Hello. Welcome everyone. Thank you for attending the Tribal 2024 Full Year Results. Let me start just with a brief reminder of who we are. We are a leading provider of education services to institutions around the world. We are split broadly into two separate businesses. We have a Student Information System business, SIS, as we refer to it as, which is a provider of leading software to manage the end-to-end student life cycle for institutions, universities, further education colleges in particularly the U.K., where we have a high market presence. Over 60% of universities run their student management system using Tribal software and in Australia, New Zealand, and in other countries around the world. Our other business is called Etio. It was rebranded in 2024 from its previous name of Education Services. This is a services business of highly skilled consultants.
I've put there to the left the relative size through the revenue for 2024 between our SIS business and our Etio business. Key messages for 2024, we had a positive year. I think one of the pleasing things is the underlying numbers were strong in terms of the growth of our key metrics and in particular, our cloud revenue growth of 25%, which really demonstrates the successful execution of our growth strategy around moving our customers into the Tribal Cloud. We have significant future opportunity to continue moving customers into the cloud. Also, it was pleasing to see the success of the initiatives of a program of transformation that we have been running, driving ARR, protecting our profit margins, and also to ensure we boost our cash flow. Our net debt improved then from GBP 7.2 million to GBP 3.2 million.
Before we hear more on those numbers from Diane, just an introduction just to the two businesses. Software information systems. This is really an orientation for our products. We have a core set of four Student Management System products. They manage the student life cycle really from admissions through to graduation. These four products were all acquired over the years, and they do broadly similar functions but in very different market segments. SITS is our core product, predominantly in the U.K. for higher education. Callista is for higher education exclusively in Australia. EBS is our student management system for further education colleges in the U.K. and Australia and in New Zealand predominantly. Maytas is our product for the apprenticeship life cycle. So those represent for those institutions the core platform of our products.
They are critical products, which is what makes them so sticky, and they are the core system of record, the single source of truth for student data within those universities. Our strategy around those is to move them into the Tribal Cloud and sell those products on the cloud to our customers and to modernize them by building out a full layer of APIs and connectors around it. That means the customers can build out, as Gartner puts it, their composable campus, their set of applications like accommodation, library systems, that will all feed into the single source of truth of their student management system platform. We have a number of products that customers can choose as part of that composable campus.
Some of those are built on Microsoft Dynamics platforms, as you can see to the bottom left of the circle, and others that we have either built ourselves or that we have acquired. Our other business is called Etio. Etio is a business of highly skilled education consultants. The business essentially inspects, it assesses, it improves the quality of delivery of education. This will include, for example, schools inspections, it could be teacher training, mentoring, leadership. We do financial benchmarking for institutions, and predominantly our customers here are government departments or government ministries in our core markets of the U.K., the Middle East, and the U.S. Onto our strategic direction. We have over the last three years or so, been running a program of transformation for our business. It is critical that we move the Tribal business to be a Software as a Service, a SaaS business.
That means it is all about the customer, all about retention, all about reducing the time to value for a customer, and all about improving the customer service through customer success and customer-centric engagement. As part of that, we are moving our customers onto a subscription pricing that allows a standardized or bundled product set that delivers greater value for customers, but critically for Tribal in a more consistent way across our customer base, so we can support our customers similarly across our base. Customer-centric is really about driving customer success and unlocking the barriers to customers being able to adopt the Tribal Cloud. Internally, we look at more operational efficiencies so we can improve our cloud margin, we improve the way we can do business more swiftly with customers, and also about our own internal business functions.
Our back office functions, we have created a single team called Global Business Services in Manila, in the Philippines, that manages much of our back office function. This transformation project continues. It will continue through 2025 and into 2026. We have some key metrics that are critical for a SaaS business. The GRR, the Gross Revenue Retention is at 93%. Our target is successful for anything over 90%, and GRR is a measure of the recurring revenue streams we had at the beginning of the year and the percentage of those that exist at the end of the year. When you add in then an upsell into that is taking those same customers at the beginning of the year, but looking at how much extra share of wallet we have gained in the year through upsells, then we get to 106%.
