MARKET RELEASE
17 October 2022
Annual Report
Sydney, Australia – Global software company Nuix (‘the Company’, ASX: NXL) attaches the 2022
Annual Report.
This document has been authorised for release by the Board of Nuix.
Investor Contact
Brett Dimon
Head of Investor Relations
+61 (0)410 671 357
brett.dimon@nuix.com
About Nuix
Media Contact
Helen McCombie
Citadel-MAGNUS
+61 (0)411 756 248
hmccombie@citadelmagnus.com
Nuix Limited is a leading provider of investigative analytics and intelligence software, with the vision
of “finding truth in a digital world”. Nuix helps customers to process, normalise, index, enrich and
analyse data from a multitude of different sources, solving many of their complex data challenges. The
Nuix platform supports a range of use cases, including criminal investigations, financial crime, litigation
support, employee and insider investigations, legal eDiscovery, data protection and privacy, and data
governance and regulatory compliance.
For further information, please visit investors.nuix.com
Nuix Limited ABN 80 117 140 235
Level 27, 1 Market Street, Sydney NSW 2000
www.nuix.com
Finding Truth
In A Digital World
Annual Report
2022
Finding Truth
In A Digital World
ASX: NXL
Listed on the ASX
Australia
Headquartered in Sydney, Australia
475Staff worldwide
Contents
Performance Highlights
The Power of the Nuix Engine
Chairman’s Letter
CEO’s Review
Vision and Values
Sustainability Report
Environmental Responsibility
Social Responsibility
Our People
Governance and Risk Management
Directors’, Remuneration
and Financial Reports
Directors’ Report
Remuneration Report – audited
Financial Report
Notes to the consolidated
financial statements
Directors’ Declaration
Independent Auditor’s Report
to the Shareholders
Shareholder Information
Corporate Directory
Nuix Annual Report 2022
2
4
6
10
14
16
17
18
22
24
27
28
46
65
70
126
127
138
141
Nuix is a leader
in investigative
analytics and
intelligence at
scale
Nuix Annual Report 2022
1
Performance
Highlights
FY22 Key Financial Metrics
$162.0m
ANNUALISED CONTRACT
VALUE (ACV)
$152.3m
STATUTORY REVENUE
Down 13.5% on FY21
Down 2.3% on FY21
$46.8m
NET CASH
Down from $70.9m in FY21
ACV has become an
increasingly useful
management metric
over the course of
2022, as it gives an
indication of
the annualised
“run rate” of Nuix’s
contract value at
a given point in time.
2 Nuix Annual Report 2022
$12.1m
EBITDA
Down 82.0% on FY21
pro forma
87.9%
5.4%
GROSS MARGIN
Down from 89.3% in FY21
CUSTOMER CHURN
Up from 3.7% in FY21
96.8%
NET DOLLAR RETENTION
Up from 95.5% in FY21
91.6%
SUBSCRIPTION ACV
Up from 88.5% in FY21
$28.4m
CONSUMPTION ACV
Up 40.6% on FY21
Nuix Annual Report 2022 3
The Power of
the Nuix Engine
Nuix is a global software technology
company that helps customers transform
massive amounts of messy data into
actionable intelligence at scale and speed
with forensic accuracy.
One of Nuix’s key strengths is the data processing
capability delivered by the Nuix engine. The engine
is the core of the platform and enables revenue
generation across multiple use cases.
Nuix makes data searchable, whether it is
structured, semi-structured or unstructured data.
The Nuix engine can process more than 1,000 file
types, including emails, text messages, images,
videos, voice messages and social media data. Files
can be searched, sorted, and digitally linked back to
the source, providing forensic accuracy that can be
used as evidence in courtrooms.
Nuix’s software is used by many of the world’s
leading organisations in critical work such as digital
forensic investigation, financial crime, litigation
support, employee and insider investigations,
data protection and privacy, data governance
and eDiscovery and regulatory compliance.
The Nuix platform comprises the power of
the Nuix Engine and associated software
applications – Nuix Discover, Nuix Investigate,
Nuix Enterprise Collection Centre, Nuix Adaptive
Security and APIs and connectors for third
party applications.
The Nuix technology has been developed
in house and shaped by feedback from
long-standing customers over almost two
decades. The power of the Nuix Engine
means not only searching at speed and scale,
but also identifying intelligence, patterns
and correlations to help solve complex data-
related challenges.
Important progress on critical
R&D projects, including:
- Further development on
integrated SaaS platform
- NLP integration
- FedRAMP High development
4 Nuix Annual Report 2022
05
YOU’LL FIND
OUR PLATFORM
SOFTWARE
APPLICATIONS1
NUIX
WORKSTATION
NUIX
INVESTIGATE
NUIX
ENDPOINT
NUIX
DISCOVER
APIS AND
CONNECTORS
(FOR THIRD
PARTY
APPLICATIONS)
ENGAGE WITH THE DATA
Nuix Engine
Enrich data with specific identifiers for
detailed and granular search capabilities
NUIX ENGINE1
Consolidate metadata into
Nuix format for search
Extract text and metadata
from each file type
Ingestion engine for 1,000+ file types
SOURCES
OF DATA
Human
generated data
Digital
User data
Enterprise
and cloud
repositories
Logs
Endpoint
behaviour
monitoring
Network
data
Third party
feeds
Communications
Multimedia
Structured
data
Endpoint
collections
1. Components of the Nuix platform are represented by the software applications boxes and the Nuix Engine boxes.
Nuix Endpoint
monitoring and
data collections
Nuix Annual Report 2022 5
Chairman’s Letter
The only true constant in life is change. This has
been true since before Heraclitus coined that
phrase in Ancient Greece. But today, the rate of
change would stun all prior generations. We live in
a world where the explosion of data use is disrupting
every area of society at unprecedented scale.
For human beings worldwide to regain a sense of
control over the cadence of change, we all need
to better understand the rapidly changing data
environments and devise tools to respond at pace.
Nuix and its world-renowned engine was developed
with this mission in mind. Nuix’s Founding Engineer
and now Chief Scientist, David Sitsky, and his team
conceived Nuix technology in the early 2000s,
recognising that the coming tsunami of data would
overwhelm us if we were not careful to develop
tools for managing its force and flow. While data
points and their uses have morphed in ways that
no one imagined back then, the structure the team
built has proved to be extraordinarily durable, and
has scaled and adapted to meet exponentially
growing needs. Nuix has continually evolved and
adapted to a rapidly changing environment, both
in terms of the technology we use and the skills of
our committed and talented staff. And so today
we remain a leader in making data searchable
in all forms so that it is usable to our customers.
The longevity of our client relationships confirms
the power of that original vision. Today, Nuix is a
world leader in finding patterns and meaning
in structured, semi-structured and unstructured
data. Our extraordinary technology, combined
with our talented global team, has positioned
Nuix to solve new and even more complex and
challenging problems for governments, law
enforcement, regulated industries, advisors, and
vital NGOs around the world, and raised market
expectations as well.
We recognise that Nuix’s financial results have not
met the expectations of many of our stakeholders,
including shareholders. Nor have those results met
Management’s expectations of this company’s
potential. So we have done what was required,
and we have changed. We have changed the
composition of the Board. We have changed much
of the company’s senior leadership team. And we
have scrutinised our own performance to identify
gaps in execution and areas for improvement
and growth. Today, Nuix is ready to take the next
steps in its evolution, with a new leadership team,
a new strategic direction and ongoing technology
investment. What hasn’t changed is the vision
6 Nuix Annual Report 2022
that draws the world’s most talented engineers to
come and to stay at Nuix. They are here to make
a meaningful difference in solving our customers’
most difficult data-related challenges.
The refreshed strategy undertaken by the
new leadership team has earned the Board’s
endorsement, because it provides the roadmap to
Nuix realising its full potential. Our customers seek
integrated platforms that simultaneously solve
overlapping use cases for data from different parts
of their organisation. Increasingly, they want cloud-
based offerings that are based on consumption
rates rather than subscriptions. They want natural
language processing capabilities by which
AI synthesises data for them and explains it in plain
language. And they want programs that combine
the efficiency of “plug and play” with the flexibility
and adaptability of custom solutions. They also
wanted a single point of contact, and a more
efficient and responsive structure. The revamped
approach that we’ve developed allows our people,
shareholders and customers to better understand
how our commercial offering realises value for
them and new ways to expand with us.
Change at the Top: Management and
Board Evolution
Nuix’s previous Chief Executive Officer, Rod Vawdrey,
announced in June 2021 that he would retire
from the role once the Company was able to
complete a proper search and effect an orderly
transition. Following an extensive global search,
Nuix announced in October 2021 the appointment
of Jonathan Rubinsztein as Rod’s successor as
Chief Executive Officer and Executive Director.
Jonathan is a seasoned technology executive with
a track record of leading dynamic organisations
in international environments and driving strategic
transformations to create shareholder value. Since
formally joining Nuix in December 2021, Jonathan
has been instrumental in moulding and driving the
strategic refresh initiatives that will enable Nuix to
fulfil its potential. Jonathan’s strengths in strategic
thinking, global viewpoint, tremendous energy and
commitment to culture have already been evident
in the short time he has been with the company.
Along with the CEO transition, the Board was
also pleased to announce that Chad Barton had
accepted the role of Chief Financial Officer on
a permanent basis. As an accomplished and
highly experienced listed company executive,
Chad is an outstanding addition to the Nuix team,
driving important initiatives and changes not
only across the Finance function but across the
broader organisation. In recognition of this, in
May 2022 Chad’s role was expanded to include
Chief Operating Officer, incorporating additional
responsibilities including IT, legal and risk.
Also in October 2021, the Board was expanded
through the addition of two new independent
Non-Executive Directors: Rob Mactier and Jackie
Korhonen. Rob’s significant ASX-listed company and
capital markets experience has added an important
dimension to the Board’s capabilities. Jackie brings
significant technology industry experience, along
with great business acumen and judgment to
the role.
In November 2021 the Board announced further
steps on its evolution pathway, with increased
responsibilities for Rob and Jackie. Rob was
appointed to the newly created position of Deputy
Chair. The elevation of Rob to this role further
strengthens Board processes and facilitates
enhanced international coordination given
the global profile of our members. In addition,
Jackie became Chair of the Remuneration
and Nominations Committee. Since Jackie’s
appointment to the role all Sub-Committee
Chair positions are now occupied by independent
directors, consistent with previous statements on
Nuix’s governance evolution.
In August 2022, Dan Phillips announced he was
stepping down from the Nuix Board. Dan had
served on the Board since 2011 and was Nuix’s
longest serving Board member, including acting
as Chair between 2018 and 2020. Dan made an
important contribution, and Nuix benefited greatly
from Dan’s deep knowledge of the company,
intelligence and experience. Dan’s commitment
to helping Nuix transition to the next chapter of
its new management team, as well as the build
out of an independent Board, was determined
and unwavering. We are grateful for his insights
and service.
ASIC Update
In late September 2022, after the release of Nuix’s
audited FY22 results, Nuix advised shareholders
that ASIC had commenced civil proceedings in
the Federal Court against the Company and its
directors during the period 18 January 2021 to
21 April 2021.
ASIC alleges that aspects of the Company’s market
disclosure in that period contravened provisions
of the Corporations Act and ASIC Act and that the
relevant directors breached their duties in respect of
that disclosure. In particular, ASIC claims that Nuix’s
disclosure of its Annualised Contract Value (ACV)
and statutory revenue performance as against
forecasts was deficient.
Nuix Annual Report 2022 7
Our teams are also inspired by the tangible
contributions we make to the broader
community. Across the organisation, we remain
focused on minimising our environmental
footprint, partnering with data centres that
have strong environmental credentials and
participating in initiatives such as hardware
recycling. Sustainability and positive
community impact are key focus areas for Nuix
in the near term as we look to increase our
own societal contribution. We also encourage
individual action, by matching donations made
by our people to a range of social causes and
by allowing them a day of volunteer leave to
support charitable causes.
The world around us is changing quickly,
and Nuix is responding. Our best-in-class
technology and people have risen to the
challenges of a rapidly evolving landscape.
Our customers continue to respond to the
strength of the Nuix offering. I remain excited
for Nuix’s future. The importance of delivering
meaningful insights from vast amounts of data
is only growing – and Nuix stands ready.
I would like to thank all the Nuix team members
for their commitment and determination this
year, and I express my most sincere thanks
to our shareholders and customers for your
ongoing confidence and support.
Hon. Jeffrey Bleich,
Chair
Chairman’s Letter continued
ASIC seeks declarations in respect of the
alleged contraventions, pecuniary penalties
against Nuix and disqualification orders
against the relevant directors. ASIC has not
yet quantified the amount of any penalties it
proposes to seek.
Nuix denies the allegations made against it
and the allegations made against the director
respondents and intends to defend the
proceedings.
Nuix has fully cooperated with ASIC during the
course of its investigation into these matters.
Our People and the Community
Ultimately, our people determine our policy.
No matter how good a policy may be, it
can’t be executed without the right people.
By contrast, even if a policy has some flaws,
good people will find them and fix them. This
is why we are encouraged by the quality of
talent that has been drawn to Nuix under this
new leadership team. As the company has
instituted changes, and adapted to a shifting
external environment, our best performers have
responded with typical grit and determination.
They’ve inspired others by their example.
Our workforce is unified in their goal of helping
our customers find truth in the digital world.
We are also drawing top-quality people
because we’ve built a workforce that
reflects the broad diversity of talents, skills,
communications styles, experiences, and
backgrounds, who nonetheless share common
values. Diversity in our workforce has proved to
be a great strength, and we are committed to
further increasing the diversity of our employee
base over time.
Our workforce remains strong during
even challenging times in part due to our
investments around wellbeing, workplace
flexibility and learning and development
programs that support our people, and make
Nuix a more rewarding workplace. People
usually don’t leave their jobs; they leave their
managers. So we invest in making sure that we
have leaders who are trained to nurture and
develop their teams.
8 Nuix Annual Report 2022
Nuix Annual Report 2022 9
CEO’s Review
Nuix is a leader in investigative analytics and
intelligence at scale. Our engine takes vast
amounts of data, whether it be unstructured,
semi-structured or structured data, and helps
users analyse and interpret it.
Nuix is evolving as we execute on our plan to return
to growth. There are several key elements to our
plan, but in short, we are:
time. During the year this downsell was largely offset
by upsell to the existing customer base and new
business.
• Deepening our customer relationships as we
move towards a greater sense of customer
centricity;
•
Investing in taking our products to cloud-based
platform solutions;
• Driving simplicity, scalability and standardisation
across processes and systems;
•
Laying the foundations to lift financial
performance with clear accountabilities and
expectations; and
• Reigniting our people’s purpose and passion to
be a force for good.
This last point is important: Nuix has the ability to be
a real force for good in a modern society by helping
to solve significant data-related challenges.
It is this sense of purpose that really drives so
many of our talented people and our passionate
customers in making a meaningful difference.
Business Performance
ACV has become an increasingly useful
management metric over the course of 2022, as it
gives an indication of the annualised “run rate” of
Nuix’s contract value at a given point in time.
ACV at 30 June 2022 was $162.0 million, down
2.3% compared to the prior year. In recent years
Nuix has seen a shift away from module-style
licences towards consumption licences, which
continued during the financial year. While the shift
to a consumption licence sometimes comes with
an initial downsell, Nuix benefits from exposure to
consumption licences as data volumes grow over
10 Nuix Annual Report 2022
Subscription ACV is a component of Total ACV and
is an important indicator because it measures ACV
that is generally recurring in nature. Subscription
ACV grew 1.1% year on year to $148.4 million,
comprising 91.6% of overall ACV. Other ACV, which
includes perpetual and services business, fell in line
with expectations, as Nuix pursues its strategy to
move away from perpetual licences.
Statutory Revenue fell 13.5% during the year, to
$152.3 million, driven by lower multi-year sales and
lower new sales. Nuix’s Statutory Revenue can be
variable due to the accounting treatment of multi-
year deals between periods. New business fell by
32% in the year, to $18.7 million.
During the year Nuix invested significantly in its
Research & Development program. R&D spend lifted
to $58.3 million during the year, up 32% on the prior
year, representing 38% of Statutory Revenue.
We lifted headcount in our R&D team by 15% and
made very important progress on key projects
such as further development on our integrated
SaaS platform, NLP integration and FedRAMP High
Development.
These higher R&D costs, as well as higher Sales
costs, were in line with our strategy of investing now
to drive revenue in future periods. Nuix’s General and
Administrative expenses were also higher, driven
by higher non-operational legal costs in particular,
as well as incremental headcount and insurance.
These factors led to EBITDA falling to $12.1 million for
the year.
In general, the cash costs of the increase in
research and development have been funded
from operational cash flow. Underlying cash flow,
before legal costs and costs associated with our
acquisition of Topos, was positive in the second
half, and recorded a small fall over the full year of
$2.5 million. Nuix finished the year with $46.8 million
in cash.
Strategic Refresh: Positioning for Growth
Nuix’s path to growth is via a greater focus on
customer centricity, ensuring the breadth and value
of our product and service offerings align with
customer requirements.
It is important that we focus our talented people
and great technology on solving our customers’
highest value problems. We can achieve this
through continuous and rigorous prioritisation, while
also delivering our proposition with simplicity.
Our strategic refresh is about putting the
mechanisms in place to drive that customer
centricity and growth.
We are focused on three horizons of change that
underpin our strategic refresh.
Horizon 1 is the immediate and near-term
focus, building on our strengths, improving
competitiveness, commercial performance and
customer relationships. These near-term initiatives
help to not only provide important momentum to
restart growth, but also provide a solid foundation
for Nuix’s medium and long term growth strategies.
Our strategy is clear and
we’re acting on it. We are
hard at work executing on
that strategy and execution
will be urgent and focused.
JONATHAN RUBINSZTEIN
GROUP CEO
SIMPLICITY
CUSTOMERS
& OUR PEOPLE
PRIORITISATION
TRUST
Nuix Annual Report 2022
11
CEO’s Review continued
HORIZON 1
Build on our strengths
Immediate focus on driving competitiveness,
commercial performance and customer
relationships in our core business
HORIZON 2
Differentiate for large enterprise
Medium term growth from anticipating the
needs of enterprise customers and building out
our cross-solution platform to make the best of
Nuix easily accessible
HORIZON 3
Solve for the future
Longer-range investment and prioritisation
of innovation pipeline for new ways to use our
technologies
During the year, and particularly in the second half,
Nuix made good headway on Horizon 1 initiatives.
A new price book was launched, providing greater
alignment between pricing and the value added
from the Nuix offering. A global sales refresh
program was initiated to standardise our buyer
experience. As this program comes to fruition it is
expected to provide significant benefits in terms of
improved win rates, higher customer retention and
sales force efficiencies.
A more rigorous renewal process is being
implemented, with a strong focus on renewal
metrics and processes to drive stronger Net Dollar
Retention outcomes. We are also upgrading our
service offerings to customers, to help make sure
that customers can optimise their Nuix experience,
providing incremental revenue opportunities for Nuix.
Structure follows strategy, and we have made
important changes to our organisational structure,
including key hires at the leadership level, to drive
our strategy forward. Across the company we have
realigned performance incentives and KPIs to ensure
better alignment between individual performance
measures and the goals of the organisation.
Looking further out to Horizon 2, we are already
building out our SaaS infrastructure and will
increasingly integrate Nuix’s technology into a
unified investigations platform. Releasing our
Natural Language Processing capability will enable
customers to ‘work smarter’, building new use cases
and giving our customers an early opportunity to
take advantage of the Nuix SaaS infrastructure. Over
Horizon 3, our team is already working on new, high
value, repeatable use case solutions.
These initiatives are designed to evolve Nuix into an
organisation with simpler structures and processes,
with clearer accountabilities. Central to our mission is
to evolve Nuix’s customer focus and return to growth.
The Nuix Team: Passion and Purpose
Our people are critical to Nuix’s success, and remain
at the heart of our organisation. During the year,
we increased our headcount significantly as we
invested in our future, with total headcount rising
8% to 475 people. The bulk of this headcount lift
occurred in our Research & Development team,
enabling us to make good progress on key initiatives.
As travel recommenced, our Sales team was able to
engage more of our client base face-to-face, and
we look forward to more in-person interactions with
our customers and industry contracts.
12 Nuix Annual Report 2022
Our strategic refresh is about putting
the mechanisms in place to drive
customer centricity and growth.
JONATHAN RUBINSZTEIN
GROUP CEO
Thank you to our people, customers, partners,
shareholders and other stakeholders for your
support this year.
Jonathan Rubinsztein
Group Chief Executive Officer
It is crucial to have the right leadership team in
place to drive our strategy forward. Nuix has been
able to attract high calibre individuals to join us
on our journey, driving strategic commonality of
purpose right across the organisation. We are also
expanding the depth of talent to our extended
leadership team.
Despite some challenging conditions in FY22, the
Nuix team has made significant progress on key
projects, reinvigorating customer relationships post-
pandemic and driving our organisation forward with
passion and purpose.
Nuix is a remarkable organisation making a
meaningful difference. We are putting the right
people in the right roles to make sure Nuix is fit for
growth. Our customer and partner relationships
are strong, and combined with our market-leading
engine we are well positioned for growth. And lastly,
our strategy is clear and we are acting on it, with
urgency and focus. I’m excited and optimistic about
Nuix’s future, and as an organisation, the Nuix team
is mobilising to enact the changes required to
drive growth.
Strategic Goals
• Customer-centric organisation
• Return to strong top-line growth
• Simple structure and processes,
with clear accountabilities
• Great place to work
• Build trust with our investors
Nuix Annual Report 2022
13
Vision
and Values
Be a force for good by
Finding truth in digital world
Nuix has the ability to be a real force for good in a
modern society by helping to solve significant data-
related challenges.
It is this sense of purpose that really drives so many of
our talented people and our passionate customers in
making a meaningful difference.
JONATHAN RUBINSZTEIN
GROUP CEO
NUIX CORE
VALUES
CUSTOMERS
DELIVER
DELIGHT
FOCUS
RESPECT
PEOPLE
REWARD
ENCOURAGE
COMMITTED TO THE MISSION
PASSION
INTEGRITY
AUTHENTIC
ACCOUNTABLE
INNOVATION
UNLEASH COLLECTIVE GENIUS
STRONGER TOGETHER
TEAMWORK
14 Nuix Annual Report 2022
Ongoing reinvestment
in headcount in line
with strategy
Nuix Annual Report 2022
15
Sustainability
Report
This Sustainability Report
covers the period from
1 July 2021 to 30 June 2022. In
developing this report, Nuix was
guided by the Sustainability
Accounting Standards Board’s
(SASB), Software and IT Services
Sustainability Standard on
the basis of preparation and
identification of the most relevant
and significant areas of focus.
16 Nuix Annual Report 2022
Environmental
Responsibility
Nuix is committed to playing its part in addressing
climate change. The company is currently
undertaking work to more accurately measure its
carbon footprint and greenhouse gas emissions.
Nuix’s ambition is to become Net Zero or Carbon
Neutral for our global operations. We are currently
investigating the most effective ways for our
company to achieve these goals.
Infrastructure Footprint
Nuix’s carbon emissions and the environmental
footprint of our hardware infrastructure is largely
attributable to the leased buildings we occupy.
Accordingly, Nuix’s operations are not highly carbon
intensive. Direct emissions include energy use from
electricity and gas for heating and cooling offices.
Indirect greenhouse gas emissions, also known as
Scope 3 emissions, occur as a consequence of the
activities of a facility, but from sources not owned
or controlled by the facility’s business. In Nuix’s case,
this primarily includes the use of data centres that
host Nuix’s platform.
Data Centres
Nuix works with several data centre providers to
operate its business/corporate and customer
services. All customer services are run on Amazon
Web Services (AWS). AWS has plans to power
operations with 100% renewable energy by 2025.
AWS manages its environmental footprint through
end-to-end efficiency across its facilities and
water stewardship program. Surveys conducted
by 451 Research showed that AWS’s infrastructure
is 3.6 times more energy efficient than the median
of US enterprise data centres surveyed. In addition,
451 Research found that AWS can lower customers’
workload carbon footprints by nearly
1. Sustainability in the Cloud – Amazon Sustainability (aboutamazon.com).
2. https://www.qtsdatacenters.com/why-qts/corporate-sustainability.
3. Macquarie Telecom Group 2021 Annual Report.
80% compared to surveyed enterprise data centres,
and up to 96% once AWS is powered entirely by
renewable energy in line with its 2025 goal1.
In addition, AWS employs a number of initiatives in
relation to water stewardship, including evaporative
cooling, recycling water and on-site water
treatment, and community water programs.
Nuix also utilises QTS Data Centers in Ashburton,
Virginia, USA and Macquarie Cloud Services in
Sydney, Australia. QTS has set key environmental
goals for all its USA facilities, including:
• Procure 100 percent of power from renewable
energy sources;
• Pursue green building certification in 100 per
cent of QTS facilities by 2025;
• Conserve at least 15 million gallons of water
each year;
•
Install electric vehicle (EV) charging stations at
75% of QTS facilities by 2025; and
• Recycle 90% of operational waste by 20252.
Macquarie Cloud Services focuses on low Power
Usage Efficiency (PUE). A low PUE means that a
facility is more efficient and uses proportionally
less energy for infrastructure loads. Macquarie
Cloud Services facilities typically have low PUEs. For
instance, the Intellicentre 3 facility in Sydney has a
PUE of 1.28, compared to an average data centre
PUE of 2.5, demonstrating a greater degree of
energy efficiency3.
E-Waste – Hardware Recycling
Nuix recycles all unwanted or used computer
equipment annually, avoiding this equipment
contributing to landfill and causing greenhouse gas
emissions. Nuix plans on measuring the amount
of equipment that is recycled and diverted from
landfill in the near future as part of its broader
sustainability framework.
Nuix Annual Report 2022
17
Sustainability Report
Social
Responsibility
Nuix seeks truth in a digital world.
Our software helps to solve significant
data related challenges.
