At this time, I would like to turn the conference over to our host, Darrin Grafton. Please go ahead.
Thank you for joining this morning. I'm joined today by our CFO, Shane Sampson, and also our Chief Revenue Officer, Liz Fraser. Liz joined Serko at the beginning of this year. Liz has extensive experience, including five years with Air New Zealand, where she was General Manager of Customer, and prior to that, Regional General Manager of the Americas, based in the U.S. The first part of our presentation, we will use the investor presentation titled Building a Globally Competitive Business at Scale. The second part will use the financial results presentation. We will then answer questions. I draw your attention to the important notice on slide two, and I'll begin on slide three. The size of the opportunity ahead of us is significant.
Today's announcement sets out the most compelling path for Serko to achieve its ambition of being a globally competitive business at scale and creating long-term value for our shareholders. Our North American plans announced today expand on our existing operations and are underpinned by the partnership with Sabre and the acquisition of Sabre's GetThere. The announcement follows extensive engagement with Sabre and the GetThere business, including detailed due diligence. In addition, today, we're announcing a target investment to deliver innovation and global scale to maximize the opportunities presented by a changing travel market. This will be via development of an open platform that seamlessly integrates diverse content and services with built-in data and AI at the heart of its capabilities. We enter into this new phase of our growth in a strong position with sound financials, a track record of successful partnerships, and increased efficiency and capability.
Today's announcement will be explored further at our Investor Day on the tenth of December. I'm now on slide five. We've achieved strong market success in Australasia with our managed travel business, and in April this year, signed a five-year partnership renewal with Booking.com, a key driver of growth for Serko. The next logical step for us is to accelerate the delivery of our managed travel solutions in North America, a $400 billion business travel market. For some time, we're closely considering how we scale in this market. The combination of Serko, GetThere, and Sabre increases our market presence, and at acquisition, Serko will become the number two online booking tool provider in North America by volume. Sabre is a market leader in the U.S. for corporate travel segments.
They are well connected to the wider, local, and global travel management ecosystem, along with direct corporate relationships. Sabre entering into this partnership with Serko shows the continued strength of our technology and strategic vision in business travel technology. We will continue to take measured approach to the North American market, aligned with our strategic priorities and the opportunity. We are well placed to successfully execute on this expansion. We have a strong global leadership team in place with international expertise, including in North America, and we have strengthened capabilities and efficiencies across our business. I will now hand to Liz to speak more about the North American market and the opportunities for Serko.
Thanks, Darrin, and good morning, everyone. I'm on slide six. Serko operates in a growing business travel market, expected to be worth a record NZD 2.5 trillion by the end of this year and more than NZD 3.3 trillion by 2028. As Darrin mentioned, the U.S. part of this is substantial, at NZD 400 billion. The business travel market is evenly split between bookers who book according to a company policy on a dedicated platform and bookers described as independent. The trend remains towards tech-supported travel, whether managed or independent. We expect the terms managed and unmanaged travel will be less relevant over time, with blurring underway between these. As you can see on the slide, the target markets in the U.S. are aligned to Zeno and Booking.com for Business, as well as GetThere.
Through market research, we have identified the specific customers and prospects that will benefit from the unique capabilities of GetThere and Zeno. We plan to provide further information on the North American market and our plans at Investor Day. Turning to slide seven, Serko is uniquely placed to succeed in the U.S. market with the foundations we have laid and today's announcement. Serko spans both managed and unmanaged travel, which are increasingly blurring. This means as companies grow and their needs change, we can support them as they scale up and their needs change. We are building and deploying dynamic solutions across both managed and unmanaged travel, supported by our partnerships with Booking.com and the announced partnership with Sabre. This includes unified travel experiences, data and AI-driven insights and efficiency… and consumer-grade traveler experiences.
We are well positioned for success in this market to continue to deliver value to our partners, customers, and shareholders. Thank you, and I'll hand back to Darrin.
