Good morning, everyone, and welcome to Faceph's Earnings Call for the year ended December 31st, 2024. My name is Antonio Jorge. I am the company's Investor Relations Officer, and I will be your host for today. Before we begin with the presentation, let me mention that we are offering simultaneous translation from English to Spanish in both audio and subtitles format. In order to access those tools, you can go to the lower right corner and click on the apps button. Now, in Spanish, [Spanish language] Okay.
Joining me on the call today are Javier Mira, our Chief Executive Officer, and Aitor D'Oxandabaratz, our Chief Financial Officer. Following their prepared remarks, we will open the floor for questions. You may submit your questions at any time using the chat system that you see on the right side of your screen. Before we begin, please note that some of the information discussed today might include forward-looking statements. These statements are based on current expectations and are subject to risks and uncertainties that may cause actual results to differ materially. With that, I will now turn the call to our CEO, Javier. Please proceed.
Okay, thank you, Antonio, and welcome everyone to this webcast. Thank you very much to Maite also for coordinating and organizing this webcast. Thank you, Aitor, also for helping me in this presentation to touch the financial points. First of all, I guess that many of you, if not all of you, have seen the results presented or released audited by Ernst & Young in the last week. In those results, we also introduced a presentation, a PowerPoint presentation or PDF, in this case, presentation indicating some information about the company and about the year 2024, where you can analyze the performance of the company.
Today, in order to give more importance to the questions and answers that may be really needed from your side, we just try to reduce this presentation just to resume a little bit the year, but we are more than happy to be open to analyze your questions and try to answer in the best way. Let me start to say that from Facephi point of view, we are extremely proud of the results of 2024. It's true that it's been a year where the company has been changing a lot in many aspects, and key points and ratios are really, really relevant, and we will be touching them later on. Basically speaking, what I mean is that the company has been investing in these 12 years, but especially in the last three, four years after the pandemic when we were 20-something people. Today, we are about 300 people.
We changed completely the product portfolio. We changed completely the go-to-market strategy. We invest a lot in structure and infrastructure. Now we are starting to see results that we believe that in the next two to three years, the company is going to be in a very good position. Generally speaking, if we talk about the market, not only Facephi, we see that the cybersecurity market and digital identity market is growing as it has been doing in the last year, and it is going to keep this growth in the next or in the coming years. It is something that we have to take advantage . Facephi is not only leading the market in some specific verticals, but it is also part of this trend. We believe that in terms of responding to the market demand, it is something that we definitely are going to do.
In terms of facial recognition, it's even more. We can see here that the facial recognition market is growing more and more than the rest of other biometrics or technologies. We are experts on facial recognition. You know that. Experts in the financial sector, but also opening new verticals like airports, airlines, and many others. In the end, what we just noticed is that all the efforts that we have been doing in the last years trying to make our algorithms, our technology much more accurate, precise, and convenient is getting the results somehow. If we talk about Facephi, some of you know the company since the beginning or at least many, many years ago. We started just with a product called Face Authentication, that it was only an algorithm capable to authenticate our face against the camera, web camera, or with a selfie on the phone.
Now you can see in these charts the product portfolio we have. The main product we have is the Facephi Onboarding. It's the KYC. It's the verification of the identity. It's when you want to open a new account and you are not registered already, and you use your phone or your web in order to say who you are to the other party. It can be a bank or it can be a hotel, etc. We use the OCR process, ID, passport, facial recognition, liveness, etc. This is practically about 60% of the revenue today for the company. We have also the authentication, as I said, it's a combination. Practically every client that is buying onboarding is buying authentication just to continue authenticating the customers for any other transactions that they might need. We have the identity platform.
It's a tool that we give to our customers to be capable to track or to monitorize transactions and to improve the technology without the help from Facephi. They can manage them themselves. We also launched a few months ago IDV Suite. This is really important because in the end, the solution is the same, but this is based on the cloud and the integration is minimum. The IDV Suite product, what it's going to do is open a lot of new opportunities where Facephi cannot go now because we cannot send people every week to many places around the globe. With this specific suite, IDV Suite, we are capable to deploy our technology with an integration. It's going to open a lot of small, medium businesses rather than only key players or banks.
