Thank you, everyone, for joining us today. I'm Stephen Kowal, the Chief Executive Officer of Atturra Limited. Also joining me today is Herb To, the Chief Financial Officer, and you'll hear from him later. Today, I'm going to walk you through both our business and our FY 2025 results. It's really important that you take the information in this presentation in conjunction with the accounts we released earlier today for ASX. It is important that you review the presentation pack, understanding disclosure on this page. Let me start with the agenda. Firstly, we're going to do the results summary, followed by the financial performance, then business update, then outlook, followed by Q&A. At the end of the pack, we do actually have some additional details that I will not cover, but it's available for your review.
Before I jump into the numbers, I want to give a brief update on the business and where we are. For those long-term investors, you'll note that our overall vision and strategy is unchanged, and our messaging is consistent since our IPO in December 2021. Our vision is simple, and it remains unchanged. It is to be Australia's leading advisory and IT solutions provider. On the right, you can see this vision is enabled both through an industry and technology strategy. At a high level, the industry strategy is about having strong industry specializations, allowing the development of industry solutions and clear sales differentiation, which leads to low client churn and more predictable revenue streams. Our technology strategy, at a summary level, is about choosing technologies and specializations in which we can be market leaders.
In FY 2025, we entered the enterprise software market through the acquisition of Delray, a specialist SAP provider. The other core nuance of our vision is to focus on being the leading IT solutions provider. This is slightly different from an IT services provider. The important difference is that solutions are more than services. It's about building Atturra-specific solutions aligned to our selected technologies and industries. This provides Atturra secure long-term revenue streams and the ability to achieve higher overall margins. FY 2025 saw that solution vision start to come to fruition with the launch of several Atturra offerings, including Atturra Cloud Platform for Boomi (ACP), Scalarium, our student information management system, and several ERP accelerators primarily focused around our manufacturing clients. Although only very early days, our IP-related revenue, excluding associated services, already exceeds $1 million and is expected to grow at more than 100% for the next few years.
Importantly for Atturra, not only do our IP offerings provide a stable source of income, they actually drag through significant services-related revenue. On this slide, you can see that Atturra surpassed 1,200 staff in FY 2025. Although not a direct business measure, it does reinforce my comments earlier this year that as a business, we have reached a scale that now means we can service more than the lead market, but also the enterprise market. The end of the year with over $90 million in cash and equivalents, giving Atturra significant strategic flexibility to execute on our growth strategy. Next, you'll see that Atturra now has offices in several countries, including new to FY 2025, the U.S. It is worth highlighting, despite this overseas presence, that we are still focused primarily on the ANZ region, and the Asia presence is primarily around sales enablement.
In FY 2025, we also achieved scale in many parts of our business. One call-out is our Atturra Managed Cloud business, which now exceeds $30 million in revenue, making it a significant local player in the cloud ecosystem. I will talk about that later in this presentation. Achieving scale is a critical milestone for Atturra, not only because of the ability to service larger clients, but it also means that we continue to grow, we'll get the benefits from improved operating leverage. This improved operating leverage, combined with a renewed focus on better capital management, will see a significant improvement in EPS over the next few years. Lastly, Atturra had solid cash flow from operations in FY 2025, achieving $14.7 million. Herb will provide more details on this later. Let me move on.
Despite the tough market around government, revenue increased by 24% on prior comparable period, PCP, to $300.6 million, and the underlying EBITDA increased from 24%, PCP, to $31.5 million. In addition, we had a significant increase in our predictable revenue, with recurring revenue increasing to 31% from 29% and long-term client revenue to 47% from 29%. For those new to Atturra, recurring revenue is our revenue locked in with long-term contracts, and long-term client revenue is revenue that's consistently procured by our clients for three or more years, but not necessarily under long-term contracts. Atturra will be reviewing these metrics as we move into FY 2026 to allow more consistent comparison with other technology companies. In addition to the financial objectives, there are several key objectives we have announced for the market, either in the FY 2024 results or at the time of our IPO.
I'd like to cover a few of them off now. Firstly, in FY 2024, we highlighted continuing investment in managed services, and in particular, additional sales capability for FY 2026 and '27. We actually brought part of this investment forward in the second half of FY 2025 in line with the acquisition of Plan B, a managed services provider in New Zealand, and have accelerated this investment in FY 2026 by investing more than $2 million in a strategic sales function. The second objective we mentioned in FY 2024 was to invest in Atturra IP solutions, and you'll hear more about that later. We have made substantial progress in FY 2025, most notably with the Scalarium product, which ended FY 2025 with two clients, and since the end of the year, we've signed an additional two schools, and I'll talk to this later in the presentation.
