Cogstate Limited

Good morning, everyone. Welcome to Cogstate's Full Year Results for Financial Year '25.

I am conscious that the ASX has not yet released our results. We did lodge with the ASX at 7:30 this morning.

So still waiting for that to happen, which should happen within a matter of moments, hopefully. But nonetheless, we'll get going and we'll take you through it.

Joining me today, I've got Darren Watson, who's Cogstate's CFO; as well as Rachel Colite, who's our Executive VP of Clinical Trials. Before we get started, a reminder this webinar is being recorded, and participants are in listen-only mode at the moment.

We will open for questions at the end, and we invite you to submit your questions using the chat function that's at the bottom of your screen. We'll get through as many of your questions in the allotted time as we can, but we will aggregate similar questions just for efficiency purposes.

So today's presentation includes forward-looking statements. So I note our disclaimer stating that this information is general in nature, and I encourage all investors to consider your own investment objectives and also review in detail our full year financial results and annual report that have been lodged with the ASX this morning, even though not quite released just yet.

So this will be all new to you, so which is exciting. So the results that we are releasing today reflect the market penetration and scale that Cogstate has achieved over the last 20 years.

After more than 2 decades of scientific and commercial validation, Cogstate has proven leadership position in digital assessments of cognition. But beyond those digital assessments, we offer to our customers a technology-driven platform of integrated solutions, including rater training and monitoring, database monitoring as well as emerging data analytics and AI capabilities that enable us to provide really high-quality data for better decision making.

We're very proud to work as partners with our major customers. We understand they drive us, and we ensure that our solutions match their need.

Our scientists are often involved at the very early aspect of trial design and endpoint selection, which really helps us to cement our relationship even before a protocol has been developed. There's a small universe of companies that can provide services like Cogstate.

And we like to believe that our tech-driven approach paired with that deep relationship partnering separates us from those small number of competitors that we do have. Cogstate delivered strong financial performance over the last 5 years.

Total revenue has grown by a compound annual growth rate of 17.5% over those 5 years, while Clinical Trials revenue over the same period has grown by a compound annual growth rate of 19.1%. We're really well positioned for future growth, and we'll dig into those growth opportunities as we progress through today's presentation.

So revenue growth is great, but profitable growth is what we've been building towards. The graph shown on the screen here demonstrates the financial leverage that exists in our business, and Darren is going to talk to that specifically as we get into the presentation.

I want to note that I'm really proud of the leadership team at Cogstate who have delivered these results. As a team, we focus on product innovation, growth in our customer base and then efficient delivery to those customers.

We put in place the infrastructure to deliver against each of those goals, and I think we've been really successful in doing that. So Darren will dig into these numbers in detail, but I wanted to run through some highlights as we get started.

So total revenue for the year of $53.1 million, which was up 22% on the prior year. Our Clinical Trials revenue at $50.6 million is up 28%.

Profit before tax of $13.9 million, which is up 96%. Our profit after tax of $10.1 million is up 86%.

Really solid margins. So gross margin of 61%, EBITDA margin of 30% and EBIT margin of 25%, showing that financial leverage that exists in the business.

We've efficiently allocated the capital, $11.5 million of operating cash inflow for the business, a cash balance of $35.6 million at the end of the financial year, and that's after accounting for $4.8 million spent on the share buyback throughout the year. We're really pleased to announce that we've declared a fully franked dividend, so Cogstate's maiden dividend of AUD 0.02 per ordinary share, and I'll run through that in a second.

Really good momentum in terms of Clinical Trials contracts. So $41.3 million of the contracts signed for the June '25 financial year, which is up 53% on the prior year.

Excitingly, in the first few weeks of the FY '26 year, we've signed an additional $14.1 million worth of contracts. So we're off to a good start.

And then we are seeing rising demand for -- through our technology outside of clinical trials. And the amendment to the Eisai agreement that we enacted in April of 2024 is enabling us to use our technology as a screening tool for -- in clinical trials, and that's being well adopted at the moment.

So really good results, and I want to dig into a little bit where did that growth come from. And Darren will explain this in even more detail, but the mix of contracts, especially with a higher mix of license fee revenue has delivered a record level of in-period revenue.

So just a quick explainer there. When I say in-period revenue, what I really mean is revenue that's been recognized during fiscal '25 from contracts that were executed in that same year.

