Hello and welcome to Catapult's first half of FY 2023 results. As we have done in past presentations, we are sharing this pre-recording, which will be followed by a conference call tomorrow morning here in Australia. I am joined today by Hayden Stockdale, Catapult's Chief Financial Officer, which will cover a portion of this presentation.
Before we dive into the numbers, I always think it's important to share a little bit about the journey we are on here at Catapult, as well as the mission that drives us and the technology that underpins it. At Catapult, our vision is simple. We are here to unleash the potential of every athlete, team, and league on Earth. We think the best way of doing this is by building the leading data and analytics platform for sports performance. Now, this platform is underpinned by cutting-edge technology across three different segments.
At the heart of what we do is performance wearable, and this is an athlete monitoring system that you will hear being described as P&H for performance and health. This is an elite wearable solution that tracks athletic performance in order to optimize development, manage injury risk, and expedite return to play.
Alongside that is our software and analytics package, particularly focused on video analysis. You will hear this being described as T&C or tactics and coaching. This is an end-to-end platform designed for teams to efficiently analyze and communicate key insights across practice and games for athletes, coaching staff, and front office. Lastly is our media and services arm. While this is a smaller part of our business, it encompasses things such as content licensing, asset management, and broadcast enhancement services that we do for leagues and teams alike.
We've been doing this for a long time, and we work with the very best teams and leagues across the globe. At the end of this half, we are incredibly proud to say that we work with over 3,650 teams across more than 40 sports in over 100 countries. These include some of the most demanding leagues across the globe, such as the NFL, Premier League, and Formula One.
Includes current and past champions across a number of different sports, such as basketball, football, and soccer. Let's get to the results. There are some really incredible highlights in this past half. First, our revenue quality here at Catapult continues to improve at a dramatic pace. This past half, we recorded a record revenue half, achieving AUD 41.6 million or close to AUD 60 million.
Our subscription revenue continues to grow, and it is now 89% of total revenue as our shift into a full SaaS model is complete. Our ACV churn continues to show how sticky our products are, coming in at 4.0% this past half. We thought it was important during this half-year results to also share a one-time peek on what's happening on our future revenue under contract.
This metric has actually outpaced our ACV growth, growing at 28% and crossing over $109 million or AUD 167 million. It really starts to show the quality of our revenue and the predictability about its future potential. Another great highlight of this half is that our leading KPIs continue to expand and accelerate. ACV growth in this past half grew at 21%, reaching $70 million.
At the heart of our technology, which is performance and health for that wearables technology, ACV actually grew at 26%. Cross-selling, which is an important aspect as we start to expand our platform, continues to grow incredibly well. This past half exceeding 33% year-on-year. Really important metric for us is how well are we doing in terms of expanding our ACV per customer.
In the past half year, average ACV in our pro customer grew 18% year-on-year, demonstrating our strength in upselling and cross-selling. This half year was also the part that we decided to reprioritize and resize our business to return to generating free cash flow with a focus of being free cash flow positive in FY 2024. As our business has transitioned into a full SaaS model, we are now able to provide confidence and predictability of future earnings.
What we saw was a half that despite our investment broke even on operating cash flow, and we're excited to announce we have received a credit-approved unconditional offer to expand our debt facility to $20 million. This strengthening of our cash balance means that we again want to reiterate that we don't have a need for equity funding going forward.
Let's dive into these metrics and why we believe they're really incredible and exciting. As I mentioned, record revenue half despite our FX pressures. First ever half that exceeds $40 million. Our revenue grew 16% year-on-year to reach $43.3 million. Performance subscription revenue actually grew 28%, and performance and health overall revenue grew 22%, as I mentioned earlier. What we've seen is that our ACV growth continues to remain strong and consistent.
For the past two years, our ACV has grown at a 25% CAGR and has now reached a really meaningful number of $70 million or AUD 108 million. As I said, we thought it would be important to actually understand and show how the business has changed as we've transitioned into SaaS by giving this one-time peek on what's happening with future revenue under contract.
This metric grew 28% in this half, has outpaced our ACV growth and shows the strong future support in Catapult's revenue base. As a matter of fact, in the past 12 months, while ACV grew $12.4 million, our future revenue under contract actually has outpaced at $23.6 million. What this shows is that our deals are being brought in on a much higher multi-year design.
That means that in the past 12 months, deals are coming in at an incremental average of 2.1 years, and this is up from 1.4 years this time last year. Our revenue has become really more predictable and really is well supported. As our future growth is really well supported in these numbers from a subscription revenue basis. ACV churn continues to remain at all-time lows.
As a matter of fact, annual ACV churn improved 3% year-on-year and reached a level of 4.0%. For our North American customers, ACV churn was actually even lower at 2.4%. I think this continues to reflect strongly on our customer engagement and the embedded nature that our solutions provide in their critical workflows. Another key component, as I mentioned, is cross-selling.
