographic divisions. That's Americas, North Asia, and rest of the world. In the last two years, we've seen a slight decline in the proportion of total orders coming from North Asia as a result of the continued U.S.-China geopolitical tensions, with 18% of revenues coming from that region in FY 2025. Americas was most impacted by the telecom slowdown in prior years, if you remember previous presentations. The focus that we had in FY 2025 was to explore other markets, and that has proved successful with a growth in revenues in the year. In FY 2025, you can see from the chart here, Americas accounted for 40% of our total group revenues compared to 31% in the previous year.
Now, I've got more information on the regional and the product line revenue trends in a couple of slides' time. Just moving across the slide to the right-hand side, as you'll remember from previous presentations as well, our sales are predominantly derived, have been predominantly derived, from the telecoms customers, where the end application is within a telecoms network. Cloud computing market customers within this analysis here include hyperscalers, data centers, enterprise, and defense customers, to name a few. Within this chart here, you can see in FY 2025, these cloud computing market customers represented 43% of our total orders compared to 39% in FY2024. More recently, we've seen an increase in customers from the cloud computing markets, which include the areas I've mentioned before: hyperscalers, data centers, defense, enterprise, etc.
The equipment vendors who initially developed products for use in telecoms applications are now selling the same products into our data, into other data network applications where the same technology is implemented. These new applications are becoming the primary market opportunity for our customers' products, which is contributing to the increase in the proportion of business coming from the cloud computing market within that chart there. Moving on to the bottom of this slide, these two pie charts are quite interlinked in terms of the drivers. I'll talk about them as a collective. Over the last three-year rolling period to the end of March 2025, our top 10 customers contributed 45% of total orders.
In addition, the average length of relationship that we have with those top 10 customers is 10 years, which demonstrates the repeat nature of business that we have with those customers and the strong relationships that we also have with them as well. That is slightly down from last year's 11-year average. However, that demonstrates how we are broadening our customer base, and a small number of these new customers are entering into our top 10 list. We will see customers come back to order from us frequently because they might want to buy multiple bits of hardware for multiple sites. They might want to add new software options or upgrades, as I was mentioning before, when they have already got the hardware. Their requirements might be growing, so they might just want to add new kit for that.
They might want to move on to our newer products and functionalities as we release them to the market. That repeat revenue demand, as I've mentioned in previous presentations, is a metric we measure across our whole customer base as well as the top 10. The other pie chart here is showing that on a three-year rolling profile, repeat orders generated across the whole group were on average 77% of total revenues, which is in line with last year's three-year rolling average. In FY 2025, we received orders from 274 customers. That is relatively flat compared to last year's number, but the revenue per customer increased in the year.
Just onto the next slide here, just in terms of summary, just to add to Tommy's exact summary from a few slides ago, as Tommy presented just a minute ago, we saw a return to profit this year as a result of the 13% growth in revenues and margin improvement in the year. Much of that was driven by the trading performance in H2, with GBP 11 million of revenues coming in to add to the more challenging H1 revenues of GBP 7.4 million. That, together with a slight positive operational gearing effect of our largely fixed cost base, saw us return to improved positive profit margins. Underlying EBITDA is up from 0% in FY2024 to 6% in FY2025. PBT margin also saw a 6 percentage point swing from a loss of 2% to a profit margin of 4% in the year.
H2's stronger trading performance also resulted in strong cash generation in that half compared to H1. GBP 2.3 million of cash was generated in H2 alone. The year-end cash balance, as Tommy was mentioning, was GBP 10.9 million. That was up from GBP 8.6 million at the end of the half year, slightly down on the start of the year. However, the cash balance increased further in April to GBP 12.7 million as trade receivables were collected from the strong Q4 shipment volumes. I'll cover that in more detail when we get to the cash flow slide. As Tommy mentioned, we'll be proposing a final dividend at the August AGM of GBP 0.0062 per share. That's in line with last year. Just moving on to more detail on the geographic and product performance in the period.
