Thank you for standing by, and welcome to the Nuix Limited First Half 2022 Results Presentation. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will 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. Jonathan Rubinsztein, CEO. Please go ahead.
Good morning, everyone. Thank you for joining us today for a discussion about Nuix and also some commentary around where we go from here. My name is Jonathan Rubinsztein, and I'm the new CEO of Nuix. I'm joined today by our CFO, Chad Barton. We're going to approach today's webcast in a slightly unconventional way. Before we talk about the financial results for the half, I'd like to spend a bit of time on my early observations at Nuix and my ideas about the future. After these outlook comments, I will talk to the financial results at a high level, and Chad will follow with a bit more detail before I make some concluding remarks. If we move to slide four, just a quick reminder of who we are. Nuix is an Australian-born global technology company. We specialize in transforming massive amounts of messy data into actionable intelligence.
Our technology means users can understand context and connections across enormous amounts of data to search it, filter it, visualize it, analyze it, and ultimately find the truth that it holds. Whether we solve e-discovery process or investigations by law enforcement or regulators to some other areas such as ransomware attacks to data and risk management, our software is used by organizations across the world to make a meaningful difference to business outcomes and people's lives. If I move to slide five, which is my early observations. Before delving into financial performance for the half, I'd like to talk about where Nuix is today and where I think it is headed. First, why did I join Nuix? I love the purpose of Nuix, which is finding truth in the digital age. At heart, I'm a technology guy.
Nuix has world-leading technology and plays in one of the most exciting parts of the tech industry. I also like a challenge and feel really energized by this opportunity. I'm about three months into the role, and during that time, I've been able to meet with many of our people, customers, and partners. It's clear that Nuix has talented people and great technology, and this combination has helped us to solve a very broad range of customer problems. The market potential continues to grow and expand into new industry sectors and use cases for our technology. We are continuing to evolve and improve our solutions and business models to capitalize on those expanded opportunities. I've been incredibly impressed at the type of deals and strategic nature of those deals that we win. I'm also cognizant that there's a great opportunity to further evolve and improve our execution.
The business structure is complicated, the business workflows are complicated, and there's a huge opportunity to simplify the structure and workflows and further invigorate the team. We are currently underachieving on our potential. Slide six. Driving to our path back to growth is a focus on customer centricity. I'm focused on three core tenets of change, simplicity, prioritization, and trust. I'll talk in a moment about how those tenets are going to drive our path forward. Above all, the focus is on customer centricity. I can see even more opportunity to focus our talented people and great team. We will think about how we do business, not simply the act of doing business, but doing that in a more effective way, enabling our team to drive success for ourselves, but also for our customers and partners.
Nuix software can make this a better world to live in, and the team and I are super excited by that broader purpose. I am very focused on building a strong foundation of trust, both internally and externally. This will allow Nuix to drive a commitment to doing business in a more effective way, in a prioritized way, simple and elegant way. I'd like to see an environment where our people, technology and business grow in line with our partners and customers' businesses. Finding truth in the digital world will help us create a better real world. This truly is an aspirational purpose. What will it take? On slide seven, some of the participants on this call will be aware that Nuix has been undertaking a strategic refresh, which has already yielded some important insights and areas of focus. Let's look at the three horizons of change.
Firstly, we'll look to build on our strength with an immediate focus on driving improved competitiveness, commercial performance, and customer relationships in our core business. I think we can improve our sales execution and deliver better customer outcomes. Beyond that, we have an opportunity for robust medium-term growth through anticipating the needs of enterprise customers and building out our integrated SaaS platform to make the best of Nuix easily available. This is an important strategic change towards providing both on-premises and SaaS platform options. Lastly, over the longer- term, we need to solve for the future. We'll undertake longer-range investments and prioritize the innovation pipeline for new ways to use our technologies. We'll have more to say about these horizons in the coming months, but this really is a framework that will inform Nuix's strategic path from here. What will it look like?
How will Nuix look different as we implement some of these changes? Firstly, we'll look to simplify our annualized performance metrics to make it easier for the market to ascertain our growth path. Second, we'll be much more focused in terms of targeting where we will win across different industries and geographies. While we know the use cases for our technology are very broad, we need to make sure we prioritize those areas where we can make the most difference to our customers and monetize them. Third, our sales team needs to be empowered and supported by the most efficient internal processes so that they can do what they do best, sell our fantastic technology. Fourth, we'll invest in our alliance and channel partners as an important driver of growth. Lastly, back to the idea of simplicity.
We need a simplified organization structure to support alignment, accountability, and agility. On slide nine, we discuss the strategic goals. Implementation of some of our early strategic review outcomes has commenced, and we have concrete, achievable goals. Central to our mission is to further evolve Nuix's customer focus and return to strong top-line growth. We will evolve into an organization with a simple structure and processes with clear accountabilities. Very importantly, we need to make sure that Nuix is a great place to work for our people who have done an amazing job in their recent years. Lastly, I fully understand we have further work to do to build the trust of our investors through transparency and a commitment to delivery. On slide 10, you can see the metrics dashboard in the same format that Nuix has presented previously.