This past half, we saw a growth of 33% on customers across different verticals. 87% of cross-sold customers took a video product, meaning that our strategy to land with wearables and then expand with video is really playing out. As a matter of fact, 66% of cross-selling was due to this land and expand strategy of selling video to existing wearables customer.
Another impressive metric is that 21% of these new customers started with both products outright as they join the Catapult client list. I think this provides significant confidence for the continued acceleration of our video ACV growth going forward. Customer ACV expanded across all customer cohorts. The average ACV on a pro customer basis actually grew 18% year-on-year to reach an average of $23,500 .
We're very excited that we see this continued growth across segments that are zero to two years, two to 10, and 10+. Now, diving into lowering our cash burn and our focus to return to positive free cash. In September of 2022, we announced that we prioritize our accelerated investment program to concentrate on key product verticals that continue to be our core growth here.
These reductions in cost bases were made immediately and are expected to deliver approximately $12 million of annualized savings without having any impact in our near and midterm growth rates. As we said in previous presentations, we have really strong operational leverage in our business model.
As we start to bring our costs around R&D, sales and marketing and G&A back to the levels that they were before our accelerated investment program, we anticipate that we will return to free cash flow positive the same way we were before we started these accelerated investment periods. Anticipate that our R&D costs, our sales and marketing, our G&A, will return to the same levels that they were prior to the start of acceleration on investment. Our margins are also poised to increase in FY 2024. This past half, our gross margins were temporarily impacted by the increases in shipping costs and the need to increase inventory due to supply chain constraints. Now, these increases have begun to normalize as supply chain have improved.
If you normalize for this increased one-time cost, what you would have noticed is that our gross margin for this half actually would have been very in line with where they have been in the past of around 73.2%. Our contribution margin has been consistent with the accelerated growth investment that we have now curtailed starting in September. If you normalize for these COGS pressures and increase in investment, we would have actually raised our contribution margin back to our regular levels of around 45%. What this shows us is that the underlying core business continues to be at the right spot and continues to offer long-term, high-quality revenue. Also want to address our balance sheet strength.
At the end of the half, our closing cash for the half was $15.6 million. As a matter of fact, it would have been $17.3 if it's adjusted to the FX movements as we hold cash in different currencies at this stage. The strengthening of our revenue quality and the predictive nature has meant that dramatically we have improved our credit and our access to debt financing. Despite the macro market credit conditions, we have received multiple credit-approved offers, including a credit-approved unconditional offer for an upsized $20 million debt facility from our existing debt provider, Western Alliance Bank. This debt facility has come with multi-year improved commercial terms on an existing revolving facility that we already have.
We expect that we will execute a full legal documentation of a new debt facility before the end of the year or by late December. We think this facility is consistent with our previous remarks that we are fully funded to return to cash flow positivity by FY 2024, and we do not anticipate any required additional equity funding to get there.
From a SaaS metrics across company-wide, we continue to stay strong and consistent. As I've mentioned, ACV continues to grow well at 21%. It's also important to note that our customer lifetime duration has increased to six years, and our churn, as I mentioned, has dropped by 3%. Multiple vertical customers grew 33%. What we see here is that our leading indicators of growth continue to be strong and consistent.
As I mentioned earlier, we expect margins to improve following temporary impacts. Supply chain pressures have improved and the contraction that has lowered our contribution margin were really driven by planned investment accelerated growth, which have now been curtailed since September. From an outlook perspective, we are really delighted that subscription revenue grew 20% year-on-year.
Excluding the media business, subscription revenue growth was actually 24%, which is in line with our higher ACV our leading indicator growth for the past year. The changes in underlying EBITDA, operating cash flow, free cash flow, and R&D were consistent with our accelerated investment during this period. Another thing to note is that despite these accelerated initiatives, operating cash flow was break-even during this half. Now let's dive into the Pro segment a bit deeper. Our ACV in the Pro segment grew 18%.
This was pinned and driven by our P&H professional segment that grew at 26% year-on-year, and our video analysis product that grew 8.5% year-on-year. Management growth in ACV and management and media is slightly down as we continue to focus on P&H and T&C as a core growth solution in the past few months. When we look at our performance and health category, we really saw amazingly strong global growth of 26%. With an impressive growth in the Americas of 32%. APAC came in line with what we anticipated since that was not their main selling season. EMEA growth lagged slightly as we revamped our sales team in Europe.
This is probably the last time we share this slide, because at this point, our transition to a recurring revenue model, particularly around our Performance & Health category, is done. 99% of our revenue now is contracted and recurring, and the drag that we've seen historically around revenue growth as we've switched into a subscription model is behind us.
