Thank you, Michelle. Welcome, everyone, to IMDEX's FY 2025 Full-Year Results Presentation. I am joined today by Linda Lim, our CFO, Michelle Carey, our Chief of Digital Earth Knowledge, and Shaun Southwell, our Chief of Exploration and Production. Throughout this presentation, we will be referring to the investor slides released on the ASX this morning. At IMDEX, our purpose is clear: we aim to efficiently and sustainably unlock the Earth's value. We enable our customers to find, define, and mine ore bodies with greater precision, confidence, and speed, while leading the shift towards smarter, lower-impact mining. The My Portal visualization you can see on slide 3 demonstrates how we bring that purpose to life, turning complex subsurface data into real-time insights that drive better decisions. Turning to slide 4, I want to reinforce what makes IMDEX unique.
We have been at the forefront of mining tech for over 50 years, operating in more than 100 countries. That global footprint allows us to serve 500+ resource companies and 150+ drilling contractors across every major mining region. Our business model is capital-light and people-light, with a highly capable team of just over 800 employees worldwide, giving us the ability to scale and deploy new products quickly, as evidenced by our acquisition of Devico. Most critically, we can deliver top-quality service to our customers in the field where they operate. Importantly, the innovation that underpins our business is protected. More than 80% of our revenue is protected by patents and other forms of intellectual property. Increasingly, our IP is supported by an integrated digital platform, and when combined, they form a powerful base for growth.
This combination of global reach, technical leadership, and disciplined execution is what sets IMDEX apart and positions us to lead the next wave of transformation in mining. Moving to slide 7 and our financial highlights. Revenue for the year came in at $431 million, down slightly on PCP, but characterized by market share gains and an increase in contribution from new technologies and services. Most recently, our 4Q revenue was up 19% on 3Q, reflecting the underlying fundamentals and the green shoots that we've been increasingly seeing around the world. However, it is equally important to point out that the challenges we have faced in our industry for the past few years, including rising costs and geopolitical uncertainty, do remain in effect.
The second key financial highlight is our normalized EBITDA margin, which has been maintained above 29% despite the decline in top-line revenue and despite the rising cost environment in which we operate. Linda will provide additional detail on our reported and normalized numbers in her deep dive later on today. Normalized EBITDA at $126 million and reported EBITDA came in slightly higher at $130 million, reflecting a number of one-off gains during the year. Clearly, these results reinforce our ability to consistently perform in all market conditions. Turning to slide 8, I wish to highlight the balance sheet strength of our business. Once again, there are two key numbers I would like to spend some time on. Our cash conversion at 95% is exceptional and a credit to the discipline of our global teams and the robustness of our working capital management.
We have made significant progress on debt reduction, bringing net debt down by $22 million, or 63% for the period, and closing the year with a net debt balance of just $13 million. Our net debt-to-EBITDA leverage ratio now sits at just 0.1x , giving us ample capacity to invest in growth and pursue strategic opportunities as and when they become available. Finally, the board has declared a fully-franked dividend of $0.02 per share, consistent with our approach to capital management being a 30% payout of normalized NPAT. These financial highlights collectively demonstrate the strength of both our operating and balance sheet discipline, particularly noteworthy given the recent challenging year. Turning now to slide 9, this is the new lens through which we are presenting the IMDEX business, one that better reflects how we operate today and how we will report going forward.
We evolved into two clearly defined market segments and two clearly focused business units, each with distinct growth levers and distinct leadership accountability. Starting with our market segments, first, our minerals exploration and resource definition market. This is where we support exploration companies and drillers to find and define resources with greater precision and efficiency. Second, our mining production and non-mining activities market. This is about leveraging our existing core competencies through the deployment of IMDEX technologies into new end-markets, including downstream into mining operations and further afield into adjacent industries such as infrastructure, energy, and renewables, where customers are increasingly finding applications for our products today. To serve these markets, we have structured IMDEX into two business units.
One, IMDEX Drill Site Technologies led by Shaun Southwell, which encompasses our specialized drilling fluids and fluid optimization equipment, our downhole sensors and directional drilling technologies, all of which originate valuable data into our connected digital ecosystem. Two, IMDEX Digital Earth Knowledge led by Michelle Carey, delivering our software products, data analytics platforms, and AI tools that convert data into actionable insights, including that created by our IMDEX Drill Site Technologies business unit. This is increasingly in demand by our customers who seek to make decisions closer to real-time throughout the mining lifecycle. As you look at the slide in front of you, you will note that the history of the IMDEX business originated in the top left of the slide. Our sensors continue to maintain technical leadership, and our specialized drilling fluids continue to be the single greatest driver of drilling productivity improvement for our customers.