What is also interesting about this is where the revenue didn't come from. In prior years, revenue growth has generally come from the initiation of a new Phase III Alzheimer's program.

And while Alzheimer's was certainly still important to our financial '25 revenue result, the growth also came from other areas such as sleep and rare diseases. Across the industry, we saw renewed interest in schizophrenia, and Cogstate is pushing aggressively into mood and psychiatric disorders, and we'll come back to that topic later in the presentation.

We're really pleased with our gross and profit margins. There's an element here of just simple operating leverage that exists at a higher level of revenue.

But also built into that is the deliberate efforts that we have taken as an executive team to become more efficient. Our Appendix 4E that's been released today states that Cogstate had 167 full-time employees at 30 June '24, and that number dropped to 159 at 30 June '25.

And I think it's important to acknowledge that it's not simple to deliver 22% revenue growth with less staff. So to capital allocation.

As our profitability and cash flow have improved over recent years, our Board has had to deal with what's probably an [ uptown ] problem of capital allocation. We're very much in growth mode, and we're investing in new products and solutions that enhance our capabilities to deliver long-term value.

We have, over recent years, considered a handful of acquisition opportunities, but we've not found anywhere the opportunity and the return on investment of the proposed acquisition matched what we thought we could get from our internal initiatives. Obviously, we've been an active acquirer of our own shares, and we spent $4.8 million in the last financial year acquiring those shares at an average price of $1.30 per share, which looks like pretty good buying now.

Over the last 2.5 years, Cogstate has bought back around 6% of our shares on issue. Given all of that and with a view to consistent growth that management believes that we can deliver over the coming years, the Board has declared a maiden fully franked dividend of AUD 0.02 per share.

Moreover, we're targeting an annual dividend payout ratio between 20% and 50% of net profit after tax while retaining sufficient capital for growth and innovation. I'm now going to turn over to Darren for a deeper dive into the numbers, and then Rachel Colite is going to provide a more detailed explanation of what's happening inside the business.

Thanks. Darren?

Thank you, Brad. So moving to the group results.

Revenue for the financial year was $53.1 million, a record for the company. As Brad said, up almost $10 million year-to-year or 22% year-to-year.

I'll cover a segment view on the next chart, but the revenue growth was primarily driven by a strong result in Clinical Trials, which grew 28% year-to-year, was partially offset by the decline in health care revenue, which resulted from the renegotiation of the Eisai global licensing agreement. Our gross profit was $32.4 million, an increase of almost $8 million or 32% year-to-year, with the gross profit margin increasing by 4 percentage points to 61 points.

Our focus on providing world-class digital cognitive testing and rater training has resulted in a record software license mix, which when we combine that with our focus on driving our productivity and delivery and our ongoing resource and cost management, has driven the margin improvement. The operational leverage is evident -- in the business is evident in both the gross profit margin, but also the limited growth in operating expense, which has resulted in a growth in EBIT of almost $7 million or 72% year-to-year and an EBITDA margin of 30%.

After we account for the small growth in depreciation and amortization year-to-year, our EBIT has doubled from the prior year with the EBIT margin hitting 25%, an improvement of 10 percentage points year-to-year. Our net profit has similarly almost doubled year-to-year to $13.9 million.

If I turn to the segment view. As mentioned, Clinical Trials revenue has grown 28 million -- 28% year- to-year to $50.6 million.

Our in-year revenue yield, as Brad was just mentioning, has exceeded prior year levels, largely due to the different mix of trials with trial phase, indication, duration and size, all being factors in a changing revenue yield. And as mentioned before, the higher level of software license revenue mix is contributing to a higher revenue yield from new contract sales.

Our software license revenue has now grown at a compounded annual growth rate of 25% over the last 4 years, showing the strength of our digital cognitive testing and rater training offerings. While revenue has grown just over $11 million year-to-year, the gross contribution has grown $9 million year-to-year, an illustration of the operational leverage in the business, the benefit from the growth in the software licensing revenue and as mentioned before, our focus on productivity and cost management.

