Good morning and thank you for joining today's presentation of TradeWindow's half-year results for financial year 2026. We will be presenting a series of slides that have been released to the NZX and are also now available on TradeWindow's investor website. Before proceeding, I would first direct your attention to slide two and the important notice regarding this presentation. I'm on slide three. I'll start with an overview of our financial results and the strategic progress we have made, as well as cover the prevailing market conditions. Deidre will then provide more detailed information on the financials before I finish with the outlook. There will be time then for questions at the end. Now I'm on slide four. I'm pleased to report a successful first half of the financial year ended 30 September 2025.
We've extended our record of unbroken quarter-on-quarter revenue growth since listing on the NZX in November 2021. Our confidence comes from strong trading revenues at $4.6 million, up 25% on the half-year result of FY2025. Annual recurring revenues have now grown by 21% from 30 September 2025 to reach $8.8 million. The growth in ARR reflects our increased focus on winning larger customers that utilize a wider range of our solutions, as well as offer more predictable trading patterns irrespective of the business environment. Our EBITDA loss for the half-year was $700,000, down 49%, while the net loss after tax reduced to $1.3 million from $2.4 million. We previously announced that we have deferred annual EBITDA break-even by 12 months to prioritize the accelerated development of Freight AI, our next-generation freight forwarding solution. Monthly average cash consumption reduced to $100,000 from $200,000 in financial year ended 25 March 2025.
We ended the first half of the year with cash and cash equivalents of $1.1 million, with $5.8 million yet to be received from the conditional placement, which closed on Monday this week. We are now on slide five. Our strategy is to build on four key pillars that together define how we create value and drive growth. First, innovation. We are incrementally delivering our new Freight AI solution. Our modular approach ensures customers can adopt seamlessly, gaining immediate benefits while laying the foundation for long-term transformation. Second, driving greater usage. By cross-selling additional solutions such as certificate of origin services, we are deepening engagement with our existing customers. This is evidenced by the consistent growth in average revenue per customer. Third, new customers. We have sharpened our focus on winning more customers in Australia, a market where demand is accelerating. And fourth, acquisitions.
We have a proven track record of making value-accretive acquisitions. We are constantly scanning for opportunities to acquire businesses that can accelerate our growth. Our focus is on trade and logistics software companies that provide a low-risk entry into new geographies and all customer segments, while also bringing new capabilities to our software solutions. Together, these four pillars—innovation, usage, new customers, and acquisitions—form a cohesive strategy. They position us not only to capture immediate opportunities, but to also build a scalable, resilient platform for the future of global trade. Now moving to slide six. Our key metrics dashboard for the first half of FY2026 shows consistent growth, reinforcing the strength of our strategy. Trading revenue reached $4.6 million, up 25% on half-year financial result of FY2025. ARR now stands at $8.8 million, a 21% increase on the prior year.
Average revenue per customer continues to climb, up 20% for both shippers and freight forwarders. Gross margin sits at 58%, down three points, while this reflects in the transition of freight customers to a TradeWindow managed cloud service. We now service 534 customers with a retention rate of 92%. That's a 5 percentage point lift on the results reported on 31 March. This speaks to the stickiness of our platform and the value we're delivering. With regard to cost, 34% of expenses were directed to R&D and commercialization, which is slightly down. We remain committed to a disciplined investment in innovation with a focus on Freight AI acceleration. In summaries, these metrics show we are executing well across innovation, usage, customer acquisition, and retention. We're building a scalable, resilient business with strong fundamentals and a clear momentum. I'm now on slide seven.
