Transcript

Oct 12, 2026

Summary

H1 revenue rose 22% to £8.54m and PBT increased 55% to £1.7m. Strong pipeline maturity supports confidence in the full-year forecast, while product launches and international opportunities broaden growth prospects.

Good afternoon, ladies and gentlemen, and welcome to the Intercede Group PLC half-year results investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that is just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish our responses where it is appropriate to do so. Before we begin, as usual, we would just like to submit the following poll, and if you could give that your kind attention, I am sure the company would be most grateful. I would now like to hand you over to the executive management team from Intercede Group PLC. Klaas, good afternoon, sir. Good afternoon, Jake. Good afternoon, everyone. My name is Klaas van der Leest. I am the CEO for Intercede. I would like to welcome both existing investors as well as potentially new private investors to this session, which will cover our first half being 1st of April until the end of September 2024. I am joined by Allen Storey, who is our CPO, and Nitil Patel, who is the CFO. Whilst this presentation is us presenting to you, we do look forward to your questions, but also your feedback after the session. Without further ado, let us start with the presentation, which will provide an update into an insight into the markets we operate in and how we position through both additional features, but also through new products like MyID SecureVault. Let us start. If you look at company introduction, I know this is a difficult one because we are presenting into a black hole and we do not know whether you are an existing investor or whether a new investor and how much background you have. So I am going to pick out a few salient points here. Intercede is a software company based out of Lutterworth. We have got two offices in the U.K., main office in Lutterworth and through acquisition, we are also based out of Bracknell. We are about 809 staff, just over 94, 95 in the U.K. and the rest of our colleagues are based just outside of Washington. Washington for a very good reason, because we are heavily geared towards the U.S. federal market, so we need to be near clients and prospects. We are a software company. What does the company do? Ultimately, at 30,000 feet, we help our customers to protect themselves against data breach. Data breach five years, 10 years ago was something which was sporadic in the news. Nowadays, it's daily, if not hourly. Only yesterday, one of the NHS trusts was hit and completely rendered ineffective. This is something that's very, very real. We help and protect our customers against data breach. How do we do that? We basically replace weak credentials such as passwords with much stronger authentication. Alan will pick that up in his part of the presentation. We do that simply, we do that securely, and we do it at scale. What do I mean with simply? It's standard off-the-shelf software. This is easy to implement, easy to integrate with, and easy to maintain. We do that securely. If you look at our client base, and there are some samples of our clients in the appendix, but also you can find some logos on our website. You will find that these clients are very recognizable, and they tend to test our software rigorously before it comes into production, particularly in the U.S. A lot of our U.S. federal clients need to have an authority to operate, and they can only do so if this software has been tested. We know it's secure. Final point is it scales. We tend to position in the market at mid-level upwards. Lowest number of licenses we probably sell is in the high hundreds, and then we scale to millions. The largest one we've probably got out there is the Kuwaiti National ID scheme, who have probably issued between 6.5 and 7 million licenses by now. We know the platform scales. It's also business critical software. This is not the kind of software that will get turned off because there is an economic downturn. Basically, our clients are protecting their crown jewels with the software that they have purchased, and therefore it's regarded as business critical. It's also very much positioned within the wider cybersecurity market, and depending on which analyst you read, that market is still growing very much at double digit. If we then move to the box on the left from a business perspective, it is very much a scalable business. We've proven that over the last couple of years. There are three main revenue streams, recurring revenue or support and maintenance. We have then our repeatable revenue, which is typically our professional services. Then on top of that, the licenses. The good news nowadays is that the majority of our cost, and a lot of that is labor, is actually covered by the revenue we get from both the recurring revenue as well as the professional services. Therefore, as and when we sell licenses, it becomes highly accretive and a lot of that will drop to the bottom line. Operating model is very much proven. I talked about the tier 1 client base. Some of the logos are on our website. Other clients we simply can't talk about, but think about interesting shaped buildings in and around Washington, D.C. Think about intelligence agencies. By the way, not all intelligence agencies have three-letter acronyms. I think there are in the low 20s in the U.S., and we're dealing with a number of them. Management team is established. Obviously, I've got Alan and Nitil with me here, but we also have COO and CTO as part of the team. The growth pillars are very much defined. We position ourselves as an organic growth business. The objective is always to drive double-digit growth. Clearly, we came off of the back of a very strong full year, but also in this first half, we are showing again that we can drive very solid double-digit growth in the mid to low 20s. The second growth pillar is acquisition. As and when we can find the right acquisition and we focus particularly on IP, then we will layer that into the business. We have completed our first acquisition that has been fully integrated, and we are on the lookout for more acquisitions. Market-wise, we are very much recognized, not just recognized by clients and partners, but also by industry analysts like KuppingerCole, who have written very favorably about our products in the market. If we look at that pipeline, our pipeline has developed very, very nicely compared to comparable period last year, not just in terms of absolute value, but also in terms of geo diversification. What do I mean with that? Those who have been following us for a while will know that the majority of our revenue, typically 80%, 85%, is U.S. But what we have actually seen that our pipeline outside of the U.S., which is what we classify as rest of world, has grown very nicely, and that is not just focused on a single region. It is pretty much broad brush. We see opportunity in the U.K. We see opportunity continental Europe, Middle East, as well as Asia PAC. That is really good to see that our pipeline is balancing more out. What I am not saying is that our pipeline in the U.S. is not growing. That is absolutely not the case. But we are actually seeing more number of opportunities appearing in rest of world region than we have seen for a little while. The second point about the pipeline is actually the weighted pipeline, and we have described it as materially ahead of where we were last year. What does that mean? We have more opportunities in the pipeline that sit on the right-hand side with heavier weighting, so closer to the procurement stage. Competitively, we can very much protect and defend our moat. Whilst we are quite niche, we are very much regarded in the space we operate in, and we