Blackpearl Group Q3 FY25 Results Announcement

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BLACKPEARL GROUP | Investor Announcement

30 January 2025

Blackpearl Group Q3 FY25 Results Announcement

Introduction
Blackpearl Group (BPG) today presents its results for the third quarter ending 31
December 2024.

Key Highlights
• Annual Recurring Revenue (ARR):

Reached $11.1 million as of 31 December
2024, marking a 100% year-on-year increase and a 7% increase from Q2
FY25.
• Subscription Revenue: Achieved $2.1 million, reflecting a 79% year-on-year
increase and 24% growth quarter-on-quarter.
• Gross Profit Margin: Achieved 72%, maintaining stability from Q2 FY25 and
slightly down from Q3 FY24 (73%).
• ARR Per Employee: Recorded at $271k as of 31 December 2024, up 47% year-
on-year, reflecting efficiency despite a slight quarter-on-quarter decline due
to planned team expansion.

CEO Commentary

In his foreword, CEO Nick Lissette said, “Winners and losers in this new world will be
defined by those that can continually innovate at hyper-speed. That is what we did
last quarter at Blackpearl.”

He described today’s market as “the fastest evolving in human history” and
reinforced the company’s commitment to aggressive innovation. Lissette also
announced that Blackpearl Group is currently market testing a new product, set to
beta-launch in February.

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BLACKPEARL GROUP | Investor Announcement


“This advanced AI-powered conversational platform is designed to create tailored,
company-specific sales and revenue strategies. Think of it as ChatGPT, but
purpose-built for driving business growth and revenue.

The product will be fully
self-service and aggressively priced,” explained Lissette.


Evolving Pearl Diver

This innovation was achieved alongside a radical evolution of Pearl Diver, which saw
the team introduce new data sets and transition away from lower-tier offerings
toward a self-service model designed for a more sophisticated Ideal Customer
Profile (ICP). This shift is expected to reduce churn in the long run and increase
average revenue per customer.

Jean Arlove, Chief Financial Officer, commented:

“Our enhanced product functionality now provides automated time to value, reducing
operational strain and creating a foundation for sustainable growth.”

Lissette emphasised that these two major initiatives represent, “The fastest and most
efficient path to our goal of $20 million ARR and, more importantly, to the larger
milestones beyond.”


Financial Update

Blackpearl Group’s financial performance in Q3 reflects the company’s strategic
pivot towards higher-value customers and increased operational efficiency.

While transitioning non-ICP customers impacted short-term churn, the company
successfully grew ARR by 100% YoY to $11.1 million, with subscription revenue rising
79% YoY to $2.1 million.

Jean Arlove added:

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BLACKPEARL GROUP | Investor Announcement


“These priorities will support long-term growth and reinforce the company’s position
as a leader in the market, ultimately delivering greater value for shareholders.”


Future Outlook

Blackpearl Group remains focused on innovation, efficiency, and scaling high-value
customer segments. Key initiatives for Q4 and beyond include:

• Beta-launching our new AI-driven sales intelligence platform in February
2025, a fully self-service product designed to optimise revenue generation for
B2B businesses in the US.
• Further refining Pearl Diver’s ICP focus, ensuring long-term revenue stability
by prioritising customers with higher engagement and retention rates.
• Continued optimisation of operational efficiencies, balancing ARR growth
with disciplined cost management to sustain profitability.

Blackpearl Group remains on track to achieve its $20 million ARR target within 10–15
months while reinforcing its position as a leader in AI-powered sales and marketing
solutions.

Contact
Released for and on behalf of BPG,
Karen Cargill
Chief Governance Officer

For further information, please contact:
Karen.cargill@blackpearl.com | +64 21 135 5183


ENDS

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BLACKPEARL GROUP | Investor Announcement


About Blackpearl Group
Blackpearl Group (BPG) is a market leading data technology company that pioneers
AI driven, sales and marketing solutions for the US market.

Specifically engineered for small-medium sized businesses (SMEs), BPG consistently
delivers exceptional value to its customers. Our mantra is simple: ‘Better Growth
Together’. When our customers win, we win.