We also introduced our own behavioral biometrics about October last year in Las Vegas that is really, really, really relevant in order to keep the fraud out of our clients. This is combined with the mule account detection. We combine those two technologies. What we say is like a fraud platform. The IDV with the onboarding and the authentication is called the identity platform. In this case, it is fraud platform. This specific solution, the mule account detection, is something that is not deployed yet. We are in the process. Basically, in a couple of months, we will have first customers using this technology. This technology is new on the market.
It's something that everyone is demanding, the banks, I mean, because we are capable to track the transactions between different accounts, and we can detect if an account is a mule account, a fraudster account, or a victim account. It's a technology very, very well accepted. The wallet is something that we use, for example, in the POC for the airline project, that it was from Narita Airport in Tokyo to Hong Kong with passengers using just the wallet for verified credentials. They were not using any physical passport, any physical boarding pass, any physical loyalty card, etc. They just went to the airport, boarded the plane, arrived at the destination just by using biometrics and the wallet. This is basically the product portfolio we have today. We are very proud of this product portfolio.
I think we are just responding to the demand of the market and more than happy to start growing in terms of revenue. We have some numbers here, some numbers about where the company is right now. As I said, more than 12 years investing in R&D. We are owners of the technology in 99% of the cases. Still, we use obviously some models from third parties. We consider that it's important to combine with our technology. 70% of our team, that is about, as I said, 300 people, is tech-related, is product-related. The company, since day one, has been investing in R&D, and still today we are investing in R&D in order to be a little bit ahead of our competitors in terms of product and technology. More than 150 bank clients, more than 300 million end users, and long, etc.
All this is supported with the most trusted certification that you can have in the market today. The technology is certified, let's say, by NIST, for example, the algorithm, the National Institute of Technology or Standards of Technology. We have been named by Gartner in the hype cycle for financial crime. We have certifications for liveness, for facial recognition, and etc., etc., for banking systems, SECLAC, and along, etc. The company is really prepared to explore other markets, other verticals, and obviously with the trust that our technology has been certified not only by clients, by associations, and by certifications. Before handing to Aitor, the CFO, that is going to go into the detail on the figures and the numbers, what is important to understand is that the company has been investing and growing.
Growing means in revenues, but also in expenses in the last three years, as many of you may know, but until the point that in 2024, we reached the point where the company is completely stable in terms of structure. We are really prepared to grow in terms of revenue. You can see in some of the figures that we've been growing a lot, what we call the annual recurrent revenue. That is one of the most important key points of this presentation, but also in TCV. TCV means the total amount of contracts that we've been signing. The 2024 is a growth of 50% versus 2023. I think that's basic because that's giving us the scope for the future, how the company is going to be. Happy to answer as many questions as we can with the time that we have.
Please, Aitor, if you can, just let's move to the financial information.
Before passing the presentation on to Aitor, let me highlight one very important aspect of our strong financial performance and our strong growth rate. The important aspect is that this growth is coming from more diversification. The company is no longer so concentrated in very few sectors or verticals, very few regions, but we have been gradually diversifying towards other products, regions, and sectors. As you can see on this slide, the participation of onboarding is gradually decreasing to 60%, which is obviously being offset by higher growth from other products and services. In terms of region, as you know, historically, our core market was Latin America. We represented 96% of our revenues in 2022, and it is coming down slightly, and it now represents around 94%, with a very important growth in the Asia-Pacific market that has gone from 2% to 4%.
We have doubled in just two years thanks to our alliance with HANCOM and other initiatives. In terms of sectors, the same. Although banking continues to be our core business, you can see how we have been gradually diversifying towards other sectors, such as security service, insurance, pensions, and so on. The bottom line is that this growth is coming from a more diversified base, and we believe it's a more qualitative growth. I will pass the word on to Aitor. Aitor, go ahead, please.