As I mentioned before, the Americas region was most impacted by the telco slowdown. We focused, while the telco market was subdued, our plan was always to focus on selling into the cloud-based infrastructure applications and government opportunities. That has proved successful. The revenues in the Americas region increased 44% on last year. We are working with our partners really closely to understand how best to navigate the U.S. tariffs. We are working with them hand in hand to understand the effects and the process of passing through those tariff costs to the end customer. In the rest of the world region, demand levels were least affected by the slowdown in prior years, if you remember from last year's presentation.
Although the revenues, when you look at the disclosure notes, were slightly down on the prior year, this was due to timing of orders, the order-to-shipments in Q4's orders did grow year on year in the region. In North Asia, as I mentioned before, the revenues were flat compared to FY 2024. That is driven by China still being quite a challenging country for us due to the impact of the U.S. restrictions. We are continuing to focus on growing the business in the other countries within that region. From a product line perspective, LabSync, that's the Paragon products. The Paragon product line was the most impacted by the telecom slowdown in prior years. We did see strong demand and revenue generation, particularly in H2 for the new 800 gig Neo in FY 2025. That demand is expected to continue into FY 2026.
Network sync, so that's our Sentinel and Sentry products. Revenues for those grew in the year, driven predominantly by a repeat order from our major hyperscaler investing in data center operations. And NAA, which is our SNE and NE1 products. SNE saw revenue growth this year after quite a difficult FY 2024 when we saw growing demand for our newly launched products, which are the SNEX and the SNE Ignite products. NE1 saw a slight reduction in retraction in revenue. That was impacted more by the shift of marketing focus to the SNE and the Paragon products in the year. Focus for FY 2026 is returning that product to growth. Just onto the income statement itself. I've covered a few items here already. Just to work down the P&L, 13% growth on revenues on FY 2024, and that is despite continuing challenges in our end markets.
In the prior year, if you remember, previous presentations are largely fixed indirect cost base in conjunction with the lower revenue levels created a negative operational gearing effect on profits, which was creating that loss effect last year. In FY 2025, that operational gearing effect did flip slightly. We would like to get more for it in future years. The effect was slightly positive. That was one of the drivers behind the improved profitability in the year. Gross margin was 75% in the year. That's up 2 percentage points on last year. Just as a reminder, that gross margin is net of any commissions payable to our channel partners. That's our gross margin.
Because we are a low-volume, high-value business, the gross margins can fluctuate 1-2% through the year, just depending on the mix of the products and the mix of hardware and software bundles shipped as well. We continue to keep a very tight hold on costs in FY 2025 and into FY 2026. Our headcount remained in line with the prior year. We retained our small graduate hiring program to aid future succession planning and investment into our future roadmap opportunities. That was all within that flat headcount figure. As you can see from this analysis here, admin costs, which excludes depreciation and amortization, which is shown separately here, came in at GBP 0.4 million higher than last year.
However, if you exclude non-capitalized R&D costs, which are allocated to this line, admin costs were in line with prior year, despite year-on-year inflationary cost increases and salary increases as well. As you know, we capitalize the majority of our R&D costs and amortize these to the P&L over five years. Our R&D amortization came in at GBP 4.3 million in the year. That was known at the start of the year. That was versus GBP 3.8 million in the prior year. In a period where there is little or no headcount increase within the development spend that is capitalized, the amortization will increase if you have had previous years of cash spend or increasing cash spend over the past five-year period. That is the reason for that amortization increase there. Profit before tax came in at GBP 0.7 million.
That is effectively just driven by everything I've just talked about, the improved revenue volumes and margin improvements as well, while we're keeping a tight hold on costs. The tax charge was GBP 0.4 million in the year. That brings an effective tax rate of 53%. However, if you take into account there's a couple of one-off prior year adjustments within that tax figure this year, if you strip them out, the underlying effective tax rate is actually nearer to 25%, which is pretty much in line with the tax rate. That should be assumed as the run rate forecast ETR going forward into future years. Just onto the cash flow. The total cash outflow was GBP 1 million in the year.