Thanks, Liz. Now turning to slide eight. Sabre is a major player in the global travel industry, with Sabre solutions, such as Sabre's GDS, forming a critical part of our offering to many partners and customers across our managed and unmanaged business. Sabre also owns business travel management solution GetThere, which supports some of the world's largest travel programs. Sabre and GetThere have a number of customers in common. Sabre and Serko will be working closely together on mutual product innovation for the benefit of our partners and customers globally. This includes drawing on Sabre's capabilities, including disciplines such as AI. In 2020, Sabre and Google announced a multi-year partnership to build the future of travel. Our partnership with Sabre will enable us to collaborate within the Sabre and Google co-innovation framework to drive innovation in our travel solutions.
Sabre and Serko have a number of initiatives in planning to help fast-track delivery of a more connected, frictionless trip benefit to travel management companies and travelers. These partnerships, along with our existing partnership with Booking.com, provide us with increased access to resources and knowledge to produce advanced technology, expand market reach, and deliver market-leading innovation. I'm now on slide nine. The partnership defines a joint approach to commercial, sales, and marketing initiatives to facilitate growth in North America and beyond. The partnership has an initial term of five years, commencing upon the closing of the GetThere acquisition, which is expected to occur on about the sixth of January next year. The performance bonus payments strongly align Sabre's incentives for selling and marketing Serko's products to outcomes which drive long-term value for Serko and its shareholders.
The performance payments of up to $12.75 million will be made upon Sabre achieving contracted annual revenue on a one-to-one ratio from co-selling in the first two calendar years. I'm on slide 10. The acquisition of the GetThere business provides Serko with a broadened blue-chip customer base, and as mentioned, includes incentivized selling by Sabre's North American sales team under the partnership. The purchase includes the GetThere solution and intellectual property, the substantial expertise and deep domain knowledge of the GetThere team members, as well as a strong global customer base, including many blue-chip companies in North America, including Deloitte, Oracle, and Marsh McLennan. $10 million will be payable at close, with a further $2 million payable in cash and shares in late 2025.
A multi-year hosting services agreement and twelve-month transitional services agreement will support the smooth transition of the GetThere business operations to Serko. Slide 11. Serko will continue to operate and sell under the GetThere brand. GetThere's customer base is diversified, with details of key industries represented in its customer base on the slide. We've been impressed with the quality of GetThere's senior leadership, and we are delighted that Brett Dowling and Simjit Patel will both join Serko, along with other senior leaders. GetThere employees will be an important and welcome addition to the Serko team, bringing extensive expertise and market knowledge to complement our existing North American business. I'm on slide 12. The strategic partnership with Booking.com and Sabre are significant for Serko as we target further growth at scale.
Following the acquisition of GetThere, our solutions and our channel strategy mean we will reach business travelers from the small and medium-sized businesses powered by Booking.com for Business, through to mid-market and global enterprise customers on the Zeno and GetThere brands. Through these strategic partnerships, the opportunity will exist for Serko to open up Booking.com content to Sabre-powered customers. This would allow our TMC partners to access Booking.com's vast inventory of accommodations, enhancing choice and flexibility that help transfer the leakage of spend back into the managed travel programs. Additionally, the advanced e-commerce experience developed for Booking.com for Business will enrich the entire Serko platform and our offerings, while also creating additional value for our TMC partners. There'll be opportunity to provide managed travelers booking through TMCs with the same seamless and user-friendly interface, simplifying travel planning and driving adoption.
By bringing together Booking.com's accommodation expertise with Serko's business travel focus and Sabre's positioning as a leading GDS, this new partnership enables Serko to create more comprehensive travel solutions for businesses, whether they want to be served by digital platforms or through a travel management company, and whether they are small businesses or the largest corporates. As the managed and unmanaged segments become more interconnected, Serko's position as a provider through both digital and the TMC channels, and as partners with two of the most influential players in the travel, means we are uniquely positioned to succeed. Slide 14. Serko will accelerate investment in its product and technology to support our growth plans and remain at the forefront of business travel. Additional investment to accelerate delivery of Serko's product and technology will allow us to support growth plans globally, benefiting partners and customers.
This will be targeted investment to deliver innovation and global scale, and maximize the opportunities presented by a changing travel market. It will see development in an open, cloud-native platform that seamlessly integrates diverse content and services with built-in data and AI capabilities. Serko's current product and technology platform already powers key components of Booking.com for Business, including search, shop, dashboard, insights, and search engagement. Accelerating the evolution of our product and technology will allow us to maximize the opportunities available to us in the chosen markets, while also positioning us to respond to increasing demands for automation, data, and AI tools. More details, again, will be shared on our Investor Day. I'll now hand to Shane to cover some of the additional financial information.
