All right. Thanks everyone for joining us for our FY2026 half one results presentation. We're going to get underway now. We've got a pretty good quorum in. We're gonna run through the presentation first. We'll open up to the floor for questions at the end. Over to you, Matt.
Yeah. Good morning, everybody. It's great to be with you and to present these results this morning. Let's get going. The numbers are starting to reflect the Malaysian Software as a Service and HPC as a Service contract that we signed last year. That came on a little earlier than we expected, so that's terrific. We have had a record half-year financial performance, hitting over $40 million in revenue and a significant, a very significant uplift in the EBITDA. We're really seeing the service business continue to deliver and MP-FWI Imaging really being at the forefront of that for us. The pleasing thing is that a lot of that revenue is in coming out of our new offices now. Just looking at some nice graphs.
The revenue, as we touched on, is up 40%. Again, you can see that we've got some really nice year-on-year-on-year growth pattern coming through. We certainly have no reason to expect that to stop anytime soon, that growth pattern. EBITDA is up. The first half of 2025 was not a great year. So that is not very representative of what the business can do. So it's a really nice result and tells us, you know, starting to show what the business can actually deliver. Super pleasing, the cash is really up, and this is, make note, is at the end of January, we're at $21 million. All our numbers are U.S. dollars, of course.
It's a, we've got a lot of cash in the bank relative to what we often have, so hopefully that puts to bed that any thought that we're gonna need to raise money because we're cash generative, not we won't be spending money. The services revenue, which underpins everything, is up 30%, which is super, and software revenue is up 16%. Again, both of these are year-on-year growth, and of course, the HPC revenue, we expect a very significant growth given the Malaysian signing. Of course, the EBITDA was normalized EBITDA because of a ongoing court case, which is still in play, and it's been a, sort of an interesting result, with neither party really winning.
This is our timeline. Just a quick look at it. You know, in 2024, we opened Abu Dhabi office, or more what we did in 2024 was we put a leader into country, and we started hiring people. We actually opened that office, which is pictured on the screen here, opened in 2025. But we had an office, temporary office there, up to that point in time. Rio de Janeiro opened last year and is really delivering really well. That's the latest of the new offices, and we're not seeing any reason to open any further offices at this time.
Everything that we do in DUG, and everything we've ever done in DUG, is all related, and it's all about this key offering around numeric physics, you know, data processing. If you're processing data, then you need software, and that's why we've written our own software and have done from day one. You need high-performance computers, and that's why we've been building high-performance computers from day one. Then you need a business, and that's what we've been, you know, R&D, generating software, generating algorithms, running high-performance computing. It's all part of doing the same thing, and including Nomad, which is just HPC in a container, which we needed ourselves, for countries where we can't take the data out of the country, and we don't want to open a traditional data center.
All of these things are related, but we're gonna look at it in the terms of these three areas: imaging, software, and the HPC backbone. In terms of imaging, we're leading, we believe, the world in Elastic MP-FWI Imaging. We're significantly ahead of our competition. We started on it a lot earlier. We believed in it very early on, and we got a team on it, and we've been pursuing it for a long time now. And we're increasing our team, and we're getting after it more and more. Although others are now offering MP-FWI, they're a long way behind where we're at, and it is really delivering.
Elastic is just fantastic technology because we go from field data straight to the elastic rock properties, and the elastic rock properties are very important for oil companies and other companies to look at what the rocks and fluids actually are. Multi-client has been new and has been a really terrific addition to our offerings. Again, it's based on what we do. We own a lot of you know, it's around our service offering. We've got partners who are doing it, and you would have seen that Equatorial Guinea is a new project which is looking really well. Software is the heart and soul of everything, you know. It's so important. It's not stuff that can be developed rapidly, it takes years and years.
You know, everybody, just as a sidetrack, you know, everyone looks at NVIDIA. I had this discussion about NVIDIA and saying, you know, and everyone's going, "How good is the hardware?" The main thing about NVIDIA is their software. What separates NVIDIA from AMD is their software toolkit. It isn't the hardware so much, it's the software. Software is so important, and software cannot be reproduced overnight. It takes years and years of really strong teams. We're seeing this accelerate, the software. We're using the software for our own services, we're selling the software on top of our HPC, and we're also selling the software for use on on-prem.