Increasingly, we have moved to the right of the slide and into the mining production value chain. Furthermore, we now move down the page, reflecting the increased customer demand to move from data origination to data enrichment. Many of our recent investments are highlighted here. Each segment within this business model has its own strategic growth levers. The strategic growth levers for IMDEX Drill Site Technologies include the next generation of sensors and fluids, expansion of integrated field solutions, expansion of IMDEX mining technologies, and the acquisition of Krux , which enhances drill site productivity and on-site data capture. The strategic growth levers for Digital Earth Knowledge include next-generation IMDEX digital products and expansion and integration of both Datarock and ESA .
Together, these two business units create a powerful integration advantage where physical and digital tools work seamlessly to streamline workflows, enrich data quality, and unlock value from complex geology. This structure reflects how we operate today, how we're positioned to grow, and how we'll commence reporting at the end of FY 2026. Let me now turn to some of the strategic highlights for FY 2025, aligned to the business units we introduced earlier. Starting with Drill Site Technologies, we've continued to execute well in our core exploration market, and I will draw your attention to a number of highlights. Our share of wallet has increased from $2.10- $2.20 for every $100 spent on exploration, a strong indicator of the value our solutions continue to deliver.
We've expanded our integrated field solutions footprint into seven new countries, and we're continuing to see strong uptake of our next-generation technologies. Krux has had another strong year with growth of 86%, and importantly, HUB-IQ connected sensors are up 11%, once again a clear sign of growing customer engagement with our digital platforms. Our mining production and non-mining segment continues to build momentum. IMDEX mining technologies revenue is up 31%, and we've deployed IMT solutions on 30% more sites globally in this past year. Within that portfolio, the OMNIxBOLT product is a particular highlight. We have previously informed the market that although OMNIxBOLT was the last product to become commercial within that portfolio, it would likely be the fastest to grow in adoption, and this is clearly evident with a 74% uptake year-over-year.
Turning now to our Digital Earth Knowledge business, we're very pleased with the performance of this new portfolio. Datarock delivered 63% revenue growth, showing strong traction with global resource companies. We also saw record revenue from ioGAS and a steady contribution from AI Cyrus , reinforcing once again the strength of our growing SaaS portfolio. Across both these business units, these results reflect strong customer engagement and the continued evolution of IMDEX into a platform leader in mining intelligence. Turning now to slide 11, I want to briefly highlight the progress we've made across our ESG focus areas. Across all the different stakeholders that touch the IMDEX business, our ESG strategy resonates most strongly with our workforce. It is our people that drive our ESG focus areas.
We've maintained strong safety engagement with 98% compliance and HSC training across our global workforce, and we've made meaningful strides in our ESG strategy, completing a double materiality assessment and a climate-related financial disclosure gap analysis, ensuring that we are aligned with global best practice and well-positioned for long-term sustainability. This year, our global volunteering program continued to gain momentum, with over 14% of our workforce participating, a wonderful example of our IMDEX people living our values beyond their IMDEX workplace. As always, we continue to invest in innovation and R&D, recognizing the growing demand for solutions that improve productivity and reduce our impact on the Earth. These are tangible steps forward that our entire team is proud of. I'll now hand you over to our CFO, Linda Lim, to take you through the financial performance in more detail.
Thank you, Paul. Building on your overview, I'll now take us through the key financial metrics and performance drivers for FY 2025. Moving to slide 13, Paul has already mentioned revenue and our normalized EBITDA margins, and I'll expand on this in the following slides. In FY 2025, we normalized our result to reflect three non-recurring items. As announced on the 16th of August 2024, we resolved the global tech claims, resulting in a net gain of $9.1 million. We also resolved a longstanding matter with the ATO regarding warrants, delivering $0.4 million cost recovery and a $6.6 million tax adjustment, reducing our tax expense. We adjusted for $5.8 million in reorganization costs, incurred in reshaping the business in response to market uncertainty, and positioned it for future growth. These adjustments resulted in a $3.7 million uplift in normalized EBITDA and a $12 million uplift in normalized NPAT.
Reported NPAT was $55.2 million, with an annualized effective tax rate of 18.5%. I'll provide a more detailed capital management overview later, but I'm pleased to highlight strong normalized operating cash flow of $120 million, net debt reduction by 63%, closing at $13 million, and a return on capital employed of 9.9%, and return on equity of 7.2%. These metrics reflect our continued investment in technology and long-term growth initiatives. Moving to slide 14, as Paul has mentioned, revenue for the year came in at $431 million, down slightly on PCP, but characterized by market share gains and increasing contribution from new technologies and services. 66% of revenue came from sensors, services, and software, up from 64% in FY 2024, reflecting the growing adoption of our next-generation technologies, continued growth of Devico technology in the IMDEX network, and an increase in IMDEX mining technologies, primarily due to BOLT.