The third objective we listed in FY 2024 was a selected overseas expansion, where we're considered to be market leaders. In ANZ, we are the undisputed leader in Boomi, and in FY 2025 we acquired Kite Pipe in the U.S., a small U.S.-based Boomi provider. Our strategy with Kite Pipe is to focus on U.S. growth, and we'll continually reinvest U.S. earnings into our U.S. Boomi business over the next few years until we achieve a scale operation. The last two objectives on the slide are from our IPO. Both objectives, which we have largely achieved or overachieved. Firstly, our predictable revenue, which is now at 78%, is significantly above the original objective of 66%. Secondly, in terms of Blue Chip strategic partnership, Atturra continues to be the leading partner for many of our selected technologies, and this is reflected by a list of our awards you'll see later in this presentation.
At the start of FY 2025, Atturra also flagged to market a desire to enter into the ServiceNow and SAP market, and I'm pleased to say we achieved this. During FY 2025, Atturra organically became a partner with ServiceNow and, through the acquisition of Delray, also became an SAP partner. Let's move to our business philosophy. This is simple and unchanged. We target a growth rate for revenue of above 20%, with a mix of organic or inorganic growth. Importantly, we focus on delivering a minimum underlying EBITDA of 10.5% and investing in any overperformance backed in the business. I will share some of the key investments for this financial year later in the presentation. Let's move on to finances. Overall, Atturra is guiding that we will reach our expected 20% growth.
However, in saying that, Atturra did have a disappointing FY 2025 in terms of organic growth, primarily linked to challenges around the federal and defence markets. Atturra's organic growth was around 7%. However, the majority of growth was offset by deteriorating work climate in Canberra and federal markets. As you can see in this grid, in FY 2025, $54.6 million of our growth was acquired revenue, resulting from acquisitions made in FY 2024 and FY 2025. Excluding our Canberra and federal-related business, we had $16.6 million of organic growth. However, the majority of this was offset by a negative impact of $13.9 million in Canberra-related businesses. Looking forward, Atturra anticipates the worst-case scenario for Canberra and related markets is a softening of a maximum of $10 million in FY 2026 and $9 million in FY 2027.
Overall organic growth is anticipated to be in the range of 5%- 10% over FY 2026, which will more than offset any Canberra-related risks. We'll now move on to the finances with Herb.
Thank you, Stephen. Hello, everyone. My name is Herb To. I'm the Chief Financial Officer for Atturra. I'll be presenting some more detail around the company's financial results for the 12 months ended 30 June 2025. This first slide details underlying EBITDA. EBITDA, or adjusted NPAT, adds back client relationship intangible amortization and acquired software amortization. Underlying EBITDA also adds back specific non-recurring items. This metric provides the underlying profitability of the group, excluding the amortization impact of non-cash charges of acquired intangibles and specific non-recurring items. The underlying EBITDA of the business of $19.6 million has increased 20% on PCP. The next slide here highlights the key profit and loss results. It compares our 12-month performance up to 30 June 2025 with a 12-month period ended 30 June 2024. As Stephen has highlighted, we achieved 24% revenue growth on revenue of $300.6 million.
The quality of the business has remained stable with a gross margin percentage of 34%, an increase from 32% on PCP. We've highlighted underlying EBITDA as an important measure of the company's performance. The underlying EBITDA result of the business has improved by 24% to $31.5 million. To understand our underlying EBITDA, we exclude non-recurring expenses in revenue. In FY 2025, we've added back share-based payments, M&A-related transaction and retention costs, capital raising costs, and acquisition-related integration costs. For the comparable period in FY 2024, we added back share-based payments, gain on bargain purchase, and M&A-related transaction and retention costs. The underlying EBITDA margin of 10.5% is consistent with the company's investment philosophy. Earnings per share decreased by 28% to $0.026. This is due largely in part to the capital raising that we did during FY 2025, which had a very diluted effect on the number of shares outstanding.
However, EPSA, or adjusted EPS, or adjusted earnings per share is the earnings per share of Atturra, excluding the amortization of intangible assets. Including the updated issues of outstanding shares, EPSA calculated using NPAT declined only slightly by 7% to $0.056. The next slide is a summary balance sheet. It compares balances at the end of the current 12 months with the balances at 30 June 2024, the end of FY 2024. As Stephen mentioned, the company has a very strong balance sheet position. Our cash balance is $91.6 million, an increase of 51% and $31 million from 12 months ago. We have net tangible assets of $46.7 million, an increase of $25.2 million from the same period last year. We have working capital of $65.8 million, an increase of $35.5 million from 12 months ago.
