DUG Technology Stock

All right. Good morning, everyone, from - morning from Western Australia. Good afternoon for those on the East Coast. Thanks for joining us today. We're kind of pleased to present FY '26 results, and you've got here Matthew Lamont, Managing Director and Founder of DUG; and then myself, Daniel Lamont, acting CFO. So without further ado, I think we've got a good cohort, so we'll get into the presentation now.

Good morning, everybody. Thanks very much for joining us. I've got to remember to look up, the camera is up there, not down there where the laptop is. We'll get into the presentation. We've had a great year. We're really, really pleased with our results. And so it's a pleasure to share them with you. And we'll touch on what things might be concerning people because we don't think they're valid. We're really happy with where we're at and where we're going.

So just to remind people, we are a big compute, big data company, big algorithms, physics-based algorithms. We're now in 330 employees. We're really building a base to grow significantly. We're not in the realms of focusing on profits at the moment. We're focused on building a big company because we believe there's a great deal of growth that we can achieve. 38% is great, but we think we can do more, a lot more.

Over the last couple of years, we've opened 2 new offices, Abu Dhabi and Rio de Janeiro, and both of those offices are going really well, and that's added to our offices in London, Houston, KL and Perth. Multi-Client has really kicked off very well for us this year, but that's who we are. We're basically a technology company.

History according to DUG, and as you can see in the last couple of years, we've opened Abu Dhabi and now Rio. So that's the history of DUG. I'll whiz through this. You've seen these slides before. That's the world according to DUG, and now you can see the new Rio office and the new Abu Dhabi office. We've hired people -- a lot of the jump in people costs is getting those offices fitted out with people, and it's been a massive undertaking getting them up and running, but we're on top of it now. And the work is there. The work is really coming into those offices and the opportunities look great.

So it's a record full year revenue. It is what the industry -- what investors expected, and we delivered. The EBITDA is perhaps slightly lower than we would have liked because we -- again, we settled on the MP2 dispute, but we also had to use a bit of third-party compute again because we just couldn't keep up with what was going on. And -- but we're now on top of compute, and we just got another month or 2 of third-party compute to move on to being back all on our own compute. So if you're wondering what happened to EBITDA, that's what it is. There's nothing fundamental there. It's just what we've been coping with internally to deliver that 38% growth.

What's really, really pleasing to us is our focus on software and HPC and Multi-Client is really delivering. And the reason we love services, that's where we come from, but we really love software and HPC and Multi-Client because it's got such a great margin. It's got that -- just great margin, great business. And so that release we put out yesterday, again, is a business with really terrific margin, better margins than services. So that's really significant that release yesterday, and we're certainly expecting more of that type of release over the coming 12 months.

The emerging regions have really kicked in, as I've already touched on. And again, Multi-Client has been great and really starting to find its feet, and we've been building that business, and we've got quite a few assets now, and we're looking at ways to really improve that business going forward to grow it. Again, they're the businesses we love. We love services. That's fundamental to who we are. But the businesses we really want to grow, number one is software because of the terrific margins, and that's really going well. It's HPC because of the margins and it's -- and Multi-Client because of the margins. One of the highlights of Multi-Client is Venezuela. We really got in early on Venezuela and now it's opening up and that data is looking like it's going to sell many, many times over. And so that's a real highlight there.

So total revenue up 38%, which the market expected, and we delivered, and I think it's a great result. I believe we can do better this year, but it's still a bit up in the air. There's a lot going on in the pipeline. It's complicated, but there is fantastic scope out there.

The normalized EBITDA is up significantly. It would have been up significantly more if we hadn't incurred the third-party compute. But it's -- again, it really shows what this business is capable of delivering. But having said that, that we're delivering this while we're growing at 38%, right? We were focused on profit, we would deliver a lot more than that. But we're not. We're focused on growing because there's such opportunity out there. And then NPAT, again, is up and could be up more.

Services revenue up 23%. HPC, again, you can see this is one of our focus areas, and it's really, really starting to take off. And again, another nice release yesterday, and we certainly expect more. Software revenue up 33%, another great result.

So just to remind people of who we are and currently what that makeup of our revenue is because it is changing for the better, we've got this common intellectual property, which is throughout everything we do. It's not like these things are totally independent business units. They're not. They're all different ways to capitalize and build on the same intellectual property and the same knowledge base basically. So seismic imaging is -- we've got the best seismic imaging in the market and have done. And the last we've just finished our -- I'm just back yesterday from our big U.S. conference which went super well. And again, just reinforced how we are leading the market still by a couple of years in MP-FWI. And then just 2 or 3 months ago, we had our big European conference. And again, same result and excited clients, great opportunities. It just looks fantastic. And the interesting thing that's happened that's played out now in those marketplaces is that all of our competitors now use the term MP-FWI, which is our term. We -- it's like us being Hoover now. And everyone acknowledging that, that's the future, which is not what we've had before. We've had the muddying the waters, fighting against it and now really working hard to get on top of that.

And the thing that -- the difference is that we've been focused on what I term efficiency, productivity and quality, right? So efficiency, [ events ] get jobs through the machines, how quick can we do it? Productivity, how quick can we get jobs through people, right? So less people, time and quality is just getting results coming out of the algorithms looking fantastic. There's a few different interesting areas that plays out. So you can't focus on efficiency, productivity and quality if you're still scampering around adding functionality, right, which is what everyone else is doing. You need fairly stable functionality in order to focus on those, right? You can't have code that's changing rapidly. And so that's where we're at compared with all our competitors are scrambling to catch up and get that functionality in the code. It is a great place to be. And that impacts everything from services to people using our software to every aspect of DUG, and we will see that coming through in that bottom line margins over the next 12 months. You've seen it coming through already over this last 6 months, but really, it's really starting to hit its straps now, and you're going to see it coming in for the next 12 months and more beyond.

Again, the software, we love it. The software is at the heart of services. It's the heart of what's really driving the HPC. And then the HPC infrastructure of course, these things are so interlocked, right? You've got to have the HPC, you got to have the software and then the services rides on top as well as those other 2 being business units on their own. And you can see the different makeup now, which we're really pleased about and the software is now 13%. HPC is now 13% and seismic imaging grew by 23%, but it's dropped as a percentage of our revenue down to 74%. So this is a great outcome. And we hope to drive that further and further. And we're still hoping to grow services and believe we can grow services significantly, but we're driving to push software in HPC as a bigger percentage of our overall revenue.

