Good morning, everyone, and welcome to the 2025 Annual General Meeting of Articore Group Limited. My name is Robin Mendelson, and I have the privilege of serving as your Chair. The Company Secretary has confirmed that we have a quorum, and now I declare the meeting open. Today's meeting is being conducted virtually, and shareholders and their proxies and the representatives can ask questions through the online platform and vote electronically when prompted. Should we experience any technical difficulties, I may need to pause or adjourn the meeting, and we will email you on how and when to rejoin the meeting. Joining me online today are my fellow directors, Non-Executive Directors Robin Low, Robert Sherwin, John Lewis, together with our Group CEO and Managing Director Vivek Kumar. We are also joined by representatives from Boardroom, our share registry, who will act as Returning Officer and Scrutineer for today's meeting.
Before we move to the formal items of business, I will begin with my Chair's address. Vivek Kumar will then provide a CEO update on performance and strategy. There will be an opportunity to ask questions after each item of business. Since the Board's renewal in June, we have acted decisively to stabilize the business and accelerate the turnaround already underway. We are encouraged by the progress made to date, while recognizing there is still more to do. Following the renewal, the Board has made a number of commitments to shareholders on our priorities for fiscal year 2026, which are highlighted on this slide, as well as the progress we have made to date. We remain focused on a clear, disciplined strategy aimed at delivering sustainable, long-term returns for shareholders. Our recent results, two consecutive profitable quarters, demonstrate the momentum building across the group.
The Board has engaged Citizens Capital Markets and Advisory to undertake a strategic review of the group's capital structure and value creation options. To strengthen the oversight and local insight, we are progressing the search for an additional independent Australian-based director. We are taking the time to ensure the appointee adds depth and value to the Board. We believe the alignment with shareholders is critical. To that end, all Non-Executive Directors have increased their shareholdings, and we have recalibrated executive performance-based incentives to strengthen alignment with shareholder outcomes. Finally, we are enhancing transparency through regular milestone reporting. Consistent with this commitment, we released the group's first quarter fiscal year 2026 results well ahead of today's meeting to enable shareholders' time to review our performance before voting. We have taken a close look at Articore's current position and future potential.
Articore operates two high-margin capital-light digital marketplaces, Redbubble and TeePublic, together with Dashry, our new SaaS storefront platform launched earlier this year. Collectively, these businesses place us at the forefront of the global creator economy. We are operating in a market with strong tailwinds. The global print-on-demand sector is valued at more than $15 billion and is forecast to grow by about 26% annually over the next decade. As consumer demand continues to shift towards personalized made-to-order products, Articore is exceptionally well placed to capture this growth and continue building long-term value for shareholders. Articore holds a leading position in this space, underpinned by one of the world's largest and continually expanding design ecosystems. In FY2025 alone on Articore's marketplaces, millions of designs were sold to millions of customers, a powerful demonstration of the scale of our community and the value we deliver to both creators and their customers.
I will now hand over to our Group CEO and Managing Director, Vivek Kumar, who will provide further detail on the group's operational performance and outlook.
Thank you, Robin. Good morning, everyone, and thank you for joining us. It's great to be here and to have the opportunity to share the progress we have made over the past year and where we are headed. One thing that drew me to Articore and what gets me excited is the power of the flywheel. This model underpins our growth, profitability, and scalability. For shareholders who may not be as familiar with the group, here is a quick overview of how it works. Creators upload their designs to our marketplaces and sell products printed with those designs to their customers. When a customer purchases from a creator, the product is printed on demand by a third-party fulfiller who then ships it to the customer. We take a service fee for each sale.
Creators only earn when they sell, which means our marketplaces benefit from a zero-cost, ever-expanding supply of high-quality user-generated designs. The more creators we attract, the more unique content they upload to our marketplaces. That content draws in more customers who engage and purchase, which in turn attracts even more creators. This reinforcing cycle drives the marketplace flywheel faster. As the marketplace flywheel directs greater volume to our community of third-party fulfillers, they achieve scale efficiencies that reduce unit costs and improve our margins. Stronger margin gives us the ability to reinvest in customer acquisition for creators, which again accelerates the flywheel. The entire cycle reinforces itself. That's the power of the flywheel. Articore is built on four key competitive advantages that make our business model defensible and scalable.