Obviously, a major driver of this increase was the capital raise completed in January, where we raised $71.4 million with net funds received after costs being $69.2 million. This cash flow slide is a summary of the sources and applications of funds, that is, the cash flow of the business. It compares cash flow from the current period to the 12 months ended 30 June 2024. As mentioned, our cash position has improved by $31 million from $60.6 million to $91.6 million. Overall inflows and outflows in the period include operational cash flow of $14.7 million, an improvement of $2.9 million to PCP. Seasonality and time factors affect operational cash flow and tend to be slightly volatile and may show large movements from period to period. Cash outflows include $47.2 million in investments in subsidiaries.
This is comprised of subsidiaries acquired in FY 2025 of $40.7 million plus earnout payments made to previously acquired businesses of $6.5 million. This compares with the investment in subsidiaries made in FY 2024 of $49 million. In the current period, cash inflows include $4.7 million of drawdown of our existing loan facility to fund our activity in the period. The net cash from the capital raise was $69.2 million, as mentioned before, and this includes the fees paid of $2.2 million. There is a net increase in cash outflow regarding our lease payments, primarily due to an increase in office capacity associated with the Excent, Chrome Consulting, ComActivity, Plan B, and Kite Pipe acquisitions that did not exist for the full period in FY 2024. There was a dividend cash payment in FY 2024 that reflects payment to a non-controlling interest.
At the time, we paid an 80% owned subsidiary a dividend to all shareholders, and the $265,000 dividend paid represents the amount paid to non-controlling interest, so it moves outside the consolidated entity. This dividend payment did not occur in FY 2025. Now I'll hand back to Stephen, and we'll be pleased to answer any questions in the Q&A later in this session.
Thank you, Herb. Let's start with the hot topic, AI. If you ask any client or vendor what's on top of their minds, the answer is AI, and I'm sure you're all reading it in the paper and seeing it everywhere in these meetings. At Atturra, we're committed to supporting leading technologies that enable our clients to scale and innovate with confidence. As AI moves from pilot projects to enterprise-wide deployment, we're seeing a clear shift in IT budgets towards growth investments, particularly in cloud, infrastructure, and data modernization. If you look at those offerings that Atturra does, that's our specializations. Our strong partnerships with Boomi and Microsoft, for example, allow us to deliver powerful integration platforms and cloud-native AI services that meet the needs of enterprise workloads.
These technologies are foundational for enabling real-time analytics, automation, and digital resilience, which are now a top priority for our clients and CIOs. Strategic partnerships are central to our belief to deliver differentiated value in this fast-moving landscape, and you'll recall that even from IPO, it's always been around that strategic partnership for us. As companies consolidate vendors to manage complexity and cost, our approach, which is partnering with best-of-breed providers, ensures that we remain agile and scalable with our technology partners, and we can extend those capabilities across cloud, security, and data platforms. If you think of our business model and those carriers, we're strong in all of them. That's kind of seen where the highest budget growth is according to industry analysts. By working closely with our partners, we help clients adopt AI responsibly and effectively.
Being industry-led, we also know that every industry faces unique challenges, and that's why we're focused on that tailored delivery of industry-specific solutions as AI becomes more autonomous, embedded in operations. Organizations need systems that are not only powerful but also compliant and trustworthy. Our deep domain expertise positions Atturra as a trusted provider, helping clients navigate complexity and unlock the full potential of AI. In addition to that, we are actively reviewing and adjusting our own internal operating model and adding AI capabilities to drive efficiencies across all parts of our business, and I'll touch on that later. If we're going back to talking about industry unique specific challenges, that was a great segue into our deep industry expertise. What you'll see in this slide is what I'll cover off our go-to-market strategy. For those who've known Atturra for a while, this is unchanged.
We have a very strong industry focus, and it's been consistent with the exception of adding resources last year since IPO. I'm not going to go into depth of each of the industries as there's significant information in the market already. However, I do want to do a few call-outs. Firstly, federal and defence. Despite the tough trading conditions around federal and defence, Atturra still has a significant presence, and a lot of our work is linked to long-term agreements. We still have over 300 security clearance staff and work with over 450 SMEs who are members of our defence network. Strategically, Atturra still sees significant upside in both federal and defence. Despite short to medium-term risks, over the long term, being a large sovereign provider will deliver significant benefits. The second industry I'll call out on this slide is manufacturing.
