Good morning, everyone, and thank you for joining our half-yearly results webinar for the financial year, 2026. Tim, we've got a bunch of people in the room now, ready to kick off.
Awesome. Thanks, Ben. Thanks, everyone, for joining us. Look, in many ways, the half-yearly is a repeat of the information that's coming out in the quarterly results. What we've done in this session is provide some, a deep dive into some of those really important strategic themes. Those things that we're doing in our business that are making sure that we are set up for success long-term, way into the future. I'll talk a bit about sustainability in this presentation. The highlights of the half, I think this provides a good summary of them. We've got a business now that is growing comfortably above 25%. For the half, we grew at 25% PCP.
Whilst doing so, over the last couple of years, we've kept our fixed cost discipline strong, with our CAGR of fixed costs at 4%. That's delivered AUD 10.3 million of EBITDA, a 68% increase on the prior period, and AUD 9.2 million of free cash flow, again, a 51% increase on the prior period. There's some notable things going on in our business, but one clear highlight is Qustodio. It has been growing at 15% per year in the first three or four years of its joining of our business, but it's really come into its own in the last couple of years. Now growing comfortably at 4% for this financial year. It's profitable.
It's really is a strong part of our business. All the other things we're doing around the K-12 business that are promoting into the Qustodio are now proving successful. Again, you know, we once again reiterate our guidance around ARR growth north of 20%, adjusted cash flow, free cash flow year, and adjusted EBITDA margins of around 20% or better. I'm sure Ben will talk more about those in a moment. Before I get into this, look, I think where we're at as a business is in a great spot. Honestly, I've never been more excited. Qustodio business is on fire. We're profitable, you know, cash flow, break even or better. The next half of the financial year, obviously, everybody knows we'll be generating significant cash flow.
Crispin, who's on this call, he runs our K-12 business. That has never been set up better than it is today. With clear innovation, I'll talk a bit about that, and our product ranges. Our go-to-market motions are outstanding and only getting better. Our reputation is getting better. Our pipeline is enormous and even bigger than what we reported in December. I literally cannot wait for Crispin to be talking through our K-12 numbers in July with that, the annual results. We have never felt more, you know, more excited and more, you know, better set up than we are right now. Let me highlight some of the things that we're investing in that gives us that confidence. We are seeking to be the most compatible provider of safety technology globally. Here is a few indicators.
We're looking after 30 million children, 9 million parents, 32,000 schools. Significantly, we've passed through 20% of US students are on our platform now. That is astonishing. That's all organic. We entered that market in 2018. Now in 2026, we're at 20% of that market. Then we're accelerating. If you look at our ARR growth, we're accelerating into that market, particularly in the big end of town, where we're becoming really the go-to for statewide procurement deals. Those big top 100 schools, which Crispin, again, is on this call if anyone's got any specific questions.
As we said at the top there, not only all of those kind of raw statistics, but we are literally intervening in life-threatening situations every couple of hours, which is really important. Talking more broadly about impact, I flagged this in a couple of last quarterly reports. We're now starting to see the indicators or the outcomes that we're generating for our school communities. It's not just measures of how many people are using our technologies and, you know, wouldn't it be good if we're blocking kids, you know, accessing inappropriate content, but we're now looking through our data points to show that we're actually changing the lives of not only individuals, but communities. I'll show you a couple of really important stats. This is, by the way, an analysis of 1.2 million students in the U.S.
What this chart is showing is that in these intervals between launch and 6 months and 12 months after a school launches Qustodio, so U.S. school districts who start communicating to their parents, "Hey, you can now control your kids' school devices after school, and you can put Qustodio on your kids' personal mobiles." To be clear, we're typically getting around 20% of these parents signing up to this product. Notwithstanding, what sounds like a, in fact, it's a pretty high take-up. Notwithstanding that, there's a modest portion of the community taking up these products. The reductions in toxicity, principally around bullying incidents, in these schools is astonishing. Within 6 months of launch of these programs, across 1.2 million kids, there is a halving of the incidents of terrorist, extremist content, and bullying. I mean, think about that.