Chad will talk through the financials in more detail shortly, but a couple of key things to point out here. In line with our most recent trading update, statutory revenue and annualized contract value, ACV, are down slightly and up slightly respectively compared to PCP. EBITDA is materially lower than the PCP on reinvestment and some non-recurring expenses, particularly legal fees. Importantly, our customer cohort remains loyal and sticky, with customer churn relatively low at 4.1% and net dollar retention came in at 98.8%. I think everyone on this call will be aware that there has been a lot of attention around Nuix, including over the last half. Despite these distractions, the Nuix team has continued to deliver. During the half, we delivered on several key technology initiatives. The critical work on our SaaS journey continues.
During the half, our engineering team ran a successful proof of concept unifying the end-to-end Nuix platform, leveraging the cloud and parallel processing. In short, it works. The general availability of automation is a really important development for our customers, meaning they can reduce time spent configuring and managing processing jobs and seamlessly transition workloads between Nuix products. Automation forms a critical building block of Nuix's next gen SaaS platform. As part of our FedRAMP accreditation, Nuix released world-class end-to-end encryption, meeting the required standards for the U.S. government and cloud region. This is an important enabler for FedRAMP High status and means we are at the assessment stage to be FedRAMP ready. Working with key partners, we developed a national investigations platform. This is important because it means government agencies can quickly mobilize to respond to royal commissions and coronial inquests.
During the half, we saw significant agency take-up and we expect further growth into the second half. Lastly, as part of our SaaS journey, the team completed renewals and additions of our ISO certifications, demonstrating our ongoing commitment to data security. This too is a critical step on our journey into the cloud. These are just some of the technology achievements delivered by the team during the half. Turning to slide 12, we can see customers continue to respond to the Nuix offering. In North America, the Nuix team closed two significant deals with large corporates, one a large American utility and the other a global technology company. Additionally, multi-year deals were renewed with three key global advisory businesses. We saw strong performance from U.S. government with future growth opportunities coming through the pipeline.
In EMEA, the team secured a significant SaaS contract with a large German multinational for in-house legal use. Long-term contracts and in-contract growth were secured with two consultancy service providers. Nuix was selected as a technology of choice for Project NEMO or New Evidence and Methods of Detection for Multinational Organized Crime. This is an EU-funded initiative to demonstrate a platform to fight transnational organized crime through the analysis of digital traces and includes Airbus as a partner. In Asia Pacific, we saw very good growth in regulators and defense in particular. Separately, corporate sector growth is being driven by governance and insider threat investigation use cases. The opportunities continue to expand for Nuix technology to be deployed in new and innovative ways. For instance, work completed during the half means that data from chat channels can be imported, processed, and searched in real time.
We are currently examining ways to help a major Australian university combat cheating on assessment tasks. In time, the work from our natural language processing team will help uncover hidden nuances in text, such as the emotion of writer or whether the text was indeed written by a person or a computer. Artificial intelligence will read code and make decisions. I highlight all of these technology and business achievements as a reminder that while there's a lot of noise surrounding Nuix, our people are getting the job done. Our technology continues to evolve and our customers are responding to our offerings. On slide 13, you can see the revenue split according to region. Recording that our revenue can be lumpy according to the prevalence of multi-year deals, you can see that our North American business remains the largest overall contributor of revenue at six...
It's up 13% on PCP, driven by both stronger upsell and new business. As a component of this, our U.S. government business performed particularly strongly, securing some key renewals. EMEA was weaker on the PCP, down 32%, partly because there were some large contract wins in the prior year. Nonetheless, significant contract wins were achieved, as I've highlighted, driven by strong renewals. Along with these wins, the team saw important growth in areas like SaaS and government and in-insider threat use cases. I'll now hand over to Chad to talk through the financials in more detail.
Thanks, Jonathan. Good morning, everyone. Before I jump into the detail of the results, I want to highlight that we continue to disclose results on both a functional and constant currency basis. Unlike last year, the currency movement has had limited impact on the performance. However, we thought it was important to continue with this disclosure. I'll run through the results for the half from a statutory basis in more detail shortly, but I wanted to start with annualized contract value on page 15. ACV is a useful metric because it removes the volatility associated with multi-year deals that can impact revenue. As Jonathan briefly mentioned, total ACV rose 1.7% compared to PCP. Just on 90% of ACV is subscription ACV. Subscription ACV is a measure of our recurring revenue stream akin to ARR and represented here by the blue bars on the chart.