Seismic imaging, we talked about this. We're still really driving it. We've still got a really big team working on this with that efficiency productivity. And as you get more efficient, as you get more productive, we'll get better results coming through as well. That's the quality piece. And it really is -- endorses that we've been working on this for 14 years now, and we're well out ahead of our competitors and to have these massive companies coming out over the last couple of months and saying, yes, that is the future. And all oil companies, major oil companies saying that is the future is really quite a feather in our cap that it is us that have identified that 14 years ago.

We're going straight to rock properties, which just means that we're really able to produce better outcomes for clients, and we're able to get there a lot shorter time frames, which is what everybody wants to see. And Multi-Client, again, it's just such a great business. And we see that from our other competitors, how good Multi-Client is, and it is something we probably should have done years ago, but we're really on it now, and we've got a really great Multi-Client strategy in play.

And there are our assets. So, there are assets that we either own totally or we have a share of as a partnership now. And we used to have a share of revenue share and not a partnership in the underlying asset. Now we have a partnership in the underlying assets. We've been building that. We've been investing in it. We've been building it. It's brought great rewards, but the better and better rewards are going to come in the future. It's getting great momentum. It is just a terrific business. And the thing to remind everybody is that, that Multi-Client business, that total addressable market is way bigger than the underlying services business, right? And that's what we're chasing.

And there is -- that market now is dominated by TGS. You've got TGS, you've got Viridien in that market, you've got WesternGeco, but it is really dominated by TGS and clients are really unhappy with that, and that's creating great opportunity for us.

The software, again, we love the software business. It's a -- it's an annual pay-as-you-use business. There is consumption billing on certain HPC things. There's a lot of really lovely development work that's been done in the software around the AI space where clients can -- if you're doing AI interpretation, for example, which is all now baked into the software, you can just hit the button and you can go off and train your own models on our HPC. So, you can be sitting there wherever you are in the world, you can say, I want to train a new model or you can just hit the button and instantly goes out and runs on our HPC in the background and comes back. And you're not even aware that has done that. Well, you're aware that has done it, but you haven't had to jump through hoops to achieve that. So, there's a lot of work being done in the development back end of this to integrate AI seamlessly into all our products.

The processing imaging software, which does -- it might appear to everybody to cannibalize our services business is going really well, and we're really, really happy with that. And that's in all sorts of different jurisdictions. We've got a really great company using that software and our HPC in Mexico. And Pemex is really using them a lot and really working with us now to get us integrated there, and it's a really great outcome. And other clients of that business are running in the [ stand ]. So, Turkmenistan and Pakistan and other places, they're based in Pakistan and Poland, and they're using it. RockWave is using it and they're sitting in England, just south of London, and they're doing a whole bunch of wind farm work. That business is going great. And the projects that these guys are getting by and large, are not projects that we want for our services business. They're either a bit small for what we would like or whatever, some other issues with them. And so, it's just a great business. And our goal and what we're working on and what we're thinking about strategically is how do we become a very, very significant software player. So many, many, many times bigger than what we are today.

And Nomads, again, we keep talking about Nomads and DUG Cool every year and how much we love it and how important it is. But let me try to give you some clarity on what's holding it up and what's going on in these business lines and why we're still doing them. What's holding it up is that the very high-end NVIDIA equipment doesn't immerse well. We can immerse the stuff that we need for HPC, but the work that -- the stuff that companies want the training for their AI models and stuff doesn't immerse so well. Now BAC have licensed our patent and they've partnered with NVIDIA to see what they can do about getting NVIDIA's blessing on immersing their equipment, and that's underway. But that's what holds this up to give you some clarity.

Meanwhile, back at [ La Ranch ], we're having to really put in place a big Nomad team because there are so many Nomad inquiries coming in. And so, it's a really strange thing where we're not selling many Nomads, but actually, the pipeline for Nomads is growing very rapidly. And so, we see great opportunity, and we do expect it to start selling. It is a bit frustrating that they aren't selling, but the pipeline is growing, and we're having to put a lot more resources into dealing with it. It's got to either start selling a great deal or we've got to shut it down. But it is actually pretty exciting at the minute, and it's all over the world.

So, I'm now going to pass over to Daniel. Do you want to do questions now, Dan, on what I've talked about? Or you want to wait right to the end?

I think we wait right till the end. So, for those with your hands up, thank you. We'll get to you after. So, I think Matt's already talked on the revenue piece. So, I won't dive into that. I think I'll go through the cost bit and then hand over to Matt to touch on the order book as well.

Well, yes, I need to talk about order book. It's not something that concerns us, by the way, everybody.

Do you want to just take it away?

Order book. Okay. Sorry. Sorry, Dan. Look, the order book is down. Now the order book is only -- the order book doesn't cover a lot of what we do. It's services only and a little bit of Multi-Client in a particular way. It doesn't cover the big pipeline of Multi-Client. It doesn't cover the big pipeline we have. It's a funny time at the moment, and everybody is seeing the same thing. Order book means a little bit different to different companies, right? The sentiment in the industry, having just gone through our big 2 conferences, is the same. The industry is up and about. There's a great deal of energy. There's great opportunities. The pipeline is going really well. We are winning work, but it's just not -- it's more replaceable work at the moment. But the dam wall is going to break because of the energy we see growing. And it's exactly the same sentiment that we're seeing in our competitors is that they're saying to us exactly the same thing, large pipeline projects are just not dropping at the minute. And a part of it is probably to do with the uncertainty in the Middle East. It's always bad for people getting on and doing stuff. But it doesn't worry us because again, the large margin areas of software and HPC are going really well, and we see great opportunities there. And we see services sort of keeping its head up, and we just see so much opportunity out there. It just feels totally different than it has in other years when the service book dropped and we're sort of -- we're concerned about what was happening. That isn't where we're at internally. And it's mostly around Houston services as well. The other business units are doing really well. We've also swapped some service work in Malaysia into other business as well.

So, as we grow HPC and software around the world, we're turning a little bit of service revenue into that sort of revenue, and that's a better way. It's a higher-margin business. So, I'm sure we'll get more questions, and we can play with that more as we get questions later. But I'll let Daniel finish off the talk first.

Thank you. So, we saw employee benefits rise through the year. And part of that is just to deliver on the higher revenue. We also, as Matt touched on, had really the build-out of our Brazil office, which has gone really well and delivered just a little bit shy of USD 6 million in revenue this year, which was a great result from going from 0 in July to $6 million for the full year with a really great run rate entering this FY '27. We also had some start-through in kind of the software HPC and just helping us deliver through on some of those big contracts that we won this year.

In other expenses, we had a few items which caused the 38% growth. So, the first one, which we've excluded for our normalized EBITDA is the MP2 settlement. So, what we're excluding there is the $1.5 million that was paid out in the fourth quarter of this year. And then otherwise, the normalized EBITDA doesn't have anything else carved out of it.

