Thank you for standing by, and welcome to the Catapult Group International Limited, Catapult to acquire Perch, expanding its performance and health vertical conference call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you would like to ask a question, you need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Will Lopes, Chief Executive Officer and Managing Director. Please go ahead.
Thank you, and good morning, and thank you all of you for joining us. I'm here with Bob Cruickshank , Catapult's Chief Financial Officer, to walk you through the acquisition of Perch, which we announced this morning. Today, I'll comment on the acquisition and the strategic rationale behind it, and then Bob and I will take questions from participants on the call. First, Perch is a company we've long admired. It's an enterprise software business that, like Catapult, has fundamentally reimagined how athlete performance is measured. Founded in 2016 by two MIT engineers, Jacob Rothman and Jordan Lussier, Perch was born from a bold ambition to transform the weight room from a fragmented analog environment into a data-rich, precision-driven training space. They accomplished that by building a compact 3D camera system which mounts in weight racks, fusing optical tracking with computer vision and machine learning.
With this, they made the invisible visible, capturing real-time performance data in the gym and turning what was once subjective coaching into a quantifiable, repeatable process. Today, Perch is a full-stack weight training and assessment solution with three distinct software products, serving as the connective tissue of the modern gym. It spans three mission-critical areas. First, in the planning of workouts, Perch enables coaches to create a personalized, data-driven programming that prescribes optimal loads and intensities based on performance history. Second, is in evaluating readiness. Through computer vision, their camera system can identify athlete routes, assess jump performance, and detect athlete fatigue. This enhances efficiencies by seamlessly integrating assessment into existing training workflows. Lastly, is really the core of what they do, which is training athletes.
Through a closed feedback loop, coaches can monitor, adapt, and optimize athlete output in real time using tools that help athletes stay motivated, such as daily leaderboards, and athletes themselves can see progress and adjust workouts on the fly. None of this works without their camera system, seamlessly and silently capturing data across the gym without getting in the way. We were attracted to Perch for a number of reasons. First, this acquisition is deeply strategic. It strengthens our position as the global leader in athlete monitoring by bringing the weight room intelligence into our performance health portfolio. Strength training is foundational to the athletic development, and yet it has been largely siloed from the on-field data. Perch helps us bridge that divide. It also enables us to create a unified athlete performance system, one that combines gym-based strength data with Catapult's field-based metrics.
That's a powerful step forward towards giving our teams a holistic, real-time view of athlete load and recovery, all within a single platform. More than that, Perch's product is battle-tested, particularly in the chaotic reality of the elite pro weight rooms, a notoriously difficult environment to measure and use computer vision. Their institutional knowledge built over nearly a decade is a competitive advantage, which we now bring into our fold. Lastly, we are confident in our ability to help scale it. With over 3,400 pro teams in our platform, Perch will benefit from Catapult's go-to-market reach, allowing us to expand beyond North America with speed and precision. As outlined in the ASX announcement, the financial terms align with our disciplined M&A approach. We remain steadfast in pursuing only opportunities that strengthen our product leadership and meet our financial criteria, particularly in the Rule of 40 adherence.
This transaction checked both boxes. In closing, the acquisition of Perch moves us meaningfully forward in our mission to serve the world's best athletes and teams with unrivaled technology. That mission drives every product decision, every hire, and every acquisition, and today is another step in fulfilling it. We're excited to bring Perch into the Catapult platform, and we are even more excited for what's ahead as we integrate their capabilities and we introduce them to our customers in the months to come. With our all-in-one SaaS platform, purposely built for sport, we are better positioned than ever to help teams and athletes unlock potential and perform at their peak. Thank you all for listening, and I'll turn it back to the operator for any questions.
Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you'd like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Evan Karatzas from UBS. Please go ahead.
Hi, thanks. Okay, I'll just ask a couple of quick ones here. The ACV growth milestones that existing shareholders and management need to hit as part of the earnout, can you just provide, I guess, some more detail on that, please?
