Good morning everyone, welcome to Cogstate's full year results for financial year 2025. I'm pleased to introduce on our call today Brad O'Connor, Cogstate CEO and Managing Director, Darren Watson, our CFO, and Rachel Colite, our Executive VP of Clinical Trials.

Before we get started, a reminder that this webinar is being recorded and all participants are in a listen-only mode. We will be opening for questions at the end and invite you to submit your questions using the chat function below.

We will try to get through as many of your questions in the allotted time and may aggregate similar questions. I'd like to now hand over to you, Brad.

Thanks, Bec. Welcome everybody and thank you for joining us today.

We're really excited to bring you these results. We'll dig into the numbers, but I think what's really interesting is that within Cogstate, we feel that the business is changing fairly substantially over the last 6 months.

Through today's presentation, we're going to try and draw out those changes and the growth that we're seeing in the business, as well as the financial results. Today's presentation of course includes forward-looking statements, and therefore, I note our disclaimer stating that this information in the presentation is general in nature.

Obviously encourage all investors to consider your own investment objectives and also to review in detail our 2025 annual report, as well as the half year financial reports that were released today. With that, and before we get into the numbers, what I want to do is spend a couple of minutes just highlighting the trends that are driving our business.

One of the key takeaways from this presentation is the expansion and diversification of both the portfolio of trials that we're working on, as well as the growth in the customer base. As at 31st of December, Cogstate's managing a portfolio of 133 clinical trials, which is up 34% on the same time the previous year.

This included a record 42 new trials that were started during the December half year period. That's a record for any half year period, and in fact, it's more trials than we started throughout all of fiscal 2025.

Pleasingly, after investing in additional resources to support a push into new indications, we saw almost a 6x growth in the value of sales contracts in mood, sleep, and other neurological disorder programs throughout the December half. In terms of who we're selling to, we've added new pharma customers, as well as larger biotech customers to our customer base, and many of those customers have potential for multi-program pipeline of trials.

In part, our growth stems from the growing maturation of our channel partnership program. As Rachel will take you through later in this presentation, we've identified a record number of sales opportunities in each of the last six quarters, and our channel partners are a really big factor in that growth.

In the December quarter, channel partners drove 70% of the number of sales opportunities identified and 62% of the number of sales contracts executed. It's important to note that Cogstate margins aren't impacted when we're co-selling alongside channel partners.

We also continue to invest in technology advancement, and we believe that new and improved products will be a key to Cogstate's ability to grow market share over time. From a financial perspective, as we announced last month, sales contracts for the December half year totaled $41.7 million, which is an increase of 105% on the previous corresponding period.

In reviewing this growth, the relevant question is whether the market overall is growing or whether Cogstate is growing market share, and we believe the answer is a little bit of both. We know that over the next 10 years, CNS trials are expected to be one of the fastest growing areas of R&D spend, and so we're well placed to benefit from that growth.

First half revenue was $26.9 million, which was slightly ahead of the guidance we provided of around $25 to $26 million. That $26.9 million was up 12% compared to the previous corresponding half, but down approximately 8% compared to the most recent June half year period.

Given the strong sales contracts that we executed, the in-period revenue yield was probably slightly lower than we might have otherwise expected and certainly lower than the historical average. Darren will dig into that as we go through the presentation a little bit.

It is important to note that license fee revenue was 23% of clinical trials revenue in this December half, which was up from 19% in the previous corresponding December half, but down from 31% in the most recent June half. Because license fee revenue is generally recognized in the same half as we execute contracts, lower license fee revenue can result in a timing difference in terms of revenue recognition.

That's part of the explanation as to why we saw that lower in-period revenue yield. As indicated at the beginning of the financial year, direct costs were expected to increase during the first half of '26 as we invest in additional resources to support expansion into new therapeutic indications and to pursue growth opportunities across the Asia-Pac region.

Both initiatives have been instrumental in driving the strong growth in sales contracts that we saw during the first half of the year. In total, we increased the number of staff directly involved in the clinical trials delivery by 17%.