At Nuix, our people are our most important
asset. We will continue to invest in our
people with a range of initiatives focusing
on wellbeing and development.
Helping Solve Real Societal Issues
The flexibility of the Nuix engine means that our
software can be used to solve complex problems
involving large data sets, across a broad range of
use cases.
Nuix’s global customer base includes large
government agencies, regulators, corporations and
professional services firms. Nuix software is sold
directly by Nuix and indirectly through a partner
network, which actively markets, and in some cases
supports, the Nuix platform.
Alongside traditional government and corporate
uses, Nuix software has also been used in cases for
social good, such as combating child exploitation
and terrorism. In these cases, investigators across
different jurisdictions can use Nuix software to
counter criminal acts using tools that piece
together disparate information sets, including
dealing with evidence in a sensitive way where
required.
Nuix matches staff donations made to supported
causes. During the year, donations were made to
support those impacted by the conflict in Ukraine as
well as COVID-19 in India, and global causes such as
Movember.
Nuix offers one day of volunteer leave for all staff
globally, enabling our people to dedicate time to
the causes that are important to them.
18 Nuix Annual Report 2022
We are committed
to acting ethically
throughout our
organisation
Managing Human Rights
Nuix is fully committed to preventing modern
slavery and human trafficking in our operations
and supply chains across all jurisdictions in which
we operate. Nuix is also committed to continuously
improving its processes and policies with respect to
the identification and elimination of modern slavery.
Based on our industry, business model,
procurement profile and geographical footprint, we
have assessed the risk that we cause, contribute
to, or are directly linked to modern slavery as low.
We have assessed the risk of modern slavery within
our direct business operations as low, given the
relatively low outsourcing and consequent level
of control we have on our operations and our
comprehensive labour management controls.
We have assessed the risk of modern slavery
practices in our supply chain as low. This
assessment is based on the geographical footprint
of our suppliers and the types of services and
products provided. Our procurement generally
consists of technology, professional services,
recruitment and labour hire, marketing, and facilities
management expenditures.
Nuix strives to do business with customers, partners
and suppliers of sound business character and
reputation. Nuix does not knowingly support any
public or private organisation which espouses
unethical or discriminatory policies or practices.
Nuix has not been made aware of any allegations
of human trafficking or modern slavery activities
in relation to any of our subsidiaries, suppliers or
partners.
Nuix Annual Report 2022
19
Sustainability Report
Social Responsibility continued
Data Security And Privacy
Data security and privacy are critically important to
both Nuix and our customers.
Nuix has implemented risk management measures
in accordance with ISO/IEC 27001:2013 – Information
Technology – Security Techniques – Information
Security Risk Management (Second Edition)
Standard. These measures help to mitigate risk,
for example in relation to the Nuix-hosted cloud
environment, hosted within data centres. In this
circumstance, while the customer has full control
over the data that is uploaded into Nuix Discover
SaaS, Nuix is responsible for the security and
availability of the data.
Nuix’s IT Security and Risk Committee undertakes
monthly assessments of the IT risk register.
Protecting Customer Data
Nuix maintains ISO 27001:2013 certification and in
2020 was assessed to host Australian Government
data classified as PROTECTED under the Information
Security Registered Assessors Program (iRAP).
During the last financial year, Nuix recertified
ISO/IEC 27001:2013 (206 controls), while adding
ISO/IEC 27017 (13 additional controls) and ISO/
IEC 27018 (28 additional controls). Nuix has been
assessed as compliant against the Australian
Prudential Regulation Authority (APRA) CPS234 cyber
resilience program.
Nuix operates Discover SaaS in six AWS regions.
In December 2021, a new region came on-line:
US Gov-Cloud.
Nuix’s customer data is managed by over 1,000
independently verified controls.
To achieve these certifications and assurances,
Nuix invests heavily in security and monitoring
tools. Nuix’s SaaS environment hosting customer
data is physically and logically separated from
Nuix’s corporate network. Nuix utilises world-class
cybersecurity vendors such as Microsoft, Palo Alto
Networks, Splunk, DUO, TrendMicro and NuHarbor
and to protect and defend the environment.
Nuix, and its authorised Cloud Service Providers
(CSPs), offer and use high-grade software
encryption to protect customer data at rest
and in transit, including backups using industry
standard encryption techniques and cryptographic
resources.
Nuix applies a least privileged access approach to
managing the SaaS environment. A team of staff
based in Sydney, Cork and Virginia, are responsible
for the 24x7x365 operational management of the
SaaS platform.
20 Nuix Annual Report 2022
Protecting our Corporate Network
Intellectual Property Regulation
Nuix is subject to laws and regulations relating to
intellectual property in the jurisdictions in which it
operates. Nuix’s primary intellectual property assets
are its patented processing technology, copyrights
and trademarks. All of Nuix’s material patents
are located in the United States. Nuix software is
developed in Australia and the United States.
In the United States, patent, copyright, trademark
and trade secret rights contained in laws and
regulations govern the ownership, prosecution,
maintenance, enforcement and infringement of
intellectual property. These laws and regulations
include the Patent Act of 1952, Copyright Act of 1976,
Digital Millennium Copyright Act of 1998, Lanham Act
of 1946, Defend Trade Secrets Act of 2016 and other
federal and state laws and regulations.
Like Nuix’s SaaS platform, Nuix’s Corporate
Network utilises world class products to protect
and defend Nuix’s assets. The entire network,
firewall configurations and Standard Operating
Environment (SOE) have been independently verified
and tested by an independent expert.
Platform vulnerability management
Vulnerability management at Nuix incorporates
three distinct elements: code vulnerabilities, SaaS
infrastructure vulnerabilities and corporate IT
vulnerabilities. Nuix utilises industry standard code
quality, dynamic and static code analysis platforms
and follows common vulnerability scoring system
(CVSS) for remediation.
SaaS Infrastructure is constantly scanned using
Tenable.IO to detect infrastructure vulnerabilities
and allow for real-time remediation. Nuix performs
monthly patching across the SaaS platform, as well
as additional critical patching as required.
Nuix’s endpoints are all connected and managed
to a central endpoint management platform.
Endpoints are patched monthly, or more frequently
depending on criticality. An independent security
specialist conducts an annual threat hunt across
the environment and provides remediation
actions to Nuix IT and Cloud Operations Team
for implementation. Nuix conducts bi-annual
penetration testing of the SaaS and Corporate
IT environment.
Continuous monitoring
Nuix maintains a 24x7x365 Security Operations
Centre (SOC), managed by an external host based
in the USA. Nuix has also deployed application,
network and administrative monitoring across the
platform to ensure that all administrative operations
are logged. Nuix SaaS provides customers with the
ability to log the actions of their own users and run
usage reports as required.
Nuix Annual Report 2022 21
Sustainability Report
Our People
Recruiting and Managing a Global, Diverse
and Skilled Workforce
Nuix is a global leader in investigative analytics,
headquartered in Sydney Australia. At 30 June 2022,
Nuix’s total headcount was 475, with team members
located across North America, EMEA and Asia
Pacific. In addition, Nuix works with a small number
of individuals that are engaged through labour hire
firms or contractors.
Our people are the foundation of Nuix’s success. We
strive to create a workplace that is energising and
rewarding. Our continued success is dependent
on attracting and retaining skilled and qualified
employees.
Guided and Inspired by Our Values
Nuix has six core values – Customers, Innovation,
Teamwork, People, Integrity and Passion. These
values support our vision to find truth in a digital
world.
Nuix is committed to conducting business with
integrity and in accordance with our corporate
values. Nuix’s Whistleblower Policy provides a
mechanism for current and former directors,
employees, consultants, contractors and suppliers
(as well as their relatives, dependants or spouses)
to raise concerns regarding misconduct or an
improper state of affairs. Reports received will be
treated sensitively and seriously, and concerns can
be raised on a confidential basis.
The Nuix Team in Numbers:
Employees by
Region
58%
North America
30%
Asia Pacific
12%
EMEA
Employees by
Function
43%
Research &
Development
40%
Sales & Distribution
17%
General &
Administrative
During the year Nuix matched
donations made by our people
to a range of causes and our
staff were able to dedicate
time to important causes
via a day of volunteer leave.
22 Nuix Annual Report 2022
Headcount rose
by 8% to 475 in
the year
Nuix’s Anti-Corruption and Anti-Bribery Policy
outlines the company’s zero-tolerance approach to
bribery and corruption, as well as implementing and
enforcing effective systems to counter such actions.
The Policy also reinforces Nuix’s commitment to
acting professionally, fairly and with integrity in
business dealings and relationships.
Valuing Diversity
Nuix’s greatest asset is its people. Our workforce
is made up of many individuals with diverse skills,
values, experiences, backgrounds and attributes
including those gained on account of their gender,
gender identity, age, disability, ethnicity, marital
or family status, religious beliefs, cultural or
socio-economic background, sexual orientation,
perspective and experience. We value the diversity
of our workforce and are committed to further
increasing the diversity of our employee base
over time.
As at 30 June, females represented 27% of Nuix’s
workforce. Nuix is committed to improving diversity,
and works with talent acquisition partners to
reach a broad range of talented people who can
contribute to our success.
Wellbeing
Nuix’s wellbeing program enables our staff to
take time to focus on health, wellbeing and
development. The program includes an online
information portal, enabling our people to access
a range of health and wellbeing resources and
activities, fitness initiatives and specific interests.
Flexibility
Providing our people with flexibility in the way
they work contributes to a more inclusive work
environment, along with increased engagement,
retention and wellbeing, while delivering to
our business outcomes. This flexible approach
continued throughout COVID-19, and will continue
to be an important element of Nuix’s approach to
engagement and retention.
Learning and Development
Nuix is committed to professional development.
Our Learning and Development (L&D) team has
developed a series of onboarding and professional
development courses that are offered through
the Nuix Academy, our dedicated Learning
Management System. Through the Nuix Academy,
staff can undertake compliance and governance
training, as well as product, sales and soft skills
courses like leadership, time management, sales
acumen and other self-guided learning.
In the last financial year, a significant number
of Nuix staff had access to the training that
Nuix provides our customers, with 34 of our staff
receiving Nuix accreditations and 24 staff becoming
Nuix Masters.
Nuix Annual Report 2022 23
Sustainability Report
Governance and
Risk Management
Governance Approach
The Board is ultimately responsible for the overall
governance, operation and stewardship of the
Company, and in particular for protecting and
optimising the long-term sustainable growth and
profitability of the company.
Nuix is committed to the highest standards
of corporate governance. The Company has
operated across multiple jurisdictions over many
years and has a proud history of working with
regulators exercising the highest standards of
probity. Nuix has established corporate governance
practices which are formally embodied in corporate
governance policies and codes adopted by the
Board. The aim of the policies is to ensure that Nuix
is effectively directed and managed, risks identified,
monitored and assessed, and appropriate
disclosures are made.
Responsibility for governance and risk management
is shared between the Board and senior
management. The Board reviews and ratifies the Risk
Management Framework and provides oversight of
management’s execution of the framework.
Nuix’s Corporate Governance Statement and
investor website provide full details of corporate
governance policies and charters.
Fit For Purpose Effective Risk Management
Overview
Risk recognition and management are integral
to Nuix’s objectives of creating and maintaining
shareholder value, and to the successful
execution of the company’s strategies. Good risk
management enables the pursuit of opportunities
while managing risks and achieving compliance
with applicable laws, regulations, and contractual
obligations, while meeting or exceeding stakeholder
expectations
Nuix is committed to investing in and maintaining
effective risk management systems and a risk
culture that provides employees with opportunities
to grow and improve risk management capabilities
that will support consistent and appropriate
risk decisions. At the heart of our risk strategy is
a commitment to creating a culture where our
employees feel empowered and incentivised to have
the right risk conversations on an ongoing basis.
Risk Management Framework
Nuix has a Risk Management Framework (RMF)
which is aligned to the ISO31000 Risk Management
Standard and describes our integrated approach
to identifying and managing financial and non-
financial risks and making risk informed decisions
and choices within boundaries.
Nuix’s RMF represents the mechanisms through
which we deliver reliable products and services
to our customers and retain the trust of key
stakeholders. We do this by maximising opportunities
to achieve our objectives and goals without
exposing the organisation to unnecessary risk.
Risk Governance
To bring the transparency, focus and independent
judgement needed, the Board has delegated
oversight of the RMF to the Audit and Risk
Management Committee. The Committee has
a Charter which is aligned with Principle 7 of
the ASX Corporate Governance Principles and
Recommendations. The Committee meets at least
quarterly to monitor management’s performance
against the RMF and consider risk reports and key
risk matters.
24 Nuix Annual Report 2022
39
Monitoring &
Reporting
Training &
Awareness
Compliance
Management
Policies &
Procedures
NUIX RISK
MANAGEMENT
FRAMEWORK
Three Lines
of Defence
Risk
Management
Process
Risk
Management
Strategy
Risk
Appetite
Risk
Culture
Principal Risks
The Committee is provided with regular and ad-hoc
reporting and risk data aligned with Nuix’s principal
risks, which provides the Committee with indicators
and information that management is operating
within the prescribed appetite.
Risk Culture
Accountability for managing risk is embedded into
Nuix’s management structures, with responsibility
for each of our principal risks and our key
compliance obligations assigned to one or more
members of the Leadership Team.
Nuix has a great opportunity
ahead to ensure its RMF is more
formal, consistent, measured and
prioritised for the size and scale
of our company. Our RMF
represents the mechanisms
through which we deliver reliable
products and service to our
customers and retain the trust
of key stakeholders, we do this
by maximising opportunities
to achieve our objectives and
goals without exposing the
organisation to unnecessary risk.
Risk Management Governance
Effective risk management is
dependent on a positive risk
culture so through the RMF,
employees are encouraged to
think about risk proactively, in
a consistent and disciplined way.
We recognise the importance
of having regular and varied risk
conversations that are open,
purposeful and held at all levels
of the organisation and of equal
importance is to hold ourselves
and others accountable to
closing actions against our
identified risks.
Nuix’s primary focus is on the identification and
The Board is responsible for risk
management of principal risks which could impact
oversight and the management
current or future business performance. We have
and internal control of the
recently reviewed and refreshed our principal risks.
processes by which risk is
Details of these risks and associated mitigation
considered for both ongoing
strategies are set out in Section 2.6 of the Director’s
operations and prospective
Report. Details on Financial Risks can be found in
actions. The Board has delegated
Section 7.1 of the Financial Report. In relation to
the risk management function
Contingencies (Sheehy litigation, ASIC investigation
to Nuix’s management with
oversight by the Audit and Risk
and Class Action Risk), detail is provided in
Management Committee.
Section 9.6 of the Financial Report.
Management provides risk
reporting to the Audit and Risk
Committee on a quarterly basis.
Nuix Annual Report 2022 25
Contents
Directors’, Remuneration and Financial Reports
Directors’ Report
Auditor’s Independence Declaration
Letter from Chair of Board Remuneration
and NominationCommittee
Remuneration Report – audited
Financial Report
27
28
42
44
46
65
Consolidated statement of comprehensive income
66
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ Declaration
Independent Auditor’s Report to the Shareholders
Shareholder Information
Corporate Directory
67
68
69
70
126
127
138
141
26 Nuix Annual Report 2022
Directors’
Remuneration
and Financial
Reports
For the year ended 30 June 2022
ABN 80 117 140 235
ACN 117 140 235
ASX Code: NXL
Nuix Annual Report 2022 27
Directors’ Report
The Directors of Nuix Limited (Nuix) present their report for the consolidated entity comprising Nuix and its
controlled entities (collectively referred to as the Group) in respect of the financial year ended 30 June 2022.
1. Directors
The following persons were directors of Nuix Limited during the year and up to the date of this report unless
otherwise stated:
• Jeffrey Bleich
Chair and Non-Executive Director
• Robert Mactier
Deputy Chair and Non-Executive Director, appointed 6 October 2021
• Daniel Phillips
Non-Executive Director, resigned 31 August 2022
• Sir Iain Lobban
Non-Executive Director
• Susan Thomas
Non-Executive Director
• Jacqueline Korhonen
Non-Executive Director, appointed 6 October 2021
• Jonathan Rubinsztein
Executive Director, appointed 6 December 2021
• Rodney Vawdrey
Executive Director, resigned 6 December 2021
2. Operating and financial review
The operating and financial review for the year ended 30 June 2022 has been designed to provide
shareholders with a clear and concise overview of the Group’s operations, financial position, business
strategies and prospects. The review also discusses the impact of key transactions and events that have
taken place during the reporting period, to allow shareholders to make an informed assessment of the results.
This Operating and Financial Review includes statutory and pro forma comparisons for the prior
corresponding period prepared on the same basis as presented in the Nuix Prospectus dated
18 November 2020.
The pro forma adjustments for the prior corresponding period remove the impact of offer costs, non-
recurring transaction costs related to a sale process explored by Nuix as an alternative to the offer, and
share-based payment expenses in respect of existing options that were cancelled on completion that were
recognised in that period. The pro forma adjustments also provide for a full year of listed company costs for
the corresponding period and the relevant tax impact of the pro forma adjustments. There have been no pro
forma adjustments made to the results of the full year ended 30 June 2022.
The following commentary should be read with the consolidated financial statements and the related notes
in the Financial Report.
Non-GAAP measures have been included, in particular Annualised Contract Value (ACV), as Nuix believes they
provide information for readers to assist in understanding the company’s financial performance. Non-GAAP
financial measures should not be viewed in isolation or considered as substitutes for measures reported in
accordance with Australian equivalents to International Financial Reporting Standards.
2.1 Principal activities
Nuix is a leading provider of investigative analytics and intelligence software which empowers organisations
to simply and quickly find meaningful insights from large amounts of unstructured data.
Nuix offers a software platform (Nuix platform) comprising a powerful proprietary data processing engine
(Nuix Engine) and several software applications. It has been developed in-house, shaped by feedback from
long-standing government and private sector customers over the past 15 years, and assists customers in
solving complex data challenges. The Nuix platform operates at a ‘forensic level’, providing users with a highly
detailed, contextualised and legally defensible way of viewing and interacting with data.
No significant change in the nature of these activities occurred during the year.
28 Nuix Annual Report 2022
2.2 Significant changes in state of affairs
On 20 September 2021, the Group acquired Topos Labs, LLC (‘Topos’), a developer of Natural Language
Processing (‘NLP’) software that helps computer systems better understand text and spoken words at speed
and scale. The Group has started to integrate the acquired Intellectual Property with the powerful Nuix Engine
and anticipates that it will be a valuable add-on for users of our Nuix Workstation software.
The upfront consideration for the acquisition paid in September 2021 was USD $5,000,000, with the potential for
a further USD $20,000,000 comprised of USD $18,500,000 in cash payable to the shareholders of Topos (some
of whom are required to remain employed by the Group at the time milestones are met in order to be eligible
for receiving such payments), and up to USD $1,500,000 in performance rights (which would be issued to
specified employees should they remain employed with the Group and milestones be achieved).
There were no other significant changes to the state of affairs of the Group during the year.
2.3 Business strategies
During the financial year, Nuix outlined key strategic review initiatives to drive growth through a renewed focus
on customer centricity. The overarching strategy hinges on three key horizons of change:
• Horizon 1 – Build on our strengths: Immediate focus on driving competitiveness, commercial performance
and customer relationships in Nuix’s core business;
• Horizon 2 – Differentiate for large enterprise: Medium term growth from anticipating the needs of
enterprise customers and building out Nuix’s cross-solution platform; and
• Horizon 3 – Solve for the future: Longer-range investment and prioritisation of innovation pipeline for new
ways to use Nuix technologies.
Importantly, while the durations of each horizon vary, work on all three horizons commenced in the past
financial year. Horizon 1 initiatives help to drive and underpin Horizons 2 and 3, with all three horizons underway
concurrently.
In the past financial year, important progress was made on Horizon 1 initiatives such as the rollout of a new
price book, sales enablement optimisation, renewal process focus and revamped service and support
offerings – all critical elements of driving top line growth and operational efficiency.
A firm-wide organisational restructure, including at the leadership level, was implemented, with performance
and rewards revised to be more closely aligned to the Group’s objectives. A renewed focus on marketing,
including representation at the leadership level, will help to drive new business and better sales outcomes.
Horizon 1 initiatives are intended to not only drive near term revenue, profitability and operational efficiencies,
but to also provide the foundations for longer term growth across Horizons 2 and 3. Key Horizon 2 initiatives
include further building out Nuix’s cloud-hosted investigations platform and Natural Language Processing
integration. Horizon 3 will focus on new high value and repeatable use cases that are scalable solutions.
Nuix will keep the market informed of status across each of the strategic horizons.
2.4 Group performance
Statutory revenue for the year was $152,310,000 down 13.5% on the prior corresponding period. Statutory
revenue displays a greater degree of variability than Annualised Contract Value (ACV) due to the accounting
impacts of multi-year deals. The fall in statutory revenue occurred primarily due to a lower value of multi-year
contracts sold and lower new sales.
Traditional module-style licences continue to drive the bulk of statutory revenue, however there has been a
significant increase in the amount of statutory revenue derived from sales of licences that are priced on a
consumption basis.
Nuix Annual Report 2022 29
Directors’ Report continued
New business for the financial year was $18,748,000, down 32% on the prior year.
Statutory EBITDA for FY22 was $12,064,000, down 82.0% on the prior corresponding period on a pro forma basis,
and down 60.5% on a statutory basis.
During FY22, Nuix further invested in sustainable revenue generation, with an uplift in research and
development spend, as well as sales and marketing. These investments are expected to contribute to
revenue growth in FY23 and beyond. Along with a lower revenue outcome, this investment in research and
development and sales and marketing weighed on the EBITDA outcome in the FY22 financial year.
Separately, the Group continues to experience material, non-operational legal costs ($13,796,000 in the
financial year). The operating loss associated with Topos amounted to $3,345,000. These two items also
impacted EBITDA.
Incorporating these impacts, the Group reported a Net Loss After Tax of $22,791,000 for the financial year,
compared to a Net Loss After Tax of $1,406,000 in the prior corresponding period.
Annualised Contract Value (ACV)
Annualised Contract Value (ACV) is a non-GAAP measure that gives an indication of the annualised ‘run rate’
of Nuix’s contract value at a given point in time, adjusting for the sometimes volatile impacts of multi-year
deals on measures such as statutory revenue.
Annualised Contract Value (ACV) at 30 June 2022 was $162,042,000, down 2.3% compared to 30 June 2021, with
the continued shift away from module-style licences to consumption licences largely offset by upsell to the
existing customer base and new business.
Subscription ACV is a component of Total ACV and is an important indicator of ACV that is generally recurring
in nature. Subscription ACV grew 1.1% year on year to $148,413,000 comprising 91.6% of overall ACV.
‘Other ACV’, comprising short-term (less than 12 month) and perpetual licences, and services ACV, fell to
$13,630,000 from $19,134,000 a year earlier.
Nuix continues to see a shift towards consumption-based licences across its client base. While the initial
shift to a consumption licence sometimes comes with an initial downsell, Nuix benefits from exposure to
consumption licences as overall data volumes grow.
During the financial year, Consumption ACV grew by 40.6% to $28,448,000, driven by strong growth in both
SaaS and non-SaaS licences.
30 Nuix Annual Report 2022
2.5 Group financial position
Summary balance sheet
Assets
Cash and cash equivalents
Trade and other receivables (including contract assets)
Other current assets
Property and equipment
Intangibles
Other non-current assets
Deferred tax assets and lease assets
Total assets
Liabilities
Trade and other payables
Deferred tax and lease liabilities
Deferred revenue
Provisions
Other liabilities
Total liabilities
Equity
Issued capital
Reserves
Retained earnings
Total equity/net assets
30 Jun 2022
$000
30 Jun 2021
$000
46,846
50,813
10,016
3,040
70,865
63,767
6,209
2,018
237,125
197,415
11,762
14,515
9,474
14,261
374,117
364,009
23,742
13,650
49,285
3,915
14,458
20,325
13,829
45,360
3,420
–
105,050
82,934
370,696
370,696
(163,539)
(174,322)
61,910
269,067
84,701
281,075
The Group has no debt and a closing cash balance of $46,846,000 at 30 June 2022, down from $70,865,000
from the previous financial year. The decrease in cash and cash equivalents is primarily due to an increase
in investment in sustainable revenue generation, including higher research and development and an uplift
in sales and marketing spend, along with Topos acquisition and operating costs and non-operational
legal costs.
The lift in research and development spend and sales and marketing costs was mostly funded by operational
cash flow. In the near term, Nuix aims to be cash flow neutral before Topos and non-operational legal costs.
Trade and other receivables fell during the period, driven by working capital improvements.
Nuix Annual Report 2022 31
Directors’ Report continued
2.6 Risk management
Our Risk Management Framework (RMF), implemented in 2021, continues to evolve and become embedded
in our business, processes, and ways of working. The RMF has been designed to help the business set risk
strategy, foster risk awareness, and enable risk informed decision making within boundaries. We seek to
maximise opportunities without exposing the organisation to unnecessary risk.
To support a broad view of risk, and to seek out best practice standards appropriate to the size and risk profile
of Nuix, we continue our investment across a range of areas enabling us to grow, support and protect our
environment and our customers.
Nuix takes a structured approach to identifying and managing risks and opportunities. There are a variety
of financial and non-financial risks that could affect business activities, financial position or operating and
financial performance, and these are assessed and managed as part of the RMF.
Our material risks are presented below together with mitigations employed. Mitigation strategies are
designed to reduce the likelihood of the risk occurring and/or to minimise the adverse consequences of the
risk should it happen. However, some risks are affected by factors external to and beyond the control of the
Group.
Detail on Financial Risks can be found in Section 7. In relation to Contingencies (Sheehy Litigation, ASIC
Investigation and Class Action Risk), detail is provided in Section 9.6.
The Group’s operations are not significantly impacted by environmental regulations under a law of the
Commonwealth or of a state or any other territories of Australia or territory in which it operates, however, in
recognition of its importance, climate change risk is addressed separately in the Group’s ESG report that is to
be included with the Group’s annual report.