Thanks, Darrin. I'm now on slide 15. Serko has a successful track record with partnerships, and we are strongly positioned as we scale our technology solution to a bigger market. Investment levels outlined are structured to maximize these opportunities, as well as retaining flexibility and appropriate cash reserves. The NZD 250 million FY 2030 total income aspiration reflects Serko's current growth trajectory and our assessment of the size of the opportunities ahead. Accelerated product and technology investments are anticipated to be approximately NZD 40 million over the next four years. Funding for the North American expansion, together with product and technology investments, will be sourced from our existing cash balance and operating income. Turning to slide 16. We expect to incur transaction costs related to the Sabre partnership and the acquisition of GetThere, of approximately NZD 3 million.
One-off integration costs associated with the acquisition, including IT equipment, setting up offices in the U.S. and India, staff integration with vendor and third-party applications, and financial and legal controls, are also anticipated to be approximately NZD 3 million spread across FY 2025 and FY 2026. Gross annual revenue for the GetThere business for the 12 months from acquisition is estimated to be NZD 18 million from the existing revenue base. The acquired business was integrated within Sabre and does not include support functions. We intend to make additional investments to drive revenue growth, including additional sales and marketing resources. Combining the cost of the acquired business and these additional costs, we anticipate total annual spend for GetThere within Serko to be approximately NZD 36 million in the first year, with the resulting contribution being earnings dilutive.
We will maintain our focus on generating operational leverage through scaling revenue while ensuring efficient spend. Performance payments of up to $12.75 million, that's approximately NZD 21 million, will be made on Sabre achieving contracted annual revenue on approximately a one-to-one ratio from co-selling in the first two years. Payments for the $2 million deferred payment and the up to $12.75 million performance bonus can be made in cash or shares, subject to Serko's discretion and certain cash balance conditions. We're happy to take questions on any of these points at the end of the presentation. Thank you, and I'll hand back to Darrin.
Thanks, Shane. We'll now cover the interim financial results we released this morning. We will then take questions on both presentations. I'll just give you a pause to switch presentations. Our first half result demonstrates our ability to deliver on our commitments and achieve our goals. Total income was NZD 42.7 million for the half, up 18% on the first half of 2024, and 23% on the second half. We achieved positive EBITDA and positive free cash flow in the first half of 2024, an important milestone for Serko, reflecting the disciplines in place to achieve material improvements in revenue without growing our underlying total spend. We are particularly pleased with the positive trajectory of Booking.com for Business under our long-term partnership with acceleration in the second quarter.
This follows the successful execution of plans to drive higher volumes, including increased customer acquisition. Looking at Slide four, we're delivering on our objective of scaled growth and operational efficiency. Consistent improvements in operational efficiencies saw total spend as a percentage of total income decrease further from 116% to 104%. Volume and inflation-related costs were successfully offset by efficiency and initiatives. A 5% increase in total spend primarily reflected acquisition-related costs. The increase in operating expenses was driven by the acquisition-related costs, lower capitalization, and higher amortization. We maintain a strong balance sheet with NZD 82 million of cash on hand and a cash generative core business. Turning to Slide five. At the half year, we set out our areas of focus for growth in Booking.com for Business across customer acquisition, active customer growth, and volume growth.
The results demonstrate we are successfully delivering on these plans with close collaboration with Booking.com on scaling initiatives to drive higher volumes. This includes increased customer acquisition. Completed room nights on Booking.com were 1.6 million, up 17% on the first half of 2024, and up 29% on the second half. Average revenue per completed night was EUR 10, down 1% on the first half of 2024, and up 7% on the second half. Active customers increased to 187,000, up on both the first and second halves of 2024. On Slide 6, in the second quarter, there was an acceleration in growth versus PCP in the September quarter. As highlighted, this percentage lift was 27% in the second quarter of FY 2025 on FY 2024, versus 9% in the first quarter.