As a matter of fact, this first half was the best subscription revenue results we've ever had. Another exciting aspect of this half year is the growth rate that we're seeing around our Tactics & Coaching solutions. Our T&C growth rate expanded to 11% on an annualized ACV growth rate, and this is up from 6.5% growth rate at the end of FY 2022. Nearly doubling the growth rate what we saw in ACV prior to this.
EMEA in particular benefited as our products for soccer and rugby were delivered earlier in the year, and they saw an annualized growth rate of 13.3%. Another really exciting metric is that the total amount of new customers using our new solutions, these are solutions that were acquired through the acquisition of SBG, grew over 100%. We believe this bodes incredibly well that as we start to grow that customer base, we anticipate that our ability to grow ACV over time is really in a great location.
We were also excited in T&C that we were able to deliver new solutions this past half around basketball and ice hockey, and we're really excited about the products that we have in our roadmap for other sports in the second half of the year and going into FY 2024.
Now looking into the prosumer segment, we're also excited by the results that we saw. ACV was up over 500% year-on-year, and while this started from a much slower base, I think the leading indicator here says that we anticipate future strong revenue growth in this lower part of the market. Despite it not being a huge part of what we do yet, I think it starts to bode well that our strategy to land and expand in professional sports and then expand further into the prosumer market is really starting to play well in our strategy.
A couple of notable key wins for the half. We had some really amazing standout multi-year deals. We expanded our deal here in Australia with the NRL and the NRLW. We also saw some really incredible deals that really love our combination of wearables and video. This included the XFL, the Bahrain FA, as well as FC St. Pauli.
We also saw some interesting deals that took us out of just team sports, such as the Ohio State University, where we're actually focused on their Olympic sports. We saw some incredible deals going down market, such as this Chinese Youth Football Association. From a technology perspective, we had some amazing wins. We continued to release new integrations of video analysis along with our wearable data. These included our GameTracker solution for the NBA, for NCAA basketball, and for ice hockey in the past half.
We were excited to bring new live features that will enhance real-time data analysis for our coaching staff on the sideline as they try to understand what is happening with their athletes in real time. We also brought a new generation of vest with integrated heart rate, specifically designed for female athletes. We think this is a great solution that is really ahead of its time in this market. I'm gonna hand it off now to Hayden, who's gonna talk a little bit more about our P&L and our path to free cash flow positivity. Hayden.
Thanks, Will, and a big hello and welcome again to everyone. Now, before I start, just a reminder to all that the numbers we're presenting here today are in U.S. dollars, not Aussie dollars, unless otherwise stated. Okay. First up, I want to address head-on probably the most burning question in investors' minds, and that is, How does our cash burn, cash balance, and recent restructure actions triangulate to free cash positivity in FY 2024? Well, the answer is on this slide, and let me step you through it. First off, it's important to note that we finished the half just gone with over $15 million of cash in the bank, which is more like $30 million when you couple it with a new debt facility. In Aussie dollar terms, that's AUD 45 million.
Our starting position is really AUD 45 million of available cash. Now let's walk through the cash burn. The main thing to note here is that of the $13.4 million of free cash burn in the half, $9 million of this is non-recurring. You won't see it again. This is depicted on the left-hand side of the page, as you'll see there. What makes this up? Well, it's no surprise that we've been suffering some higher supply chain costs, and $1.8 million of these costs have now since abated, and we believe will not be repeated. These relate to some component parts and the like, which spiked during the half, but have now fallen back down to more historic pricing levels.
Working down the graph here, there was also an additional $6 million, which were costs we incurred that have since been eliminated as part of our recently announced restructure. This includes both fixed and variable employment costs, as well as external marketing and fixed cost spend. Then there was the restructure itself, which cost almost $1 million. As you'll see, that leaves a baseline of free cash flow burn of around about $4.5 million for the half. Rolling forward, how can we expect to cover a first-half free cash burn of $4.5 million and a second half that would typically be slightly higher than that? Well, at a top-line ACV growth rate of 20% and, say, a contribution margin of 50%, this implies an incremental contribution profit of around about $8 million.
You then couple this with other non-ACV revenue growth that we'd expect, as well as some margin improvement, which is implied in the restructure savings, and our negative working capital benefit, which has averaged about $6 million a year. You can see it's not too hard to bridge our current baseline cash burn rate through to positive free cash in FY 2024. To summarize, we've effectively got $30 million of cash. We're just around the corner from being free cash positive with a modest baseline burn rate that can comfortably be covered by a range of aspects that we've consistently delivered on, like ACV or a structurally inbuilt like working capital benefits. To cap it all off, as you will see I've put here, we've actually been free cash positive for each of the last three months. Okay?