Risk and Potential Consequences
Mitigations Employed
Attracting and Retaining Talent
Nuix’s success is dependent on attracting and retaining
talent and fostering a high-performance culture. Loss
of talent or inability to attract new talent may impact
achievement of business goals.
This risk is elevated by changes in employee working
operating model expectations, the competitive environment
for talent globally in the disciplines in which Nuix recruits
and the ongoing media coverage of Nuix.
Customer and Competition
Nuix’s future business prospects are dependent on
protecting and growing our share of the addressable
market. Nuix may not be able to compete successfully
against competitors, some of whom have significantly
more financial and operational resources.
A decline in general economic conditions or a change
in business and government spending could adversely
impact financial performance. Nuix may also not meet
customer expectations or sales enablement strategies
may be ineffective.
Values led business strategy and vision
A remuneration strategy to attract, motivate and retain
individuals with performance linked reward
Board Committees to steer and oversee people
strategies and programs
Flexible work policies and hybrid work model
Communication with all staff to ensure that the strategy
is understood as well as the role that they play
Training programs for managers to ensure that they
have the skills to manage staff
Multi-horizon customer centric strategy
Investment to optimise sales enablement and account
management processes
Proactive monitoring of market, industry, and competitor
intelligence to identify strategic opportunities
Strong and effective relationships with our customers
and partners
32 Nuix Annual Report 2022
Risk and Potential Consequences
Mitigations Employed
Partner Distribution Channel Performance
A key sales channel for Nuix is to sell with, and sell through,
sales partners. This channel may not achieve planned
revenue volumes, margins, or renewal targets.
This could be caused by inadequate sales partner
performance or competing competitor product or
incentivisation offerings.
Partner program focussed on strategic partnerships
and mutually beneficial relationships
Alliances and Partnerships strategy with dedicated
leadership and account management team
Relationship management lifecycle aligned with the
Association of Strategic Alliance Professionals
Partner portal, enablement, training, quarterly business
reviews and a Partner Advisory Council
Integrating Acquisitions
Nuix has completed strategic acquisitions in recent years.
There is a risk that Nuix is delayed in integrating acquisitions
or that they do not deliver expected benefits.
Board oversees integration strategy and programs
New opportunity due diligence and approvals
Integration roadmaps and milestone planning
Data Privacy and Protection
Use of our products involves the storage, transmission,
and processing of our customers’ privileged, confidential,
sensitive, and proprietary data.
Failure to adequately safeguard customer data could
result in the loss or corruption of data, breaches of
obligations, damage to our reputation and impact
customer and investor confidence in our products. This
risk will grow as more customers utilise our SaaS offerings.
Our information security costs may also increase
if customer, regulatory or accreditation minimum
standards increase.
Cyber
Customers use the Nuix platform to analyse privileged,
confidential, sensitive, and proprietary data. Cyber
incidents could affect access to the platform and
compromise customer data. Incidents may also impact
the execution of Nuix’s critical business processes. Actual
or perceived failures in our technology security capability
and control environment could result in financial loss and
impact our reputation and brand.
The sophistication and frequency of cyber-attacks aimed
at companies is increasing, and our exposure will grow as
more customers utilise our SaaS offering.
Nuix may also need to accept higher liability exposures
as customers are increasingly seeking indemnification or
higher liability caps for defects, errors or other liabilities
arising from the platform.
In-house expertise to identify, manage and oversee
information security risks
Privacy Policy, Privacy Officer, and a Privacy Compliance
and Awareness Program
Best practice certifications for data security
management (ISO 27001:2013, ISO 27018:2019)
iRAP certification to host Australian government
‘protected’ data
USA Federal Risk and Authorization Management
Program (FedRAMP) HIGH readiness in-progress
Multi-factor authentication and least privileged access
to SaaS environment
High grade encryption including 256-bit Advanced
Standard, SSL, and FPS 140-2
Cyber vendors who monitor the SaaS platform
Cyber risk and security strategy
Highly skilled cyber security employees who focus on
identifying and responding to threats
24x7 Security Operation Centre and continuous
monitoring of critical systems for signs of performance,
intrusion, or interruption
Employee cyber risk awareness program
Physical and logical separation of environments and
duties across Nuix SaaS and Corporate IT
Market-leading third-party tools to protect and monitor
the SaaS and Corporate IT environments
Penetration testing of all SaaS and Corporate IT
networks every six months
Incident management and recovery playbooks and
cyber insurance policy
Nuix Annual Report 2022 33
Directors’ Report continued
Risk and Potential Consequences
Mitigations Employed
Product Strategy
Our technology strategy and continued investment in
product innovation is a critical foundation for our future
success.
There is a risk that research and development (R&D)
investment may be insufficient, not used effectively
and efficiently, or may not meet customer and market
expectations. This could impact our ability to retain, grow
and win customer accounts.
Technology and product roadmap informed by
customer engagement and feedback
Continued investment in R&D inclusive of longer-term
innovation pipeline
Highly skilled engineers and product development
employees and Agile Software Development Program
Planning
Product Functionality and Performance
Highly skilled engineers and product development
Our customers include government agencies, regulators,
corporations, and professional service firms who often rely
on our software to analyse data in sensitive and high-profile
investigations.
Our software and products may not function as intended,
resulting in adverse outcomes for customers. This could
be caused by unintended or undetected errors, defects,
failures, or bugs in the platform.
Open-Source Software
Nuix uses open-source software in our products which
can create security vulnerabilities or instabilities which
may impact our customers or execution of our product
roadmap. There are also inherent uncertainties regarding
the interpretation of and compliance with open-source
software which could result in 3rd party claims, increased
licence and product re-engineering costs or the disclosure
of Nuix proprietary software.
Intellectual Property
The value of Nuix’s business is, in part, dependent on Nuix’s
ability to protect its IP and rights – particularly its unique
parallel-processing approach for processing unstructured
data.
Theft of, or inability to protect our IP could result in a loss of
competitive advantage. Infringement of third-party IP by
Nuix could also result in claims or litigation.
employees
Software Development Life Cycle which includes robust
review and testing of code prior to release
Software vulnerability management tools and practices
Customer service support system integrated with
Engineering software development planning
Register of open-source libraries and licences by
product
Tools to monitor and report on the security profile of
open-source code
Open-source vulnerability management capabilities
and practices
IP legal protection strategy and engagement with
external IP experts to shape strategy and provide advice
Process for registering trademark, copyrights, and
patents
Contractual safeguards (e.g., non-disclosure
agreements) prior to any proprietary disclosures
Corporate IT information security program
Legal and Regulatory Compliance
Regular review of compliance risk areas by the Audit &
Nuix is impacted by numerous laws and regulations globally,
including corporate, privacy, sanctions, employment, tax,
and financial reporting. Nuix’s activities, including past,
current, or future activities, may have contravened laws or
regulations in one or more jurisdictions. This could result in
financial loss and damage to our reputation and brand.
Changes to laws and regulations may impact strategy,
business performance and may increase compliance costs.
Risk Committee
Policies, supported by staff training, on key legal and
regulatory obligations and expected practices
External corporate law and professional services firms
provide advice on issues and specialist resourcing and
compliance support
34 Nuix Annual Report 2022
Risk and Potential Consequences
Mitigations Employed
Contractual Risk
Nuix’s business is dependent on our ability to enter and
comply with legally binding agreements and allocate and
manage contractual risks and obligations.
Nuix may enter into agreements that are not legally
enforceable, have unintended consequences or create
exposures which are not able to be fully mitigated. Nuix may
also inadvertently breach contractual obligations and be
subject to claims and disputes.
Accreditations and Certifications
Nuix has accreditations and certifications which enable
customer sales. Loss of existing, or failure or delays to
obtaining new, accreditations or certifications may have a
temporary or permanent impact on financial performance.
Litigation
There are currently proceedings on foot within Australia
that pose certain risks to the organisation if the outcomes
to these proceedings are adverse to Nuix. Such adverse
outcomes may be costly and could damage our reputation
and brand, which in turn may impact our capital structure.
Litigation may also disrupt the execution of strategy and
impact business performance.
In-house Legal function which provides review and
oversight of contracts prior to execution
Delegations of authority setting out individuals who are
authorised to sign agreements
Standard contractual Terms and Conditions (T&Cs)
inclusive of liability caps and rights to termination
clauses
Processes in place to manage deviations from
standard T&Cs
Investment in our accreditation and certification
strategy, e.g., FedRAMP (HIGH)
Dedicated in-house team auditing against certification
control standards
Annual independent certification audits
Litigation, disputes, or investigations are managed in an
effective and efficient manner with a view to protecting
the outcomes of Nuix’s financial position and reputation
Engagement of specialised external legal counsel and
internal structure.
Communications strategy to keep employees and
stakeholders informed
Funding and Refinancing
Nuix may seek to raise additional capital to support
operations, fund future growth or respond to opportunities.
Nuix may not be able to secure debt or equity financing
on favourable terms or at all. Raising additional funds by
issuing equity securities may result in ownership dilution for
shareholders.
Nuix’s ability to meet objectives could be impacted if it
is unable to obtain necessary and adequate financing
solutions or maintain sufficient working capital.
Financial Risks
Nuix is exposed to a variety of financial risks including
foreign exchange, credit, and liquidity. If financial risk
management strategies are ineffective, financial
performance may be impacted. Nuix is required to
comply with complex revenue recognition rules and make
accounting judgements. There is a risk of error in financial
reporting or accounting judgements due to inadequate or
ineffective financial controls, data, or flawed assumptions.
Board approved capital, funding, and liquidity
management strategy
Appointment of external advisors to advise and help
facilitate a review of future state capital structures and
renewal of finance facilities
Maintain relationships with investors and banking
partners. Active investor relations management and
engagement with capital providers
Working capital management processes and controls
including budgeting and forecasting
Refer to Section 7.1 for more detail on how Nuix manages
its financial risks
Early engagement and consultation with external
auditors/professional firms on significant deals and key
accounting policies
Budgeting, forecasting and performance monitoring
and reporting processes
Documented key financial processes and controls
Refer to Section 7.1 for more detail on how Nuix manages
its financial risks
Nuix Annual Report 2022 35
Directors’ Report continued
Risk and Potential Consequences
Mitigations Employed
Business Continuity, Third Parties and Resilience
Nuix’s operating model places high reliance on the
availability and reliability of third-party software, hardware,
and information technology, including data centers and
global communication systems.
Failure or disruption may impact our customers’ use of our
products or the execution of enterprise critical business
processes. Incidents could result in financial penalties,
customer churn or missed business critical deadlines.
Increases in third party service provider prices may also
increase costs.
Environmental, Social and Governance (ESG)
Nuix seeks to make a positive contribution to the world and
conduct business responsibly, ethically, and sustainably.
This includes ensuring that our powerful technology is not
used for unethical or illegal purposes.
Failure to meet ESG commitments or expectations, or
manage our ESG risks, could harm our reputation, impact
performance, limit access to capital or impact our ability to
attract and retain talent.
Nuix SaaS architected for high-availability and resilience
Third-party vendor for incident, customer support and
change management
Assessment of third-party software providers for
reliability and reputation
Continuous monitoring of critical systems for signs of
performance, intrusion, or interruption
Continuity plans, incident response and recovery
playbooks
ESG strategy, investment, and reporting
Diversity Policy
Anti-Corruption and Modern Slavery Policies, training,
processes and controls
High-Risk Countries Policy, heightened review and
approvals process and board approved restrictions on
the type of software provided to certain jurisdictions
3. Environmental regulation
The Group’s operations are not significantly impacted by environmental regulations under a law of the
Commonwealth or of a state or any other territories of Australia or territory in which it operates.
4. Dividends paid or recommended
The payment of dividends by the Company is at the complete discretion of the Directors, and the Directors do
not provide any assurance of the future level of dividends paid by the Company.
The ability to pay dividends will depend on a number of factors, many of which are beyond the control of
the Company. In determining whether to declare future dividends, the Directors will have regard to Nuix’s
earnings, cash flows after development costs, overall financial condition and capital requirements, taxation
considerations (including the level of franking credits available), the general business environment, and any
other factors that the Directors may consider to be relevant.
There were no dividends paid or declared since the start of the financial year and up to the date of this report.
5. Events since the end of the financial year
Nuix had a Facility Agreement with the Commonwealth Bank of Australia (‘CBA’) which was set to expire on
11 September 2022. Given that the Company has not utilised the Cash Advance Facility over the preceding
12 months and has $46,846,000 cash available at 30 June 2022, the Group has, post year-end, terminated
the facility with CBA.
In relation to the Class Actions referred in Note 9.6 to the Annual Financial Report, on 23 August 2022 the
Supreme Court of Victoria handed down a decision to the three competing and overlapping claims filed
against Nuix. The Supreme Court of Victoria ordered that:
•
the proceeding commenced by Banton Group (which had sought to join a number of Directors as
co-defendants) be permanently stayed; and
•
the proceeding commenced by Shine Lawyers and Phi Finney McDonald be consolidated.
36 Nuix Annual Report 2022
Nuix disputes the allegations contained in the claim and will be defending it.
Except as disclosed above, no other matters or circumstances have arisen since the end of the financial
year which significantly affected or may significantly affect the operations of the Group, the results of those
operations, or the state of affairs of the Group in future financial periods.
6. Information on Directors
The details of the Company’s Directors in office at the date of this report are set out below.
Jeffrey Bleich
Jeffrey has been a Non-Executive Director of Nuix since 2017 and was appointed as Chairman of the Company
in November 2020. Jeffrey lives in Piedmont, California, U.S.A.
Jeffrey has over 30 years’ experience in the legal, government, and technology sectors, and most recently
served as a Court-Appointed Special Master and Mediator in the United States District Court, before being
named the Chief Legal Officer of Cruise LLC, a San Francisco-based autonomous vehicle company. After
clerking for the Chief Justice of the United States Supreme Court, Jeffrey practised law as a Partner at Munger,
Tolles & Olson LLP from 1992 to 2009 and 2014 to 2016, and as both CEO of Dentons Diplomatic Solutions and
a Partner in the Public Policy and Regulatory practice of Dentons international law firm from 2016 to 2019.
Jeffrey’s practice focused on cyber security, technology, complex international disputes, as well as high profile
pro bono matters before the U.S. Supreme Court.
Jeffrey served four years as the U.S. Ambassador to Australia from 2009 to 2013 and as special counsel to
President Obama in 2009. He has served as Board Chair of the San Francisco based Pacific Gas & Electric
Company, Chair of the Fulbright Foreign Scholarship Board, Chair of the California State University Board of
Trustees, President of the State Bar of California, and as a Director of a number of charitable and public policy
organisations including the Australian-American Leadership Dialogue, RAND Australia, Stanford University’s
Center for Advanced Study in the Behavioral Sciences, Amherst College, the American Security Project, and
Futures Without Violence.
Jeffrey holds a Bachelor of Political Science from Amherst College, a Master in Public Policy from Harvard
University and Juris Doctor from the University of California Berkeley. He has also received an honorary
Doctorate of Laws from San Francisco State University and honorary Doctorates from Griffith University and
Flinders University.
Robert Mactier
Robert has been a Non-Executive Director of Nuix since October 2021 and was appointed Deputy Chairman in
November 2021.
Robert is a Consultant to the Advisory and Capital Markets division of UBS Australia (since June 2007).
Robert is also a Non-Executive Director of Kinetic IT Pty Limited and was formerly a Non-Executive Director
and Chairman of ASX-listed ALE Property Group and WPP AUNZ Limited as well as Non-Executive Director of
NASDAQ-listed Melco Resorts and Entertainment Limited.
Robert began his career at KPMG and worked across their audit, management consulting and corporate
finance practices. He has extensive investment banking experience in Australia having, prior to his current role
with UBS, worked for Ord Minnett Securities (now J P Morgan), E.L. & C. Baillieu and Citigroup.
Robert holds a Bachelor’s degree in Economics from The University of Sydney. He has been a Member of the
Australian Institute of Company Directors since 2007 and is formerly a member of the Institute of Chartered
Accountants in Australia and New Zealand.
Nuix Annual Report 2022 37
Directors’ Report continued
Daniel Phillips
Dan has been a Director of Nuix since 2011, and acted as Chairman between 2018 and November 2020. Dan
lives in Umina Beach, Australia.
Dan has more than 25 years’ experience providing venture capital to high-growth companies in Australia,
Asia, Europe, Israel, and the United States. Dan is currently an employee of the Macquarie Group, having joined
Macquarie Group in January 1989 and founded Macquarie Group’s technology venture capital investment
business in 1996.
Dan has served on boards of the ASX listed entities oOh!media Group Ltd and IBA Health. Dan is currently
a Director of a number of companies, including RecordPoint Software Holdings Pty Ltd, FoodByUs Pty Ltd,
Haventec Pty Ltd, Forwood Enterprises Pty Ltd, Australian Philanthropic Services and HSCTUTE OPS CO Pty Ltd
(Atomi). Dan also served as a member of the Australian Federal Government’s ICT Advisory Board.
Dan is a member of the Chartered Accountants Australia & New Zealand (CA ANZ).
Sir Iain Lobban
Iain has been an adviser to the Board since October 2018 and was appointed as a Non-Executive Director of
the Company in November 2020. Iain lives in the UK.
Iain has over 30 years’ experience in the security and intelligence sector, including having served as the
Director of the British Intelligence Agency GCHQ from 2008 to 2014. Iain was one of the five experts appointed
by Australia’s Prime Minister to create Australia’s first National Cyber Security Strategy in 2015. He was
subsequently one of the senior three person team appointed by the Prime Minister to conduct the 2017
Independent Review of the Australian Intelligence Community.
Iain’s advisory work for boards now spans cyber security risk management and financial crime compliance.
Iain holds a Bachelor of Arts in French and German from the University of Leeds. Iain is a Visiting Professor of
King’s College London and an Honorary Fellow of the Judge Business School at the University of Cambridge.
Iain was appointed a Companion of the Bath in 2006 and Knight Commander of St Michael and St George
in 2013.
Susan Thomas
Sue has been a Non-Executive Director of the Company since November 2020.
Sue has over 30 years’ experience in the financial services and information technology sectors, having
founded and acted as Managing Director of FlexiPlan Australia Limited, which was subsequently sold to MLC/
NAB. Sue lives in Perth, Australia.
Sue is currently a Director of ASX-listed companies Temple and Webster Group Limited, Cash Converters
Limited, Maggie Beer Holdings Limited and Fitzroy River Holdings Limited, and was formerly a Director of
Property Exchange Australia Limited and Grant Thornton Australia Limited.
Sue holds a Bachelor of Law and Bachelor of Commerce from the University of New South Wales and has
received a diploma from the Australian Institute of Company Directors.
Jacqueline Korhonen
Jacqueline has over 30 years’ experience in the Information Technology, Telecommunications and Financial
Services sectors, where she built her career around transformation, P&L management, complex negotiations,
project delivery, operations, strategy development and risk management.
38 Nuix Annual Report 2022
She started her career as an engineer in IBM where she spent 23 years living and working across Australia,
New Zealand, ASEAN, India and China. After leaving IBM, Jacqueline was appointed CEO of Infosys Australia
and New Zealand, a position she held for six years. In the later years of her executive career Jacqueline was
the CEO of SMS Management & Technology, an ASX listed IT Services company and subsequently returned to
IBM as the Vice President of Cognitive Transformation Services across the Asia Pacific Region.
Jacqueline is now a Non-Executive Director (NED) and board advisor. She was a NED of NetComm Wireless
(ASX: NTC) until 2019. She is currently a NED of MLC Insurance, Auswide Bank (ASX: ABA) and .au Domain
Administration. In addition, Jacqueline is a member of the Board of Chief Executive Women.
Jacqueline holds a Bachelor of Science and Bachelor of Engineering with Honours from the University of
Sydney and is a Graduate of the Australian Institute of Company Directors.
Jonathan Rubinsztein
Jonathan is a seasoned CEO with a track record of building world class global technology companies and
leading high-performance teams in the technology sector.
Jonathan is a Non-Executive Director at Atturra (ASX:ATA) and previously was the Managing Director and
CEO of Infomedia, Ltd, (ASX:IFM) an ASX-listed SaaS company.
Prior to that role, Jonathan was CEO and founding shareholder at UXC Red Rock Consulting, where he was
instrumental in growing the business from a start-up to over 700 people across 13 offices in Australia, New
Zealand, India, and Singapore.
Jonathan is also an active member of YPO Sydney Chapter and sits on the Board of Atturra Limited, an
ASX-listed company.
Jonathan holds a Bachelor of Commerce from the University of Cape Town and a Postgraduate degree in
Finance from Software & Information Industry Association. He also holds a Master of Business Administration
from University of New South Wales and a Diploma from the Australian Institute of Company Directors.
Jonathan was also a Founder and Director of RockSolid SQL, a company that built monitoring and automated
data management software for over 18,000 databases globally.
7. Directors’ interests in securities
At the date of this report, the Directors had the following relevant interests in the securities of the Company:
Name
Jeffrey Bleich
Robert Mactier
Daniel Phillips
Sir Iain Lobban
Susan Thomas
Jacqueline Korhonen
Jonathan Rubinsztein
Ordinary Shares
Options
135,000
175,000
–
–
315,300
–
150,000
240,000
–
–
250,000
–
–
–
Nuix Annual Report 2022 39
Directors’ Report continued
8. Meetings of Directors
The numbers of meetings of the Company’s Board of Directors and Board Committees held during the
financial year ended 30 June 2022 and each director’s attendance at those meetings is set out below.
Jeffrey Bleich
Robert Mactier
Daniel Phillips
Sir Iain Lobban
Susan Thomas
Jacqueline Korhonen
Jonathan Rubinsztein
Rod Vawdrey (former)
Full Board
Remuneration and
Nominations Committee
Audit and
Risk Committee
Held1
Attended
Held
Attended
Held
Attended
20
11
20
20
20
11
8
12
20
11
20
20
20
11
8
12
5
–
5
–
5
2
–
–
5
–
5
–
5
2
–
–
–
5
12
12
12
–
–
–
–
5
12
11
12
–
–
–
1.
Number of meetings held during the time the director held office or was a member of the committee during the year.
9. Indemnification and insurance of directors and officers
The Directors and Officers of Nuix are indemnified against liabilities pursuant to agreements with the
Company. The Company insures the Directors and Officers of the company and its Australian-based
controlled entities, and the general managers of each of the divisions of the Group. The liabilities insured are
legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the
Directors and Officers in their capacity as officers of entities in the Group, and any other payments arising
from liabilities incurred by them in connection with such proceedings. This does not include such liabilities
that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of
their position or of information to gain advantage for themselves or someone else or to cause detriment to
the Company. It is not possible to apportion the premium between amounts relating to the insurance against
legal costs and those relating to other liabilities.
During the year, the Company paid a premium under a contract insuring each of the Directors and Officers of
the Group against liability incurred in that capacity. Disclosure of the nature of the liability and the amount of
the premium is prohibited by the confidentiality clause of the contract of insurance.
10. Auditor
Following a competitive tender process, PwC resigned as auditor and KPMG was appointed as auditor on
31 January 2022.
11. Indemnification of auditors
Nuix has agreed to indemnify its auditors, KPMG, to the extent permitted by law, against any claim by a third
party arising from Nuix’s breach of their agreement. The indemnity stipulates that Nuix will meet the full
amount of any such liabilities including a reasonable amount of legal costs.
40 Nuix Annual Report 2022
12. Audit and non-audit services
Details of the amounts paid or payable to the auditor (KPMG) for audit and non-audit services during the
year are disclosed in Note 9.4.
The Company has decided to employ the auditor on non-audit services in additional to its statutory audit
duties.
The Board of Directors, in accordance with advice provided by the audit committee, is satisfied that the
provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by
the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the
following reasons:
• all non-audit services have been reviewed by the audit committee to ensure they do not impact the
impartiality and objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants.
13. Rounding of amounts
Nuix is a company of the kind referred to in Australian Securities Investments Commission’s ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191. In accordance with that Instrument, all financial
information presented has been rounded to the nearest thousand dollars, unless otherwise stated.
14. Auditor’s independence declaration
The Directors have received the Lead Auditor’s Independence Declaration under section 307C of the
Corporations Act 2001. The Lead Auditor’s Independence Declaration is set out on page 42 and forms part of
the Directors’ Report for the year ended 30 June 2022.
This report is signed in accordance with a resolution of the Board of Directors.
Signed:
Jeffrey Bleich
Chair
Sydney, Australia
31 August 2022
Jonathan Rubinsztein
Director
Sydney, Australia
31 August 2022
Nuix Annual Report 2022 41
Auditor’s Independence Declaration
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Nuix Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Nuix Limited for the
financial year ended 30 June 2022 there have been:
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
i.
ii.
KPM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG
Kenneth Reid
Partner
Sydney
31 August 2022
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited
by a scheme approved under Professional Standards Legislation.
17
42 Nuix Annual Report 2022
Contents
Letter from Chair of Board Remuneration and Nomination Committee
1. Who is covered by this report?
2. Our value proposition
3. FY22 – executive KMP remuneration at a glance
4. FY22 executive remuneration outcomes – in detail
4.1 Overview of Group performance
4.2 Total fixed remuneration (TFR)
4.3 FY22 short term incentive outcomes
4.4 FY22 long term incentive awards – granted
4.5 One-off awards
4.6 Legacy option awards
4.7 Executive KMP remuneration statutory table
5. Non-executive director remuneration
5.1 Overview
5.2 Fee pool and schedule
5.3 Legacy options held by Non-Executive Directors
5.4 Non-Executive Directors – statutory remuneration
6. Remuneration governance
6.1 Responsibility for setting remuneration
6.2 Use of remuneration consultants
6.3 Details of Executive Service Agreements
6.4 Treatment of equity arrangements for former CEO
7. Further information
7.1 Executive KMP and Director share ownership
7.2 Movement of securities
7.3 Other transactions and balances with KMP
44
46
46
47
49
49
50
50
53
54
55
55
57
57
57
58
58
59
59
59
60
60
61
61
63
64
Nuix Annual Report 2022 43
Letter from Chair of Board Remuneration
and Nomination Committee
Dear Shareholders
On behalf of the Board, I am pleased to present the Remuneration Report (Report) for Nuix Limited (Nuix or
the Group) for the year ended 30 June 2022 (FY22).
