Announcement PDF 27 October 2023 ASX Announcement The Manager Market Announcements Office Australian Securities Exchange Dear Manager 2023 Annual General Meeting – Chair’s & CEO’s Addresses In accordance with Listing Rule 3.13.3, attached are the addresses to be delivered by Ms Deanne Weir, Chair and Mr Tony Abrahams, CEO at this morning’s Annual General Meeting. Also attached are copies of the slides to be used during the presentations at the meeting. ENDS This announcement has been approved for release by the Company Secretary. Further Information Ai-Media Technologies Lisa Jones Company Secretary investorrelations@ai-media.tv NWR Communications Melanie Singh Investor Relations melanie@nwrcommunications.com.au About Ai-Media Founded in Australia in 2003, technology company AI-Media is a global leader in live and recorded captioning, transcription and translation solutions. The Company helps the world’s leading broadcasters, enterprises and government agencies ensure high accuracy, secure and cost-effective captioning via its AI-powered LEXI automatic captioning solution. LEXI captions are delivered to millions of screens worldwide via AIMedia’s range of captioning encoders and its iCap Cloud Network – the world’s largest, most secure caption delivery network. Globally, AI-Media delivers over 9 million minutes of live and recorded media monthly. AI-Media (ASX: AIM) commenced trading on the ASX on 15 September 2020. Access Innovation Media Pty Limited | ABN 49 105 924 490 | ACN 105 924 490 Level 1, 103 Miller Street, North Sydney NSW 2060 | PO Box 763, North Sydney NSW 2059 P +61 2 8870 7700 | F +61 2 8870 7788 | E info@ai-media.tv | W ai-media.tv Legal Notices This announcement may include forward-looking statements that relate to anticipated future events, financial performance, plans, strategies or business developments. Forward-looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “outlook”, “forecast” and ”guidance”, or other similar words. They may include, without limitation, statements regarding plans, strategies and objectives and anticipated business developments. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forwardlooking statements are based on the Company’s good-faith assumptions as to the financial, market, regulatory and other considerations that exist and affect the Company’s business and operations in the future and there can be no assurance that any of the assumptions will prove to be correct. There may be other factors that could cause actual results or events not to be as anticipated, and many events are beyond the reasonable control of the Company. AI-Media’s actual results, performance or achievements may be materially different from those which may be expressed or implied by such statements, and the differences may be adverse. Accordingly, you should not place undue reliance on these forward-looking statements. Any forwardlooking statements in this announcement are only made as at the date of this announcement and, to the maximum extent permitted by law, AI-Media disclaims any obligation or undertaking to update or revise any forward-looking statements or to advise of any change in assumptions on which any such statement is based. Ai-Media Technologies Limited 2023 Annual General Meeting Chair’s Address by Deanne Weir Welcome to all our Shareholders and thank you for joining our 2023 Annual General Meeting. Ai-Media experienced another significant year of transformation in financial year 2023. At our AGM in 2022 I highlighted that following strategic M&A activity, we have emerged as a stronger company, poised for sustained earnings growth. FY23 affirmed this statement, as our transformation into higher margin SaaS products, the ongoing refinement of product solutions, and further technology enhancements all underpinned our financial performance. FY23 delivered revenue of $61.8 million and Gross Profit of $36.9 million, a 12% increase on FY22, with over 54% of Gross Profit now coming from recurring revenues. Bottom-line growth was a primary driver in our strategy and importantly we delivered $3.3 million of EBITDA, a 201% increase on FY22, further highlighting increased operating leverage in the business. As we reflect upon the year, the effective execution of our higher-margin transition strategy emphasises that Ai-Media is well-positioned to drive increased growth in an expanding global captioning, translation and transcription market. We have established a market leading ecosystem with a high-quality and scalable suite of solutions and technology that is designed to meet the growing and varying quality, security and accuracy needs of our customers. Development of our technology-driven solutions allows us to be at the forefront of translation and captioning; building upon our reputation for delivering extremely accurate, low-cost captioning, transctiption