Just the launch of this product, even though a modest group of parents are taking it up, we're getting a halving of toxicity in these communities. This is the thing that's really opening up the eyes of school district leaders, superintendents, as to the power of the core, the core ecosystem approach. It's not just blocking content, it's engaging with kids, engaging with the teachers and admins at school and the parent community. We're now seeing material changes in behavior inside these communities. This is becoming now the way we're talking about our products. We're not just flogging risk management, we're selling outcomes. Everyone's talking a lot about outcomes today, particularly around the use of AI tools, and we can now demonstrate a clear link between the products we sell and wellbeing outcomes. It gets even better.
This is something that Crispin's been pushing for a long time, is looking for evidence on the take-up of schools of our products. What's that doing in two dimensions? One is, are they becoming stickier? You know, are they liking? Are they getting value out of our products and staying with us longer? That is a clear trend. I think you're seeing that in all our net revenue retention figures and our churn figures, which are industry-leading. This is the other dimension, which is what are the behavioral implications of schools that are committing to our ecosystem? What you see here is a clear correlation between the number of Qoria products that a school is signed up to, and the amount of toxicity in that school community.
You can see it goes from 16 out of 0.16 toxic incidents for every 1,000 students per month, sorry, per week, and more than drops by nearly two-thirds if you've got 5 Qoria products. Think about that as a powerful message that we can now sell to communities or talk to school communities. If you're engaging in our ecosystem, and the more you engage in our ecosystem, the more benefits your community will see in terms of better behavior, better academic outcomes, better attendance, just better mental health outcomes. That's what we're now seeing through this platform approach. We've been talking about this for many, many years, and I think all of us in our hearts have known that a more engaged community will deliver more better outcomes for kids.
Now I'm really glad to see that across 1.2 million kids, we're seeing very clear and dramatic evidence of that. All of us in this company, and all the investors behind our company, should be really proud of the difference that we're making. If you wanna, you know why I'm so confident about the sustainable advantage of our business, it's because us and only us can actually do this in our industry. Of course, it's not only about these kind of broad macro stats, and I don't wanna, you know, I don't wanna get too melancholy in this presentation, but it's ultimately it's about individual situations of children that are at risk of serious harm. This is one example of the examples that we receive daily of our technology leading to direct interventions, which are saving kids' lives.
Kids have a tomorrow because of the things that we all do. This is one customer who's communicated to our team that they are, as they say, her bucket is continuously filled by the products that we offer. That is the reason why we do what we do, and I can't be more proud of the team. You know, there's a lot of things that we do for a sustainable advantage, and, you know, obviously, I've spoke about a few, this ecosystem approach. We lay our content, professional services across our technology. We have a data analytics platform that means that we're more deeply being integrated in the decision making of these school communities. There's a heap of things that we do to make sure that we are, us, have a sustainable business model, and we are penetrating deeply inside these school communities.
I thought I'd touch on a few things that we did in the last year, so in 2025. There was a lot of work, in particular, around content, and in particular, around the use of AI technology. The video you see here in, at the top, this screen grab is from our AI, content-based AI capability. We can filter real-time now what kids see in their browser. You see here them seeing it, but we actually can do it before the kids even see it. We can highlight, hide or blur inappropriate videos, inappropriate images, and recently, and it looks like it's gonna be, I think, our most successful launch ever, real-time analysis of everything inside a page, even those hidden keywords on inside pages.
We see the lot, which helps us protect kids from inappropriate content, but mainly the value of that technology is stopping kids using VPNs and proxy services, using websites as ability to bypass the expensive filtering technology that schools use. That's deeply embedded in our filtering platform, and it puts us bounds ahead of our industry. On the bottom of this slide, you see the new interface that's now starting to pop up across all of our platforms. In here, what you're seeing is the monitoring product, which is now you're starting to see signs of the deeper integration between our filtering and monitoring technology. It's all starting to come together.
In the right-hand side, what you see there is a commitment that we make that I still don't think any of our competitors are doing, which is leveling up our community to not only use how to use our tools, but how to use our tools in these situations that really matter, oftentimes, where the kids' lives are at stake, and making sure that those choices that they're making are appropriate, are ethical and legal, given the jurisdiction that they're in. In Qustodio, look, these are just four areas of work. The Qustodio product has come on leaps and bounds in the last couple of years, so much so that the churn starts in that business, you know, in the mid-20% is clearly industry-leading. Churn in the consumer and control space is typically in the order of 50%.