FY22 – A year in overview
Transformation and renewed leadership
At Nuix, we know that our people and our technology are our greatest assets, and the Group is on a journey of
renewing its key leaders to manage the business in the next phase of its development.
FY22 has been a year of challenges and change however our staff have continued to work hard to deliver a
first class product to our customers.
In FY22, the Board announced important changes to its Executive Key Management Personnel (Executive KMP)
to support the execution of the Group’s strategy and delivery of value to our shareholders.
The Board was pleased to announce the appointment of Jonathan Rubinsztein as Chief Executive Officer and
Executive Director (CEO) from 6 December 2021. Mr Rubinsztein is a seasoned technology executive who brings
extensive experience and a proven track. The Group’s former CEO and Executive Director Rod Vawdrey retired
on 6 December 2021.
The Board was also pleased to announce that the Interim Chief Financial Officer (CFO), Chad Barton became
the CFO permanently in October 2021 before moving into an expanded role of Chief Operating Officer (COO)
and CFO (COO/CFO) from May 2022. As an accomplished and highly experienced listed company executive,
Mr Barton has played a pivotal role since joining Nuix.
The Group was also delighted to announce the appointment of Rob Mactier in a newly created position of
Deputy Chair and Non-Executive Director and myself, Jacqueline Korhonen as a Non-Executive Director in FY22
to complement the skills, experience and capabilities of the Nuix Board.
For the most part of FY22, the majority of our staff have worked from home and we have continued to
maintain a strong focus on the wellbeing of our people. In the last four months of the year, as the world has
started to open up, we have seen more of our staff return to office environments and find creative ways to
connect with each other. Despite the challenges of the last 12 months, we have managed to continue to sign
new customers, maintain a high level of delivery and support to all of our customers, and continue to evolve
our product.
Executive remuneration at Nuix
At Nuix, our remuneration framework is designed to ensure that our Executives maintain a deliberate and
continued focus on delivering strong financial performance and creating value for our shareholders, as well
as encouraging long-term sustainable decision-making in the interests of all of our shareholders, customers
and other key stakeholders
With this in mind in FY22, we introduced a balanced scorecard approach under the FY22 short-term incentive
(STI) for the CEO and COO/CFO in line with market practice. Their STI was assessed against a mix of financial
and non-financial measures (in contrast to FY21 where the STI was determined solely based on revenue
and EBITDA). The STI for the Executive Vice President, International (EVP, International) and Executive Vice
President, Americas (EVP, Americas) was assessed against their relevant region revenue and relevant region
contribution margin in order to drive performance in the countries in which Nuix operates.
An overview of our executive remuneration framework for our Executive KMP is outlined in section 3.
44 Nuix Annual Report 2022
Linking FY22 remuneration outcomes to performance
At Nuix, we are focused on ensuring our remuneration arrangements and outcomes for our Executive
KMP are closely aligned with our performance and the experience of our shareholders, and also meet the
expectations of all of our stakeholders.
Nuix has put in place a new leadership team to drive transformation and growth. We do acknowledge the
experience of our shareholders and that we did not achieve the results that they would have expected.
In FY22, having regard to the Group’s performance during the financial year (as outlined above):
• The FY22 STI outcomes are between 0% and 70% of maximum for Executive KMP, reflecting the
performance of the business, the progress on the implementation of the strategy and the sales
outcomes.
• There were no long-term incentive (LTI) awards that were eligible to vest for the CEO and COO/CFO.
One-off equity awards to the EVP, International and EVP, Americas (who do not currently participate in
the LTI plan) also did not vest based on the performance of the business.
Refer section 4 for further detail on remuneration outcomes for FY22.
Remuneration changes for FY23
During FY22, Nuix undertook a further review of the LTI plan for Executive KMP to ensure that outcomes under
the plan were aligned with the turnaround of the business. Further detail of the new arrangements will be set
out in the 2022 Notice of Annual General Meeting and the FY23 Remuneration Report.
Conclusion
The Board will continue to monitor Nuix’s executive remuneration framework to ensure that it provides the
right balance between attracting, motivating and retaining our executives to deliver on our strategy for our
shareholders and our customers, while meeting the expectations of the Group’s external stakeholders.
I invite you to read Nuix’s Remuneration Report and welcome your feedback on our remuneration practices
and disclosures.
Jacqueline Korhonen
Chair of Remuneration and Nominations Committee
Nuix Annual Report 2022 45
Remuneration Report – audited
For the year ended 30 June 2022
1. Who is covered by this report?
This Report outlines the remuneration arrangements in place for KMP of the Group in FY22, which comprise all
Non-Executive Directors and senior executives who have authority and responsibility for planning, directing
and controlling the activities of the Group. The FY22 KMP are set out in the table below.
Table 1: Overview of FY22 KMP
KMP
Executive KMP
Current Position
Term As KMP
Jonathan Rubinsztein
CEO and Executive Director
Partial year from 6 December 2021
Chad Barton
Jonathan Rees
Ethan Treese
Rod Vawdrey
Non-Executive Directors
Jeffrey Bleich
Robert Mactier
Daniel Phillips
Sir Iain Lobban
Sue Thomas
COO/CFO
Full year
Executive Vice President, International
Full year
Executive Vice President, Americas
Full year
Former CEO and Executive Director
Ceased as KMP on 6 December 2021
Independent Chairman
Full year
Independent Deputy Chairman
Partial year from 6 October 2021
Non-Executive Director
Full year (Resigned 31 August 2022).
Independent Non-Executive Director
Full year
Independent Non-Executive Director
Full year
Jacqueline Korhonen
Independent Non-Executive Director
Partial year from 6 October 2021
2. Our value proposition
At Nuix, we strive to foster a customer-collaborative and innovative culture, and a talented team of employees
who are motivated to build software with a purpose and assist our customers to contribute to a wider public
and social good.
We recognise that remuneration is only one of a number of reasons why our people come to work for us
every day and our broader value proposition (beyond remuneration) is key to our ability to attract, retain and
motivate world class talent to deliver on our vision of ‘finding truth in a digital world.’
We value our people and seek to provide a supportive and inclusive workplace that delivers high employee
engagement and satisfaction, and encourages everyone to be the best they can be.
It is our fundamental belief that the behaviour and performance of all employees should be aligned with our
values (see Section 3) and expectations to drive business performance and meet the expectations of our
stakeholders and the community.
46 Nuix Annual Report 2022
3. FY22 – executive KMP remuneration at a glance
At Nuix our executive remuneration framework is set in line with our key remuneration principles which are
designed to encourage behaviour aligned with our core values and support our strategic priorities in the
interests of our shareholders.
OUR VALUES
Aligning with our core values and expected behaviours
INTEGRITY
INNOVATION
TEAMWORK
CUSTOMERS
PEOPLE
PASSION
Authentic and
Accountable
Unleash
collective genius
Stronger
together
Focus, Deliver,
Delight
Respect,
Encourage,
Reward
Committed to
the mission
STRATEGIC
PRIORITIES
Our vision of being a force for good by finding truth in the digital world
RETURN TO
STRONG TOP
LINE GROWTH
To fund the
future
DEVELOP SALES
EXCELLENCE
Drive sales
and partnering
enablement
EVOLVE
TECHNOLOGY
TO MODULAR
PLATFORM
Cross-solution
platform for
large enterprise
REMOVE
COMPLEXITY
Simplify and
streamline
processes
REMUNERATION
PRINCIPLES
ANTICIPATE
FUTURE USE
CASES
Identify and
monetise new
use cases
enabled
by data
processing
ENHANCE
COMMERCIAL
CAPABILITIES
Improved
financial
systems and
processes
Supporting our business objectives
SIMPLICITY
Simple and easy
to understand
ACTING LIKE
OWNERS
Shareholder
and customer
alignment
STRATEGY LED
Rewarding for
delivery on our
strategic priorities
PERFORM &
INNOVATE
Encouraging the
best from our
people
RIGHT BEHAVIOURS
Encouraging
behaviours
aligned with our
values
Nuix Annual Report 2022 47
Remuneration Report – audited continued
OUR
FRAMEWORK
TOTAL FIXED REMUNERATION
(TFR)
• Base salary and
superannuation
(or other equivalent
pension arrangements)
• TFR is reviewed
annually having regard
to the individual’s
role, responsibilities,
skills, experience and
performance, as well as
fixed remuneration levels
offered to comparable
roles within companies
with which the Company
competes for talent
Our remuneration framework aligns with our values and strategy
SHORT TERM INCENTIVE (STI)1
LONG TERM INCENTIVE (LTI)
• Performance period of 1 year
• Delivered in performance
• Assessed against a
rights
• Assessed against
revenue and EBITDA
• Performance rights vest
progressively in thirds
with the first being at
initial vesting and then
after a further 1 and 2
years and are subject to
remaining employed
•
•
LTI drives the delivery
of Nuix’s longer
term objectives in a
sustainable manner
In FY22, only the
CEO and COO/CFO
participated in the LTI.
The EVP, International
and EVP, Americas did
not participate in the LTI
(instead being eligible for
one-off equity awards –
refer section 4.5)
combination of revenue,
cost base and other
non-financial Group
performance measures
for the CEO and COO/CFO
and relevant revenue and
contribution margin (for the
EVP, International and EVP
Americas) as set by the Board
• Delivered in cash (2/3) and
share rights (1/3) deferred
for 12 months for the CEO
and COO/CFO (and cash
for the other Executive KMP).
STI deferral in share rights,
creates further alignment
with shareholder interests
and supports retention
• As part of its overarching
discretion, the Board has the
ability to make downward
adjustments for any
behaviour that is inconsistent
with the Company’s culture
and values (as well as
any risk, regulatory or
reputational issues)
• STI provides motivation for
the achievement of annual
performance goals
KMP pay mix
Pay mix for performance
A. The pay mix for the CEO and COO/CFO at target and maximum is weighted towards the LTI to encourage
a focus on long term sustainable decision making in the interests of Nuix’s shareholders and other
stakeholders.
B. The EVP, International and EVP, Americas and their remuneration arrangements are consistent with other
senior non-KMP staff. In FY22, they receive fixed annual remuneration, STI and eligibility for a one-off equity
award, which did not meet the performance hurdles (they did not participate in the LTI).
48 Nuix Annual Report 2022
4. FY22 executive remuneration outcomes – in detail
4.1 Overview of Group performance
As noted above, it is important to Nuix that the remuneration outcomes for our Executive KMP align with
the Group’s performance. An overview of Nuix’s FY22 performance is set out below.
Annualised Contract Value (ACV)
Net Dollar Retention (NDR)
$162.0m
Down 2.3% on FY21
Down 3.6% on constant currency basis
96.8% Up from 95.5% in FY21
95.3% in constant currency
Gross Margin
Customer Churn
87.9%
Down from 89.3% in FY21
87.8% in constant currency
5.4% Up from 3.7% in FY21
5.4% in constant currency
Subscription ACV
Consumption ACV
91.6%
Up from 88.5% in FY21
91.5% on constant currency basis
$28.4m
Up 40.6% on FY21
Up 39.1% on constant currency basis
Statutory Revenue
EBITDA
$152.3m
Down 13.5% on FY21
Down 14.8% on constant currency basis
$12.1m
Down 82.0% on FY21 pro forma
Down 83.7% on constant currency basis
Statutory Revenue - Americas
Statutory Revenue - International
$82.7m
Down 10% on FY21
$69.6m
Down 17% on FY21
Share price at 30 June 2022
Earnings per share (basic)
$0.76
Down 65.6% on FY21
$(0.07)
Down from $(0.00) in FY21
Nuix Annual Report 2022 49
Remuneration Report – audited continued
4.2 Total fixed remuneration (TFR)
Table 2 below sets out the annualised TFR payable to the Executive KMP in FY22 based on their contractual
values. Executive KMP TFR levels have been set with regard to benchmarking data within the technology
sector.
Table 2. Executive KMP fixed remuneration levels
Executive KMP
Jonathan Rubinsztein
Chad Barton
Jonathan Rees
Ethan Treese
Rod Vawdrey (former)
Total fixed
remuneration
(annualised) $
723,568
813,568
515,687
457,351
723,568
4.3 FY22 short term incentive outcomes
A. Overview
As noted above, Executive KMP participate in an STI program. The maximum STI awards that Executive KMP
were eligible to receive in respect of FY22 are set out in Table 3 below. The EVP, International and EVP, Americas
had their STI calculated under the staff remuneration policy.
The Board determined that the former CEO Rod Vawdrey was not eligible for an STI in FY22 (refer section 6.4
for further detail on his exit arrangements).
Table 3. Executive KMP STI outcomes
Executive KMP
Jonathan Rubinsztein1
Chad Barton
Jonathan Rees2
Ethan Treese2
STI OUTCOMES (FY22)
Maximum
STI opportunity
($)
Maximum
STI opportunity
(% TFR)
Value of
STI awarded
% of FY22
STI awarded
335,417
474,000
306,250
420,000
75%
60%
64%
91%
234,792
331,800
0
147,000
70%
70%
0%
35%
% of FY22
STI award
forfeited
30%
30%
100%
65%
1.
2.
Pro-rated for part year
For the EVP, International and EVP, Americas their maximum STI in the above table represents On Target Earnings (OTE)
50 Nuix Annual Report 2022
B. FY22 STI – assessment of performance measures
An overview of performance against the FY22 STI measures is set out in the tables on the next page. As
outlined, the CEO and COO/CFO were assessed against a balanced scorecard of financial and non-financial
Group measures. The EVP, International and EVP, Americas were assessed against performance of the
International and American businesses respectively in order to drive performance in the respective regions in
which Nuix operates.
Table 4. Performance against FY22 STI performance measures for CEO and COO/CFO
STI PERFORMANCE MEASURES
Outcomes
Explanation
Nuix did not meet the revenue target in FY22, therefore
no STI was awarded against this measure
Nuix managed the cost base (excluding non-BAU legal
expenses) and were under budget in FY22, therefore the
maximum STI was awarded against this measure
Based on the Board’s assessment of the implementation
of the Nuix strategy for FY22, the Board determined the
maximum STI was awarded against this measure
Based on the Board’s assessment of these measures,
the Board determined 87.5% of the STI for other non-
financial measures would be awarded
Measure
Weighting
Group revenue
Group cost base
Implementation of Group
strategy
25%
15%
20%
Non-financial measures
40%
• Culture and Employee
engagement
• Retention of key staff
and key appointments
• Key customer retention/
Financial management
• Risk management
Key: Below threshold Between threshold and target Above target
Table 5. Performance against FY22 STI performance measures for EVP International and EVP Americas
Measure
Weighting
Outcomes
Explanation
STI PERFORMANCE MEASURES
Relevant region revenue
70%
Relevant region contribution
margin
30%
EVP,
Americas
EVP,
International
The Americas region achieved between threshold and
target revenue for FY22 and in accordance with the staff
Short-Term Incentive Policy, 50% of the measure was
awarded to the EVP, Americas. The International region
was below threshold and therefore no STI was awarded
against this measure for the EVP, International.
Neither region achieved their contribution margin in
FY22 and no STI was award against this measure.
Key: Below threshold Between threshold and target Above target
Nuix Annual Report 2022 51
Remuneration Report – audited continued
C. FY22 STI terms - further detail
Key terms and conditions applying to the STI arrangements for the Executive KMP during FY22 is set out below.
Table 6. Description of key terms of FY22 Executive KMP STI
SHORT TERM INCENTIVE – KEY TERMS
Term
Further detail – CEO and COO/CFO
Further detail – EVP, International and
EVP, Americas
Performance
period
STI awards are assessed over the 12-month financial year. Any STI award payments are made after
performance is tested at the end of the performance period.
Once the total dollar value of the
STI earned is determined, the STI will
be awarded in cash as their STI was
calculated and awarded under the staff
remuneration policy.
Instrument
Once the total dollar value of the STI earned is
determined, 2/3 will be awarded in cash, the remaining
1/3 will be delivered in share rights to support
alignment between the CEO and COO/CFO and Nuix’s
shareholders. Each share right will vest into one share
after 12 months subject to continuing employment.
For the CEO, the number of share rights granted will
be calculated by dividing the dollar value attributable
to those share rights by the closing Share price on the
trading day immediately before the date of the grant.
For the COO/CFO, the number of share rights granted
will be calculated by dividing the dollar value
attributable to those share rights by the 5-day VWAP
immediately before the date of the grant.
Performance
Measures
The STI is assessed against multiple performance
measures being:
The STI is assessed against two
performance measures being:
• Group-wide revenue (25% weighting)
• Relevant region revenue (70%
• Group-wide cost base (15% weighting)
•
Implementation of strategy (20% weighting)
• Other non-financial measures (40% weighting),
this includes retention of key staff and key
appointments, culture and engagement, key
customer retention, financial management and
risk management.
It is considered that these metrics reflect not only
the key financial drivers of value in the business but
what is required to drive renewed growth. As part
of its overarching discretion, the Board also retains
discretion to adjust STI outcomes for behaviour that
is inconsistent with the Group’s values and culture
(as well as any risk, regulatory or reputational issues).
weighting)
• Relevant region contribution margin
(30% weighting).
It is considered that these two metrics
reflect the key financial drivers of value
in the business and the EVP, International
and EVP, Americas are assessed against
performance of their respective regions
in order to drive performance in the
countries in which Nuix operates.
As part of its overarching discretion, the
Board also retains discretion to adjust
STI outcomes for behaviour that is
inconsistent with the Group’s values and
culture (as well as any risk, regulatory or
reputational issues).
Treatment on
cessation of
employment
Where an Executive KMP ceases employment prior to the end of the performance period, the default
position is that the executive would not be eligible for an STI award for that financial year (unless the
Board determines otherwise).
Change of
control
Where there is a change of control event (for example, a takeover bid, scheme of arrangement,
merger or any other transaction or event that in the Board’s opinion is a change of control event),
the Board has discretion in respect of the treatment of the STI (subject to the ASX Listing Rules).
52 Nuix Annual Report 2022
4.4 FY22 long term incentive awards – granted
A. Overview
The CEO and COO/CFO were eligible to participate in an LTI award for FY22. The awards were delivered in
performance rights and vest in three equal tranches.
There was no LTI available for the EVP, International and EVP, Americas for FY22 (who instead received a one-off
grant of performance rights – refer section 4.5).
The Board determined that the former CEO Rod Vawdrey was not eligible for an LTI in FY22 (refer section 6.4 for
further detail on his exit arrangements).
Table 7. FY22 LTI awards to Executive KMP
Executive KMP
Jonathan Rubinsztein1
Chad Barton
Jonathan Rees
Ethan Treese
1.
Pro-rated for service period
Maximum
LTI opportunity
($)
Maximum
LTI opportunity
(% of TFR)
510,417
711,000
N/A
N/A
125%
90%
N/A
N/A
B. FY22 LTI key terms – further detail
Table 8 below outlines the key terms attaching to the LTI awards granted to Executive KMP during FY22.
Table 8. Key terms of FY22 LTI awards granted to Executive KMP
LONG TERM INCENTIVE – KEY TERMS
Further detail
Entitlement
Subject to the satisfaction of the performance conditions, each LTI performance right entitles
the holder to one fully paid ordinary share in Nuix Limited (or a cash equivalent payment at the
discretion of the Board).
Allocation
methodology
The number of LTI performance rights to be granted is calculated by dividing the participant’s dollar
value LTI opportunity for FY22 (as outlined in table 8 above) by the market value of the underlying
share determined based on the 5-day VWAP before the grant date.
Performance
conditions
and vesting
schedule
For example, the COO/CFO will receive 333,787 Performance Rights which were calculated as
the LTI opportunity of $711,000 divided by the 5-day VWAP of $2.13. The CEO grant is subject to
shareholder approval.
The FY22 LTI performance rights are subject to performance testing against the following
performance conditions:
• Revenue (50%); and
• EBITDA (50%).
The revenue and EBITDA targets are assessed at the end of FY24. If the targets are met, one-third
of the vested LTI performance rights will be available upon the release of the Company’s financial
results for each of FY24, FY25 and FY26.
The vesting schedule in respect of the revenue and EBITDA measures is outlined below. Specific
targets will not be disclosed until the end of FY24 due to commercial sensitivity.
Nuix Annual Report 2022 53
Remuneration Report – audited continued
LONG TERM INCENTIVE – KEY TERMS
Further detail
Level of
vesting
Revenue
EBITDA
Threshold
66.6%
To be disclosed at the end of FY24
To be disclosed at the end of FY24
Maximum
100%
To be disclosed at the end of FY24
To be disclosed at the end of FY24
Treatment on
cessation of
employment
Forfeiture and
clawback
Where an Executive KMP ceases employment prior to the expiry date noted above:
•
•
for cause or resignation, the default position is that any unvested LTI performance rights will
lapse (unless the Board determines otherwise); and
in all other circumstances, the LTI performance rights will remain on foot (unless the Board
exercises its discretion to treat them as lapsed).
Under the Nuix Employee Share Plan, forfeiture and claw-back provisions apply to the LTI
performance in a range of circumstances including (but not limited to) where (1) a participant
has acted fraudulently or dishonestly, or breached his duties or obligations to the Group; (2) has
done an act which brings the Group into disrepute; or (3) there has been a material misstatement
or omission in the Group’s financial statements or circumstances which will require the financial
statements of the Group to be restated.
Change of
control
Where there is a change of control event (for example, a takeover bid, scheme of arrangement,
merger or any other transaction or event that in the Board’s opinion is a change of control event),
the Board has discretion in respect of the treatment of the awards (subject to the ASX Listing Rules).
4.5 One-off awards
A. One-off equity grant
In lieu of an LTI award, the EVP, International and EVP, Americas were eligible to participate in a one-off
performance rights grant that was subject to the overall performance of Nuix for FY22. The grant was based
on Nuix achieving or outperforming the revenue and EBITDA targets for FY22. 50% of the eligible grant was
tested against the revenue and 50% was tested against EBITDA, neither of which Nuix achieved.
All other terms are consistent with the LTI awards outlined in section 4.4.
54 Nuix Annual Report 2022
Table 9. FY22 Maximum one-off equity grant awards to Executive KMP
Executive KMP
Jonathan Rees
Ethan Treese
Maximum
one-off
equity grant
opportunity
($)
$517,192
$453,981
Maximum
one-off
equity grant
opportunity
(% of TFR)
Value of
one-off
equity grant
awarded
($)
100%
100%
$0
$0
B. Sign on equity for new CEO and COO/CFO
As noted above, Nuix appointed a new CEO and COO/CFO in FY22. In order to attract executives of this calibre
and wealth of experience, sign-on incentives were provided as summarised below:
• CEO: subject to shareholder approval at the AGM in November, in recognition of incentives forfeited
with his previous employer, Nuix provided a sign on grant at a face value of $2 million. The number of
performance rights issued was 711,744, based on the 5-day VWAP being immediately preceding the date
of signing of his contract (21 October 2021). The grant will be issued as performance rights and will vest in
five equal tranches in the first trading window following the first and subsequent anniversary date of the
start date. Each vesting is subject to a continued service hurdle.
• COO/CFO: Nuix provided a sign on grant at a face value of $500,000. The number of performance rights
issued was 210,084, based on the 5-day VWAP being immediately preceding the effective date of his
contract (1 July 2021). The grant will be issued as performance rights and will vest in five equal tranches
in the first trading window following the first and subsequent anniversary date of the start date. Each
vesting is subject to a continued service hurdle.
4.6 Legacy option awards
The EVP, International and EVP, Americas both have options that remain on foot that were granted to them
prior to the IPO. These options are subject to remaining employed at vesting date. These options are due to
expire on 31 October 2024 for the EVP, International and 30 September 2023 for EVP, Americas. Refer to table 16
for the number of options held and in table 10, the share-based payments include the cost of these options
for this year.
4.7 Executive KMP remuneration statutory table
The table on the next page sets out Executive KMP remuneration for FY22 in accordance with the requirements
of the Accounting Standards and Corporations Act 2001 (Cth). The table reflects the accounting value of
remuneration attributable to KMP, derived from the various components of their remuneration.
Nuix Annual Report 2022 55
Remuneration Report – audited continued
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56 Nuix Annual Report 2022
5. Non-executive director remuneration
5.1 Overview
The Board sets the fees for its Non-Executive Directors in line with the key objectives of the Group’s Non-
Executive Director remuneration policy set out below.
Non-Executive Director remuneration is reviewed annually and the Remuneration and Nomination Committee
makes recommendations to the Board regarding the remuneration of Non-Executive Directors.
The Group does not make sign-on payments to new Non-Executive Directors nor provide for retirement
allowances/benefits for Non-executive Directors (other than superannuation). Executive Directors of the Group
are not entitled to be paid Non-Executive Directors’ fees.
Elements
Details
Market
competitive
• The Board’s policy is to pay Non-Executive Directors at market competitive rates to attract
and retain high calibre Directors with the necessary skills, expertise and experience for the
Nuix Board
•
In positioning fees, the Board has regards to fees payable by comparable companies
(based on external benchmarking data) as well as the time commitment and workloads
of Non-Executive Directors
Independence
and impartiality
• No element of Non-Executive Director remuneration is ‘at risk’ (i.e. subject to performance
conditions) in order to preserve the Directors’ independence and impartiality
• Two Non-Executive Directors held options over Nuix shares that were granted to them pre-IPO.
These options are not performance tested so as not to conflict with their obligation to bring
an independent judgement to matters before the Board. No options have been granted to
Non-Executive Directors since Listing
•
It is not intended to grant options or performance rights to Non-Executive Directors in the future
Shareholder
alignment
• Non-Executive Directors are encouraged to hold securities in the Company to create alignment
between interests of Directors and shareholders
5.2 Fee pool and schedule
Non-Executive Directors are paid from an aggregate annual fee pool of $1,100,000, as approved by the Group’s
shareholders upon its listing in 2020.
