Thank you for standing by, and welcome to the Nuix Limited FY 'twenty one Results Presentation Conference Call. All participants are in listen only mode. There will be a presentation followed by a question and answer session. I would now like to hand the conference over to Mr. Jeff Blythe, Non Executive Independent Chairman, please go ahead.
Well, thank you and good morning, everyone. My name is Jeff Bleich, Chairman of Nuix, And I'm joining you from my home here in California. Before Rod and Chad walk you through the results, I'd like to share some brief opening comments. Firstly, the success of Nuix has always been built on 3 things: world class people, extraordinary customers And the new X engine that's simply best in class. Each of these three pillars of success has stood strong And actually growing stronger this past year as we continue to expand our customer base, retain and attract exceptional talent And accelerated our efforts to move the Nuix engine into the cloud and to offer all of our solutions as software as a service.
Now there's no question that this year tested the resilience of these foundations. Our first year on the ASX has been And our revenue results did not meet our initial expectations. But These challenges have sharpened our focus as an organization. Adversity summoned The very best from our dedicated employees and our loyal customers and their example this year has really inspired all of us. We're truly grateful to Rod and to his entire team.
Now our financial performance Also reflects that resilience. Despite a number of headwinds, we continue to enjoy a position of strategic market leadership It is the envy of the industry. The Board and senior management are absolutely focused on strengthening all aspects of the company and addressing the issues that surfaced during our 1st 8 months as a publicly listed company. And we have work to do, But we're encouraged by the pace of progress on our agenda. At the governance level, we'll be expanding and strengthening our Board with the appointment 2 additional independent non executive directors who are being selected from an exceptional pool.
We've been fortunate to have secured the services of a highly accomplished and experienced ASX listed executive in Chad Barton as our Chief Financial Officer. We've also welcomed Brett Diamond as our new Head of Investor Relations And we're heartened by the strong field of truly talented candidates who have expressed interest in the CEO position. These and further additions to our team are all important steps towards rebuilding trust and meeting the expectations of all of our shareholders. Now as an organization, we've concentrated on our valued team members around the globe And to ensuring that they have the right support and incentives to drive future success. People like David Citsky, the brilliant mind behind the Nuix engine I'm more committed than ever.
As Rob will describe, our retention rates have remained stable. NUXT continues to attract great talent And we'll keep investing for growth, in particular in sales and engineering. The recent additions of Abdes Afris, Our EVP for Investigations and Oliver Harvey as EVP for Governance, Risk and Compliance reflect the high caliber of the people joining our organization. Our technology is world leading and it's unique. Our customers have stuck with us in a competitive environment, not out of sentimentality.
It's because of the tremendous value our Solutions bring to their operations. Again, as you'll see, the company has continued its tradition of retaining All its large blue chip customers. In fact, our already low rate of customer attrition overall was even lower this past year. We recognize clearly that there are areas for improvement and necessary change, but scrutiny Breeds accountability and integrity. We've been listening and we have been taking action.
We've made it a priority to learn from recent challenges and to ensure that we address any underlying problems. I'm absolutely convinced We're in the process of emerging as a stronger business, able to reach its true and incredible potential. So thank you for listening And thank you to everyone who supported Nuix. And now I'll turn it over to Ron to present the FY 2021 results.
Thank you, Jeff, and good morning, everyone. I'm sure many of you have seen this morning's release to the ASX, and the purpose of this call is to speak to our fiscal year 2021 results and provide the opportunity for some Q and A. We'll cover the highlights, the financial results and provide some insights into the outlook. To speak to the strength of the Nuix offering is really to speak to 3 different components, as Jeff said, our technology, our customer base and our people, In conjunction with our broader stakeholder groups, the power of the Nuic Engine as a platform for new use cases together with our strength in e discovery forensics and government risk compliance continues to be our competitive advantage and the focus of our land and expand strategy. With an increasing ability to connect to other solutions Together with our commitment to SaaS and automation, we see increased value and opportunity for our clients, which is being acknowledged by growing customer base And partner community.
We are confident we can create further competitive advantage and pipeline growth with an amazing team of dedicated Nuix employees and partners. Working through the pandemic has been challenging for everyone and for Nuix, this has meant that most of our staff have worked from home since March 2020. As Jeff mentioned in his opening remarks, all our team have really stepped up. We know that our people and our technology are the greatest assets. Over the last year, our people pivoted to delivering virtual monthly events and engagement with our customers, providing virtual setup, support and training With an increase in the number of customers that achieve various accreditations, we continue to engage with our employees And not only their well-being, but also the work environment that they need to meet the way that they work, while continuing to deliver for our customers.