It's also used for interpretation, and, as well as we're selling it to competitors, if you like, that use the software to compete against us, which is really nice because they're often picking up work that we actually don't want. It's a bit smaller than really moves the needle for us, or there might be other reasons why it just doesn't quite fit us. That model is working really well, and we've really got a strong roadmap ahead for software, which fits into our strategic business model. There's the HPC, which has been exciting. You've seen the deal we did in Malaysia, and just having strong expertise in HPC is really important. Now, of course, it's very important for AI.
We should touch on our AI strategy while we're at it, because we've had a very strong AI strategy for a long time now. You know, machine learning was in the first ever code we wrote, so it predates DUG in terms of our expertise and what we've been working on in our own individual lives before we came into DUG. AI is part of our imaging toolkit. AI is part of our business. We've rolled out AI in our finance teams, in all our different commercial teams, and we're pursuing an active AI role as things are really moving rapidly in that space.
We've also got AI toolkit, a toolkit coming out in, or is out in our software, where we can help users of the software progress really much more rapidly with their interpretation and other things. AI is extremely important to us. Of course, AI runs on the big computers and on the NVIDIA chips in particular that we've just purchased. We're really excited about how we can transform DUG or how DUG is being transformed by our AI capabilities. There is all our immersion cooling, which is the backbone of how we do compute, and DUG has been very important for us.
We are, of course, our map now shows that we've got a really nice geographic spread from the Middle East to Asia, to London, can't call it Europe anymore, I guess, to the Americas, including Rio de Janeiro, which is the new office, which is really, really kicking goals. Of course, we've got our global fiber. That varies a little bit how we do it over time, but connects all our offices. Except for Abu Dhabi, by the look of it. We need to update our map with Abu Dhabi, Dan, and Rio. They're all on that fiber, by the way, everybody, we just haven't updated the map. Now I'll hand over to Dan for financial performance.
Thanks, Matt. Hey, everyone. I guess starting off the, at the top on revenue, services was a really great result. Just to provide context there, 30% was on same half last year. You know, that was really driven by good utilization, good productivity, and the teams really getting through projects. That's a really exciting result for us, and it doesn't include anything from EPIC. That number is kind of EPIC exclusive or non-inclusive, rather. It's a really great underlying, you know, performance. When we moved down into software and HPC, we had pretty good growth in both of those business lines, you know, excluding EPIC. What we've had through the Q2 was, I think as we framed it, an earlier than anticipated ramp-up.
What ended up happening was we were able to firstly receive some storage equipment sooner than we were expecting, and then we also managed to mobilize equipment from the U.S. What that allowed us to do was to combine with existing equipment in KL and get the project started earlier than we were originally anticipating. That's driven a lot of the growth now in what we're seeing in software and HPC, and really helps the overall revenue growth. Through employee benefits, we've got a little bit of growth through there as we kind of ramp up in Brazil, and we ramp up in certain regions where we're getting, you know, that underlying services growth.
What we're seeing is adding headcount, but not adding headcount at the same speed as we're growing the top-line revenue, which is, you know, what we've been pretty consistent with over the last few years and what we expect to continue going forward. Other expenses, we had a 48% increase, inclusive of the MP2. It's around 25% increase if we ignore that provision for the normalized EBITDA. What we're seeing in other expenses is we've got a big part of the step-up is related to Cegal. For Cegal, our partner in the EPIC deal, we've got, you know, their portion or their costs for delivery coming through other expenses, and so that's come through in this half as we've managed to kick the project off earlier.
We've also just got a general step-up in IT, you know, facilities and some subcontracting as we got that project up and running. When we get down to EBITDA line, we've got normalized EBITDA, so excluding the one-off provision, up 161%, which was a really great result for the team. The 34% EBITDA margin, I think, is a really great stake in the ground. What we're seeing now is the result of EPIC and software and the growth in revenue, you know, and not the same growth in our cost base, and we're just getting really great operating leverage come through the business. As we move a little bit below there, depreciation amortization, lowered in the quarter, lowered in the half, rather.
What we're seeing there is some of the equipment that we purchased a few years ago is starting to roll off and have been fully paid for. A lot of the EPIC equipment was delivered in late December, early January, so we'll start to see that coming through the accounts in the second half, both through depreciation and the finance expense. As we move on to the balance sheet, we had cash and cash of $14.3 at the end of the quarter, and we had really good receipts through January. As we disclosed earlier, the 31 January cash balance of $20.7 came off the back of really good receipts through January.