That's part because parents start using parental controls when kids are 13, 14, which is too late. Our business model through schools helps to address that problem, Qustodio's outstanding product called Qustodio. They're focused on making sure it's a feature-rich product, and you have a beautiful experience in your journey of opening up those features to deal with your life challenges. I could talk forever about Qustodio, the innovation of that product is enormous. This year, I, you know, Victoria's not on the call, so I can say it. This year, there's gonna be a lot of work around the kids' experiences, making sure the kids are part of their journey as well.
On the right-hand side, just to highlight that I'm asked often, you know, where are you at with the unification of all the different technologies that were brought into the Qoria business over the years, and it's coming together apace. What you see here is, I can't tell you the name of it's the Qoria Unified Platform. It is rolling out in the U.K. currently. It's going to start being used in anger this half in the U.K., and by the end of the year, we're expecting all customers to have access to this product, and they're rolling out to the U.S. beyond. It is the unified interface on top of the unified cloud applications and unified data sets that have been plumbed over the last couple of years.
It's very, very exciting, and it offers an, a, the opportunity to create huge value, particularly in the UK, because they'll have access to all of our products. It offers us a much simpler code base to manage, and therefore, this ability to opportunities from that. One is the ability to be more agile. We can deliver more features more quickly, and two, there is an efficiency dividend that will clearly come to our business as we simplify our tech stack and stop the duplication. All right. The other objective of this business, obviously, profitable growth. We see an enormous opportunity to grow in a in a space that's that's almost infinite. The, the school safety and parental control world is enormous. There is no incumbent. There is a...
It's a fractured market. We see an infinite opportunity for us, but we are seeking to responsibly grow into that market profitably. What you'll see here is a few slides, which is kind of how we think about it and how we've been organized to accept that challenge. On ARR, I think everybody knows that our ARR has always been a strength of our business. We've always grown. Last in the last half, we've grown north of 25%, with Qustodio growing 34%. As I said, looking forward to Crispin reporting the June half. You know, this is the key selling period for our northern hemisphere K-12 business. You see here in the chart on the bottom left, our weighted pipeline at December is, you know, is extraordinary.
Never been so high, and it's in fact materially higher now as we approach the key selling period in the U.S. All of our markets are growing extremely well. U.S. is obviously our biggest market now, growing north of nearly 30% in an established market, and, you know, I don't see any signs of that letting up. Our brand name's building, our feature sets are building. The channels that we work with are getting more excited. Again, Crispin's on the call if people would like to ask more questions about that. The top-line growth is very strong and we're growing the market to continually 20% or better. Our unit economics has also been a key focus for our business. Our average revenue per license is consistently getting bigger, and that's despite a falling U.S. dollars against the Australian dollar.
We're still climbing on our ARR per student, so our net dollar retention is improving, and our gross margins at 92% is extraordinary. Our data and hosting costs, the hardware that deliver our services, the app store fees that we manage are all accommodated within 10 points of our revenue, which is extraordinary. The chart on the left shows that it's not just one product. We're getting better at selling other products. Again, we talk about this often, our Trojan Horse in school districts is the CTO, is that IT persona with the compliance obligation. I think we're very clearly starting to own that relationship, particularly in the US. That's a relationship that's very dear to us, and we've worked very hard to build that relationship.
We're leveraging that into instructional learning, into safeguarding, into data analytics, and ultimately, into the executive in schools. You're seeing that represented in the increase in contributions from these different products that are in our portfolio. Again, Qustodio, I mean, I can't be more proud of the team there in Qustodio. We gave them a very strict parameters to operate in within the last few years as they kind of built out their feature set and our business became profitable, which it now is. So now we're unlocking a little bit of marketing dollars for them, and they're turning it into... Honestly, they're turning it to rivers of gold. Most importantly, as you see this line here about month zero payback, they're investing more.