These increases were offset by lower integrated field solutions revenue, which includes IMDEX Managed Solutions, or IMS, and Directional Core Drilling or DCD. We had an increase in IMS offset by lower DCD revenue due to some projects coming to their natural end. Drilling fluids and equipment sales accounted for 34% of our revenue and was down 8%, the majority of which is due to two large customers ceasing projects in Asia and South America and political instability in West Africa. Our five-year revenue CAGR now sits at 13%, significantly ahead of S&P exploration budget CAGR of 6%. Looking ahead, we remain confident in our ability to continue delivering top-line growth as market conditions improve and our strategic investments begin to scale. Moving to slide 15, reiterating our Q4 revenue hit a record of $119 million, up 19% on Q3. This was driven by strong U.S. activity, next-generation product uptake in Asia-Pacific, and high infrastructure and sensor sales in Europe and Africa. In FY 2025, the Americas delivered $213 million, 49% of group revenue, Asia-Pacific $107 million, 25% of group revenue, and Europe, Middle East, and Africa at $111 million, being 26% of group revenue. This underscores the strength of our diversified footprint and the impact of strategic technology investments. Turning to slide 16, I'd like to highlight our operating EBITDA performance. Despite a 3% decline in revenue, we maintained a strong EBITDA margin of 29%. This reflects the resilience of our business model and our cost discipline. The shift in product mix has helped offset the impact of softer market conditions. Importantly, we absorbed Devico KMP cost while continuing to invest in R&D. Moving to slide 17, I'd like to highlight our continued investment in innovation.
In FY 2025, we invested $41 million in R&D, consistent with our capital management approach of allocating 8%- 10% of revenue to innovation. A significant portion of this spend was directed towards Horizon1 initiatives, supporting the development of next-generation tools already contributing to revenue. Importantly, our catalyzed R&D increased this year, reflecting the nature of the projects, primarily software and prototypes with clear commercial pathways. Just to clarify, there has been no change in our accounting treatment. The increase in capitalization simply reflects the type of work we're undertaking. It is not a shift in policy. This disciplined approach ensures we continue to lead in mining tech innovation while maintaining transparency and financial rigor. Turning to slide 18, we delivered strong operating cash flow of $124 million, with a 95% normalized conversion rate from EBITDA.
This is a clear reflection of our disciplined working capital management and the strength of our underlying operations. This level of cash generation has enabled us to invest confidently in growth, supporting continued evolution of our technologies, software development, and internal systems to enhance scalability and efficiency. At the same time, we've maintained our dividend payout at 30% of normalized end-pat and continued to manage debt and leverage effectively, with a leverage ratio of 0.1x . This performance again reinforces our capital management discipline and positions us well to fund strategic initiatives without compromising shareholder returns. Turning to slide 19, our balance sheet remains strong and consistent with prior years, underpinned by disciplined capital management and robust cash generation.
As we look forward to FY 2026, we do expect changes as we consolidate the acquisition of Datarock, Krux, and ESA , strategic additions that will enhance our digital capabilities and support long-term growth. However, for now, our balance sheet remains stable, well-capitalized, and positioned to support reinvestment in innovation, expansion, and shareholder returns. Turning to slide 20, this provides a clear view of our capital investment for FY 2025. We increased CapEx this year to support growth across our core and emerging technologies, including survey, tool fleet upgrades, development of our next generation of tools, and expansion of our IMDEX mining technology product suite, as well as our software offerings. It is important to note that the capitalized R&D referenced earlier is included in the CapEx figure. This investment positions us well to scale our technology and deliver long-term value.
Turning to slide 21, our capital management approach is anchored by strong operating cash flow, disciplined R&D investment being 8%- 10% of revenue, and a 30% dividend payout of normalized end-pat. We have capacity to fund the acquisitions of Datarock, Krux Analytics, and ESA , all aligned to our long-term growth strategy. Our solid cash position provides flexibility for further reduction in debt and reinvestment through R&D, CapEx, or strategic M&A, balancing growth, innovation, and shareholder returns. I will now hand to Shaun Southwell, our Chief Exploration and Production.
