To their elders past, present, and emerging. If you're attending in person, please take this opportunity to turn off your phones or put them on silent. It is now 9:00 A.M., and there being a quorum present, I declare the meeting open. I confirm that the meeting has been properly constituted. I would like to introduce my fellow directors seated next to me, Jenny Macdonald, Kim Anderson, Les Szekely , Paul Wilson, Dean Stoecker, and Sankar Narayan, our CEO and Managing Director. Also in attendance are Aaron McKenzie, our Company Secretary, Tim Howard, our CFO, Sandeep Chadha from Deloitte, the company's auditor, and Samantha Sundaraj from Automic, the company's share registrar. As this meeting is being conducted as a hybrid meeting, I would like to welcome those shareholders that are joining us via the Automic's online meeting platform.
This platform enables shareholders and proxy holders to participate in this live webcast of the meeting, as well as ask questions and submit votes. For those shareholders attending virtually who wish to ask a question, instructions on how to do so are now shown on the screen. If you'd like to ask your question verbally, type your SRN or HIN, and then type, "I want to ask a verbal question." Please also state your name and the organization that you are representing. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. The agenda for today's meeting is as follows: firstly, I'm going to say a few words, and then we're going to hear from Sankar. Then we'll turn to the formal business of the meeting, and we have four resolutions today.
Finally, I will close the meeting. Before I give my address, I do want to provide some important information on the meeting process. Voting on all resolutions will be conducted by poll. Shareholders attending virtually and wishing to vote on the resolutions can do so through Automic's investor portal. If you are not already logged into the investor portal, please see the instructions shown on the screen. If you have a problem registering your shareholding with Automic, please call the support number shown on the screen. To allow shareholders time to log in, I now declare the poll open. Online voting will remain open until I declare the poll closed at the end of the formal business. Votes must be submitted prior to the poll being declared closed to be counted. The twenty twenty-four financial year was a transformational year for SiteMinder.
It was a year where SiteMinder sustained strong organic growth, delivered a step change in its profitability, and positioned itself for future success with good progress on its Smart Platform strategy. The Smart Platform strategy is an exciting opportunity for the company to continue its strong momentum. By making it easier than ever for hoteliers to optimize the distribution of their inventory, the strategy will deliver unprecedented value to hoteliers and distribution partners and expand the boundaries of what is already a very large addressable market. Sankar will shortly share with you further details of the Smart Platform strategy and the team's performance in the twenty twenty-four financial year. As the company continues to grow as an ASX, ASX-listed company, the board has continued to evolve the remuneration program for the key management personnel and the executives.
As outlined in the notice of meeting, the new long-term incentive structure is subject to a shareholder vote today. Much consideration and consultation was undertaken in deciding to use the Rule of 40, a measure that will be familiar to many SaaS investors. This measure provides the team with flexibility and incentivizes them to find the right balance of growth and profitability. Given the transformational impact of the Smart Platform strategy, the flexible nature of the Rule of 40 makes it an ideal measure, and the board recommends shareholders vote for the resolution today. I would like to take the opportunity to thank Les, who earlier this month announced his intention to retire from the board by the end of this calendar year. Les was SiteMinder's first angel investor, and his guidance over the years has supported SiteMinder's success.
On behalf of SiteMinder Board, management team, and investors, thank you, Les, for your contributions, and best of luck in your future endeavors. I would also like to thank my fellow directors, the SiteMinder leadership team, and all of SiteMinder's staff for their support and effort during FY 2024. To our investors, thank you for your steadfast support for the SiteMinder team and for being so generous with your time and advice. The team looks forward to your continued partnership as we build upon SiteMinder's industry leadership with the execution of the Smart Platform strategy. I will now invite Sankar to address the meeting on the operational performance and strategy.
Thank you, Pat. I would like to acknowledge the support and guidance you and the board have provided to the whole SiteMinder team during the 2024 financial year. Similarly, I would like to recognize Les's contributions over the years. Les, your long history with the business and the industry has been an invaluable resource for me and the team, and I wish you the very best in your future endeavors. As Pat commented, the 2024 financial year was a transformational year for the company, and our performance is even more impressive when compared to the time of our IPO almost three years ago. During the last three years, amidst unprecedented market conditions, there have been questions about our competitive advantage and the scalability of our business model. Our performance over the last three years has addressed these questions, and the results speak for themselves.