Table 11 sets out the fees (inclusive of superannuation) payable to the Non-Executive Directors of the Group in
respect of FY22.
The Chair and Deputy Chair do not receive separate fees for their participation in Board committees. Daniel
Phillips was not paid fees for being a Non-Executive Director, or for chairing or being a member of any Board
Committee, during FY22.
Table 11. Non-executive Director fees for FY22
NON-EXECUTIVE DIRECTOR FEES
Position
Chairman
Deputy Chairman
Directors
Committee chairman
Committee member
Fees for FY22
(Annualised)
$240,000
$160,000
$120,000
$20,000
$10,000
Nuix Annual Report 2022 57
Remuneration Report – audited continued
5.3 Legacy options held by Non-Executive Directors
As outlined in section 6.4.2.7 of Nuix’s Prospectus, Non-Executive Directors Jeffrey Bleich and Sir Iain Lobban
(via Cyberswift Ltd) each held 625,000 options over Nuix shares prior to completion of the IPO. Upon
completion of the IPO, 375,000 of those options were cancelled for cash and 250,000 options remained on
foot for each of them. Of these options (as outlined in table 16), 240,000 and 250,000 still remain on foot for
Mr Bleich and Sir Lobban at year end respectively.
The terms of the options remain the same and will lapse on 30 September 2023. In accordance with best
practice and the Group’s Remuneration Policy, these options do not have performance conditions attached
and are intended as a one-off arrangement.
5.4 Non-Executive Directors – statutory remuneration
The fees paid or payable to the Non-Executive Directors of the Group in respect of FY22 are set out in the table
on the next page.
Table 12. FY22 – Non-executive Directors statutory remuneration table
Short-term
benefits
Post-
employment
benefits
Share
based
payments
Salary
and fees
Super-
annuation
Options
Total
Total
Performance
related
$
240,000
228,556
$
–
–
$
–
392,787
100,151
10,015
–
–
130,000
121,820
136,364
130,231
91,332
697,847
480,607
–
–
–
–
13,636
7,591
9,133
32,784
7,591
–
–
–
–
372,652
–
–
–
–
$
240,000
621,343
110,166
–
–
130,000
494,472
150,000
137,822
100,465
730,631
765,439
1,253,637
%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Non-Executive
Director
remuneration
Jeffrey Bleich
Robert Mactier
(from 6 October 2021)
Daniel Phillips
Sir Iain Lobban
Sue Thomas
Jacqueline Korhonen
(from 6 October 2021)
Total
Total
Financial
year
FY22
FY21
FY22
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY22
FY21
58 Nuix Annual Report 2022
6. Remuneration governance
6.1 Responsibility for setting remuneration
Nuix maintains a robust remuneration governance framework, which aims to ensure that the Group’s
remuneration practices are fair and reasonable, aligned with best practice and balance both financial and
non-financial risk considerations.
Diagram 1. Nuix’s remuneration governance framework
Nuix Board
The Board is responsible for the overall corporate governance, operation and stewardship of the Group and, in
particular, for the long-term growth and profitability, the strategies, values, policies and financial objectives.
The Board reviews, challenges, applies judgment and, as appropriate, approves the Remuneration and Nomination
Committee’s recommendations. It approves the remuneration of Executive KMP and of Non-Executive Directors and the
polices and frameworks that govern both.
Remuneration and Nomination Committee
The role of the Remuneration and Nomination Committee is to assist the Board by reviewing and making
recommendations to the Board in relation to:
•
•
•
•
•
•
•
the Group’s Remuneration Policy (including as it applies to Non-Executive Directors);
remuneration packages of senior executives equity-based incentive plans and other employee benefit programs;
the process by which the pool of Non-Executive Directors’ fees approved by shareholders is allocated to Directors,
succession issues and planning for the Board and senior executives and the recruitment of new Non-Executive
Directors and senior executives;
the appointment and re-election of people as members of the Board and its committees;
the Group’s recruitment, retention and termination policies;
the process for the evaluation of the performance of the Board, its Board committees and individual Non-Executive
Directors; and
the size and composition of the Board and strategies to address Board diversity and the Group’s performance in
respect of the Group’s Diversity Policy.
Management
External advice
Management is responsible for preparing proposals to
be considered by the Remuneration and Nomination
Committee on remuneration arrangements and
outcomes.
Management also oversees the implementation of
approved remuneration policies and processes.
External advisers may be used from time-to-time
to supplement the Remuneration and Nomination
Committees own information and insights (as required)
and to ensure the Committee is appropriately informed
when discharging its obligations.
6.2 Use of remuneration consultants
The Remuneration and Nomination Committee seeks external remuneration advice to assist the Committee
with discharging its duties and ensure that it is fully informed when making decisions (including on recent
market trends and practices and other remuneration related matters).
Any advice from consultants is used as a reference point by the Remuneration and Nomination Committee
and the Board only, and does not serve as a substitute for thorough consideration by Non-Executive Directors.
No remuneration recommendations (as defined in section 9B of the Corporations Act 2001) were obtained
during the financial year ended 30 June 2022.
Nuix Annual Report 2022 59
Remuneration Report – audited continued
6.3 Details of Executive Service Agreements
Key terms of the service agreements of Executive KMP are summarised in Table 13 below.
Table 13. Key terms of Executive KMP contracts in FY22
EXECUTIVE SERVICE AGREEMENTS
Element
Further detail
Duration
Ongoing term
Periods of notice
required to
terminate
The Group or Executive KMP may terminate the contract by giving the following notice:
• CEO and COO/CFO - 6 months’ written notice,
• EVP, International and EVP, Americas – 90 days or 3 months’ written notice
For all Executive KMP, the Group may terminate the service agreement immediately without notice
in certain circumstances, including (but not limited to) where the relevant Executive KMP engages
in a serious breach of agreement or serious misconduct.
Termination
payments
Members of the Executive KMP may be entitled to termination payments in limited circumstances
and subject to local legislative requirements and practices (but not when the termination
occurs for cause). A payment may be made in lieu of notice at the discretion of the Board where
termination occurs other than for cause.
Restraints
All Executive KMP are subject to post-employment restraints as follows:
• CEO: 12 months
• COO/CFO, EVP, International and EVP, Americas: 6 months
6.4 Treatment of equity arrangements for former CEO
As outlined in section 1, former CEO Rod Vawdrey ceased as KMP on 6 December 2021 and concluded his
employment with the Group on the same day.
Table 14. Treatment of various incentives for former CEO
Incentive/Entitlement
Further detail
Notice period
Nuix provided notice to Mr Vawdrey on 6 December and he received a payment in
lieu of his notice period which was paid in December 2021.
Short term incentive
(section 4.3)
Legacy LTI award and FY22
LTI award (section 4.4)
Mr Vawdrey was not awarded an STI payment for his service for FY22.
The Board determined that Mr Vawdrey’s FY21 LTI award (i.e. 169,891 options) will
remain on foot to be tested against the original revenue and EDITDA performance
conditions and vest (as applicable) at the end of the original 3-year performance
period. The treatment of any options that remain on foot (to the extent performance
hurdles are met) will remain subject to the forfeiture and clawback provisions of the
LTI plan rules in various circumstances including fraud or dishonesty.
There was no LTI award made for FY22.
60 Nuix Annual Report 2022
7. Further information
7.1 Executive KMP and Director share ownership
Tables 15 and 16 below set out the number of shares held directly, indirectly or beneficially by KMP.
Table 15. Movements in shareholdings not held under an employee share plan
Opening
balance
Purchase
of shares
Disposal
of shares
Other changes
during the year
Balance
30 Jun 22
Non-Executive Directors
Jeffrey Bleich
Robert Mactier
Daniel Phillips
Sir Iain Lobban
Sue Thomas
Jacqueline Korhonen
Executive KMP
Jonathan Rubinsztein
Chad Barton
Jonathan Rees
Ethan Treese
35,000
–
–
–
100,000
175,000
–
–
18,833
296,467
–
–
–
4,610
–
–
150,000
–
–
–
–
Rod Vawdrey (former)
1,680,509
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,680,509)
135,000
175,000
–
–
315,300
–
150,000
–
4,610
–
–
Nuix Annual Report 2022 61
Remuneration Report – audited continued
Table 16. Movements in options and performance rights held under an employee share plan
Instrument
Opening
balance
Granted
Exercised Cancelled
Lapsed
Balance
30 Jun 22
Exercisable
30 Jun 22
240,000
240,000
–
–
–
–
250,000
250,000
–
–
–
–
–
–
–
–
–
–
–
–
–
1,039,946
–
751,766
420,041
117,000
–
–
408,206
102,788
–
–
169,891
–
–
–
–
–
–
–
–
–
–
–
Non-Executive Directors
Jeffrey Bleich
Options
240,000
Robert Mactier
Daniel Phillips
Options
Options
–
–
Sir Iain Lobban1
Options
250,000
Sue Thomas
Options
Jacqueline
Korhonen
Executive KMP
Jonathan
Rubinsztein
Options
Options
Performance
Rights
Chad Barton
Options
Performance
Rights
–
–
–
–
–
–
–
–
–
–
–
–
–
1,039,946
–
751,766
Jonathan Rees
Options
420,041
–
Performance
Rights
–
117,100
Ethan Treese
Options
408,206
–
Performance
Rights
–
102,788
Rod Vawdrey
(former)
Options
169,891
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1.
Sir Iain Lobban holds options through Cyberswift Ltd, an entity incorporated in the United Kingdom.
62 Nuix Annual Report 2022
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Nuix Annual Report 2022 63
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Remuneration Report – audited continued
7.3 Other transactions and balances with KMP
A. Loans to Executive KMP
No Executive KMP or their related parties received loans, guaranteed or secured, directly or indirectly from the
Group during the year.
B. Other Executive KMP transactions
The Group did not engage in any transactions with Executive KMP or their related parties during the year.
C. Other transactions
There were no other transactions that occurred with the Executive KMP or their related parties during the year.
64 Nuix Annual Report 2022
Financial Report
For the Year Ended 30 June 2022
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
1. Basis of preparation
1.1 Reporting entity
1.2 Basis of accounting
1.3 Going concern
1.4 Basis of consolidation
70
70
70
70
72
1.5 Foreign currency transactions and balances 72
1.6 New standards, interpretations and
amendments adopted by the Group
1.7
Impact of standards issued but
not yet applied by the Group
1.8 Use of judgements and estimates
1.9 Significant events and transactions
1.10 Financial instruments
1.11 Goods and services tax
1.12 Classification of expenses
1.13 Fair value measurement
2. Operating results and financial
performance notes
2.1 Revenue
2.2 Segment information
2.3 Loss for the year
2.4 Other income
2.5 Finance costs
2.6 Reconciliation of cash flows
from operating activities
2.7 Earnings per share
3. Taxation of our global operations
3.1 Income tax (benefit)/expense
3.2 Reconciliation of effective tax rate
3.3 Deferred tax balances
3.4 Current tax assets/(liabilities)
3.5 Income tax paid by legal entity
3.6 Franking credits
73
73
73
74
74
75
75
76
76
76
80
82
83
83
84
84
85
85
86
86
87
90
90
66
67
68
69
91
91
91
92
93
93
94
95
96
97
99
100
4. Working capital
4.1 Cash and cash equivalents
4.2 Trade and other receivables
(including contract assets)
4.3 Other current assets
4.4 Trade and other payables
4.5 Deferred revenue
4.6 Provisions
4.7 Borrowing facility
5. Non-current assets
5.1 Intangible assets
5.2 Property and equipment
5.3 Leases
5.4 Impairment testing of non-financial assets 102
6. Remuneration
6.1 Employee benefit expenses
6.2 Share-based payments
6.3 KMP Remuneration
7. Financial risks
7.1 Financial risk management
8. Business structure
8.1 Issued capital
8.2 Reserves
8.3 Acquisition of Topos Labs, LLC
9. Other
9.1 Other liabilities
9.2 Dividends
9.3 Related party disclosures
9.4 Auditor’s remuneration
105
105
106
109
110
110
113
113
114
114
118
118
119
119
121
9.5 Parent or the Company financial information 122
9.6 Contingent Liabilities
9.7 Events after the reporting date
122
125
Nuix Annual Report 2022 65
Consolidated statement of comprehensive income
As of 30 June 2022
Revenue
Cost of goods sold
Gross profit
Sales and distribution
Research and development
General and administration
Other income
Net realised and unrealised foreign exchange gains/(losses)
Operating loss
Finance costs
Loss before income tax
Income tax benefit
Loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income, net of tax
Total comprehensive income for the year, net of tax
Earnings per share
Basic
Diluted
Notes
2.1
2.3
2.4
2.5
3.1
2022
$000
2021
$000
152,310
176,068
(18,440)
133,870
(18,851)
157,217
(60,022)
(52,399)
(47,811)
(37,932)
(50,787)
(68,598)
1,230
1,045
(22,475)
(1,630)
(24,105)
1,314
(22,791)
1,160
(2,015)
(2,567)
(1,393)
(3,960)
2,554
(1,406)
7,873
7,873
(8,478)
(8,478)
(14,918)
(9,884)
2.7
2.7
(0.07)
(0.07)
(0.00)
(0.00)
The consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
66 Nuix Annual Report 2022
Consolidated statement of financial position
For the year ended 30 June 2022
Current assets
Cash and cash equivalents
Trade and other receivables (including contract assets)
Other current assets
Current tax assets
Total current assets
Non-current assets
Deferred tax assets
Intangible assets
Property and equipment
Right of use assets
Trade and other receivables (including contract assets)
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Deferred revenue
Provisions
Lease liabilities
Other current liabilities
Current tax liabilities
Total current liabilities
Non-current liabilities
Deferred revenue
Provisions
Lease liabilities
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings
Total equity
Notes
2022
$000
2021
$000
4.1
4.2
4.3
3.4
3.3
5.1
5.2
5.3
4.2
4.4
4.5
4.6
5.3
9.1
3.4
4.5
4.6
5.3
3.3
9.1
8.1
8.2
46,846
50,813
8,098
1,918
70,865
63,767
6,209
–
107,675
140,841
3,326
237,125
3,040
11,189
11,762
266,442
374,117
23,742
32,544
2,898
2,802
7,528
–
5,225
197,415
2,018
9,036
9,474
223,168
364,009
19,754
33,832
2,878
2,635
–
571
69,514
59,670
16,741
1,017
10,848
–
6,930
35,536
105,050
11,528
542
8,727
2,467
–
23,264
82,934
269,067
281,075
370,696
370,696
(163,539)
(174,322)
61,910
269,067
84,701
281,075
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
Nuix Annual Report 2022 67
Consolidated statement of changes in equity
For the year ended 30 June 2022
Issued
capital
$000
104,227
Share option
reserve
$000
(654)
–
–
–
266,469
–
–
–
–
–
–
(175,040)
4,053
Foreign
currency
translation
reserve
$000
5,797
–
(8,478)
(8,478)
–
–
–
Retained
earnings
$000
86,107
(1,406)
–
(1,406)
–
–
–
Total
equity
$000
195,477
(1,406)
(8,478)
(9,884)
266,469
(175,040)
4,053
Balance at 1 July 2020
Profit for the year
Other comprehensive income
Total comprehensive income
Contributions of equity, net of
transaction costs and tax
Cancellation of options
Share-based payments
Balance at 30 June 2021
370,696
(171,641)
(2,681)
84,701
281,075
Profit for the year
Other comprehensive income
Total comprehensive income
Share-based payments
–
–
–
–
–
2,910
Balance at 30 June 2022
370,696
(168,731)
–
(22,791)
(22,791)
7,873
7,873
–
5,192
–
7,873
(22,791)
(14,918)
–
2,910
61,910
269,067
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
68 Nuix Annual Report 2022
Consolidated statement of cash flows
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers
Payments to employees and suppliers1
Interest received
Interest paid
Income tax paid
Net cash from operating activities
Cash flows from investing activities
Payments for software development costs
Purchase of property and equipment
Purchase of intangible assets
Acquisition of Topos Labs, LLC, net of cash acquired
Net cash used in investing activities
Cash flows from financing activities
Principal payments of lease
Proceeds from issuance of ordinary shares
Payments to option holders for cancellation of options
Payments for share issue costs1
Repayment of borrowings
Net cash provided by/(used in) financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of financial year
Exchange differences on cash and cash equivalents
Cash and cash equivalents at end of financial year
Notes
2022
$000
2021
$000
171,544
164,482
(139,410)
(152,039)
1
(1,630)
(385)
30,120
17
(1,464)
(195)
10,801
(42,388)
(34,130)
(2,358)
–
(6,861)
(1,051)
(126)
–
(51,607)
(35,307)
(2,727)
(3,739)
–
–
–
–
(2,727)
(24,214)
70,865
275,661
(175,614)
(13,132)
(25,071)
58,105
33,599
38,539
195
(1,273)
46,846
70,865
3.5
2.6
5.1
5.2
5.1
8.3
8.1
8.2
4.7
4.1
4.1
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
1.
In FY2021, cash flows related to payment of offer costs are recognised in the statement of cash flows between operating activities and financing
activities, on a basis consistent with the split between recognition in equity and profit and loss (refer Note 2.3). The total amount of cash paid for
offer costs during the year was $45,409,000 of which $32,277,000 was recognised within payments to employees and suppliers as part of operating
activities, and $13,132,000 was recognised as payments for share issue costs as financing activities.
Nuix Annual Report 2022 69
Notes to the consolidated
financial statements
1. Basis of preparation
The notes are grouped into 9 sections. Each section contains an introduction and general information, along
with the relevant accounting policies and key judgements.
The layout of these financial statements has been streamlined to present them in a way that is intuitive for
readers to follow. This is achieved by grouping disclosures, and focusing information in a manner which
provides increased clarity and ease of understanding.
This section describes the key accounting principles and policies that we have adopted in preparing the
financial statements for the Group as a whole. This section also analyses the impact of any newly issued but
not yet effective accounting standards which will be effective for Nuix in future years.
Certain reclassifications have been made to the prior year’s financial statements to enhance comparability
with the current year’s financial statements. Comparative figures have been adjusted to conform to the
current year’s presentation.
1.1 Reporting entity
Nuix Limited (‘Nuix’ or the ‘Company’) is a company that is incorporated and domiciled in Australia. The
Company’s registered address is Level 27, 1 Market Street, Sydney NSW Australia. Nuix is a leading provider
of investigative analytics and intelligence software. These consolidated financial statements comprise the
Company and its subsidiaries (together referred to as the ‘Group’).
1.2 Basis of accounting
The consolidated financial statements are general purpose financial statements which have been prepared
in accordance with Australian Accounting Standards adopted by the Australian Accounting Standards Board,
and the Corporations Act 2001. The consolidated financial statements also comply with International Financial
Reporting Standards and Interpretations (‘IFRICs’) adopted by the International Accounting Standards Board.
The financial statements were authorised for issue by the Board of Directors on 31 August 2022.
The consolidated financial statements are presented in Australian dollars, which is the reporting currency
of the Company, and has been prepared on the basis of historical cost except in accordance with relevant
accounting policies where assets and liabilities are stated at their fair values.
Nuix is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191. In accordance with that instrument all financial information presented has been rounded
to the nearest thousand dollars, unless otherwise stated.
1.3 Going concern
At 30 June 2022, the Group is in a net current asset position of $38,161,000. At 30 June 2022 the Group had
$46,846,000 available cash and cash equivalents (refer to note 4.1). The financial statements have been
prepared on a going concern basis.
In preparing these financial statements, the Group has prepared and the Directors have considered cash flow
forecasts, taking into account information currently available regarding current conditions and those, at least
but not limited to, twelve months from the end of the reporting period. Important to these cash flows are the
assumptions used regarding seeking to return to operating net cash inflows in FY24, the potential outcomes
and timings of the regulatory and litigation matters as discussed in Note 9.6, and the access to other funding
sources should they be required to achieve the Group’s strategy. The uncertainties attached to funding
sources, the unknown outcomes of the litigation matters together with the potential business impacts of the
ongoing litigation matters, gave rise to the Group concluding that while there are uncertainties related to
events or conditions that may depending on the circumstances, cast doubt on the entity’s ability to realise its
assets and discharge its liabilities in the normal course of business, it remains appropriate that the financial
statements be prepared on going concern basis.
70 Nuix Annual Report 2022
In forming this conclusion, the Directors consider that the Group has a business plan which appropriately
considers the following assumptions, associated risks and mitigating factors:
• cash flow forecasts include new pricing plans, growth in revenue supported by the investment in sales
capability and continued product development along with significant unusual matters such as the
settlement of contingent consideration for the Topos Labs acquisition and ongoing legal fees. The Group
is targeting to be cash flow neutral, excluding the impact of non-operational legal fees and M&A activity.
There are risks to achieving this given business performance in FY22, forecast economic headwinds, and
broader business impacts of the regulator and litigation matters;
•
•
•
recent results of operating activities undertaken aligned with the new Nuix strategy including price rises
and an improving NDR% have been taken into account when setting revenue forecasts used to derive
forecast cash receipts;
the potential timing and quantum of any adverse outcomes from the current regulator action. In
applying the assumptions and judgements, we have had regard to the penalty regime, views of our
advisors and potential likelihood of outcomes;
the litigation and claims underway, in particular, consideration of the potential impact to the business
if there was a significant adverse judgement in relation to the Sheehy claim in the cash forecast period.
With the exception of legal fees, the forecasts do not include cash outflows related to the claim. Based on
the views of our advisors, Nuix will continue to vigorously defend the proceedings and rejects the Sheehy
claim in its entirety; and
•
the Directors continue to assess debt financing options to provide medium- and long-term support for
the business strategy. The Group has no current debt financing facilities and there is increased risk and
uncertainty of debt financing becoming available to the Group in the cash forecast period.
The outcomes of these indicate sufficient cash balances throughout the next 12 months with a return to net
cash inflows in the year ended 30 June 2024.
Further, the Group has prepared and the Directors have considered cash flow forecasts using a range
of alternate scenarios, in particular as they relate to outcomes from the regulator and litigation matters.
Additional mitigants available include:
•
the ability to reduce forecast operating expenditure to retain cash, aligning timing of reductions and
preservation of cash to expected legal milestones. Potential reductions are through ceasing recruitment
of new staff, managing consulting spend, delaying the development of new products, and/or other cost
reduction measures. While the Directors have determined these can be implemented as required to
scale back cash outflows, they may impact the ability of the Group to achieve its strategy;
•
in the event where there is a significant adverse outcome in the Sheehy Claim, the Group may, subject to
legal advice sought at the time, seek a stay of judgement pending an appeal which is likely to be at least
12 months from the date of signing this financial report; and
•
in the event that it is required, the ability to raise equity from existing and or new shareholders based on
known levels of interest and support.
The Directors additionally have processes to monitor actual results closely such that mitigating actions can
be taken at pace, in the amounts which may be required should they be required in the relevant timeframes.
Based on the above, the Directors are satisfied that it will be able to continue to realise its assets and
discharge its liabilities in the normal course of business for a minimum of the next 12 months.
Nuix Annual Report 2022 71
Notes to the consolidated financial statements continued
1.4 Basis of consolidation
The Group accounts for business combinations using the acquisition method when the acquired set of
activities and assets meets the definition of a business and control is transferred to the Group.
The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an
acquired set of activities and assets is not a business. The optional concentration test is met if substantially all
of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar
identifiable assets.
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired.
The consideration transferred in the acquisition is generally measured at fair value. The consideration
transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts
are generally recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay
contingent consideration that meets the definition of a financial instrument is classified as equity, then it is
not remeasured, and settlement is accounted for within equity. Otherwise, other contingent consideration is
remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent
consideration are recognised in profit or loss.
Identifiable assets and liabilities in a business combination are, with limited exceptions, measured initially
at their fair values at the acquisition date. The Group recognises any non-controlling interest in the
acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquired entity
and the acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of
the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of
the net identifiable assets of the business acquired, the difference is recognised directly in profit and loss as a
bargain purchase. Any goodwill that arises is tested annually for impairment.
Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities.
1.4.1. Subsidiaries
Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries are included in the consolidated
financial statements from the date on which control commences until the date on which control ceases.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
1.4.2. Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses (except for foreign
currency transaction gains or losses) arising from intra-group transactions, are eliminated.
1.5 Foreign currency transactions and balances
1.5.1. Functional and presentation currency
Transactions in foreign currencies are translated into the respective functional currencies of Group
companies at the exchange rates at the dates of the transactions.
72 Nuix Annual Report 2022
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency
at the exchange rates at the dates of the transactions. Non-monetary assets and liabilities that are measured
at fair value in a foreign currency are translated into the functional currency at the exchange rate when the
fair value was determined. Non-monetary items that are measured based on historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are
generally recognised in profit or loss.
1.5.2. Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated into Australian dollars at the exchange rates at the reporting date. The income
and expenses of foreign operations are translated into Australian dollars at the exchange rates at the dates of
the transactions.
Foreign currency differences are recognised in other comprehensive income (OCI) and accumulated in the
translation reserve, except to the extent that the translation difference is allocated to non-controlling interests.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence
or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is
reclassified to profit or loss as part of the gain or loss on disposal. If the Group disposes part of its interest in a
subsidiary but retains control, then the relevant proportion of the cumulative amount is reattributed to non-
controlling interests.
1.6 New standards, interpretations and amendments adopted by the Group
A number of new or amended standards and interpretations became applicable for the current reporting
period effective from 1 July 2021. The Group did not have to change its accounting policies or make
retrospective adjustments to adopt these standards, as they did not have a significant impact on the Group’s
consolidated financial statements.
1.7 Impact of standards issued but not yet applied by the Group
A number of new or amended standards and interpretations have been published that are not mandatory
for 30 June 2022 full year reporting and have not been early adopted by the Group. When they are required
to be adopted, they are not expected to have a significant impact on the Group’s consolidated financial
statements.