see very little revenue attrition. Our revenue attrition in terms of revenue is significantly below 2.5% and has been so for many, many years. Alan will talk about the authentication pyramid, which is a very good reflection of the journey we have been on over the last five years, but is also a good picture to highlight where we want to take the business next. Final point in the central box is regulation. We love regulation. Again, Alan will talk more about regulation in the U.S. But we also see more regulation now appearing in continental Europe within the EU, where NIS2 is very much coming into force, and we fully expect in the next two to three years that companies will have to work hard to comply with the new laws that will appear in each individual country. Financials. Nitil will talk about the KPIs and how they have grown over a period of time. Main thing I want to stress here is the share buyback we have commenced. Two main reasons for that. First of all, we have got some EMI options coming up next year. We have not got enough shares in treasury, so we are actually buying shares for treasury to fulfill that potential requirement. Secondly, each one of us knows on this call, there has been a lot of instability leading up to the new budget around AIM and IHT. We have a small exposure, relatively small exposure to AIM IHT, so we wanted to make sure we had an instrument in the market that we could actually deal with. As most of you, I am sure, will realize, share buybacks have to be approved by board. There is and there are some mechanics we have to take in place, so we want to make sure that before the budget was announced, we actually had an instrument in the market that could deal with any adverse reactions to what was going on in the budget. That is very much high level introduction. At this point, I hand over to Nitil, who will talk you through the numbers. Thanks, Klaas. Hopefully, everyone has read the RNS we released on Tuesday. I will start on the left-hand side on the progress report, and then I will just highlight some of the key revenue streams that we have had in H1. Revenues have grown by 22% to GBP 8.54 million and 29% on a constant currency basis, which is a good result for us, as Klaas has mentioned, coming off on FY 2024's exceptional results that we had. Profit before tax was GBP 1.7 million. Again, really good number for us in H1, 55% higher than the comparative last year. The reason for this is because our products are so good and we continue to invest in our product. Alan will explain what we are doing with our flagship MyID CMS later in the deck, and also what we have done with our acquisition since we bought it. What have we integrated, how have we gone to the market and what we are looking to do with it. That is version 5.06. Again, Alan will explain more about that. This week also, we have launched our new product called MyID SecureVault. It is a separable standalone product, subscription-based pricing only. Again, Alan will explain more of why we are doing this and what we see in the marketplace for this product. We have taken a different approach to R&D tax credit. It is a technical tax adjustment policy, and there is a slide later in the deck and I will explain what we are doing with that, but you will see an impact on the income statement because of that. Just as Klaas has mentioned, professional services have grown quite well this year in H1 as a comparative. This is mainly because of our three either deployed, deploying or just deployed and potential POC that we are doing with three large federal agencies. One we can name, the Department of State. Four years ago, we won it. Two and a half years ago, went live. We are continuing to help them maintain and operate that and manage that, and they are constantly using our services for that. We like that because it is a good revenue stream, a repeatable revenue stream for us, and it embeds our staff in their environment. Last year we had a really good strong order in December, $8 million, and that was with a new federal agency, which we unfortunately cannot name yet. They had an aggressive timeline to go live. The good news is they have gone live. They have used a lot of our professional services, and they continue to use our professional services going forward. We do not see that tailing off. As we have highlighted, we are in the process of doing a POC for another large U.S. federal that is taking a longer period of time to test it. We are happy with that at the moment. We normally do not do this unless there is a license order attached to it. Because of the opportunity, we have decided to allow two of our staff to be embedded into the POC world in this agency. So that is why PS is looking good this H1. There is a license income is slightly behind schedule, but we will come to an explanation of why that is the case and what we are seeing in H2. Just the highlights on the right-hand side. Yes, we do have a lot of good federal revenue, but we are also seeing movement in ROW and through that, as Klaas has explained about our pipeline and the weighting of that pipeline. Our MyID CMS, MFA and PSM is also getting good traction. The release of version 5.06 and the potential of what we are trying to achieve in the new marketplace, which I will explain, has some good prospects for us in the future. Again, financial highlights pictorially, if you look on the right-hand side, sorry, left-hand side top, revenue streams by analysis of support and maintenance, our recurring element, our PS, our repeatable element, and our license income. As you know, we are normally perpetual. We have, like last year, introduced subscription. We will see how that develops. Our MFA PSM products are all subscription, as is our new product, MyID SecureVault. If you look at this year, 4.7, 2.7, that is a really good number for us. Why? Because as Klaas has mentioned, it covers a large percentage of our operating expenses. So any license sales that we do, less commission, are going to be highly accretive to us. We are focusing that and looking to convert a chunk of our pipeline in H2 into license income. Revenue by region, as you know, Americas continues to be the largest and will continue to be the largest in the foreseeable future, purely because it has got bigger budgets, it is well-funded, it has got more agencies that are abiding with regulations that exist in the United States. But there is traction in ROW, and we will look to see that orange segment grow over the coming H2 and into next financial year. Adjusted EBITDA and profit before tax is a good metric, again, that we focus on. Why? Because we would like to see them close enough to each other. As you can see in H1, it is GBP 1.8 million versus GBP 1.7 million. Again, there is a reason for that, and I will explain that later in the income statement. On the bottom right, you see the movement of cash. Good cash generation gives us the capability of secure foundations to continue to invest in our products, and also gives us room to maneuver in regarding M&A activity or share buybacks that we had to do this year. Equity is going in the right direction as well. Income statement, we have a very clean statutory income statement, that is the top half, and the bottom half is just an illustration of where the adjusted EBITDA and the adjustments look like. If you look, you will see the two major issue changes here are the net finance income. It is larger than last year. Again, a reflection of our cash balances. We spread that money across three U.K. banks, A-plus rated, A-rated or A-plus rated, and we hold it to the maximum of three months to abide with accounting standards. Then you will see the taxation. We have not received a tax credit this year. We have elected not to take it. Again, there is a later slide on