However, as Darren will walk you through a bit later in the presentation, our cost of sales was also impacted by some one-off costs and some reallocation of costs from overhead. Like-for-like comparison of costs shows a 58.4% gross margin, which was in the range of guidance provided at the beginning of the financial year when we said that we expected margins to be impacted to be somewhere between 0 and 3 percentage points.

Notwithstanding our investment in growth, profit margins remained strong. EBITDA of $6.5 million at a 24.3% margin, profit before tax of $5.3 million at just under 20% margin, and profit after tax of $4.5 million at a 16.7% margin, all demonstrate the leverage that exists in the business.

As a management team, we're really confident that those margins will improve in the second half of the financial year. Again, we'll talk about that as we get into the presentation, but that's really a revenue question there that will drive that margin improvement.

We begin the June half with $21.7 million of revenue contracted for that half year period. That's up 24% from the same time last year.

At 1st of January '25, at so 1st 1st of, yeah, sorry, 1st of January '25, we had 17 and a half $17.4 million of revenue contracted for the June half, and ultimately we recorded $29.1 million of revenue for that half. That's the relevant previous corresponding period.

As I said, $21.7 million contracted at 1 January 2026, which is up 24%. Cogstate had $27 million of revenue already contracted for FY '27, which is up 13% compared to the amount we had contracted for FY '26 at this time last year.

Our pipeline, in terms of opportunities, remains at record levels, and that provides us with confidence in respect of sales contracts as we look forward to the June half period. I'm now going to hand over to Darren, who's going to take you through the financial results.

Thanks, Brad. As Brad mentioned, revenue growth for the year is for the half year is 12%, largely driven by growth in our clinical trials revenue, which was up 13% year to year.

That clinical trials revenue growth is a result of the strong new contract sales number, as Brad mentioned, 41.7, though partially offset by a lower in-period revenue yield. That lower yield resulted from a late new contract sales skew, with a third of the contract value signed in December, together with a mix of contracts, with a couple of those contracts being Phase 4 real-world evidence deals, which have a slower revenue yield than the typical Phase 2 and Phase 3 trials, hence the that the lower yield in the half.

Our gross profit is down 3% year to year, which with margins down by 8.6%. The largest contributor to this is the investment we have made during the half, knowing that we have an increasing number of trials to support across a greater number of indications, which has been important to set the business up for expected ongoing growth.

Our margin has also been impacted by the movement of key science resource from operating expense into clinical trials costs to better reflect the contribution that they make to our clinical trials business, together with an increase in sales commissions, given the stronger sales performance, and a provision for doubtful debt that we've taken up relating to a US biotech for a trial that did not meet its endpoints. We'll dive into that in a little bit more detail in a moment.

Despite declining margins, we do expect margins in the range of 56 to 59% in the second half of FY '26, and beyond that, we continue to hold to our target model margins of 60 60 points plus. Our operating expense is down 9% year to year.

It does benefit from the reallocation of cost into clinical trials, but excluding that, still contained to a moderate growth year to year. EBITDA has grown 5% year to year, although the EBIT margin is down, which reflects the investments that I just mentioned before.

Our net profit before tax is up a modest 2% year to year, but with the expectation of revenue growth going into the second half and improving margins, we expect a higher net profit before tax in the second half. Just focusing on on revenue for a moment, our strategy is clearly resulting in a more mature revenue profile in the business.

As you can see, this the successful expansion into other indications, the success we're seeing from our channel partners, in particular Medidata, and the expansion of the number of customers is resulting in strong revenue performance in new in contract sales, and as a result, a continuing growing revenue profile. We continue to see demand for both our digital cognitive tests and our rater training products, which has provided for a license fee revenue mix at 23% for the half, above our historical long-term trend, although down from the high that we achieved in the second half of '26.

The graph here illustrates that maturity that we're now seeing in our business, shows a strong growth profile over the last 5 years. While the first half of '26 is down on the second half of '25, which is not unusual given software license mix and contract milestones, the important thing is from our perspective is that the revenue under contract for the second half of '26 sits at 21.7 and positions us for what we believe will be strong growth coming out of the second half of '26.