and translation services. There is a growing demand for language services across entertainment, government, and corporates and our engagement with both new and existing customers across the globe was rewarded with new premium contract signings in FY23 from customers including Google and SBS in addition to renewed agreements with Foxtel and Al Jazeera. Pleasingly, we have maintained our momentum into the first-quarter of this year with the onboarding of new customers and renewals by key existing customers. Tony will provide greater details on these wins during his presentation. We believe our ability to deliver real customer value by leveraging improving products and solutions means we are well-placed to take advantage of mandated spending across captioning and translation services, delivering further growth and profitability. Towards the end of FY23 we broadened our offerings through Lexi 3.0 and the Lexi Tool-Kit. This allows us to attract and retain customers by better meeting their needs through modifying their service mix, including by the substitution of human delivered services for technology led captions. We see a real opportunity to up-sell Lexi products to existing customers. Through FY24 we will keep our focus on the transition to a greater proportion of higher margin, SaaS products in our service mix. We will also be very focused on identifying potential growth opportunities. At the end of September 2023, having paid out the final M&A related vendor debts, AI-Media had a net cash position of $10.4 million. This gives us real optionality to explore opportunities in new territories and adjacent markets with emerging demand for our services. With some very strong foundations, and our technology investments clearly paying off, we are now very well positioned to strengthen our sales pipeline and deliver the profitable growth that we have all anticipated. I would like to provide my sincere thanks to all of you, our shareholders for your continued support. The Board and Management are committed to driving growth and results in the business and this would not be possible without your endorsement. We are all working very hard to reward your patience with an increase in shareholder value in the months ahead. I will now pass to Tony to commence his address. Ai-Media Technologies Limited 2023 Annual General Meeting CEO’s Address by Tony Abrahams Thank you, Deanne. A warm welcome to everyone and thank you for joining our 2023 AGM. For 20 years AI-Media has been developing into a global market leader, delivering highquality live and recorded captioning, transcription, and translation solutions. In FY23, we kept a tight focus on transformation, and as a result we saw continued growth in our higher margin subscription as-a-service (SaaS) revenues. As Deanne touched on, we continued our intention of delivering bottom-line growth. Since integrating our 2021 acquisition we have made strategic investments in our technology products, while transitioning the business away from legacy services towards higher margin SaaS revenues. It is this shift which successfully underpinned our growth in FY23. The team delivered a 33% increase in technology revenues in the last financial year, with over half of our gross profit now coming from technology. As the business transitions further towards SaaS revenues, we expect further improvements in operating leverage. FY23 delivered a 201% increase in EBITDA to $3.3 million and an EBITDA margin of 5% reflecting the scalability of the business model. Our best-in-class technology, provides the only end-to-end captioning solution in market, from encrypting source data to encoding, captioning, transcription and translation. It is the intellectual property (IP) embedded into our end-to-end ecosystem that drives our leading position in the market. This ecosystem starts with a video stream which connects to one of our family of technology encoders. The next area of our IP is the ability to network all those devices to an iCap cloud service, where we host various AI engines to undertake the translation in real time. The third pillar of IP relates to the data interchange of LEXI. Comprehending the context in which it is transcribing, ensuring the application of subject appropriate dictionaries, delivering captioning accuracy, driven by secure access to customer data systems behind firewalls. We remain focused on extending our offerings and strengthening our market position. Our slated technology updates will further strengthen our competitive moat as we focus on each of the three areas of our unique IP - being encoders, iCap and Lexi. One of the growth priorities we flagged at our FY23 results in August was growing our iCap network. Significant investment has been made in the iCap network in recent years and continued investment in security, reliability and uptime will drive