Atturra was already a leader in the manufacturing space in FY 2024, but with the acquisition of ComActivity, we've increased our footprint and now have over 100 clients. I believe manufacturing is an exciting long-term prospect with what we believe is a bipartisan political switch to more domestic manufacturing. We have a strong client base and the ability to upsell Atturra's services in this industry. We have also started to develop industry-specific solutions around our offerings to provide additional revenue streams. The last industry I'll call out on this slide is education. Education continues to be an exciting marketplace for Atturra, and in particular, our launch of Scalarium is very exciting and gaining significant interest in the sector. I'll talk about that more on the next slide. Let's talk about Atturra's key IP offerings. Scalarium is an Atturra-owned IP and has a cutting-edge student information system built in-house on Microsoft D365.
Scalarium in total will be 12 modules, which can be used as an entire integrated system or just selected modules as required. We set a target of having two schools in FY 2025 and achieved that. Since the end of FY 2025 until now, we've actually signed up an additional two schools, taking it to four. This is particularly exciting for Atturra as the full 12 modules are not available until either late this year or early 2026. We stated in July this year the goal for FY 2026 is to have six schools in FY 2026 and 20 schools in FY 2027. We appear to be well on track for this to be achieved. Also, in addition to this, we have a strong pipeline of over 50 schools and a proven economic model. As a result, we'll be increasing our investment in Scalarium in FY 2026, but I'll cover that off later.
The second major IP offering we did in FY 2025, Atturra launched ACP in FY 2025 and has over 35 clients. More than 20 of these are net new clients in FY 2025. The remaining are migrated from legacy Atturra Solutions. I'm very excited about the possibilities of our ACP. ACP is the umbrella brand we use for our fully managed software as a service offering. The first product we launched was Boomi ACP in FY 2025. Since Boomi ACP launched late last year, there's been a continuous stream of new clients between then and now. Even since the close of FY 2025 results date, we've signed an additional three clients. The progress of our overall IP offerings has already generated more than $1.1 million in recurring revenue, and this is forecast to grow over 100%. Importantly, in addition to our direct IP revenue, there are significant additional services revenue with most solutions sold.
For Atturra, our sales of our solutions have been a mix of new and existing clients, and IP revenue is at a significantly higher gross margin than services revenue. This slide talks about Atturra's managed cloud business. It's something I've only briefly touched on since its launch in FY 2023. Atturra has a managed cloud business offering a secure sovereign solution within Australia and New Zealand. Atturra managed cloud business is primarily a private cloud solution that does include revenue from public cloud providers, but that is less than 25% of the revenue. It does offer our clients a true seamless hybrid cloud solution. In addition, Atturra Cloud also provides a fully flexible GPU as a service offering. During FY 2025, Atturra Cloud skills have been acknowledged by joint press releases with NVIDIA and UX, where we set new benchmarks.
More recently, we've been awarded the Microsoft Solution Partner designation for private cloud. This signifies a partner's expertise in delivering and managing private cloud solutions. I just want to call out that this is a rare designation and puts Atturra in a very select group of companies globally. Atturra's cloud business, excluding the Atturra Cloud Platform for Boomi IP offerings I spoke about on the previous page, is now at a sustainable scale and has generated over $30 million in revenue for FY 2025 and is predicted to grow at more than double digits going forward. Atturra sees significant upside, both because our cloud business operates at high average gross margin in the rest of Atturra, but also because Atturra sees ongoing strong demand as a result of our benefits around sovereignty and security. Let's talk about awards. I'm very proud to have another year of being recognized in the industry.
I'm very proud of the team and what they've delivered, and this list is actually too long to go through here, but I will call out a few. I just spoke about it before. Cloud Service Provider of the Year by the Australian Cyber Awards. We also got an award for our Scalarium product through ARN, their Digital Transformation Award. There are two global awards as well: the Boomi AI Asian Hackathon recognition globally of Atturra's leading position and the QAD Gold Partner Award, another global award. In addition to these specific awards, you can see the ongoing leadership in many of our offerings, not only Boomi, but HP, Education Partner of the Year for five years, and Smartsheet again. I will say it again, I'm very proud of what the team has achieved, and these awards reflect the strategy of Atturra being the leader in the technologies it selects.
FY 2025 was an unusually busy year for acquisitions in Atturra, and the Atturra strategy is post-acquisition and the focus on keeping the people in the specializations and integrating those acquisitions on the HR side slowly into the Atturra way and culture. It's one of the key reasons that our acquisition strategy has a clear step to ensure close cultural alignment prior to any acquisition, and this is to ensure we don't lose the secret sauce that made our acquisition targets successful. However, we do believe in full systems integration to drive long-term synergies. This is done to ensure we have consistent systems and processes that are scalable. On each acquisition, Atturra clearly calls out the integration costs in our ASX announcement, and for FY 2026, we have $1.4 million of costs remaining to be spent on integration.