why we are looking to do that. You will note at the bottom that we have got carried losses of GBP 3.9 million. We probably want to utilize those into this financial year and then utilize the R&D tax losses. Again, I will explain that later, why we are doing that. Financial position of the group. Again, we have a very clean balance sheet. We do not expense our R&D expenditure. The GBP 3.5 million, GBP 3.6 million that goes through the income statement will continue to go through the income statement, bar a slight tweak on MyID SecureVault. Again, I will explain why we are probably going to have to capitalize that. But the amounts we are talking are not material. The movement in other property and plant and equipment, right of use assets is mainly because, one, we have got a new office in Reston, and that reflects the seven-year lease. Also, we have invested heavily this H1 in upgrading our back-end infrastructure, not just physical servers, but also moving into Azure. All staff have received new laptops, especially development testing staff, to get new specs and capabilities functionality, so they can increase bandwidth, increase productivity, and get ready for the next three to four years of hopefully increased activity. The other parts of the balance sheet that we focus on quite heavily is trade and receivables, cash, and deferred income. I should have highlighted the deferred income that are greater than one year. The reason for this, pure working capital management. It is good to have deferred income, gives you good visibility or good visibility into the future. If you have got even longer non-current liabilities, that shows you that we are selling either two or three-year contracts, either licenses under MFA PSM, and also maybe as people are doing longer term SM, self-automated contracts with us, and locks in the price now without the inflation increases that we apply if you renew every year. Trade and receivables is higher than last year. We just had late orders in September. We are under procurement rules with our big corporates and our government agencies. We get paid, but you have to be in their system. We're in the system. It takes 50 to 60 days to get paid. Most of that money has now been collected. It hasn't had an impact on the cash flow. It's just a negative outflow, but that's comparable to the 31st March as a working capital adjustment. We had a large debtor at 31st March on a large renewal subscription that we have every year. That's just the comparative. The cash used in investing activities, as I've mentioned, it's all to do with the fixed assets. There's no tax credit. Last year, we got GBP 450,000 in tax. Obviously, this year we didn't. Again, we've elected not to receive that. But we've got a good strong cash balance, and we expect that to turn around in H2. I just wanted to give some additional notes. I've mentioned in the updates from the financial section, the capitalization of MyID SecureVault. There's a slight change potentially on the policy, and this has got to be audited. But because it's a separable asset with standalone, can be sold without the MyID CMS attached to it, has its own pricing, and has identifiable costs associated with it and future earnings streams, then the standard dictates and kind of gives guidance on you should be capitalizing this because you're matching future revenues with the cost element of the development of the product. We don't see this as material. We don't see this as a significant change in policy, but it's one thing that we will be probably doing so at year-end. I just wanted to highlight that to our investor community. Not a material change in impact on the income statement and no change on our flagship MyID CMS, which also now incorporates MFA and PSM. The other technical change we're doing is on R&D tax credits. We normally, in the previous years, taken cash because we wanted it and it was good to have the cash and we could invest it in a product. As we are cash rich at the moment, we've decided not to take the tax credit for this year, and we've also gone back and opened last year's tax comp, and that's where you'll see a cash outflow in H2 of circa half a million. That's GBP 450,000 that we got from HMRC, and plus interest flowing out of us. Actually, it's flown out of us in H2. The reason we're doing this is purely tax arbitrage rates. We get a blended tax cash credit of circa 12%-14%, and the corporate tax is now at 25%. Going forward, it's better for us to utilize R&D tax losses against future corporation tax liabilities. It just makes sense to have that arbitrage, and that's what we're doing, and that's why we've opened up last year's tax comp and why we're paying it back, and also why we haven't got a credit for this year. Share buyback, as Klaas has mentioned. We decided to do one in the beginning of November, getting ready just for the budget on 30th of October, with an end date of 31st of December. We'll see that flowing through. You'll see the statement. RNS is coming out from Cavendish and coming to this via LSE RNS. We'll see how that progresses through. But we are anticipating a GBP 1.5 million cash outflow in H2 mainly to do with the share buyback and the R&D tax credit I have just mentioned. And you will see Cavendish's note moving us down from GBP 18.5 million to GBP 17 million, purely to do with this GBP 1.5 million cash outflow that we have described just now. We also wanted to show you that for a like-for-like basis, if you took the exceptional out of the equation, where has this company been going the last four or five years? Klaas and I were talking that three years ago, three and a half years ago, we were reporting GBP 9, GBP 9.5 million for the full year. We are now reporting GBP 8.5 million in H1. CAGR for us is great in the sense it is now 20, 21.4%. We would like to continue that. And you can see that the progress we are making. So the emphasis on the pipeline, the conversion of the long pipeline is really important to us, and we will be focusing on that going forward in the coming months and years. On that basis, I am going to pass you over to Alan, who is going to talk more about product. Thank you, Nitil. So let us start to take a look into the product and what we are doing with it to try and drive that revenue. As Klaas mentioned, and what we do is we help protect our customers against data breach. We use that by taking weak credentials, typically passwords and one-time passwords, and replacing them with stronger credentials. We use what we call the authentication pyramid to describe the strength of those credentials. So passwords at the bottom, multi-factor authentication, one-time passwords in the middle, and moving up to the top of the pyramid, PKI. So this is authentication based on public/private keys and cryptography. Historically, we have only played at the top of that pyramid. So that is the gold standard of security as used by governments, aerospace and defense, for example. Strategically, we wanted to move down the pyramid to address a wider market. So that is why we made an acquisition a couple of years ago of a company that had multi-factor authentication and password security management. We have now completed the rebrand of those products. We take those to market as MyID solutions. So MyID has now become a product family, and we are a multi-product company. The next three slides really talk through each of those products in a little bit more detail. Conscious of time, I will not leave those there, but those will be in the deck, and you can use those as a little bit more reference on what each product does. What I am going to do is really focus on where we are taking those products. So this is how we are positioning them into the market today. The first one is aimed at the very top of the market. This