global iCap growth. Over the last few years we have witnessed significant growth in the network with over 80% of US broadcasters (and the vast majority of our captioning industry competitors) utlising our iCap network to deliver captioning on air. A main priority for this year is to introduce per hour charges on the network, while transitioning legacy users to new monetised agreements. A long-tail of over forty captioning organisations are committed to utilising iCap as their preferred method of captioning delivery. The transition will ensure that for the first time we are monetising one of our core IP products. We have already secured agreement from most competitors covering a majority of third-party content with negotiations continuing with the remainder of the industry. Our AI-powered LEXI Toolkit was successfully launched in Q1 FY24. The LEXI Toolkit offers a comprehensive collection of automated captioning solutions that mark a new era in the industry, combining cutting-edge AI technologies to meet the needs of content creators worldwide. The Toolkit features solutions to empower data optimisation, enhance security, reduce costs, streamline workflows and expand global reach. Continued enhancement of our automatic captioning solutions delivers significant commercialisation benefits and accelerates growth in our technology revenues. Early feedback from customers has been positive with customers valuing the ability to mix and match solutions to suit their specific requirements and providing the opportunity for the Company to cross-sell to its existing customer base. The introduction of LEXI 3.0 (launched in April 2023) combined with LEXI Toolkit further enhances AI-Media’s value proposition resulting in a larger addressable market. FY24 has started positively with Q1 revenues up 10% on the pcp (up 7% in constant currency terms). Our ability to attract new customers to our technology products has underpinned this total revenue growth to $15.7 million, notwithstanding a continuing single digit decline in our legacy Services business. Key customer wins including major US sports organisations the National Basketball Association (NBA) and the National Football League (NFL). Technology platforms, Netflix, Apple and Amazon continued to place their trust in AI-Media with increased volumes of encoders and LEXI captioning being purchased at the start of FY24. In the Middle East, Al Jazeera became the first regional broadcaster to convert to automatic captioning with LEXI. AI-Media’s technology sales pipeline continues to strengthen. The Company’s debt-free cash position of $10.4 million (as at 30 September 2023) provides flexibility for management to continue to execute on growth opportunities in new territories and adjacent markets with emerging demand for accurate captioning, transcription and translation solutions. All final vendor payments have now been completed. The success we have achieved in our transformation to date would not have been possible without the efforts of our customers, dedicated employees and the leadership of the Board and management team. Thank you to our shareholders for your patience and support. I look forward to updating you of our first-half results in February. I will now hand back to Deanne to continue with the formalities of the meeting. 27 October 2023 ASX Announcement The Manager Market Announcements Office Australian Securities Exchange Dear Manager 2023 Annual General Meeting – Chair’s & CEO’s Addresses In accordance with Listing Rule 3.13.3, attached are the addresses to be delivered by Ms Deanne Weir, Chair and Mr Tony Abrahams, CEO at this morning’s Annual General Meeting. Also attached are copies of the slides to be used during the presentations at the meeting. ENDS This announcement has been approved for release by the Company Secretary. Further Information Ai-Media Technologies Lisa Jones Company Secretary investorrelations@ai-media.tv NWR Communications Melanie Singh Investor Relations melanie@nwrcommunications.com.au About Ai-Media Founded in Australia in 2003, technology company AI-Media is a global leader in live and recorded captioning, transcription and translation solutions. The Company helps the world’s leading broadcasters, enterprises and government agencies ensure high accuracy, secure and cost-effective captioning via its AI-powered LEXI automatic captioning solution. LEXI captions are delivered to millions of screens worldwide via AIMedia’s range of captioning encoders and its iCap Cloud Network – the world’s largest, most secure caption delivery network. Globally, AI-Media delivers over 9 million minutes of live and recorded media monthly. AI-Media (ASX: AIM) commenced trading on the ASX on 15 September 2020. Access Innovation Media Pty Limited | ABN 49 105 924 490 | ACN 105 924 490 Level 1, 103 Miller Street, North Sydney NSW 2060 | PO Box 763, North Sydney NSW 2059 P +61 2 8870 7700 | F +61 2 8870 7788 | E info@ai-media.tv | W ai-media.tv Legal Notices This announcement may include forward-looking statements that relate to anticipated future events, financial performance, plans, strategies or business developments. Forward-looking statements can generally be identified by the use of words such as “may”, “will”, “expect”, “intend”, “plan”, “estimate”, “anticipate”, “outlook”, “forecast” and ”guidance”, or other similar words. They may include, without limitation, statements regarding plans, strategies and objectives and anticipated business developments. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forwardlooking statements are based on the Company’s good-faith assumptions as to the financial, market, regulatory and other considerations that exist and affect the Company’s business and operations in the future and there can be no assurance that any of the assumptions will prove to be correct. There may be other factors that could cause actual results or events not to be as anticipated, and many events are beyond the reasonable control of the Company. AI-Media’s actual results, performance or achievements may be materially different from those which may be expressed or implied by such statements, and the differences may be adverse. Accordingly, you should not place undue reliance on these forward-looking statements. Any forwardlooking statements in this announcement are only made as at the date of this announcement and, to the maximum extent permitted by law, AI-Media disclaims any obligation or undertaking to update or revise any forward-looking statements or to advise of any change in assumptions on which any such statement is based. Ai-Media Technologies Limited 2023 Annual General Meeting Chair’s Address by Deanne Weir Welcome to all our Shareholders and thank you for joining our 2023 Annual General Meeting. Ai-Media experienced another significant year of transformation in financial year 2023. At our AGM in 2022 I highlighted that following strategic M&A activity, we have emerged as a stronger company, poised for sustained earnings growth. FY23 affirmed this statement, as our transformation into higher margin SaaS products, the ongoing refinement of product solutions, and further technology enhancements all underpinned our financial performance. FY23 delivered revenue of $61.8 million and Gross Profit of $36.9 million, a 12% increase on FY22, with over 54% of Gross Profit now coming from recurring revenues. Bottom-line growth was a primary driver in our strategy and importantly we delivered $3.3 million of EBITDA, a 201% increase on FY22, further highlighting increased operating leverage in the business. As we reflect upon the year, the effective execution of our higher-margin transition strategy emphasises that Ai-Media is well-positioned to drive increased growth in an expanding global captioning, translation and transcription market. We have established a market leading ecosystem with a high-quality and scalable suite of solutions and technology that is designed to meet the growing and varying quality, security and accuracy needs of our customers. Development of our technology-driven solutions allows us to be at the forefront of translation and captioning; building upon our reputation for delivering extremely accurate, low-cost captioning, transctiption and translation services. There is a growing demand for language services across entertainment, government, and corporates and our engagement with both new and existing customers across the globe was rewarded with new premium contract signings in FY23 from customers including Google and SBS in addition to renewed agreements with Foxtel and Al Jazeera. Pleasingly, we have maintained our momentum into the first-quarter of this year with the onboarding of new customers and renewals by key existing customers. Tony will provide greater details on these wins during his presentation. We believe our ability to deliver real customer value by leveraging improving products and solutions means we are well-placed to take advantage of mandated spending across captioning and translation services, delivering further growth and profitability. Towards the end of FY23 we broadened our offerings through Lexi 3.0 and the Lexi Tool-Kit. This allows us to attract and retain customers by better meeting their needs through modifying their service mix, including by the substitution of human delivered services for technology led captions. We see a real opportunity to up-sell Lexi products to existing customers. Through FY24 we will keep our focus on the transition to a greater proportion of higher margin, SaaS products in our service mix. We will also be very focused on identifying potential growth opportunities. At the end of September 2023, having paid out the final M&A related vendor