Healthcare revenue largely reflects the amortization of the global Eisai licensing agreement and the improvement that you can see in the gross margin is a result of the cost actions we have taken during the year to align the cost base to the amended delivery requirements under that agreement. The renegotiation of the Eisai agreement has been a really important renegotiation for us as that has enabled us to use our technology as a screening tool in clinical trials, which has generated $1.2 million of revenue in Clinical Trials in the FY '25 financial year.

Moving on to cash flow. Our operating cash flow has almost doubled to $11.5 million, driven mainly by a 23% increase or almost $10 million growth in receipts from customers, while we've contained our payments to suppliers and employees to a 4% growth year-to- year or $1.5 million year-to-year.

The increase in cash flow used in our investment activities is a result of increased investment in our technology to both modernize some legacy systems, but also investment in new AI-based offerings that we will be launching later this year. Cash flow used in financing activities is primarily the share buyback with $4.8 million of share buyback conducted during the year.

Inclusive of that share buyback of $4.8 million, our total in cash -- our total cash has increased by $5.4 million, taking the cash on hand in the business to now $35.6 million. Moving to our future contracted revenue runoff.

So while our backlog of Clinical Trials revenue has declined from $85.6 million to $76.3 million, a strong start to FY '26 has added $14.1 million to that backlog. And importantly, focusing on the current year, the financial -- FY '26 financial year, we now have $35.9 million of revenue under contract as of today, comprising $33.6 million of revenue for Clinical Trials and $2.3 million of revenue for Healthcare.

Clinical Trials revenue under contract has grown considerably from a year ago, but an additional $4.4 million has been added from the strong start to the new contract sales -- from the new contract sales. The graph here illustrates the revenue that we have under contract for future years.

You'll note that FY '27 has $19 million under contract, but we expect will grow considerably through FY '26, depending on new contract sales and the mix in terms of phase, indication, duration and size of those contracts. With that, I'll hand over to Rachel.

Thank you very much, Darren. So in October of last year, we announced our partnership with Medidata.

They are a Dassault Systèmes brand, and they are the industry leader with respect to electronic data capture and clinical trials. The partnership integrates Medidata's robust platform with Cogstate's validated digital assessments and scientific services for improving data quality.

Medidata is a very large organization compared to Cogstate. They're about 10x our size by public revenue estimates and about 15x our size by headcount and about 3,000 employees.

So they are the most widely adopted EDC provider in the market, and they bring an exciting commercial reach to Cogstate. And while they enjoy this strong market share in areas like oncology, Medidata views CNS as the second largest and fastest-growing segment of clinical trials is a major focus area for growth.

So they've demonstrated a deep commitment to the partnership with Cogstate and to product innovations to really fit out their platform for the CNS trial challenges that we face. Thank you.

We wanted to highlight just some of the partnership -- highlights of the partnership that bring to life the momentum that we're building together with Medidata. Since announcing our partnership, we have been jointly awarded 7 studies in a range of indications and spanning both large pharma customers as well as biotech relationships.

We're delivering together in areas like long COVID, Parkinson's, rare and Alzheimer's disease. And this is proving our ability to deliver in a way that we expect will only accelerate our future growth.

We're building a strong sales pipeline. To date, since announcing the partnership, we have 42 open opportunities currently and a consistent uptick each month of new opportunities that steadily increase since May.

We've established a robust commercial process together, particularly in the U.S. and in Europe, where we've now begun sales training and enablement for Medidata's Asia Pac team.

And we expect that this Asia Pac team will deliver additional growth in those geographies in the coming periods. In addition to our deep technical integrations that combine Medidata's platform capabilities with Cogstate's validated digital tools and endpoint quality solutions, a large part of our Medidata strategy is about building out greater capabilities in psychiatric indications.

We've expanded our offering to meet a more diverse customer base with Medidata, and this includes the scientific leadership addition that we've announced recently in -- Dr. Luka Lucic.

So Dr. Luka Lucic will lead our scientific services delivery in psychiatry, such as depression, schizophrenia trials.

He brings a deep expertise to our customers, particularly around endpoint selection and proven approaches for error prevention and detection. And independent of the Medidata relationship, Cogstate has seen exciting progress in awards supporting disorders -- of mood disorders this financial year already, less than 2 months in, and we've already signed $4 million in psychiatric awards, and that's compared to the $3 million in all of financial year '25.

So overall, our go-to-market plans are strategic and aligned with Medidata. We are engaging the full commercial force of both of our organizations.