The improved trading that we had in the year was offset slightly just by timing of shipments versus trade receivable receipts at the end of the year. The main driver in that, working capital in the year, increased by GBP 1.8 million. That is a lower increase than what you would have seen in last year's cash flow versus the GBP 3.7 million increase last year. That was driven predominantly by very strong trading in Q4 and just the timing of the shipments going out and the collection of those trade receivables crossing over into April. Debtors' days remaining the same, but just happening over the cutoff of the year-end. We actually received a large majority of that cash back on time within the April month. Our cash increased as a result to GBP 12.7 million at the end of April.
Cash spent on R&D activities, which you can see here, was GBP 4.9 million. That is versus GBP 5.6 million in the prior year. That reduction in spend was mainly as a result of lower equipment purchases in the year. As a majority of the equipment spend for the Paragon-neo 800 gig project was made in FY 2024, plus there were some non-capitalized R&D costs that went straight to the P&L issue as well. We still manage surplus cash balances through notice accounts just to benefit from higher rates of interest. We do not hold any on a very long-term deposit. We also still have no debt on the balance sheet. Just onto the summary slide.
Just in terms of just to summarize all that up, gross margin improvement in the year created and helped with positive operational gearing and a tight cost control within all cost buckets that just helped to drive profitability with that revenue, 13% growth in revenues as well. We continue to invest in our R&D programs where we see revenue growth potential and ROI growth while also keeping a tight cost on all other overheads. The diversification of our customer base and our end markets, plus the diversification of our channel, which Tommy was talking about earlier, just provides that increased resilience and that increased spread of risk across our global customer base as well. We are confident that we will continue to see improvement in revenue and profitability into FY 2026. I will hand you back to Tommy.
Thanks very much, Ashleigh.
Just this last stage, let's have a quick look at the strategy and some of the market opportunities that we've been focused on last year and also looking forward to the year ahead. Regarding the strategy, it's pretty much the same as we've presented before. As I said at the beginning, there are two big fundamental drivers that we see that we focus on. That is the continuous innovation required for the build-out of the mobile network, whether it's 5G, 6G, or whatever. We do believe that while it's subdued at this point, the innovation in that sector has not slowed down at all, even though the build-out has slowed down. We do believe it has to come back again in the future because it's so essential for, I guess, the future cities and the future applications that we see talked about.
The other area we're focused on is expansion of the cloud computing and the defense sectors. I guess, basically, wherever there's other key areas where networking is happening. Obviously, with AI happening in the cloud computing or the data center space, this is being quite disruptive in terms of bringing in the need to really increase the build-out of mobile, sorry, build-out of data centers and look at the efficiency and effectiveness of these. Again, we see a lot of drivers in this group where that's creating growth and should create opportunity for us in the future. Lastly, as we've done in the past, we have done acquisitions. We look to partner with companies. In the recent period, the partnering has been something that we've had more focus on. Acquisitions is still something we plan to do. It's always been opportunistic in our sector.
There isn't a huge number of other companies. We are prepared if something comes past our door. We would definitely look at it and consider it if it was going to increase our product portfolio and bring new business to us. Given the kind of scaling back of then to working with Spirent, it's actually allowed us to speak to other test vendors in the sector and look for situations where we can work together to the mutual benefit of the two parties into particular sets of customers where the portfolio of our products and other people's products gives us both a stronger position in there. Looking at our product family, there's been lots happening in all of these sectors in the last year and also going forward.
The LabSync, as I've already mentioned, the big release last year was that 800 gig capability, which was leading in the industry. Now, the interesting thing that we've seen happen through that period, the period of sales so far, is while it's very much a telecoms developed technology and standardization happens in telecoms, we're seeing other sectors picking it up. When we came out with 400 gig a few years ago, there were some new entries that started to buy our products that were really servicing the data center, people that made servers to go into data centers or chipsets to go into servers into data centers. Bought it mainly because at that time, there was talk of O-RAN and actually the data centers hosting mobile networks. That has subdued at the moment. Actually, it's interesting, these new names have come back and bought the 800 gigs.