Founded in 2012, BPG is based in Wellington, New Zealand, and Phoenix, Arizona.

Blackpearl.com

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Quarterly
Investor Update
Black Pearl Group Limited - Quarter Three Report
Quarter Three report for the three-month period to 31 December 2024

Contents:
Contents:
04
Foreword from the CEO
06
Highlights
08
Commentary from the CFO
12
Future Outlook
Blackpearl Group - Quarter Three Report
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Foreword from the CEO
Blackpearl Group - Quarter Three Report
Dear Shareholders,
We are in the fastest evolving market in human history. Growth of AI is exponential,
a word that is commonly used and yet almost impossible for the human mind to
fathom. The only thing we know for sure is mass disruption is guaranteed – just
look at Nvidia, Microsoft, and Meta getting shaken by DeepSeek – an app built for
only US$6m.
The winners and losers in this new world will be defined by those that can
continually innovate at hyper-speed.
That is what we did last quarter at Blackpearl: we aggressively evolved. Some
might say we bit off more than we could chew. I hate that saying. My mantra is
‘bite it all off and chew like [insert you know what]. It might not appear elegant, but
you get things done, fast.
Over the last quarter, we took on two big initiatives:
Evolving Pearl Diver
We started a major evolution of Pearl Diver, introducing new data sets and
refining our ideal customer profile (ICP). This is to ultimately reduce churn, increase
average revenue per customer, and create additional technical resilience
(removing over-reliance on singular data sets).
Pearl Diver’s growth over the last 12 months has been undeniable, but many
shareholders had challenged us to reduce its churn. To do this, we identified the
lowest-churning segment of customers on the service and decisively recalibrated
all aspects of Pearl Diver – product, marketing, sales, and support – to serve this
customer segment. These customers are still small to medium-sized businesses
in the USA but have existing Meta and/or Google paid advertising spend. Their
utilisation of Pearl Diver is significantly higher, with some achieving a 25–30%
reduction in paid ad spend through using Pearl Diver. For Blackpearl Group, these
clients are of higher value, with the lowest price tier generating over $18,000 in ARR..
Conversely, lower-value customers have consumed a disproportionate amount
of support resources and incurred higher supply costs (see Jean’s comments
that follow). To scale efficiently, we need to ensure time and resources are not
allocated to this segment. As such, we are transitioning customers to the higher-
value features of Pearl Diver, now supported by our new data supplier, which
reduces supply costs by replacing the previous provider. Customers who choose
not to migrate are receiving reduced technical and support service levels,
contributing to the short-term increase in churn this quarter.
We chose to implement these changes aggressively in Q3, a period traditionally
challenging for sales in the US due to Thanksgiving and Christmas. These holidays
not only disrupt business activity but also drive up advertising costs as we
compete with heightened consumer product spending.
Market Testing New Product
As we discussed in the Q2 FY25 report, Blackpearl Group is in the final stages of
developing a new product, which we will beta-launch in February. This advanced
AI-powered conversational platform is designed to create tailored, company-
specific sales and revenue strategies. It specialises in prospect identification,
outreach optimisation, and delivering actionable market intelligence for B2B
businesses targeting the US market. Think of it as ChatGPT, but purpose-built for
driving business growth and revenue. The product will be fully self-service and
aggressively priced.
This new product operates on new and proprietary data sets, which further
increases our technical resilience and deepens our competitive moat.
As you’ll understand, we’re keeping details under wraps to maintain a competitive
edge. Additionally, since it’s not yet launched, we’re managing expectations and
avoiding unnecessary hype.
That said, let me call a spade a spade: we took on too much at once to achieve a
seamless ARR increase and customer migration. This resulted in a moderate ARR
lift and a short-term spike in churn. And guess what? I’d do it all again exactly the
same way. This is the fastest and most efficient path to our goal of $20 million ARR
within 10–15 months – and, more importantly, to the larger milestones beyond.
Ad Astra.
Kind regards,
Nick Lissette
CEO, Blackpearl Group
5