Thanks, Linda. Let me take you through our operational outlook for the year ahead, focusing on where we see activity trending across key regions. We're entering FY 2026 with a measured sense of optimism, while we remain cautious given the mixed signals across the market. We are seeing clear pockets of opportunity emerging. These are driven by commodity fundamentals, policy shifts, and the increasing demand in integrated solutions and next-generation technologies. The strong revenue growth in IMT for FY 2025 of 31%, with this momentum expected to continue in FY 2026, with increasing adoption of all technologies within the regions. The latest generation of technologies released in exploration have had strong adoption in all regions during FY 2025 and are expected to maintain this during FY 2026. Our strategy remains consistent: leverage our global footprint, deepen customer engagement, and deploy both physical and digital solutions that uplift productivity, reduce impact, and improve decision-making.
Moving to slide 23, the Americas remain our strongest opportunity for growth. In the U.S.A., we expect steady near mine drilling programs with copper and gold leading demand. The FAST-41 program is helping to unlock major projects, and we anticipate more opportunities for our integrated field solutions and higher margin sensors. In Canada, the push for critical minerals is a positive sign, and we may see increased winter drilling from juniors if funding conditions improve, but we do remain mindful of the funding headwinds. In South America, copper is the core driver, with Chile, Argentina, and Peru likely to maintain healthy exploration budgets. These are linked to the global energy transition, which we see as a structural tailwind. Gold should remain stable, and in Brazil, the market remains resilient, but cost pressures are still a watch point.
On slide 24, turning to Europe, Middle East, and Africa, activity remains steady, supported by strong fundamentals. In Europe, we expect policy-led demand for critical minerals and infrastructure to continue supporting activity, particularly in Eastern Europe and the Balkans, while activity in Scandinavia may remain subdued in the near term. The adoption of our technologies continues to provide growth opportunities. In Africa, demand for gold and copper projects is expected to hold, with North Africa and Zambia positioned for increased activity. Political uncertainty in Mali and the DRC will continue to limit investment in these regions. Moving to slide 25, in Australia, we anticipate gold drilling activity in WA to remain steady. IMT technologies and integrated field services pipeline is strong and continues to expand. In Asia, exploration activity in Papua New Guinea and the Philippines is trending upward, supported by gold and base metal demand.
Importantly, demand for AI-powered geological solutions and sensors-enabled platform is growing, creating opportunity to expand our presence. Across APAC, the mix of steady production-related activity and emerging high-growth exploration plays provides a solid base. The step change will depend on sustained budget increases. I will now throw it over to Michelle, Chief Digital Earth Knowledge.
Thank you, Shaun. As we look ahead to FY 2026, I'd like to take a moment to walk through the performance of Datarock, Krux , and Earth Science Analytics, or ESA, and how they will integrate into IMDEX's digital growth strategy across both business units. Each of these businesses has demonstrated strong revenue growth from FY 2024 to FY 2025, and together they are building meaningful market penetration. As they consolidate into the group, we expect them to be broadly break-even with clear pathways to scale. What's exciting is the strategic alignment across all three. They complement our existing platforms and position IMDEX to deliver scalable, interoperable SaaS solutions that enhance productivity outcomes and subsurface intelligence for our customers, driving margin expansion for IMDEX. Turning to slide 27, I want to bring together the strategic rationale behind our digital growth initiatives.
With the acquisitions of Krux , Datarock, and ESA, we've continued to deliberately build out a connected, interoperable digital stack, one that spans the full subsurface workflow and delivers scalable, recurring SaaS revenue. Krux captures drilling inputs and provides real-time optimization at the drill site, enhancing performance and enabling faster decision-making. Datarock transforms sensor data into geological insights using AI and machine learning, automating workflows and improving orebody understanding. ESA scales subsurface analytics across industries, bringing cloud-native AI-powered geoscience capabilities that extend our reach beyond mining. Together, these platforms integrate seamlessly with IMDEXHUB-IQ, creating a unified data platform that brings forward decision-making for our customers and positions IMDEX as a leader in mining intelligence. This strategy is deliberate, highly scalable, and already delivering results, with an expectation that in aggregate they will be break-even in FY 2026. Now let's take a closer look at each of them.
Turning to slide 28, let's start with Krux . In FY 2025, Krux delivered 86% revenue growth, reflecting strong customer adoption and the value it brings as part of our integrated solutions offering. We currently hold a 40% stake in the business and are set to acquire the remaining 60% by April of 2026. The final consideration will be based on Krux 's SaaS revenue over the prior 12 months, in line with our focus on recurring, high-margin digital revenue. Krux is a key part of our digital growth strategy, scalable, interoperable, with strong market penetration already. Turning now to slide 29, let's look at Datarock. Datarock continues to deliver strong performance, with revenue up 63% year-on-year. The business is scaling well and is expected to reach break-even in FY 2026 as adoption continues to grow across global resource companies.