Yeah, we won't be specific with it, but it's intended to basically be an improvement into our ACV growth, particularly in the vertical of P&H.
Okay, all right, fine. Maybe just around the typical size of contract per team that Perch has, and I guess does it vary much depending on, I do not know, how many devices you take? Just some additional information there too, please.
Yeah, I think at this stage, it's still early on for us. How do we see it fitting into our world? From an ACV perspective, they have a very similar profile than what we have in P&H, where you'll see a variation of the top tier sort of be in really on the high end, closer to the hundreds of thousands, and sort of the mid-end in sort of those 20-40, and in the low end sort of in the sort of 5-10s. I think their average ACV of that P&H is probably slightly lower than ours, but it's sort of in the same range. It's not too far away from that.
Okay, good one. Okay, and then just final one here. The comment on the accretion to Rule of 40, any sort of way you can, I guess, break that down to what revenue growth and margins look like for this business as well, please?
Yeah, they're accretive to us. We're at 30 once a day, and so they're doing slightly better than that, and they are profitable. I think that's as much as we're going to give at this stage. It's still fairly small, right? It's a $2.5 million of ACV here, so I don't want to get too sort of too crazy on that. I think our focus in the next six months is really about integration. I think we're very impressed that, given their size, how well they've done in that Rule of 40. Then two, I think probably the sort of the immediate investment that is sitting in front of them is really around scaling sales and distribution, which I think we could help on that front without adding any cost to the system.
Yeah, okay. All right, I'll pass it on here back in the queue. Thanks.
Thank you.
Thank you. Your next question comes from Tom Chapman from Jefferies. Please go ahead.
Hi guys. Just two questions from me. What's the split between professional teams and post-human, and how do you kind of think about the strategy of that moving forward? Obviously, you're focused on the pro teams. Yeah, just that first.
Yeah, I think from an ACV perspective, it's probably like 90% or more is coming from the pro side. Again, very similar to profile and overlap to what we do. Our anticipation there is that we continue to focus on the pro environment.
Yeah, no, that makes sense. Is there any additional kind of cost of integrating it? How should we think about the CapEx in FY2026 onwards? Is there any incremental CapEx required, or is it kind of baked in already?
No, there's no expectation that we're going to see incremental sort of R&D from a CapEx perspective from where we are. Obviously, we're pulling in some of their engineers into the team, so anticipate that that's going to add a little bit, but that's also going to be offset by the top line. From a percentage of revenue perspective, don't anticipate any major difference there. I think from a cost of integration, there'll probably be a little bit of, obviously, some engineering work for us to connect their data system to ours, but we feel pretty well established given the engineering power that we have. That won't necessarily change the profile of our R&D cost.
Yeah, okay, makes sense. JSOS.
Thank you. Once again, if you'd like to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Kieran Harris from E&P. Please go ahead.
Oh, hi there, Will and Bob. Thanks for the question. Would you mind just giving a little context and data around how the deal was initiated, how you arrived at the pricing, and whether there was any kind of contingent bidding? Thanks.
I think we're not going to talk through a little bit of how the terms and the negotiation went on. I think we've known Perch for quite some time. They're neighbors here in Boston, I think, as I said at the top of the start here. It's a company that I've admired quite deeply for some time. I think the two founders have similar ethos to what we have. They look first as sort of customer-focused primarily. We've always thought that what they were doing was actually quite interesting. We knew that, I think, as I mentioned, we've talked to companies probably once a week when it comes to opportunities knocking on our door. Most of the times, we're basically not seeing a lot of, we're seeing a lot of frogs and not seeing a lot of princes.
I think ultimately, the conversation with them got a little bit more serious, I think, as they started to rethink about their growth strategy, as they started to think about sort of their cash profile, where they wanted to go, and how they wanted to scale. I think the mingling of minds or melding of minds between what we have and what they have, I think, fell into a really good conversation. We're big fans of doing M&A where the team stays along, the founders come along. We think that adds a tremendous value, and I think that's coming with this. From a valuation perspective, look, I think we primarily looked at, obviously, we do an assessment of where other companies of their size are, where we stand against sort of the multiples we are.