Where GRR is really about retention, NRR is about the ability to upsell, and over 100% means, of course, we are getting more from our existing customers, more share of wallet. Finally, we have our ARR, our Annual Recurring Revenue, which is more of a forward-looking indicator. This is adding on the new sales we make in year, and the new sales for customers will have an annual recurring revenue for the software when it is implemented. But of course, the revenue will not come through until a future point in time after we have actually implemented the software. Our ARR has also seen good growth in the year at GBP 57 million. Then if we look forward to what our potential areas of growth are, and there are three areas of growth, and I have put there the incremental opportunity. Important to point out that these numbers are not guaranteed.
They are the opportunities that we are driving for in the medium term, and they relate in the first instance, the journey to delivering as a service. This is about our cloud opportunity moving forward. We have currently over 30 of our customers in the Tribal Cloud, but that means we have 70 customers who are not yet in the cloud. We have a strategy for working with those customers so they can adopt the cloud. I think it is fair to say that the vast majority of customers expect to move into the cloud at a point in time in the future. We have a program to assist and drive those customers into the Tribal Cloud, and based upon the realized annual recurring revenue from existing customers, we would expect that opportunity to be around about GBP 20 million over the medium term.
Important to say there will be some customers maybe who do not want to go to the cloud. I think the competitor in that space, so to speak, is inertia, is the customers do not get round to it for some years. We need to work on trying to drive that time to value for customers and improve the cloud take-up. The second one, increased product penetration, is about our move to subscription pricing. We have rolled out a program for our customers to move to subscription pricing. We have agreed with the sector as a whole, its membership organization, about how we will do that. We have some customers who have started, who have already taken up our subscription pricing and moved to that, and we are working with significant number of others at the moment. We expect that take-up to continue through 2025.
Finally, the expanded market, which really talks about new customers. In a year, we may get one or potentially two new large customers coming into our Higher Education business. There are limited numbers of opportunities, but each opportunity we win can be fairly significant. Within our EBS product, we also win a number in each year. We would expect GBP 1 million to GBP 2 million of revenue each year over the midterm. That equates to GBP 5 million to GBP 10 million of potential opportunity. These three areas are the areas that we are focusing our sales and business development efforts on as we move forward. With that, I will pass over to Diane to talk more about the specifics of our financial numbers.
Thank you, Mark. Overall, we have had a really positive year with a strong performance in our core SIS business on both revenues and margin. That is offset by weak results in Etio. To start with a summary of our key financial metrics, revenue grew 6% to GBP 90 million, driven by our core software products, in particular Foundation Cloud, which rose 25% to GBP 13 million. ARR grew 6.5% to GBP 57 million, driven by a strong 9% growth in our core products, offset by the expected decline in our non-core areas. Adjusted EBITDA is up 17.8% to GBP 16.7 million, driven by increased revenues, improved cloud efficiencies, and headcount reductions across the business. Cash adjusted EBITDA is up 114% to GBP 12.2 million. This flows from the increases in EBITDA and significantly lower capitalized product development spend, which is down 48% to GBP 4.4 million.
Profit before tax is slightly lower year-on-year at GBP 5.9 million. Increased EBITDA was offset by higher exceptional costs, mainly caused by a GBP 3 million charge, previously announced Nanyang Technological University settlement. Adjusted basic earnings per share has risen to 4.7p, and net debt has seen a really significant improvement to GBP 3.2 million from GBP 7.2 million in the prior year, driven by continued high cash conversion of 101.5%, higher revenues, and our continued cost reduction programs. The board is proposing a final dividend for 2024 of 0.65p, which is consistent with the prior year. This next slide gives a high-level overview of our two business segments, and both will be explained in more detail on later slides.
Our SIS business had a solid revenue growth of 7.2% to GBP 72.7 million, and this is driven by the 9.5% growth in our core revenues, with a slight increase in margin percentage to 37.9%. However, our Etio business was impacted by a delay in the sales pipeline due to the U.K. and U.S. elections, with revenues only slightly increasing. However, the operating margin drops to 3.2% due to lower margin contracts and investments to support our longer-term growth. Those investments focused on our business development teams and those marketing costs are establishing the single global unified brand that Mark was talking about earlier. Group EBITDA has increased 17.8% to GBP 16.7 million. Given the higher SIS margin and the lower central overheads and Forex charges, and they declined by GBP 2 million.