Subscriber additions have never been stronger. We added 5,400 subs, subscribers during FY 2024, more than double what was added in FY 2022, the year of our IPO. For our 44,500 subscribers, we help generate and manage more than 120 million reservations each year, valued in excess of AUD 75 billion, dwarfing our competitors. We've proven our ability to upsell to our customers, with 26,300 transaction products adopted at the end of FY 2024, doubling since FY 2022. Revenue growth has accelerated, and with a Smart Platform strategy, there's a pathway to accelerate and maintain growth at 30%. The scalability of the business has been demonstrated with underlying EBITDA and free cash flow, making step change improvements to become positive in the second half of the 2024 financial year. Unit economics have also improved.
This was achieved while we invested for growth and embarked on a transformative product strategy, the Smart Platform. Getting the balance right between growth and profitability is key to the success of any SaaS business, and we measure this performance by the Rule of 40. The Rule of 40 is a sum of a company's revenue growth and free cash flow margin. Progressing towards 40 demonstrates the company's investments are yielding adequate growth and returns. Since FY 2022, SiteMinder's Rule of 40 performance has improved from - 15 to + 17 in FY 2024. In the second half of FY 2024, it was 21. The momentum is strong, but there's much work to be done, and as Pat indicated, the revised long-term incentive structure further aligns executive compensation with shareholder value creation. The centerpiece of our plan to build on our strong momentum is a Smart Platform strategy.
Announced last year, the strategy is about making the strengths of a platform work together better, so that we can help our hotel customers and partners generate more revenue. The key initiatives of the strategy are focused on answering three questions. One, SiteMinder has a large and valuable repository of data, unrivaled in size, depth, and geographical coverage. How do we make this data accessible and useful to our hoteliers? Number two, how do we translate that data into actionable recommendations across not just pricing, but other commercial levers as well? Number three, how do we help hoteliers execute those recommendations with minimal effort? This is about creating a unified revenue management experience, something that doesn't exist in the industry today, but operators are crying out for.
The team has made great progress in delivering the Smart Platform strategy with all three pillars: Dynamic Revenue Plus, Channels Plus, and the Smart Distribution Program, either in pilot or having commenced their launch. Dynamic Revenue Plus. We are pleased to launch Dynamic Revenue Plus, as we call it, DRPlus, in Australia and New Zealand last month. DRPlus provides our hotelier customers with proprietary insights and execution tools to optimize key commercial decisions and drive more revenue. The launch has received very positive feedback from our hotel customers and industry partners. Dynamic Revenue Plus will level up next year with the integration of pricing recommendations from IDeaS, ahead of its global launch in March twenty twenty-five. IDeaS is the industry's most trusted revenue management system, and we are pleased to have deepened our partnership with them.
This is very exciting, but it's just the start of the journey for Dynamic Revenue Plus. Advanced capabilities are under development that will combine the latest in artificial intelligence with SiteMinder's deep and comprehensive data assets to deliver even greater revenue gains for our hotel customers. I'll look forward to sharing more details of these capabilities in due course. Channels Plus is the second pillar of our Smart Platform strategy and is focused on making it easier than ever for our hotel customers to distribute their inventory. In less than five minutes, they can sell their inventory to 30 participating distribution partners. Achieving the same outcome with our Channels Plus would take weeks, if not months, and is practically impossible for most hoteliers to sustain. Today, we have more than 1000 hoteliers and 30 distribution partners signed up for Channels Plus.
We have received strong interest from our customers and have received strong support from some of the world's leading booking platforms. From January twenty twenty-five, Channels Plus will be a default inclusion for all new customers on the SiteMinder platform. Smart Distribution. Finally, the third pillar of our Smart Platform strategy is a Smart Distribution Program. The Smart Distribution Program will drive unprecedented collaboration between our hotelier customers and distribution partners to deliver win-win-win outcomes through enhanced connectivity, optimized setups, and technology investments. The program commenced during the September quarter just past. The three pillars of the Smart Platform strategy to work together to deliver more revenues for hoteliers and our partners. For SiteMinder, the Smart Platform strategy represents more than just incremental revenue.
The strategy transforms our revenue model from one that is just hotelier-oriented and largely based on fixed fees, into one that touches other parts of the travel ecosystem and is increasingly focused on activity-based fees. This will allow us to better participate in the success of our hoteliers, customers, and partners. The three pillars will meaningfully contribute to revenue at different times over the next few years. The Smart Distribution Program will come first, and its contributions will be compounded by Channels Plus and Dynamic Revenue Plus. Together, they'll help us achieve our guidance for 30% organic annual growth in the medium term. While we're doing a lot of work to position the company for the future, we have not lost sight of the now and present. The company has continued to perform well in the first quarter of the twenty twenty-five financial year.