That $21.7 is up 24 points 24% from where we were in the second half of '25, bodes us well for that growth. From a cost of from a cost of sales perspective, as I mentioned earlier, our margin in the first half has been impacted by a conscious investment investment that we've made in delivery capabilities to support an expanded number of trials across an expanded number of indications.

We have increased the number of FTEs by 17% to almost 90 FTEs in clinical trials to ensure we maintain our standard of delivery to our customers, but also position us for the growth we expect to see in the second half. In addition to this investment, we've also seen a number of impacts in the half.

There's been a reallocation of science resource from operating expense into clinical trials to better reflect that contribution that those resource make to our clinical trials business, but which has no bottom-line impact. We have also incurred higher sales commissions due to the strong new contract sales performance in the first half, and we have booked a provision for doubtful debt of half a million dollars, which relates to an unsuccessful study of a US-based biotech.

We're continuing to pursue the debt with a customer, but we've prudently taken a provision for that loss. Importantly, if we adjust for the reallocation and the other impacts, gross margin would have been 58.4%, roughly aligned with our target model.

As I've mentioned, we're confident of improving margins in the second half. If I turn to cash flow, the business remains very strong from a cash perspective, with $34.1 million of cash on hand and no debt and a positive operating cash flow of $2.4 million.

You can see the cash flow used in investing activities reflects the investment we've we're making in both modernizing our existing technology platform, but also investing in new innovative products that will differentiate us against our competitors. $2.2 million was spent on that technology investment, and I'll cover that in a little bit more detail in a moment.

The cash flow used in our investing activities includes the payment of our maiden dividend of $2.2 million, proceeds from the exercise of some employee options, but offset by a lower share buyback activity during the half. As we've mentioned, we do enter the second half with strong contract revenue under contract.

Our total future contract revenue has grown by 6% year to year, resulting from the clinical trials backlog revenue of $92.3 million, which is up 9% year to year. Importantly, we're well set for the second half of FY '26 with 48.3 of contracted revenue, being our first half actual of $26.9 million and $21.7 million under contract for the second half of FY '26.

That compares to 17.5 that we commenced with at the at the start of the second half of '25, a 24% increase, and so positions us well for going into growth in the second half. On technology spend, as I as I mentioned before, we continue to remain focused on creating new innovative products that differentiate Cogstate in our market.

Our development of AI-powered monitoring and AI-powered rater training is progressing, and we are now working on scaling the technology for commercial release. We're also continuing to enhance our algorithmic monitoring solutions, which enables our customers to improve data quality through automated error detection.

We're also working to modernize our technology platform to ensure that we continue to scale, integrate, and innovate a pace. This work is progressing well and should be largely completed by the end of this financial year.

With that, I'm going to hand over to Rachel.

Thank you, Darren. Clinical trials sales contracts executed in the first half totaled $41.7 million.

That's more than doubled the prior corresponding period, and it represents our second best sales result ever for a half year. The composition of these contracts demonstrates substantial progress in our diversification strategy.

45% of contract value was derived from a category of mood, sleep, and other neuro. That's almost a sixfold increase compared to the previous half year period.

Of that 45%, a large proportion of that is in the area of depression trials, which shows significant traction in a stated growth area for Cogstate. Depression trials represent a market that we've really targeted within CNS.

It's the second largest CNS indication based on trial starts per year. It's second to Alzheimer's disease.

It's also an area with the potential for large relative deal sizes, given the number of service lines that these trials can require. They often rely on central rating services where Cogstate or an organization like Cogstate will centrally rate the endpoints versus site raters, and this helps to overcome some of the trial challenges in these types of trials, such as rater variability and blinding challenges.

We also note that our first half sales result was second only to the first half of financial year '22, which was a unique period in that it saw significant concentration in Alzheimer's disease. In particular, this period saw large presymptomatic stage trials, which Cogstate is the market leader, and we remain well positioned to win when these types of trial opportunities present.

Moving forward, we anticipate AD trial growth to remain strong, and that's fueled by momentum in the disease-modifying breakthroughs that the field is seeing, advances in blood-based biomarkers, and a broadening set of therapeutic targets. These dynamics really support our continued sales growth in our core area of Alzheimer's disease, while also expanding opportunities in rare disease and these emerging areas such as mood, sleep, and some others.