What you have seen is that the technologies that have perhaps developed in the telecom space, because telecoms is such a mature industry, the standards are well structured, other industries pick them up. We are starting to see different names, companies that you would associate with data centers like Arista, Dell, who make servers, and then Intel and NVIDIA are buying our products to test their devices to these standards. We see that continues to be important going forward. We hope that trend continues, that we see more people picking up these standards, which will expand our market. The network sync, the Sentinel programs, is really focused on the telecoms. Given the subdued spending, there is not a lot of R&D going into that at this stage.
The R&D in this sector has really been going into the Sentry, which is really aimed more at the data center market. As you may know, we have one particular hyperscaler we have a great relationship with and have good sales with. Very much the development that we've been doing in there is aligned to their needs and their developing needs to make sure the product stays aligned to the future needs for the data center market. The last group is the network and applications assurance. We have a whole array of network emulators. We had some big R&D releases last year in the SNEX in particular that came out with 400 gig capability, which is important to start speaking to the data center guys who are all working in these very high interface rates.
What the main focus has been in there as well, or one of the other big focuses, has been in our go-to-market and the way that we present these products to the customers. Because these are general-purpose testers that can be used for many different applications. Really, what we find that gets more traction is to focus on key applications, create collateral, and then present the product very much in a way that the customer can understand how they can get value in their sector. That is very much the trend and what we are doing there. We will continue to enhance our products moving forward and make sure they are well positioned to be successful in a whole array of applications. Over the years, you will see that we actually have a pretty high investment in R&D.
That is because it is fundamental in our model that we continue to innovate because we work in an area that does not stand still. There are continuous new standards, interfaces, approaches coming. We continually have to invest to keep our products relevant. Not just relevant, but capitalize on these new opportunities. You can see in the top row here over the last four or five years, the number of major releases we have had of new platforms or enhanced platforms, the most recent being the 800 gig version of the LabSync product. It is not about just doing big platforms. We very much try and create a platform that we can actively enhance for at least four or five years and hopefully potentially sell for up to 10 years. You can see lower down that we do lots of minor releases.
This is basically software enhancements to these platforms where we're adding additional features. These features may come from customers asking us for additional capability, or it may be because we've seen changes in standards or identified new opportunities. There are basically lots of smaller enhancements continually happening as well as the larger enhancements. This is core to the business model that we have that our customers expect our products to continue to move forward, that when they invest in a platform, that it'll be enhanced, which they understand that that's a costed enhancement, but they need it enhanced to make sure it stays relevant to them and they can sweat that asset for many years and we can continue to capitalize on that.
If you look forward into the year ahead on the two major programs, the LabSync, obviously last year we came out with the 800 gigs platform. There are no major releases planned for FY 2026, but there are a lot of minor releases in terms of building out the capability in that platform and adding capability both to the 800 platform and the 400 gig platform to meet these customer demands and the changes in the environment that we need to do. One of the other things we are starting, which is really very much a future, is a 1.6 Tb platform. Now, we have seen so many waves, as I have probably mentioned before. I think, well, I know I have been in this industry for 40 years. Getting to 1.6 is almost like the 14th or 15th wave of technology. In fact, they are already talking about 3.2 Tb. It just keeps moving.
Although there are products out there today with 1.6, we usually have to wait until technology allows us to deliver a solution because the initial parts do not have the control that we need through delay of every component to be able to build a Neo. We have now identified parts for 1.6. We hope to get started soon on that, literally in the next month. That will be an 18-20 month project. It will come out more towards the end of FY 2027. It is important to continue to follow these trends and follow the waves and stay relevant and capitalize because it is not only important, as I mentioned, for the telecoms area, but for the data centers as well.