1 October 2024
Highlights
100% increase YoY
47% increase YoY
As of 31 December 2024.
Churn has increased 5.7ppt YoY and
increased 5.4ppt from the previous quarter.
As of 31 December 2024.
A 7ppt increase YoY and a 8ppt decrease
on previous quarter Q2 FY25.
Revenue Churn
9.4%
Annual Recurring Revenue
Top 10 Customers % of Revenue
$11.1m
Was 73% in Q3 FY24 and 73% in the previous
quarter Q2 FY25.
Gross Profit Margin
72% 18%
As of 31 December 2024.
Down 4% from the previous quarter Q2 FY25.
Annual Recurring Revenue Per Employee
$271k
31 December 2024
Note:
• Comparative figures relate to Q3 FY24 unless otherwise stated
• Figures are in NZD$ unless otherwise stated
• ppt stands for percentage points
As of 31 December 2024.
Up 7% from the previous quarter Q2 FY25.
79% increase YoY
Subscription Revenue
$2.1m
For Q3 FY25.
Up 24% from the previous quarter Q2 FY25.
Blackpearl Group - Quarter Three Report
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7

When I joined Blackpearl Group, the company
had access to capital and a clear commitment
to delivering value for shareholders. My goal
is to prepare the business for sustainable
growth and to support our CEO, Nick, in driving
the organisation towards its next milestone of
$20 million in Annual Recurring Revenue (ARR).
Achieving this milestone requires operational
readiness and disciplined execution.
With only 41 people in the company, including
the recent necessary hires, we have agreed to
scale using the resources available to us. This
includes making critical decisions to position
ourselves for sustainable growth.
The lowest-tier offering of our Pearl Diver
product previously strained our operations
due to manual onboarding and labour-
intensive enablement, which targeted the
lowest end of the SMB market in the US.
Transitioning away from these customers has
been essential to align with our goals and
deliver increased shareholder value.
This strategic focus is already delivering
measurable outcomes. Blackpearl Group’s
Q3 FY25 results demonstrate the strength of
our realigned approach and the resilience of
our business model. Even within a challenging
quarter, while addressing non-ICP customers,
ARR has increased by 100% year-on-year to
$11.1 million, with subscription revenue rising
79% year-on-year to $2.1 million. These figures
highlight robust market demand and the
effectiveness of our pricing strategies in
capturing value.
As part of our strategy to focus on higher-
value customers, we have seen significant
growth in Average Order Value (AOV), which
increased 91% year-on-year. This showcases
the effectiveness of our efforts to drive
greater value from our customer base while
maintaining a strong ARR per employee of
$271,000, well above industry benchmarks.
The strategic refinement of our ICP has
resulted in an increase in churn to 9.4% for
this time period. Moving away from lower-
tier offerings towards a self-service model
designed for a more sophisticated ICP within
the US SMB market aligns with our long-term
vision. Enhanced product functionality now
provides automated time to value, reducing
operational strain and creating a foundation
for sustainable growth.
Looking ahead, Blackpearl Group remains
focused on achieving our goal of $20 million
ARR while enhancing operational efficiency.
These priorities will support long-term growth
and reinforce the company’s position as a
leader in the market, ultimately delivering
greater value for shareholders.
Commentary
from the CFO
Jean Arlove
Chief Financial Officer
Delivering on our strategy
Blackpearl Group - Quarter Three Report
9

