Ann: Half Yearly Report and Accounts, page-2

Key Metrics:

• Revenue for the half up 10% (on pcp)
• Gross profit for the half up 38% (on pcp)
• Remains NPAT profitable
• Team expansion of 29%

"Whilst the half year is too short a timeframe upon which to place much weight, it likely represents the early emergence of the flywheel concept described in prior Quarterly Updates. Increased internal investment supports increased Gross Profitability which, in turn, supports increased future internal investment."

The main driver of growth was new proprietary features. The team seems to be focused on increased spend with existing customers, as opposed to the expansion of the customer base itself. I like that strategy given the current percentage of software spending that CXZ captures today (from dealerships) is small, albeit I'd like to see the userbase (dealerships) diversify as well.

If they can continue to grow gross profit north of 25% p.a., I'll be impressed. Ideally, we want to see the increased investment (and neutral bottom line re-investment strategy) continue to yield strong top-line growth. If not, I'd rather them consider alternative uses for the US$2.5m in net cash and investments (e.g. a special dividend) and optimise for bottom-line profitability instead.

Either way, I think we are OK.