1.8 Use of judgements and estimates
In preparing these consolidated financial statements, management has made judgements and estimates
that affect the application of accounting policies and the reported amounts of assets and liabilities, income
and expenses. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting
estimates are recognised in the year in which the estimate is revised if the revision affects only that year or in
the year of the revision and future years if the revision affects both current and future years.
Significant areas of estimation and critical judgements are described in the relevant note.
• Revenue recognition – Note 2.1;
• Uncertain tax position and recoverability of tax assets – Note 3;
• Capitalisation and useful life of intangible assets – Note 5.1;
•
Impairment testing of goodwill – Note 5.4;
• Share-based payment expense – Note 6.2;
• Business combinations – Note 8.3; and
• Contingent liabilities – Note 9.6.
Nuix Annual Report 2022 73
Notes to the consolidated financial statements continued
1.9 Significant events and transactions
The Group acquired Topos Labs, LLC on 20 September 2021, a developer of Natural Language Processing
software that helps computer systems better understand text and spoken words at speed and scale. Refer
to Note 8.3 for further details related to the accounting for transactions related to this acquisition, and an
explanation of how the acquisition has impacted the results for the year ended 30 June 2022.
During the year ended 30 June 2022, central banks including the Reserve Bank of Australia have lifted the risk-
free rate of interest. Notwithstanding this change in the macroeconomic environment, no impairment has
been recognised against the intangible assets of the Group (refer to Note 5.4).
For a detailed discussion about the Group’s performance and financial position, refer to the ‘Operating and
financial review’ included in the Directors’ Report.
1.10 Financial instruments
1.10.1 Recognition and initial measurement
Trade receivables are initially recognised when customers are invoiced. All other financial assets and financial
liabilities are initially recognised when the Group becomes a party to the contractual obligations.
A financial asset (unless it is a trade receivable) or financial liability is initially measured at fair value plus
transaction costs that are directly attributable to its acquisition. Trade receivables without a significant
financing component are initially measured at the transaction price.
1.10.2 Derecognition
Financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial asset are transferred, or in which
the Group neither transfers/ retains substantially all of the risks and rewards of ownership, and it does not
retain control.
Financial liabilities
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or
expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of
the modified financial liability are substantially different, in which case a new financial liability based on the
modified terms is recognised at fair value. On derecognition of a financial liability, the difference between the
carrying amount extinguished and the consideration paid is recognised in profit or loss.
1.10.3 Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the consolidated
statement of financial position when, and only when, the Group currently has the legally enforceable right
to set off the amounts and it intends either to settle them net, or to realise the asset and settle the liability
simultaneously.
1.10.4 Impairment
The Group assesses on a forward-looking basis, the expected credit losses associated with its trade
receivables and contract assets. Loss allowances for trade receivables and contract assets are always
measured at an amount equal to the expected lifetime losses. The expected lifetime losses are those that
result from all possible default events over the expected life of a financial instrument. Loss allowances for
financial assets measured at amortised cost, are deducted from the gross carrying amount of the assets.
74 Nuix Annual Report 2022
1.11 Goods and services tax
Revenues, expenses and assets are recognised net of the associated goods and services tax (GST), value-
added tax (VAT), and sales tax unless when the tax incurred is not recoverable from the taxation authority. In
this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables
and payables are stated inclusive of the amount of GST receivable or payable. The net amount of tax
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
balance sheet. Cash flows are presented on a gross basis.
The GST components of cash flows arising from investing or financing activities which are recoverable from,
or payable to the taxation authority, are presented as operating cash flows.
1.12 Classification of expenses
1.12.1 Presentation of results
The Group has presented the expense categories within the consolidated statement of profit or loss on
a functional basis. The categories used are cost of goods sold, research and development, sales and
distribution and general and administration. The presentation style provides insight into the Company’s
business model and enables users to consider the results of the Group compared to other major software
companies. The methodology and the nature of costs within each category are further described below.
1.12.2 Cost of goods sold
Cost of goods sold consists of expenses directly associated with securely hosting the Group’s services
and providing support to customers. Costs include data centre costs, personnel and related costs directly
associated with cloud infrastructure and customer consulting, implementation and customer support,
contracted third party costs, reseller channel costs and allocated overheads.
1.12.3 Research and development expenses
Research and development expenses consist primarily of personnel and related costs directly associated
with the Company’s research and development employees, as well as direct costs of research and
development (including subscriptions) and allocated overheads. When future economic benefits from
development of an intangible asset are determined probable and the development activities are capable of
being reliably measured, the costs are capitalised as an intangible asset and then amortised to profit or loss
over the estimated life of the asset created. The development activities comprise the interface design, coding,
documentation and testing of a chosen alternative for new or improved software products, processes,
systems and services. The amortisation of those costs capitalised is included as a research and development
expense.
1.12.4 Sales and distribution expenses
Sales and distribution expenses consist of personnel costs directly associated with the sales and marketing
teams’ activities to acquire new customers and grow revenue from existing customers. Other costs included
are external advertising, digital platforms, marketing and promotional events as well as allocated overheads.
1.12.5 General and administration expenses
General and administration expenses consist of personnel and related costs for the Company’s executive,
Board of Directors, finance, legal, human resources, corporate strategy, and IT employees. They also
include legal, accounting and other professional services fees, insurance premiums, acquisition and
integration costs associated with the Company’s ongoing acquisition strategy, other corporate expenses
and allocated expenses.
Nuix Annual Report 2022 75
Notes to the consolidated financial statements continued
1.12.6 Overhead allocation
The presentation of the consolidated statement of profit or loss and other comprehensive income by function
requires certain overhead costs to be allocated to functions. These allocations require management to apply
judgement. The costs associated with the Group’s facilities, internal information technology and non-product
related depreciation and amortisation are allocated to each function based on respective headcount.
1.13 Fair value measurement
A number of the Group’s accounting policies require the measurement of fair values, for both financial and
non-financial assets and liabilities. The carrying amounts of cash and cash equivalents, trade and other
receivables, and trade and other payables are assumed to approximate their fair values due to their short-
term nature. When measuring the fair value of an asset or liability, the Group uses market observable data as
far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs to
the valuation techniques as follows:
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
•
Level 3: inputs for the asset or liability that are not based on market observable data (unobservable inputs).
If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of
the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the
fair value hierarchy as the lowest input that is significant to the entire measurement. The Group recognises
transfers between levels of the fair value hierarchy at the end of the reporting period during which the change
has occurred.
The Group does not have any debt securities or derivative financial instruments which require measurement
at fair value. As the inputs to the valuation of contingent consideration are not based on observable market
data, this is deemed a Level 3 measurement of fair value.
Refer to Notes 8.3 and 9.1 for fair value disclosures related to contingent consideration.
2. Operating results and financial performance notes
This section focuses on the operating results and financial performance of the Group.
It includes disclosures related to revenue and its recognition during the period, breakdowns of selected costs,
segment reporting, other income, and a reconciliation of profit before tax to operating cash flows.
2.1 Revenue
Software (including related support and maintenance)
Services
Hardware
2022
$000
146,418
5,840
52
2021
$000
171,513
4,465
90
152,310
176,068
76 Nuix Annual Report 2022
Disaggregation of revenue
The Group disaggregates revenue by categories shown in the tables below.
Revenue by type
Subscription licences
Perpetual licences
Consumption licences
Total licence revenues (including related support and maintenance)
Professional services
Hardware
Total other revenues
Total revenues
Timing of revenue recognition
Point in time
Over time
Accounting policies
i. Revenue recognition
2022
$000
88,953
26,174
31,291
146,418
5,840
52
5,892
2021
$000
119,049
30,442
22,022
171,513
4,465
90
4,555
152,310
176,068
2022
$000
94,094
58,216
152,310
2021
$000
118,592
57,476
176,068
Revenue is recognised upon transfer of control of promised products or services to customers in an amount
that reflects the consideration expected to be received in exchange for those products or services. We enter into
contracts that can include various combinations of products and services, which are generally capable of being
distinct and accounted for as separate performance obligations. Revenue is recognised net of allowances for
returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.
The timing of revenue recognition may differ from the timing of invoicing to our customers.
ii. Nature of products and services
Licences for on-premises software provide the customer with a right to use the software as it exists when made
available to the customer. Customers may purchase perpetual licences or subscribe to licences for on-premise
software, which provide customers with the same functionality and differ mainly in the duration over which the
customer benefits from the software. Revenue from distinct on-premises licenses are recognised upfront at the
point in time when the software is made available to the customer, and in the case of renewals, when the original
period ends and the additional period has started on the basis that this is the date from which the customer can
use and benefit from the renewal.
Subscription licencing agreements are generally combined with support and maintenance, which conveys rights to
unspecified upgrades released over the contract period and support and maintenance to help customers deploy
and use products more efficiently. On-premises licenses are considered distinct performance obligations when sold
with support and maintenance.
Nuix Annual Report 2022 77
Notes to the consolidated financial statements continued
Revenue allocated to support and maintenance is recognised rateably over the contract period as customers
simultaneously consume and receive the benefits, given that support and maintenance comprises distinct
performance obligations that are satisfied over time.
For consumption licences, the customer is charged based on the volume of data processed or under management
in each licence period. Customers are charged on a tiered ‘cost per gigabyte’ basis, typically with minimum annual
volume/revenue commitments.
Where such consumption licences are for a right to use software, and there is a fixed minimum commitment, a
portion of the contract value related to the sale of the licence is recognised when the licence is made available to
the customers, with the portion related to support and maintenance recognised over time. Any overage charges
are recognised when the usage occurs, as this corresponds directly with the value to the customer of Nuix’s
performance completed to date.
Where such consumption licences are for a right to access software, generally the case for consumption
licences related to our software as a service (‘SaaS’) offering Discover SaaS, revenue is recognised over time as
they are delivered. This is because the obligation to provide a SaaS service is determined to be a series of distinct
service periods, and allocation of the fees earned to each distinct service period based on the customer’s usage
each period would reasonably reflect the fees to which Nuix expect to be entitled for providing the SaaS during
that period.
A licence is a right to access software where:
•
•
the contract requires, or the customer reasonably expects, that the entity will undertake activities that
significantly affect the IP to which the customer has rights;
the rights granted by the licence directly expose the customer to any positive or negative effects of the entity’s
activities that significantly affect the IP; and
•
those activities do not result in the transfer of a good or a service to the customer as those activities occur.
iii. Support and maintenance revenue
Support and maintenance services are either bundled into licensing arrangements or sold separately to customers.
Where these services are bundled the Group allocates the transaction price to support and maintenance
performance obligations based on their relative standalone selling price. We determine standalone selling price by
considering multiple factors including but not limited to prices we charge for similar offerings and pricing practices.
Priority is placed on observable pricing where available. Support and maintenance services are provided over the
contractual period and accordingly are recognised over time.
iv. Professional services revenue
Professional services revenue mainly consists of fees charged for consultancy and training service. Revenue from
a contract to provide consulting and training services is recognised over time as the consulting and training is
performed.
v. Sale of goods
The Group on occasion will provide 3rd Party Software and Hardware to a customer. Revenue from the sale of
these goods is recognised at the point of delivery as this corresponds to the transfer of control of the goods to the
customer.
vi. Costs of obtaining a customer contract
Incremental costs associated with acquiring a customer contract, such as sales commissions, are generally
required to be recognised as an asset and amortised over a period that corresponds with the period of benefit.
We recognise an asset for the incremental costs of obtaining a contract with a customer if the Group expect the
benefit of those costs to be longer than one year. The Group has determined that certain sales incentives meet
the requirements to be capitalised.
The Group applies a practical expedient to expense costs as incurred for costs to obtain a contract with a
customer when the amortisation period would have been one year or less. These costs include our internal sales
commission compensation program and reseller margin where it has been determined that the reseller is acting as
an agent for Nuix.
78 Nuix Annual Report 2022
vii. Sales through partners
Where the Group uses partners, the Group must assess whether its customer is the partner or the end user. Where
the end user is the customer, revenue is recognised for the consideration paid by the end user with any commission
retained by the partner recognised as commission expense within costs of goods sold. Where the partner is the
customer, revenue is recognised at the net (of commission) amount received.
viii. Contract balances and other receivables
Timing of revenue recognition may differ from the timing of invoicing to customers. The Group records an unbilled
revenue when revenue is recognised prior to invoicing, or deferred revenue when revenue is recognised subsequent
to payment being received or due. For multi-year agreements, the Group generally invoice customers annually at
the beginning of each annual coverage period. The Group records a receivable related to revenue recognised for
multi-year on-premises licences as the Group has an unconditional right to invoice and receive payment in the
future related to those licences.
Deferred revenue comprises mainly unearned revenue related to support and maintenance obligations, cloud
services (Nuix hosted SaaS services), and revenues from subscription licences where Nuix presently have billed
customers, but the customer can only begin to benefit from the licence post balance date.
Payment terms and conditions vary by contract type, although terms generally include a requirement of payment
within 30 to 60 days. In instances where the timing of revenue recognition differs from the timing of invoicing, the
Group have determined our contracts generally do not include a significant financing component. The primary
purpose of our invoicing terms is to provide customers with simplified and predictable ways of purchasing our
products and services, not to receive financing from our customers or to provide customers with financing. An
example of providing such simplified and predictable ways of purchasing our product and services include
multi-year on-premises licences that are invoiced annually, with revenue recognised upfront.
Significant judgements and assumptions
Determination of contract term
For licences to use our software, determining the non-cancellable term of a contract with a customer can require
significant judgement. Given a substantial portion of our contracting is with governmental agencies, and the varied
nature of our contracting with customers, interpretation of termination clauses at the inception of the contract
requires judgement. If a contract term is determined to be non-cancellable for a longer period, a higher amount of
revenue is likely to be recognised upfront; whereas a contract term that is determined to be non-cancellable for a
shorter period, a lower amount of revenue is likely to be recognised upfront.
Contracts with multiple performance obligations
The Group enters into contracts with its customers that can include promises to transfer multiple performance
obligations. A promised good or service must be distinct to be accounted for as a separate performance obligation.
For software license contracts, there is a combination of goods and services that include software licensing,
software maintenance and support services which are generally treated as separate performance obligations on
the basis that the customers can benefit from them separately (or with other rights that they have), and they are
separately identifiable in the contract.
Judgement has been exercised in estimating the standalone selling price for software licences with bundled
support and maintenance. To estimate the standalone selling prices for the software licenses and bundled support
and maintenance, Nuix considers available observable inputs, such as the support and maintenance charges
where there is no bundling, including adjustments to these observable inputs to reflect differences in the licensing
arrangements and pricing practices.
Nuix Annual Report 2022 79
Notes to the consolidated financial statements continued
Recognition of revenue on sales made through partners
Where the Group transacts with customers through partners, the Group is required to assess whether the partner is:
• our customer – in which case, Nuix will recognise the net consideration receivable from the partner as revenue;
or
• an agent, and the end customers are Nuix’s customers, in which case Nuix will recognise the gross
consideration paid by the end customer as revenue, with the partner’s fee usually recognised as a cost.
Nuix sells through partners which includes entities that are referred to by Nuix as resellers and distributors. Nuix’s
partners help to extend coverage and capacity of Nuix’s distribution network. The flagship program for Nuix partners
is known as the Partner Connect Program, which involves the tiering of partners to deliver a strategic focus by
Nuix on high revenue generating partners and an efficient support framework for those with less sales frequency
and volume. A reseller is an intermediary that acts on behalf of Nuix and sells Nuix software to third parties. A
distributor also sells Nuix software to third parties, however the distributor may also appoint sub-distributors or
agents to market and sell Nuix products on their behalf. There are a number of other types of organisations that
Nuix considers to be partners that do not support indirect sales in the same way as a reseller or distributor. These
partnerships include advisories and service providers, integrations partners, authorised training partners, original
equipment manufacturing (OEM) partners and transactional resellers.
Nuix has concluded that it is only through reseller partners, that the partners do not obtain control of the goods
and services that are provided by Nuix to end customers as part of that sales channel. In relation to sales of
licences to Nuix software, resellers are required to provide Nuix with an order from an end customer and Nuix has
the unilateral ability to decline such an order form. On the basis that the licence to an end customer is generated
only on acceptance by Nuix of such an order form, and that the licence and associated support and maintenance
is provided directly to the end customer, Nuix has concluded that the end customer is its customer, and the
reseller is acting as an agent in these arrangements. In these instances, Nuix applies judgment to determine the
consideration to which it is entitled using all relevant facts and circumstances that are available.
For all other sales made through partners (e.g. advisories, distributors and original equipment manufacturing
partners), Nuix has concluded that the partners take control of the licence and related support and maintenance,
and as a result those partners are Nuix’s customers in those arrangements.
2.2 Segment information
The Group manages its operations as a single business operation and there are no parts of the Group that
qualify as operating segments under AASB 8 Operating Segments. The CEO (Chief Operating Decision Maker
or ‘CODM’) assesses the financial performance of the Group on an integrated basis only and accordingly, the
Group is managed on the basis of a single segment. Information presented to the CODM on a monthly basis
is categorised by type of revenue as provided below. Further, earnings before interest, tax and depreciation
and amortisation (EBITDA) is used to assess the performance of the business.
Segment performance
Software
Services
Hardware
Total revenue
80 Nuix Annual Report 2022
2022
$000
146,418
5,840
52
2021
$000
171,513
4,465
90
152,310
176,068
In general, a large amount of revenue is generated by customers that are global, from transactions that cross
multiple countries and where the source of revenue can be unrelated to the location of the users accessing
the software. Accordingly, the Group is managed as a single segment.
Key elements adjusted against statutory loss after tax to derive segment EBITDA are as follows:
Net loss after tax
Less: Income tax benefit
Loss before income tax
Add: Depreciation and amortisation
Less: Net foreign exchange (gains)/losses
Add: Interest expense
EBITDA
Geographic Information
Revenue generated by location of customer1
Asia Pacific
Americas
Europe, Middle East and Africa (EMEA)
1.
The amounts for revenue by region in the following table are based on the invoicing location of the customer.
Non-current assets by geographic location
Asia Pacific
Americas
Europe, Middle East and Africa (EMEA)
2022
$000
2021
$000
(22,791)
(1,406)
1,314
(24,105)
35,584
(1,045)
1,630
12,064
2022
$000
34,479
82,708
35,123
152,310
2022
$000
134,928
129,492
2,022
266,442
2,554
(3,960)
31,072
2,015
1,393
30,520
2021
$000
29,519
92,348
54,201
176,068
2021
$000
121,272
99,604
2,292
223,168
Nuix Annual Report 2022 81
Notes to the consolidated financial statements continued
2.3 Loss for the year
The loss for the year has been arrived at after charging the following items:
Notes
2022
$000
2021
$000
Expenses (included in general and administration)
Legal fees – operational
Legal fees – non-operational1
Offer costs2
Corporate action/trade sale3
Listing fees
Bad debts expense
Low value/short term leases
Employee benefit expenses, inclusive of share-based payment expenses
(recognised across functions)
6.1
Sales and distribution
Research and development
General and administration
Depreciation and amortisation (recognised across functions)
Sales and distribution
Research and development
General and administration
Finance costs
Interest expense
1,841
13,796
–
–
–
1,221
313
55,226
13,950
15,904
2,378
31,948
1,258
1,623
–
32,277
2,637
1,014
2,215
106
50,442
9,954
15,317
2,615
27,157
1,300
2.5
1,630
1,393
1.
2.
Relates to costs for Group’s defences to the actions brought as disclosed in Note 9.6, and legal advice for the acquisition of Topos Labs, LLC.
The total costs related to the offer in the prior corresponding period were $45,409,000, of which $13,132,000 ($9,192,000, net of related tax impact)
related to the issue of new shares by the Company and are offset against equity raised in the offer. The remaining $32,277,000 ($22,593,000, net of
related tax impact) relates to the sale of existing shares and is recognised as an expense within General and Administration, with the related tax
benefit recognised in profit and loss.
3.
Relates to one-off costs of a sale process explored by Nuix Limited as an alternative to the Offer in the prior corresponding period.
82 Nuix Annual Report 2022
2.4 Other income
Government grant income
Other income
2022
$000
1,157
73
1,230
2021
$000
1,086
74
1,160
Government grants recognised as other income for the current financial year relates to benefits received
under the Research and Development Tax Incentive regime in excess of the statutory income tax rate.
Accounting policies – government grants
Allowances under the Australian Research and Development Tax Incentive regime are accounted for as a tax
credit, except for the incremental benefit above the statutory income tax rate which is accounted for as a
government grant.
Grants from the government are recognised where there is a reasonable assurance that the grant will be received
and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to
match them with the costs that they are intended to compensate.
Government grants relating to intangible assets are included in non-current liabilities as deferred income and
they are credited to profit or loss on a straight-line basis over the expected lives of the related assets.
2.5 Finance costs
Interest expense
2022
$000
1,630
1,630
2021
$000
1,393
1,393
Accounting policies – finance costs
Interest expense is recognised using the effective interest method. The ‘effective interest rate’ is the rate that exactly
discounts estimated future cash payments through the expected life of a financial liability to the amortised cost of
the financial liability.
Nuix Annual Report 2022 83
Notes to the consolidated financial statements continued
2.6 Reconciliation of cash flows from operating activities
Cash flows from operating activities
Loss for the year (before income tax)
Non-cash charges recognised in profit and loss:
Depreciation
Amortisation of intangible assets
Amortisation of capitalised borrowing costs
Bad debts expense
Share-based payment expense
Net exchange rate differences
Changes in assets and liabilities:
Decrease/(increase) in trade and other receivables
(Increase)/decrease in deferred tax asset
Increase in other current assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in deferred revenue
Increase in employee benefits provisions
Decrease in current tax liabilities
Increase in deferred tax liabilities
Increase in provision for make good
Net cash from operating activities
2.7 Earnings per share
Loss for the year
Weighted average number of ordinary shares (basic)
Basic earnings per share (in dollars)
Loss for the year
Weighted average number of ordinary shares (basic)
Shares issuable in relation to equity-based compensation scheme
Effect of share options and performance rights
Diluted weighted average number of ordinary shares
Diluted earnings per share (in dollars)
2022
$000
2021
$000
(24,105)
(3,960)
3,856
31,728
66
1,221
2,997
604
9,346
(257)
(2,717)
3,444
3,247
702
(543)
–
531
4,567
26,506
69
2,225
4,627
1,686
(15,884)
381
(4,310)
(3,035)
(3,073)
1,542
(377)
(165)
2
30,120
10,801
2022
$000
(22,791)
2021
$000
(1,406)
317,314,794
295,123,838
(0.07)
(0.00)
(22,791)
(1,406)
317,314,794
295,123,838
4,527,969
18,519,9201
Antidilutive2
Antidilutive2
321,842,763
295,123,838
(0.07)
(0.00)
1. Calculated as the gross shares issuable under option (i.e. not calculated using the treasury method).
2.
In the year ended 30 June 2022, the conversion of the options and performance rights on issue would reduce the loss per share.
Potential ordinary shares are ‘antidilutive’ when their conversion to ordinary shares would decrease loss per share from continuing operations. The
calculation of diluted earnings per share does not assume conversion, exercise, or other issue of potential ordinary shares that would have an
antidilutive effect on earnings per share.
As a result, the effect of share options and performance rights on diluted earnings per share is considered to be ‘antidilutive’ in the year ended
30 June 2022 (30 June 2021: Antidilutive).
84 Nuix Annual Report 2022
Accounting policies – earnings per share
Basic earnings per share is calculated by dividing:
• profit attributable to owners, excluding any costs of servicing equity other than ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial year, excluding any
treasury shares.
Diluted earnings per share adjusts amounts used to compute basic earnings per share to take into account:
•
•
the after-tax effect of interest/financing costs associated with dilutive potential ordinary shares, and
the weighted average number of additional ordinary shares that would have been outstanding assuming the
conversion of all dilutive potential ordinary shares.
3. Taxation of our global operations
This section focuses on the taxation of our global operations.
It includes disclosures related to the income tax expense recognised from both current and deferred taxes, a
reconciliation of the effective tax rate for the group, and breakdowns for the deferred tax assets and liabilities of
the Group.
The note also includes disclosures of significant judgements and uncertainties related to our tax positions.
3.1 Income tax (benefit)/expense
Current tax expense
Current tax on profits for the year
Total current tax expense
Deferred tax expense
Increase in deferred tax assets
Decrease in deferred tax liabilities
Decrease in deferred tax assets (initially recognised directly in equity)
Changes in estimates related to prior years
Total deferred tax benefit
Income tax benefit
2022
$000
1,141
1,141
(1,619)
(7,370)
7881
5,7462
(2,455)
(1,314)
2021
$000
5,039
5,039
(4,727)
(2,866)
–
–
(7,593)
(2,554)
1.
2.
This relates to section 40-880 deduction recognised and amortised over 5 years in respect to the IPO costs incurred in December 2020.
The changes in estimates are attributed to Nuix Limited of $3,921,000 and mainly relates to derecognition of R&D tax offsets to align with the
amended FY2019 and lodged FY2020 and FY2021 tax returns which were finalised during FY2022. These adjustments to estimates previously
made as to the eligible R&D activities and expenditure during the relevant years are reflected above. The remaining amount relates to book to
return adjustments attributable to the overseas subsidiaries relating to the accounting for the tax treatment of deferred revenue restatements
in a prior year for US, UK, and Irish tax purposes.
Nuix Annual Report 2022 85
Notes to the consolidated financial statements continued
3.2 Reconciliation of effective tax rate
Loss before income tax expense
Tax at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Entertainment
Share-based payments
Interest expense
Difference in overseas tax rates
Benefit of Australia R&D tax credit amortised to other income
Benefit of United States R&D tax credit recognised in income tax expense
2022
$000
(24,105)
(7,232)
46
899
18
114
(347)
(924)
2021
$000
(3,960)
(1,188)
7
1,388
–
(1,121)
(326)
(660)
Benefit of Australia R&D tax credit recognised in income tax expense
(3,058)
(2,907)
Non-deductible R&D expenditures
Recognition of permanent benefits on R&D at 8.5%
Changes in estimates related to prior years – Nuix Limited1
Changes in estimates related to prior years – Nuix North America
and other subsidiaries1
Others
Income tax benefit
2,383
675
3,921
1,825
366
2,265
642
1,899
(2,437)
(116)
(1,314)
(2,554)
1.
