The Eastern pany(US:EML)2025-08-27 00:02Financial Data and Key Metrics Changes - Revenue for FY 2025 increased by 9% to $220.9 million, with customer revenue (excluding interest income) up 3% to $157 million [7][8] - Underlying EBITDA rose by 13% to $58.6 million, aligning with the upper end of guidance [19][21] - Statutory loss after tax for continuing operations was $53 million, impacted by nonrecurring items including a class action settlement [21][8] - Cash balance improved by 46% year-on-year to $59.3 million [8][40] Business Line Data and Key Metrics Changes - European segment revenue increased by 18% to $128.6 million, driven by a 6% uplift in customer revenue and a 40% increase in interest revenue [22][23] - Asia Pacific segment saw customer revenue grow by 2%, with active benefit accounts in the Human Capital Management vertical increasing by 6% [25][27] - North American segment revenue decreased by 3%, attributed to lower breakage and soft incentive product performance, despite a 10% growth in GDV [30][31] Market Data and Key Metrics Changes - GDV in Europe rose by 7% to $6.1 billion, reflecting a return to growth post-restrictions [22] - North American GDV grew by 10%, primarily due to increased volume for Vans products [31] - Customer store balances increased from $2.1 billion to $2.35 billion, with most growth coming from Europe [36] Company Strategy and Development Direction - The company is focused on the AML 2.0 transformation strategy, aiming for sustainable double-digit growth over the long term [9][14] - Project Arlo is a key initiative to create a single global platform, enhancing operational efficiency and customer responsiveness [45][46] - The company plans to grow its pipeline to over $90 million by December 2025, with a focus on new product solutions and improved customer engagement [43][47] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformation agenda and the ability to drive growth despite challenges [15][41] - The outlook for FY 2026 anticipates underlying EBITDA in the range of $58 million to $63 million, factoring in new business growth and historical client terminations [42] - Management highlighted the importance of Project Gallo for future efficiency and growth aspirations [45] Other Important Information - The company has settled the Shine class action provisionally, which is expected to positively impact future financials [6] - A yield lock program has been structured with Citigroup to provide income certainty through a forecast down cycle [5] Q&A Session Summary Question: Thoughts on demand from different regions heading into FY 2026 - Management noted seasonality in Australia and consistent growth in government programs in Europe, with new client additions contributing to GDV [49][50] Question: Factors affecting guidance range for FY 2026 - Key factors include winning clients from the pipeline and the speed of onboarding, with a focus on operational efficiencies and reinvestment in sales [53][54] Question: Market growth rates in main verticals - Management indicated that the markets are running at CAGRs of 10% to 12%, with expectations to reach that level of growth by 2028 [59][60] Question: Clarification on top line growth and conversion dynamics - Management stated that conversion dynamics will be clearer by the end of the year, with faster-than-expected conversion rates observed [89][90] Question: Exclusion of Project Arlo costs from underlying EBITDA - Management clarified that Project Arlo is a significant one-time investment, hence its exclusion from underlying EBITDA [93][94]