We currently hold 51% and are set to acquire the remaining 49% in February of 2026. As with Krux, the final consideration will be based on SaaS revenue over the prior 12 months. Datarock is a key enabler of our data enrichment strategy and continues to strengthen our digital offering. Now looking at slide 30, let's take a look at Earth Science Analytics. We announced the acquisition of 80.5% of ESA in July of 2025 and expect to close by end of August. The business is expected to contribute approximately $4 million of revenue, reaching EBITDA break-even in FY 2026, with a current focus on the energy market. Together, ESA , Datarock, and Krux form a connected, interoperable digital platform that positions IMDEX to lead in the future of mining intelligence. I will now hand back to Paul.
Thank you, Michelle. Turning to slide 23, this is where innovation meets execution. Whilst IMDEX has long been subject to exploration cycles, we've been very deliberate in finding ways to grow in all market conditions. There are three pillars that form the basis for IMDEX-led growth: increasing market share by using our R&D capabilities to ensure technical leadership in all products, and increasingly, offering those to our customers as integrated solutions. Secondly, we have the opportunity to grow our share of the exploration spend by adding new offerings to our existing portfolio. We use R&D to develop new products, and we use M&A to add complementary technologies to our portfolio. Thirdly, we continue to expand our market access into new Earth Science end-markets and new geographies.
A prime example of this is the replication of Devico's technology portfolio through the IMDEX sales network, where we've seen over 75% growth in Devico sensors since acquisition. These three pillars work together to drive growth regardless of market conditions. Having said that, we do see clear signals for market growth ahead of us. The underlying industry fundamentals are lining up to grow exploration activity in the years ahead. Whilst these factors are outside our control, they present significant headroom for growth for the IMDEX business. The traffic light slide that we often use to show the various elements driving exploration activity remains unchanged from our most recent presentations at the Macquarie Conference in Sydney and the Canaccord Conference in Boston. To that end, we retain our amber position on exploration activity, and I draw your attention to my quote in the ASX announcement that accompanies this presentation.
As you heard from Shaun and Michelle, numerous green shoots and opportunities for growth are appearing in the market. As Linda spoke to earlier, Q4 has finished strongly, being 19% up on Q3. This strength of demand has been maintained into Q1 of FY 2026, with tools on hire currently being up 4% on PCP, as just one health check of market exploration activity today. Finally, turning to slide 33, IMDEX is not just growing; we are outperforming. Our capital-light, IP-rich business model generates strong cash flows, supports disciplined investment in innovation and strategic growth. We continue to accelerate organic growth by integrating hardware and software, expanding into adjacent markets, and driving margin expansion through digital transformation. Backed by a high-performing, diverse team, and a culture of innovation, IMDEX is well-positioned to lead the next wave of mining technology and mining intelligence that delivers susained value to our shareholders. That concludes our presentation of the results for FY 2025, and I'll hand back to the moderator for Q&A.
Thank you, everyone. If you have not yet submitted your text question or joined the audio queue, please do so now. I will introduce each caller by name and ask you to go ahead. You will then hear a beep indicating your microphone is live. Our first question comes from Nicholas Rawlinson from Morgans. Please go ahead.
Linda, thanks for taking my question. Just on the capitalized R&D, it stepped up in the first- half, and it was well flagged that it would persist into the second half. Last call, you mentioned that you expected it to revert to more normal levels in FY 2026. Is that the way that we should still think about it?
Thanks, Nick. As I mentioned when we'd spoken earlier, the capitalization really depends on the underlying nature of the project. As part of our FY 2026 budget process, we've actually now got that portfolio of projects that we're going to invest in come FY 2026. Although I had signals for the first- half of 2026 that we would continue to capitalize at the same rate, that will now look like it will be for the whole year.
Okay, great. That's helpful. Just on the margins, sorry, I haven't had a chance to go through all the numbers with a fine-tooth comb, but revenue was up half- on- half in the second half, and EBITDA margins were down, so more than 1.5% half- on- half, which looks a bit unusual. What were the drivers and how should we be thinking about margins into FY 2026?
Yeah, the big difference actually, Nick, was because of our short-term incentive plan, which we accrued for at the end of the financial year. We performed strongly, and that came in with an additional cost. That's the main reason for the slightly reduced EBITDA in the second half. You should think about our margins. We always seek to maintain 28%- 30% EBITDA margin, and that still guides us.