The changes in estimates attributed to Nuix Limited of $3,921,000 mainly relates to derecognition of R&D tax offsets to align with the amended
FY2019 and lodged FY2020 and FY2021 tax returns which were finalised during FY2022. These adjustments to estimates previously made as to the
eligible R&D activities and expenditure during the relevant years are reflected above. The remaining amount relates book to return adjustments
attributable to the overseas subsidiaries relating to the accounting for the tax treatment of deferred revenue restatements in a prior year for US,
UK, and Irish tax purposes.
3.3 Deferred tax balances
Deferred tax assets
Research and development tax credit to carry forward
Employee benefits
Deferred revenue
Lease liabilities
Tax losses
s40-880 ‘black hole’ deductions related to IPO costs
Accruals and provisions
Others
Total deferred tax assets
Set-off deferred tax liabilities pursuant to set-off provisions
Net deferred tax assets
86 Nuix Annual Report 2022
2022
$000
19,708
1,814
4,670
3,174
10,188
9,077
–
2,239
50,870
(47,544)
3,326
2021
$000
20,314
1,374
6,193
2,794
820
12,106
1,207
1,858
46,666
(41,441)
5,225
Deferred tax liabilities
Intellectual property
Right of use assets
Property and equipment
Unbilled revenues
Others
Total deferred tax liabilities
Set-off deferred tax assets pursuant to set-off provisions
Net deferred tax liabilities
2022
$000
44,018
2,576
950
–
–
47,544
(47,544)
–
2021
$000
39,136
2,220
–
1,152
1,400
43,908
(41,441)
2,467
In the prior year, $3,939,000 of the deferred tax asset related to offer costs was recognised directly in equity as
it is related to the portion of the offer costs associated with the issuance of new equity.
3.4 Current tax assets/(liabilities)
Opening balance
Current income tax provision (net of tax credits)
Income tax payments
Prior year adjustments
Foreign exchange difference
Closing balance
2022
$000
(571)
(287)
385
2,367
24
1,9181
2021
$000
(327)
(454)
195
47
(32)
(571)
1.
The current tax liability account is in a net refund position due to the application of the tax loss carry back rules for US tax purposes in relation to
Nuix North America Inc. Under the tax loss carry back rules for US tax purposes, Nuix North America Inc. is expected to amend the FY2015 to FY2019
tax returns to apply the tax losses incurred in those years of approximately US$6.9m and is expected to result to a cash refund.
Nuix Annual Report 2022 87
Notes to the consolidated financial statements continued
Accounting policies – income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in equity or other comprehensive income.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to
income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Current
tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously.
ii. Deferred tax
Deferred tax is recognised in respect of the temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
• Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss;
• Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent
that the Group is able to control the timing of the reversal of the temporary differences and it is probable that
they will not reverse in the foreseeable future; and
• Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences
to the extent that it is probable that future taxable profits will be available against which they can be used. Future
taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of
taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits,
adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual
subsidiaries in the Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
it is no longer probable that the related tax benefit will be realised; such reductions are reversed when the probability
of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has
become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, using tax rates that are expected to be applied to temporary differences when they reverse, using tax rates
enacted or substantively enacted at the reporting date, and reflects an assessment of uncertain tax positions taken.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the
Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax
assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority.
iii. Accounting for Investment Tax Credits
The accounting for an Investment Tax Credit (ITCs) is dependent upon whether the arrangement is more akin to a
credit received for investment in a certain area, or a rather reduction in an applicable tax rate. Where an ITC is the
former, it is treated as a government grant (with the relevant benefit amortised over the period necessary to match
the benefits with the costs that they are intended to compensate), and where it is the latter, it is treated as a part of
current tax expense.
iv. Uncertainty over income tax treatments
The application of the tax law to a particular transaction or circumstances may be unclear and the acceptance
of the treatment may not be known until the relevant taxation authority undertakes an examination of the tax
treatment adopted or, in the event of a dispute, when a court makes a decision at a future time.
Where there is uncertainty over income tax treatments the recognition and measurement of current or deferred tax
assets or liabilities is determined applying Interpretation 23 – Uncertainty Over Income Tax Treatments.
88 Nuix Annual Report 2022
Each uncertain tax treatment is considered separately unless consideration together with one or more other
uncertain tax treatments gives rise to a better prediction of the resolution of the uncertain treatments on
examination by the relevant taxation authority.
Where it is considered probable (more likely than not) that the relevant taxation authority will accept the tax
treatment used or planned to be used in its income tax filings the tax treatment adopted is consistent with that used
or planned treatment in the income tax filings.
In assessing such probability in the recognition and measurement of uncertain tax treatments it is assumed that the
relevant taxation authority will examine amounts it has the right to examine and have full knowledge of all related
information when making those examinations and determining whether or not to accept the tax treatment in the
relevant income tax filings. In the event that the relevant taxation authority will not accept the tax treatment, the
uncertainty of each treatment is measured using either of the following methods:
• The most likely amount – the single most likely amount in a range of possible outcomes, particularly where the
outcome is binary or concentrated on one value; or
• The expected value – the sum of the probability weighted amounts in a range of possible outcomes.
In the event that an uncertain tax treatment affects both current and deferred tax the judgements made in relation
to the uncertain tax treatment are made consistently for current and deferred tax.
Significant judgements and assumptions
Uncertain tax position
The Group is subject to tax in numerous jurisdictions. Significant judgement is required in recognising and measuring
current and deferred tax assets and liabilities as there are transactions in the ordinary course of business and
calculations for which the ultimate tax treatment on examination by a relevant taxation authority or, in the event of
dispute, decision by a court is uncertain.
The Group recognises liabilities based on estimates of whether additional tax will be due. Where the final tax
outcomes of these matters are different from the amount that was initially recognised, such differences will impact
on the results for the year in which the respective income tax and deferred tax assets or provisions in the year in
which such determination is made.
In the current and prior periods, the Group has exercised judgement in recognising and measuring the tax benefit
of Research and Development (‘R&D’) tax offsets available under Australian tax legislation relating to eligible R&D
expenditure incurred on eligible overseas development activities in excess of expenditure incurred on related eligible
core Australian activities. In respect of the Group’s Endpoint Cyber Security Project (‘Endpoint Project’), the relevant
overseas and Australian activities were the subject of the Advance Overseas Finding for the years ended 30 June
2016 (FY2016) to 30 June 2018 (FY2018). The relevant advance overseas finding continues to be in force.
The Advance Overseas Finding was made that the overseas expenditure on the eligible overseas development
activities would not exceed the Australian portion of the total development expenditure on the eligible R&D activities
as required by section 28C Industry Research and Development Act 1986 over the life of the project activities. The
finding was made on the basis of reasonable estimates of actual and anticipated expenditures on the activities
provided by the Group totalling $42,673,000 in the course of the application for the Advance Overseas Finding in
September 2016 for years FY2016 to FY2018 only.
The Group has exercised judgement in prior years in assessing that it is probable that the relevant taxation authority
(the Australian Tax Office, ‘ATO’) will accept the tax treatment for the Endpoint Project for the years FY2016 to FY2018.
The judgement that it is probable that the tax treatment for the Endpoint Project for the years FY2016 to FY2018 would
be accepted by the ATO has remained consistent in the preparation of both the current and prior year financial
statements.
The Group has further exercised judgement that the core Australian activities approved under the Advance
Overseas Finding were effectively completed during the year ended 30 June 2019 (FY2019). Accordingly, the Group
did not claim R&D tax offsets for expenditures relating to the Endpoint Project in the FY2019 and later years. For
completeness, the Group has amended its filed tax position for FY2019 to align the tax return treatment with the
financial statement treatment adopted in the finalisation of the financial statements.
Nuix Annual Report 2022 89
Notes to the consolidated financial statements continued
The Group, in preparing the financial statements, determined that the potential implication of the filed position for
FY2016 to FY2018 if the tax authority will not accept the treatment applied would be that the deferred tax asset of
$3,269,000 and a deferred government grant revenue balance of $1,352,000 would be derecognised.
In FY2022 the Group has initiated an early engagement request with the ATO to obtain certainty in relation to the
eligibility of the overseas development expenditures on the Endpoint Project for FY2016 to FY2018. Having considered
the observations and recommendations provided by the ATO as part of the early engagement, management have
concluded that it is likely that the tax authority will accept the filed positions for FY2016 to FY2018.
Recoverability of tax assets
Evaluating the need for a provision for recoverability of deferred tax assets often requires significant judgement and
extensive analysis of all the evidence available to determine whether all or some portion of the deferred tax assets
will not be realised. A recoverability provision must be established for deferred tax assets when it is more-likely-
than-not (a probability level of more than 50%) that they will not be realised.
Management have assessed all evidence available including historical utilisation patterns, anticipated timing
of the reversal of deductible and taxable temporary differences and forecast future assessable income, and
notwithstanding the tax loss incurred in FY2022 have determined that it is more-likely-than-not that the tax assets
will be utilised.
Accordingly, no recoverability provision has been recognised against the deferred tax assets.
3.5 Income tax paid by legal entity
Nuix North America Inc
Nuix Ireland Ltd
Nuix Limited
Nuix Holding Pty
Nuix Philippines Regional Operating Headquarters
Nuix Pte. Ltd.
Nuix Technology UK Limited
2022
$000
140
89
63
59
29
5
–
385
2021
$000
–
6
–
–
10
11
168
195
3.6 Franking credits
Franking credits arising from the payments of income tax, by Nuix Limited in prior years until 30 June 2022 are
represented below.
Franking credits attributable to the Company
Franking credits available for subsequent financial years based
on a tax rate of 30% (2021: 30%)
2022
$000
669
2021
$000
669
90 Nuix Annual Report 2022
The amounts represent the balance of the franking account as at the end of the reporting period, adjusted for:
•
•
•
franking credits that will arise from the payment of the amount of the provision for income tax;
franking debits that will arise from the payment of dividends recognised as a liability at the reporting
date (2021: Nil); and
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting
date (2021: Nil).
Franking credits attributable to Nuix Limited as an ASX listed company only are represented above. Additional
franking credits will be received if the distributable profits of the subsidiaries were paid as dividends to the
Nuix Limited.
4. Working capital
This section focuses on the working capital of the group as of balance date, how it has moved during the year, and
how balances are anticipated to be realised in forthcoming periods.
4.1 Cash and cash equivalents
Bank balances
Total cash and cash equivalents
2022
$000
46,846
46,846
2021
$000
70,865
70,865
Accounting policies – cash
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments
that are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in
value. Refer to note 1.10 for accounting policies and disclosures related to financial instruments.
4.2 Trade and other receivables (including contract assets)
Trade receivables
Provision for impairment of trade receivables and unbilled revenue
Unbilled revenue
Other debtors
Total trade and other receivables
1. Comparative amount of $9,474,000 was reclassified from unbilled revenue to trade receivables for consistency.
2022
$000
29,309
(1,007)
34,273
–
62,575
2021
$000
30,3541
(1,565)
44,3651
87
73,241
Nuix Annual Report 2022 91
Notes to the consolidated financial statements continued
Presentation of balances
Current
Non-current
Total trade and other receivables
Ageing of overdue receivables
1 – 3 months
4 – 6 months
Over 6 months
2022
$000
50,813
11,762
62,575
2022
$000
3,212
365
1,232
4,809
2021
$000
63,767
9,474
73,241
2021
$000
3,601
561
1,176
5,338
The Group does not disclose further qualitative information related to remaining performance obligations, as
they are either part of a contract that has an original expected duration of one year or less; or the associated
revenue is recognised in the amount to which the Group has a right to invoice.
Accounting policies – trade and other receivables (including contract assets)
Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they contain
significant financing components when they are recognised at fair value. They are subsequently measured at
amortised cost using the effective interest method, less loss allowance.
Nuix has contracts with certain customers, for purchases of a subscription licences that cover a multi-year period.
As the term of a licence is a characteristic of the licence which is delivered to and controlled by the customer at a
point-in-time, the portion of the consideration related to the provision of the licence is recognised as revenue when
the licence is delivered to the customer, the contractual term of the licence period begins, and the customer can
benefit from having the licence.
Refer to note 1.10 for accounting policies and disclosures related to financial instruments.
4.3 Other current assets
Prepayments
Costs of obtaining contracts
Other receivables
Total other current assets
92 Nuix Annual Report 2022
2022
$000
6,164
1,650
284
2021
$000
6,057
–
152
8,098
6,209
4.4 Trade and other payables
Sundry payables and accrued expenses
Trade payables
Customer deposits
Payroll tax and other statutory liabilities
Indirect taxes payable
Total trade and other payables
2022
$000
16,626
5,311
245
878
682
2021
$000
9,670
5,846
186
3,686
366
23,742
19,754
Accounting policies – trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year, which are unpaid. The amounts are unsecured and are usually paid within 45 days of recognition. Trade and
other payables are presented as current liabilities unless payment is not due within 12 months from the reporting
date. Refer to Note 1.10 for accounting policies and disclosures related to financial instruments.
4.5 Deferred revenue
Customer-related
Support and maintenance on term licences
Term licences (billed) commencing post balance date
Support and maintenance on perpetual licences
Perpetual licences commencing post balance date
Consumption income
Professional services income
Tax incentive-related
Research and development
Total deferred revenue
2022
$000
2021
$000
15,026
3,370
14,862
–
8,189
2,922
14,946
7,284
12,561
32
2,138
3,004
44,369
39,965
4,916
49,285
5,395
45,360
Nuix Annual Report 2022 93
Notes to the consolidated financial statements continued
Movements during the year of customer related deferred revenue
Opening balance
Revenue recognised in the current year
Non-cancellable right to invoice established during the period
Exchange differences
Closing balance
Movements during the year of tax incentive related deferred revenue
Opening balance
Other income recognised in the current year
Additional research and development incentive
Closing balance
Presentation of balances
Current
Non-current
Total deferred revenue
4.6 Provisions
Current
Annual leave
Long service leave
Non-current
Long service leave
Make good obligation
94 Nuix Annual Report 2022
2022
$000
39,965
2021
$000
41,952
(71,164)
(80,016)
74,518
1,050
44,369
2022
$000
5,395
(1,157)
678
4,916
2022
$000
32,544
16,741
49,285
2022
$000
2,547
351
2,898
181
836
1,017
79,817
(1,788)
39,965
2021
$000
5,839
(1,086)
642
5,395
2021
$000
33,832
11,528
45,360
2021
$000
2,519
359
2,878
237
305
542
Movements in make good obligation during the year
Make good obligation
Opening balance
Charged to profit or loss
Closing balance
2022
$000
305
531
836
2021
$000
303
2
305
Accounting policies – provisions
The current portion of these liabilities represents the Group’s obligations to which the employee has a current legal
entitlement. These liabilities arise mainly from accrued annual leave entitlements at the reporting date. A provision
has been recognised for employee benefits relating to long service leave for employees. In calculating the present
value of future cash outflows in respect of long service leave, the probability of long service leave being taken is
based upon historical data. The measurement and recognition criteria for employee benefits have been included
in Note 6.1.
Nuix is required to restore the leased office at 1 Market Street in Sydney, Foster Plaza Building 3 in Holiday Drive Suite
300 in Pittsburgh, and Unit 201 Alameda Del Prado in Novato to the original condition at the end of the respective
leases. A provision has been recognised for the present value of the estimated expenditure required to remove any
leasehold improvements. These costs have been capitalised as part of the cost of leasehold improvements and
are amortised over the shorter of the term of the lease or the useful life of the assets.
The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of
time is recognised as an interest expense.
4.7 Borrowing facility
Secured liabilities
Nuix Limited had a Facility Agreement with the Commonwealth Bank of Australia (‘CBA’) which provided
funding to the Company through a Cash Advance Facility for the period to 11 September 2022.
Funding under the Cash Advance Facility was available under two tranches, being Tranche A for AUD
$40,000,000 and Tranche B for USD $7,500,000. Accordingly, the available funding under the facilities as
denominated in Australian dollars fluctuated from period to period, with $50,000,000 being available under
these facilities as of 30 June 2022 (2021: $50,000,000). The Company had not drawn on either of these facilities
during the year ended 30 June 2022, nor subsequent to 30 June 2022.
The Facility Agreement also provides for a bank guarantee facility and CBA has issued a bank guarantee
under that facility in an amount of $746,460 to support Nuix Limited’s obligations under a real property lease.
Nuix Limited’s obligations in respect of that bank guarantee are contingent only.
Given that the Company has not been utilising the Cash Advance Facility over the preceding 12 months
and has $46,846,000 cash available at 30 June 2022, the Group has, post year-end, terminated the Facility
Agreement with CBA. The Company will continue to assess its ongoing liquidity requirements.
Nuix Annual Report 2022 95
Notes to the consolidated financial statements continued
Accounting policies – borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in the consolidated statement of comprehensive income over the period of the borrowing
using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction
costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the
fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of
the facility will be drawn down, the fee is capitalised and amortised over the period of the facility to which it relates.
5. Non-current assets
This section focuses on the non-current assets of the Group including how management identify activities that are
required to be capitalised, how balances have moved during the period, and how the Group has assessed whether
there has been any impairment of these assets.
Most of the non-current assets held by Nuix relate to the intellectual property embedded within the software
platform that has been developed (the Nuix platform). This software platform comprises a powerful, proprietary,
data processing engine (called the Nuix Engine) and several software applications. It has been developed in-house,
shaped by feedback from long-standing government and private sector customers, and assists customers in
solving many of their complex data challenges.
The Nuix Engine is at the core of the Nuix platform and can be deployed at varying scales, for example, on a single
laptop or across multiple servers depending on the volume of data that require analysis or the speed at which
that analysis is to be delivered. A key part of the processing performed by the Nuix Engine is to ‘normalise data at
its binary level.’ The Nuix Engine uses parallel data processing technology to process, normalize, index, enrich and
analyse data at speed and scale. Currently, the Nuix Engine can process over 1,000 file types, and this capability
is expected to continue growing over time. Customers can also export data processed by the Nuix Engine to third
party applications or further enrich that data, for example by merging data processed by the Nuix Engine with an
existing database, creating an enhanced data set from which more informed decisions can be made. This is made
possible through open application programming interfaces (or APIs) and connectors developed by Nuix.
In addition to the Nuix Engine, the Nuix platform comprises a suite of visualization, analytics and relationship-
mapping software applications (Nuix Workstation, Nuix Investigate, Nuix Endpoint and Nuix Discover) that use the
outputs of the Nuix Engine to provide insights and intelligence to customers in many different investigative and
analytical situations. These applications have extended and continue to extend the number of use cases for the Nuix
platform and assist Nuix to grow into new and broader markets.
Nuix acquired Topos Labs, LLC during the year, to further expand the capability of the Nuix Engine and related
Nuix platform products in Natural Language Processing. Activities to complete integration of the capability of this
acquired Intellectual Property with Nuix platform products are ongoing and anticipated to be completed in the short
term, enabling Nuix to make available to customers of Nuix platform products solutions that are enabled by the
acquired NLP technology.
96 Nuix Annual Report 2022
External
licenses
$000
Brand
$000
Intellectual
property
$000
Total
$000
730
(64)
–
–
–
–
191,754
197,155
(8,438)
(9,033)
1,418
1,542
34,130
–
34,256
–
(26,371)
(26,505)
666
192,493
197,415
666
–
666
666
62
277,753
284,710
(85,260)
(87,295)
192,493
197,415
192,493
197,415
8,993
9,579
5.1 Intangible assets
Reconciliation of carrying amount
Year ended 30 June 2021
Balance at 1 July 2020
Effect of movements in exchange
rates – cost
Effect of movements in
exchange rates – accumulated
amortisation and impairment
Additions
Disposals
Amortisation
Goodwill
$000
4,543
(398)
–
–
–
–
Balance at 30 June 2021
4,145
128
(133)
124
126
–
(134)
111
Carrying amount at 30 June 2021
At cost
4,145
2,146
–
(2,035)
4,145
4,145
384
111
111
140
Accumulated amortisation
and impairment
Balance at 30 June 2021
Year ended 30 June 2022
Balance at 1 July 2021
Effect of movements in exchange
rates – cost
Effect of movements in
exchange rates – accumulated
amortisation and impairment
Acquisition via business
combination1
Additions
Transfers from other asset
classification
Amortisation
–
(133)
(7)
(2,719)
(2,859)
13,872
–
–
–
–
–
1,275
(362)
1,031
95
–
–
(246)
570
7,088
21,055
42,388
42,388
–
1,275
(31,120)
217,123
(31,728)
237,125
Balance at 30 June 2022
18,401
Carrying amount at 30 June 2022
At cost
18,401
3,786
823
336,222
359,232
Accumulated amortisation
and impairment
–
(2,755)
(253)
(119,099)
(122,107)
Balance at 30 June 2022
18,401
1,031
570
217,123
237,125
1.
Following the Topos Labs acquisition, the US Dollar denominated balances of the intangible assets acquired as a part of the business
combination are: Goodwill: US $9,536,000; Brand: US $65,000; Intellectual property: US $4,873,000. The difference between the Australian Dollar
denominated balances in Note 5.1 and Note 8.3 arises from the movement in the foreign currency exchange rates between the acquisition date
20 September 2021 and the year end date 30 June 2022. The balances in Note 8.3 were presented using foreign exchange rate at 20 September
2021 (1.37 AUD to 1 USD) whereas the balances in Note 5.1 were translated using the foreign exchange rate at 30 June 2022 (1.45 AUD to 1 USD).
Nuix Annual Report 2022 97
Notes to the consolidated financial statements continued
Accounting policies – intangible assets
i. Development costs recorded as Intellectual Property
Development costs are capitalised where future economic benefits from development of a chosen alternative for
new or improved software products, processes, systems or services are considered probable, and expenditure in
relation to such activities is capable of reliable measurement. Future economic benefits are considered probable
where commercial benefit and technical feasibility have been established. The expenditure includes all directly
attributable costs, including external direct costs of materials, services, direct labour and overheads.
Other development expenditure that does not meet these criteria, which includes research activities and the
expenditure on maintenance of computer software, is expensed as incurred.
ii. Goodwill
Goodwill acquired in a business combination is measured at cost and subsequently at cost less any impairment
losses. The cost represents the excess of the cost of a business combination over the fair value of the identifiable
assets and liabilities acquired.
iii. External software licences
External software licences are carried at historic cost or fair value at the date of acquisition less accumulated
amortisation and impairment losses.
iv. Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditure, including expenditure on internally generated goodwill, is recognised
in profit or loss as it is incurred.
v. Amortisation
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the
straight-line method over their estimated useful lives and is recognised in profit or loss. Goodwill is not amortised.
Intangible assets, other than goodwill, have finite useful lives. Goodwill has an indefinite useful life.
Class of intangible
External software
Brand
Intellectual Property
Depreciation rate (per year)
20% - 33%
25% - 100%
10%
Significant judgements and assumptions
Capitalisation and useful life of intangible assets
Management has made judgements in respect of intangible assets when assessing whether an internal project
in the development phase meets the criteria to be capitalised, and on measuring the costs and economic life
attributed to such projects. On acquisition, specific intangible assets are identified and amortised over their
estimated useful lives. The capitalisation of these assets and the related charges are based on judgements about
their value and economic life.
Management has also made judgements and assumptions when assessing the economic life of intangible assets
and the pattern of consumption of the economic benefits embodied in these assets. The economic lives for
intangible assets are estimated at between three and ten years. Amortisation methods, useful lives and residual
values are reviewed at each reporting date and adjusted, if appropriate.
98 Nuix Annual Report 2022
5.2 Property and equipment
Reconciliation of carrying amount
Year ended 30 June 2021
Balance at 1 July 2020
Effect of movements in exchange rates – cost
Effect of movements in exchange rates –
accumulated depreciation
Additions
Disposals
Depreciation
Balance at 30 June 2021
Carrying amount at 30 June 2021
At cost
Accumulated depreciation
Balance at 30 June 2021
Year ended 30 June 2022
Balance at 1 July 2021
Effect of movements in exchange rates – cost
Effect of movements in exchange rates –
accumulated depreciation
Additions
Disposals
Depreciation
Balance at 30 June 2022
Carrying amount at 30 June 2022
At cost
Accumulated depreciation
Balance at 30 June 2022
Office and
computer
equipment
$000
Furniture
and fixtures
$000
Leasehold
improvement
$000
1,047
(653)
603
815
–
(712)
1,100
11,021
(9,921)
1,100
1,100
614
(591)
1,030
–
(829)
1,324
328
(87)
61
–
–
(127)
175
1,027
(852)
175
175
82
(76)
625
–
(191)
615
1,037
(209)
131
236
–
(452)
743
3,873
(3,130)
743
743
174
(145)
703
–
(374)
1,101
Total
$000
2,412
(949)
795
1,051
–
(1,291)
2,018
15,921
(13,903)
2,018
2,018
870
(812)
2,358
–
(1,394)
3,040
12,665
(11,341)
1,324
1,734
(1,119)
615
4,750
19,149
(3,649)
(16,109)
1,101
3,040
Nuix Annual Report 2022 99
Notes to the consolidated financial statements continued
Accounting policies – property and equipment
i. Recognition and measurement
Items of property and equipment are measured at cost, which includes capitalised borrowing costs, less
accumulated depreciation and impairment losses. If significant parts of property and equipment have different
useful lives, then they are accounted for as separate items or property and equipment. Any gain or loss on disposal
of an item of property and equipment is recognised in profit and loss.
ii. Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that future economic benefits will flow to the Group.
iii. Depreciation
The depreciable amount of all property and equipment is depreciated on a straight-line basis over the useful lives
commencing from the time that the assets are held ready for use. Depreciation methods, useful lives and residual
values are reviewed at each reporting date and adjusted if appropriate.
