Good morning, everyone, and welcome to the 2026 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 I now declare the meeting open. Today's meeting is conducted virtually, and shareholders and their proxies and their representatives can ask questions through the online platform and vote electronically when prompted. Should we have any technical issues, I may need to pause or adjourn the meeting, and we will email you on how and when to rejoin the meeting. Joining me today are my fellow directors, Non-Executive Directors Robin Low, Bob Sherwin, John Lewis, and Naseema Sparks, together with our Group CEO and Managing Director, Vivek Kumar, and our Group CFO, Derek Yung.
We are also joined by representatives from BoardRoom our share registry, who will act as Returning Officer and Scrutineer for today's meeting. The company's auditor, Tony Morse from Ernst & Young, is also present. 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. 12 months ago, I outlined five priorities for the Board for financial year 2026. I am pleased to report that we have delivered on every one of them. First, shareholder value. We committed to a clear strategy focused on value creation and cash flow, and the result was a AUD 20 million turnaround in EBIT. FY 2026 is the Group's first profitable year since listing, outside the pandemic-driven spike in FY 2021.
Vivek will take you through the details on how this was accomplished shortly. Second, we committed to undertaking a strategic review. The Board looked carefully at our capital structure, our portfolio, and our pathways to value creation, and we considered a range of potential counterparties and alternatives. We concluded that executing our strategy as an independent company offers the most compelling pathway to long-term shareholder value. Third, strengthening Articore's governance. In March, we were delighted to welcome Naseema Sparks to the Board. Naseema is an independent director based here in Australia, and she chairs our People, Remuneration, and Nomination Committee. She brings significant experience in scaling high-growth, consumer-facing technology businesses, which has been particularly valuable as we have worked with management this year to sharpen the group's vision and strategy. Fourth, aligning executive rewards with shareholder outcomes.
A key focus for the Board this year has been strengthening our remuneration framework to align executive remuneration more closely with shareholder returns. For long-term incentives to non-KMP executives, we have added an operating performance measure alongside share price hurdles and removed retesting. For short-term incentives, we moved in FY 2026 to an EBIT-based hurdle, tying the reward directly to profitability. For FY 2027, it will be tied to both marketplace revenue growth and operating EBITDA, reflecting the importance we place on profitable growth. Below the executive level, the incentive plan has moved from shares to a self-funded profit-sharing plan. These changes have materially reduced dilution. Our directors and senior executives also have a growing personal stake in the company's success. Every director and each member of our key management personnel increased their shareholdings during the year. Our final priority was to strengthen transparency and accountability.
We kept you informed throughout FY 2026, recognizing how important clear and regular communication is during a period of significant change. I would like to give an overview of the Articore business today. Articore owns and operates two established consumer-facing digital marketplaces, Redbubble and TeePublic, alongside two high-growth businesses, Dashery and Frankly Wearing. At the bottom of the slide is our flywheel. Creators upload designs to our marketplaces, customers purchase products printed on demand by third-party fulfillers, and we charge service fees to provide tools and support for creators. Because creators only earn when they make a sale, Articore benefits from an asset-light take rate model. As volumes grow, fulfillment costs per unit fall, supporting stronger margins. This allows us to reinvest in customer acquisition, driving further growth and reinforcing the flywheel. As the flywheel gains momentum, the benefits compound for creators, customers, and shareholders.
Building and sustaining that momentum towards profitable growth remains our core priority. Supporting Articore's flywheel are four structural competitive advantages. First, our unique asset. We hold more than 75 million designs, and more than 10,000 are added every day on average. Over many years, we've built a vast catalog of unique user-generated content that continues to grow. Second, scale economies. We have a diversified global network of 44 third-party fulfiller sites, which allows us to flex volume, optimize cost, and maintain efficient delivery. We shipped 21 million units in financial year 2026. Third, network effects. More than 3 million creators sell across the group. More creators attract more customers, and more customers attract more creators, strengthening the platform over time. Fourth, process power. With a global team of around 200 people, Articore generates approximately AUD 1.8 million in marketplace revenue per employee.