We've given them an extra, I think it's AUD 4 million of marketing budget this year. Importantly, every dollar cost of acquisition is being covered by the average order value. It's almost, you know, a cash-free growth engine. It does affect our EBITDA with the way the accounting works, so we can't just give them infinite cash, but it's not burning cash. It is, in fact, you know, cash flow break-even growth in a business that's already profitable. The net ARR is growing significantly. Look at the chart on the bottom left, the ARR is growing materially above planned. You can see the top chart on the left. The CAC payback period is instant, you know, at month zero.
Net subscriber growth, which has been relatively flat, that business has been growing in many parts through pricing optimization. It's a combination of pricing optimization and sheer subscriber growth. I should note, I think analysts will be interested to know this, we are going through a price optimization process right now, showing good signs. I'm expecting a growth in this half through contribution from both price optimization and subscriber growth as well. Again, really excited about that team in Qustodio. Discipline cost management. As we highlight there, we're growing at north of 25% revenue and ARR, and yet our fixed costs over the last couple of years are growing about 4%, and inflation across the places where we operate is in the order of 3%-4%.
I think that's a pretty good story. That's resulted in 4 halves of EBITDA, and that's consistently growing. I'll let Ben talk more about the finances in a moment. Look, while I've got you, obviously, the big topic for us is our agreed merger with Aura, which we announced in January. It's very exciting. I'll talk about the transaction in a moment, just again, to position it for those people who aren't clear, Aura is a consumer security player with a deep interest in, you know, some real innovation in family safety with the Qoria for families offering.
Obviously, Qoria is of, you know, all about family safety and school and student safety, and the combination of these business creates a, you know, really once in a, you know, lifetime opportunity for people in our business, for investors, and I think it creates the business that the world needs. It's that place, it's that household name that the world needs to protect adults, protect families, and protect schools. Our mission is to empower communities with lifetime digital protection for everything that matters most, everyone that's precious. I'll kind of touch on these things again because it's worth highlighting.
For Aura, it gives them a deeper access into the family with the Qustodio product set, and a deeper access into a really important community, where you can leverage the trusted relationships of parents with schools to offer not only safety, but hopefully offer security offerings. Let's face it, the distinction between security and safety with the rampant development of AI technology is disappearing. The challenge that we're all facing is AI threats that come in all shapes and sizes. These, Aura, as it brings together these options, creates significant opportunities. For Qoria, it's the access to the AI capability of Aura, which is a huge advantage for us. I'll talk more about that in the coming announcements.
It gives us access to higher revenue streams through our relationships that were built through schools and into the home, and importantly, it gives us a much opportunities for a much greater lifetime value, where if you think about the Qustodio business, it has this, what's called an age-out issue. When a kid becomes 16 or 17, our product becomes less relevant. With the Aura product set, we have products that are relevant from the time you become an adult to the time you end up in a aged care home. That is an extraordinary opportunity for our investors that we get to leverage. Financially, we're scaled, growing, profitable, cash flow generating. We have huge distribution networks. We are in global markets. We can take our products and leverage existing channels and existing markets.
There's a lot of very exciting low-hanging fruit and broader strategic opportunities. Then kinda going back to the original part of this presentation, there is an impact opportunity here. There is this opportunity to be that world brand name that the world needs to have that person on your side as we're all facing these immense challenges from the dynamics of AI and the rapidly changing world that we're living in. It creates this opportunity to have that partner for a whole lot of protection for you. Also for me, it gives me much more of an opportunity to have a seat at the table as these big decisions are being made around policy and technology that are being thrust upon the communities. That's the background.
In terms of the transaction, this is essentially the same slide that we released in January. The transaction's on track, it's all expected to complete sometime in the middle of June, where AXQ will be listed on the ASX, and Qoria shareholders will become shareholders in AXQ. Just to reiterate a few things, Aura will be acquiring 100% of the Qoria shares. It's subject to shareholder approval at a scheme meeting expected in June. It's subject to no material adverse change, and that's an incredibly high bar. It's a 15% reduction in annualized revenue between now and completion. That's very unlikely. Regulatory and court approvals, which are perfunctory, and receipt of the placement from the Aura holders, which we've mentioned in here.