is our existing customer base and type of customer, federal government agencies, aerospace defense contractors, who have to comply with the legislation called PIV, Personal Identity Verification, which states that you have to issue strong credentials to known people in your organization. That is the legislation people have to comply with. To comply with that legislation, they have issued fairly complicated systems out there that integrate lots of components together. This is how customers today are using our system in that federal government market. On the left-hand side of the slide, we are onboarding people. We are capturing fingerprints, facial biometrics. We are placing documents such as passports or driving licenses on scanners, making sure they are not faked, they are not known to be tampered with. Then we pass that information up to background checking systems. Do these fingerprints match anybody else in the system who has enrolled before? This person has enrolled. They are who they claim to be, but are they on a terrorist no-fly list before we actually let them into the air traffic control tower? A lot of this is about, is it the right person and is it a good person? Once we have done that, then we issue them a high assurance digital credential. That takes the form of a PKI certificate with keys on a smart card, USB token, or phone. To do that, again, we are integrating lots of technologies together. The PKIs that provide the certificates, mobile device management systems look after mobile security, physical access control systems, et cetera. This is what customers have deployed in that high assurance environment today, and that allows us then to comply with those federal government regulations. There is a change to the regulations coming out of the executive office of the president that states that organizations now need to deploy stronger authentication to the maximum extent possible. That means everybody in the organization and down the supply chain. It is quite hard to deploy PKI down the supply chain because the organization to do that has a complex system like this set up, but they are not in control of the supply chain's IT infrastructure, so it is quite difficult to implement. There is another technology that is used in the consumer space called FIDO, now called FIDO Passkeys, still based on cryptography, which is potentially easier to deploy because you do not need as much infrastructure in place to deploy it. It is built into operating systems, for example. Now, what customers wanted to do is to be able to deploy and manage this in the same way as they could PKI with their credential management system. But until recently, they could not do that. They could either issue the FIDO Passkeys with Microsoft Entra, which is Microsoft's rebranded name for their identity and access management suite, but then they could not do it to the policy. They could not comply with the federal government policy rules. Or they could issue them with a credential management system that complies with the federal government rules, but they would not work with Entra. Microsoft realized this, our customers realized this. We have been on conversations with Microsoft, with some of those customers, asking Microsoft to give the ability to issue Passkeys that it could work with from a third-party system. We have been working with Microsoft as an early adopter in this space. There's a small number of vendors we're invited to work with them on that scheme. We've worked with them on that scheme. What that allows us to do is then issue and manage those FIDO Passkeys in exactly the same way as customers today issue their PKI. They use our system, and they get all of that compliance with policy, but then they work within the Microsoft Entra environment. What that means is the customer can keep meeting the guidelines, and they can deploy those from their credentials. From our perspective, that's simply more licenses into our existing customer base. Whenever they issue a PKI smart card, that consumes a license. If we issue a FIDO Passkey or something like a YubiKey, that also consumes a license. Moving down to the absolute opposite end of the scale now. One market customer size Intercede hasn't addressed in the past is the very small customer, 5, 10, 15, 20 users, for example. Even our multi-factor authentication product, our mid-market product, typically starts around the 250 users plus environment. These customers are very difficult to deploy to because they typically don't have their own IT departments, and they outsource their IT to a service provider. We were approached by an organization called Riverbird, based in Germany. What they do is they have a platform, a cloud SaaS platform that multiple managed service providers use to satisfy multiple end customers. That Riverbird platform is used by around 400 managed service providers, and those 400 managed service providers in turn manage multiple end customers, and they've got millions of devices under management. Partly because of the increase in the level of cyberattack, the geopolitical climate, partly because of the upcoming NIS2 legislation in Europe, which drives organizations to set their own cybersecurity standards, Riverbird said, "Can we have stronger authentication as part of this platform?" We took the product we'd acquired, rebranded it to MyID MFA Server, and we made two major enhancements to it. The first one is the ability to manage multiple end customers within a single instance of that server environment. That way, we can deploy this into the Riverbird cloud, into their SaaS cloud environment. We don't have to deploy it at the end customer site. We don't even have to deploy it into each managed service provider. The second thing we did is we enhanced the APIs around the product to allow it to be completely automated. That way, if an end customer ticks the box saying, "I want strong authentication," the deployment of any software is absolutely automated down to their client, so no human being has to get involved. The point where they start using that and they start getting billed, again, nobody has to run a report. All of that is completely automated. I'm personally very keen on this for a couple of reasons. One is that it allows Intercede to address a customer base that doesn't cannibalize our existing revenue. We've not got any of these customers before, so these are brand-new types of customers for us. The second one is that it allows us to tap into that pure cloud SaaS model that gives us the scalability without having to actually run that SaaS environment ourself. By tapping into an existing platform that is out there and widely used, it gives us those scalability benefits. This is currently in production. We have been working with Riverbird for a few months on pilot customers. It is early days, so we are up to the first few hundreds of end users at the moment. We are now monitoring that and working with them to look at what the attachment rate is, how many of those end customers will start stepping up to stronger authentication. If that is successful, we intend to take that model through to other managed service providers in other regions. Talking now about a new product, MyID SecureVault. Part of the security of PKI is that there is a private key, and you need access to that private key to read an email that somebody sent you if it was encrypted or open a file that was encrypted. When I get a new device, so I might lose my smart card or get a new one, or I buy a new phone, I need to get those private keys onto that device to be able to continue to read the email or open that file. Now, traditionally, customers have managed those keys within the PKI infrastructure. Those keys are placed in what is known as a secure vault or a secure archive within