A leading indicator that is tracking quite well with our increased sales contracts, we're seeing consistent sales pipeline growth in the number of new sales opportunities or requests for proposals. As Brad mentioned, in the December '25 quarter, 70% of opportunities and 62% of executed sales contracts included our channel partners.

This speaks to the strength of the channel partner strategy execution, and it also speaks to the alignment of the strategy with the prevailing outsourcing approaches by trial sponsors. Many of these sponsors want a single contract, full-service relationship across multiple service lines, such as the eCOA that's offered by our partners and the quality assurance services offered by Cogstate.

The diversification we're seeing in our sales contract values is also evident in our expanding portfolio of clinical trials projects, with an increase in the number of trial starts across a broad number of indications and customers. In this half, we managed 42 new trial starts versus the 25 in the previous period, making this our most active half year ever in terms of trial starts.

All of these are delivered by Cogstate, but uniquely alongside different eCOA partners based on the sponsor's preference for the trial. We're offering the consistency of our science, paired with the flexibility to deliver with their eCOA partner of choice.

We've established a strong strategic account planning process with this sponsor, and we now have visibility to additional future contracts across additional indications. This is a real success story for our partnership strategy.

Now with that, I will pass it back to Brad to recap some growth drivers and outlook.

Thank you, Rachel. Thank you, Darren.

Just to summarize, then we'll have a look at what the second half looks like. We continue to see growth opportunity across multiple indications, and that's obviously been a real focus for us.

As mentioned, we've expanded our offering into mood disorders, but we're also beginning to push into dermatology, autoimmune diseases, and hematology. Cogstate digital tests remain a really key plank for us gaining market share.

In sleep and narcolepsy trials, Cogstate digital endpoints are regularly chosen now as either primary or key secondary endpoints in those trials, and Cogstate is currently working across four such programs with different sponsors, and those opportunities are growing. Our work in rare diseases continues to mature.

Following a number of years of early-phase work and a number of natural history trials, we're now seeing more Phase 3 work in rare disease, which obviously just increases total contract value. Finally, we're really well positioned in presymptomatic Alzheimer's disease, and that's an area whilst not a big focus in this December half year period just finished, that we expect will get a lot of attention throughout calendar 2026.

In terms of how we go to market, we believe that we're only getting started with our channel partners. Obviously, those results look really good, but we think it's the beginning of how we can leverage off the depth of partner relationships or customer relationship within those partners.

We believe there's substantial upside still to come from those relationships. Finally, we believe that the competitive dynamics are favorable for us.

There are only a few full-service providers that compete with us on a like-for-like basis, and there are high barriers to entry for new players coming into this market. We're well positioned there.

Just really briefly in terms of capital allocation, we note that the Cogstate Board has resolved not to declare an interim dividend for the half year. We maintain our annual dividend policy, which targets the payout ratio of 20 to 50% of NPAT, which is subject to capital plans, as well as our franking balance.

Our share buyback remains open. We will use that opportunistically where we see value.

Obviously, we've been an active acquirer of own shares over the last couple of years. I think just to close out this section, we're very much still in growth mode and we're investing in new products and solutions.

You can see that in the results in terms of where we're putting our numbers, that we're investing in those solutions that will enhance our capabilities and allow us to deliver long-term growth and to grow market share over time. Turning to the forward-looking comments, we're expecting revenue growth both from half 1 into half 2, but also from FY '25 into FY '26.

Our sales pipeline is at record levels, and executing against those opportunities will allow us to add revenue to both the second half of FY '26, obviously into FY '27 also. We expect gross margins to recover in the June half, and as we've mentioned throughout this presentation, that are largely a function of revenue growth.

Operating costs should remain relatively constant in the June half. We'll continue to invest in the expansion of indications, in technology, and in our channel partnerships because these are the drivers of our medium-term revenue growth.

Finally, we believe that our proven capabilities, our unique technology offering, and our go-to-market strategies will allow us to win a greater proportion of work in a market that we expect will continue to grow. In summary, we believe that these half year results show a business not only delivering today, but is also investing for tomorrow, and we're poised to profitably grow market share in a growing market.

