Hello, everybody. Thank you very much for taking 25 minutes out of your very precious time at this conference. There are a lot of phenomenal companies presenting, so I feel grateful that you've come to hear a little bit about Kneat. Who we are, what we do, and why you should consider Kneat for your portfolio. In a nutshell, Kneat makes no-code, very easy-to-use, highly configurable software that life sciences companies use to digitize their validation processes. What does that mean? First, we are going to pause here. We are in Vegas, and you guys do what you do for a living, so you are no stranger to risk. I would be remiss to not point out there are some things outside of our control, like the economy, like competition, like currency, that could create headwinds for us.
We control everything that we can to the best of our ability. If you look at this management team's track record, you'll see that it's pretty dang good. I know that past results don't guarantee future, but it's the best we've got. Like I said, we have a pretty good track record. Why should you consider this software company in Ireland for your portfolio? I have seven reasons here in purple for you to consider. The first one, we are market leaders in life sciences validation. The second one, customers really love us, and they stick around. Importantly, their revenue sticks around as well. If you go to our website, you'll see that customer satisfaction, people who rate us very, very good or excellent, is at 97%.
Software review sites poll things like this, and 100% of those asked said they plan to renew Kneat. This has led to incredibly strong organic growth because people try us, they like us, and then they buy more from us. We keep adding more customers all the time. Secular support is there, as you know. Technology is pushing the world forward, and people want to automate. Companies want to automate. They can't use this technology if their data is on paper or paper on glass, which we consider to be hybrid when you've scanned in a document, but it's just a flat, two-dimensional document that you can't read. Kneat captures the actual data real- time. Margins are getting better. I think four years ago, they were maybe around 50. This past year, they were 75% on the gross margin side.
Operating expenses are growing at a fraction of the rate of gross profit. We are headed in the right direction toward profitability. Not there yet, but on our way. This executive team is second to none. They are world-class. They took a risk when they recognized this need as quality engineers themselves. Paper is not the way forward. They left. It took seven years to find people who knew how to write software. They developed this phenomenal platform. They have been at it ever since. I believe, having joined Kneat two years ago, that the product itself, the fact that it is a quality management product, has really cascaded down into the culture, along with the passion and purpose that this management team really exudes. This is our CEO.
If you were at this conference a couple of years ago in Chicago, you would have gotten to meet Eddie himself. I'm sorry I'm not him. He tells the story much better than I do. Really, Kneat is about quality. Yes, we are doing validation only today, but the platform is powerful, and there's a lot that can be done. It doesn't just turn paper into digits. What it does is it delivers confidence, right? Confidence that you are delivering what your brand is representing to deliver. This is really important for life science companies, actually, for any company that has a brand that they need to keep investing in. Validation isn't something that probably anyone in here deals with on a regular basis. I'm going to take just a minute to talk through what validation is.
Any life sciences company needs to be absolutely sure that their bioreactor, their autoclave, whatever equipment it is, is delivering what it is supposed to deliver. If you're a quality management engineer and you're having to validate a brand new site or a brand new piece of equipment, you have to go, you have to test it. You have to capture everything you did to test it. You have to keep that and document it and have it as sort of CYA when you prove that you did everything right, your equipment was up and running. That's important. If you've ever been on a manufacturing line for anything like, I don't know, t-shirts or metal barrels, there are outliers. All right? It's okay if it's a t-shirt or a barrel and it's something you can see.
When you're working with biopharma and pharma, you do not have that margin for error. You need to be absolutely sure. Yes, it's about regulation and compliance, but it's also very much about your own confidence in your product because human lives are at stake. You don't have to just keep this for a little bit while you're making it. You have to keep it for years and years to come. If you don't do that right, you are liable on all kinds of levels. Eddie has a great story he tells about a company that was out of compliance and what it did to that company. You need to make sure you're doing it right. I don't probably have to spend too much time convincing you on why digital is better than paper.
When you stop and think about what it means to have all of your information on paper, it's not just getting the piece of paper to another person who has to sign it and approve it, then to another person to sign it and approve it. You have to keep it. You have to store it. You have to ship it, archive it, climate control it. That has to live there for years beyond the time that you've end-of-lifed a product. People ask us a lot, what are we replacing? Are you replacing competitors? The answer is it's mainly sort of patched-together systems that people use, paper and hybrid. Think of like a doc management where you've scanned it in. Yes, it's digital. It's digitized. But you're not really sure what exactly is in it.
What Kneat's platform does is it captures each and every data point that the validation engineer is doing. That is taggable and findable. It can be served up in rows and columns. It can be served up in documents. It is a very smart, highly intelligent system that manages workflow processes. It's not just about getting rid of paper and putting it into digital format. It's also about making things faster, making them more collaborative, giving transparency throughout the entire process globally as you do it. Guess what this leads to? Faster time to market. When you're trying to deliver GLP-1 or whatever, those weeks matter, those days matter. In one case that I'll tell you about, it was even months, taking a process down from two months to one week because they digitized everything.