that PKI infrastructure. They use our product, the credential management system, to help them recover them and write them down securely to the new device. But this causes our customers a problem. We had a customer approach us saying, "The problem this causes me is whenever I move PKI provider," which they do regularly, often, so they may move between DigiCert or Entrust or Verizon as a PKI provider. "I am kind of locked into that vendor because my private keys are in that vendor's environment, and I need to move them from that vendor to another vendor. That is costly, it is time-consuming, it is very risky." The customer approached us and said, "Intercede, you understand keys and security. Could you build a SecureVault to store these private keys, but one that gives us independence from the PKI provider?" We built it. The good news is that we had a lot of code and skills and knowledge in our existing product that allows us to build this product relatively quickly. We have built it as a standalone product, so it is not part of the credential management system. It is a completely standalone product, partly for security purposes, so the customer can deploy it in a different environment, but partly so we can sell it integrated with the credential management or completely standalone, so it could work with somebody else's credential management system. What this does is it gives customers the ability to store and manage those private keys completely independent from the PKI infrastructure. Because it is a new product, we are only providing it on a subscription pricing basis, so there is no perpetual licensing here for this product. The way we license it is for the number of keys held within the system. The more keys, the lower price per key. Most organizations, people use this, they have around five keys per person because the keys change over time. And there's also a requirement to hold onto historical keys, typically for around seven years. For example, with one of our customers, Federal Aviation Administration, they need to hold them for seven years due to government guidelines. If somebody like the FBI or the CIA came in to investigate somebody, they'd need to have access to those keys so they could read the emails. That's why they need to keep it for seven years. So brand new product. This is focused on our top-end customer base and where the CMS plays initially on PKI keys. But as we continue our M&A journey and start to look at other areas where we can add value, there are potential future uses for this. For example, in non-person entity secrets management, API keys and device keys, for example. Moving on to innovation. What research activities we undertake to try and add ongoing value to our customers? The first one is quantum cryptography. This is probably the thing that keeps our customers awake at night at the moment. The idea behind public-private key cryptography and base security is there's a private key and a public key. I can sign something or authenticate with the private key. I can verify that with the public key, but I can't get back to that private key. That remains secret. The theory is with quantum cryptography and quantum computing, you can have a computer that is so powerful and so fast it can perform billions of what if calculations per second. So theoretically, with the public key and only the public key, you could work out what the private key is. That means it undermines the security of public-private key cryptography. The good news is that NIST, who set all the standards in the U.S. around cryptography, are well aware of this, and they're already working on it. They've recently published the first three quantum-resistant algorithms. What that means is even if a nation state has an incredibly powerful quantum computer, because the way the maths is calculated, you still can't get back to the private key if you know the public key. I was in NIST last week with their people who are setting these standards, talking to them. They are running early adopter schemes for vendors to prove you can work with these algorithms and deploy them. We will be part of those schemes, so as those algorithms become available on hardware devices such as smart cards and hardware security modules, we will be working with them in the NIST labs, proving to our customers we can actually deploy that cryptography when they need it. So it's probably two to three years before customers need to start deploying these quantum-resistant algorithms, but we will be there before they need it, demonstrating that to them. And we will also help them migrate from the old cryptography to the new cryptography. That's an important part of our product value. Second one here is artificial intelligence. We've been looking at artificial intelligence and how it can add value to our product set. It's no secret that artificial intelligence is being used by hackers. There's lots of examples of deepfakes of people reading video out that look like real people. The emails we all used to receive from the Nigerian princes that are obviously fake. It's very, very difficult to spot a phishing email these days when it's generated by AI because it looks very, very realistic, and it has context in there. The good news for us is that drives people towards stronger authentication, which is FIDO Passkeys or PKI. It drives people to our sort of technology. But we've been looking at where we can add value to our product set using AI. Our view of our particular product is we don't think it will replace the people using it, but it does add value and help those people. That's probably why Microsoft call AI Copilot as opposed to pilot. The two areas we're looking at initially, the first one is our system is connected to lots of other systems. There are lots of log files and audit files that come out from those systems, and we have an online knowledge base. AI with machine learning is very good at spotting patterns. If we can spot patterns ahead of an incident occurring, we can help those customers. It could be, for example, this particular person has been logging on an abnormal number of times. You might want to investigate that. It could be when we've seen this pattern happening in the log before, we're starting to see a network slowdown, therefore, you might want to go investigate a particular area. Proactive AI analysis of logs, we think can help people maintain their systems. The second one on here is, a while ago, we put our documentation online. Some people aren't comfortable with that because it means competitors can look at it. We are comfortable with it because we believe we should focus on being the best product and making that available and stand behind it. I'm very pleased we did that. The documentation's online, the knowledge base is online. Customers can search that easily, and they like that, but you still need a degree of knowledge to know where to look. What this can do is act as more of a conversational style engine to help you find what you're looking for. How do I change the color of a card layout? How do I actually swap from an old crypto algorithm to a new one? AI with machine learning, again, is quite useful at pulling together that information from different places and presenting it to the end customer. These are just two of the areas we're looking at in bringing AI usage in to add value to our product set. Okay. With that, I'm going to hand back to Klaas. Thank you, Alan. Trying to summarize where we are today and a little bit more about outlook on the next slide. If you are left with one thing today other than presenting half-decent results, it is that Intercede does incredibly well in highly regulated markets. One of the reasons why we are successful in the U.S. is because it is very heavily regulated. There are other countries