Total ARR at Quarter End
$12 m
$10 m
$8 m
$6 m
$4 m
$2 m
$0 m
Q3 FY23Q4 FY23Q1 FY24
Quarter, Financial Year
Q2 FY24Q3 FY24Q4 FY24Q1 FY25Q2 FY25
Q2 FY25
Total ARR (NZD)
$300k
$250 k
$200 k
$150 k
$100 k
$50 k
$0 k
Q3 FY23Q4 FY23
Quarter, Financial Year
Q1 FY24Q2 FY24Q3 FY24Q4 FY24Q1 FY25
ARR per employee at Quarter End
Total ARR (NZD)
Delivering on our strategy
Key Commentary
Achieving growth even during our most challenging
quarter, ARR doubled year-over-year to $11.1m,
demonstrating consistent customer acquisition.
This shows strong team execution and the growing
appeal of our AI-driven solutions in the USA SME
market as we continue to refine and evolve our ICP.
$11.1m
Annual Recurring Revenue (ARR)
Gross profit margin held steady at 72%, demonstrating
the scalability of our platform and its ability to deliver
strong results with minimal cost increases. As we
continue to grow, maintaining operational efficiency
remains a key focus to support growth and future
investments.
72%
Gross Profit Margin
Top 10 customers contributed 18% of total revenue,
an increase reflecting deeper engagements and
opportunities with key accounts. This growth aligns
with our strategy to target higher-value customers,
better suited to our product offering, and drive longer
customer lifetime value.
18%
Top 10 Customers: % of Revenue
Revenue churn rose to 9.4% for this period, reflecting
a strategic decision to phase out non-ideal customer
accounts. This deliberate optimisation aligns with our
focus on profitability and long-term growth, ensuring
resources are directed toward high-value customers
who align with our tighter ICP.
9.4%
Revenue Churn
ARR per employee decreased slightly to $271k due to
planned team expansion. Despite this, it remains well
above the industry median*, reflecting the efficiency
and scalability of Blackpearl Group’s operations.
This highlights our ability to grow while maintaining
strong performance relative to industry standards,
supporting our long-term goals.
Source: High Alpha and OpenView, “2024 SaaS Benchmarks Report”
$271k
Annual Recurring Revenue Per Employee
Subscription revenue increased 79% year-over-
year, reaching $2.1m for this quarter. The initiatives
implemented to address the lag between subscription
revenue recognition and ARR growth have started to
show results, demonstrating improved alignment and
efficiency in revenue realisation.
$2.1m
Subscription Revenue
Q3 FY25
Q3 FY25
Blackpearl Group - Quarter Three Report
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Future
Outlook
The exponential growth of AI technology demands relentless speed and
innovation. To thrive, businesses must embrace disruption: disrupt the industry,
disrupt themselves, and move swiftly to stay ahead.
As the adage goes, “If you’re not breaking things, you’re not going fast
enough.” This mindset drove us to make bold changes last quarter –
strengthening our technical resilience, fortifying our competitive advantage,
and optimising long-term efficiency.
We are particularly excited about the new service we will beta-launch in
February. This platform enables Blackpearl Group to enter the US small-
to-medium business market from a different vector –individual users. With
potential global applications, its self-service and zero-touch design opens
entirely new markets and opportunities.
Alongside this, our strategic focus on high-value customer segments and
optimising Pearl Diver’s features continues to deliver results. By prioritising
these segments, we are driving profitability while reducing supply costs.
The future of AI is transformative and limitless. By staying agile, taking
calculated risks, and fostering innovation, we are well-positioned to lead
in this era of exponential growth and deliver sustained success for all
stakeholders.
With a clear path forward, we remain committed to achieving $20 million
ARR within the next 10-15 months while building a platform for even greater
milestones beyond.
Delivering on our strategy
Driving Toward
$20 Million ARR
and Beyond
As CEO Nick Lissette states, “Our
focus is now on reaching $20 million
ARR while building a platform to
scale to $100 million and beyond.
This is the fastest, most efficient
path to long-term success.
With a doubling of ARR year-over-
year and subscription revenue
growth of 79%, Blackpearl Group
is well on track to achieve its goals,
ensuring long-term shareholder
value while solidifying its position
as a leader in AI-driven sales and
marketing solutions.
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Blackpearl Group - Quarter Three Report

About Blackpearl Group
Blackpearl Group is a market-leading data
technology company that pioneers AI-driven,
sales and marketing solutions for the US market.
Specifically engineered for small-medium-sized
businesses (SMEs), Blackpearl Group consistently
delivers exceptional value to its customers. Our
mantra is simple: ‘Creating Motivating Opportunities.’
Blackpearl creates the opportunities that motivate
action. We create high-impact products that pivot
at speed to serve what businesses really need, kick-
starting action – turning data into dollars.
Founded in 2012, Blackpearl Group is based in
Wellington, New Zealand, and Phoenix, Arizona.
blackpearl.com