Binding commitments have been received for that AUD 75 million at the equivalent of AUD 0.72 for Qoria shares. The exchange ratio is 35%. The ultimate result of this transaction is that Qoria shareholders will own about 35% pre-money, and just under 34% of the combined group post the placement. As I said, the placement is committed. It's around about AUD 109 million at that AUD 0.72. It values the combined business at about AUD 3 billion. That's based on a view of the valuation of a company that's in the order of AUD 500 million, you know, $350 million USD at the time of the merger. We expect $340 million, $350 million, growing north of 20% profitable cash generating. That's where that price was negotiated.
Just to be clear, again, the equity placement pricing is fixed in the securities pricing agreements. There is no mechanism for a repricing. There is a reimbursement fee in the event that the deal falls over due because of failure of either party. As I said, I don't think either party, both parties are very confident in this deal going through. I think it's also worth highlighting that the Aura holders are committed to this deal. A big chunk of the Aura holders will be, in fact, escrowed through the passing of the first half's financial report, which will be sometime in 2027. There's clear commitment from the Aura holders into this merged vehicle. Look, that's a brief summary.
Let me hand over to Ben, and then we'll hand over for questions.
Thanks, Tim. I won't spend too much time going through these slides, so we can jump into questions and not be all day for everyone. I guess the key highlight, probably the growth in revenue at 25%, so the lift in ARR delivering into that straight revenue, notwithstanding a little bit of FX headwinds in the latter period of the year, we remain on track to meet our targets around revenue growth. Free cash flow growth was also quite pleasing, up 50% or 51% year-on-year, and continues to be a positive.
As Tim mentioned earlier, the pipeline's strong, which we'll be able to talk to more at the end of the on March quarterly, that'll, it'll be clear, I guess, line of sight for investors through to 30 June and the FY audit, which will then give you line of sight around cash flow into the next period of the year, which will be incredibly strong. A lot of these numbers will have been out in the market with the quarterly reporting, I won't labor them too much, but important to highlight those things. EBITDA also was pretty positive, up 68% year-on-year. Again, a little bit of FX headwind there, and we've relatively sensitivity that we have in the PNL to FX previously. I think.
That will probably continue in the next couple of months, but on a consistent currency basis, we're very comfortable with where our guidance is set. I think, Tim, we can jump into questions in the interest of time.
Yeah, sure.
Unmute. Owen, you should be able to unmute now and ask a question.
Can you guys hear me now?
Yes, we can.
Yes.
Good one. A couple of questions, a few good nuggets to dive into. The first one on that comment around price optimization, can you just maybe talk through the blended average price rise across your products in your key markets, and mainly in the B2B side?
Crispin, you want to talk through that?
Hey, Owen. Good to see you, buddy. Yeah, you should assume it would be around 5%, typically, through, you know, each renewal that we have, on an annualized basis, where we're typically looking to exceed CPI. We do look at, you know, the products and the innovation that have been introduced over that time, and potentially may go a bit higher or a bit lower, but you can assume an average around that 5%.
Good one. Commentary around the cost reduction there of AUD 4 million. I guess the question here is, WiseTech obviously came out the other day with a huge cost reduction related to AI and AI optimization of its people cost. Does the AUD 4 million relate to the acquisition, or is this in the core business?
Look, we're chipping away where we can to reduce costs. The big chunk of that is in engineering, where we're not replacing, you know, the churn, which always happens, unfortunately, in businesses like ours. Yeah, I'd say 2/3 of that cost is through efficiencies that we're finding in the engineering part of the organization. Yeah, look, I think the investors need to understand this, we've got an incredibly important and complex integration exercise that's happening right now. It has to be delivered, because there's so much value that can come from that.
Not only bottom line efficiencies and, you know, cost outs and so on, but it's, you know, order of magnitudes more value will come from the additional, the ability to sell more products, particularly in the UK, and provide better experiences for customers and more features more quickly. It's a really important time. That, those sorts of, order magnitude engineering savings that WiseTech are running, I think they're in our future, but for this year, we've got to hit this unification work. It's really, really important.