You can start to appreciate, I hope, the importance of digitizing validation data. Now, I've put a list here so you can see how many parts within this manufacturing and production process, and even beyond, need to be validated. Right here, you see 12. Validation includes all of these things, not just equipment, but facilities, the utilities that power them, the cleaning processes, the methods, and even things that aren't so much validation attached to their name. Drawing management is another example. Some document, e-log book management. All of this can be done by the Kneat platform. You're looking at this, and you may be thinking, like other investors think, okay, that's cool, pretty nichy, pretty specialized, not much TAM there. I would disagree because there is TAM there. There's lots of TAM, especially when you look at our size today.
We ended last year with about CAD 50 million in revenue. We have a TAM that's about $2 billion just for validation, just for life sciences companies. When you look at life sciences companies, we're not talking just the pharmas. We're talking about other companies in life sciences that would be medical device makers, CDMOs, CMOs, and the value chain within that. Right? We're not even counting logistics companies, but we do have a logistics customer. There are other companies. That's just life sciences for Kneat. That's just validation. Now, as we are building this platform and making it more powerful, we can do other things beyond validation. We think that some of these companies want us to do that. That takes us to an entirely new territory that's $7 billion. This is doing other parts of quality management.
Think of areas within manufacturing that have been poorly served today. Think about engineering, other areas. This gives you a nice future-oriented horizon to think about when you think about Kneat. Even beyond that, this big bubble here is years out. It is not a huge leap to think about, how could aviation use this? How could energy use this? Here are the largest by revenue global pharmaceutical companies. Most of these companies use Kneat. Remember, we're still pretty small, but they use us and they like us. They are giants, and they're global, sites globally. This is important for you to understand because the next slide I'm going to show you what this means for our revenue.
One other thing I want to point out here is often investors brand new to the story will say, okay, well, you're already in most of the top 20. Where are you going to go from here? What you're not seeing here are the thousands of other companies that need to do validation and that are doing it on paper or hybrid that would really benefit from Kneat. These are our customers today. Sure, we have most of the 20, but we ended the year with 108 customers. There are thousands of customers out there that would use us. My favorite number on this slide is at the bottom, 151% net revenue retention. That is phenomenal. Why do we get there? Because a big company will say, all right, it's time. This is ridiculous. We're done with paper. Let's just do it. We're building a new site.
Let's use it for commissioning and qualification. It will be one site. It will be one process. They will use it. They will see it. It's not a huge lift to get to $100,000. They can get that by the budget. An important aspect here is this is a corporate-level sale. We have an entire company signing an MSA, a Master Services Agreement, which means yes, it is hard to get into that first site. It does take a lot of time. Once we are in there and people use it, they see it, they love it, it rolls out to the next site. They will use it for commissioning and qualification for that. They will say, hey, why do we not use it for cleaning validation? Why do we not use it for facilities validation? It rolls out across any enterprise in this way.
We just announced a new customer just a couple of weeks ago, big company. They are using it for one thing. That is going to sort of push the growth for the next several years. On this slide, you see it goes out 48 months. It has gone out beyond that. Merck is a marquee customer of ours. They have fully penetrated their sites and processes with Kneat. We are talking over 12,000 users, 27 sites globally using Kneat. Nobody else has penetrated to that degree. The potential is there. What you just saw is sort of captured by this navy blue circle, right? You get more sites. You get more processes. That is how you get more users. Revenue comes in on a per-user basis. When the revenue comes in, and then they use it in more sites, more processes, that is how it grows.
That is how it gets that 151% NRR rate that we saw last year. They are expanding it within their own organizations. They are also expanding it throughout their value chains. This is why we have a logistics company as a customer. They are not a pharma, but a pharmaceutical company said, yep, this is how we are doing our validation. You are going to get a license. You are going to use it. And they do. This is coming in, chemical companies, other suppliers to a pharmaceutical company, logistics companies, distributors, anyone who takes that therapy the last mile to the patient, they can be called on to use Kneat. This helps you understand why our TAM is not just one pharmaceutical or biopharma company. It goes beyond that. How do we get new customers? We have hunters, we call them, these salespeople. We have farmers.
You get a new large company in. It takes a while. It's not easy. Some of my favorite moments at Kneat are listening. Before we do a press release, I talk to the salesperson, and I hear the stories about all the hurdles they had to jump through to get this. It's not short, but they are good at it. When they come in, there is even more sort of audit. You are really getting in there. It takes a long time, but it is worth it. Because once it's in there, it's hard to switch out. We don't want it necessarily to be hard to switch out. We want them to love Kneat. And so far, they do. You have the hunter bringing them in, and then you have the farmer.