The next question is from Mitch Sonogan from Macquarie. Mitch, please go ahead.
Michelle, we're unable to hear Mitch in case he is speaking and you're able to hear him.
We cannot hear from Mitch at this time, so we will move on to our next caller. The next caller is Evan Karatzas from UBS. Evan, please go ahead.
Thanks. That 4Q revenue run rate, maybe just focusing on it from a year-over-year basis, is that sustained or do you expect that to sustain into, I don't know, 1Q26 or 1H26? Maybe from a year-over-year basis, please.
Yeah, hi Evan. Look, I think normally we would expect Q4 to step up over Q3 by 10%, so 19% is obviously a very strong finish. We saw most of that activity in the back- end of May and June. It has continued into Q1 at a sustained level. We'd normally be expecting it to sort of just drop off a little bit now towards the end of August, just with some seasonal bits around the world. That hasn't happened as yet. We are quite optimistic around how that has carried through into the first quarter of FY 2026. Looking a little further afield, I think we still need to see, you know, that amber, that signaling around being an amber traffic light, meaning there do remain some plus and minus pressures on overall activity. We feel pretty good about where we sit right now.
Okay, all right, thanks Paul. Maybe just coming back to the margins in the 2H, Linda, I hear you saying you're talking EBITDA, but maybe just focusing on the GP margin here. I personally, I mean, I include the field technicians as part of COG, so bringing that in. GP margin in the second half declined about 120 basis points from the first- half, despite the stronger revenue number in the second half. Can you just maybe speak specifically what's happened to the GP margin in the second half? Thanks.
Yeah, so first half GP was 70 and we had about 60, and it's only gone down one percentage point in the second half. I'm not sure, I hope that matches what you have, but I mean, that's not really a material difference. There's nothing specifically that's attributing to that from a gross margin perspective.
The next question is from Josh Kannourakis from Barrenj oey. Josh, please go ahead.
Hi, Paul and Linda, can you hear me okay?
Yes, w e can.
Great, okay, just a couple of questions. Firstly, on the cost base, you mentioned there that there was some one-off restructuring in the period. How should we think about this impacting the cost base into FY 2026 and maybe just with consideration of that and also in terms of the acquisitions coming and ESA coming in as well?
Yeah, sure. If we take OpEx for FY 2025, take $178 million, that's employee expenses of $131 million, plus other of $58 million, and take off our field labor cost of $11 million. There is restructure cost of $6 million in there, so that needs to come out. We've got wages inflation of another $6 million, so that nets out. When you look at ESA , Datarock, and Krux in terms of the other expenses and employee expenses coming in, that's about $12 million. It's about $4 million, which is a combination of a capability reset for us as well as investing in our internal systems. What we've previously called Digital 2.5, we're going to continue to invest in those systems to ensure we've got scalability of our functions, and that will also come in. That's about another $4 million.
Got it. In terms of the cost base, you said wage inflation of $6 million, $4 million increase on that. The ESA, Datarock, Krux, I imagine they're relatively neutral with regard to EBITDA, I guess, in terms of this year. Is that sort of how we should look at it?
That's correct, yes.
Okay, got it. Just a second one, just a broader question maybe, just in terms of the competitive landscape. What are you seeing out there from a competitive perspective, maybe around some of the core categories you're operating in or regions? In terms of the increased connectivity, the IQ connections, you know, what are you seeing in terms of the strengthening of that? How should we sort of look at your views around potential for further market share gains into 2026 and beyond?
Yeah, Josh, I think we do see further headroom for market share gains. We're very happy that we've been able to win market share gains in overall a declining exploration market activity. Shaun and his team listen very closely to the customers to make sure that we are building products that they need that do service, improve productivity. Obviously, it's up to us to set the price to reflect that value, to provide the service that ensures the customer gets the best out of those products. That is what Shaun and his team do with relentless discipline.
We do think there's further headroom there, not least of which because I think our new products have still got a lot of headroom to grow, which Linda spoke to earlier, as did Shaun, and not least of which because I think the demand for productivity or improvements to combat some of that rising cost environment is only going to increase. Certainly, that's the feedback that we're increasingly getting from resource companies and drillers both. We see good potential there for that to continue to grow.
The next question is from Mitch Sonogan from Macquarie. Mitch, please go ahead.
Morning, Paul and Linda. Can you hear me this time?
Yes, we can hear you now, Mitch. Thank you.
Great, thanks for taking your questions, guys. Sorry if any of these are being asked, it's being cut off. Linda, just on the overall CapEx, $57 million up from $33 million, just with what you're developing across the product set, what should we expect that to be in FY 2026?