You know, what that meant was with the $14.3 of cash at December 31, we had net debt of $0.3. We'll bring those new assets online and the new asset financing online in, we'll see it come through in second half, so that number will shift a little bit, but it's a really great result, and it's just an indication of the kind of performance of the business. Trade and other receivables was up. That's as we started to issue our first EPIC invoices, which got paid in January, so we're seeing that number kick up at the end of the year, and that's then come through to cash. Contract assets rose. We've just got a few more milestone projects in certain regions, and then also some e-invoicing timing.
For the e-invoicing, it's just creating a balance that carries through the end of month, but it gets reversed in the first week of the following month. It's creating a sort of temporary increase in the contract assets balance, which makes it seem a little bit overstated. Contract liabilities is up. That's a result of the EPIC contract, where we're able to invoice for the full year in advance. As we start to recognize that revenue from EPIC, we'll be slowly pulling that contract liability balance down each month. Trade and other payables is up, as I mentioned earlier. A lot of the new equipment was delivered right at the tail end of December, and so we've got that coming through the books here.
That will all be settled with the financings all settled, and we'll see that all kind of correct itself through the second half. Then finally, the provisions, as discussed, you know, there's further detail on the MP2 matter in the, in the release we made yesterday, but we've got that provision coming through, our provisions in our current liabilities. So that's driving the change there. Onto cash flow, it was a really good result once again. $7.4 million in cash generated from operating activities, really driven by higher receipts from customers. It was a really great result, and good cash flow for the quarter. As we mentioned, cash flow from investing and general CapEx, is probably a little bit lower than people expect, but it's just a timing.
What we've talked about in the past with the EPIC CapEx will come to bear in the second half. We'll see that full-year number kind of be in line with the expectations. Similar for financing. Once we get the financing, we'll come through the books as the equipment kind of goes on to financing in the second half as well. Hand back over to Matt to wrap this up.
Last slide here. The Malaysian contract is underpinning the profitable growth in the HPC and software sectors. We're still dining out on the best-in-class seismic imaging, and we certainly don't see that changing over the next 12 months or even 24 months as we strive to get that better and better and better. It's different, a little bit different now for us. We're now really focused on efficiency, productivity, and quality, and so efficiency is just making it run through. It is an incredibly complicated code, right? Just keep working on to get it running through the machines faster, keep working on making it faster for people to run, so efficiency's machines, productivity's people, and just make sure that the results always come out looking fantastic. Just little tweaks to the algorithms here and there.
Our focus is on that now, as opposed to adding features to the software, adding new things that the software can do, and that's a real milestone to get to that point, whereas all of our competitors, of course, are scrambling to try to develop this from the ground up. Established regions are continuing to grow, so our, you know, London and Houston and Asia are continuing to grow. The new emerging geographies like Abu Dhabi and Rio especially, are really looking good and will grow significantly from here. Thanks very much, everybody.
Thanks everyone. We'll shift into questions. If you have a question, please raise your hand, and then I'll give you the floor. First cab off the rank, Branko.
Yeah, can you hear me all right?
Yep, loud and clear.
All good. Well, appreciate your time. Just first question from me, just around the Middle East. I'd be interested in any feedback you've received from both Aramco and ADNOC, just noting those trials that you had progressing last time we spoke.
The trials have gone super well. Aramco just last week, or the week before, at a conference in the Middle East, stood up in the conference when one of our competitors was having a go at us and just trying to muddy the waters, and just said, "These guys are so far in front of everybody else, it's not funny." Aramco relationship is very strong, and we're looking at taking that to another level, and it just takes time. You know, there's a lot of work going on in Aramco with the legal and contractual and so forth. ADNOC project has really hit its straps, and the results look great, and there's actually a paper coming out in a conference in June in Europe.
With those great results, in both of these projects, we've done things with the code, with the technology that no one's ever done before in the world. Everyone's pretty surprised, and it's worked really well. Middle East is a slow burn, but it's really, really solid momentum towards very significant business. Rio, on the other hand, was a really fast burn, bang, big projects coming through.
No, that makes sense. Just to stay on the same topic, is this something we can expect to receive an update on in the next six to 12 months in terms of another contract win? I assume you're on a target one of the larger contracts that are outstanding in the region.
Well, we'd hope so. We certainly the pipeline is very significant in that region, so, we're certainly working hard towards that end.
I appreciate that. The final question from me was just on the services awards. It did seem that they slowed in that Q2 , about $8 million-$9 million, but I was just interested in, I guess, the pipeline of work you are seeing, noting that revenue line for the services division keeps growing, which is nice to see.