With that, Bec, I'm going to open up to questions.

Fantastic. Thanks, Brad.

That does bring us to the conclusion of the formal part of today's meeting and we'll now open for questions. Thank you to everyone who has been entering their questions into the chat function as well.

We have got a couple that have been pre-submitted, I'm going to start there before turning to others. You've delivered double-digit revenue and earnings growth alongside record sales contracts and contracted future revenue this half.

How should investors think about the sustainability of this momentum and what it signals about Cogstate's competitive position over the next few years?

I'll take this briefly and then I'll hand over to Rachel for some sort of more color. I think from the sustainability point of view, one of the things we've been really focused on is obviously we've got a really strong offering in Alzheimer's disease.

The reality is that Alzheimer's disease trials, particularly Phase 3 trials, are really expensive and there's a limited number of companies that are running those trials. We understand that that degree of concentration just leads to a relative boom and bust cycle, or can lead to that in terms of our sales contracts.

Whilst at the same time, providing really good revenue visibility for a number of years given the length of those trials. What we've sought to do is to expand our offering to ensure that we can see growth in other central nervous system diseases.

I think we've been really successful in doing that. I think the other aspect is then layering that on top of our channel partnership program has enabled us to put that offering as a really viable offering in front of a number of new customers, and we're seeing that that message is being well received.

I think the opportunity in terms of the momentum is continuing to grow at this stage, and we really don't see a lid on that opportunity at the moment. Rachel, I don't know if you want to add some more color to that.

No, I completely agree. I think the exciting thing for where we are today is that there's growth in our core area of Alzheimer's disease.

We're really seeing new trial targets, new mechanisms, as well as seeing sort of the next generation of amyloid-clearing agents progress. I think that the opportunity for those trials to become more commonly run by a larger number of sponsors is only increasing with the advent of blood-based biomarkers progressing.

I think those trial costs will come down, which will certainly fare well for Cogstate in our support of those trials. At the same time, we are expanding into new areas that is right in line with what our channel partners need, and so it's allowing us to really make the most of those partnerships, particularly our growth in psychiatry and certainly rare disease and sleep.

I think these are really exciting times for those reasons.

Thanks, Rachel. This next question I'll direct to you, Darren.

With more diversified customer base now in expanding medical indications, are there customer credit quality measures that you're implementing to avoid future bad debt situations with smaller biotechs?

Thanks, Bec. We have put in additional controls around credit checks and contract language to ensure that we don't get caught up again in a similar situation.

Also looking carefully at our payment structures to ensure that particularly where it's a smaller biotech in a single molecule trial, that we don't allow it to get ahead of ourselves.

Thank you. Historically, license fee revenue was recognized upfront.

Roughly what proportion is now being recognized over multiple years? Is this limited to new complex endpoints or does it apply more broadly?

There hasn't been any change. We still continue to recognize software license upfront.

At this point in time, we don't have any software license revenue that is recognized over a period of time. That may change as we start to sell our AI-powered monitoring and rater training.

At this stage, we haven't entered into contracts for those yet. At the moment, we're still recognizing all software license revenue upfront.

Thanks, Darren. At the investor day, the company noted some exciting AI-enabled functions being introduced to customers.

Are some of those project costs in this half year's high R&D capex and what's the development on those projects so far?

Darren, do you want to take that?

Those costs are in our capital spend through the half. There's roughly around $500,000 to $600,000 US spend across those two products.

That's the AI-powered monitoring and the AI-powered rater training. We're continuing to progress the development of those two products.

We're now in a phase of scaling them up across different scales and languages. The rater training is pretty much for one of our scales ready for use, but our focus is now on scaling and ready for commercial use.

Just staying on the AI theme for a moment. Globally tech companies have seen a dramatic sell-off in the last few months due to fears around AI displacing their business models.

Can you talk about Cogstate's moat and how it protects itself from new AI startups and partners or customers using more AI to replace Cogstate solutions?

It's probably not the last few months you've seen that. I think it's the last few days.

Apparently SaaS is dead and everything, everyone loves services again. Welcome back, we've missed you.

Look, I think there's a couple of really important things to draw out here. The first is in terms of when we talk about AI, or advanced analytics, what we're talking about.