Yeah, we'll be continuing to develop our product set and the next generation of technologies. That also includes, we'll have an increase. What I would guide is for property partner equipment, it's an additional 20%. That is also addressing our IMDEX mining technologies build as well. For intangibles, we're going to have a little bit more R&D because of the nature of the projects and the timing of those. We are going to continue to invest in our business enablers. For our intangibles, intangibles CapEx, you're looking around the sort of $15 million- $18 million.
I think, Mitch, I'd add to that. I'd add to Linda's comment. I mean, that increase in CapEx is a direct reflection of customers demanding those new technologies, right? It's the positive validation that we're looking for, which secures some of those market share gains. Our commitment to invest in a couple of those additional initiatives comes off the confidence that we have around that amber traffic light. Three years of red traffic light has meant that we've been fighting a little bit of a rear guard action while maintaining some of our initiatives. Looking forward, although it's amber, we can invest with confidence in amber. That's a good position for us to be in. That gives us an opportunity to pull some of those other initiatives forward.
Yeah, great. Thanks, Paul. Paul, just on the Devico result, revenue was up 27%, which is really, really strong in 2024. I think it grew at about 14% with pretty equal growth across both directional and sensors. Given the commentary, I think on the directional might have been a bit softer, which implies a really strong result in sensors there. Can you maybe just talk through the growth drivers in Devico through FY 2025 and just say how you're seeing that trajectory into 2026? Thank you.
Yeah, I might ask Shaun Southwell to speak to that one, Mitch. Obviously, the key there, and I touched on it in my notes, is that having that full technology survey stack now made available through the entire IMDEX sales network has been the key uplift in ARPU and uptake in those products. Shaun, did you want to elaborate on Mitch's question?
Yes, thanks, Paul. When we acquired Devico, obviously, one of the key technologies was the DeviGyro survey tool. This is a leader in the reference tool space. This enabled us to make sure that we matched the right solution to the right customer problem. Our teams around the world have been very active making sure we match this. This has created an opportunity for us to upsell our technologies, moving up into the DeviGyro from a magnetic tool. There have even been occasions where we've taken customers off of the traditional IMDEX technology onto the Devico product, which has also driven that up. Overall, it's probably one of our fastest growing sensors, and we expect it to maintain being a fastest growing sensor for us in the next 12- 24 months.
For the DCD, we had a couple of large projects that we'd been on for multiple years that came to a natural conclusion. As you may have seen in the presentation and in the notes we spoke around, we've been entering new markets, and we're very comfortable and confident on the pace of DCD adoption around the world.
The next question is a text question. John Campbell from Jeffreys asks, can you talk about how the Devico cross-sell into IMD customers is going?
Yes, thank you. I suspect we may have covered that with the question we just answered. Obviously, maybe just to take a slightly nuanced view on that, Devico had done an outstanding job building out into some markets. Obviously, the IMDEX reach was much greater, and that's what's driven those market share gains and that uplift in Devico revenues. I think the most pleasing thing for us is to see the sustained and actually increased synergies that continue to come on the top line as a result of that transaction.
The next question is a text question. Gavin Allen from Euroz Hartleys asks, did 4Q improvements begin in April or whether it was perhaps later, maybe May, and if this activity has continued through July and August?
Yeah, thanks, Gav. It was definitely more towards mid to late May when we started to see that uptake through into June, and it has continued into Q1 of FY 2026. We look at a number of reference points, as you're well aware. One of those reference points is sensors on hire, which is up 4% on PCP as we sit here today.
The next question is from William Park from Citi. William, please go ahead.
Thank you. Thanks, Paul and Linda, for taking my question. Thanks for the color around sensors on hire. I was just going to ask, Paul, I know you've touched on in the past that ARPU is one of the many pulses that you kind of look at, but just if you could sort of provide some color around how ARPU has tracked over the course of FY 2025 and early in FY 2026.
Yeah, certainly will. You might remember, I think we said ARPU was up 1% at the half. It's up 4% in H2. We have seen that continue to tick up, and that obviously correlates very closely to the take-up of new technologies that create more value and for which we can capture more value.
Thank you. Just one other question I had. I don't know if you'd be able to kind of provide some numbers around it. Over the last few years, you've talked about market share gain and so forth, but as you could probably imagine, for us sales analysts and investors alike, we're trying to get a feel for what the market, addressable market, actually looks like for IMDEX and what sort of market share numbers kind of look like for IMDEX and where your kind of ambition is in terms of market share, terminal market share, so to speak. I don't know whether you could sort of provide some color around, and provide some numbers around market share, please.