First, our unique asset of more than 3 million creators sell on our platform, and over 75 million designs are available to their customers. Second, scale economies. We have created one of the world's leading and most resilient print-on-demand fulfillment networks with over 40 third-party fulfillers located around the globe. We are able to increase or reduce volume to different fulfillers to enhance customer satisfaction through faster shipping times and lower costs. Third, strong network effects. The more creators and their customers participating in our marketplaces, the more attractive the platform becomes for new participants. Fourth, process power. Our global team of just 200 people delivers nearly $1.8 million in revenue per employee, a testament to our efficiency and capability. Articore continues to trade at a significant discount to peers despite our improving performance. Our enterprise value-to-gross profit multiple is 0.3 times compared with the peer median of 3.5 x.
Recognizing this disconnect in valuation, the board approved an on-market share buyback as a clear signal of confidence in our turnaround, our improved cash generation, and belief in the long-term potential of the business. A big part of what makes our business so efficient is how our cash cycle works. Unlike traditional e-commerce retailers, a product only gets produced after a customer places an order. We receive the entire customer payment upfront and route payments to creators and fulfillers later, which gives us an average 20-day positive cash flow. Because we are paid upfront and hold no inventory, our marketplaces scale without requiring additional investment. In October 2024, we announced a transformative change for the group: the consolidation of our two marketplaces under a single leadership team.
This integration was rolled out progressively through the remainder of the year with a clear goal to drive cost synergies, sharpen execution, and deepen our focus on profitable growth. The results of this change were evident in our fourth quarter performance, the strongest in five years. We delivered a record gross profit margin and a significant reduction in operating expenses, clear evidence that our turnaround strategy is gaining real momentum. We have issued strong FY2026 guidance with an expected EBIT of $2 million - $8 million, representing at least a $12 million improvement on FY2025. We are also guiding to underlying cash flow of $5 million to $12 million. Last week, we released our first quarter FY2026 results, which reinforced the step change in group's performance. We have now delivered back-to-back profitable quarters with positive cash flow. Marketplace revenue decline continues to stabilize.
At the same time, we are seeing significant margin expansion across the group. Gross profit increased 5%, with gross profit margin up 570 basis points to 50.6%. GPAPA was up 11%, and the GPAPA margin expanded by 480 basis points to 30.2%. We delivered EBIT of $0.8 million, marking our first profitable Q1 in four years, a $6.5 million improvement on the prior corresponding period. The benefits of our consolidation efforts and disciplined cost management are clear on this slide. On the left, you can see the strong uplift in gross profit and GPAPA margins from the second half of FY2025, improvements we believe are sustainable going forward. On the right, our operating expenditure has reduced by 29% between FY2023 and FY2025, reflecting the success of strong cost discipline, organizational restructure, and the consolidation of our marketplaces.
These decisive actions have eliminated inefficiencies, improved operating leverage, and positioned us well to deliver positive EBIT in FY2026. This slide shows how AI is being used across the Articore flywheel, from detecting fraud patterns and automating content moderation to powering on-site search and optimizing customer support. Today, 83% of customer interactions are handled through AI chat, helping us deliver faster, more consistent service at scale. We are also using AI in marketing and product discovery, enabling more personalized and effective engagement with customers. AI is deeply embedded in how we operate, creating real measurable advantages that enhance productivity, reduce costs, and ultimately support our core goal of returning to profitable revenue growth. As we look ahead, we are focused on driving growth across our two core marketplaces, Redbubble and TeePublic, while also investing in Dashry, our new SaaS offering.
We firmly believe both core businesses can deliver sustainable, profitable growth. Our strategy begins with strengthening the foundations of our marketplace by enhancing the customer and creator experience, accelerating license and fan art content, optimizing paid marketing, and driving higher retention and conversion. At the same time, we are unlocking new ways to monetize our ecosystem by introducing initiatives such as the new artist account fee structures, enhanced creator tools, and new ways to connect creators with their customers. Looking ahead, we are also focused on expanding our marketplace flywheel, launching new products, and extending our reach into additional geographies to capture further growth. Our conviction that both of our core marketplaces can deliver growth is reinforced by the consistent performance of TeePublic. Since it was acquired, TeePublic has delivered revenue growth while expanding margins, demonstrating the strength and scalability of our model when executed well.
TeePublic's strong performance demonstrates the capability and experience within our leadership team and the underlying strength of the business model. The same team is now driving the Redbubble turnaround, and we are applying learnings from TeePublic to Redbubble and vice versa. We are also investing in a completely new revenue stream with Dashry, our SaaS platform, purpose-built for creators. Dashry is designed to be simple and seamless. Creators can set up their own branded stores in minutes without the operational burden of managing inventory, logistics, or payments. They also benefit from being part of the group's digital platform ecosystem, which offers creators scale economies and a low-cost supply chain. Dashry is a measured strategic bet that leverages our technology infrastructure, established creator community, experienced sales team, and a global fulfillment network. Importantly, it is also a strategic move within our ecosystem, helping us retain and re-engage high-value creators.