Subscription ACV rose 4.9% on PCP. As we flagged at the AGM trading update and also our update last month, in a general sense, lower new business has been offset by higher net upsell to existing customers, leading to broadly flat outcomes for both ACV and statutory revenue. Upsell was a weakness for us last year, so it's good to see strength in this half with our existing customers. During the half, several key contracts were resigned on multi-year consumption deals, including a significant global accounting firm. This highlights the ongoing shift to consumption that we've previously flagged. Turning to slide 16, you can see the quantum of growth in consumption ACV for the half. As we've spoken about previously, there is a mixed shift occurring in our customer base, broadly from module-style licenses to consumption licenses.
As you see here, the consumption ACV grew by almost 25% compared to PCP, partly driven by those contracts that I've mentioned previously. Demand for both SaaS and non-SaaS consumption licenses remains strong across the client base, and we expect this trend to be ongoing for the medium- term. Importantly, while there is often a short-term downsell associated with a customer shifting to a consumption license, over the longer- term, Nuix is leveraged to ongoing increase in usage. Turning to statutory results. On slide 17, total revenue for the half fell 1.5% on PCP. Business from new customers was AUD 9.2 million for the half, down 30% on PCP, and largely offset by upsells to Nuix's existing customer base. Multi-year deals increased to 44% of revenue as customers further increased their willingness to sign long-term deals.
Average new order value was $186,000. On a statutory basis, subscription revenue grew to 91% of total revenue, mirroring the trends seen in ACV. There is more detail on revenue recognition and customers in the appendix. Slide 18 provides an update on revenue by license type and helps to illustrate the mix shift occurring across our client base. The shift to consumption licenses was particularly pronounced during the half, partly driven by the large contract I mentioned earlier. Consumption licenses contributed 19% of revenue for the half, up from 9% in the PCP. As I mentioned, we expect this trend to continue in the medium- term. Looking at research and development on slide 19. R&D is critical to continuing to build out Nuix's competitive offering.
As flagged previously, Nuix has made a conscious decision to reinvest, and we can see some early outcomes from that reinvestment on this slide. R&D spend for the half was just under AUD 29 million or 34% of revenue, 75% of which was capitalized. This lift in investment has been driven by some of the key projects mentioned by Jonathan earlier, as well as a lift in R&D headcount of 21% compared to a year ago. The market for talent across the sector and the broader economy for that matter remains tight. That said, we've been able to increase our R&D footprint meaningfully, which will help drive innovation and development into future periods. Slide 20, we've provided the income statement.
While revenue is broadly flat on PCP, we have flagged previously Nuix experienced a materially higher level of cost during the half, which impacted EBITDA in particular. To explain these movements in EBITDA, I will turn your attention to slide 21. While revenue was down, the cost of goods sold outcome for the half. In keeping with our previously highlighted commitment to reinvestment in sales and distribution function, as well as the expense component of the increase in our R&D undertaking. Both these will produce benefits in the future period. After incorporating the G&A impacts of share-based payments, we arrive at an underlying EBITDA of AUD 24.7 million, down 22% in comparison to PCP. The non-recurring costs associated with higher legal fees and Topos acquisition are highlighted separately to clarify and to get to our reported EBITDA. Slide 22 highlights Nuix's cash flow.
Prior to software development costs, Nuix generated an underlying cash flow of AUD 17 million in H1. This underlying cash flow funded most of the increased software development costs in the half. You can see here that we have highlighted cash flows associated with Topos acquisition and legal as separate to our normal operating cash, given their one-off nature. Briefly, on the balance sheet, Nuix finished the half with AUD 52.5 million in cash. Trade and other receivables are impacted by the timing of renewals. While we've seen a lift in this metric compared to six months ago, the current level is in line with December 2020. Intangibles have lifted primarily on the back of the Topos acquisition. I'll now hand back to Jonathan.
Thanks, Chad. Before we hand over for Q&A, I just wanted to revisit this slide on strategic goals to leave you with some signposts as to where Nuix is heading in the coming half and in the halves beyond. We won't be providing numeric guidance for the full year at this time, but we are finalizing our roadmap and already implementing some early-stage initiatives. I'll have more to say about these in the coming months. To reiterate, a pivot further towards customer centricity will be the overarching theme of our strategic path and the key to returning to strong top line growth. I'm excited about Nuix's future. I believe the strategies we are putting in place are the right ones to leverage our remarkable technology and people. Finding truth in the digital age and helping create a better world is such an exciting opportunity for us.
The team and I are committed to this purpose, and we are confident and energized about the opportunity before us. I'll now hand back to the operator for Q&A. Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. We will pause momentarily for questions to enter the queue. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no questions at this time. I'll now hand back to Mr. Rubinsztein for closing remarks.
Thank you, operator. I'd like to thank all of you for listening to this call. I am very excited about the future, and we're looking forward to chatting with our shareholders over the next few days. Thanks very much.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.