Through enablement of our global sales force and multichannel marketing plans that focus on the thought leadership events that add value to our customers, we're promoting a truly differentiated joint offering that addresses the challenges of CNS studies. Thank you.

So we wanted to bring you through just a few examples that highlight the fact that we don't just support trials, we can have a really transformative impact on the quality and reliability of outcomes. Our solutions have directly enabled regulatory approvals, improved patient experiences and delivered high-quality data across some of the most complex therapeutic areas.

Starting with a look at Alzheimer's disease, Cogstate had played a pivotal role in a global Phase III trial that led to FDA approval of a new treatment for early-stage disease. We oversaw every aspect of clinical outcome data quality, and we scaled operator training and central review across hundreds of sites worldwide.

Our platform ensured that high fidelity data was collected. We optimized signal to noise and gave regulators the confidence they needed to approve the new therapy.

As we look at our activities within pediatric oncology, we replaced lengthy and stressful neuropsychological tests with brief game-like digital assessments for children aged 4 to 11. This innovation led to an over 86% completion rate in a global leukemia trial, dramatically improving data quality and participant satisfaction while enabling conclusive study results.

And then as we look into antidepressants and cognitive safety, for the esketamine trial in treatment-resistant depression, Cogstate tests were chosen for all 5 Phase III trials to assess cognitive safety. This was a critical concern to the drug's NMDA mechanism.

Our sensitive regulatory accepted assessments help the sponsor to characterize cognitive effects contributing to the approval of a first-in- class antidepressant. In rare disease, we have led not only the delivery of the endpoints, but also the development and validation of the endpoints for an entirely new rating scale, supporting multiple FDA interactions from the pre-IND and Type C meetings.

We then implemented the central rating to ensure the consistent delivery of that endpoint, helping the sponsor to align with regulators and advance a promising therapy with confidence. So these are just a few examples about how Cogstate delivers measurable impacts for biopharmaceutical sponsors and ultimately for patients by accelerating approvals, improving trial efficacy and elevating data quality across the board.

So with that, I'll hand it over to Brad.

Thanks, Rachel. So as we look forward, I just wanted to run through a few catalysts for growth that we see within the business.

So starting with the Medidata partnership that Rachel has already talked about. In FY '25, we saw pipeline build, but really didn't contribute a lot of revenue into the '25 financial year.

We are expecting this partnership to deliver increased revenue in the '26 financial year as we expand our reach into new CNS indications. And that's consistent with the sales time line that we see in terms of new programs and winning new work as a new vendor.

So that's all going to plan. In this current '26 financial year, we expect the commercial launch of Cogstate's first AI-powered products, and that will support further automation, scalability and differentiation in terms of our product offering.

We are hopeful of demonstrating that at our Investor Day in November, and I'll talk about that in a second. We're expanding indications.

As Rachel mentioned, we're pushing heavily into psychiatric and mood disorders over the first 7 weeks of this financial year. We've already signed $4 million of sales contracts in that area.

So that's really promising for us. We see an upcoming catalyst in Alzheimer's disease.

We did a webinar on this around 5 weeks ago, and I encourage you to have a look at that. If you haven't, it's available in our investor website.

But we see a catalyst coming in terms of earlier treatment of Alzheimer's disease, and we're really excited about what that could mean for Cogstate given the experience we have in that very early stage of Alzheimer's disease trials. And then finally, we're really ready to add scale.

We have a really strong balance sheet. We've proven the operating leverage, and Darren talked you through that.

We're expanding these partnerships. I think we're really well placed to capitalize on what we think will be a rising global demand in CNS R&D spend.

So more specifically to the 2026 financial year. As we said before, we've executed $14.1 million worth of contracts in the first 7 weeks.

So we're off to a really nice start. Contracted revenue of $35.9 million as of today, which includes $31.5 million that was contracted at 30 June and another $4.4 million that we've added through the execution of $14.1 million of sales contracts over the first few weeks.

We're expecting revenue growth to continue, but consistent with what we said last year, we've provided no specific guidance in terms of revenue at this time because the amount of growth will really depend on the execution of those additional sales contracts, and that will provide us with much greater certainty in respect to the timing of revenue. We are investing for growth, and I think this is really important to note that we will see an increase in direct costs and operating costs from financial year '25 to financial year '26 as we make those investments.