debts, AI-Media had a net cash position of $10.4 million. This gives us real optionality to explore opportunities in new territories and adjacent markets with emerging demand for our services. With some very strong foundations, and our technology investments clearly paying off, we are now very well positioned to strengthen our sales pipeline and deliver the profitable growth that we have all anticipated. I would like to provide my sincere thanks to all of you, our shareholders for your continued support. The Board and Management are committed to driving growth and results in the business and this would not be possible without your endorsement. We are all working very hard to reward your patience with an increase in shareholder value in the months ahead. I will now pass to Tony to commence his address. Ai-Media Technologies Limited 2023 Annual General Meeting CEO’s Address by Tony Abrahams Thank you, Deanne. A warm welcome to everyone and thank you for joining our 2023 AGM. For 20 years AI-Media has been developing into a global market leader, delivering highquality live and recorded captioning, transcription, and translation solutions. In FY23, we kept a tight focus on transformation, and as a result we saw continued growth in our higher margin subscription as-a-service (SaaS) revenues. As Deanne touched on, we continued our intention of delivering bottom-line growth. Since integrating our 2021 acquisition we have made strategic investments in our technology products, while transitioning the business away from legacy services towards higher margin SaaS revenues. It is this shift which successfully underpinned our growth in FY23. The team delivered a 33% increase in technology revenues in the last financial year, with over half of our gross profit now coming from technology. As the business transitions further towards SaaS revenues, we expect further improvements in operating leverage. FY23 delivered a 201% increase in EBITDA to $3.3 million and an EBITDA margin of 5% reflecting the scalability of the business model. Our best-in-class technology, provides the only end-to-end captioning solution in market, from encrypting source data to encoding, captioning, transcription and translation. It is the intellectual property (IP) embedded into our end-to-end ecosystem that drives our leading position in the market. This ecosystem starts with a video stream which connects to one of our family of technology encoders. The next area of our IP is the ability to network all those devices to an iCap cloud service, where we host various AI engines to undertake the translation in real time. The third pillar of IP relates to the data interchange of LEXI. Comprehending the context in which it is transcribing, ensuring the application of subject appropriate dictionaries, delivering captioning accuracy, driven by secure access to customer data systems behind firewalls. We remain focused on extending our offerings and strengthening our market position. Our slated technology updates will further strengthen our competitive moat as we focus on each of the three areas of our unique IP - being encoders, iCap and Lexi. One of the growth priorities we flagged at our FY23 results in August was growing our iCap network. Significant investment has been made in the iCap network in recent years and continued investment in security, reliability and uptime will drive global iCap growth. Over the last few years we have witnessed significant growth in the network with over 80% of US broadcasters (and the vast majority of our captioning industry competitors) utlising our iCap network to deliver captioning on air. A main priority for this year is to introduce per hour charges on the network, while transitioning legacy users to new monetised agreements. A long-tail of over forty captioning organisations are committed to utilising iCap as their preferred method of captioning delivery. The transition will ensure that for the first time we are monetising one of our core IP products. We have already secured agreement from most competitors covering a majority of third-party content with negotiations continuing with the remainder of the industry. Our AI-powered LEXI Toolkit was successfully launched in Q1 FY24. The LEXI Toolkit offers a comprehensive collection of automated captioning solutions that mark a new era in the industry, combining cutting-edge AI technologies to meet the needs of content creators worldwide. The Toolkit features solutions to empower data optimisation, enhance security, reduce costs, streamline workflows and expand global reach. Continued enhancement of our automatic captioning solutions delivers significant commercialisation benefits and accelerates growth in our technology revenues. Early feedback from customers has been positive with customers valuing the ability to mix and match solutions to suit their specific