In May, we outlined we had achieved our FY 2025 growth objectives, as mentioned in the presentation today. The successful execution against these plans in Q1 and Q2 has not only delivered growth for the half, but has positively shifted our growth trajectory for future periods. We have continued to see an acceleration of growth year over year in October, with completed room nights running at around 36% higher, with the lead metric of bookings at over 40% higher. On Slide 7, we've seen continuing strengthening of our market position in Australasia, with online bookings up 8% in Australia and New Zealand. Online bookings were up 8% on the first half 2024 in Australia and New Zealand to 2.1 million. The combination of increased volume and higher average revenue per booking drove travel revenue for Australia and New Zealand up 18%.
Average revenue per booking also increased 13%. On Slide 8, we have provided more details on achieving positive free cash flow for the period. This achievement reflects disciplined execution, delivering continued operating leverage, with total income growth far outpacing total spend growth. The graph shows our adjusted free cash flow, accounting for the exceptional items, which Shane will cover in more detail. And on Slide 9, we have shared the trajectory over time of total spend and operating expenses. This reflects the growth trajectory of the business, as well as the successful focus we have had on cost and efficiency. These trends, and our continued commitment to scaled growth and operational efficiency, demonstrate our readiness to pursue new growth horizons. I'll now hand to Shane for some comments on the selected financial slides.
Thanks, Darrin. Starting with slide 11, please note that all references are to the prior comparable period to 30 September 2024, unless otherwise specified. As Darrin noted earlier, we had total income growth of 18% to $ 42.7 million. Operating expenses grew by 12%. However, as noted earlier, total spend was flat if the acquisition-related costs are excluded. I will talk to that in more detail on subsequent slides. Despite the lower levels of capitalization in the half and the acquisition-related costs, we delivered a positive EBITDA of $ 1 million, an improvement of $ 1.6 million.
On Slide 12, Darrin has talked of a strong and accelerating growth in Booking.com for Business revenues, which is reflected in the Europe and other geographic segment growth of 17% to $ 26.3 million, and the supply commissions revenue growth of 16% to $ 26.4 million. Travel platform revenue grew by 23% to $ 11.7 million, reflecting increased volumes and an increase in the average revenue per booking or ARPB. We did see a reduction in NZ revenues, reflecting lower volumes as a result of the weaker New Zealand economy. I'm on Slide 13. Total spend increased by 5% or $ 2.2 million to $ 44.3 million. Of the $ 2.2 million growth in total spend, $ 1.9 million related to acquisition-related costs. Over the last five halves, Serko has grown revenue strongly, while largely holding total spend.
In the six months to 30 September, we offset the growth in volumes by improving the efficiency of our hosting costs. We were also able to hold personnel costs despite wage inflation. As noted in May, we undertook a realignment of our product and technology functions to increase efficiency and effectiveness early in the half, and we've seen our teams continue to deliver strong outcomes despite the lower headcount. Looking at slide 14, Serko continues to take a conservative approach to capitalization, and this, combined with a change in the mix of development work undertaken, and in particular, increased investment in experimentation initiatives, reduced capitalization to 13% of total product design and development costs, from 24% in the prior comparable period. In core operating costs, savings and third-party costs offset the small net growth in other expense lines.
Jumping ahead to slide 18, we achieved positive free cash flow of $ 1.3 million, a $ 4.7 million improvement. Our underlying business requires investment in product and technology to support growth, but has strong unit economics, allowing us to reap the benefits of scale. We've used the term free cash flow in this report rather than the previous term of underlying cash flow, but the concept is the same. We're seeking to present the real economic cash flows of the business by removing some technical accounting movements and cash flow, such as the net amount invested in term deposits or returned from term deposits maturing. We've also continued to present an adjusted free cash flow, which excludes items which are exceptional in timing or nature.
In the current period, we've excluded the cash outflows related to the acquisition, shown in the table as a transaction cost, to provide a clear view of the free cash flow of the business. Finally, turning to the next slide, we have a strong balance sheet with $ 82 million of cash and short-term investments and no debt. Thanks, and I'll hand back to Darrin.
Thanks, Shane. Serko affirms its total income guidance from its FY 2024 results announced in May 2024, anticipating total income to be in the range of $ 85 million-$ 92 million for FY 2025. This does not take into account any expected revenue from the acquisition of GetThere, as announced today. Based on current growth trends and ongoing execution of plans, Serko anticipates continued acceleration of Booking.com for Business revenues in the second half. Serko's current business is on track to deliver positive free cash flow for FY 2025. However, Serko no longer expects to be cashflow positive for the FY 2025 when including the acquisition and accelerated investments announced today. Risks to the achievement of Serko's FY 2025 goals include the timing of delivery of initiatives and the timing and scale of subsequent benefits, currency and ARPB, CRN movements, and any geopolitical and macroeconomic factors.