Those central overheads have benefited from our continued push towards standardizing processes across the group and utilizing the Global Business Services function, as Mark mentioned, in the Philippines, and that more than offsets our inflationary pressures. Also, the prior year included GBP 1 million of one-off Nanyang Technological University costs. It is worth noting that for 2025, there is an increase to employees NI, which will have a GBP 0.5 million impact. The next slide focuses on the revenue and margin performance of our SIS business. From the table on the left, we can see that revenue has increased by GBP 4.9 million to GBP 72.7 million, and operating margin has increased GBP 2.2 million to GBP 27.6 million. Our GRR was at 93%, which is up two percentage points from the prior year. The metrics being impacted by the completion of our non-core Australian contract with Department of Education and continuing churn in our non-core storage product.
If you exclude those items, our core underlying GRR is running at an excellent 96%, and that demonstrates the stickiness of our core product. The reported GRR is therefore likely to improve going forward. NRR at 106% is up four percentage points from the prior year, and that highlights the ability to upsell to our existing customers, in particular migration to our on-premise customers into the cloud. The software and services pipeline includes all the revenues of our core Foundation SMS products, such as SITS, Callista, EBS, and also our cloud-native products such as Tribal Engage and Technicians. These have performed well in the year, and you can see they have increased 8.3%, mainly driven by uploads to our existing base. Foundation Cloud revenues, in particular, have grown strongly at 25.2% to GBP 13 million, and we have successfully moved six HE customers during the year into the cloud.
SIS margin is running at a steady 37.9%. However, it is worth mentioning the prior year was boosted by 2.5 percentage points due to the release of an onerous contract provision, as our underlying margin has actually increased significantly. That is due to the sustained cost reduction program, and it has reduced our SIS headcount by 9% over the year, as well as focusing on our cloud cost reductions, and we have also gained increasing scale as we have grown our cloud revenues. Other software and services is continuing to reduce over time, as anticipated. Within 2024, our three major Australian non-core contracts contributed GBP 5 million of revenue, and this is expected to drop to GBP 2 million in 2025.
As noted, the growth of cloud is a key strategic direction for us, and the business case for customers going to the cloud, to the Tribal Cloud is significant. Fundamentally, it is around business risk, concern about ransomware attacks, cyberattacks, which are frequent in the higher education sector. It is also about the customers being able to retain internal expertise around SITS, but also around cloud and cloud architectures. Over time, also, if they go to the cloud, they can simplify their systems. They can reduce technical debt as part of the optimization program that we run, and that will over time reduce costs. It is a good reason for a customer to move. And I think from Tribal's perspective, we have now achieved a depth of expertise in cloud that universities really can not reach. We have over 100 consultants.
We have seven or more years expertise in this, and we have seen our margins increase as well through our efficiency, through our scalability. So the offering out to customers in terms of risk mitigation is significant. We also have future opportunities. Our other product, for example, Callista in Australia, is not yet in the cloud. We are working on cloud-enabling that product, which will be probably in 2026. And indeed, what we see is an increasing number of further education colleges also desiring to go into the cloud, and over time we will move our EBS product into the cloud. That is a little bit further in the future and the revenue opportunities are lower, but it really is indicative of the shift of institutions into absolutely wanting their student management systems, indeed most of their core systems, to be delivered in the cloud.
It does take time to move customers there, and they have to build their own business case, but the opportunity for us and our ability to deliver is, I think, strong and deep.
Next slide focuses on the ARR of us as business. We see that SITS ARR has increased by 6.5% to GBP 57 million, with our core business running at 9%. Of the GBP 4.5 million increased core ARR, GBP 1 million is from new customer wins and new cloud migration deals. Within the year, we had one new SITS customer, SOAS University of London, and one new cloud migration deal, the Institute of Tourism Studies in Malta. It was a particularly strong year for EBS, with seven new customer sales. The remaining GBP 3.5 million of ARR comes from uplifts across our existing customers and across all of our product ranges. Other software and services is now running at GBP 2.3 million, and that's now had the removal of the last major Australian legacy contract for the British Council.
From this point onwards, the rate of decline will slow considerably.