I'd like to take this opportunity to sincerely thank the team for the way they've responded to these challenges over the last 12 months And for the way our customers have acknowledged and rewarded us with an even stronger commitment to our software. Slide 6 presents key financial metrics for the year. What they show is the resilience of the U. S. Business, the high recurring nature of our revenue and ACV and a sticky customer base in the face of FX headwinds, Limited access to U.
S. Gene opportunities and the backlog of work amongst law firms and the courts. Statutory revenue came in at $176,000,000 slightly up on fiscal year 2020 and up 7.4% on a constant currency basis. Annualized contract value $165,600,000,000 for the full year, down 1.7% on FY 2020 and up 4.1% on a constant currency basis. Towards the end of the second half, several customers were holding off on upsell commitments or shifting to consumption, particularly in the U.
S. And this transition created a short term impact on our revenue metrics. Pro form a EBITDA for the full year was $67,000,000 Up 20.3 percent on FY 2020 and 31.3% on a constant currency basis due to continued cost savings. The depreciation of the U. S.
Dollar created FX tailwinds across most cost centers, given the large proportion of U. S. Expenses and headcount that are denominated in U. S. Dollars.
We've also seen some decreases in reseller margins if we improved our pricing programs for the channel. And of course, restrictions associated with the pandemic have meant significantly reduced travel and marketing spend. Gross margin improved further to 89.3%, largely due to the reseller margins, some blatant capacity in our data centers And FX tailwinds in resources. Our customer relationships remain very strong, highlighted by a very low churn figure of 3.7% and endorsing the competitive advantage of our technology. Net dollar retention of 95.5% was impacted by the lower net upsell that we started to see in the 4th quarter and flagged previously.
Subscription ACV, Which is an important indicator of recurring revenue for the group rose to 89% from 83% a year ago, highlighting the recurring nature of the majority of our revenue. Consumption ACV grew to $20,200,000 over the course of the year, up 12.1% in functional currency and up 22.4% in constant currency. And I'll expand more on consumption license growth shortly. And lastly, Nuix finished the year in a strong financial position with almost $71,000,000 in net cash, meaning we're well funded to pursue growth opportunities. ACV is an important metric for Nuix because it strips out the sometimes lumpy effects of multi year deals.
As I mentioned, ACV grew in constant currency terms year on year as did the subscription element of ACV. Subscription ACV is the measure of our recurring revenue stream, representing 89% of our total ACV this year. Importantly, subscription ACV grew 10.3% in constant currency and each region grew subscription ACV on a constant currency basis. This rise in subscription ACV on both an absolute and proportional basis is due to a mix shift that we're seeing across our customer base. Perpetual and services licenses fell year on year due to U.
S. Government elections and the COVID impacts, While consumption licenses continued to rise. On Slide 8, you can see the growth we're experiencing in consumption based licenses. As a reminder, SaaS licenses are a subcomponent of overall consumption licenses. Consumption based ACV grew 12% over the year to $20,200,000 or 22 percent in constant currency.
SaaS licenses grew to 10.7 up 9% in functional currency and 20% in constant currency. SaaS is an important area of customer growth With customer numbers rising to 112, up from 71 a year ago. This growth in consumption licenses is customer led and we continue to respond to this market Not only have we had strong growth in consumption licenses over the last 12 months, but new contracts commencing in FY22 suggests further strong growth coming through in this part of the business. I'd like to quickly step through highlights from different parts of our business around the world to help provide some color on how Nuixis business is developing. Our U.
S. Business was up slightly in constant currency with upsell below the previous year, again impacted by that shift to consumption And customers less confident to add capacity until their business has shown more predictable future opportunity. New business rose with more than 27 new customers signed accompanied by a strong increase in average deal size. Corporate and law firms were particularly particular areas of growth. Customer confidence in these areas was strong With 2 7 figure Discover SaaS deals won from Tier 1 global law firms and many customers committing to multiyear deals at Higher than anticipated levels demonstrating the importance of continuity with Nu X as their business expands.
It has been a challenging year for our USG business given the election and the pandemic. Pleasingly, we saw some significant contract wins The progress we've made with our FedRAMP R and D will create new opportunities for our USG business in FY22 and beyond. In both EMEA and APAC, we had strong sales orders, building momentum for upcoming years. In EMEA, multiyear contracts were re signed With 2 major advisory firms, we had several wins with significant European corporates. In Germany, we welcomed 27 new SaaS customers New employees were on boarded for our expansion into Southern Europe.