Shane, Liz, and I are now happy to take any questions you may have.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are joining us using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open. We'll take your first question from Guy Hooper. Guy, your line is open. Please state your company name.
Yeah, good morning. It's Guy here from Jarden. Maybe if I could just start with a general one. Given the opportunity that exists within the managed space and the partnership with Booking.com, and now with, I guess, a greater or a re-emphasis of the growth that is available on the managed side, can you just give us a bit of color about how you think about that return on marginal dollar and where that marginal dollar is spent?
Hi, Guy, it's Shane. I think we are definitely looking at the Booking.com for Business. Business is now generating, you know, meaningful returns for us while we continue to invest to drive that product forward. On the managed side, there's definitely more of a curve of investment before we've seen the same pattern that we've seen with the Booking.com for Business partnership of coming out the other side of that investment curve. We are seeing the $ 40 million of product and technology investment that we talk about as having benefits for both sides. So we'll be looking to, you know, leverage the investments that we make to drive value on both the managed and unmanaged side going forward. Does that answer your question?
Yeah. Yeah. I mean, yeah, generally, and I just maybe to follow on from that, I mean, like, there was an acquisition flagged, or a target acquisition flagged on the managed side, a number of years ago, which didn't quite eventuate. You know, is this broadly along that same strategy? Is this essentially the acquisition that was targeted back then? Can you maybe give us a commentary about the strategy then versus now and whether or not there's been any shift?
No, there is, it is a different acquisition, and this acquisition came about, working with Sabre on how do we really drive, an innovative solution, into the North American global market together. And that's how this sort of came about. Pulling that together with a wider strategic partnership to build out the platform, being part of Sabre's Google innovation process, as well as picking up, one of the major global platforms, and the number two player was of huge interest to us.
But also the strategic partnership that it comes with, with Sabre, co-selling and co-investment, is hugely appealing, as it sits very similar to the same model that we use with Booking.com, if you remember back t o that point where we took on their product and Booking helped expand our, helped the platform out. So it's a very, very similar model. It's one of our strengths, is working with these strategic partnerships, and that's one of the reasons why this acquisition is being done today.
Okay, and, like, as those, I mean, you mentioned it earlier, just as customer scale potentially blending that unmanaged and managed side, I mean, like, what happens on the branding front? Are, are customers all that aware that it's Serko that they're dealing with on, on both sides? I mean, who actually owns, I guess, the end customer relationship?
It depends where it's contracted through, but for us, you know, what we've said is we're building out our platform, and it's powering brands like Booking.com for Business. It's powering brands like Orbit Online for Orbit in New Zealand and Savvy for Flight Centre. So for us, the most important part is how our technology is driving that innovation and transaction through into there. Being able to bring that cross-investment, of the investment that we're making with Booking.com, into the managed travel market, and bringing that whole experience of consumer, means that people don't actually have to go out to other systems.
The benefit is to not only our travel management companies, who don't see any of that leakage today, but also to the companies and the travelers, which have a seamless interface that's consumer grade that they can actually operate from. I think that's one of the key aspects of what Serko brings, being that we're spanning both of those segments at a significant size.
Great, thanks. Just one last one from me then. On the guidance commentary for FY twenty-five, can you talk a little bit about what's actually assumed in the second half? I mean, if you look at just on the unmanaged side, I mean, Q1 bookings were flat, despite sort of commentary back in May, the April run rates were pretty positive. They've then re-accelerated in Q2, presumably relating to the dashboard release. Can you talk about what those buckets and drivers are for the continued acceleration into the second half, and what you need to be heading to achieve guidance?
Hi, Guy. Yes, so it's in slide 6 of the interim results briefing. We've got the two quarters, so, and there we've got completed room nights, which is particularly a lagging, if you like, bookings or a lead metric. So you can see there that we're up about 9% on completed room nights in the first quarter relative to the same quarter of the prior year. So definitely we had growth in that first quarter. That accelerated through to 27% growth in the second quarter, and I think we've, Mitchell has talked through that we're seeing in October that we're at about 36% growth in completed room nights for the month, with bookings above 40%. So we're on that accelerating trajectory. Certainly to get into the sort of midpoint of the guidance range, we...