Net property additions are tracking ahead of last year, with continued focus on larger properties, which present attractive longer-term revenue opportunities for the company. The adoption of transaction products continues to grow across incoming and existing customers. On the Smart Platform, we are progressing as planned with the commencement of the Smart Distribution Program. Channels Plus is on track for its full commercial launch in January 2025, and Dynamic Revenue Plus is progressing through its stage launch program with positive early industry feedback. Our guidance is unchanged. We continue to target organic revenue growth of 30% in the medium term, aided by contributions from the Smart Platform. SiteMinder also expects to be underlying EBITDA profitable and underlying free cash flow positive in FY 2025 and make continued progress on the Rule of 40.
I would like to end by echoing Pat's sentiment and express my gratitude to the SiteMinder team for their efforts. None of the achievements highlighted would have been possible without the outstanding contributions and indeed, the strong foundational work they've put in over the years. To our investors, thank you for the trust you've placed in the team, and I look forward to your continued partnership. I'll now hand the meeting back to Pat, Chairman of the Board, to continue proceedings.
Thank you, Sankar. If there are any questions in relation to Sankar's address, we'll take them shortly. I'll take the questions from the floor first, and if I could please ask, if you're asking a question from the floor, just to state your name prior to asking the question, and then we'll follow that by questions submitted by the virtual meeting platform. This will be the format that we'll use for each of the resolutions as we move through the rest of the meeting. So are there any questions of us in relation to Sankar's?
Robert Kennelly is my name. Could you just go over the Rule of 40 again, please?
The Rule of 40 is the addition of the organic growth rate, revenue growth rate of the business and the underlying free cash flow margin. So it has got a combination of growth and profitability in single measure. It allows the company and the board to set the direction of where and how we wanna continue our journey forward, growth-oriented in the early years, and at some time late in the future, well, well into the future, orient that focus towards profits. So it is a really good measure that balances growth and profitability into a single measure.
My name, Brian Eggert. Do any of the-
I think there's a microphone there, Brian. Sorry. Thanks, Brian.
Do any of the other SaaS businesses use the Rule of 40 in measuring the executive and the company's performance?
To our knowledge, nobody. This is. We are first. There may be one other company, but we are one of the first companies to do it. We collectively, with the executives, spent a lot of time thinking about whether or not we do adopt it. The reason we landed on adopting it is because since the company listed, if you recall, if you were a shareholder back when we issued the prospectus, we talked about medium-term growing the company at 30% top line. And we set off on that journey, and then the world decided that actually, for SaaS companies in that scale-up phase, they'd like some cash. So we debated whether or not we would change the direction of the company to achieve that, and we have, and that's...
You'll have seen that in terms of the cash we generated in the second half of the year. But the Rule of 40, as Sankar says, gives you the flexibility to pivot when there's opportunities to grow the top line versus times to actually take some margin and grow the cash at the same time. So we think that flexibility will be a good way to measure management in terms of their performance, but time will tell.
Thank you, Chairman.
Any other questions from the floor? Aaron, any questions?
Chair, there are no questions.
Excellent. As there are no further questions in relation to Sankar's presentation, we now move to the formal business as set out in the notice of meeting. The notice of meeting was mailed to all registered members and is to be taken as read. For the purpose of the poll, I appoint Samantha Sundaraj of Automic, the company share registry, who examined and prepared summaries of the proxy forms received to act as returning officer and to conduct the poll. Those shareholders in attendance physically that are entitled to vote on the poll are all shareholders, representatives, and attorneys of shareholders and proxy advisors, sorry, proxy holders who hold yellow voting cards. I would like to remind everyone who's attending this meeting in person of the color scheme, which applies to the cards handed out by our share registry.
Yellow is for those who are entitled to vote on the poll, blue is for those who are not entitled to vote on the poll, and red is for visitors. If anyone believes they're entitled to vote on this poll in any capacity and does not have a yellow voting card in respect thereof, please raise your hand now, and a member of our share registry team will assist you. If you're a shareholder and wish to cast all of your votes for resolution, please mark in either the for, against, or abstain box next to that resolution. If you wish to split your votes, please write the number or the portion of votes you wish to cast in the corresponding for, against, or abstain boxes. Obviously, please note the sum of the split votes must not exceed your total holding.
After all resolutions have been read and voted upon, please place it in one of the ballot boxes that will be circulating the room. The results of the poll will be announced to the ASX today once they are available. Are there any questions from the floor in relation to the voting process? Aaron, any questions?
Chair, there are no questions.