Put together, these advantages make the model hard to replicate, scalable, and more efficient as volume grows. We are operating in an attractive market. Grand View Research projects the global print-on-demand market will grow from $11 billion in the current year to $58 billion in 2033, a compound annual growth rate of about 24%. That is where Articore stands today, and we are confident about the opportunities ahead. On behalf of the Board, I'd like to thank Vivek and his entire team for their dedication and the work behind this year's results. Vivek will now take you through the financial year 2026 results, which demonstrate a clear turnaround. He'll also outline how the group is positioning itself for its next phase of profitable growth and our priorities for financial year 2027. Thanks, Vivek.
Thank you, Robin. Hello, everyone, and thank you for joining us. FY 2026 is the first year Articore has delivered positive EBIT since listing in 2016, excluding the pandemic-driven spike in FY 2021. EBIT was AUD 10.3 million, a AUD 20.1 million improvement over the prior year's loss of AUD 9.8 million. It reflects sustained execution against our turnaround strategy. This slide shows the structural nature of the improvement over time. Since FY 2023, gross profit and gross profit after paid acquisition margins have risen every year. That was driven by supply chain efficiencies, pricing and paid marketing effectiveness, and the new artist account fee structure. We have also cut operating expenses from a peak of AUD 129 million to AUD 85 million, a 34% reduction. We achieved this while continuing to invest in growth, including building Dashery from the ground up and acquiring Frankly Wearing. Margin expansion and sustained cost discipline together have driven the EBIT turnaround.
The balance sheet has strengthened alongside earnings, enabling financial flexibility to invest in our growth priorities. Underlying cash flow improvement, AUD 1.6 million in FY 2025 to AUD 10.1 million. Closing cash at 30th June was AUD 40.5 million, up 42% from AUD 28.4 million. Return on equity moved from - 22.8% to + 21.8%. We also bought back more than 2 million shares during the year. Turning now to our high-growth businesses, starting with Frankly Wearing. In May 2026, we acquired Frankly Wearing, an India-based print-on-demand marketplace. The acquisition opens access to the India print-on-demand market, worth more than $1 billion and growing around 25% annually. It also enables us to establish a global capability center to drive sustained operating efficiencies across the group, including engineering capabilities that advance our platform consolidation efforts. Integration is progressing well. India-based teams are already providing engineering and other functional support across the group.
Dashery, our storefront platform for creators, launched in January 2025 and is showing early signs of strong product-market fit. In FY 2026, Dashery generated gross platform sales of AUD 4 million, up 450%, marketplace revenue of AUD 2.4 million, up 482%, and a gross profit after paid acquisition margin of 36.5%. There are more than 1,500 active selling creators. To broaden the target market, we launched a Shopify integration in August. Our vision is to be the leading destination for customers to discover and buy unique, design-first products driven by a global creator ecosystem built to turn passion into profits. We will pursue this through three growth drivers. For customers, strengthening our competitive moat through content differentiation, building high-impact acquisition and retention engines, and elevating the experience through AI-driven discovery and personalization. For creators, we will generate higher value outcomes through incremental monetization opportunities.
We will continue to invest in new high-growth businesses, including Dashery and Frankly Wearing, leveraging our strategic assets and existing capabilities. Underpinning all three is our unified technology platform. We are reaffirming our FY 2027 guidance today. The first quarter has performed in line with our expectations. We expect to hold the margin gains delivered in FY 2026. We are guiding to a gross profit after paid acquisition margin of 27%-30%, compared with 28.6% in FY 2026. We expect operating expenses to be at or below FY 2026 levels in the range of AUD 79 million-AUD 85 million. Together, this drives up a step up in operating EBITDA, which we expect to be AUD 17 million-AUD 23 million, compared with the AUD 16.4 million in the prior year. I will now hand it back to Robin.