The key driver is going to be continued significant growth in Booking.com for Business. It needs to be, you know, I think, around the sort of 55% mark. That's why we've left that relatively wide range there, even though we're seven months into the year. We're definitely seeing the acceleration. How far that goes and what other sort of macroeconomic things occur that sits in behind it. But from our point of view, we're definitely seeing that acceleration. Outside of Booking.com for Business, you know, second half in ANZ will be lower, and that's just a picture of us all taking holidays. But you know, we'll still see growth on the prior comparable period. Guy, we might just ask you to hold there, and-
Yeah.
and we'll give a few others a chance to ask some questions.
Hi, Darrin. Hi, Shane. Can you hear me okay?
Hi, yes.
Hi, Suraj.
Hi. Let me just start with GetThere, right? Can you... I mean, I think it's what it's doing sort of $80 million in revenue. Just need to understand, is that growing? Is it going backwards? And that $36 million in cost base sounds quite high, Darrin and Shane. Can you just touch on that as well? Why it's so loss-making with that sort of revenue base?
Yeah, so it, it's gotta be. That's why I. You've gotta take it into context, that it's the strategic agreement and the acquisition together. So the current GetThere business, plus what we're doing with Sabre, which is the strategic revenue share, which is targeted in that upper range to, and I think it was around 21 million NZD of revenue. So we're building some of the costs early on to enable for that scale and support structure to achieve those outcomes, and so that... it's gotta be taken into context. So there, very much the intention is to keep growing both Zeno and the GetThere brands in the U.S. market. As indicated by Liz, that's focused on the ideal customer profiles for the solutions into that market as well.
So that's why it's gotta be taken into context of the growth that we're planning with Sabre as part of that strategic partnership side.
... Yeah. So Darrin, just following up. So, I mean, is that revenue? What I'm trying to understand is, sounds like around $12 million in revenue today, right? And you're targeting revenue to double in two years based on that agreement. Is that right? Because I think what the incentive rate is one-to-one, right? So I mean, that sounds quite significant.
Yeah, just trying to understand what it's doing today and what's changing for you to double it in two years, right? Especially given U.S. has been a tough market, right, to crack for Serko itself.
Yeah, great. So it's the combined investments that we're making and the sales and the co-selling and the co-investment model, Suraj. So the part of that is the teams and Sabre are frontlining and selling the solution. We're also supporting that behind the scenes with additional sales and support functions to actually enable that to occur. And of course, the investment that we're also making into that sort of side from roadmap and technology side. So those combined things give us to work with Sabre. Sabre's signed up to those, and that's why those commitments are documented into there to try and achieve.
And is there any content sort of revenue, Darrin? Or is it just signing new customers and getting the booking revenue? Is there some sort of content?
It comes from. We're not outlining where all the revenue comes in onto there. It will be from a combination of areas.
Got it. Secondly, just in terms of that, just thinking strategically, you're investing to GetThere. You have Zeno's. Zeno's supposed to be best in class, as you mentioned. So, so-
Yeah
... I'm just wondering, would it be having two sort of booking tools, two different tech stacks, should you be bringing that together, faster?
Yeah. So the key part is that, GetThere is a phenomenal platform. It's been around thirty years. It's been servicing global accounts very, very well, and there's a lot of learnings that we can take from that solution that enable us to bring about, together with the GetThere team, an evolution in this platform, along with some of the things that Sabre also have and along, as we mentioned, with the Google AI. And so the combined investment is how we bring all three parts together, that we're working on, over that midterm sort of strategy. And that's definitely something we'll be covering extensively at the Investor Day, as well.
Okay.
How we're going about that.
Got it. Thanks. And just last question, just, I mean, $ 250 million, pretty aspirational target. How should I think about the split roughly? I think previously $ 100 million years, sort of third, a third, a third. How much is the 250 split? Is that, you know, a lot of it is, is it half Booking and half U.S., or how do you sort of think about that?