They are the ones that are now really pushing hard to get to the higher rates, to get to the 1.6, the 3.2 Tb because of the sheer volume of data that they're pushing around. Lots happening this year as well as major releases getting kicked off within the R&D. In our AAA market, again, we have come out last year with the SNEX with 400 gigs capability. We're looking to expand that this year, add more capability, and potentially start in the next platform as well, being more 800 gigs and beyond because, again, in that data center world, the customers want to speak about these higher rates. It's important for us to do that there.
It's also we're spending a lot of time looking at these other segments we've spoken about, the satellite, the defense applications, and building out the ports needed, what's in our platforms in terms of capability, but also in presenting it to these customers and developing our go-to-market to enhance our market capability and being prepared to change the product to meet the needs for these new markets. When I look forward into the future, what we call our discovery activity, this is a product management activity that's very much looking in the future. The area that we are spending time looking at is around AI. It's not so much AI applications in themselves. It's the way that AI has been disruptive into the data centers. The fact they've had to build out faster, get to higher rates quicker.
The modeling algorithms that are running seem to have sensitivities to impairments in the networks. Ferenc testing, this is when once you've got a model, it's working with the real world. That's what they refer to in Ferenc influence. Basically, is there an opportunity for us to offer test solutions to prove the robustness of these algorithms at that time? Still too early to say, but there's so much disruption going on in there. In my experience, it's disruption that creates new opportunities. It's definitely an area for the future that we are investing our discovery activity, looking to the future to see what's happening and see whether we can expand what we do, expand the current products, or potentially find variants of the products we need to create to get to these new markets.
In summary, we are confident we can continue the growth through 2026. A lot of the growth really came through a number of things. It came through our new product releases. It came through our improved go-to-market. It came as well through our new channel partners that we have. All of these things are at an early stage, and we continue to develop them through the year. That is why we have confidence that it will continue. We go into the year with a healthy backlog and a strong cash position that Asleigh presented. We are seeing increased customer engagement. We still see an area where there is a future in terms of the innovation that is happening in the industries is accelerating. It is not slowing down even in telecoms where the build-out may have slowed down. The innovation is not slowing down. The test world is driven by innovation.
It's driven by disruption. We still see this opportunity for the year and for the years ahead in this area. We are also not resting on our laurels and looking to go into new verticals where we can use the same products but actually find new customers whether it's in defense or into the cloud applications. We believe the drivers are there. We believe that we've got a good team in place. We have a structure in place and a product program and discovery activity that we can deliver sustainable growth moving forward. That's the end of the formal presentation part of this webinar.
Tommy, Asleigh, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the top right corner of your screen.
While the company takes a few moments to review those questions submitted today, I would like to remind you that the recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via our invested dashboard. Tommy, Asleigh, as you can see, we have received a number of questions throughout today's presentation. Asleigh, if I may now hand back to you and kindly ask you to read out the questions where appropriate to do so, and I will pick up from you at the end. Thank you.
Okay. Thank you very much. I've got a couple of questions for you that I can answer.
Chloe has asked the question, the receivables that are past due of GBP 1.3 million, which is in the disclosure notes in the R&S, majority being between zero to 30 days, is this mainly due to the orders received end of Q4 or something else? It's actually the quirk of the disclosure. That GBP 1.3 million was two to three days late, past our credit terms with customers. Because of our change in channel, we've ended up with a longer list of customers on our ledger that we have to chase for debt compared to when we had Spirent. Debt to space has changed just slightly, but not by any material amount. You do get some that are a couple of days late. That was just a quirk of that disclosure.
Those 1.3, alongside the receivables I was talking about earlier, have all been collected since the year end. The receivables balance at the end of the year was one of the highest receivables balances that we've had in a while. The majority of that, the driver behind that was mainly to do with the pattern of when the orders and shipments went out the door compared to any sort of timing on receivables collection, if you know what I mean. Those receivables have all been collected now within that sort of April cash balance. Hopefully that answers your question there, Chloe. There was another question from Sean here. Under what circumstance would you consider a share buyback? The board constantly reviews its options around this area.