requirements and providing the opportunity for the Company to cross-sell to its existing customer base. The introduction of LEXI 3.0 (launched in April 2023) combined with LEXI Toolkit further enhances AI-Media’s value proposition resulting in a larger addressable market. FY24 has started positively with Q1 revenues up 10% on the pcp (up 7% in constant currency terms). Our ability to attract new customers to our technology products has underpinned this total revenue growth to $15.7 million, notwithstanding a continuing single digit decline in our legacy Services business. Key customer wins including major US sports organisations the National Basketball Association (NBA) and the National Football League (NFL). Technology platforms, Netflix, Apple and Amazon continued to place their trust in AI-Media with increased volumes of encoders and LEXI captioning being purchased at the start of FY24. In the Middle East, Al Jazeera became the first regional broadcaster to convert to automatic captioning with LEXI. AI-Media’s technology sales pipeline continues to strengthen. The Company’s debt-free cash position of $10.4 million (as at 30 September 2023) provides flexibility for management to continue to execute on growth opportunities in new territories and adjacent markets with emerging demand for accurate captioning, transcription and translation solutions. All final vendor payments have now been completed. The success we have achieved in our transformation to date would not have been possible without the efforts of our customers, dedicated employees and the leadership of the Board and management team. Thank you to our shareholders for your patience and support. I look forward to updating you of our first-half results in February. I will now hand back to Deanne to continue with the formalities of the meeting. 2023 Annual General Meeting 27 October 2023 AI-Media Technologies Limited (ASX: AIM) Board Highly skilled and experienced senior leadership team with decades of experience DEANNE WEIR TONY ABRAHAMS ALISON LOAT JOHN MARTIN CHERYL HAYMAN Non-Executive Chair Co-Founder and CEO Non-Executive Director Non-Executive Director Non-Executive Director • Deanne has served as a director of AI-Media since 2010 and became Chair in August 2013. • Tony co-founded AIMedia in 2003. He served as a Director of Northcott Disability Services. • Alison joined the Board in 2018. • John joined the board in 2010 and served as the company’s first Chairman until 2013. • Cheryl joined the board in March 2022 • Previously spent 10 years at ASX listed company Austar United Communications as a senior executive. • Worked to establish the Oxford Internet Institute in 2001, while attending the University of Oxford as a Rhodes Scholar. • Managing Director, Sustainable Investing and Innovation at OPTrust, a Canadian public pension plan, with $23 billion CAD in globally diversified investments. • Served as CEO and director of ASX-listed Babcock & Brown Communities, Primelife and Regeneus. • Held several nonexecutive director roles of ASX-listed companies over the last 15 years. Previously held CMO roles at George Weston Foods, Yum Restaurants International & Unilever. 2 Management Strong and qualified management team to drive product development and commercialisation strategy TONY ABRAHAMS DONNA REID JAMES WARD BILL MCLAUGHLIN JOHN BIRD Co-Founder and CEO Chief Operating Officer Chief Sales Officer Chief Product Officer Chief Financial Officer • Tony co-founded AIMedia in 2003. He served as a Director of Northcott Disability Services. • Donna joined AI-Media in March 2021 after five years as the Director of Content Service Operations for Foxtel Media. • James joined AI-Media in 2013, leading the company’s expansion across the APAC region • Bill was CTO at EEG and now Chief Product Officer globally at AIMedia. • John recently held the role of CFO and COO of Regeneus, an ASXlisted biotechnology company. • Worked to establish the Oxford Internet Institute in 2001, while attending the University of Oxford as a Rhodes Scholar. • Has more than 20 years’ experience in Human Resources and Operations. • • Has led the Company’s successful entry into EMEA, achieving growth in access services and multilanguage localisation Since 2007, Bill has been with EEG architecting the company’s leading software solutions including iCap, Falcon, LEXI, and Alta. • Previously provided financial and strategic management services to ASX-listed companies. 3 Chair Address 4 FY23 Key highlights Total revenue1 Tech revenue2 LEXI revenue Monthly LEXI minutes3 $61.8m $24.0m $7.8m >3.4m up $2.0m (FY22: $59.8m) up 33% (FY22: $18.0m) up 45% (FY22: $5.4m) up 44% (FY22: 2.4m) Total GPM Tech gross profit Total EBITDA Cash balance4 60% $20.2m $3.3m $17.0m up from 55% (FY23 GP: $36.9m) up 30% (FY22: $15.5m) up >200% (FY22: $1.1m) up $1.8m (FY23 Op. CF: $3.5m) 1. 2. 3.