Okay, thank you, Antonio. Good morning, everyone. Delighted to be here with all of you to share any question you may have on the financial aspect. Okay. Let me share with you what you can see on this slide, okay. ARR has been, as you see, has been growing exponentially at double-digit growth every year, which is showing how well the business has evolved over the last years. Definitely, from our point of view, it's the way to measure, to properly measure the growth of the business in a consistent way without mixing or misunderstanding by taking different methods of revenue recognition, TCV or invoicing or whatever.
Once the business has reached a significant size, as shown in the ARR 2024, and together with the fact that we all, the management team, have been working closely together as one team to improve the cash conversion cycle, this is why the net financial debt at the end of 2024 was only 16% of the size of the business versus close to 60% at the beginning of this period, 2021, o kay? The net financial debt at the beginning of the period 2021-2024 was playing its role, which is nothing more than to support the business growth. Okay? In this way, debt has played this important role.
As a consequence of our growth and as a consequence of our improvement, a huge improvement in our cash conversion cycle, the debt has declined sharply, as said, as gaining scale in the growth and has greatly improved our cash conversion cycle., okay. This is why in terms of percentage, it involves less than 20% of our ARR, that is the size of our business in 2024, okay. The evolution of the cash flow shows a J effect, okay. That is, as you know, is the typical sign of a change in the trend of this indicator that has been, as you can see in the chart, increasingly negative until 2023. In 2024, this trend has been reversed, showing, as said, the typical sign. The change in the trend of this indicator showing the typical J effect, I mean, okay.
In the next slide, turnover is showing the audit report, okay, but being the ARR, the indicator that most, let's say, consistently shows the growth of the business, o kay? Anyway, all of them, turnover, ARR, and TCV showing a significant and great year-over-year growth, okay, and in terms of compound accumulated growth rate, okay, in the last three years. TCV, as Javier said, as you know, shows in some way the total value of the contracts currently in place, o kay? In this way, and mathematically speaking, if you want, close to EUR 60 million in front of close to EUR 30 million ARR, it could say more or less that we have, in average terms, two years of contracts as long term, o kay?Anton, I think that's all from my side.
Thank you, Aitor.
Sorry, my mic was off, but thank you, Aitor. As Javier mentioned, we intended the presentation to be short, so we have more time for your questions. Now we will proceed to answer your questions. As you probably saw, in the lower right corner, there is an option where you can enter your questions. We have already received several, and we will be answering them in order of importance. We are going to proceed with those questions. Okay. The first question comes from Miguel Gomez. He is asking why the cost of goods have grown 41%, which is higher than the growth of turnover. Aitor, would you like to take this one?
Yes, for sure.
I would like, first thing, it's important to share the questions with all of the assistants just to understand the question. Aitor and Antonio and myself try to be as short as possible because I see that there are quite many questions, and I would like to respond to all of them. Let's try not to be 10 minutes with an answer.
Okay. As for the question, in terms of gross margin, the company in gross value, let's say in gross value, we have improved by close to 10% in spite of the fact that it is true what this question says, that is that the variable cost increased a little more than what the revenues did. Okay? In terms of total value for the gross margin, the company ended 2024 in a great and better position than 2023.
Next question, please.
Okay. The next question also comes from Miguel Gomez, that is basically asking whether we have any kind of exchange rate protection as many of a large percentage of our revenues come from U.S. dollars. I believe that question is also for you, Aitor.
Okay. The exchange rate actually in the marketplace are more or less in the same way that we found in mid-2024 and in mid-2023. Okay? We are a little more than $1.10 per euro. Okay? We have not only nominated in U.S. dollar the revenues, but also a significant part of our cost. In terms of impact, not significant in this way. Okay? For sure, we are finding currently a tool to properly cover this eventual downside risk. Okay?
Okay. Thank you, Aitor. Okay. Aitor, can you see the next question?
Okay. The next question is about, sorry, working capital or?
That is correct. It's a function, a tool that I was not aware of, but it will be better if you read them instead of me telling you.
