Thank you, Jamie. Thank you for joining us to discuss Bravura Solutions Ltd's fiscal 2025 results. My name is Shezad Okhai, Bravura 's Interim CEO. I'm joined by our Chief Financial Officer, Neil Montford. I'm going to provide a brief overview of our results. In fiscal 2025, Bravura Solutions Ltd delivered underlying revenue from customers, excluding the impact of the perpetual license agreement with Fidelity , and prior to interest income and R&D incentives of AUD 256.8 million, which is up 0.7% on a constant currency basis over fiscal 2024. The details of the impact of the Fidelity license agreement, which was announced in August 2024, can be found in the appendix. We reported underlying cash EBITDA of AUD 43.8 million, representing a cash EBITDA margin of 17%, showing a marked improvement over last year.
We ended the year with a strong financial position of AUD 58.7 million in cash and no debt, allowing us to declare a final fiscal 2025 dividend of AUD 13.1 million and a special dividend of AUD 8 million. The CEO search is underway, with a likely announcement by our AGM. I'm very proud of the results delivered by our dedicated team of 1,000, who made a measurable impact in fiscal 2025. Page four shows our results in more detail. Maintenance, support, and hosting revenue grew by 5.6%, and professional services by 2.1%, neither of which ise adjusted for FX. Margins continue to improve throughout the year, although at a slower pace than in fiscal 2024. We delivered a cash EBITDA margin of 18% in the second fiscal half of 2025, compared to 16% in the first fiscal half.
We thought it would be helpful to highlight how our business is organized on page six. Within our two reportable segments, we track a number of P&Ls, each with a business unit leader, and focus on the market niche. We believe that increased decentralization will result in improved customer intimacy and allows for better decision-making by those closest to our customers. This will be further strengthened by incentives that are linked to revenue growth and cash EBITDA margin at the business unit level, aligning managers with the outcomes they deliver and that of shareholders. On page eight, we introduce a new recurring revenue metric, which represents our recurring software revenue and is defined as reported support, maintenance, and hosting revenue, plus the portion of license fees that are recurring, less one-off support that is billed on a time and materials basis.
Please note that this definition of recurring revenue has been refined from the version presented in the first half fiscal 2025 results presentation. The figures are not comparable. We will be using this updated definition going forward. In 2025, recurring revenue was AUD 154.3 million. On a constant currency basis, this is approximately flat compared to the AUD 149.6 million delivered in 2024. Impacting recurring revenue was a cushion of AUD 8 million, which is the in-year impact of recurring revenue decline due to customer loss and shrinkage. This also includes the impact of the perpetual license agreement with Fidelity . The fiscal 2025 attrition will have a further impact of AUD 6.5 million on fiscal 2026 recurring revenue, as we experience the full run-rate impact of those decisions. Counteracting the churn was growth of AUD 8.8 million in recurring revenue.
This is the in-year impact of growth in volumes, client expansion, pricing, and new clients. Page nine shows operating costs are down AUD 17 million in fiscal 2025 compared to fiscal 2024, but remain stable across the first and second half of fiscal 2025. The table on the right shows the distribution of our employees by function. This reflects our continued investment in keeping our products relevant and responsive to customer needs. Page 10 shows our capital return and dividends. Bravura has a dividend policy of at least 50% of underlying impact. We will continue to prioritize organic growth, where it is underpinned by a clear business case and an acceptable return on capital. After funding growth and operational priorities, excess capital will be returned to shareholders in the form of dividends and/or buybacks. Moving on to our outlook on page 12.
In fiscal 2026, we expect revenues to be in line with fiscal 2025 and cash EBITDA to be above AUD 50 million. Our priorities are to protect and grow recurring revenue, advance our platforms, explore partnerships with administration providers, continue to increase accountability at the business unit level, and continue to drive efficiency gains. On page 13, we show some key data points regarding fiscal 2026. Here, you can see the percentage of fiscal 2025 revenue by currency. In the release dated November 2nd, 2022, Bravura disclosed three customer exits. In fiscal 2026, one of these three customers will complete their migration away from Bravura to a BPO. This customer generated AUD 10 million of revenue across professional services, support, maintenance, and hosting in fiscal 2025, and we expect that they will complete their migration by January 1st, 2026.
On the professional services side, approximately 20% of our services revenue is from contracts with annual minimum commitments. We expect PP&E CapEx of AUD 2 million - AUD 3 million after a low year in 2025. I'd also like to highlight that we expect to either purchase or issue 6.8 million shares across fiscal 2026 and fiscal 2027 to satisfy outstanding rights and options for existing employee incentive plans. If we purchase all the share requirements, the net cash outflow will be greater than the P&L expense, primarily driven by the fiscal 2024 option plan. I'd like to now open it up for any Q&A.