Now in the expenses there, we do still have some of the legal fees relating to that case. And then we're also through that line, seeing the partner costs come through for some of those big contracts that we won earlier this year as well.

The final bit that sat on that EBITDA margin a little bit in Q4 then as well is we had, as Matt alluded to earlier, some third-party compute costs. So, in June, we had a few projects where they kind of peak compute usage aligned. And so, we had to make the decision to utilize some third-party compute, so we didn't impact on the timelines of those projects. So that cost came through in June and sat on that fourth quarter EBITDA margin.

The other bit that we had come through in June was some conference expenses as we entered into our big conference period. And that money ended up also kind of having an impact on that fourth quarter margin, but there's nothing there that's -- as Matt touched on earlier, nothing there that's systemic and a lot of those costs are truly one-off, and we're back in a position now where we might need to incur them moving forward.

So, on normalized EBITDA margin, 32% was a great result for the year, up 7 percentage points from last year. And as Matt's already talked through, we're seeing the benefit of that changing sales mix and the increased software and HPC revenue really helping us kind of shift into a better quality, higher-margin kind of business. And we saw that really come through with the operating leverage in particular. And so, what I'm referring to there being the fact that we were able to grow revenue at 38%, which was a great result, but simultaneously grow EBITDA -- normalized EBITDA at 78%. And I think that really shows the quality that we're bringing into the business and finally capping it off with a $7 million improvement to NPAT and getting back into being profitable again, which was a great result for -- and a great way to cap off a great year.

So, moving into balance sheet, we finished the year with net debt of $13 million. So, there's a few little items here that came through. And so, some of the asset financing relating to the equipment that was purchased in December didn't end up getting finalized until April. And so that's where we saw some of that additional financing come through in Q4. We had contract assets increased during the year. We had some big invoices go out in the last couple of months. So that balance has come down, but we just had a big balance at 30 June due to just timing of those projects and when those milestones were ultimately achieved.

One shift that we've made in our balance sheet this year from previous years is shifting HPC right-of-use assets from PPE into the right-of-use asset category. And so previously, this is HPC infrastructure that we buy and then asset finance. Previously, we've been putting that through PPE. But with that balance being significant, we worked through with the auditor and made the decision to shift that through to right of use. So same balances, we've restated that through the accounts, so we get the appropriate comparables.

PPE, we had a big step-up then, and we had the equipment purchased earlier in the year to kind of service those big contracts. And then we also had some equipment that was delivered on the 30th of June. Now part of that equipment is to kind of give us a bit of headroom for all these exciting HPC and services opportunities we're seeing coming, but it also helps us deliver on the contract that we announced yesterday, which was the $9.3 million software and HPC contract, which will -- with a 2-year term, which will commence straight away. So that $12.9 million then we see come through trade and other payables. This is just a timing element where financing is arranged after the equipment is delivered. And due to the equipment being delivered on the 30th of June, we have that appear through in trade and other payables, albeit now the financing has come through.

On cash flow then, really great receipts from customers and a big step-up on last year, which really helped us drive that improvement in net cash from operating activities. Net cash investing, we saw the $11.6 million, which was, as we've talked about, HPC infrastructure and data storage infrastructure that was added during the year to deliver on those contracts that we won and the heightened increase in revenue through this year.

And then net cash flow -- outflows from financing is fairly straightforward for us, and it's just repayments on our asset financing facilities. The nice thing for us as we enter FY '27 is we're starting -- this will be the final year of the equipment that we purchased in mid-calendar year 2024. And so, this will be the last year of those financing repayments. And so, we're going to start to see some of these financing facilities wrap up at the end of the year, which then places us really well from a cash flow and free cash flow perspective as we generate income and revenue from those units, which are fully paid for.

I'll hand back over to Matt for the outlook, and then we'll jump into questions.

So yes, thanks, Dan. Software and HPC, we are set for continued growth. And so, we're hoping that we can bring out some more releases and you can follow along our journey there. The compute capacity is now in place to support growth. There's a bit of new compute that's just being installed at the minute, and we're in really good shape now. We don't -- we've got another couple of months to go on the third-party compute, but we'll be off it, and we've now got the capacity to drive that business without the third-party compute. And the industry is really up and about, right? There's a lot of excitement out there. There's a lot of projects. There's a lot happening. The sentiment amongst us and our competitors at the moment is that we're all sitting on these pipelines, and we're waiting for things to drop. And I think it's an uncertainty, an uncertainty issue because of the Middle East is what the obvious thing to us that we think it probably is, but we're not seeing clients bury their heads in sand or anything. It's quite the opposite. Everyone is up and about. And that's why you see Multi-Client going so well across the board for everybody. And so, we're really excited for the following year. We don't quite know -- there's some really big projects we've got. If they drop, then we're going to see very significant growth, but we believe we'll grow regardless.

Great. Thank you, everyone. We'll shift into questions first. So, Milo?

I think we have the Caleb question first.

So maybe just on the order book and the pipeline. I think you mentioned a lot of your sort of peers are also seeing strong pipeline growth. Do you kind of see that converting into order book over the next 6 months? Or it's too hard to tell.

I think that there's -- yes, I do think it will convert, Caleb. I think that we're not going to see the order book drop from here. Well, it's my expectation. We're seeing it maintain. We also eat through the order book a bit quicker now because projects go through the system a bit quicker. The MP-FWI projects now we complete on a shorter time frame. But the -- I do see it dropping. We -- we're waiting for the dam wall to break to be perfectly honest. And there's some projects where -- very large projects where we're up to our sort of seventh clarification, which is sort of -- it just -- it goes to the uncertainty. Normally, if you -- in clarifications, it's a really good time for winning project. So yes, I do see it converting. I see it changing any -- it's very akin to -- I see it changing rapidly. It's very akin to what we had in -- was it '24 or '25, '24?

December '24 into January '24.

Where we won like $20 million or $18 million worth of work in 1 month. It feels like that. It feels like the dam wall needs to burst. Whether it does or not in a hurry, I don't know, but there are some very large projects in the pipeline as well.

Yes. Helpful. And just on the U.S., I think second half, that fell -- went backwards a bit, interesting you said also Houston contributed a lot to sort of the order book falling. Is that just weakness in the Gulf of America? Or is that sort of you guys becoming [ competitive ]? Or how should we interpret that?