The farmers are Kneat's account managers who go in, go side by side, look at opportunities to do it. Increasingly, there are partners helping us do this. Some are boutique partners who understand the industry really, really well and can work side by side, all the way up to systems integrators. These big global companies that you're familiar with go in, and they want to be the service provider and figure out how you can push this further out across the organization because it's good for them. We have other things like the Kneat Academy that helps people learn and get trained and get certified to use Kneat. It is the space itself, the industry itself, that brings many of our new customers. Pharmas do not really compete on validation processes.
You go into some of these online forums, and you'll see them talking about Kneat and how much they love it. Eddie just told a story a few weeks ago. He was at a conference and walking by someone presenting. They were talking about how they were just set up a new site, and they were getting to market in just a few months. Somebody raised their hand and said, how are you doing it that fast? There's no way you can do it that fast. They said, we have this validation software Kneat that got us there so much faster. That is real revenue. Because our customers like us and because it's good software, we have an 87% compound annual growth rate over the past four years. It got us to not quite CAD 60 million in annual recurring revenue.
The gross profit that is sort of driving our R&D and the build-out of our platform for more great things is, like I said in the beginning, it's gone up 75%. Yes, we are still not quite profitable, but I can tell you that operating expenses grew at 15% last year versus nearly 60% gross profit rate. That's pretty good. We cut our EPS by more than half. We are on a great trajectory towards profitability. We're pretty excited about it. I'm happy to turn it over to you if anybody has any questions. Sure. When we go into a new customer, normally they don't really have anything. They're looking for something to digitize what they have on paper or hybrid. An important thing when you think about Kneat is when they do this, they want one validation system that can do all their validation.
They're tired of bits and bobs here and there and not feeling organized and in control of their quality. They want one validation system that can do all of their validation the way they have been doing it. Remember I said Kneat's highly configurable? They'll take whatever it is they're doing. We'll help them for the first few, and they just take it and digitize it. It's the way they've been doing it all the time. Our competition is there's one company right now that was in the market before us, doesn't have anywhere near to the degree, the usability, or the depth that we have here. Increasingly, Veeva is trying to get into the space. The one thing about Veeva is you've got sort of all kinds of validation. I showed you that slide.
We've got a new site, drawing management, things like that, very document-centric. On the other side, you have computer systems validation, rows, columns, Agile. This is what Veeva is doing today. They're offering just computer systems validation. They do not have any of the other aspects of it. They're offering it their way. You have to do it their way. You do not take your process and put it onto their system. You have to change how you're doing it. We feel pretty good about that, but nobody ever underestimates such a company as that. I would say that we are still very cognizant of that. That is it. They really have not shown up much in sort of the final bake-offs. The final bake-offs come between us and one other company, but we feel pretty good about how we've been competing against them.
It was hard to do. I did not go into the nuts and bolts of capturing that piece of data and then keeping it in a way that you can grab it and serve it up in a document or grab it and serve it up in rows and columns the way you need to do that. Neither of those two competitors that I just mentioned can do that. Essentially, nothing other than time. It took us a very long time to do it. I guess maybe they could if they took several years to do it. By then, we will have moved on. I am glad you asked the question because you brought up another good point. We are in there today, right? It is really hard to swap out something like this.
When you start with the largest pharmas and they're some of your best referrers, you get a really good head start. It's going to be pretty hard, I would say, to displace the validation system that they have in place. Not only do they really like us, but I would encourage you, and I printed out today copies of a case study for anybody who's interested. There are lots more on our website that go into the value delivery that Kneat brings. It really just helps you appreciate why our customers love Kneat so much. Yeah, I'd say a little bit, a little bit. Less than in the past. This is what's driven the gross margin to the heights that it's at today, as we're pushing that more and more towards partners. Partners understand it and can do it.
In the beginning, we'll do more. Then they get used to it. They have their own in-house experts who know how to do it. That's right. That's exactly right. Yeah. When you say cross-sell, the only thing I can think of is when you go in and you can recognize how else they could be using Kneat, how else they could be using our platform. We do that today. We have account managers who go in and help them identify. This is also where systems integrators like Capgemini and the boutique partners are also really helpful to help expand the footprint of Kneat within one customer. Probably have time for one more question. With the big customers that you have, is there any regulatory advantages you guys have as a result of kind of being in a climate-accepted environment?
I wouldn't say it's a regulatory advantage, but I would say that when an auditor comes in and everything's right there at the click of a mouse, and it's so easily served up, they do really, really like it. At the end of the day, those rules and regulations are up to the company to interpret and apply as they think is sufficient, which is why the configurability is so important. Every company does it their own way. Oh, I have time for one more question. The price increases are kind of built into the contract, right? They're sort of like inflation.
Very little of it is from price increases. All the rest of it would be when you say upsell, I hear it as us helping them or them just doing it on their own. I don't have that kind of visibility, but it almost doesn't matter. Because if the edict is, this is what we're using for validation, then anytime they build a new facility or the quality management person is ready, then they roll it out. All right. Thank you. Thank you so much, everybody, for listening.