At this time, we'll begin the question and answer session. If you wish to ask a question, please press star and then one on your telephones and wait for your name to be announced. If you wish to cancel your request, please press star and two. If you are on a speakerphone, we do ask that you please pick up the handset to ask your questions. Our first question comes from Jack Daly from Shaw and Partners. Please go ahead with your question.
Hi guys. Yeah, hi Shezad, hi Neil. Congrats on another great result for Bravura. I guess just firstly, as we kind of look through the guidance that you provided for FY 2026, could you maybe just walk us through, maybe starting the revenue line you talked about, AUD 10 million something off, how you're kind of seeing the demand for revenues, particularly in Europe, and I guess is that going to be supported by software revenues or kind of more professional services revenues? Something like how you think, and that's kind of the timeline for some of the contracts dropping.
Hey Jack, sorry, just wanted to make sure I've got the question right. Are you asking for clarity on how we see revenues in fiscal 2026 between professional services and our recurring software revenues? I just wanted to make sure I got that right.
Yeah, I guess how are we thinking about it versus new logos versus pricing coming through as well?
Right. Okay. I'll take a first crack at it, and Neil can follow up if I've missed anything. We have guided to expecting revenues to be in line with fiscal 2025. As you saw on the recurring revenue bridge, we have experienced some attrition in fiscal 2025. We expect, as I disclosed on the recurring revenue slide as well, that fiscal 2025 attrition will have a further impact on our fiscal 2026 recurring revenues of AUD 6.5 million. In addition, we are expecting the one customer that I disclosed leaving on January 1, 2026. Offsetting that is growth. We are expecting growth within our existing customers. We are forecasting winning some new business; that's in our forecast as well. I would say predominantly, our growth is within existing customers in both EMEA and in APAC. That growth is driven by growth in volumes, expansions that we're doing.
Clients grow, we grow with them. We continue to build enhancements for our clients, and we are looking for closing some cross-sell opportunities as well. I do expect it to be a mix, driven by existing clients, but we are looking at growth to offset some of the negatives that I mentioned on the call. I don't know if that helps, if that answers the question, Jack, or whether you're looking for something else. Yeah.
No, that's great. Thanks, Shezad. Just on slide nine, you kind of spit out the FTE by category. As we look into FY 2026, it looks like there's more cost savings coming out of the business, just driven by that increase in cash EBITDA. How should we be thinking about the change in FTE by category and what's kind of driving those increases in cost savings through the business?
Right. I won't get into the details of expected changes in the mix of our staffing by category here. We wanted to share that mix of employees to demonstrate that we are investing materially in keeping our products relevant and responsive to customer needs. Regarding further cost reductions that drive the improvement in cash EBITDA year- over- year, we are always looking for ways to do things more effectively, more efficiently, without lowering the high levels of service that we give to our customers and without slowing down the pace of change within our products. I think change is happening across likely all of the departments and within different business units as well, across the groups. It's not one area in particular that we look at to drive effectiveness improvements.
Got it. Thank you. I'll just jump back in a few to answer those questions. Thank you again.
Our next question comes from Olivier Coulon from E&P Financial Group. Please go ahead with your question.
Hi, guys. Just on the FX and assumptions around that in terms of the revenue guidance as a first question. Presumably, there's no kind of material unsecured kind of logos within your revenue expectations for FY 2025, sorry, FY 2026. What's the, I suppose, market opportunity set looking like in terms of potential new logos in EMEA and Australia, if you don't mind?
Okay. Olivier, FX, the forecast assumes current rates hold. Pending changes in FX rates, that will impact our forecast for fiscal 2026. We are active in the market. We will participate in RFPs for new logos. At this point, I'm not going to disclose our current pipeline and whether or not we expect to win any large net new logos.
Is there a reasonable activity level, even if it's not necessarily at the formal contracting stage at the moment? What's your read on the opportunity set in the U.K. and Australian markets as to how many logos there are that are kind of floating around in the near term?
Right. Large replatforming decisions are not frequent at all. These are large decisions where customers are looking to devote millions or tens of millions of dollars and go through extensive, you know, an extensive change in platform is a massive investment. These are not frequent decisions at all. I'm just not in the position where we're just going to disclose the level of activity of our sales pipeline.
That's right. Understand. Thanks.
Our next question comes from Ross Barrows from Wilsons Advisory. Please go ahead with your question.
Yeah, good morning. Thanks. I just had a couple of questions, if I may. The first one was just a clarification, I guess, around the clients that you've called out that will be leaving or churning. You did say it was AUD 10 million per annum last year, and the client will churn at the end of the first half. Is it fair to assume that that's, just to be clear, it's like a linear contribution? There will still be a AUD 5 million contribution this year?
I think that's a fair assumption. That's a fair assumption to make.
Okay. In terms of the other clients that have flagged as having been listed as a customer exit, or you may have said it before, apologies if you did, was there any comment around those other two customers in terms of their timeline?