In Australia, we had several important wins with government agencies and law firms. And also in Australia, a big four bank is using Nuance to identify PII data across the enterprise using compliance scanner, our first out GRC use case. In fact, in all regions, we're seeing solid customer interest around our emerging GRC applications, e comm surveillance and compliance scanner with several early adopters. I wanted to spend some time talking about our people. Hiring new talent is crucial to our organization.
Over FY 2021, we recruited 119 people and since 1 July, an additional 32 people have joined us With 15 in engineering roles. 2 significant hiring campaigns have been related to EMEA and engineering and now we're adding sales resources in the U. S. In EMEA, we made 20 new hires this year, adding people in both France and Italy for the first time. We've listened to our people as well and sought external advice, implementing several initiatives to demonstrate our commitment to our employees.
We've made further improvements in our approach to ESG, including initiatives for our people and a renewed focus on remuneration programs, Well-being, training, development and recruitment. Over the last 12 months, our voluntary turnover has been between 15% 18%. Engineering voluntary turnover has been between 13% 17%, with a slight uptick in the last 2 months, reflecting a shortage of supply in engineering resources in Australia. Given the market shortage of engineers, we have taken a 3 pronged approach to hiring, Specifically hiring directly, the use of contractors and engaging with Australian based supply companies. And we've implemented several retention strategies for engineers, including bonuses and in the U.
S. Pension plan improvements. Pretension packages are now in place also for a number of employees. Our leadership team continues to expand, as Jeff mentioned. In fact, over the last 18 months, about 40% of the leadership team are new to Nu X.
This brings new ideas and fresh approaches to an already robust leadership team, which will continue to aid in the evolution of the company. I'll now hand over to Chad to talk through some of the financial details.
Thanks, Rod. Good morning, everyone. Before jumping into the detail on the financial results, I want to comment on the way we presented them today. In response to market feedback, we've expanded You'll notice throughout the presentation that we've added references to constant currency To provide further clarity around the impact of foreign exchange movements on these results, Rod has already spoken to the additional disclosures And we will continue to refine our disclosures into the future. Looking at revenue now.
Revenue was $176,000,000 for the year and grew by 7.4% on a constant currency basis. The standout for me was the new business growth, up 26%. Multi year deals was also strong, Being 36% of revenue. In my view, this reflects the confidence in Nu X and its products and the willingness of customers to sign up to long term deals. Upsell from existing customers was softer than expected, probably due to customers transitioning to consumption based licenses.
This shift has revenue impact in the short term, but benefits the business over the longer term As overall consumption and data usage levels rise. On the statutory basis, subscription revenue grew to 93% of revenue, mirroring the trends seen in ACV. There is more detail on revenue recognition And customers in the appendix. On to Slide 13. Nuix is a truly global business, Having over 1,000 customers across the globe and generating nearly 90% of revenue outside of Australia.
To me, this really highlights the strength of the Nuix solution and our team that delivers to customers globally. Looking at the bar chart on the left, we can see that revenue contributions from each region have been relatively consistent on TCP. North America has faced some pressures in FY 2021 from FX, the government contracting cycle and softer upsell. I know the team are keen to turn this around in FY22. Growth in EMEA and APAC offset the pressure in North America last year.
Looking at revenue by industry, you'll see that our customer base remains well diversified. Advisories remain our largest client group, But I think corporate and law firms are a significant growth opportunity for the business. Slide 14 provides an update on revenue by license type. It's worth highlighting there are some differences between revenue and ACV. As you'd expect, there's a lag between ACV and revenue for our fast growing component like consumption licenses.
ACV is a forward looking run rate metric and revenue is a backward looking statutory metric. Our traditional module licenses continue to make up 2 thirds of our revenue base. And on a statutory basis, Consumption licenses grew to 13%. All else being equal, I expect consumption licenses that have been signed in recent months Should have a materially higher proportion in FY22. It's also worth noting that while we still have some perpetual licenses, We continue to see a shift away from them.
On to Slide 15, Research and development is obviously critical to continuing to build out Nu X's offering. R and D spend for the year Normalized for the impact of FX was 26% of total revenue and only marginally below the spend last year on a constant currency basis. Neurics continues to capitalize development costs with 77% of R and D costs capitalized in FY 2021 And this is down from 84% in the PCP. You can see some of the critical areas of focus for our R and D team on the right. It's anticipated that R and D spend will shift higher in FY22 as we are extending the team and investing further into moving our products into the cloud.
And Rob will discuss this further later. On Slide 16, we provide the pro form a income statement, both in functional and constant currency to allow for easier comparisons. Looking at the constant currency results, a couple of points to note. Firstly, while revenue grew 7.4%, Software revenue grew faster at 8.9%. And then looking at costs, of note was the reduction in sales and distribution.