It isn't us becoming competitive, Caleb. I think our competitors would love that. We're extremely competitive. We are fighting a battle every day, right? We're fighting against very large companies, and I've said this to you before. And every now and again, they get the upper hand. But having said that, their sentiment is -- what we're hearing is no better than ours. It's just this uncertainty. And yes, a lot of stuff happens in Houston, and we're seeing London maintain its order book quite nicely. We're seeing Malaysian office being a little bit different. We're seeing lots of opportunities in the Middle East and Brazil. There are -- Houston is in an interesting place at the moment. And Houston is also where our competitors are at their strongest and they're really fighting hard at the minute because we've got such a lead on MP-FWI. But having said that, it's good. I'm rambling now, I'm sorry, but it's -- we're not seeing anything that's -- we are extremely competitive. That isn't an issue. We're not losing projects, right? We're not losing projects. That's the point I would make to you. They're just tending to be sitting around. Our percentage of win versus lost projects haven't changed.

That's very good color. And just lastly on Multi-Client. So, you mentioned TGS and Viridien, they sort of do large CapEx programs to sort of buy the rights to that multi-client data. How do you guys -- and you guys mostly do, I think, partnerships at the moment. How do you plan to sort of develop that segment over time?

Through opportunity, Caleb. We just see what opportunity comes along. If -- the thing about Multi-Client is it delivers quickly, right? And so, if we could even buy a Multi-Client business that is cash generative in the short term, then we would certainly consider that. We're considering all avenues to growing that business. But yes, it's -- but we're not interested in growing something that just to grow it for long-term strategic reasons. It has to be cash generative in the short term. But we're looking at all sorts of opportunities for growing Multi-Client.

Is that Milo next?

Milo next.

[ Declan ]?

So, another good contract win in the HPC software part of the business yesterday. How are you viewing that pipeline going forward?

Yes, really good. We think we'll manage to win other work in that space. There's other opportunities in the pipeline, significant opportunities that we're working on, and we expect to be able to convert them. But there's no guarantees, but that's what we expect to be able to do, yes.

Excellent. And just on the Multi-Client, obviously, quite a nice run rate in Q4, USD 2.6 million. Do you see that sustaining over FY '27?

Yes, we do. Yes. We've got some really great assets, Declan, in Venezuela. We got really -- well, you've got to be in it to win it, but we got fortunate. We got in really early and those assets look fantastic. And every Multi-Client company I know is looking at and going, you got lucky there and we did, but that's for Multi-Client. But we're even selling our assets in Australia really well. So we have a nice book going forwards there.

And I think that's the nice thing for where we are now, and we use that term library in the slides, and that's something we'll talk to more in the future as well. But that idea of building out a whole library of projects, it also gives us more opportunity to get upside and smooth it out. And that's what we're seeing it all just contribute really strongly. So, it's an exciting, really exciting business.

And we go.

To Jules.

Yes. So just a couple of questions. You mentioned there, Matt, that you saw the services business keeping its head up, I think, was how you phrased it. You've been here before. You sort of alluded to the fact that we could be rerunning that late '24, early '25 period. As you sit here, how do you think the services revenue shapes for the business, mindful of like the demand, but also the intent of the business here to maybe prioritize other areas that are higher margin as well? I'm just curious, we've got a lens of the order book, but it's not -- I guess you'd have a better perspective on where you think revenue lands for the year ahead from services.

So those businesses are quite independent, right, independent sales teams, independent people. So, when we say we're prioritizing software and HPC, all we are allowing is competition for our services, if you like, but they are separate teams. And so, services will grow as fast as we can grow services independent of software and HPC, although we do love the software and HPC businesses. I don't -- what I'm feeling -- and when I go out and I poll our BD guys out there regularly when the order book is -- and jobs are not winning and jobs are not losing, they're just sort of sitting in the pipeline, I go out there and poll our BD guys and I chat to them regularly, and they're not feeling pessimistic at all. They're quite optimistic. And so, we expect companies to start things to happen. And there's other jobs we're actually waiting for data to turn up and they're moving -- that services business can be a bit cyclic in that they do acquisition and then you follow that with processing, and it tend to be a little cyclic, and we're in a bit of an acquisition mode at the moment. We're seeing companies acquiring quite a bit of data. And I think you saw that coming through in the TGS books where they say their [ butts ] are 90% busy, which is amazing, right? And then you see the OEM companies are really busy acquiring data and that data is going to come out and all need processing, and we've sort of got those processing jobs sitting in the pipeline. So, it's really hard to put a number on it, Jules, as to where we're going to end up this year. I'm trying to put -- give you a bit of the feeling for it. But we've got some really big jobs sitting in that pipeline. You just need 1 or 2 of them to drop and we'll be growing by multiples, which Daniel is going to elbow -- tell me not to say. But we expect -- I expect to grow services again this year.

Yes. Okay. All right. No, that's helpful. And just as we think about the year that's gone and into next, are you able, Daniel, at all to share just the impost from the third-party compute on the accounts? Or is it actually relatively immaterial?

It's relatively immaterial overall. I think we saw in the range of $700,000 come through in June, and we've probably got another couple of million, which will come through as we kind of start the next couple of months [indiscernible] a couple of months just gone and a few months to come, and then that will be fully round up. So it's not completely immaterial to the business, but it's really -- it's certainly not overly significant in our view.

Yes. Got it. Got it. All right. And then just the last one, Matt, you mentioned that immersion cooling is not as conducive for training with NVIDIA hardware. But I just wondered, as it pertains to inference and that sort of specialist infrastructure that we'll increasingly see being deployed in that area, how does immersion cooling sort of sit there? And do you see it as being more applicable?

Yes. It just depends on the level of equipment. So we put in the H200s, which is a really high-end GPU, and we have no problem putting that into immersion. But we're very comfortable with immersion, having said that as well. And it's not that they don't warranty. I had a really good discussion with the NVIDIA guy just recently. But their top-end DGX type stuff, they have a lot of networking on board, some very, very low latency whole rack type equipment. And that networking is a lot of fiber optics, and it's not all being sealed up, ready for immersion. So it's just hard to see at the minute. But there's a lot of discussion going on around it, and BAC are of the magnitudes of company to really carry it. So it's not over yet. We'll see how it plays out.

We'll go to Allan Franklin next.

Can we step into a bit of detail, please on that Multi-Client business? There are differences between late-stage sales, late sales and pre-funding. Maybe just define to us how that flows through the business if you're focusing on one area in particular and just the extent to which we might be able to annualize 4Q? Or how should we think about the scaling of the business moving forward?