Okay. Okay. Working capital as the difference between current asset minus current liabilities has improved also sharply as a consequence, again, coming from our great improvements in cash conversion cycle. Okay? We ended 2024 with a positive working capital figure. That is what Ernst & Young auditor says in its report. Okay? It is as a consequence of our growth in revenue. Obviously, if you sell more, you will have more accounts receivable in your balance sheet, obviously. Okay? It is again as a consequence of having, let's say, under control our cost structure as for the current liability side, of course.
Okay. Thank you, Aitor.
Okay. There is another question from Miguel Medina. Javier, do you want to take this one?
Yeah.
Yeah. Okay. When I mean stable, it's not related to low growth going forward. It's exactly the opposite. It was stable like the company has been growing about 40, 50, 60 headcounts per year in the last years, even more than that. Now, the company is stable means in terms of we do not need to grow more the number of people working with the company in order to receive a lot of revenue in the future. It's needed to mention also that going a little bit back to the revenue things, it's true that we grew only 14% or 15% comparing the 2023 in terms of revenue. We have to analyze that. It's true that the company has changed completely the licensing model, where in 2023 and years before, we used to have on-prem technology.
That means that the licensing was contracts for one, two, three, four, even five years. On those years, contracts were one, three, or five years, they were recognized as a full revenue because the model licenses was completely different, was on-prem. 2024 is completely different. The revenues coming, many of them from SaaS, from the cloud. It is a different licensing model, and the recognizing of the revenue is completely different. That is why this 50% is not the same as in the TCV that we grew 50%, coming from the EUR 37 million or EUR 38 million to EUR 57 million. What I mean with that is that the low growth that we had in 2024 in terms of revenue is completely nothing to do with what is going to happen in 2025, 2026, or 2027, where the company needed one year to make this change.
Obviously, the revenue in 2025 is not going to be in terms of growth in the same way it was in 2024. We have to say that comparing 2024 with 2023, just in terms of revenue, is not really comparable because the licensing model was different.
Okay. Thank you very much, Javier. The next question comes from David Lopez.
Okay. I can answer this. I would separate what is EMEA and what is U.S. We do not have yet a strategy to go into the U.S. market. We landed in Canada because we signed some contracts. Indeed, we have two banks in main Canada using our technology, obviously LATAM. You know that we are really strong. The U.S. is a market that so far we have some partnerships in order to start stepping into the market, but we do not have a full potential team or structure in the U.S. in order to develop that market. It will come, but we do not have it yet. In the case of EMEA, it is the opposite. We started EMEA regional strategy about 18 months ago, I would say, and it is taking time in order to start a new region with the technology, but it is doing well. It is doing well.
When you say which level of contribution we expect for 2025, we do not have or we cannot share exactly the numbers, but we are coming from zero, and probably this year, it should be contributing at least between 7% to 10% of the total revenue of the company, just EMEA.
Fantastic. Thank you, Javier. Okay. The next question comes from Jaime Soriano. As this question is in Spanish, let me translate it. Basically, Jaime is asking where we can give an advance on our turnover today and provide any kind of guidance for 2025.
Yeah. We are not providing any guidance for this year. As usual, Facephi is not giving forecasts, let's say. We only have our own estimated figures. What is true is that I'm going to try to repeat myself in terms that 2024 has been a year of change. The revenue is not comparable to the revenue that we have been showing in the years before, and 2025 is completely a different issue in many aspects.
In the revenue, you have to analyze that if we have EUR 28 million in annual recurring revenue and a TCV of EUR 57 million last year, you can understand that 2025, the numbers of the growth in terms of revenue the company is going to have is going to go back to the previous years in terms of growth that we had years of 30%, 40%, even 60% growth in some cases in terms of revenue. This year is going to be in the same way. We cannot anticipate figures or numbers.
Okay. Thank you, Javier. Okay. The next question comes from Romain D'Obral from Markets.