Our customer base includes some of the largest exporters and freight forwarders across New Zealand and Australia, organizations that are central to the region's trade flow. In Australia, we're proud to serve major seafood exporters such as Tassal and Huon. The adoption of our platform reflects the strength of our offering as a high-value, time-sensitive for export sectors. In New Zealand, our customers span leading names in the meat, dairy, and horticulture, industries that anchor the country's export economy and demand efficiency and compliance. Our top five customers include three major agricultural exporters and two large Australian freight forwarders. This blend highlights our relevance across both customer segments. We also work with global freight forwarders, including DHL Australia, who use our origin service alongside other significant names in the sector. This reinforces our role as a trusted partner in cross-border logistics. Moving to slide eight.
Slide eight highlights a key shift in our revenue composition. Australia is rapidly emerging as our largest market by customer count, with revenues growing at pace and on track to represent half of our total revenue. This growth has been driven by strong performance in freight revenues as we continue to push into the Australian market and win share from the competition. Our product differentiation and speed of execution are translating into measurable gains. We are also seeing consistent contribution from our pay-as-you-go revenues, which come from customers using our TradeWindow Origin Certificate for origin services. This solution is charged on a transactional basis and remains a valuable entry point for new customers. Together, these revenue streams reflect the strength of our multi-pronged strategy, expanding geographically, deepening product usage, and capturing transactional volume. Australia is proving to be a high-value, high-growth market, high-value market for us.
I'm moving to slide nine. One of the defining strengths of our business is the stickiness of our customers, which makes our revenues highly predictable. Today, 95% of our revenues are recurring. We classify both subscription and transactional revenue as recurring because they are tied to the highly predictable and non-discretionary nature of our customers' businesses. We are also making a concerted effort to standardize our products. This will allow us to convert more services' revenue into recurring revenue, further strengthening predictability and scalability. I'm now on slide 10. At the half-year, our customer retention rate was 92%, up 5 percentage points from the FY2025 full-year result. This rebound follows the reported dip to 87%, which was attributable to our strategic decision to exit the microbusiness segment and focus more on the lucrative freight forwarding customers.
The focus is paying off, and we are also moving forward towards larger freight forwarders, which is evidenced in the ARPC increase to 20% from FY2025, demonstrating strong engagement and higher-value customers. Importantly, our customer concentration remains low. No single customer represents more than 4.4% of revenue, and our top 10 customers collectively account for only 23.8% of all revenue. Our customer base is also well-diversified by sector, with revenues spanning across dairy, meat, seafood, horticulture, timber, manufacturing, and logistics. This breadth provides resilience and reduces exposure to any single industry cycle. Taken together, these metrics highlight the strength of our customer mix: high retention, rising ARPC, low concentration, and broad sector diversification, all of which underpin the predictability and scalability of our revenue base. I will now hand over to Deidre to cover the details of our financial results. Thank you, Deidre.
Thank you, AJ.
On slide 12, we're looking at overall financial performance. AJ has already covered a few of these points. However, I would like to highlight, firstly, the continuation of double-digit revenue growth of 25%, which has lifted the first-half revenue to $4.6 million, as well as the 27% increase in other expenses, which was driven by revenue-linked variable costs and one-off costs, notably the ASX listing and the transition of freight customers to a freight or a TradeWindow managed cloud environment. These, combined with maintaining a cost-efficient operating structure, resulted in an EBITDA loss of $654,000, a 49% reduction on the first half last year. On slide 13, we're looking at a breakdown of our revenue by type and geography. We've mentioned the top-line revenue growth, so just a couple of further points.
Recurring transactional and subscription revenue remained strong at 95% of total revenue, providing a high level of predictability. This compares to 94% in the last financial year. Other income remains low, reflecting the absence of R&D grant revenue as we reduced innovation activity to focus on EBITDA break-even. Consistent with prior years, we expect the second half of our financial year to seasonally outperform the first half. We're now on slide 14, where we set out monthly average revenue per customer, or ARPC in short. As of the 30th of September, total customers were 534, a small reduction of 4% on the 31 March total. The small reduction reflects our deliberate focus on higher-value accounts. The monthly ARPC increased 20% for both freight and shipper segments, driven by broader product adoption, improved customer mix of the higher-value accounts, and cost inflation passed through.