where there may be less regulation, but they want to follow the U.S. standards, like FIPS 201 that Alan referred to. We see that, for instance, in Singapore. We now start to see that happening in Australia. We see interest in New Zealand, which is really interesting for us. We also see more regulation now within the EU with NIS2. NIS2 is something that is coming into law pretty much now as we speak, and there is a large cohort of companies that will have to comply with NIS2 regulations. Compliance is something that typically takes time, but it does mean that they have to make investments, particularly around the cybersecurity posture. The good news is within NIS2, there are real good drivers similar to those we have seen in the U.S. So we expect that those market drivers will be positive for a company like Intercede. We will continue to expand our product portfolio, not just in feature enhancements, but also the launch of new products. SecureVault, MyID SecureVault is a very interesting product. We have got that to market very quickly. We have already initial interest. There are active quotes for this product out there, and we fully expect that they will materialize in the foreseeable future. That also quite nicely builds onto point number three. We build and grow a diverse pipeline. In my introduction, I referred to a pipeline that is very solid in terms of absolute numbers, but also with regards to the weighted pipeline. It is in a much better position than where we were last year. So that gives us a lot of confidence for the full year ahead. The second point I raised on the pipeline is the fact that we see lots of opportunity arising in rest of world, so real good movement on the pipeline. Nitil as CFO, he has got very single-mind focus on revenue margin and profitability, and hopefully through the numbers you see that they really play a key part in our day-to-day business, and we very much focus on those going forward. Liquidity is excellent, and that will continue to provide us opportunity to grow the cash pile and hopefully invest some of that cash into future acquisitions. We have not focused a lot on the acquisition part in this presentation, but just to reconfirm, we have a full-time corporate head of development in-house. We have a long list of around 300 companies. At any point in time, we talk to about five to 10 potential targets, and that typically takes time. As and when we have updates, we will clearly come back to the market. Balance sheet, as Nitil has talked about, is very clean. We used to have a convertible for $5 million that was dealt with just over two years ago, and 12 out of the 13 loan note holders actually converted. If we then wrap up towards the last slide, because we do want to leave a little bit of time for Q&A. Outlook-wise, we've clearly come off the back of a very successful year. It was the best year in the history of the company with GBP 20 million revenue. But we've seen that same kind of traction continuing into half one. On the back of half one, as we've clearly presented the results to you, we also see very strong traction into the second half, and it gives us a lot of confidence to deliver the full year numbers for the full year. We talked about SecureVault. That allows us to capitalize on net new opportunities, not just in the existing client base, but also in potential prospect areas that we are already starting to explore. We're very close to our technology partners, our resellers, our distributors, and continue to expand. It was only last week we announced a new reseller relationship with Infinigate in the Netherlands. Clearly, it's a country I know reasonably well. We visited a couple of times. Why Infinigate? They focus very heavily on the cybersecurity space, which is good, but also one of the leading distributors of YubiKeys in the Netherlands. As you may recall from earlier presentations we've done through IMC is that when you issue or when an enterprise or a government body issues thousands of YubiKeys, you need to have a management platform. So we're very much driving that proposition jointly with Infinigate into the Dutch market, and we already start to see initial traction there. M&A-wise, it is extremely disciplined. Again, we've highlighted in previous updates that we have been in DD from time to time, but once you start lifting up the carpet tiles in somebody else's organization, it's not always the things that you like to find compared to what they presented to you. So in that case, yes, we incur some legal costs, and in some countries like the U.S., lawyers are expensive, but it's better to walk away from a deal that doesn't feel right or doesn't smell right than have to come back in 2 years' time and say, "Actually, the acquisition we did, didn't really work out." There are plenty of examples in the industry where acquisitions haven't worked out, and we can even stay pretty close to home for those. Final point is, I think we excel in delivering very good service to our clients. Allen was in the U.S. last week, not just to visit NIST, the standards body, but also to run our client advisory board in the U.S. where we had over 40 attendees. So we're extremely close to our clients. We get real good feedback from them. We have an NPS at 55, which not that long ago was around 20. So we continue to invest quite heavily. For those who attended the CMD, we had one of our partners, Guidehouse, talking about the importance of playing the long game, and that's exactly what we do. We play the long game with clients, even if that means that there is some short-term pain. But if you take the 5 to 10 to 15 to 20-year view on a client, that's where the lifetime value of the client comes in, and that's very much the game we're in. So final point is, short term, we are very much focused on half 2. We are extremely busy. Nitil and I are flying to the U.S. on Saturday to spend more time, not just with our colleagues, but also again with clients and partners and potential prospects. Medium-term, our ambitions have been very clearly outlined in the industry that we have got strong ambition to grow, and that is pretty much where we are. Jake, on that note, I am handing back to you. Perfect. That is great. Klaas, Allen, Nitil, thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab that is situated on the right-hand corner of your screen. Just while the company take a few moments to review those questions that were submitted already, I would just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard. Guys, as you can see, we have received a number of questions throughout your presentation this afternoon, and thank you to all of those on the call for taking the time to submit their questions. But guys, at this point, if I may just hand back to you just to read out those questions and give your responses where it is appropriate to do so, and if I pick up from you at the end, that would be great. Thank you. Right. We got quite a few questions in the Q&A box. Now I am in the very good position that I read the questions, and I decide who is going to answer them. This is actually quite good fun. Let me start with the first question from William C. "Great results." Thank you. "How much visibility do you have over half 2 license sales at this time?" William, I hope it has become clear that we got real good confidence in our pipeline, not just in the short term, but also medium-term pipeline is really, really good. So we have no concerns about the opportunity for license sales in the second half and indeed beyond. Next question is from Mark C. "Your advice that 80%-85% of the revenues comes from works in the U.S.A. How concerned are you about the possibility of tariffs the incoming president has threatened to impose on imports? We obviously discussed this. We are pretty well