Yeah. I will repeat myself. There are some numbers or figures that we cannot share. For example, pipeline value to date. Obviously, as I said, if the company has last year EUR 57 million in total contract value, and this year we are saying that the growth is going to go back to the previous year, you can imagine that the numbers we are managing here in terms of pipeline is quite strong. We really believe hardly that 2025 is going to be a really successful year in all aspects, not only in revenue, in total contract value, but also in positive cash flow generation. In terms of SaaS, the estimation, obviously, the market, the trend is going to SaaS. We still have clients on-prem, but many of them are migrating to SaaS. Some of them are migrating to a private cloud.
Some of them are migrating to a public cloud. It depends. Definitely, all the clients that we are signing, obviously in 2024 too, all of them are being signed on SaaS. On-prem is getting more and more released to the bank. Some of the banks, all banks, let's say, they are still using the on-prem system, but in the end, all of them are changing. The strategy of the company, obviously, is go to SaaS in a very strong way. The percentage last year was 50/50, I think more or less. This year should be at least 70% to 80% in terms of SaaS. The AWS Marketplace partnerships, this is something that is new.
What it means is that Amazon Web Services, they ask us, we have many clients in common, clients that they use Amazon Web Services for the infrastructure to use our technology placed in those servers. At the same time, they have their own go-to-market strategy. We share some meetings. We have some common points, and we just developed this partnership. What it's going to bring us is that some of the customers that AWS has in the banking industry using their own services and asking for verification or digital identity verification, they're going to have to say, "okay, we have in our marketplace, we have a technology from this company that is an expert in the banking industry, and you are ready to use from our service." That's the impact. We cannot manage that impact.
We do not know if this impact is going to be EUR 1 million or EUR 15 million. It is too early to say that. We are just starting having some meetings with some of the clients, but we cannot, it is impossible to know what it is going to be by the end of the year. In terms of EBITDA guidance, I tell you the same. What I can say is that the target that we have in the company, the EBITDA and the revenue, is a changing point for the company in terms of you see how we have been reducing the debt of the company. We thought that we would be able to generate positive cash flow at the end of 2025 or beginning of 2026. We advanced one year. We have been generating positive cash flow in January 2025. That means that the company is really healthy in this sense.
I told you that the structure of the company in terms of headcounts, in terms of people, and that means cost or expense for the company now is stable. We do not need to grow 5,100 people more. That is over. On the other side, the revenues are going to grow in a huge percentage. This is what we have in our goals. That is going to produce a very positive EBITDA by the end of 2025. We cannot give the numbers.
Thank you, Javier. The next question comes from Miguel Gomez. He's a retail investor. The question is in Spanish. Once again, I'm going to translate it so everyone can follow it. Basically, Miguel is saying that if we have close to EUR 6 million in cash by the end of 2024, why did we decide to convert the last capitalized loan that we had from Nice and Green?
Aitor, you want to answer this one.
Okay. It is true that we end 2024 with close to EUR 6 million in cash. Okay. That is great news, of course. Taking into account two points. First point is that the Nice and Green loan had a maturity date in the first quarter of 2025. Okay. This is why we had to decide quickly how to do with this loan. Together with that, and most importantly, is the fact that the growth in the company keeps going. Okay. We are expecting a predictable scenario with a huge growth in 2025, being the financial renewal date at the end of 2025. This is why, to some extent, we had no choice to convert. Okay. It is absolutely normal and obvious.
Aitor, thank you very much.
Okay. You're welcome.
Okay. The next question comes from Álvaro Roja. I believe it's a question for Javier. Do you want to answer that?
Yeah. I mean, EUR 28 million in revenue, but it's making me believe EBITDA because of this bonus of EUR 3.5 million seems to be high. Wouldn't make more sense to link the bonus to the company EBITDA this way. That's completely correct. That's completely correct a nd it's exactly what is happening or what happened the years before. I told you that 2024 has been a year of change. We also keep or try to keep people at the company happy in terms of salaries, bonuses, incentives, etc. This 2024 was a year of change because, as I said, before 2024, the revenue was related to a license model related to multi or pluriannual contracts, bringing EBITDA positive in many of the years. 2024 is the first year that, basically speaking, the revenue aligns with the invoicing of the company.