Slide 15 provides details on our operating expenses, in particular staff costs and numbers. Employee costs at $3.4 million are relatively constant on prior period as a cost-efficient operating structure is maintained. In the period, we have capitalized the development cost of AI, totaling $228,000 to the balance sheet. Total employee costs before the capitalization were $3.7 million, up 3% on the first half last year. As mentioned previously, other expenses increased 27%, driven by revenue-linked variable costs and one-off costs. On slide 16 is a high-level detail of our balance sheets, just noting that the principal repayments of the ASB debt commenced in April 2025, reducing the non-current assets balance. The total equity is up, reflecting the net of capital receipts in the period and accumulated losses. On slide 17, we're looking at cash flow.
Cash balance was $1.1 million, with an additional expected $5.8 million on settlement of the conditional placement next month. Receipts from customers increased 29% to $5.3 million, in line with the revenue growth. Average monthly cash burn was $100,000, flat on the second half last year. As noted earlier, the development of Freight AI commenced with an initial investment of $200,000. I would now like to hand back to AJ to take you through the outlook.
Thank you, Deidre. I'm now on slide 18. We are well positioned to help our customers navigate the increasing complexity of international trade. The regulatory burden is rising, and our platform is built to simplify and automate what were once manual, error-prone processes. Freight forwarders are facing pent-up demand to automate and streamline their operations.
Our Freight AI solution is directly aligned with this need, bringing speed, accuracy, and efficiency to the heart of freight execution. There is a clear opportunity to accelerate the development of Freight AI, not only to capture market share domestically, but also to drive growth in offshore markets. We are on track to deliver guidance reflecting strong momentum in Australia and deeper product usage across the customer base. Importantly, we remain focused on financial discipline. Our target is to reach EBITDA break-even in FY2027, and every investment decision is made with that milestone in mind. That concludes today's presentation. Moving to slide 20, we will now take questions. Richard will provide these questions, and we will be happy to answer some of them.
Thank you. If you wish to ask a question via the phone, you will need to press the star key, followed by the number one on your telephone keypad.
If you wish to ask a question via the webcast, please type it into the ask a question box and click submit. Pause a moment for any phone questions to register. Once again, to ask a question, please press star one. Thank you. There are no phone questions at this time. I'll hand the conference back to your speakers to address any webcast questions.
Yes. AJ, we have two questions from the web. The first one comes from Russell Smart. He's concerned, he's a long-time investor, and he's concerned about the dilution of his holding without the opportunity to take part in the current capital raise.
Sure. We reiterate our position that we released this week regarding the SPP, or the share purchase plan. We believe there will be opportunity.
TradeWindow has decided just to postpone the previously announced share purchase plan to an appropriate time in the new year. We anticipate that this will be that this time will provide the shareholders with a clear opportunity to participate in this offer in the early of the year next year.
Thank you. The next question really relates to customer acquisition. It's from Ken Atcherson, and he says, "Given the scale of the industries you're working in, the average revenue per customer seems low. What is your customer acquisition costs, and what strategies do you have to increase ARPU?"
We are not that sophisticated yet with all of our capturing of our cost.
TradeWindow is putting all of these systems in place, and we believe that in the near future, we will be more in a better position to capture the specific cost to work all of these costs out. Deidre, I'm not sure if you want to add to that.
Maybe just to clarify that the average revenue per customer numbers that we present are monthly. To get the annual figures, you need to multiply it by 12.
Yeah. It's a metric that we started with and just continuing to calculate it on a monthly basis. Yeah. Hopefully, that answers the question.
That's the end of the questions from the webcast.
Thank you.
Thank you. The honor of the phone questions at this time. I'll now hand back for any closing remarks.
I think that concludes our conference. Thank you, everybody, for participating.
If you have any questions, please reach out to AJ or Chief Strategy Officer Andrew Balgarnie.