We're not talking about large language models that are scraping the internet looking to solve these problems. What we're talking about is bespoke datasets.

Cogstate has access to thousands of recordings of these assessments that have been conducted by either site-based staff or Cogstate clinicians as a telehealth assessment. We train those staff as to how to administer those tests, we know what good looks like.

What we're doing is training a very bespoke model, it's a small model as opposed to a large model, on those materials. What we're then seeking to do is apply that model to stand in the place of an expert and identify error as it occurs.

What would happen at the moment, when we talk about central monitoring, what that is, is an assessment is conducted, it's recorded, and then an individual reviews that assessment after the assessment's been completed. What we're seeking to do with these AI models is have the AI stand in as the first screener rather than a human to do that review.

It's quite distinct to what you're looking at at the moment. When you look at how SaaS companies, whether that be Atlassian or others, their valuations are being hit at the moment, the concern is that with the advancement of AI and vibe coding, right, what that will enable businesses to do is to create their own solutions rather than need to rely on Atlassian's Jira or whatever it is to manage their businesses better.

This is quite distinct from that. Right?

Now, in terms of what's the moat to that, the reality is, as we mentioned, it's a relatively small competitive set. There's only a small number of companies who have access to a similar portfolio or well of these kind of recordings.

It's not something you can just go the internet and scrape and create that dataset. You have to create the dataset, so that becomes the moat.

I would actually argue that our moat at Cogstate is actually getting bigger, not smaller, because of the advancement of AI.

I would just add to that, Brad. Our customer base for these types of services, there's a real value in our independence and that we are a separate entity doing these reviews purely objectively to ensure the data quality without introducing any bias.

I think that independence is something that will certainly continue. You won't see these services sort of go in-house the way that there may be a threat that that's quite different with some of the B2B SaaS dynamics.

We're also in a space that is quite conservative with the use of technologies in place of clinical expertise, and so we really see that our human-in-the-loop clinical expertise is another key driver. It's going to be very difficult to get to full automation or quite progressed automation without having a really strong basis of clinical expertise, and so our global clinician network will remain a really critical part of how we deliver these services, which I think is also quite unique for our space.

Thanks, Brad. Thanks, Rachel.

Can you just remind us, please, on the geographic split of FTEs and cost base across Australia versus US versus the rest of the world?

Most employees are based in the US. Rough numbers today is roughly around 170 FTE.

We have around 30 in Australia, I think about 12 in the UK, we have a couple in Japan, and the rest are in the US.

Thank you. Gross margins stepped down in the first half due to reclassification of scientific resources and those sort of high commissions and the one-off doubtful debt that's been mentioned.

Can you just unpack how much of this is genuinely structural versus temporary and what gives you confidence in returning to the sort of 56 to 59% range and towards that longer-term target of 60%?

The couple of things there. We pull it apart.

That reallocation of science resources, that'll stay the same. That was present in the June half year and present in the most recent December half.

That allocation wasn't the same in the previous corresponding December half, so that's a difference from half to the previous corresponding period. That'll stay the same going forward.

That's not an additional cost, it's just reallocation. You've seen overheads go down and you've seen cost of sales go up, so that's just what that is.

That'll stay the same. We hope sales commissions go up, let's be honest.

Right? Sales commissions going up is what everyone wants to see, because that means we're selling more.

Let's hope that sales commissions are even higher in the June half, that'd be great. We really would like not to see significant doubtful or bad debts in the June half, and we hope that that's really a one-off.

As Darren mentioned, we're continuing to pursue that and so there is a chance that some of that'll get written back, depending on how successful we are in the pursuit of that debt. Those things, I think, you can pull apart and understand what those are.

In terms of the investment we've made in resources, there's a 17% increase in actual direct resources. Obviously, that will continue into the June half, and in fact, you'll see more of the cost, because you'll get a full half of those additional resources in the June half versus a part half in the December half.

You will see those cost of sales increase, as they will. Right?

Cost of sales will always increase. We're not going to be a $100 million revenue business with the same cost of sales.