The pipeline is the biggest it's ever been. I know we keep saying that quarter after quarter, but it really is. It's, we have thought about how we could wrap it up just for our internal use because it's lumpy and it's all over the place, but it's huge. Which is why we don't let it out, because it's sort of very difficult to understand, but it is huge and it is growing. It has been disappointing, but it just happens in our business where you have a couple of months where your wins are a little lighter than what you would hope, the pipeline keeps growing, and then suddenly it's a downpour and you win a whole bunch.
You will remember that from July wins of $18 million a couple of years ago, when suddenly you'd been quiet, and then woof. You know, everybody's feeling good about what's happening in the industry, so we're confident.
No, that makes sense. Appreciate your time.
Thanks, Branko. Caleb, over to you.
Thanks, Dan. Hey, Matt and Dan.
Hey, Caleb.
Just on the revenue and order book, maybe some color on the split between production and exploration revenue, and whether you're still seeing that growth in 4D seismic?
Yeah, we've just won another big 4D seismic project. We're talking to the super majors now about 4D projects. We're solidly entering that production space, with a significant amount of our revenue. Now, I don't actually know what it would be. When I say significant, I'm talking maybe 20%, not more, but it's growing and it's... We're solidly in that production window, and we expect to win more and more of that work.
Yeah, that will be more sort of recurring revenues type of style compared to exploration work, would it?
Yeah, the classically, the 4D projects are repeated every 12 months. Make sure everyone's in on the picture here. If you've got a reservoir, like Bongkot in the North West Shelf here, and you can see the fluids, then you shoot a baseline seismic before you start producing the fluids, and then every 12 months, you shoot seismic again, and you can see the fluid movement where you've produced oil, where you haven't produced oil, and you can shape how you do your drilling campaigns to maximize getting the oil and gas out of the ground with minimum cost. You know, the wells cost all the money, seismic's less, much less expensive.
That's what 4D is for, and that's why 4D is very important to us to get into that space, but it's only the top companies do 4D because you've got to have the best technology, and you've got to be very reliable.
Thanks, Matt. On the EPIC contracts, the PETRONAS, CapEx, and Compute, that doesn't really arrive till this quarter, can we kind of interpret that as you still have some headroom in sort of your compute in the U.S. before you say to, for, say, 20%, 30% revenue growth before you need to order another large?
chunk or?
We've actually put in more compute into the U.S. over the last quarter. We're just, you know, enjoying that for the moment, and we'll see how we go. There are some very, very significant projects in the pipeline, and so yeah, it's an interesting time where we're watching utilization very carefully.
I think just to clarify on that point, that compute that's gone in is the compute we've talked to previously, which we purchased simultaneously with purchasing the EPIC equipment.
Yep. Thanks, guys. That's all from me.
Thanks, Caleb. Lucky.
Hi, Matt. Hi, Dan.
Hi, Lucky.
Congrats on a strong Q2 . Just one of the things was you obviously had some significant growth in the U.S. Can you just, like, clarify? Is that growth, is that based on work done in the region? Just 'cause I know previously you had, I guess, a customer relationship in the Middle East that was, I guess, based in the U.S. It's like, is that revenue coming for work done in the U.S., or is it just based on, like, where the customer is? Just what are you seeing specifically in the U.S.?
That big Middle East customer, the work from them has dwindled a little. There is still work from them, but a new project from them is actually being done in the Middle East now, in Abu Dhabi. There's not a lot of revenue in the last 12 months from that client. They're very happy with the work, but they just ran out of seismic data. We processed it all. They're actually acquiring a new survey that we expect to process over the next 12 months, 18 months. A lot of that work in the Middle East is from, sorry, work in Houston, is from the Americas. A little bit of it is from Asia.
As you said, it's about where clients want the processing to be done based on where they live, where their head office is, where their technical people is, for example. Houston's more and more America's focus just at this point in time.
Perfect. Then, can you also just talk us through what you're seeing in terms of, like, the multi-client sales? 'Cause I know you came out with the announcement, and I'm gonna screw up the wording of this Sarawak deal. Just kind of any insights you're seeing in terms of your multi-client business that you're developing.
It's going really well. I think this financial year is going to be a very breakthrough time for multi-client, from what we're seeing. The Equatorial Guinea project is very exciting, and the thing I would point out about it is that it is fully underwritten. You know, we're not risking anything with that project. It's a very good project.
Perfect. That's all from me. Thank you.