Rachel already mentioned the addition of Luka in the last week. So we're adding science resources to support our expansion into psychiatry and mood disorders.

We're looking to add additional resources in the Asia Pac region as we support growth in customer base there, and that really reflects the push that Medidata is making in that region. We're continuing to increase expenditure related to our data engineering to enable more automated data insights for our customers.

And then obviously, with the engineering spend that's associated with the development of AI tools. So all of that means that it is possible that we may see a small decrease in margins from '25 to '26.

It's really going to be subject to the amount of revenue growth that we do see as to whether those margins do move. But at the moment, we're saying somewhere between no movement and perhaps up to 3 percentage points movements across margins.

But that will really depend, as I said, on what we see in terms of revenue growth. And at the moment, we're feeling good about that...

[Technical Difficulty]

Okay, everyone. If we could just perhaps hold.

We've obviously just had a little technical issue with Brad at the moment. So please do just hold on.

We are getting to the stage of the call that we will open up to questions. So let's just give Brad a chance to dial back in.

But obviously, just had a little technical hiccup at this stage of the call. So please just bear with us for a couple of minutes.

Okay. So clearly, an issue with Brad here at the moment.

Look, as he was giving sort of the summary slide, I will take the opportunity just to move to a couple of the questions that I certainly know that Rachel can respond to the first one. And hopefully, Brad is able to rejoin us shortly.

So not surprising, there are a few questions that are coming through in the chat. And just a reminder if you'd like to submit a question, please do so at the bottom of the screen on the right-hand side.

There is a chat button there, and you can submit your questions. As I said, not surprising, there's a lot of interest around the Medidata opportunity, Rachel, and you provided a really good overview in your presentation.

Perhaps if you could just -- and Brad's back, welcome back, Brad. We're...

I've no idea. I wasn't on screen.

I apologize. I don't know what happened there.

No, no problems. As you were sort of doing the summary of the outlook, we're just moving to some questions.

And the first one is in relation to sort of Medidata. In fact, we've got a couple coming through for that.

So Rachel, perhaps you could just expand on how the partnership is actually expanding the market opportunity for Cogstate and how each new contract is structured in terms of what you do versus what they do?

Yes, absolutely. So Cogstate is -- if you followed for some time, you've noticed that our -- we've had some concentration in Alzheimer's disease.

And so we really have a strong leadership position in areas of neurodegeneration and in AD specifically. And through the Medidata partnership, it's really introduced a much broader reach into the other corners of central nervous system disorders.

There's a number of new indications that we're bidding or at least seeing more [ often than ] we have before or had a line of sight to before. And so that's one main way it's expanding the market opportunity for Cogstate is really that commercial reach where they have hundreds of sales team members and can really support us in that sort of lead generation and bringing us into new opportunities.

And then we help address the expandable market for Medidata by offering the data quality assurance solutions that sponsors seek alongside the electronic data capture and CNS trials in particular, because these endpoints are so error prone and can be so noisy that sponsors really want to see a joint end-to-end solution for how you're going to capture the data and ensure that it's collected in a really high-quality way. And then in terms of how the contracts are structured and how our service delivery is structured, we have the services that Medidata is typically contracted for and delivering are around the electronic capture of the endpoint data.

So they have a business called electronic clinical outcome assessment, or eCOA, and another similar business called electronic data capture, which is a real -- it's sort of the main study database for all the data in the study go. And so they have a number of solutions that wrap around those 2 core sort of main offerings, everything from e-consent to many analytic services.

And that's typically what's patient engagement services. So those are the types of things that are typically comprised in the Medidata portion.

And then Cogstate is offering oftentimes both our digital endpoints. So the licensing of our proprietary endpoints into the trial that can be deployed from the Medidata system and configured on their system and then the data quality assurance solutions that wrap around those endpoints where Medidata is doing the electronic data capture.

So that could include consulting on the right endpoints all the way through to training the raters, certifying the raters, then monitoring their performance within the study and remediating and correcting any scoring errors that we observe.

Fantastic. Thank you, Rachel.

A second question on Medidata. You referenced 42 open opportunities.

What proportion of Cogstate's total open opportunities does that represent perhaps [ by number ] more so than by revenue?