As pointed out earlier by Rod, sales headcount has gone up, but on average throughout the year headcount costs were lower Than in FY 2020. Also due to COVID restrictions, travel and conference expenses for our team were significantly lower. Actual pro form a EBITDA was $66,700,000 up 20 percent and net profit after tax was $25,000,000 Up 33%.
I'd like
to mention a couple of points on the cash flow. Excluding cash flows associated with the IPO, free cash flow after the investment in software and development costs was $8,400,000 This highlights that the business continues to fund not only its operations, but also research and development out of operating cash flows. The company at year end is at a net cash position of $71,000,000 I won't spend too much time on the balance sheet, highlighting only trade and other receivables, which have lifted $13,000,000 on PCP. This increase has been driven by unbilled revenue. Actual trade receivables have gone down on PCP.
Unbilled revenue is driven by binding customer contracts that have been booked and committed to by customers. However, we can't invoice them as yet. And Slide 19 runs through the reconciliation between And pro form a NPAT, normalizing the costs associated with the IPO. I'd like to now pass back to Rod.
Thank you, Chad. The market opportunity for Nu X is large and we are both excited and confident about the future opportunity. As you might expect, there will be a focus on strategy validation and refresh where required and this work has already begun With an expectation, we will update the market further at the AGM. Jeff has provided some commentary already of our Board expansion and leadership renewal. And I have committed to continue as CEO until we can effect an orderly transition.
Importantly, fiscal year 2022 will be a year of further investment, Not only into research and development or engineering, but also into sales and distribution capability with a strong focus on the U. S. Market in the near term. We will continue to focus on our growing partner community and focus on M and A activity where appropriate to help drive our growth trajectory. And of course, we don't operate in a bubble.
We will continue to work with our customers to provide enhanced capability and a differentiated offering. To delve a little deeper into the idea of reinvestment, this is a slide that our product team helped put together, highlighting key areas of focus where we can make a meaningful difference for our customers. Current work will see us expand our offering beyond AWS to Azure in the near term based on customer requirements. We will continue on the new XaaS journey, capitalizing on the rapid and massive shift of data to the cloud. Our discovery product is already offered on the SaaS basis with A key development goal for the near term is engine as a service, Horizontally scalable processing in the cloud.
I'll have more to say about our journey to the cloud in just a moment. Other important elements of our include building on our already strong product portfolio with a unified collections platform as well as delivering further value added solutions such as those associated with governance, risk and compliance or compliance scanner and e comm surveillance. Governance risk and compliance It's a key issue for our customers and a strong growth opportunity for Nuix. Data proliferation to the cloud complicates GRC mandates and customers tell us The cost, time to value and speed of resolution are critical to their immediate requirements. The infographic on the right of the slide highlights Nuix's SaaS journey.
At the moment, just our Nuix Discover product is available on a SaaS basis, which has been strongly endorsed by our customers. The next stage of our cloud evolution involves not only introducing new products to the cloud, but also making some of our existing products offer the entire portfolio of solutions to customers on a SaaS basis as well as having an on premise capability for those customers that need or want to continue in that way. I wanted to revisit a slide that we've shown before highlighting Nu X's growth path. Nuix has a range of growth leaders available to it, all of which will be pursued in coming years. Naturally, we plan on winning new customers.
We'll also continue with our land and expand strategy, which played out well in the last year, validated by success with our enterprise selling transition, delivering meaningful increases in average order value. We have talked to our geographic expansion with hiring in Southern Europe and expanding our footprint in Canada. We've also talked about investment to extend the Nu X platform and continued efforts with operating efficiency have already achieved cost savings for the business as Nu X grows. And lastly, we will consider strategic value accretive opportunities and we continue to have an active pipeline to pursue. In closing, our customer relationships remain strong and the Nuix team is working really hard to deliver even stronger solutions to our customer base.
It's early in the new financial year and we won't be providing any specific news. We're encouraged by the early signs coming through the pipeline, including as I mentioned some of the momentum evident at the end of last financial year. As we reinvest over the course of FY22, That and our strategy validation will help to strengthen the foundation for further guidance. Thank you. I'd now like to hand back to the operator for Q and A.
Thank We will just pause for a moment to allow questioners to enter the We are showing no questions at this time. I'll now hand back to Mr. Baldry for closing remarks.
Thank you, operator, and thank you for joining us for this call. We have quite a considerable number of follow-up sessions with key investors, and we look forward to