What we're targeting, as Darren mentioned, is that sort of 60 points plus of gross margin, and we think that's realistic. What gives us confidence in respect of that margin improvement from H1 to H2 is really just revenue growth.

We will see some growth in cost of sales, even just a full 6 months of those existing costs, but we're going to add some resources in the June half. We've already identified, we've approved a couple this week in terms of additional hires that we're going to seek to make over the coming months.

That's really to service that much larger book of work that we're doing at the moment. Realistically, as Rachel mentioned, we started 42 new trials in that December half year period.

If we do anything like that again in the June half, yeah, we are going to need just additional bums on seats to help us manage that increased volume of work. The revenue growth that we're expecting to come from those increased contract sales and from the contracts that we already have in place, we think will allow us to deliver that sort of 56 to 59% gross margin in that June half year period.

Thanks, Brad. Look, I'm going to ask this question because there's a little bit more specificity in it, but you have sort of covered I think most of it.

Again, just on gross margin percentage, in H2, cost of sales, the $800,000 reallocated of science talent is carried through, and high sales commissions presumably will stay with a strong sales outlook, you've pretty much answered that. Should we think H1 GM% without the bad debt at 53% is the true GM% carried into H2?

Then just a second part to that, with low-end H2 gross margin of 56% up that 3%, what are the key variables driving that? Just finally, are you assuming more upfront licensing revenue in H2 with good visible trials timing?

Let's run through those in order. I think that the first comment in terms of just backing out the bad debt is fair, right?

That's what we've said, you continue your reallocation, your resources, let's hope we do another $40 million of bookings in the June half and your commissions look the same, right? I think that's fair.

Then the second part, Bec, just remind me was

The second part was just are you expecting that sort of gross margin to carry through into H2?

Those costs will carry through, then it becomes a revenue question, and so you've asked the question there around license fees. We don't have a forward visibility, sort of view on license fees per se.

Obviously, we've got some specific trials that we're looking at and things like that, but I think generally speaking, what we're doing is looking at revenue growth, just in total from H1 to H2. Obviously, we start the half at a much stronger position, we start at $21.7 million, which compares to 17 and a half at the same time last year.

Last year, we were successful in adding $12 million of revenue from in-period revenue yield. As mentioned, that included a really high license fee percentage, 31% of that, $3 million roughly of license fees.

We don't think we'll get to probably that 31%, we think that's probably a little unrealistic. We did 23% in this half, and so if you wound that back a little bit, if we can achieve the level of contracts that we think the opportunities give us, cuz the opportunities are there, we've got to go and execute on them, but if we can achieve that, we'll be able to deliver that revenue growth.

Given cost containment, albeit with the increases that we mentioned, we think that delivers us the margin growth that we're seeking.

Yes. Thanks, Brad.

Two final questions. Are you expecting to see further growth in FTEs given that sort of pipeline that shows sort of significant opportunities?

In direct costs we will, yeah. Focusing on that 60% gross margin.

We're not expecting growth in opex.

Great. Thank you.

Rachel, a question to you. Finally, what is a couple of the more exciting opportunities you're seeing out of the US at the moment?

I'm really excited by the psychiatry area generally, but the major depressive disorder in particular. There's a really high unmet need with treatment-resistant depression, the fast-acting agents and what we're seeing with some of the psychedelic treatments, it's just a really exciting area, and we're certainly seeing it come through in our sales pipeline.

That's been a really tremendously exciting area and one where we're gaining experience and we've added the right scientific expertise to allow us to address that market like we haven't in the past, and so that's something I'm really excited about. Also really excited just about our core of Alzheimer's disease.

I think it is a very exciting time there as we're seeing these sort of next-generation treatments in development and the promise there to really impact patients earlier. I think it's going to fuel investment and I think we're going to see the cost of trials come down significantly, which should allow for a stronger pipeline.

Right, that sounds like a fantastic place to finish. Over to you, Brad, for any concluding remarks.

Look, I just want to thank everyone for your interest. As I mentioned, we feel really that the business is in really good shape.

We're seeing an enormous volume of activity across a range of indications, and I think we're really well positioned to service that. Look forward to delivering a strong second half result and a strong FY '26 result.

Thank you for your time.

Thank you.

Thank you.