At the same time, it opens up a larger opportunity with YouTubers, Instagrammers, TikTokers, podcasters, and other creators who want to launch their own merch stores and drive traffic from their own audiences. For Articore, this also reduces reliance on traditional paid marketing channels. We are already seeing positive traction and a strong early signal with Dashry and remain excited about the growth opportunity ahead. Momentum is building, our foundations are stronger, and our strategy is clear. Thank you to our employees, our creators, and our shareholders for your continued support. That concludes my remarks. I'll now hand back to the Chair. Thank you.
Thank you, Vivek. This now brings us to the formal part of the meeting. There are six resolutions to be discussed today, which have been listed in the notice of meeting. The notice of meeting was sent to shareholders in September 2025, and I will take it as read. Before we move to the items of business, there are a number of procedural matters which I wish to draw to your attention. All items of business will be voted on by way of a poll. Voting will take place via the online meeting platform, and only shareholders, their attorneys, proxies, and authorized company representatives are entitled to ask questions and vote at this meeting. If you have not already done so, please follow the online instructions to vote during the meeting.
To ask a written question, select the messaging icon, type your question in the box towards the top of the page, and press the send button. To ask your question verbally, click the request to speak button, confirm your name, and enter the topic of your question. Submit your details and select join queue to be connected. Participants can submit questions at any time from now. However, questions will not be addressed until later in the meeting. Questions may be moderated, or if we receive similar questions on one topic, they may be combined. For further information, the virtual online meeting guide is available for download. The poll will be conducted at the end of the meeting after each resolution has been put to the meeting. In order to provide you with enough time to vote, I now declare that voting is open for all resolutions.
I will give you a warning before voting closes at the end of the meeting. Where undirected proxies have been given to me as Chair, I intend to vote all such proxies in accordance with the recommendations set out in the notice of meeting, being in favor of resolutions one to five and against resolution six if it is put. Any directed proxies that are not voted at the meeting will automatically default to me as Chair of the meeting, and I am required to vote those proxies as directed. During the meeting, we will display the number of direct and proxy votes that were received on each resolution prior to the meeting. Any voting restrictions have been set out in the notice of meeting, and the final voting results will be released to the market on the company's ASX platform shortly after the meeting.
The first item on the agenda is to receive and consider the annual report of the company together with declarations by directors, the directors' report, the remuneration report, and the auditor's report for the year ended 30 June 2025. This item does not require a resolution to be put to the meeting but does provide an opportunity for shareholders to ask questions or comment on company matters. The company's auditor, Ashley Butler from Ernst & Young, is available to address questions in relation to the conduct of the audit or the content of the audit report. Any questions to the auditor should be directed to me as Chair in the first instance. We will now take any questions on the financial statements. Moderator, have we received any questions?
No questions received at this point, Chair. Thank you.
As there are no questions, I will proceed to the first resolution. Resolution one is a non-binding advisory vote for the adoption of the remuneration report for the financial year ahead, the financial year ended 30 June 2025. The remuneration report is contained in the annual report, which is available on the company's website. The company received a first strike in its remuneration report at its annual general meeting last year. If 25% or more of eligible votes cast on resolution one are against, the conditional still meeting resolution, resolution six, will be put to shareholders. The board recognizes that last year's first strike on the remuneration report reflected shareholder concern, both about fiscal year 2024 performance and aspects of plan design. We took that message seriously. In response, the board conducted a comprehensive review and has implemented several important changes.
First, the long-term incentive now vests only once after three years, with retesting removed, and both threshold and target hurdles have been introduced. Second, the performance measures are now evenly weighted between share price targets and EBIT over three years. Third, the Group CEO's remuneration is now heavily equity-based to align his performance with long-term value creation for shareholders. Finally, non-executive director fees have been permanently reduced by 20%, and the overall fees have decreased following the board refresh. These changes reflect our commitment to genuine pay-for-performance alignment and good governance. As stated in the notice of meeting, this is an advisory and non-binding resolution, although the board will take discussion on this resolution into account when it is considering the future remuneration arrangements of the company. The resolution and proxies received are shown on the screen. We will now take any questions in relation to this resolution.
Moderator, have we received any questions online?