protected when it comes from a pricing perspective. We play in the top end of the market. If indeed there was a scenario where tariffs would be applied to our product range, then we seek to revise our pricing, and I do believe we have got the pricing power there. So I have no real concerns on those discussions around tariffs. Sorry, some of my questions have moved on. Other question from William C. Your September contract RNS mentioned half a million dollars major development order for a new government end client with deliverables in the second half. Is this still on track? Nitil, one for you. Yes. There you go. We are confident in our ability to deliver. That also comes back to the fact that we are releasing quarterly releases, and we have a very strong cadence in our deliverables. So, we would not make statements on RNSs if we did not feel we were capable of delivering. Marvin, question from you. What will be the full year impact of increased NIC on your cost base? Nitil, one for you. We have done a quick calculation for the changes in April, circa GBP 160,000-GBP 170,000 increased costs for FY 2026. What mitigation we are doing is no employee will be worse off. We were planning to increase the employer pension contributions from 6% to 7% next year. That will not happen now. The original ideal plan was to increase the graduate intake, probably by four to five people next year. We are probably going to trim that by one or two people as well, just to compensate for those costs. So there is going to be an impact, but we have got mitigating factors in play to make sure that it has a nil impact overall on the income statement. Other question from Marvin: Do you expect the level of professional services in half one to be sustainable or revert back to more historic levels going forward? I do not think they will necessarily go back to historic levels. Whether we can maintain half one, to be seen. But what we are seeing, as Nitil has indicated, is we are getting more pulled into the very large programs we are working on because ultimately, we are the subject matter experts. So we definitely expect, going forward, a very solid revenue stream on professional services. We are embedded in the large programs, so we fully expect that it will be a real good run rate on PS going forward. Sorry, I just need to skim through the questions again. There's one missed out. It's William C: Is there any particular reason? I am sorry, William. Is there any particular reason why half one license sales were weaker than the last two years? Again, we tried to highlight that it's pure a timing issue. There is nothing more sinister. This is procurement. We tried to indicate that in the RNS and in this presentation that our pipeline is strong. Our weighted pipeline is extremely mature. We fully expect the slight weaker half one license sales will be compensated in the second half. We don't see any real concerns there. Next question is a question from Marvin again: Can you give us a sense of the margin profile between your three revenue sources, licensing, PS, and recurring? Nitil, you want to take that one? Yeah. It's difficult to do recurring. Recurring is as a renewal. You've already committed the development cost and the testing environment already expensed. Then you've got a commission element on it. Renewals, the sales team get an element of commission. The PS, obviously, that's a cost of sale associated with that. The cost of sale is operating expenses on our income statement. If we're not making margins of 40%-50% of PS, we'd be disappointed. Then on license sales, why we focus on license sales is because they are highly accretive to us. Again, net of commission, you're looking at 90%, 95% gross profit on those. Quickly moving on because there's still quite a few questions, and we're trying to answer as many as we can. A question from Shakti: How do you compare with your competition? Alan, one for you. I don't want you to be left out. Thank you, Klaas. It depends on where we are on the product set. At the top end, the high assurance credential management, the competition, we are best in market there. There is no doubt about it. We can see that from the projects we have won over there against the competition and the independent reports such as KuppingerCole. At that very top end, the competition tends to have been either acquired by a large agency or lost focus, or it is a large sort of systems integrator who builds bespoke systems, and our customer base is very much looking for commercial off-the-shelf now because they have been stung by upgrade costs in the past. The third option there is some of our competition deliver this via appliances, but then the end customer does not have an open system. They cannot access the data. We are very much an open platform there, best of breed. As you move down the pyramid towards the mid-market, it is absolutely a more competitive space. Our technique there is to not try to compete with people who are bigger than us that we will not win against. For example, we are not going to try and compete with a Cisco Duo in that environment. We very much focused on how do we differentiate our product and how do we go after our sweet spots. For example, people who do not want to put their authentication in the cloud, they want to keep it closer to their own environment. We can fit very strongly there. Places have offline environments. Again, looking at the smaller market, how can we embed that into those managed service platform providers is another piece we are looking at. Thank you, Allen. Another question from Marvin: Do you see any risk on the Trump government that the new administration wants U.S. businesses to provide authentication services to U.S. government entities going forward? I think observation number one is Mr. Trump has been in office before, and it did not have any impact. We do not really expect any impact today. It is also one of the reasons why we do not sell direct in the U.S. market. We sit behind local, national, typically system integrators primes, and that is typically a very good position for us to be in. Another one from Marvin: How long are your typical contracts with government entities? What are the termination periods for those contracts? Let us keep this relatively straightforward. In the U.S., it is very much well known that they are funded on an annual basis and therefore are contracts on an annual basis. That does not mean that we do not provide pricing for the outer years. Typically, when we bid for contracts, we are being asked to bid for base year and option years, where option years can be option year number one, two, three, and four. So it could be anything up to five years. Sometimes we are being asked to price for anything up to option year number nine, i.e., you are bidding base plus nine, i.e., 10 years, but you do not get the contract for 10 years. If you look at the contracts, particularly our support and maintenance, there is no termination in as far as these contracts are paid annually upfront. We have a question from Guy next, is there any reason to question your relationship with the U.S. government given the recent election? Does the product become less valuable as you sell more and people get more familiar with your approach to software security? Hopefully answered the first question already. The second part is, does the product become less valuable? I actually think it becomes incredibly more valuable, and we've actually seen that happening in recent years. As we've won some of the real large programs within the U.S. federal agencies, that's very much the cue and the starting point for the other federal agencies to say, "Actually, if they can do it, we can do it." That's very much what we've seen after we won Department of State. Obviously, we announced