That's August, September and October individually. A very strong and very clear path to free cash positivity. Now let's turn to the P&L statement on the next slide. Here you'll see our total revenue grew by what on its face looks to be a modest 11% to record our first ever half of over $40 million of revenue. However, this result really masks two key things. One being the severe strength of the U.S. dollar and the other being our switch from capital to subscription. If we adjust for currency movements, our total revenue actually grew 16%, and within that, our biggest vertical of Performance & Health drove a whopping 28% growth in constant currency subscription revenue, which is an absolutely stellar result.
As we go further down the P&L, our COGS did rise sharply due to some supply chain issues which I mentioned above. That caused our contribution margin to fall to 71%. With a lot of those supply chain issues, I should say, having since been unwound, which would have otherwise given us a healthier 73% gross margin. Our variable costs were also up in line with our accelerated investment program, and this impacted our contribution margin, which fell to 35%, although this would have remained at 45% if we normalized for the costs that were recently eliminated in the restructure.
At the fixed cost line, this also rose in line with our accelerated investment program, but many of these costs have since been cut, as you saw on the previous slide too. If we turn now to the next slide, you can see how strong the impact is of our ACV subscription model. As you saw earlier, we just grew ACV by $7.2 million year-over-year. Here you'll see we converted this into $5 million of additional P&H and T&C subscription revenue for just a half. You'll recall that the P&H subscription revenue grew a massive 28% on a constant currency basis in the half year. It's these Performance & Health and Tactics & Coaching subscription revenues that are so central to our sustainable growth profile.
You'll also see here on the right-hand side, that capital revenue continues to be a slight drag on total revenue, but we actually think that's soon going to be very negligible. On the following slide, you'll get a sense for the impact of the accelerated investment initiative on our EBITDA. Looking at the chart, and if you go from left to right, first you'll see we had a revenue impact that, despite the FX headwinds, would have alone returned us to positive EBITDA.
Next you'll see this was offset by the COGS pressures on our gross margin that I mentioned. Then you get to the remaining waterfall bars here. If you do the calculations, you'll see that almost 3/4 of the higher cash costs in the half were for the accelerated investment initiative, with those costs not recurring going forward.
I think that's really powerful evidence to demonstrate a path to significantly improved EBITDA in the future as well. Now let's turn to the next slide on free cash flow. Look, I won't dwell on this as we covered it extensively just earlier. Other than to say we still delivered positive operating cash flow in the half despite it falling by $6.8 million, as you'll see across the bottom of the slide. With the vast bulk of these cost impacts being unwound, again, you can see a strong path to positive free cash.
Finally from me on the next slide, we give a breakdown of our CapEx, which has peaked at 20% of revenue as a result also of our accelerated investment initiative, with the dollar increase in CapEx being centered in our core growth verticals of Performance & Health and Tactics & Coaching, as you'll see in the table there. Now, clearly with the recent restructure, we'd expect this to fall going forward back more to levels in line really with our business model. With that, I'll hand back to you, Will .
Thank you, Hayden. Well, before we wrap this up, I think it's important to kind of recap the key aspects of our half year here. First, revenue quality continues to improve dramatically. Record revenue half, subscription revenue now nearly 90% of total revenue. Sticky products, which shows that through our ACV churn of being at 4%.
As I mentioned, future revenue under contract has really shown the change that we have undergone as we've moved into a SaaS business model. Our leading KPIs continue to expand with strong ACV growth, particularly around our wearable solution. Cross-selling continues to be strong, and the average ACV per customer continues to expand, really showing that our platform technology and strategy is working. We are excited that we are now ready to focus on returning our organization and our company to generating free cash flow.
Following our resize, we anticipate that with our transition, full transition into a SaaS business model, our ability to predict future earnings really makes us confident in FY 2024 being a free cash flow positive year. I think as I've stated in the past, we don't see a need for equity funding. Our ability to now access a debt facility that is supported by an unconditional offer of $20 million in debt really shows that our strength and balance sheet has dramatically improved. With that, let's touch base on the outlook for the remainder of the year. We continue to be confident in our ability to grow ACV in the short and medium term, and we expect this growth to be at least 20% for this fiscal year, with ACV churn in the range of 4.5%-6%.
We continue to be confident in our ability to generate strong operating cash flow in the short and long term, and we expect operating cash flow to be positive in FY 2023. As I mentioned, supply chain challenges had an impact in our gross margin this half. While these have improved, we anticipate that they will continue to have a moderate degree through FY 2023. As we have now pulled back in some of the costs around our accelerated investment program, we anticipate that we are gonna see stronger gross margin and contribution margin in the second half of FY 2023. We continue to reiterate that we expect to be free cash flow positive in FY 2024, and that we do not need to raise equity capital to achieve it. With that, I'd like to thank all of you for joining and listening to this presentation.
I look forward to answering any of your questions in tomorrow's conference call, and I wish all of you a great remainder of your day.