Yes. No, that's a good question.

I don't know exactly. It's not a majority of the opportunities, but we're really encouraged at what a prolific relationship it's been so far.

And we have experienced having these types of eCOA partnerships, and this has been by far the most prolific in terms of RFP generation. But without giving specifics, I can just share our excitement and optimism for where we're headed as a partnership.

Great. And then just one final one on Medidata.

The opportunities that have closed already, can you give any indication of the win rate?

That's a very good question. Yes, no specifics on win rate.

But as I mentioned, we are starting to see a number of awards coming through to win and as well as a number of high probability pipeline opportunities that we're now pursuing. So the win rate is also very encouraging.

We have different channel relationships like our contract research organizations we view as another channel where we see opportunities, but the win rate with our partnership with Medidata is far north of that in that we have just a much tighter united approach to the sponsor and therefore, a closer relationship to those sponsors because that's really what helps us impact the win rate is when we have direct access to the sponsor, and we're not really in the background of those sort of presales consultations. That's really where Cogstate shines.

And so we're seeing that as a feature of the Medidata partnership. And so we're seeing a related win rate that's also very encouraging.

Yes. There's just one further one that's come through before we move on to some other subjects.

Of the new TCV added this financial year, what contribution was Medidata? And in terms of the revenue pipeline, what do you expect the quantum of the impact from Medidata to be?

Yes. Yes.

Without sharing specifics there either, I would expect that we'll see a substantial increase in RFP flow as we prove out the partnership. But having the pipeline that we have now with Medidata, I think it's something in the orders of magnitude of maybe 20% of the pipeline, I would estimate, without being too specific, but it's probably roughly in those terms.

So not insignificant. I think it's a major contributor, but certainly still developing.

Terrific. The [ new sales ] so far this financial year is very strong.

Do you see the latest U.S. FDA policy and political trend impacting different indications differently?

For example, not much impact seeing on Alzheimer-related pipeline, but more impact on other indications in the pipeline?

I think there's been a surprising interest from partners in -- with respect to the partnership for Alzheimer's included. I think our original thesis for the partnership is that it would help us expand outside of AD primarily, but what we're seeing in the awards that are coming through so far that there's a real interest in the partnership in Alzheimer's disease as well.

Brad, anything...

And Rebecca, just relevant to the aspect of the FDA, I don't think we're seeing anything at the moment that suggests that any one indication is being impacted differently to other indications. So certainly, that doesn't mean that we have full visibility of that.

And I think the biotech companies probably have more insight. But none of our sponsors have brought to us issues with respect to slowdowns with the FDA decision-making.

Yes. I think I understand your question, Rebecca.

So yes, I would agree with what you shared there, Brad. We haven't seen -- we really haven't seen a direct impact as yet.

I think the conversations amongst vendors and sponsors is more of a curiosity on if the capacity for the agency to facilitate things like Type C meetings where you might get more innovative trial designs discussed. That's been sort of a hypothesis that, that could be an impact if there's a smaller capacity within the agency, but that's been most of what we've talked about, but not really seeing a lot of it come to fruition as yet.

Okay. The next question, with the expansion of the Eisai discussions, what is the revenue opportunity?

And have you given more thought to whether the Healthcare segment gets pushed more as a premium DTC option to GPs or to neuropsych?

Look, I think that's a really hard question to answer. I think there's some really important factors at play there.

So the first is we have seen some real interest from pharma companies in respect of using digital cognitive assessments as a prescreening tool to find Alzheimer's patients for trials. So there's -- as Darren mentioned, the $1.2 million of revenue associated with that in fiscal '25.

We're chasing some opportunities presently in terms of new opportunities. If they come through or if the pharma companies fund that screening program, I think there will be additional significant revenue, but it's probably too early at this stage to really pinpoint that.

In terms of the opportunity in the health care market more broadly, I think that changes as the drugs on market change. So if we see approval of therapies in that what we call preclinical Alzheimer's disease or asymptomatic Alzheimer's disease is patients who have amyloid plaques on their brain but are not seeing that -- at this stage, don't have that memory impairment consistent with dementia.

If we move into that really early-stage disease, I think the opportunity for a sensitive digital assessment of cognition combined with blood-based biomarkers really increases. And so I think we really want to see what happens in terms of those upcoming readouts for those trials.