At this point in time, the primary priority for the business is to continue that return to growth and profitability and sustain that into FY 2026. As such, available funds are being used at this moment in time to support that objective. It is also a priority for the business. It has been and it continues to be to maintain and protect our current liquidity levels just given the challenging end markets we are working in right now and also the sort of challenging geopolitical climate we are in right now. We do review that on a very regular basis.
Okay. There was a pre-submitted question, so let me take that one first. Although starting to see the light now, the recent downturn in the telecoms industry has created problems for Calnex. How can Calnex prevent this happening in the future if a downturn happens again?
There probably will be a downturn again in the future because it does seem to happen every once a decade or a lot more. Really, with approaches being to spread into other verticals, ultimately, these things are driven by macroeconomic effects. Really, what we've focused on over the recent time, we will continue to focus on telecoms. It will remain so for the foreseeable future of focus. We've really focused, and even in terms of our hiring and our partner network, it's all about expanding into other sectors so that we're less vulnerable to fluctuations in the telecoms market. That's the way we see that as the best way to manage that. There's another question here from Melville.
In retrospect, would you say that the big hit to your telecoms customer has turned into a medium-term benefit, resulting in the expansion of your market area as product lines to growing Calnex overall? Good question. It maybe didn't feel like a benefit at the beginning, Melville, but I actually think you've got a lot of point in there. Looking back, there's one thing when you look back and you think about yourself in the boom years, the danger is you start to think you're wonderful and everything's perfect and everything you do is great. It's only when it gets tight you realize there's still room for improvement. I'd guess you're right, when you get difficult times, it really makes you focus on how you do things and how there's ways to do them. There's always opportunity for improvement and actually looking internally.
I think I agree with you. It has forced us to be more aggressive at getting into other market areas and hopefully be more robust. I think I agree with your point. I think it has been difficult medicine, but I think it probably has grown the company and made us stronger in the future. Every opportunity, every challenge is an opportunity, as they say.
I've got one here from Ross. Could you please comment on the specific cost control measures that have been implemented? Are they structural or more short-term in nature? I wouldn't say they're structural, but they're probably more aligned to bringing in process evolution and process improvement as well.
In terms of the cost control or tight cost control measures that we put in place last year, very much around a pause on headcount unless it was targeted hires or graduate recruitment, getting the teams to effectively rethink whether they needed to spend on travel, whether they could do calls over Zoom, etc., trying to get them to sort of balance up the benefit and the cost and the benefit for these types of things. Very much just a tightening of the belt rather than any structural cost control or any sort of more serious cost control measures. However, I think it's also helped, kind of following on from what Tommy just said. It's helped us in these times where things are a little bit leaner.
It's just helped us identify areas where we might not necessarily want to add any more cost, but you might actually end up with a benefit if you look at a process improvement or a process evolution as well. It is more just a rethink of cost budgets and just a careful incremental increase to these costs where required. For example, our headcount has remained the same this year, but into FY 2026, in order for us to get the best out of our markets, we may want to make, we will want to make some targeted hires. The sort of process around understanding what the ROI is on those targeted hires has been sort of evolved over the last couple of years as well. Hopefully that answers your question.
I would not say they are structural, but I also would not say they are short-term in nature as well. They definitely were not cost control measures just to sort of manage the profit figure in that particular year. It is all just about building more efficiencies into the business from a process perspective as well while doing all the things that we need to do to grow that top line.
Okay. David has asked a question here. You are compared to this. Let me just flip back to the slide with the product lines because it is a bit easier to explain. You kind of have to talk about each of the product lines separately, David, to answer that. In the LabSync, especially at that high end, the high interface rates, the high accuracy that we perform, we basically do not have any competitor.
Keysight are probably the nearest, and they kind of nip our heels at some of the lower rates and in some of the more kind of wider application or tests that need to be done. In general, we have a very strong position. We're really known as the market leaders in there. That is why I guess continuing to invest and make sure we keep moving forward at pace and do not let anyone catch us is really important to maintain that position. In the network sync, in a Sentry product, again, we really do not have anybody that is directly doing what we are doing in that space. At the moment, it is probably somewhere where we think we can expand.