The assets we have in Australia are still selling, so we've still got sales going through, on these multi-client assets in Australia, which is quite amazing.
Perfect. Thanks, guys.
Thanks, Lucky. Dec, over to you.
Morning, gents. Great set of numbers. Obviously, a great expansion in the EBITDA margin. How do you see that run rate going forward on a full year basis? Now, are we sitting in the mid-thirties or potentially even higher than that?
I would be very happy if we finished the year with a 34% EBITDA. you know, it could slide higher. It may well.
Excellent
have more to say about it, Dec, at the minute.
Sure. Thanks, gents.
Alan.
Yeah. Hey, guys, sorry. Just one. Sorry if I missed it before, but on CapEx, can we just frame how you think about the maintenance CapEx on our look forward, and just for the full year 2026, noting the CapEx shift to the second half, you know, broadly speaking, how we should frame CapEx for the second half?
Typically, maintenance CapEx for us is falls in the range of $1 million-$3 million. You know, often falls around that $2 million mark for us, that's just money going to maintaining the data center, replacing little broken parts here and there. We're pretty maintenance CapEx light, as a general rule, we don't see a step change in that going forward. One of the nice things is that, you know, new equipment's more powerful and the cost, you know, per performance we're seeing is really, really good and really competitive, that, you know, lightens the load as well on a maintenance CapEx perspective as equipment starts to age.
I think the, this was noted CapEx for the for the EPIC projects and a couple of others, I mean, we're sort of looking, sort of $14 million, $15 million, $16 million of CapEx in aggregate. Is that correct?
Yeah, that's correct, Alan. Yep.
Helpful. Thanks.
Edward.
Hi, Matt. Hi, Daniel. How are you?
Hey, Edward.
Good. Just a quick question. You did have on the radar a few years ago to build a data center in Western Australia. You were going to build a carbon neutral data center. Is that still on the cards, or has that been completely shelved, or?
It's really we've moved on from it because we didn't see the enterprise part of our HPC business accelerate like we thought it could. We've let the option to lease that land lapse now. We're still talking to the West Australian Government 'cause they're still very keen on it. We've been asked a lot of questions from the federal government about what's going on, and we just keep saying, until you change the manner in which HPC is funded in Australia, then really the HPC industry is dead. That's what's ongoing there.
Okay. Thank you.
Great. We have a few questions through the chat. An update on DUG Nomad is it's progressing, it's going well. We're still working on the strategy and how we approach it there, one of the big areas of focus for us and the big opportunities that we're seeing, making the most of, as Matt talked about, the HPC expertise we have and the software. We're working on a lot of opportunities, and there's a lot of exciting stuff happening where we're looking at providing a kind of bundled solution. We're providing, you know, the container itself, the computer that goes in it, the software that runs the computers, as well as our process and imaging software on top.
There's a lot of exciting opportunities there, and that's what we're kind of working through at the moment.
We have a number of proposals out for that.
On the DUG Cool side, you know, I was over in the U.S. at the end of last year, visiting with BAC and attending a few conferences, and we're really happy with how they're going about it. It's just a long sales cycle, and the industry is pointed towards direct-to-chip, and so there's a bit of, you know, there's legwork that needs to be done there. But we're really happy with how they're going about it and the work that they're putting in, we think they're pursuing it. We still think there's a big opportunity there because of all the benefits that come from immersion, but there is some headwinds with the industry just being, you know, predominantly direct-to-chip at the moment, and, you know, we need to...
They need to put in a lot of work to kind of shift it. Okay. Apologies, we just get chat up. Thanks, Stella.
I wouldn't comment on that one. It's a great margin on that project. We don't want to talk about individual margins on individual projects.
What we've talked about in the past is its margin accretive to our existing business, and I think we've seen that come through this quarter, this half, as we get the revenue down. Can't get more specific than that, but we're seeing it as margin accretive, and that's coming through the financials.
There are no DUG Cool royalties, or they're very minor. It is a tough sell for them at the moment. It is a lot slower, but there is significant headwinds with the direct-to-chip, and the NVIDIA chips and so forth. NVIDIA are not, I've said this before, NVIDIA are not that keen at the moment on the chips being immersed, although we've immersed all their chips, and we point that out to them, that they run fine. That's an ongoing discussion and one BAC are picking up on as well.
Great. Well, thanks for attending, everyone. If you have any further questions, feel free to send through to investor@DUG. Otherwise, thanks for your support and thanks for attending.
Thanks, everybody.