In other years, the revenue was not directly related to the invoicing because it was pluriannual. In that case, we had to keep some of the bonuses of the incentives to people, also considering that this year, 2024, probably the EBITDA will be suffering as long as we are not capable to do a nice amount of revenue related to the new licensing model. Responding to your question, 2025 is going to be the same? No. 2025, obviously, is related to positive and nice amount of EBITDA. Otherwise, the bonuses are different.
In any way, just to be clear that half of the figure that this question mentioned is not a bonus, but a remuneration for a high management team and the board. Okay. Not EUR 3.5 million is a bonus.
Okay. Thank you both, Javier and Aitor. The next question comes from Miguel Medina.
Aitor, you can answer this.
Okay. Free cash flow positive in January 2025, is that after capitalized expenses? Absolutely. Absolutely. Free cash flow, theoretically speaking, is EBITDA plus or minus working capital impact plus minus capital expenditures impact. So capitalized expenses is nothing more than capital expenses.
Okay. Great. Understood. Thank you, Aitor.
You're welcome.
Okay. It seems that we have finished with the questions on the Q&A tool, but there are some questions on the chat. Let me read them, please. There is a question from Cyril D'Oblayen. Can you please list the latest new clients and the size of the contracts? Did you receive any upfront payments?
Yeah. I mean, the amount of the contract, in many of the cases, we cannot disclose because it's a private we sign this privacy with the clients. But we have big clients, like, for example, Samsung. Samsung in South Korea is a huge customer for us for the region. A contract that supposed a very high volume in terms of revenue for the company is Samsung Securities. Now we are dealing with the Samsung Cars for the same agreement. We cannot, as I said, disclose the final figures. But the company used to have contracts. Initially, the ticket per contract is between, I would say, EUR 200,00 to EUR 300,000 as a first shot.
Depending on the consumption or the volume of the transactions of the customers, those contracts can go to EUR 800,000, EUR 1,000,000, EUR 1.2 million, depending on the customers in terms of annual revenue per customer once the technology is established. I cannot, obviously, disclose information about any specific numbers of any specific contract.
Fantastic. Thank you, Javier. Cyril has another question. I think I can answer that one. Basically says, "award on competitors, is Facephi gaining market share?" Yes, definitely. As Javier mentioned during the presentation, the market is growing at an average of around 10%-12% over the next five years, and the company is growing well above that rate. As you recall, the turnover growth that we have in 2024 was 15%. Based on the figures for total contract value and annual recurring revenue, and also, as Javier already mentioned, we expect that 15% growth to improve going forward. Definitely, in consequence, if the industry is growing at an average of 10% to 12%, and Facephi is growing well above that, we are gaining market share from other companies.
Yeah. Just to add in something to this answer, the company, since day one, has been really focused on the financial sector. In the financial sector, Facephi is the leader by far. We have more banks than any other competitors, all of them combined. They do not have even half of us. The challenge here is that our competitors in other verticals, they are much stronger than us. That is the strategy that we started about two years ago to say, "okay, let's move from the banking industry sector to different sectors like airlines, airports, fintechs, crypto, hotels, and a long, long other verticals, many other verticals." That is exactly what we are achieving now.
When we go to a new customer that is using a competitor technology and they see the technology that Facephi has that is being certified and used by many banks, immediately they ask us to change because our technology somehow, somehow no, it's 12 years of investing, is better than the rest and is much regulated because we are experts on banking industry than the rest. Going now to crypto companies, fintech companies, or hospitals or hotels for Facephi, I'm not going to say that it's easy, but it's a question that we needed to develop to create a structure, to bring salespeople, to bring pre-salespeople, to adapt the product a little bit. That's where we are now.
With the new verticals that we are now trying to penetrate, that's exactly the response of the strategy we've been trying to do in the last two years, and the results are coming now. Today, we have different airlines, airports, hospitals, hotels using our technology instead of the competitors. Somehow we are biting the market step by step.