And I think we need to be ready to adjust our offering to meet as that market moves. But certainly, our expectation is that Alzheimer's disease R&D is going earlier in the disease phase.

And at that earlier stage, there's even more opportunity for things like home-based smartphone-delivered cognitive assessments that are reliable and sensitive to change.

Brad, there's a couple of questions in relation to Cogstate's competitive position and comments around, obviously, great to see more AI development as well as how you're sort of seeing the evolving tech and AI landscape potentially impacting that sort of competitive advantage? Are new players entering the field?

Or does your longer-term involvement in the space create a barrier to entry?

Yes. I think it's more the latter.

I think there is a little bit of a moat that we think is developing for the existing players. So the tools that we're developing rely on us having access to data to assessments that have been done over hundreds of clinical trials.

We have thousands of recordings of those assessments. And that's what we're using to develop new tools.

So I think where we're focused, I think it would be hard to come in as a new player, a new technology player. Without access to that data, you can't just -- this is not scraping the web kind of thing using a large language model.

To generate these things, you do need to have access to that data. So I think that provides a little bit of a moat for the existing players.

In terms of where we're positioned relative to our competitors, we can only assume that they're working on similar things to what we're working on. We don't really know, and I suppose time will tell.

Yes. I think another similar moat, Brad, is that we have the newer entrants who may go fully digital or fully AI, I think it's a challenging value proposition in our highly regulated and risk-averse industry.

I think for a while, sponsors will want a human in the loop, they'll want the conventional approach enhanced by AI enablement. And I think that's what the Cogstate offering will provide where you'll have that trust and a baseline level of data quality oversight.

And I think that's going to be a challenging thing for newer entrants to compete with.

Yes. I agree.

Next question. Thanks for a strong financial year '26 outlook, including investment plans.

After this step-up in OpEx, how should we think of the margin going into financial year '27? Would the capability expansion plan for financial year '26 be largely sufficient to support 2 to 3 years of invisible growth?

Yes, I understand the question. So as we've said, we've given some guidance around margins for '26.

And really, that's going to be dependent on revenue. As we look forward to '27 and beyond, I think there's enormous leverage in this business, and I think we've already demonstrated that.

I think the question becomes what do -- as we move to -- or what we're seeking to do, I suppose, is as we become more tech-enabled, where license fees continue to grow as a percentage of total revenue, I think there's opportunity over the longer term for growth in gross margins. And then in terms of OpEx, we don't see, and we haven't seen OpEx growing at significant rates.

I mean it's growing slightly more than CPI, but not substantially. And that's including the investments we're making in new product and engineering.

So I think we'll continue to see greater leverage over OpEx in future years as we grow revenue. So I think there's -- I think over the longer term, there's margin upside.

Over the shorter term, there's some pressure on margins as we're making these investments.

Great. So Brad, that is the end of the questions.

So perhaps throwing back to you just to cover the last couple of slides.

Thank you, Rebecca, and apologies. So I will note that I did a really compelling job of presenting these to myself just 10 minutes ago.

But anyway, so our Annual General Meeting of Shareholders, it was a hybrid meeting, so virtual and in person on Thursday, the 16th of October in Melbourne at 11:00 a.m. You can join that online.

Our Shareholder Day, so first ever in-person Shareholder Day will be held on Friday, the 7th of November in Melbourne again. Registrations are now open via our Investor hub, and we encourage you to come along to that.

If you can jump to the next slide, please, Rebecca. So just to close out, some closing comments.

So we believe that Cogstate is really well positioned now as a compelling investment proposition. We have an industry-leading technology platform.

We're positioned at that intersection of digital health, neuroscience and AI enablement in a market that's showing increasing demand for scalable solutions. We've got a proven track record of partnerships with our large pharma customers.

And we think that there's a shift happening now that we think will accelerate over the coming years to more digitally enabled and home-based clinical trials, and we're really well positioned to support that shift given our technology focus. We're delivering profitable growth, and we have great financial momentum as we begin the 2026 financial year.

With that, I'll just thank you all for your interest in Cogstate. All of our announcements are now live on the ASX, so you can go and review the annual report, and I [ encourage ] you to do so.

Thanks very much for your interest today.

Thank you.