So prefunding is if we have a project which we wish to do, and it could even be acquisition, it could be -- but most of our -- all of our so far are all processing ones. Then it's about finding companies that are willing to pre-commit to data that is if you're going to produce 6 months down the track or whatever, right, or 4 months down the track. And that's called prefunding. And so, they pay for the -- they pay in just the same way as a normal services project by monthly payments or whatever, right? And that's what pre-funders do and they help you get the project up and running. And for doing that, they get a discount on what you would pay if you bought into the data later. But once you produce the data, it then sits there on the shelf and you can sell it to anybody that comes along and they're called late sales because they're after the data has been produced and it's sitting on the shelf. And you all love late sales because you don't have to do any work, except for delivering the data. And that money is all profit sort of thing and you hold the late sales. So that's the difference between the 2. And so, when you're building up a library, you basically got all this data sitting on the shelf ready to be delivered, and it's very high margin because it's -- because all you got to do is deliver the data. And in the past, you have to -- and sometimes you have to still put it on tape and pay for tapes. But increasingly now, you're just delivering it over the fiber, so there's not even that cost.

Anything you want to add, Dan, anything I've missed?

From a revenue perspective then, I guess, for the pre-funding, that will be recognized through revenue as the project is processed, and it will -- those committed amounts will come through into the order book. And then for late sales, those just are recognized and invoiced in the months that they're contracted, so they don't flow through the order book. And they're recognized fully at the time of invoicing or contract timing.

And generally, for pre-funders, you try to get the project like at least 2/3 funded. So you try to get your really underlying cost covered by the pre-funders so that you -- no matter what happens, you're not out of pocket. And if you can't get that sort of pre-funding, then you don't go ahead with the project because it doesn't have the interest, right, unless there's some reason why you think it's going to really gather interest later. And it's the -- but the guys coming in later like in Venezuela pricing, I don't know what we're up to, we must be up to 7 or 8 sales now for that data. So, you -- and typically, it's between 2 and 3 sales [ paying ] for the underlying data. So, if you're in 7 or 8 sales, you're in really high-margin territory.

Does that help, Allan? Is that a bit of.

It does. It does. Yes, I was just going to sort of follow on and say, well, which is the most interesting data set. I think you've obviously clarified that pretty clearly. But yes, I mean, when we look at the fourth quarter, there was between $2 million and $3 million of sales, I assume a chunk of that's obviously Venezuela flowing through. But with 12 data sets there, you're obviously confident we can start to see a more normal flow-through and/or benefit from Multi-Client in F '27?

Yes. It is, with the sales every month, some months are a lot bigger than others. There is a bit of cyclicity to it, but it's -- and it also often your projects over areas that are going to come up and be released by governments. So, you're a bit waiting for that. But yes, it's just a great business. It's a really great business that we really want to grow.

And it's had a very good start to FY '27 as well, absolutely. So that momentum is really carrying on.

We got a number of projects in really great areas in Africa as well as Venezuela. And even Australian assets are sold. We just sold a big one to Chevron on the Northwest Shelf, which is terrific.

And just my second one, please, probably helicoptering up a little bit. I appreciate margin was, call it, 30-odd percent for the full year, but we did see quarters within that, that were more of mid-30s, 33% to 35%. If we roll in the contract you announced yesterday, which should be incremental strong margin, if we contemplate the efficiency drive that you're trying to get out of your algorithms, I guess, and that you've now opened these 2 offices and made investments in the second half, just the extent to which you're feeling comfortable with the margin profile going forward or how we should think about the margin profile going forward, please?

I think that the margin profile will maintain or improve. Obviously, the more we can do software and HPC, the better the margin will get. The more that we can do Multi-Client, the better the margin will get. But even services now because we're -- the multiparameter FWI is where we're at with that compared with our competitors, which is now around efficiency, productivity and quality, they just go straight to the margin, right? Because you make things -- we've got some aspects of running MP-FWI that are going multiple times faster now. And that's what we think we can continue to do. And as that code is made more efficient and more efficient, which comes about because you're not adding all the functionality to it, then that goes straight to the bottom line. And just to give you some idea of the complexity and capability of this code, there's all these different options in that code for different anisotropy. Anisotropy is sound going at different velocities in different directions, right? And there's different models you can have for anisotropy. And then you can have visco or not visco. So that's absorption. You stand outside the nightclub, and you hear this boom, boom, boom. You go inside the night club and you hear a much broader spectrum of frequencies, and that's because the higher frequencies are being absorbed preferentially over the low frequencies. That's why you get that big boom, boom, boom when you stand outside. But that's the same in seismic. So, you include that [ queue ] modeling, that absorption modeling and so on and so forth. There's all these options and there's, in fact, about 500 different ways to -- of combinations of these options in our code now. If you look at our competitors, they're probably up to 6 or 8 combinations in their MP code maximum, absolute maximum. Most of them have 1 or 2 options through. So, ours is very rich, which is enabling us to go down that efficiency productivity path, which will just go straight to the bottom line as well.

So if there's no other questions -- please raise your hand if you do. But if there's no other questions, I think we'll call it there. And thank you to everyone for attending our FY '26 results webinar. And thanks for your support through the year. And we're really excited, I think it's safe to say, for what's to come in FY '27.

Thanks, everybody. Bye for now.

Great. Thanks, everyone, for joining us for our FY '26 Half 1 Results Presentation. So we're going to get underway now. We've got a pretty good quorum in. We're going to run through the presentation first, and then we'll open up to the floor for questions at the end.

Over to you, Matt.

Yes. Good morning, everybody. It's great to be with you and to present these results this morning. Let's get going. So the numbers are starting to reflect the Malaysian Software-as-a-Service and HP (sic) [ HPC ] as a Service contract that we signed last year. So that came on a little earlier than we expected. So that's terrific.

We have had a record half year financial performance hitting over $40 million in revenue and a significant -- a very significant uplift in the EBITDA. And we're really seeing the service business continue to deliver and MP-FWI imaging really being at the forefront of that for us. And the pleasing thing is that a lot of that revenue is coming out of our new offices now.

So just looking at some nice graphs. The revenue, as we touched on, is up 40%. And again, you can see that we've got some really nice year-on-year-on-year growth pattern coming through. And we certainly have no reason to expect that to stop anytime soon that growth pattern.

EBITDA is up. The first half of '25 was not a great year. And so that is not very representative of what the business can do. And so it's a really nice result and tells us starting to show what the business can actually deliver.

And super pleasing, the cash is really up. And this is -- make notice at the end of January, we're at USD 21 million. All the numbers are U.S. dollars, of course. And so it's -- we got a lot of cash in the bank relative to what we often have. And so hopefully, that puts to bed that any thought that we're going to need to raise money because we're cash generative, not -- we won't be spending money.

So services revenue, which underpins everything is up 30%, which is super. And software revenue is up 16%. So again, both of these are year-on-year growth. And of course, the HPC revenue, we expect a very significant growth given the Malaysian signing.