I think I'm really pleased that pretty much in line with where the market is valuing us. We're not paying a gigantic premium from that, which typically is anticipated. We feel pretty good about the value of the transaction here.
Thanks for that useful context. Just on the synergy side, I mean, the revenue and cross-sale go to market opportunity, that certainly makes sense and looks compelling. I'm just curious about the development side of things. Are you guys thinking about ways that you could potentially advance their product or even deploy that technology across different use cases, kind of like you did with SVG?
We're definitely, I think there's, I think, on two levels, right? I think there's technology we have in-house that I think could benefit in how they're capturing data today. I think there's expertise, particularly in their computer vision and sort of the algorithms they build in AI that I think we could think about deploying in other areas, particularly in the field. Absolutely, we're excited. I think there's lots of innovation synergy, right? I think that's kind of where your question was going. I think we're looking forward to ideally kind of pulling that out. It's probably going to take a little bit longer. I think day one, the first six months, right, is really making sure that the team settled in, that the product is well understood by our sales and customer success staff, that the integration is in a good place.
I'm sure that within due course, we'll start to meld the R&D the same way we did with the SVG acquisition.
Thanks. And one last quick one. Could you give a sense of the crossover with your existing customer base?
Yeah, it's fairly small, right? I think they've primarily been focused on American football. I think they have, let's call it, a couple of hundred clients at this stage. Probably out of those couple of hundred clients, I'd venture to say most all of them, if not exactly all of them, are clients of ours. The synergy there is really high. I think we're excited that it allows us to help bring their product into a global perspective, right? Their ability to grow, I think, has been stunted mainly from an investment perspective, not because the product is not in the right order. I think we could solve that problem fairly quickly for them.
Sure. Thanks, Will. Appreciate it.
Yeah.
Thank you. Your next question comes from Anshuman Anand from William Blair. Please go ahead.
Thank you. Thanks, Will. I just had a quick question. I think you alluded to it a little bit as you were answering the last one. As you think about go-to-market strategy and the new product that you've acquired here, how do you think about what areas will you target in the first phase and then in the latter phases, i.e., which sports or which geographies do you think will be a natural fit straight away and which might take a while?
Yeah, I think the product itself, I think, will lend incredibly well for all the sports that I think we support. I don't know if there's, if you look at how athletes are trained, what they do in the gym is pretty universal, right? The need to measure how well that programming is coming along is also pretty universal. Having said that, I think we prioritize typically the same way we prioritize most of our new products as we bring them into go-to-market. Anticipate that American football and ice hockey and basketball in North America will probably be sort of top of mind as their seasons sort of reach. Obviously, European football or soccer as well, right? Following that typically will be sort of the power sports that we have great access to, so in rugby, in the AFL, in Australia.
The other sports as it relates to the rest of the world, the product itself is well designed to be supportive of all sports code that we support, but I think we'll probably follow that same kind of pattern of start with American football, followed by European football, and then sort of the larger sports in North America before you kind of take on the other regions.
Clear. Thank you.
Thank you. Your next question is a follow-up from Evan Karatzas from UBS. Please go ahead.
Hey, sorry. Okay, just one more for me, if I can here. Just following up on some of your comments, I guess it gives your existing sales teams another product to sell through to some of your existing customer base. Maybe just a little bit of expansion on that. Just trying to understand the relationship that you've got with the wearables into sports teams that are similar. Is that, I guess, who Perch sells their product to as well?
Yeah, it's a great question. I think the overlap of the buyer here, particularly in that vertical, is very high. The decision maker on who's selecting Catapult today in sort of our P&H vertical most of the time is also the decision maker that would be buying the technology for the gym. I think there's a good overlap on that front.
Yeah, yeah. Okay, cool. Thanks.
Thank you. There are no further questions at this time. That does conclude our conference for today. Thank you for participating.