As there are no questions, proxies have been inspected, and all those validly lodged have been accepted. Proxies have been received representing 232,641,672 shares, or 83.4% of the issued capital of the company. All undirected proxies or open votes that have nominated the chair of the meeting as their proxy will be cast in favor of each resolution in the notice of meeting. We will now proceed to the resolutions set out in the notice of meeting. The first item of business is to receive the company's annual financial report for the year end of 30 June 2024. The financial report and the reports of the directors and the auditors are now laid before the meeting. There will be no vote on this item, and it is a discussion item only.
The company's auditor for the 2024 financial year, Sandeep Chadha of Deloitte, is present, as I said earlier, to present answers relevant to the conduct of that audit and preparation and content of the independent auditor's report. Are there any questions or comments from shareholders on the financial report or the reports of the directors and auditors on the management of the company, or relevant to the conduct of the audit, of the preparation and content of the auditor's report to be put to the auditor? Are there any questions from the floor? Aaron?
Chair, there are no questions.
We will now proceed to the resolution set out in the notice of meeting. Resolution one is the adoption of the remuneration report: to consider and, if thought fit, to pass Resolution one, adoption of the remuneration report as an ordinary resolution. That for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the remuneration report as contained in the company's annual financial report for the financial year ended thirty June, twenty twenty-four. The proxies received in relation to this resolution are on the screen. Are there any questions from the floor on this resolution? Aaron, any questions?
There are no questions.
I now put the motion.
Sorry, just one.
Oh, sorry, mate.
Question.
Name, please.
Robert Kennelly again. Mr. Chairman, I think you mentioned the connection between the Rule of 40 and the adoption of the remuneration report. Could you just say something about that link, please?
Yep. The remuneration report is effectively a historical record of remuneration. The Rule of 40 is a forward-looking, so it's probably more relevant to the resolution in relation to Sankar's LTI, but the linkage will be next year. We'll talk more about the Rule of 40 in the REM report, albeit the actual plan is a three-year plan, so it'll be FY 2027, I guess, which is where we'll see whether or not the company has achieved the LTI targets. I now put the motion. Please mark your voting instructions on your yellow voting card or vote via the online portal. Resolution two: to consider and thought fit to pass Resolution two, the re-election of Jenny Macdonald as a director as an ordinary resolution.
That for the purposes of the company's constitution and all other purposes, Jenny Macdonald, a director who retires by rotation in accordance with the company's constitution and ASX Listing Rule 14.5, and being eligible, offers herself for re-election, is re-elected as a director of the company in accordance with the company's constitution, effective immediately. This resolution concerns the re-election of Jenny as a director of SiteMinder. Jenny retires at this meeting and offers herself for re-election. The board, other than Jenny, recommends Jenny to you as a SiteMinder director and unanimously supports her re-election. As is customary, we will now ask Jenny to say a few words about herself and her role on the board.
Good morning, and thank you for allowing me to briefly address the meeting. As Pat said, my name is Jenny Macdonald, and I'm honored to be standing for re-election as a non-executive director of SiteMinder. I also currently serve as your Audit and Risk Committee chair, and am a member of the People and Culture Committee. I was appointed to the board just prior to the IPO, and have, since that time, utilized my financial expertise and travel industry experience to contribute to the strategic direction of the company, the innovation and governance. In that time, we have shown significant growth. We've become EBITDA profitable and cash flow positive, which has led to our increased market position.
Looking ahead, I am committed to continuing the growth by advancing our goals of the Smart Platform strategy, building our global customer base, and ensuring our team continues to be world-class. I will also continue to prioritize transparency and accountability to continue to deliver shareholder value. I'm grateful for your trust and support, and thank you for considering my re-election.
Thank you, Jenny. The proxies received in relation to this resolution are now on the screen. Are there any questions from the floor on this resolution?
Chair, there are no questions.
I now put the motion. Please either mark your voting instructions on your yellow voting card or vote via the online portal. As the next resolution relates to myself, I now hand the chair of the meeting to Kim Anderson.
Thank you, Pat. Resolution three is as follows: To consider, and if thought fit, to pass Resolution three, re-election of Pat O'Sullivan as a director as an ordinary resolution. That for the purpose of the company's constitution and all other purposes, Pat O'Sullivan, a director who retires by rotation in accordance with the company's constitution and ASX Listing Rule 14.5, and being eligible, offers himself for re-election, is re-elected as a director of the company in accordance with the company's constitution, effective immediately. This resolution concerns the re-election of Pat as a director of SiteMinder. Pat retires at this meeting and offers himself for re-election. The board, other than Pat, recommends Pat to you as a SiteMinder director and unanimously supports his re-election. I will now ask Pat to say a few words about himself and his role on the board.