Of course, the EBITDA was normalized EBITDA because of an ongoing court case, which is still in play, and it's been sort of an interesting result with neither party really winning.

This is our time line, just a quick look at it. And so in '24, we opened our Abu Dhabi office or more what we did in '24 was we put a leader into the country and we started hiring people. We actually opened that office, which is in -- which is pictured on the screen here, opened in '25. So we really -- we had an office -- temporary office there up to that point in time.

And Rio de Janeiro opened last year and is really delivering really well. And so that's the latest of the new offices. And we're not seeing any reason to open any further offices at this time.

So everything that we do in DUG and everything we've ever done in DUG is all related, and it's all about this key -- key offering around numeric physics, data processing. And if you're processing data, then you need software, and that's why we've written our own software and have done from day 1.

And you need high-performance computers, and that's why we've been building high-performance computers from day 1. And then you need a business. And that's what we've been R&D, generating software, generating algorithms, running high-performance computing. So it's all part of doing the same thing.

And including Nomad, which is just HPC in a container, which we needed ourselves for countries, where we can't take the data out of the country, and we don't want to open a traditional data center. So all of these things are related, but we're going to look at it in the terms of these 3 areas: imaging, software and the HPC backbone.

So in terms of imaging, we're leading -- we lead the world in elastic MP-FWI imaging. We're significantly ahead of our competition. We started on it a lot earlier. We believed in it very early on, and we got a team on it, and we've been pursuing it for a long time now. And we're increasing our team, and we're getting after it more and more. So although others are now offering MP-FWI, they're a long way behind where we're at. And it is really delivering.

And elastic is just fantastic technology because we go from field data straight to the elastic rock properties. And elastic rock properties are very important for oil companies and other companies to look at what the rocks and fluids actually are.

Multi-client has been new and has been a really terrific addition to our offerings. Again, it's based on what we do. We own a lot of -- it's around our service offering. We've got partners doing it, and you would have seen that Equatorial Guinea is a new project, which is looking really well.

Software is the heart and soul of everything. It's so important. It's not stuff that can be developed rapidly. It takes years and years. Everybody just as a sidetrack, everyone looks at NVIDIA, I had this discussion about NVIDIA and saying anybody is going [indiscernible] with their hardware. The main thing about NVIDIA is their software.

What separates NVIDIA from AMD is their software toolkit. It isn't the hardware so much. It's the software. And software is so important and software cannot be reproduced overnight. It takes years and years of really strong team. So we're seeing this accelerate the software. We're using the software for our own services. We're selling the software on top of our HPC, and we're also selling the software for used on on-prem.

It's also used for interpretation. And as well as we're selling it to competitors, if you like, that use the software to compete against us, which is really nice because they're often picking up work that we actually don't want.

It's a bit smaller than we would -- than really moves the needle for us or there might be other reasons why it just doesn't quite fit us. So that model is working really well. And we've really got a strong road map ahead for software, which fits into our strategic business model.

And then there's HPC, which has been exciting. You've seen the deal we did in Malaysia. And just having strong expertise in HPC is really important. And now, of course, it's very important for AI. And we should touch on our AI strategy, while we're at it because we've had a very strong AI strategy for a long time now.

Machine learning was in the first ever code we wrote. So it predates DUG in terms of our expertise and what we've been working on in our own individual lives before we came into DUG.

AI is part of our imaging toolkit. AI is part of our business. We've rolled out AI in our finance teams, in all our different commercial teams, and we're pursuing an active AI role as we -- as things are really moving rapidly in that space.

We've also got AI toolkit coming out in -- or is out in our software, where we can help users of the software progress really much more rapidly with their interpretation and other things. So AI is extremely important to us.

And of course, AI runs on the big computers and on the NVIDIA chips in particular that we've just purchased. So we're really excited about how we can transform DUG or how DUG is being transformed by our AI capabilities.

And then there is all our immersion cooling, which is the backbone of how we do compute in DUG and been very important for us.

We are, of course, our map now shows that we've got a really nice geographic spread from the Middle East to Asia to London, I call it Europe anymore, I guess, to the Americas, including Rio de Janeiro, which is a new office, which is really kicking goals.

And of course, we've got our global fiber that varies a little bit how we do it over time, but connects all our offices, except for Abu Dhabi by the look of it. We need to update our map with Abu Dhabi [ Dan ] and Rio, they're all on that fiber, by the way, everybody, we just haven't updated the map.

So now I'll hand over to Dan to -- for financial performance.

Thanks, Matt. Hi, everyone. So I guess starting off of the -- at the top on revenue. Services was a really great result. So just to provide context there, 30% growth on same half last year. That was really driven by good order book, good productivity and the teams really getting through projects. So that's a really exciting result for us, and it doesn't include anything from EPIC. So that number is kind of EPIC exclusive or non-inclusive rather. And so it's a really great underlying performance.

When we move down into software and HPC, we had pretty good growth in both of those business lines excluding EPIC. And then what we've had through the Q2 was, I think, as we framed it, an earlier-than-anticipated ramp-up. And so what ended up happening was we were able to firstly receive some storage equipment sooner than we were expecting.

And then we also managed to mobilize equipment from the U.S. And what that allowed us to do was to combine with existing equipment in [indiscernible] and get the project started earlier than we were originally anticipating. And so that's driven a lot of the growth now in what we're seeing in software and HPC and really helps the overall revenue growth.

So through employee benefits, we've got a little bit of growth through there as we kind of ramp up in Brazil and we ramp up in certain regions, where we're getting that underlying services growth. And so what we're seeing is adding headcount, but not adding headcount at the same speed as we're growing the top line revenue, which is what we've been pretty consistent with over the last few years and what we expect to continue going forward.

Other expenses, we had a 48% increase inclusive of the MP2. It's around 25% increase if we ignore that provision for the normalized EBITDA. And so what we're seeing in other expenses is we've got -- a big part of the step-up is related to Cegal.

So for Cegal, our partner in the EPIC deal, we've got -- we've got their portion or their cost for delivery coming through other expenses. And so that's come through in this half as we've managed to kick the project off earlier. And then we've also just got a general step-up in IT facilities and some subcontracting as we got that project up and running.

And so when we get down to the EBITDA line, we've got normalized EBITDA, so excluding the one-off provision, up 161%, which was a really great result for the team. And the 34% EBITDA margin, I think, is a really great stake in the ground. And so what we're seeing now is the result of EPIC and software and the growth in revenue and not the same growth in our cost base, and we're just getting really great operating leverage come through the business.