Good one. Then around, we're in the key UK selling period now, this quarter. In the past, you've always talked about, I think you call it growth or those, whatever the word to use. Just talk us through the pipeline there. Are you comfortable with that business where it is today? I know the integration is not fully done, and you may miss a sales period, but just maybe talk through how that pipeline is maturing in this quarter, 'cause the pipeline was quite strong.
Yeah, I'll take that. Pipeline, yeah, year-on-year basis is up sort of 15%-20%. The U.K. actually is at 116% of target year to date, Owen, and yeah, we're seeing a real positive trend towards the blended monitor and filtering proposition in the U.K. I think just a general positivity in the market overall. Even while the team wait with bated breath for, as Tim was saying, the Linewize Connect proposition, which essentially brings what dominates in the U.S. market into the U.K., with the first tranche of that release literally happening in the next sort of couple months, everything in the U.K. is extremely promising. Really exciting, actually.
Whereas in the last couple of years, you know, we had challenges and, you know, with growth there, for reasons we don't need to get into, we've come through that now. Yeah, I'm really, really optimistic on the U.K.
Just to, good one, well done. Just to go back to that price optimization. In the past, you always talked about 20%+ growth. Was that on volume, is price additive to your growth rate, or is it embedded inside the 20%?
Better way to answer that question, Owen, is it's, we think there's upside on the 20%. We've got a lot of levers to pull, from additional products, to price increases, to new logos. It's just one of the streams of work for us.
For shareholders buying Qoria today at whatever share price it is today, 30 odd cents, they're really buying Aura. There's little information today around the Aura business. Maybe you can provide, is there anything you can provide shareholders of Qoria around the financial performance of Aura? We've had strong growth in the past, around 35% in that business. Can you just talk through your understanding of that growth trajectory into calendar year 2026?
Well, so let me firstly say that Aura's being IPO'd, right? They're going through that compliance process, and a prospectus will be coming out, correct me if I'm wrong, Bennett, sometime in April. You know, ASIC doesn't like, you know, ASIC requires to be quite careful in the promotion of Aura until the full some disclosures are available to the market. What I can say is, you know, we came into this merger incredibly excited about not only the product set, but the growth profile of the business and the opportunities that will come to the businesses by bringing them together. That's, you know, self-evident and the reason for bringing these businesses together.
Where we can, we're hoping to provide some more insights to educate the market prior to prospectus coming out. Once that prospectus comes out, the questions you're answering, I'm sure will have very, very confident, positive responses to them.
Good one. Thanks, guys. Good numbers.
Tim, there's a question in the Q&A, that you touched on when you were talking about the deal, but been asked to just sort of reiterate it. Aura is owned by Warburg Pincus and Accel. What lock-up is expected on existing Aura shareholders after the ASX listing?
Yeah. We've asked the main two investors, which is Hari Ravichandran and WndrCo, which together own about 40% of Aura. We've asked them to have a voluntary escrow, and so they'll be escrow through to essentially the end of February next year. That doesn't mean that they have an intention to sell in March. Please be clear on that. Both Sujay from WndrCo and Hari are absolutely in love with this business. They're committed to it. All the representations from all those holders is they're in for the long haul. They're really passionate about building something that is world-changing, and that's really the pedigree and history of these people.
If you spend some time Googling the people that are behind, the individuals that are behind this investment, they are about making life-changing, world-changing investments. We're really excited about that. That's been backed up by the voluntary escrow. Those other investors are also making commitments to what we describe as orderly sale provisions, a commitment to take any intentions to sell shares to the board for review. We believe they're truly very committed.
Next in the queue is Laf. I've just let you through, Laf, so you should be able to unmute now.
Hey, guys. Just wanted to follow up on some of the timing around the sort of IPO and what disclosure can come out when. Are we, are you saying now that we're not gonna get any detailed information until April? Is that the next date, or how should we think about? Can some of it, like, any information come out before then, or what's your plan of, what does the timeline look like over the coming months?
Yeah, look, we're hoping, we're working with the lawyers and effectively ASIC at the moment to work out the extent of the disclosures that we can provide in the lead-up to the prospectus. We're kind of been scheduling to do something in March to bring people on, along for that journey with not only financial information, but, you know, product demos and so on. You know, the publicly available sort of information, which I'm hopeful that we'll be able to disclose. Aiming for that sort of timeframe, Laf, to run some events. As soon as that prospectus comes out, we'll be doing, you know, a significant company day and giving an opportunity for the broader investment community to really get under the hood, both financially, go to market and product, and meet the team.