Thank you, Javier. The next question comes from Rafael Drobulski. Sorry, if I did not pronounce your family name correctly. He has two questions. The first one, I think I can answer that one, is, "can you say a few words on the new monthly recurring revenue dynamics and churn in the first four months of 2025?" That goes back to what Javier mentioned. We cannot really provide any privileged information about our financial performance in 2025. However, what we can say is that the strong momentum and dynamics that we saw in 2024 are reflected in the figures of total contract value and annual recurring revenue and have continued in 2025. The outlook for 2025 is very strong. However, at this moment, we cannot provide you any kind of figures. The second question, I will pass that on to Aitor, and it is the following.
What should we expect, I guess, in terms of non-recurring revenue in 2025 and beyond? Do you expect to close any significant perpetual licenses?
That's more for me than for Aitor because it's more like a business.
Exactly.
Yeah. We do not know. I mean, we respond to the customer's needs. What is true is that more and more customers, they prefer to sign contracts in terms of post-consumption. The more they use, the more they pay than using an upfront payment for a perpetual license. We have some examples that they like that, but the trend of the market is not that. We can have some projects or even could be with some governments that they want to have a perpetual license for something, or perpetual means or even five years licensing for some specific project. We also participate in those projects, but it is the minimum. Ninety-nine percent of the projects that we have on the table today, all of them are based in annual recurring revenue or post-consumption or flat fare.
Few people, few customers are saying, "okay, we prefer to pay you a perpetual license in advance." we had that in the past, but I'm telling you that this trend is less and less used.
Okay, Javier. Great. Thank you very much. Rafael has several questions. I will try for the sake of speed. Let me see if I can answer them very quickly. Can you elaborate the contract duration timing of revenues from between total contract value and annual recurring revenue? Basically, the difference is that the annual recurring revenue is the amount of secure guaranteed revenues that we expect in one given year. That is why we have EUR 28 million at the end of 2024. It basically means that we have that amount of revenue secure in 2025. However, total contract value is a figure of EUR 58 million at the end of 2024. That reflects contracts from one to three years. Obviously, not all of those revenues are going to fall in 2025. Some of it might fall in the following couple of years.
How big is the LATAM onboarding opportunity in the next years? I mean, the opportunity is obviously great, given that the regulation in LATAM is lower than it is in Europe. The ability of banks to use more onboarding solutions is much higher than for banks in Europe. The opportunity in Latin America continues to be very strong. In addition, as Javier mentioned, we have new products that we can offer to our largest clients, such as the mule account detection that basically allows us to, on one side, provide one additional service to that client, on the other to increase our revenues, and on the third is to strengthen our relationship with our current clients in LATAM. The third question about mule account detection revenues, Javier already mentioned it.
It's something that we just recently launched, and we don't have any specific estimates or targets for that particular solution.
Yeah. I'll just add that this technology, we've seen that the impact in the customer is huge. I think that if we met with 25 banks, 25 banks want to have this technology implemented. The potential is huge. In our goals for 2025, we just put from this specific technology very little part because, obviously, timing is so important. One thing is to sign the contract, and another thing, obviously, is to implement the technology. We definitely believe that this mule account taking over technology is going to bring a lot of revenue for the next two to three years, a lot.
Fantastic. Yes. Yes. Thank you. The last question for Rafael is in regards to our number of employees. Yes, basically, as we mentioned, in June of 2024, we believe that the company have already achieved its desired organizational size and structure. Obviously, we will continue to grow our employee base as needed, but obviously at a much slower pace than before, as I believe Javier also mentioned when answering another question. Basically, revenue should continue to grow much faster than employee costs. Okay. The next question comes from Cyril. Basically, do we need to raise cash in 2025? Aitor, do you want to take this one?
Sorry. No, not needed. We will go to the financial market to do that in terms of renewal of our current lines. Okay.
Okay. Thank you, Aitor. Marcos, I see your question about the look for 2025. I believe that Javier has already answered that question. If not, please send me a message, and I will see what further information we can provide you either during this call or after we finish. Cyril, your question about HANCOM, JV, and new contracts, I believe they were also answered. If not, as I mentioned with Marcos, send me a message. Marcos, here you have a question we have not answered. How does the JV with HANCOM work? Do we have any particular estimates of our partnership with them? And he says that 4% revenue coming from APAC is low.