So as we move a little bit below that, depreciation and amortization lowered in the quarter -- lowered in the half rather. And so what we're seeing there is some of the equipment that we purchased a few years ago starting to roll off and have been fully paid for. A lot of the EPIC equipment was delivered in late December, early January. So we'll start to see that coming through the accounts in the second half both through depreciation and finance expense.

So to move on to the balance sheet, we had cash of $14.3 million at the end of the quarter. We had really good receipts through January. So as we disclosed earlier, 31 January cash balance of $20.7 million came off the back of really good receipts through January.

And so what that meant was with the $14.3 million of cash at 31 December, we had net debt of $0.3 million. We'll bring those new assets online and the new asset financing online in -- we'll see it come through in the second half. So that number will shift a little bit, but it's a really great result, and it's just an indication of the kind of performance of the business.

Trade and other receivables was up. That's as we started to issue our first EPIC invoices, which got paid in January. So we're seeing that number kick up at the end of the year, and that's then come through to cash.

Contract assets rose. We've just got a few more milestone projects in certain regions and then also some e-invoicing timing. And so for the e-invoicing, it's just creating a balance that carries through the end of month, but it gets reversed in the first week of the following month. So it's creating a sort of temporary increase in the contract assets balance, which makes it seem a little bit overstated.

Contract liabilities is up. That's a result of the EPIC contract, where we're able to invoice for the full year in advance. And so as we start to recognize that revenue from EPIC, we'll be slowly pulling that contract liability balance down each month.

Trade and other payables is up, as I mentioned earlier, a lot of the new equipment was delivered right at the tail end of December. And so we've got that coming through the books here, but that will all be settled with the financings all settled, and we'll see that all kind of correct itself through the second half.

And then finally, the provisions, as discussed, there's further detail on the MP2 matter in the release we made yesterday, but we've got that provision coming through our provisions in our current liabilities, and so that's driving the change there.

On to cash flows, really good result once again. So $7.4 million in cash generated from operating activities, really driven by higher receipts from customers. So it was a really great result and good cash flow for the quarter.

As we mentioned, cash flow from investing and general CapEx is probably a little bit lower than people expect, but it's just a timing. So what we've talked about in the past with the EPIC CapEx will come to bear in the second half. And so we'll see that full year number will kind of be in line with the expectations.

And similar for financing, once we get the financing, we will come through the books as the equipment kind of goes on to financing in the second half as well.

So I hand back over to Matt to wrap this up.

So last slide here. So the Malaysian contract is underpinning the profitable growth in the HPC and software sectors. We're still dining out on the best-in-class seismic imaging, and we certainly don't see that changing over the next 12 months or even 24 months as we strive to get that better and better and better. It's different, a little bit different now for us.

We're now really focused on efficiency, productivity and quality. And so efficiency is just making it run through the -- I mean this is an incredibly complicated code, right? And so just keep working on to get it running through the machines faster, keep working on making it faster for people to run. So efficiency in machines, productivity is people and just make sure that the results always come out looking fantastic. So just little tweaks to the algorithms here and there.

So our focus is on that now as opposed to adding features to the software, adding new things that the software can do. And that's a real milestone to get to that point, whereas all of our competitors, of course, are scrambling to try to develop this from the ground up.

And established regions are continuing to grow. So our London and Houston and Asia are continuing to grow, but the new emerging geographies like Abu Dhabi and Rio, especially are really looking good and will grow significantly from here. Thanks very much, everybody.

So thanks, everyone. We'll -- shifting to questions. So if you have a question please raise your hand and I'll give you the floor. So first, [indiscernible].

Can you hear me right?

Yes. Loud and clear.

Just first question for me, just around the Middle East. I'd be interested in any feedback you've received from both Aramco and ADNOC, just noting those trials that you had progressing last time we spoke.

The trials have gone super well. Aramco just last week or the week before at a conference in the Middle East stood up at a -- in the conference when one of our competitors was having a go at us and trying to muddy the waters and just said these guys are so far in front of everybody else. It's not funny.

So Aramco relationship is very strong, and we're looking at, taking that to another level, and it just takes time. There's a lot of work going on in Aramco with legal and contractual and so forth.

ADNOC project has really, really hit its traps and the results look great, and there's actually a paper coming out in a conference in June in Europe. And with those great results, where we -- in both of these projects, we've done things with the code, with the technology that no one has ever done before in the world. So everyone is pretty surprised and it's worked really well.

So Middle East is a slow burn, but it's really, really solid momentum towards a very significant business. Rio, on the other hand, was a really fast and bang, bang big projects coming through.

No, that makes sense. And just to stay on the same topic, is this something we can expect to receive an update on in the next 6 to 12 months in terms of another contract win? I assume you want to target one of the larger contracts that are outstanding in the region.

Well, we hope so. We certainly -- the pipeline is very significant in that region. So we're certainly working hard towards that end.

I appreciate that. And the final question for me was just on the services awards. It did seem that they slowed in that second quarter, about $8 million to $9 million. But I was just interested in, I guess, the pipeline of work you are seeing not in that revenue line for the services division keeps growing, which is nice to see.

The pipeline is the biggest it's ever been. I know we keep saying that quarter after quarter, but it really is. It's -- we have thought about how we could wrap it up just for our internal use because it's lumpy and it's all over the place, but it's huge, which is why we don't let it out because it's sort of very difficult to understand, but it is huge, and it is growing. It has been disappointing.

But it just -- it just happens in our business, where you have a couple of months, where your wins are a little lighter than what you would hope, the pipeline keeps growing. And suddenly, it's a down pour and you win a whole much.

And you will remember that from July wins of $18 million a couple of years ago and suddenly you had been quite, quite [ nimble ]. And so everybody is feeling good about what's happening in the industry. So we're confident.

Caleb, over to you.

Matt and Dan, just on the revenue and order book, maybe some color on the split between production and exploration revenue and whether you're still seeing that growth in the 4D seismic?

Yes. We've just won another big 4D seismic project, and we're talking to the super majors now about 4D projects. So we're solidly entering that production space with a significant amount of our revenue now. I don't know I actually know what it would be. When I say significant, I'm talking maybe 20%, not more, but it's growing. And it's -- so we're solidly in that production window, and we expect to win more and more of that work.

Yes. And that will be more sort of recurring revenues type of style compared to exploration -- the exploration work we do?

Yes, classically, the 4D projects are repeated every 12 months. Just for everyone's -- make sure everyone's in on the picture here, if you've got a reservoir like Gorgon in the North West Shelf here and you can see the fluids, then you [ shoot the ] baseline seismic before you start producing the fluids.