Suraj, it's Shane. I think the key thing we look at is that with the markets that we've got, either of them is capable of delivering more than half. So if you like, we won't lock ourselves into exactly what that split comes out as. But you know, both markets are big enough that they could support a significant proportion of that. And that you know, gives us confidence to put the NZD 250 million out there knowing you know, that that's not the sort of theoretical limit of where you could get to. It's an achievable number on both sides.
Yeah, Shane, but I'm just-
Again, Suraj, might just get-
Sorry, yeah. Yeah, go on, sorry.
Okay, I'm sorry, we might just need to... We've got other people in the queue. No, no, keep going, Suraj.
All good. No, no, I'm just clarifying. I mean, you know, revenue doubling in two years, I mean, this should go somewhere to 50% , saying 50%, 1 25. That's a pretty big jump, right? Do you think there's opportunity to get there? Okay, thanks.
As a reminder, ladies and gentlemen, that is the star key, followed by the digit one if you have a question or a comment. We'll move next to James Lindsay. Please go ahead and announce your company.
Yeah, James Lindsay here from Forsyth Barr. Well done on the result and the acquisition, guys. Hey, a few from me, if I may.
Thank you.
Just with regard to the cost split of the sort of $ 38 million, I was wondering if you could give any sort of indication about sort of the 75 staff, et cetera, versus the R&D spend in there?
Yeah, so, so the 75 staff are the number of staff that are coming across. There's another group of staff who are in countries that we didn't want to pick up in terms of cost and complexity, so we'll be looking to backfill them. In addition, there's some contractors. So it's probably about 125 heads that are in the business, with a significant proportion of that being in R&D. That 125 also includes us adding in some additional headcount around support functions and additional sales and marketing resource to support the revenue growth that Darrin was talking to earlier. So yeah, so, so the cost is definitely skewed towards personnel cost. There is still a reasonable amount of other operating costs there.
Effectively, just bringing on board some new systems as we acquire that business. Obviously, the cost of hosting the platform, which sits with Sabre, and a bit of cost to get all the systems in place as we bring this business on board.
Great. Thanks so much. And obviously you've moved on the capitalization stuff, not sort of unexpected. But just on the go forward basis for the forty million of extra spend in your sort of view for the next second half, and then for into next year, about what percentage would be capitalized versus spent?
Yeah. So we haven't put a lot of focus on that. We tend to focus more on the cash flows. Certainly the forty million on the face of it would seem to be likely to be capitalized. In terms of FY 2025, we won't be getting a lot of that spend underway. We'll, you know, just be specifically starting to scale our teams to do that spend. So that's going to be more of an FY 2026 issue. I think we've indicated, you know, round about forty million over four years. But, you know, I tend to think about that really coming up to around ten million in FY 2026. Yeah, so certainly that could have a significant level of capitalization with it.
Yep. No, that sounds makes sense. And thanks for the sort of ambitious FY 2030 target as well, with the 250. Can you just give us an indication of how much of this is GetThere versus sort of a change in view of the growth in B2B?
As Shane indicated just before, either one of these opportunities has the ability to, to, you know, create a large percentage in that two fifty, or enable us to outperform that number long term. And really the combination is that, yes, booking gives us confidence as well. It's, as Shane indicated, you know, it's making sure that our core business is with operational efficiency and generating free cash flow, which enables us to make these decisions. But the key part is the Sabre strategic partnership, and that long-term part to say that when you have the engine of that business behind you, scaling and connected into corporates direct and travel management companies, in a model that's e ither that does give us the confidence in that area as well, so yeah, it's a combination.
You know, we think this is a fantastic release that we've been able to put out today. We're pretty proud of what the team's done in achieving, holding operational efficiency, and one of the things that, you know, Shane stressed on is that as we apply these costs, we're gonna do it with our operational efficiency in mind. We don't wanna go backwards on all of the great things that we've done out of COVID, so we're gonna be doing this in an efficiency way, and scaling forward based on that.
Great. Yeah, thanks for the heads up. I'm just interested in sort of Sabre's view about this. It's great to have a relationship with another, you know, the global player, et cetera. Now, obviously, if you're saying this is a thirty-year business and $ 20 million of revenues at the moment, I assume you're sort of meaning then that this, you're hoping to scale that from $ 20 million up to $ 100 million? Just interested in why Sabre would think that you can do it versus them doing it direct.