I'm also hoping to work with, you know, people such as yourself and other groups to, you know, kind of hone in on specific areas of interest. It might be particular channels or, you know, a use of AI or, you know, security threats or whatever. That we're planning a whole series of events in the lead up to the shareholder vote in June.
Got it. Can I ask one question on AI and in relation to Aura's solution set? They're using AI, you can see internally for their own efficiencies, but how are they set up for, I guess, preventing AI-style attacks on or cyber phishing or whatever else may come through? Have they got specific tools that they've already worked on? Is it a competitive advantage for them? Can you talk through how they are positioning to protect people in the new world?
Yeah, look, I think this is one of the main reasons why we're keen on this merger, so thank you. I didn't set this question up, so thanks, Laf, for the question. The anomaly detection platform that they've built looks for strange things that's going on, and it might be something strange in your bank account, or strange in your credit file, or strange activity on your child's, you know, undertaking at 2:00 A.M. in the morning. It allows an analysis of what's unusual based on an individual and a collective level. That's powerful. I am of the view that that's beyond all of our competition, and it's something I'm really excited about bringing to the K-12 world, which doesn't really exist in the K-12 world.
Beyond that, the thing that's really powerful about the way of thinking of Aura, I think driven by Hari, you know, he's a genius, is this idea of, well, let's find an agentic response to those risks that have been identified. Don't just scour your experience in your digital life to look for these issues or risks, let's deal with them on your behalf. It might be removing your data through data brokers or contacting your bank and getting your, you know, transaction removed from your bank or an entry removed from your credit file. It's an agentic response to the risks that are becoming apparent in our digital lives. That's really clever, and I think they're years ahead of anybody else in the world.
That was, well, in my view, that's my main driver as to why I wanted to bring these businesses together.
How does that, you know, filter into their pitch and marketing and so their partners, like, is it that, like, is that a big component, or can you talk to anything that can prove that that's actually resonating?
Well, yeah. I mean, look at their website. Like, it's all over their website. It's all across all of their marketing materials. In fact, they talk about their speed of the ability to identify risks, which is, I've forgotten the stat, but please look at their website. They actually quote specific stats about their performance in detecting threats, beyond their competitors. Yeah, and that's core, it's core to their point of difference.
All right. Thank you.
We have a question in the Q&A on the capitalised development cost. How much development spend is capitalized versus expensed, and what would free cash flow look like if you created some development as recurring maintenance? It's about 45% of our engineering spend that gets capitalized, but it all is included in free cash flow, so it doesn't matter if we change that mix. Free cash flow includes the capitalized salaries as well, so there's no impact there. I think there's no more hands raised. There is one other question in the Q&A, Tim, for you. Have you spoken to Qoria's largest shareholders on whether they intend to vote in favor of the deal?
Yeah, look, we're engaged with all of our largest holders. They're all indicating positivity, let's say, to the deal. We're hoping in the lead-up to the vote that we can get, you know, clearer and more public indications of their support. At this stage, it's all. I feel very confident, and I feel, in fact, really grateful for our, you know, top three or four institutional investors for the support they've given to this, to this deal and the, you know, what we're trying to achieve as a business. Yeah, I'm feeling today really comfortable.
That's all the questions, Tim, so if you want to wrap up.
Great. Thanks, everybody, for attending, for your interest, for backing this story. As you see in this presentation, we're really set up. We've moved now from a start-up, cash-burning business into a business that's profitable, cash generating, growing well. We really understand our markets. We're performing better than, I think, than all of our competitors in these markets. Never been set up for more success. We're about to join forces with an innovator, a leader in the digital safety, digital security space. It's a really exciting time. Looking forward to speaking to investors in March, we get to...
Sorry, in April, we deliver the March quarter. Obviously all eyes are gonna be on Crispin and his big pipeline into that June quarter. Looking forward to seeing you there.
Thanks, everyone.
Thanks a lot.
Thanks, everybody.