We basically hold a position with the customers we are with by keeping very close in contact with them, continually engaging, even letting them engage with the R&D teams so that they feel well connected to us, and we can continue to keep that product aligned to their needs to ensure that they continue just to look to us. When you go to the network and applications assurance, there are a number of competitors in here. There are some of the big players like Keysight have a network emulator and a number of small companies that have network emulators.
The way we have really created our competitive position is by being the only company that has a whole range, so rather than having one network emulator that you try and push into every application, we have three that are quite different in terms of what they can do and how they do it. It allows us to tune it to the particular application. Being very focused on the application, making sure we understand applications, is how very much we seek to create and maintain a competitive edge. The last question we have up here is from Jeffrey. Were profits in 2023 inflated by COVID recovery, or can profits get back to there as revenues rise over the next couple of years? In 2023, it was an interesting year.
It was a great year, but it kind of was one of these years where everything seemed to work, Jeffrey. It's kind of life doesn't always work that way. All our product lines were booming. All the regions were booming. Of course, we had a great year. Actually, when we sit at the moment, obviously, we're back into profit this year, but we're far from comfortable as a management team that it's enough profit. We definitely want to get back up to the levels that we had in that year, and we firmly believe we can. We're going to continue to manage costs, but we're very focused and realize that to get back up to these levels, then we need to deliver product and solutions that people want to buy and buy at a high premium.
We're very focused on the segments that we believe that we can get a handsome return on to make sure we get that revenue line back up on the top line, and that'll start delivering the profit while we maintain close control of the expenses and all the lines between the revenue and the profit line. Another question. Given your size, would it make sense for you to be consolidated into a larger company? That's not my plan, Jeffrey. I guess if somebody comes knocking at the door, then as a responsible board, you need to look at it. I very much see Calnex as a standalone company and has a future as a standalone. We see lots of growth opportunities. We believe we can continue to expand. We find other companies come and actually want to work with us.
As a standalone company, we do not feel we are restricted. I always think that any restriction that is there, it is our lack of our own ambition that is restricting us. It is not the market. It is a big market, and there are other places that we can go to. We very much focus on the situation of trying to grow the company as it is and creating sustainable growth and creating an environment and a company that the employees see as a sustainable place that they can work and continue to contribute.
That is great, Tommy, Asleigh. Thank you for addressing all those questions for investors today. Of course, the company can review all questions submitted today and will publish those responses on the Vesmir Company platform.
Before we direct investors to provide you with their feedback, which is particularly important to the company, Tommy, could I please ask you for a few closing comments?
Thank you. Yeah, thanks very much, everyone, for joining today. As I said at the beginning, it's satisfying we're back into a profit situation. We need to keep driving that number up. It came from a number of things happening. In some ways, it's like a Formula 1 car. You don't become number one by one thing. You have to do a lot of small things. In some ways, that kind of summed up the year in terms of key releases and key R&D enhancements to all our programs, the fact that our marketing approach was changed, the fact that we continued to manage expenses and only did targeted hires.
We really needed to, we had a weakness in our skill set or needed to expand. Also, in terms of our go-to-market, the way we go-to-market and our channel partner, all these things have contributed to the growth in the last year. We are not at the end of the road of any of these. That is why we believe as we continue with these activities, we can continue to grow our market. We do see that the market is creating new areas where there may be opportunity, whether it is through AI, whether it is through the other expansions going into some of the other markets. We believe that we are in a good footing at the moment. We have got a great team. We have got a very clear focus on what we are trying to do.
We feel that we can hopefully repeat the results that we had last year and next year. Thanks very much for your attention. Bye just now.
Fantastic. Tommy, Asleigh, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete, and I am sure will be greatly valued by the company. On behalf of the management team of Calnex Solutions, we would like to thank you for attending today's presentation, and good afternoon to you all.