Yeah, absolutely Will. I think you've just struck on probably the most difficult thing for us to try and articulate cleanly, but we do spend a lot of time looking at it, and we do have very good intel on it. I'll give you two key things to think about. At its simplest level, we take exploration-related revenues over total exploration spend, and that's that growth from $2.10- $2.20 over the last year. That's a very macro picture. That's an all-in kind of view of exploration revenue to exploration spend. What we don't do is adjust for inflationary impacts in that total spend. What we don't do is adjust for whether or not out of $100 in exploration, how much is heading towards actual drilling. Underneath the covers, we can see that that's also been changing. Hence we separate that difference between exploration spend and exploration activity.
To give you an example, juniors are typically 40% of the exploration spend market. Three years ago, they would have spent $70 out of every $100 on drilling, and that's closer to $50 today, largely due to a rise in permitting and environmental red tape, green tape, all the things we've talked about in the past. How that lands is it's only $70 out of $100. Sorry, it's gone from $70 out of $100 to $50 out of $100. In the case of producers, historically that number was between $50 and $55, and now it's closer to $40- $45. You multiply all of that out, and you've got about a 23% reduction in dollars getting to the drill rig, which is that proxy for exploration expenditure, and that's before you consider inflation.
We do look at that pretty heavily, but I think if you look at that trend, that's why we say that we think exploration activity is at all times, is at bottom of cycle lows, I should say. We do see the inflationary impact as an opportunity for further adoption of our technologies. I might just check that that answered your question or that you were able to follow what I said there.
No, that's very clear. Thank you very much. My last question is around, I guess, your balance sheet capacity. Obviously, there's a lot of speculation around M&A, and obviously you guys have acquired ESA not too long ago, but just in terms of your focus for inorganic growth opportunities, is it fair to say that you're more focused on bolstering your digital capabilities more so than other core parts of your business?
No, I think we've been very consistent in saying that we see white space opportunities upstream of us, downstream of us, with digital layers that sit above across all of that. We look regularly at opportunities that are presented to us. We're very disciplined about what we say no to or yes to, conversely. I do think that it's not as narrow as just the digital realm. We do see white space opportunities all around us as we sit today.
The next question is from Jacob Cakarnis from Jarden, Australia. Jacob, please go ahead.
Morning, Paul. Morning, Linda. Hope that you can hear me. I just wanted to tie up some of the 4Q commentary and then I guess the continuation on to the first quarter of 2026 with slide 23, just where you're saying that the expectation is for things to be steady. Am I right in thinking this steady reference is more into a reference to 4Q run rates relative to the balance of FY 2025, please?
Yes, that's correct.
Thank you, Paul. Linda, previously, or I guess the last few years, we've had a first-half skew in the performance of the business. Am I right in thinking that that continues again in 2026, or is there something that we should be mindful of? Timing of M&A closure, timing of the cost-out benefits, or anything like that that might level out that skew versus, say, the last two years?
No, it should follow the same trend. There's no reason to expect something to be different.
The next question is a text question. John Campbell from Jeffreys asks, are there any significant patent expiries in the next few years?
I think there are. I mean, there's, I think we have a number of patents rolling off periodically every year. Obviously, there's been a lot of focus on the core orientation patent in recent years. I can't, top of mind, I can't think of anything significant in the couple of years ahead of us. The reason I say that is probably because we continue to look for how we layer our patents, our technologies, and integrate them into our digital ecosystem. We're increasingly moving towards providing value with the bundled products and that digital connected ecosystem rather than an individual patent. Maybe I'll ask Michelle Carey just to elaborate on that.
For example, the behavior that Paul is describing with our core orientation patent, one of which does roll off next month with the new generation of that tool that's in the market, ACTEX. Part of that offering is a marking jig where we have now got strong patent protection. That's really an example of where, as we put out new generation technologies, we put in new layers of IP protection to replace those that we've had previously.
Thank you. There are no further questions. I'll now hand back over to Paul.
Thank you very much, Michelle. Thank you everyone for joining us today. I think that concludes our result. For me, one message out to our teams around the world to thank them once again for a very robust, very disciplined result after three years of quite trying market conditions. The highlight for us is that 4Q revenue run rate, which is exemplified by the market share gains, and then the EBITDA margin that backs it up. As we look forward, I think IMDEX is very well positioned for the year ahead, both to execute on its organic and inorganic initiatives, as well as benefit from a rising tide as we see that amber light or those signals that drive that amber light start to turn in the months ahead of us. With that said, we look forward to speaking to the rest of you sometime during the week. Thank you very much.
Thank you.
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