the deal in December last year. They were pretty much waiting for Department of State to go into production before they went, and now we're seeing a stream of other opportunities coming into the market. I think it makes us more valuable rather than less valuable. Another question from Martin. Do you expect to be able to accelerate your sustainable revenue CAGR from historically low mid-teens to +20% plus going forward while keeping or increasing margins? Nitil, one for you. Thanks, Klaas. Yeah, it's a difficult one. We're cautious, as you can see. We are dependent on procurement cycles. That's why we focus on the support and maintenance and repeatable revenues as a key KPI because we know that we can rely on that. As licenses grow, then the support and maintenance grows, and as we shift to subscription, we'll have more visibility. The aim is, yes, to keep the momentum going. Can we guarantee that? No, we cannot because of the way the procurement cycle works. The idea is to, when Klaas has mentioned previously, we've been a very much a peak and trough entity. What we're trying to do is we're taking the peaks. We want to keep them, but we're trying to fill the troughs up with smaller, more sustainable deals, and therefore, we have more sustainable revenues, as you suggest. Can we keep the 20 plus CAGR? That's the aim that we want to keep on doing. Yes, we're trying to keep growing at that rate if we can. Right. We'll run through the next few questions. Hopefully, we can get to the end. A question from Steven. Given the possibility of increased trade barriers to the U.S., do you see benefit in a U.S. listing? I think if we went for a U.S. listing, I think I would have to find a new CFO because I don't think Nitil Patel would be up for quarterly reporting and the very high cost associated with that. On a more serious note, at this stage, I don't think that's even in the picture. We're very happy where we are at the moment. We do feel we've got enough differentiation in the market and pricing power to deal with that. Simon's got a question. Carahsoft seems to be very busy pushing a great many companies and webinars, but I haven't seen IGP mentioned. How is the relationship developing? Alan, you want to answer that one? Yeah. We are starting to appear in there now. We were recently on a stand with them at an event. We've recently published material on their website, and we are currently planning joint webinars with them. That is our focus in there will be increased over the coming months. Thank you. Simon, another question. How exceptional was last year's exceptional? Could something like that happen again? Absolutely, Simon. I don't see any reason why it wouldn't happen again. Well, I'm not going to tell you it will happen every quarter because we'd be in a very different space. But there's definitely opportunities in the market out there, and we're actively positioning. Alistair. Nitil Patel touched on timing for the big U.S. opportunity. Could you provide Oh, hang on one second. Could you provide a bit more detail on how this is expected to pan out and when? Let me answer on this one. We're not going to provide any detail around that other than we're actively involved in that POC. The POC is progressing well, but as we well know, with U.S. and U.S. federal procurement timings can be quite difficult to predict. Even if I looked into my crystal ball, I wouldn't even give an answer to my board. I'm not quite sure how I could give you a confident answer there, because there is no exact answer there other than we're very well engaged. We have a question from John. How is your own company cybersecurity process? Do you use your own products? Very good question. Following on, what might be the impact of a breach in a client organization relating to your product? Let's start with number one. Do you use your own products? Yes, we eat our own dog food, and we are very extremely well protected. We know that we recently had pen testing done, and they didn't really find anything worth of any note, and they couldn't get through our protection. There was a second part in that question. Following on, what might be the impact of a breach in a client organization relating to your products? Alan, one for you. The impact will be quite high. I'm glad to say in the 24 years I've been here, we've never had one. That's answered that question. Martin's got a question. Why has your share price dropped from the peak of 200p? To be totally honest, Martin, I don't know. I don't really focus on the share price. We focus on running the business. The share price is something that's happening around us, and there is clearly institutional pressures, there's retail pressure. The interesting bit we definitely know from the institutional side that they are very supportive in what we do. I'm afraid I haven't got an answer for you. John's got a question. You speak of your M&A activity, but presumably Intercede must be being looked at as a target. Are you able to comment? John, I think you know what the answer to that is. I can't comment on that. I'm not trying to be awkward, but we can only put information in the public domain that is shared with everyone else, Simon. Will Microsoft effectively start acting as a reseller? The answer is no to that. But as Allen has hopefully explained, we will be very closely technically integrated with the Entra platform, which will give us net new license opportunity through our distribution channel and resellers. Final question, Chris S. And then we're nearly over. We are out of time. But are there any opportunities to sell your products to the U.K. government? Absolutely, there are opportunities to sell in the U.K. government. We are actively doing so. Unfortunately, we can't really disclose any detail around those, but I can confirm that U.K. government absolutely uses our software. That is dealt with 24 questions in record time. Jake, back to you. Perfect, Klaas. That's great. Allen and Nitil as well, thank you very much indeed for being so generous with your time then addressing all of those questions that came in. But Klaas, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company. If I could please just ask you for a few closing comments to wrap up with, that'd be great. Yeah. Will do so. Thank you, Jake. On the back of our record year, we've maintained this momentum into the first half and believe we're in an extremely strong position to deliver the full year forecast and on the back of the strength and maturity of our current pipeline, as explained. Our offering remains very relevant, as witnessed by the daily stream of data breaches across the world. Allen has explained how we're positioning with Microsoft for an end-to-end integration with Microsoft Entra, but also highlighted how we now start to work with MSPs and MSSPs to bring strong authentication into the SMB market. So very much the low-end market that we traditionally haven't pursued. Finally, none of this is possible without our team of highly committed and loyal colleagues who day after day deliver the best code in our part of the industry. We aim to deliver continued revenue growth, both organically and inorganically, and profitability, and we strongly believe we are on track to deliver this for the full fiscal year. Please do take your time for your feedback on this session as we take this very, very seriously. Finally, thank you again for attending. We look forward to updating you all again, with IMC in June 2025. Perfect. Klaas, that's great. Thank you once again for updating investors this afternoon. Could I please ask investors not to close this session, as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of management team with Intercede Group PLC, we would like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all. Thank you.