Yeah, I guess that, you know, it's about being focused on your core. And so by being able to invest and build that platform, with the combined ways that we do it with content and other areas, and enabling that, that's what we've kind of worked through in our strategic agreement sort of side. So yeah, it's an ability to do like what—if you look at what Booking.com have done, Booking.com gave us the business travel, you know, booking for business, that part of that section, and said, "Okay, Serko, we back your technology and your team to actually drive this, and we'll drive this with you as a partner." And this is a very similar process.
Yep. And then, just a final one from me. Just with regard to, the settling on the sixth of January, and obviously just one quarter sort of, of operations flowing through, is there roughly sort of even split of that 18 mil of revenues on a forward basis? So, yeah, around about 4 and a bit, for the last quarter for FY 2025?
Yep. No, I think that, that's the right way to think about it.
Yep. Okay, great. Thanks very much, everyone. Yeah, good work.
Thank you.
Ladies and gentlemen, as a final reminder, that is the star key followed by the digit one. We'll hear from your next caller, Preston from Franks Investment Partners . Please go ahead, sir.
Good morning, and congratulations, guys. I know a lot of work must have gone into this transaction. Just on the co-investment plans, can you just sort of give us a bit more of an outline on that, and what sort of quantum you're expecting? You know, what they're looking to invest in here with you guys.
Yeah, I think probably that's commercially sensitive. The other thing I'd probably say about it is that so there's a minimum commitment from the two parties around the levels of investment, but obviously, if things are successful, then that could be significantly higher. But we would see that as being encompassed within the 40 million spend that we've talked to, if it goes higher than the base commitments.
Okay. And just in terms of going back to Jason's question on, you know, Sabre going direct, they've obviously been in the market for a while. They're a big player. You guys thinking, you know, with the acquisition, that you can grow this? ... at a faster rate. I mean, it, it's probably fair to say that you see Zeno as a better tech stack, and you'll be looking to take some learnings from Sabre's GetThere, but ultimately, you'd expect it to merge towards a turbocharge Zeno, is that right?
Yeah, I mean, look, it's the opportunity midterm to long-term is to bring about, combined with the GetThere team, a platform that evolves all three parts. And our technology investment is designed to set those foundations in play that enables us to go faster for Booking.com, but bring about an evolution with the GetThere team in there. And so there'll be multiple aspects of that over multiple horizons as we work through that. And that's something that we will cover further on the Investor Day.
Okay, great. Thanks, guys. Congratulations.
Thank you.
At this time, there are no additional callers in the queue. I'd like to turn the conference back over to Mr. Grafton for any additional or closing comments.
Thanks-
Pardon the interruption. We did have,
Thanks.
Go ahead.
Sorry. Come-
Mr. Grafton, we do have a caller in the queue. Would you like to take him?
Okay.
Yes, that, that's fine.
Suraj, please go ahead.
Thanks. Sorry, just hit it last minute. Just in terms of, Darrin, just thinking about revenue dis-synergies from GetThere, or, or any potential there, given, you know, CWT would be a key partner. Just wondering, can you give us any color as to what exposure GetThere would have to CWT? I'm just wondering, you know, GBT acquiring CWT, whether there's anything we should be thinking about.
I don't think there is a-
Sorry, so Suraj, is your question around-
Any dis-synergies.
Amex GBT acquiring CWT?
Or any sort of... Sorry, actually, two things. Revenue dis-synergies in terms of, you know, GetThere here in Australia as well, and, you know, it's pretty big here as well, right? And secondly, also thinking about any potential revenue risk for GetThere, if CWT is a big TMC partner.
Yes, I think our assumption is that GetThere will continue to serve some of CWT's biggest customers. In terms of ANZ, probably the best way to think about GetThere is they will have some business in ANZ, but that will largely be through you know, a U.S. company that has got some global coverage into ANZ. So the shared share of the ANZ market is not significant. So it's yeah, we're not seeing any revenue dis-synergies.
Okay, thank you.
At this time, there are no further callers in the queue, Mr. Grafton.
Thank you for joining, and appreciate your time today. Thank you very much.
That does conclude today's teleconference. We thank you all for your participation. You may now disconnect.