No, no comment on those other two customers.
Okay. Thanks. Maybe one for you, Neil, just given it looks back a little bit. In terms of the definition of recurring revenue, the definition you've provided today in the footnote is pretty clear, but can I just clarify that? I guess historically, the business had defined recurring revenue as the contracted recurring revenue, but also attached recurring revenue. If you go back to 2023, that contracted recurring revenue was about AUD 140 million, and today's definition is about AUD 154 million, as you've given. Is it fair to assume that that definition really just relates to what is contracted with, you know, good visibility into the business, and that attached recurring revenue definition has been softened or almost completely dropped?
Thanks. I think that was a good question. The definition has changed quite a few times over the last three years. Even at the half year, we had a different definition as well. We've refined it further. I think, as we've called out, there are professional services, and within our contracts, there are committed professional services days, but we are not including that in the definition. That would have been in previous years when the percentage was up to sort of 80%, I think, two or three years ago. It's a narrower, it's a bit more precise definition that we're using now and we'll use in the future.
Okay. Great. Just one other quick one, on slide eight, where you do have that recurring revenue chart, where you've got the attrition of AUD 8 million and the growth of AUD 9 million. Are you able to give any color around that AUD 8.8 million or the AUD 9 million, whether that's any new logos in there or new customers in that growth, or is that just incremental growth from your existing customers?
Right. The growth is a mix of existing customers and new logos. There are some new logos in there.
Right.
I won't give the split today of what's coming from our base and what's new.
No problem. Thank you.
Once again, if you would like to ask a question, please press star and one on your telephone, waiting for your name to be announced. Our next question comes from Scott Hudson from MST. Please go ahead with your question.
Good morning. I just have a couple of questions. Firstly, Shezad, maybe you could help me understand what the driver of the, I guess, revenue beat was relative to your previous guidance.
It was likely FX and increased revenue with existing customers, but Neil, you likely have more color on that.
The question was, what's the driver on revenue growth from previous guidance in FY 2025?
Yeah, Neil, I guess your guidance was sort of AUD 248 million -AUD 252 million. I'm just trying to understand what was the, I guess, what pushed you to the sort of AUD 257 million level.
There were probably three or four different factors in there. One would be that the exchange rate, as we've called out, remains favorable. We've highlighted the level of income that we get, particularly in British pounds. That was a positive. If we look at the full revenue, we received R&D incentives from the U.K. government, which were not put within our assumptions. Our professional services revenue, the third one, remained strong throughout the year.
All right. Thank you. Shezad, can I just understand, is there any sort of change in approach to, I guess, revenue growth relative to under previous management?
Okay. Changes in approach to revenue growth. We continue to have and focus on a fairly decentralized business with local leaders in each of our markets, both geographically and within each market niche that we service within each geography. Each of those leaders is very close to their customers and prospects within the market. We continue to invest in local customer intimacy to expand relationships with existing customers and to cover the market from a new name or a new logo perspective. I wouldn't say there's been a material change from that perspective.
That's helpful. Thank you. On page 12, you talk about building partnerships with administration providers. Could you maybe just expand on what you mean by that?
As part of you likely have seen with some of the announcements, particularly in the Australian market, in some cases, having administration capabilities is important. We are in early stages of partnership discussions in both Australia and in the U.K. to partner with a provider who would enable us to offer that type of administration capabilities in conjunction with one of our platforms, such as Sonata.
Like a BPO partner?
Right.
Yep, appreciate it. Thank you very much.
Our next question is a follow-up from Olivier Coulon from E&P Financial Group. Please go ahead with your follow-up.
Hi, Shezad. Just following up on your commentary around, you know, an appropriate return on investment on growth topics. Can you share with us, you know, like what sort of hurdle rate you are requiring?
Olivier, I won't get into details of specific hurdle rates. You know, those could differ depending on what type of opportunity we're looking at and the size of that opportunity. I won't disclose a specific number there. Rather, I just wanted to communicate that we are keen to invest in organic growth. We would like to ensure that the investments we make are ones where we believe will drive value for both customers and for shareholders.
Okay. The cash EBITDA outcome that you're kind of targeting for this year suggests ongoing kind of efficiency initiatives through the year. Is it fair to say that you won't necessarily harvest all of those in FY 2026, or is this really just the annualization of things that you've done late in FY 2025?
The cash EBITDA outlook is driven both by changes that were made late in fiscal 2025, as well as ongoing improvements that the team is making during the course of fiscal 2026.
Yep. Thanks.
There are no further questions at this time. I'd like to hand the floor back to Mr. Okhai for closing remarks.
Thank you, everybody, very much for joining and participating. Appreciate all of the questions, and look forward to speaking with you all again soon.
That does conclude our conference for today. We thank you for participating. You may now disconnect your line.