The nature of the sector is such that there are not a huge amount of new tender opportunities in the year. But we won the SOAS University of London, as we said. That's a key win for us. Not only is there significant increase in ARR that comes out of those new sales, it also does give us an opportunity to measure our product against competitors and the progress we're making, because it was, and these are open tenders between us and the competition. To continue the high win rates that we have previously enjoyed is important to us in terms of measuring the nature of us being a leading provider of SMS systems to the sector. We also won a number of new opportunities within EBS, within the further education sector.
North East Scotland College, NESCol, was an important win in that sector for us. EBS is strong in England, it's strong in Wales. It has all of the colleges in Northern Ireland. But historically, we've not had a presence in EBS in Scotland because of the challenges around building regulatory compliance into your product. Winning this opportunity in Scotland has enabled us then to fund the regulatory compliance requirements into the software, and that then gives us a platform to then push into further colleges within Scotland. That's a key win in terms of EBS. For existing customers, University of Exeter is an extremely important customer for us. They have moved from being a support and maintenance customer into a subscription customer. We've signed our subscription uplift with University of Exeter. As a result of that, they have taken more of our products.
They've taken our Semestry timetabling product. They've taken our Student Support & Wellbeing product as part of the bundle of products they implement. They also moved into the Tribal Cloud with one of the most successful projects of migration that we've had. It took only six months to migrate what was a complex project into the public cloud. Exeter have gone on that journey with us of partnership, which is an exemplar for us that we want to roll out to other customers. UCL is an example of a university that has invested in our Tribal Dynamics Student Support & Wellbeing product, and that's a significant project for them. It's a significant project for us, and that too is a springboard to take our Dynamics product further into our customer base.
Moving on to our product strategy. Our investment in our cloud-native products peaked in 2022, as you can see from the graph on the left-hand side, and it's now continuing to decline in line with our product strategy. Overall, product development has declined 16% year-on-year, and capitalized product development has almost halved to GBP 4.4 million. The net book value of our built software IP now stands at GBP 45 million. As our products become available to the general market, our costs will naturally increase with net EBITDA as the teams move their focus towards maintaining and supporting the wider range of live products. Margins will then improve over time as these newer products gain scale. With our wider range of products, and as demonstrated by our 106% NRR, we have the ability to drive cross-sell revenues across our entire product range.
This is made easier given the new bundled subscription model that Mark discussed. Our key focus for this year is on the development of our new admissions product. Mark will now talk about some of the opportunities.
Yes. Firstly, why is the new admissions product important? The admissions for universities has become more and more competitive. Many of you will be aware of the challenges around the recruitment of international students, where there are fewer international student visas being given out, both in the U.K. and Australia. It makes for a more competitive market, particularly with the recruiting the non-selective universities. This is a matter of the revenue for the universities, right? Traditional student management systems manage the intake of students through the central UCAS system in the U.K. What universities need moving forward is an admissions system that's going to help them reach out to international students and bring more international students to apply to their universities, and that means being able to turn around the applications more quickly, more efficiently, scale their admissions.
A product that is written natively in the cloud, as our Tribal Admissions is, that can take advantage of cloud innovative technologies, is one that provides more efficiency, more operational productivity for customers. That's what Tribal Admissions will do. We are running through the development of it. We will expect to roll it out to our customers towards the end of 2025 and into 2026. We have an ongoing pilot that has been run in Australia with a university there, Edith Cowan University, and that's been run successfully. A key factor about the admissions, not only is it natively written in the cloud, it is a standalone product. That plugs into SITS.
In future, it'll plug into Callista, and after that, it can then plug into any student management system, which gives us the ability to go and sell to any customer that is looking for an admissions system. I think a key point, I guess, to make is that the system of admissions is critical, and it takes some time to roll out. Although we'll start rolling it out to our customers at the end of this year, it takes a customer generally two academic periods in which to fully implement it. This is a longer-term story for us, but the potential, we feel, is very exciting.
Moving on to Etio. Etio revenues increased slightly to GBP 17.3 million. As I mentioned, we saw a much more challenging market environment in 2024 across all of our key markets, in particular with the U.K. and the U.S. elections. The growth in our school inspections offset a reduction in the surveys and benchmarking, and that's due to the seasonality of the surveys business, in which most institutions participate every other year. The revenue from school inspections increased by 5% to GBP 14.8 million, driven by contracts in the Middle East, particularly a teacher training project in the Emirates. Adjusted operating profit in Etio decreased by 77% to GBP 0.6 million. This is largely due to a mix more weighted to larger lower-margin contracts and investments in the business to support our long-term growth. There have been some really significant changes at Etio over the year.