Yeah. The agreement with HANCOM is a very strategic agreement. They are quite big in some specific markets, but they are investing because now Facephi is not investing in the region. That's part of the agreement. HANCOM is investing. They have a whole team now developing the market with our technology combined with some of the technologies that HANCOM Group has. I was two weeks or last week in Japan in the IT Japan Technology Exhibition Center. We presented the technology of Facephi authentication on KYC to several banks. Actually, three banks are using our technology as a POC in Japan. They are doing their homework. I think they are doing things in the right direction.
Having said that, it's true that the culture of these countries, specifically South Korea and Japan, are cultures that to accept technology or companies from abroad, they need the time to trust people, to trust you, to trust the company, and to start establishing relationships. Once these relationships are started, then you have a customer for the rest of your life. I think HANCOM knows how to read these in these markets, and we trust them. Let's see if this year, last year was the year of the change. We were training them from the technical point of view, go-to-market strategy point of view. This 2025, they are really confident that they are going to achieve some nice figures. Let's see. We are helping them as much as we can, and we really believe on that project.
Okay. Also bear in mind that we signed with HANCOM just last year. As you saw in the presentation, the percentage of revenues coming from that region was 1.7%. In just one year, it has gone to 4%. The growth is basically we have doubled the percentage of revenues coming from that region. As Javier just mentioned, we expect that momentum to continue going forward. I see several questions that I believe have been answered, so I'm going to skip them, particularly those related with guidance or expectation for the full year. If I accidentally skip any important question, please let me know. Marcus, your question regarding staff costs, I believe that Aitor already mentioned it. It's a mixture of a bigger employee base and a combination of bonus, liquidation expenses, and other.
Exactly.
Okay. There is one new question coming from Rafael Drobulski. A quick last question from his side. Are there any acquisitions possible, or will Facephi focus exclusively on organic growth in 2025?
Yeah, that's a very interesting question. Obviously, Facephi is focused, and we are not going to lose our focus on growing organically because it's the moment to grow, and we believe that 2025, 2026 is going to bring us a lot of positive results in terms of revenue, EBITDA, and net results. At the same time, it's true that Facephi is paying attention to any potential acquisition or corporate operation that is interesting in the market. We analyze. We have a committee to analyze from the technology point of view or the presence in the footprint in the market point of view. With that said, then we analyze valuation or multiples, et cetera. We are open to discuss these things, but at the same time, it's something that depends in many, many aspects.
Even if we find a nice company, if the company is completely overvalued, it is completely out of the consideration for Facephi. If the company is interesting and the price is interesting, of course. That means that in 2025, could be an acquisition or could be a corporate operation? It could be. I would not say the opposite. It could be. It is a fact. No, it is not. It is on the table. We are analyzing, and as soon as we see that it makes sense for the company that this acquisition is bringing value in terms of revenue, in terms of technology, in terms of market presence, definitely we are going to try to make the operation happen. Obviously, we are in the early stage, let's say.
Okay. Great. Thanks, Javier. I only see one more question in the queue. If anyone wants to pose a question, please do so. The next question comes from Romain D'Obral from Markets. I believe it's for Aitor. Aitor, you like to take this one?
Okay. Sorry. Yes. Payroll evolution and CapEx expected. Okay. In the same way that we have had over the last year. If you want, we will be using the tax list tool as a way of optimizing investment resources in terms of R&D and as well as a way of optimizing cash generation and the tax model. Okay. In terms of capital expenditures, we will be more or less in the same level that we have had in 2024.
Okay. Fantastic. Aitor, thank you very much, Aitor. It seems that there are no further questions. Thank you, everyone. Thank you once again for joining us today. We appreciate your time and interest in Facephi Biometria. If you have any follow-up questions, please feel free to reach me. You all have my telephone number and my email address. Also, let me mention that we have recorded this webcast, so it will be available this afternoon on our website. Once again, thank you very much, and have a great day. Thank you.
Thank you very much.
Thank you. Great day. Bye-bye.