Thank you, Kim. I have enjoyed my time serving as a chair and director of SiteMinder since we listed on the ASX in 2021. I'm very fortunate to be working with a strong group of non-executive directors on this board and with a great management and broader team across the globe, led by Sankar. Since listing, the company has performed strongly, as Sankar has shared with you earlier today, and we've collectively, as a team, worked hard to deal with the challenges that have been thrown at us over those last few years. We have a strong strategic roadmap and a high level of focus on execution. With your permission, I would like to continue serving as chair of the board, and I'm committed to giving my best efforts over the coming years if I'm re-elected.
I have the time, energy, and skills to continue to drive this company forward. Thank you.
Thank you, Pat. The proxies received in relation to this resolution are on the screen. Are there any questions from the floor on resolution three?
Thank you very much, Chair. Robert Kennelly again. In these days of stress and workload, Pat, could you outline your other directorships, please?
Yep, happily. So I'm a director of two other... Sorry, a chair and director of two other companies. So I chair CAR Group, and I chair TechnologyOne. In terms of my ability to chair three companies, I personally believe I'm more than capable of doing that in terms of workload. It's others to judge whether or not I am. There is one proxy advisor who has a policy globally of voting against any chair who holds three chairs on an ASX listed. From my own perspective, like I say, I wouldn't be sitting here before you if I didn't have the capacity, but perhaps Kim should speak as well.
Yeah. Thanks, Pat. Just let me say that Pat is an incredibly efficient and fabulous chair. So for anyone who's worked with Pat, you will know that. He's always prepared for meetings. I think he speaks to Sankar weekly, and if not, more than once weekly, which is unusual for a chair. He also turns up to meetings incredibly well-prepared and ensures that he's spoken to each of his directors prior to the meeting to see if there's anything that is on their mind. He also attends all the committee meetings, regardless of whether he's on that committee, and he also runs an incredibly efficient board meeting. So we, as directors, unanimously support Pat re-electing. Thank you.
Absolutely. Chair, there are no questions.
Okay. So we will, now put the motion. Please mark either your voting instructions on your yellow voting card or vote via the online portal. Yes, you can see the proxies received in relation to this resolution are on the screen. So if there are no questions, Aaron? No.
There are no questions.
Okay. I now hand the chair of this meeting back to Pat.
Thank you, Kim. We move to our last resolution, Resolution four, to consider and, if thought fit, to pass Resolution four, grant of performance rights to the MD and CEO in respect of his FY twenty-five LTI award as an ordinary resolution. That for the purpose of ASX Listing Rule 10.14 , and for all other purposes, approval be given for the grant of three hundred and three thousand six hundred and fifty-one performance rights over shares in the company to the MD and CEO, Mr. Sankar Narayan, in respect of his FY twenty-five LTI award, in accordance with the terms of the company's employee equity incentive plan and as set out in the explanatory statement. The proxies received in relation to this resolution are on the screen. Are there any questions from the floor on Resolution four? Aaron?
Chair, there are no questions.
I'll now put the motion. Please either mark your voting instructions on your yellow voting card or vote via the online portal. That concludes the resolutions to be voted on today. Can all shareholders voting online please now ensure that they have submitted their votes? I will allow another minute or so before the poll is closed. For those shareholders attending physically, I now invite Samantha to collect your voting cards from the floor.
Church collection.
Hmm?
It's the church collection, mate.
Oh, yeah. I know you don't go there. Are there any questions from anybody in the room in relation to the poll process? Any questions online, Aaron?
Chair, there are no questions.
I now declare the poll closed. The staff of Automic will now process the poll, and the results will be announced today on the ASX once they are available. Is there anybody else who has any other questions that we didn't address from the floor today?
Is there a set number of questions, or may I have one more?
You are very welcome, sir, to keep asking questions.
Robert Kennelly, in the strategic vision for the company, is there a view that a dividend will be paid at some time?
So at this stage, in terms of our balance sheet, the answer is no for the short term, but it definitely is something as we start to generate free cash flow, that will be considered. Any other questions from the floor? Are there any other residual questions, Aaron?
Chair, there's just one question on whether commissions will increase once we move more hoteliers onto the Channels Plus program.
That's an operational question, Sankar?
Commissions, I don't understand the commissions, because they're standard commissions, that's part of the revenue that we generate, and that is actually gonna be determined, predetermined. So we don't have a commissions number directly in our revenue numbers today.
Are there any other questions?
Chair, there are no other questions.
There'll be no other business. I'd like to thank all shareholders for their attendance today, and I will now end the formal part of the meeting. I declare the meeting closed. Please join us for a coffee and something to eat. Thank you all.