And then you -- every 12 months, you shoot seismic again. And you can see the fluid movement, where you've produced oil, where you haven't produced oil and you can shape how you do your drilling campaigns to maximize getting the oil and gas out of the ground with minimum cost.

The wells cost all the money, seismic is less -- much less expensive. So that's what 4D is for, and that's why 4D is very important to us to get into that space. But it's only the top companies do 4D because you've got to have the best technology and you've got to be very reliable.

Thanks, Matt. And on the EPIC contracts, so the PETRONAS CapEx and compute doesn't really arrive until this quarter. And so can we kind of interpret that as you still have some headroom in sort of your compute in the U.S. before you say [indiscernible] say, 20%, 30% revenue growth before you need to order another large chunk or --

We've actually put in more compute into the U.S. over the last quarter. And we're just enjoying that for the moment, and we'll see how we go. There are some very, very significant projects in the pipeline. And so yes, it's an interesting time where we're watching utilization very carefully.

And I think just to clarify on that point, that compute that's gone in is the compute we've talked to previously, which we purchased simultaneously with purchasing the -- that EPIC equipment.

[ Lachlan ]?

Congrats on a strong second quarter. Just one of the things was you obviously had some significant growth in the U.S. Can you just clarify, so is that growth -- is that based on work done in the region? Just because I know previously, you had, I guess, a customer relationship in the Middle East that was, I guess, based in the U.S. So like is that revenue coming for work done in the U.S.? Or is it just based on like where the customer is? And just what are you seeing specifically in the U.S.?

So that big Middle East customer -- the work from them has dwindled a little. There is still work from them, but that -- a new project from them is actually being done in the Middle East now in Abu Dhabi. So there's not a lot of revenue in the last 12 months from that client. And not -- they're very happy with the work. They just ran out of seismic data.

We processed it all. They're actually acquiring a new survey that we expect to process over the next 12 months, 18 months. So a lot of that work in the Middle East is from -- sorry, work in Houston is from the Americas.

A little bit is from Asia. But as you said, it's about where clients want the processing to be done based on where they live, where their head office is, where their technical people is, for example. But Houston is more and more Americas focused just at this point in time.

And can you also just talk us through what you're seeing in terms of like the multi-client sales? Because I know you came out with the announcement and when I scrub the wording of the Sarawak deal. So just kind of any insights you're seeing in terms of your multi-client business that you're developing?

It's going really well. I think this -- this financial year is going to be a very breakthrough time for multi-client from what we're seeing. And the Equatorial Guinea project is very exciting. And the thing I would point out about it is that it is fully underwritten. So we're not risking anything with that project. It's a very good project.

And the assets we have in Australia are still selling. So we've still got sales going through on these multi-client assets in Australia, which is quite amazing.

Jack, over to you.

Great set of numbers. Obviously, a great expansion in the EBITDA margin. How do you see that run rate going forward on a full year basis? Are we sitting in the mid-30s or potentially even higher than that?

No, I would be very happy if we finished the year with a 34% EBITDA. It could slide higher. It may well, but yes, I don't really know what to say about it, Jack at the minute.

Allan?

Just one -- sorry if I missed it before. But on CapEx, can we just frame how you think about the maintenance CapEx on our look forward and just for the full year '26, noting CapEx shift to the second half, broadly speaking, how we should frame CapEx for the second half?

Yes. So typically, maintenance CapEx for us it falls in the range of $1 million to $3 million, often falls around that $2 million mark for us. And so that's just money going to maintaining the data center, replacing little broken parts here and there. But we're pretty maintenance CapEx light. as a general rule. And so we don't see a step change in that going forward.

One of the nice things is that new equipment is more powerful and the cost per performance we're seeing is really, really good and really competitive. And so that lens the load as well on a maintenance CapEx perspective as equipment starts to age.

And I think this is noted CapEx for the EPIC project and a couple of others, and we're sort of looking sort of $14 million, $15 million, $16 million of CapEx in aggregate. Is that correct?

Yes, that's correct, Allan. Yes. [ Edward? ].

Just a quick question. You did have on the radar a few years ago to build a data center in Western Australia. You're going to build carbon-neutral data center. Is that still on the cards? Or has that been completely shelved or --

It's still in the -- looking for -- which really we've moved on from it because we didn't see the enterprise part of our HPC business accelerate like we thought it could. It's -- we're still -- we've let the option to lease that land lapse now. We're still talking to the West Australian government because they're still very keen on it.

We've been asked a lot of questions from the federal government about what's going on, and we just keep saying until you change the manner in which HPC is funded in Australia, then really the HPC industry is dead. And so that's what's ongoing there.

So we have a few questions then through the chat. So an update on DUG Nomad? It's progressing. It's going well. We're still working on the strategy and how we approach it there. And so one of the big areas of focus for us and the big opportunities that we're seeing are making the most of, as Matt talked about, the HPC expertise we have and the software.

And so we're working on a lot of opportunities, and there's a lot of exciting stuff happening, where we're looking at providing a kind of bundled solution. So we're providing the container itself, the computer that goes in it, the software that runs the computers as well as our process and imaging software on top.

And so there's a lot of exciting opportunities there, and that's what we're kind of working through at the moment.

And we had a number of -- we have a number of proposals out for that.

And then on the -- on the DUG Cool side, I was over in the U.S. at the end of last year visiting with BAC and attending a few conferences, and we're really happy with how they're going about it. It's just a long sales cycle. And the industry is pointed towards direct to chip. And so there's a bit of -- there's leg work that needs to be done there, but we're really happy with how they're going about it and the work that they're putting in. We think they're pursuing it.

So we still think there's a big opportunity there because of all the benefits that come from immersion. But there is some headwinds with the industry just being predominantly direct to chip at the moment, and we need to -- they need to put in a lot of work to kind of shift it. [indiscernible].

I wouldn't comment on that one. It's a great margin on that project, but we don't want to talk about individual margins on individual projects.

What we've talked about in the past is it's margin accretive to our existing business. And I think we've seen that come through this quarter, this quarter, this half as we get the revenue down. So I can't get -- get more specific than that, but we're seeing it as margin accretive, and that's coming through the financials.

There are no cool royalties or they're very minor. The -- it is a tough sell for them at the moment. It is a lot slower, but there are significant headwinds with the direct-to chip and the NVIDIA chips and so forth.

NVIDIA are not -- I've said this before, NVIDIA are not that keen at the moment on the chips being immersed, although we've immersed all the chips, and we point that out to them that they run fine. And so that's an ongoing discussion and one BAC are picking up on as well.

Great. Well, thanks for attending, everyone. If you have any further questions, feel free to send through to investor at DUG. And otherwise, thanks for your support, and thanks for attending.

Thanks, everybody.