We've completed a strategic review of the overall business. We've rebranded as Etio, the single global brand, and we have now separated it from the SIS side to create a standalone business entity. We strengthened the operational management team. We've driven a growth agenda, and GBP 0.6 million of that investment is to do with the business development areas and covering the marketing costs of our new brand name.
The Etio business, we feel, has a strength and depth to it now that puts it in a strong position to take advantage of the opportunities that come in its core markets of the U.K., the U.S., and the Middle East. Having said that, there were challenging conditions last year, economically and politically in all three of those core markets, and it will take time for all that to change. What we see is there are a lot of opportunities. We have a good pipeline of opportunities, but those opportunities are perhaps smaller than we might have expected, and the timing of when the tender for those opportunities comes out is currently uncertain. We expect an improved performance in 2024, but perhaps not back to the levels that we've seen in previous years.
I think H1, the first half, will be a slower start, and it will be really towards the middle of the year that we understand how the market conditions are shaping up. I think it's important, though, to understand that actually when those tenders come out, we feel that the business is in a very strong position to have a high win rate for those opportunities and the longer-term prospects for Etio are strong.
Moving on to cash flow. As you can see, we significantly improved year-on-year, and we generated GBP 7.3 million of free cash flow, which is GBP 8.7 million higher than the prior year. Cash from operating activities has increased substantially. That's from a combination of a high cash conversion ratio of almost 102%. Increased revenues, combined with a cost reduction program and operational efficiency across the base. Our overall FTE numbers reduced by 41 to 867, and in particular, our SIS FTE was down 9% by 59 heads. This means that overall payroll costs were down by GBP 2.7 million. It's notable that the prior year was impacted by GBP 3.7 million of cash outflows from the Nanyang Technological University project, and in 2024, cash exceptionals include a GBP 1.4 million payment for the Nanyang Technological University stipend, and a further GBP 1.7 million will be paid in 2025.
With a material reduction in our capitalized product development spend, down to GBP 4.4 million, which all led to an improved net debt position of GBP 3.2 million at year-end. Looking forward, we have a revolving credit facility of GBP 20 million, which is available to be used, and a further GBP 5 million accordion. In summary, we've successfully grown our core ARR with a CAGR of 10% since 2021. With the new bundle subscription model, we've got a clear plan to provide increased ARR whilst providing even better value to our customers. We are continually improving our cloud infrastructure whilst improving cost efficiency and have incentives to help our customers transition from on-premise to the cloud. For our new Tribal Admissions product, we're engaging with our customer base to identify our first U.K. customers to join our early adopter program in the second half of this year.
The challenges facing the sector, funding issues and the declining international student numbers have been well documented, both in the U.K. and in Australia. Tribal has a subscription pricing and cloud model that ensures that we have ongoing revenues coming from the sector. I think in terms of new sales, this is potentially an opportunity for us. There will be many customers who have not invested in technologies that ultimately will reduce the cost and make their institutions more efficient. For many, this may be the opportunity where they do invest in products such as moving SITS into the cloud, in over time taking the Admissions product because that will drive their efficiency and will actually help with some of their funding challenges that they have. This may be an opportunity for us.
We are trading positively in H1 2025, and the first two months of the year have commenced in line with our broad expectations. Finally, why invest in Tribal? We are EdTech experts. We are a leading provider in our markets. We have just about two-thirds of the market share in the U.K., significant market shares in our other markets. These are critical systems. They are very sticky. They need trust, they need resilience, they need reliance. All of which Tribal, as an established, trusted global brand, can deliver. There is opportunity for more growing digital transformation, and as we have talked about, more opportunities to get greater share of wallet from existing customers through the potential for growing their subscription pricing to move our existing customers into the cloud. There are also new expansion opportunities. Overall, we have a focused, energized team.
We have positive relationships with our customers, and we have had positive trading so far in 2025. Thank you all for attending. Thank you.