Thank you, Vivek. This now brings us to the formal part of the meeting. There are four resolutions to be discussed today, which have been listed in the notice of meeting. The notice of meeting was sent to shareholders in September 2026, 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. 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 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 all resolutions. 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. Voting restrictions have been set out in the notice of meeting. 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 the directors, the directors' report, the remuneration report, and the auditors' report for the year ended 30 June 2026. 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 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 you received any questions?
No questions on this topic, Chair.
As there are no questions, I will proceed to the first resolution. Resolution 1 is a non-binding advisory vote for the adoption of the remuneration report for the financial year ended 30 June 2026. The remuneration report is contained in the annual report, which is available on the company's website. 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 questions on this topic. Thank you, Chair.
As there are no questions, I will proceed to the next resolution. Resolution 2 seeks shareholder approval to elect Ms. Naseema Sparks as Non-Executive Director. I invite Naseema to speak to her nomination.
Thank you, Robin, and good morning, everyone. This is Naseema Sparks here. As a Director, I have specialized throughout my career in high-growth businesses and businesses needing to return to growth. I bring a consumer lens to the table and like to see retail-based companies be where the customers are. My Non-Executive Director experience includes companies like Blackmores, Australian Vintage Limited, Grays, and others. I also have expertise in taking companies through to IPO. I bring experience to remunerations committees, and especially oversighting remuneration and incentives through growth. I am pleased to join the Articore Board, and I believe I can add value to shareholders.
Thank you, Naseema. Details of the resolution and proxies received are shown on the screen. The Board, other than Naseema, 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 online?
No questions on this topic, Chair.
As there are no questions, I will proceed to the next resolution. Resolution 3 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 you received any questions online?
No questions on this topic, Chair. Thank you.
As there are no questions, I will proceed to the next resolution. Resolution 4. Resolution 4 is the approval of the issue of employee incentive securities pursuant to ASX 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 online?
No questions on this topic either, Chair.
Thank you. Moderator, are there any further questions?
Chair, we have two general business questions from shareholder CTHD Investment Pty Ltd. The first question is, "Customers increasingly use Gen AI, agentic shopping tools. What is the Group's plan to sustain and enhance your website visits volume on onsite conversion in this environment? Have you seen material sales done through AI agents done yet, and any change in key statistics with this trend?
Thank you for your question. I will direct this question to our CEO, Vivek Kumar, for his comments.
Thank you, Robin. Thank you for the question, and it is a great and a very relevant question. AI is changing the way consumers are shopping, and we are absolutely staying on top of all AI trends. For Articore, what that means in real terms is how do we really expose our content and our design catalog to all the LLMs, to all the frontier models, which we are actively doing, as well as how we really optimize and change our marketplaces for agentic and agents to be able to easily and seamlessly shop on the platform. Things are changing, as we speak, and every day there are new protocols like the UCP coming out. So we are very much staying on top of all these trends and adapting our marketplaces for the new AI wave. The traffic continues to increase.
We had announced our OpenAI pilot in the last earnings call, so we continue to see an increasing volume through AI. The transactions are still, from agentic in particular, lower. But it is going to be something that we believe continue to increase this year.
Thank you. Moderator, do we have any additional questions?
The next question, Chair, is, "How many India-based engineers do you have now? You mentioned you have over 30 at the end of FY 2027. What increase should we expect for FY 2027 capitalized R&D over FY 2026?
Thank you for that question. We are pleased to continue the growth in our India center, and I will pass your question to Vivek for some additional color around the points that you've raised.
Thank you for the question. We are really pleased with how the India GCC is scaling and ramping up. We are on track to the number we had previously announced that the 30 in the India GCC by the end of the year. We are seeing the India-based team already providing a lot of leverage across the group, including engineering and some other functional areas. So overall, we are absolutely tracking to our expectations and plan for our India-based team and the office there. Back to you, Chair.
Thank you. Moderator, are there any further questions?
No further questions now, Chair. Thank you.
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. That concludes our discussion on the items of business before this annual general meeting. As we 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. 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 resolution have been reviewed, the results of the poll will be announced on the ASX as soon as possible. I now declare this annual general meeting closed.
Thank you for your attendance and participation. On behalf of the Board, we look forward to your continued support.