For completeness, we have included the cost related to Blue Connection as it is due to close shortly. The chart to the left shows each acquisition and the status of that integration. I'll move on to outlook. What's ahead for FY 2026? Atturra will continue to pursue our growth agenda and focus on integrating our acquisitions. However, there will be a noticeable shift towards better capital management and growing EPS for the next few years, while still growing the overall business. I will call out four specific items for FY 2026. Firstly, demand for IP solutions is significant, and we have proven commercial viability of several of them. In particular, the growing demand for Scalarium. Atturra will be increasing its investment in IP development in FY 2026 and will be capitalizing up to $2.5 million of development.
This is additional investment in our products in FY 2026, and any investment over this amount will continue to be expensed. Secondly, as mentioned before, Atturra has now reached scale, and there'll be more focus on better capital management and having a more efficient balance sheet and a continuous focus on EPS by the management team. Third, Atturra has made significant investments in large deals on strategic sales capability. Our investment will exceed $2.5 million in FY 2026. In FY 2025, some of this investment commenced due to three large deals in flight, one which unfortunately we lost, one that is currently cancelled or postponed by the client, and the third one we will not know the outcome until March next year. Fourth and not last, Atturra has increased its investment in AI and related automation to drive internal efficiencies to help deliver new business models and enhance our other delivery models.
I'm happy to take questions on that later as well. Thank you. I'll now move to Q&A.
Thank you, Stephen. As Stephen just said, we will now move to the Q&A session. If you wish to ask a question, please press Star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Jonathon Higgins at United Capital Partners. Go ahead.
Thanks, Danny, and thanks to the team. Great to see you guys exiting strongly for a year and also the good cash flows and some of the things that weren't explored in the pre-release. Just a couple from me. Firstly, obviously last night we had the announcement from you guys in regards to the Microsoft Partner strategy. You've also shared further information in regards to cloud and the ambitions there, which looks like it's well outpacing group growth. There's obviously a lot of interest in this side of the group. Can you sort of talk about the competitive landscape for where you guys sit with that new partner status and longer term what that might mean for the group?
Yeah, not a problem. Obviously, the new Microsoft Solution Partner designation is actually quite unique. As a matter of fact, we're first in Australia and there are very few globally. That kind of gives us specific access and benefits in that market, not just from a sales perspective, but from an engineering perspective, and kind of recognizes the qualifications. That combined with our cloud business, it is a competitive landscape, but there's definitely, you know, I think there was a stat put out by HP recently about high double-digit growth in that kind of hybrid and private cloud space. We see significant demand. Obviously, the recognition around our Microsoft capabilities, especially being such a successful cloud platform, yeah, it's pretty exciting for us going forward.
Understand and appreciate the extra disclosure as part of this result. Just a couple more from me. Maybe just context on the government and defence work. It's been sort of visible, not just for you guys, but for others in the space that that's been a headwind. It doesn't really feel like a huge amount is going to change. Can you give us an idea in terms of your FY 2026 expectations and how much of that of a headwind that could be or what you're assuming or how best to talk about, Stephen?
Yeah, we're assuming a bit of a headwind going into the year. We have mapped out worst-case scenarios where that's kind of where we see the worst case, $10 million for FY 2026 and $9 million for FY 2027. We've factored in, you know, probably half of that. We've factored a fair bit of a, I suppose, a flat to slightly negative market. If the market turns out to be better than that, then obviously that will drive over achievement.
I understand. Last one from me, you did speak in the outlook side in regards to the continued investment in AI. You know, like you guys have got implications probably both on the corporate side, but also on the client demand side. I was wondering where you see the opportunities and potentially the risk for Atturra moving forward. Thank you.
Obviously, one of the great benefits Atturra has is our massive data integration business. As far as I know, by far the largest data integration player with over 270 experts, and AI is all about the data. We see massive business opportunities. There are stats out there saying 75% of companies are looking at pilots and activities. That positions us well, given our position around data. In terms of threat, for us internally, we're running an AI program, which is really focused on operational efficiency and better customer outcome. We don't see it as a massive threat. We've just got to go through that change and make sure we can deliver more and more with less over time. To me, AI is a major shift in the market, but it is just another shift that you've got to manage through and make sure you're investing in.
Okay, thank you, Jonathan. There are no further questions in the queue, and that concludes the Q&A session. I will now hand back to Stephen for any closing remarks.
Thank you, Danny. Thank you everyone for attending. I appreciate your time and effort, and we'll speak to you at the half of the year.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.