No online questions, Chair.
All right. As there are no questions, I will proceed to the next resolution. Resolution two seeks shareholder approval to re-elect Mr. Robert Sherwin as Non-Executive Director. I invite Bob Sherwin to speak to his nomination. Bob?
Thank you, Robin, and good morning, everyone. It's been a privilege to serve on the Articore board over the last three years. I'm standing for re-election because I'm deeply committed to the opportunity ahead of us, and I'm very proud of the progress we have already made. My career is centered on helping digital marketplaces and retail businesses grow at scale. At Wayfair, I helped expand the business from $500 million in direct revenue to over $12 billion in sales, building a world-class marketing organization along the way. At Staples and Zoe, I've led data-driven marketing programs that delivered significant growth and lasting brand impact. What excites me about Articore is it unites everything I'm most passionate about: a compelling marketplace model, a strong brand foundation, and a meaningful potential to scale globally.
I believe my experience in attracting customers, converting demand, and driving profitable growth aligns directly with Articore's next phase. I'm incredibly proud of how far the company has come, and I'm eager to continue contributing to its next chapter of success. Thank you for your trust and support. I'll hand it back to you, Robin.
Thank you, Bob. Details of the resolution and proxies received are shown on the screen. The Board, other than Bob Sherwin, recommends the shareholders vote in favor of this resolution. We will now take any questions in relation to this resolution. Moderator, have we received any questions?
No questions, Chair.
As there are no questions, I will proceed to the next resolution. Resolution three is the approval of Non-Executive Director participation in equity incentive plan for issue of equity securities in lieu of cash fees. At the company's 2024 Annual General Meeting, shareholders approved the issue of Non-Executive Director equity to each of the existing Non-Executive Directors at the time. The company is now seeking approval in accordance with the ASX listing rules to allow the participation of subsequently appointed Non-Executive Director, John Lewis, in issues of Non-Executive Director equity. Details of the resolution and proxies received are shown on the screen. The Board, other than John Lewis, recommends that shareholders vote in favor of this resolution. We will now take any questions in relation to this resolution. Moderator, have we received any questions?
No questions, Chair.
As there are no questions, I will proceed to the next resolution. Resolution four is the ratification of prior issues of shares pursuant to ASX Listing Rule 7.4. The shares were issued to the trustee of the company's employee share trust to satisfy the future exercise and conversion of employee incentive securities as and when they vest and/or are exercised. The ratification is being sought for the purposes of ASX Listing Rule 7.4 in order to refresh and preserve the company's available placement capacity under Listing Rule 7.1. Details of the resolution and proxies received are shown on the screen. The Board recommends that shareholders vote in favor of this resolution. We will now take any questions in relation to this resolution. Moderator, have we received any questions?
No questions, Chair.
As there are no further questions, I will proceed to the next resolution. Resolution five is the ratification of prior issue of employee incentive securities pursuant to ASX Listing Rule 7.4. Details of the resolution and proxies received are shown on the screen, and the Board recommends that shareholders vote in favor of this resolution. We will now take any questions in relation to this resolution. Moderator, have we received any questions?
No, no questions, sir.
As there are no questions, I will proceed to the next resolution. Resolution six relates to the holding of a board spill meeting. As all resolutions are being conducted by way of a poll today, we will discuss this item. However, the poll vote will only be tallied on this resolution in the event that 25% or more of eligible votes cast on resolution one are against that resolution. If resolution six is passed with 50% or more of eligible votes cast, the company will be required to hold another general meeting within 90 days. At this meeting, all non-executive directors must retire and stand for re-election. Details of the resolution and proxies received, should the resolution be put to shareholders, are shown on the screen. The Board unanimously recommends that shareholders vote against this resolution. We will now take any questions in relation to this resolution.
Moderator, have we received any questions?
No, we haven't, Chair. No questions.
As there are no questions, I will now move to our final item. I confirm that the company has not received any other items of business that may be legally brought before the meeting. Ladies and gentlemen, that concludes our discussion on the items of business before this annual general meeting. As set out earlier in the meeting, a poll will be held on all resolutions at the conclusion of the meeting. Please ensure that you have cast your vote on all resolutions. This concludes our discussion on the items of business, and in a couple of minutes, I will close the voting system. I will now pause to allow you time to finalize those votes. After the votes on the resolutions have been reviewed, the results of the poll will be announced to the ASX as soon as possible. I now declare this annual general meeting closed.
Thank you for your attendance and participation, and on behalf of the board, we look forward to your continued support.