Class of plant and equipment
Depreciation rate (per year)
Office and computer equipment
Furniture and fixtures
Leasehold improvements
33%
20%
Consistent with lease term (10-33%)
5.3 Leases
Amounts recognised in the balance sheet
Right of use assets, net of depreciation
Lease liabilities
Current
Non-current
Lease liabilities
Right of use assets
Balance at 1 July
Additions
Termination of lease, net of accumulated depreciation
Remeasurement of ROU assets
Depreciation expense
Exchange difference
Balance at 30 June
100 Nuix Annual Report 2022
2022
$000
11,189
2,802
10,848
13,650
2022
$000
9,036
4,536
–
–
(2,462)
79
11,189
2021
$000
9,036
2,635
8,727
11,362
2021
$000
12,872
–
(6)
80
(3,276)
(634)
9,036
Amounts recognised in profit and loss
Depreciation charge of right-of-use assets
Interest expense (included in finance cost)
Expenses relating to short-term leases
Expenses relating to leases of low-value assets that are not
shown above as short-term leases
Amounts recognised in statement of cash flows
Total cash outflow for leases
Extension options
2022
$000
2,462
539
248
65
2021
$000
3,276
573
285
68
3,314
4,202
2022
$000
3,266
2021
$000
3,935
Some property leases contain extension options exercisable by the Group to up to twelve months before
the end of the non-cancellable contract period. Where practicable, the Group seeks to include extension
options in new leases to provide operational flexibility. The extension options held are exercisable only by the
Group and not by the lessors. The Group assesses at the lease commencement date whether it is reasonably
certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise
the options if there is a significant event or significant changes in circumstances within its control.
The Group has estimated that the potential future lease payments, should it exercise the extension options
across all leases where they are available, would result in an increase in lease liability of $6,462,000.
Accounting policies – leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
(a) As lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease component on the basis of its relative standalone prices. However, for
the leases of property the Group has elected not to separate non-lease components and account for the lease and
non-lease components as a single lease component.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end
of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that
case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on
the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
Nuix Annual Report 2022
101
Notes to the consolidated financial statements continued
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as
the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various financing sources and
makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
•
fixed payments, including in substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate at the
commencement date;
• amounts expected to be payable under a residual value guarantee; and
•
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in
any optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for
early termination of a lease unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s
estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its
assessment of whether it will exercise a residual value guarantee, if the Group changes its assessment of whether it
will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount
of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for
each period.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and
short-term leases, including low-value IT equipment. The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over the lease term.
5.4 Impairment testing of non-financial assets
Allocation of Goodwill to CGUs
Management have identified that the Group has two CGUs as of 30 June 2022, until the completion of the
integration of Topos Labs, LLC into the Nuix platform CGU. On the acquisition of Topos Labs, LLC in September
2021, the majority of the goodwill from this acquisition was allocated to the Nuix platform CGU as it is this CGU
that will benefit from the synergies of the acquisition, and a small amount was allocated to the Topos CGU
reflecting the standalone goodwill of the Topos Labs, LLC business as of the date it was acquired, primarily
relating to the value of the assembled workforce.
Nuix platform CGU
Topos CGU
102 Nuix Annual Report 2022
2022
$000
16,873
1,528
18,401
2021
$000
4,145
–
4,145
Key assumptions in the Nuix platform CGU discounted cash flow model
A value-in-use discounted cash flow model has been used at 30 June 2022 to determine the recoverable
amount of the Nuix platform CGU. This model includes projected revenues, gross margins and expenses which
have been determined with reference to historical company experience, industry data and management’s
expectation of the future over a five-year period, with a perpetuity growth rate beyond that. In modelling
forecast revenues, gross margins and expenses for the Group, management have used the FY2023 board
approved budget as an input. The perpetuity growth rate was set consistent with consensus views on long
term GDP growth rates.
The following inputs and assumptions have been adopted:
Post-tax discount rate per annum
Pre-tax discount rate per annum
Long-term perpetuity growth rate
2022
10.6%
15.1%
2.5%
2021
9.8%
14.0%
2.5%
Key assumptions in determining the Topos Labs CGU recoverable amount
A fair value less cost to sell model has been used to determine the recoverable amount of the Topos Labs
CGU as of 30 June 2022. This model included a determination of the fair value less of each of the assets
attributed to the CGU, on a basis consistent with that used in determining the fair value of assets acquired in
the business combination, an estimation of the fair value attributable to the Assembled Workforce that would
be available to a transaction to sell the business to a market participant, and a view on a market participant’s
opportunities for realising value from such an acquisition, less costs to sell.
Sensitivity analysis
The key estimates and assumptions used to determine the recoverable amount of a cash generating unit are
based on management’s current expectations after considering past experience, future plans and external
information. They are considered to be reasonably achievable, however significant changes in any of these
key estimates or assumptions may result in a cash generating unit’s carrying value exceeding its recoverable
amount, requiring an impairment charge to be recognised.
For the Nuix platform CGU, although the recoverable amount exceeds the carrying amount by more than $100
million, impairment testing is sensitive to changes in the discount rate. An increase in the post-tax discount
rate above 13.3% would cause the carrying amount of the Nuix platform CGU to exceed its recoverable
amount. Additionally, an increase in the forecast annualised growth rate for costs during the explicit forecast
period of 40%, or if the annual revenue growth achievement was less than 85% of target, would cause the
carrying amount of the Nuix platform CGU to exceed its recoverable amount.
For the Topos CGU, a reasonably possible change in any of the assumptions used does not result in an
impairment charge.
Accounting policies – impairment testing of non-financial assets
At each reporting date, the Group reviews the carrying values of its non-financial assets (other than contract assets
and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists,
then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows from other assets or CGUs. Goodwill
arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the
synergies of the combination.
Nuix Annual Report 2022
103
Notes to the consolidated financial statements continued
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal.
Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any
goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro
rata basis.
An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortization, if no impairment loss had been recognised.
Significant judgements and assumptions
Impairment testing of goodwill
Determining whether goodwill is impaired requires judgement to allocate amounts of goodwill to CGUs and a
combination of judgement and assumptions to estimate recoverable amounts.
Management have concluded that whilst the Intellectual Property from the Topos Labs acquisition is yet to be fully
integrated into the Nuix platform until sales of an integrated solution are made to customers, the cash inflows
from the Topos Labs acquisition are substantially independent of those for the rest of the Nuix platform. Accordingly,
from the date of the acquisition of Topos, management have identified that the Group has two CGUs. This is in
contrast to the conclusions reached as of 30 June 2021 where it was determined that the cash inflows of the Group
were so integrated (including those from sales relating to Nuix Discover) that the Group only had one CGU at that
point in time.
Whilst a portion of the goodwill from the acquisition of Topos Labs is indicative of the ‘standalone goodwill’ of
Topos Labs as a business prior to acquisition, the majority of the goodwill from the acquisition relates to the
growth expectations and expected synergies to be achieved from integrating the NLP software into the Group’s
existing products.
As a result, most of the goodwill on acquisition is allocated to the Nuix platform CGU, with a de minimis amount of
goodwill allocated to the Topos CGU.
Management have determined that it is appropriate that testing for impairment of each of these CGUs is required
to comply with the requirements of the accounting standards, as goodwill has been allocated to each of them.
Given the recent measurement of the acquired assets from the Topos acquisition at fair value, and the requirement
that recoverable amount for a CGU be set at no less than the higher of fair value less costs to sell, or value-in-use,
management have determined that the carrying amount of the Topos CGU is supported by its fair value less costs
to sell, and accordingly no impairment has been recognised.
Management have prepared a value-in-use model for the Nuix platform CGU which is based upon the financial
plans approved by the Board for the year ending 30 June 2023, the closing balance sheet for the year ended 30
June 2022, expectations around realisation of assets and settlements of liabilities on balance sheet as of 30 June
2022, projected revenues, gross margins and expenses determined with reference to historical company experience,
industry data and management’s expectations for the future. This model determined a recoverable amount in
excess of the carrying amount of the Nuix platform CGU, and accordingly no impairment has been recognised.
104 Nuix Annual Report 2022
6. Remuneration
This section focuses on the expenses recognised in relation to the remuneration of our people, which includes
details of the employee benefit expenses recognised across the profit and loss, judgements related to accounting
for share-based payments, and summary information for remuneration of Key Management Personnel (KMPs).
Nuix is committed to attracting and retaining the best people to work in the organisation, including Directors and
senior management. A key element in achieving that objective is to ensure that the Group is able to appropriately
remunerate its key people. Nuix has adopted a Remuneration Policy, the purpose of which is to establish a
framework for remuneration that is designed to:
• ensure that coherent remuneration policies and practices are observed which enable the attraction and
retention of Directors and management who will create value for Shareholders;
•
fairly and responsibly reward Directors and senior management having regard to the Company’s performance,
the performance of senior management and the general pay environment; and
• comply with all relevant legal and regulatory provisions.
Refer to the Remuneration Report for detailed information related to KMPs.
6.1 Employee benefit expenses
Wages and salaries
Sales and distribution1
Research and development1
General and administration
Share-based payment expenses
Sales and distribution
Research and development
General and administration
2022
$000
2021
$000
53,830
13,112
15,141
82,083
1,396
838
763
2,997
49,303
8,977
12,806
71,086
1,139
977
2,511
4,627
1. Wages and salaries expense disclosed for the research and development function (and sales and distribution function to the extent that those
employees are involved in the testing of development activities), presented above are net of amounts required to be capitalised as development
costs to intangible assets.
Wages and salaries capitalised as development costs to intangible assets totalled $33,094,000 during the year ended 30 June 2022 (2021:
$29,245,000), with the remaining amounts capitalised being directly attributable costs and incremental overheads of development activities.
Nuix Annual Report 2022
105
Notes to the consolidated financial statements continued
Accounting policies – employee benefit expenses
i. Short term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months after the end of the period in which the employees render the related service are recognised in respect
of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid
when the liabilities are settled.
The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee
benefit obligations are presented as payables.
ii. Defined contribution superannuation plans
All obligations for contributions in respect of employees’ defined contribution benefits are recognised as an
expense as the related service is provided.
iii. Other long-term employee benefits obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after
the end of the period in which the employees render the related service is recognised in the provision for
employee benefits and measured as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods
of service. Expected future payments are discounted using market yields at the end of the reporting period on
high-quality corporate bond rates with terms to maturity and currency that match, as closely as possible, the
estimated cash flows.
iv. Share-based payments
Share-based compensation benefits are provided to employees via the Nuix Employee Share Option Plans. The
fair values of options granted under the Employee Share Option Plans are recognised as a share-based payments
expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to
the fair value of the options granted, which includes the impact of any market vesting conditions.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest.
The total expense is recognised over the vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each reporting period, the Company revises estimates of the number
of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the
revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity.
6.2 Share-based payments
Instruments on issue
Options
Performance Rights
30 Jun 2022
30 Jun 2021
4,527,969
4,827,141
1,024,6341
643,273
1.
Includes performance rights related to FY24 minimum revenue and EBTIDA targets for CEO and COO/CFO, sign-on performance rights for COO/
CFO and performance rights for non-KMP executives granted upon sign-on in FY2022. Excludes performance rights which may be granted to
CEO as part of their sign-on incentives which remain subject to shareholder approval. Excludes contingently issuable shares for Topos Retention
Recipients, as the number of shares is determined with reference in part to the 5-Day VWAP prior to the date before an Earnout Payment is made,
should an earnout payment indeed be achieved, and hence remaining number of shares to be granted is undetermined at this point in time.
106 Nuix Annual Report 2022
Reconciliation
Options
Performance Rights
1 Jul 2021
to 30 Jun 2022
1 Jul 2020
to 30 Jun 2021
1 Jul 2021
to30 Jun 2022
1 Jul 2020
to 30 Jun 2021
Opening balance (1 July)
4,827,141
39,654,623
643,273
Grant under ESOP
Cancellation
Forfeitures
Grant to NEDs
Grant under LTIP
Exercised options
322,740
3,315,627
1,024,634
–
(38,961,508)
–
(621,912)
(343,186)
(643,273)
–
–
–
500,000
671,585
(10,000)
–
–
–
–
–
–
–
–
–
–
Closing balance (30 June)
4,527,969
4,827,141
1,024,634
643,273
A. Employee Share Option Plan (ESOP)
The establishment of the Nuix Limited ESOP was approved by the Board of Directors on or around fiscal year
2012. The ESOP is designed to align the interests of eligible employees more closely with shareholders and
provide greater motivation and incentive for them to focus on the Company’s longer-term goals. Under the
plan, participants are granted options which may only be exercised if the vesting conditions have been met.
Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate in
the plan or to receive any guaranteed benefits.
Options are granted under the plan for no consideration and carry no dividend or voting rights and are non-
statutory stock options. Option holders cannot assign, transfer, sell or otherwise deal with the options granted
under the Plan without Board of Directors approval.
The amount of Options that vest depends upon the vesting rules of the respective Plan rules (generally three
to five years). The Options vest in a series of successive equal monthly instalments beginning on the first
anniversary of the vesting commencement date, subject to the option holders’ continued employment.
Once vested, the options became exercisable following the consummation of a Corporate Transaction/
Liquidity Event (as defined in the Plan rules) or a date determined by the Board. However, under some earlier
Plan rules, Options are exercisable for a period of three years once they become fully vested.
Following the exercise of the options, a vested option is converted into one ordinary share within a certain
number of business days as determined by the plan rules. The exercise price of options is determined by a
combination of internal and external valuation methodologies and presided over by the Board.
B. Fair value of options granted
The assessed fair value at grant date of options granted during the year ended 30 June 2022 ranged between
$0.25 and $1.35. The fair value of each grant at grant date is independently determined using an adjusted
form of the Black Scholes Model that takes into account the exercise price, the term of the option, the impact
of dilution (where material), the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield, the risk-free interest rate for the term of the option and the correlations
and volatilities of the peer group companies. Options are granted for no consideration and vest over different
periods depending on terms.
Nuix Annual Report 2022
107
Notes to the consolidated financial statements continued
The model inputs for options granted during the year ended 30 June 2022 included:
Exercise price
Grant date
Expiry date
Share price fair value
Expected price volatility of the Company’s shares
Expected dividend yield
Risk-free interest rate
ESOP grants made in FY2022
Between $2.72 and $5.79
Between 4 November 2021 and 24 January 2022
7 years after grant date
Between $2.26 and $3.03
46.00% for each grant date
0.00%
Between 1.31% and 1.61%
The expected price volatility is based on the historic volatility of comparable listed companies (based on
the remaining life of the options), adjusted for any expected changes to future volatility due to publicly
available information.
C. Fair value of performance rights granted
The assessed fair value at grant date of the performance rights granted during was determined with
reference to the fair value of shares on grant date, adjusted for any expected dividend included in the share
price as of grant date. As there were no dividends expected to be paid between grant date and vesting date
no adjustment to the share price on grant date is required in determining the fair value of performance rights.
D. Reconciliation of outstanding share options
Reconciliation
1 Jul 2021 to 30 Jun 2022
1 Jul 2020 to 30 Jun 2021
Number of
options
Weighted-
average
exercise price
Number of
options
Weighted-
average
exercise price
Opening balance (1 July)
4,827,141
$5.03
39,654,623
Cancellation
Granted during the year
Forfeitures during the year
Exercised options
Outstanding at 30 June
Exercisable at 30 June
–
–
(38,961,508)
322,740
(621,912)
–
4,527,969
128,778
$4.34
$5.58
–
$4.721
$2.48
4,487,212
(343,186)
(10,000)
4,827,141
Nil
$0.84
$0.84
$5.47
$4.50
$5.01
$5.03
n/a
The options outstanding at 30 June 2022 had an exercise price in the range of $2.00 to $5.79 (2021: $2.00 to
$5.79) and a weighted-average contractual life of 4.8 years1 (2021: 5.7 years).
1.
Exercise price for the 453,273 options held by Mr Sheehy in the above disclosure is $2.00. Impact of options held by Mr Sheehy excluded from
assessment of weighted-average contractual life remaining. See Note 9.6.
108 Nuix Annual Report 2022
Significant judgements and assumptions – share-based payment expense
The grant-date fair value of equity-settled share-based payment arrangements granted to employees is
generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and
non-market performance conditions are expected to be met, such that the amount ultimately recognised is based
on the number of awards that meet the related service and non-market performance conditions at the vesting date.
For share-based payment awards with market vesting conditions, the grant-date fair value of the share-based
payment is measured to reflect such conditions and there is no true-up for differences between expected and
actual outcomes.
Nuix uses the Black-Scholes option pricing model to determine the grant-date fair value of share options.
The determination of the grant-date fair value of stock option awards using the Black-Scholes model is affected
by assumptions regarding a number of complex and subjective variables. These variables include the estimated
number of years that management expect employees to hold their options, risk-free interest rates and dividends to
be paid on Nuix’s stock over that term.
If Nuix changes the terms of its employee share-based compensation programs, refines future assumptions or
changes valuation models, the stock-based compensation expense recorded in future periods for future grants may
differ significantly from historical trends and could materially affect the results of operations.
Management judgment is applied in determining the fair value of options issued under the employee option plan.
For the options that were granted pre-IPO, their grant-date fair values were determined with reference to the Company’s
unlisted status at that time. There are inherent difficulties in determining market volatility for an unlisted entity.
The expected price volatility used in pricing options is based on the historic volatility over a comparable period
consistent with the remaining life of the options, adjusted for any expected changes to future volatility due to
publicly available information. For the options that were granted pre-IPO, as the Company was privately held and
had constant and consistent growth, finding a comparable cohort of companies to which management could
benchmark was difficult.
Nuix has assumed a constant volatility rate for all options granted during the three-year period leading up to the
IPO in December 2020, and updated this volatility rate to reflect the nature of the Company upon listing for all
grants occurring at the time of the IPO, and continues to update this input for all grants of options made subsequent
to the IPO.
6.3 KMP Remuneration
Short-term employee benefits
Termination benefits
Post-employment benefits
Long-term benefits
Share-based payment expense
Total
2022
$000
2021
$000
3,698,177
2,425,667
350,000
197,083
–
159,025
64,743
39,269
1,186,934
1,927,356
5,394,136
4,457,0351
1.
Includes remuneration information for individuals who ceased to be Key Management Personnel in the prior year FY2021.
Nuix Annual Report 2022
109
Notes to the consolidated financial statements continued
Short-term employee benefits
These amounts include salaries, fees, cash bonuses and fringe benefits paid to Key Management Personnel
including executive and non-executive Directors.
Post-employment benefits
These amounts include the cost of superannuation contributions made during the year.
Other long-term benefits
These amounts represent long service leave and long-term annual leave benefits accruing during the year.
7. Financial risks
The Group has exposure to credit, liquidity and market risks relating to its use of debt and working
capital. This section presents information about the Group’s exposure to each of these risks, and its
objectives, policies and processes for measuring and managing risk.
7.1 Financial risk management
The Group’s activities expose it to a variety of financial risks including:
• market risk (including currency risk and price risk),
• credit risk, and
•
liquidity risk
The Group’s overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity
analysis in the case of interest rate, foreign exchange and other price risks and ageing analysis for credit risk
to determine market risk. Risk management is carried out by the Corporate Services function under policies
approved by the Board of Directors.
The Group has principles for overall risk management covering areas such as foreign exchange risk, credit risk
and derivative financial instruments.
A. Market risk
i. Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to the United States dollar, British Pound and European Euro. Foreign
exchange risk arises from future commercial transactions and recognised assets and liabilities denominated
in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
110 Nuix Annual Report 2022
The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in thousands of
Australian dollars, was as follows:
Cash and cash equivalents
Trade receivables
Trade payables
USD
4,561
3,870
919
EUR
11,705
240
137
2022
GBP
2,770
2,315
–
USD
7,066
3,848
83
EUR
14,333
1,392
113
2021
GBP
4,212
612
26
The Group’s exposure to other foreign exchange movements is not considered material.
Sensitivity
Although Nuix holds financial assets and financial liabilities denominated in many currencies, as the
Group has foreign operations with different functional currencies, the impact of a reasonably possible
change in foreign exchange rates (+/- 10%) at the end of the reporting period on the profit and loss of the
Group is limited:
AUD $000s
Effect on equity
Effect on PBT Effect on equity
Effect on PBT
2022
2021
USD
GBP
EUR
B. Credit risk
+/- 2,942
+/- 751
+/- 2,747
+/- 1,083
+/- 887
+/- 508
+/- 1,441
+/- 480
+/- 1,071
+/- 1,181
+/- 893
+/- 1,561
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, deposits with
banks and financial institutions and outstanding receivables, contract assets and committed transactions.
For all customers in all instances the Group retains title over the software. There are no significant
concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/
or regions.
Trade receivables and contract assets
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on
shared credit risk characteristics and the days past due. The contract assets relate to unbilled receivables
and have substantially the same risk characteristics as the trade receivables for the same types of contracts.
The Group has therefore concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of sales over a period of 45 months before 31
March 2022 and the corresponding historical credit losses experienced within this period. The historical loss
rates are adjusted to reflect current and forward- looking information on macroeconomic factors affecting
the ability of the customers to settle the receivables.
Nuix Annual Report 2022
111
Notes to the consolidated financial statements continued
On that basis, the loss allowance as at 30 June 2022 and 30 June 2021, expressed in thousands of Australian
dollars was determined as follows for both trade receivables and contract assets:
Current
30 days
60 days
90 days
Over 90 days
Specific provision1
Total
Unbilled receivables
Total
Balance
’000
Expected
Loss Rate
24,487
1,322
820
1,069
1,490
0.8%
0.9%
3.0%
6.5%
25.8%
121
100.0%
29,309
34,273
63,582
0.5%
2022
Loss
Allowance
’000
Balance
’000
Expected
Loss Rate
2021
Loss
Allowance
’000
208
12
25
70
384
121
820
187
25,017
2,639
524
435
1,045
694
30,354
44,452
1,007
74,806
0.9%
1.4%
5.4%
11.2%
17.3%
100.0%
0.8%
218
38
28
49
181
694
1,208
357
1,565
1.
As at 30 June 2022 there were $121,000 of specifically identified impaired debtors, that have been provided for but not written off (30 June 2021:
$694,000).
The loss allowances for trade receivables and contract assets as at 30 June reconcile to the opening loss
allowances as follows:
As at 1 July
Increase in loss allowance recognised in profit or loss during the year
2022
$000
1,565
1,369
2021
$000
470
2,225
Receivables written off during the year as uncollectible
(1,843)
(1,058)
Unused amount reversed
Foreign exchange difference
As at 30 June
(120)
36
1,007
–
(72)
1,565
Trade receivables and contract assets are written off where there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor
to engage in a repayment plan with the Group, and a failure to make contractual payments for a period of
greater than 120 days past due. Impairment losses on trade receivables and contract assets are presented
as net impairment losses within operating profit. Subsequent recoveries of amounts previously written off are
credited against the same line item.
C. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash in conjunction with the availability
of funding through adequate committed credit facilities (Note 4.7) to meet financial obligations as and
when they fall due. At the end of the reporting period the Group held deposits at call of $46,846,000
(2021: $70,865,000) and has not drawn on the facility (2021: Nil).
112 Nuix Annual Report 2022
Management monitors rolling forecasts of the Group’s liquidity reserve as discussed above and cash and
cash equivalents (Note 4.1) on the basis of forecasted cash flows. This is carried out at a Group level by
Corporate Services. In addition, the Group’s liquidity management approach involves projecting cash flows
and considering the level of liquid assets necessary to meet obligations and ongoing monitoring of balance
sheet liquidity against internal requirements.
The cash flows disclosed in the table below are the contractual undiscounted cash flows.
Contractual maturities
of financial liabilities
At 30 June 2021
Trade and other payables
Lease liabilities
At 30 June 2022
Trade and other payables
Lease liabilities
Other liabilities
8. Business structure
Less than
6 months
$000
6-12
months
$000
Between
1-3 years
$000
More than
3 years
$000
Total
$000
Carrying
amount
$000
19,754
1,630
21,384
23,742
1,690
7,536
–
1,343
1,383
–
–
19,754
19,754
6,765
2,567
12,345
6,765
2,567
32,099
11,362
31,116
–
–
–
23,742
23,742
1,705
5,894
5,722
15,011
13,650
600
6,419
–
14,555
14,458
32,968
2,305
12,313
5,722
53,308
51,850
This section focuses on the structure of the Group, specifically movements in issued capital and reserves.
8.1 Issued capital
Movements in ordinary shares
2022
Shares
2021
Shares
2022
$000
Opening balance
317,314,794
265,400,633
370,696
Shares issued on IPO, net of costs
Shares issued on option exercise
Transaction costs arising from issue of shares,
net of tax
–
–
–
51,904,161
10,000
–
–
–
–
2021
$000
104,227
275,611
50
(9,192)
Closing balance
317,314,794
317,314,794
370,696
370,696
Ordinary shares participate in dividends and the proceeds upon winding up of the Company, proportionately to
the shareholding. At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called,
otherwise each shareholder has one vote on a show of hands. The issued shares do not have a par value.
Management controls the capital of the Group in order to maintain an appropriate debt to equity ratio,
provide the shareholders with returns and ensure that the Group can fund its operations and continue
as a going concern. The Group’s debt and capital includes ordinary share capital and financial liabilities,
supported by financial assets. There are no externally imposed capital requirements aside from debt
covenants. Management effectively manages the Group’s capital by assessing the Group’s financial risks
and adjusting its capital structure in response to changes in these risks and in the market. These responses
include the management of debt levels, distributions to shareholders and share issues.
Nuix Annual Report 2022
113
Notes to the consolidated financial statements continued
8.2 Reserves
Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign currency differences arising from the translation
of the financial statements of foreign operations.
Share option reserve
The share option reserve is used to recognise the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration.
Movements in reserves
Share option reserve
As at 1 July
Share-based payment arrangements
Cancellation of options
As at 30 June
Foreign currency translation reserve
As at 1 July
Foreign currency translation reserve
As at 30 June
Total Reserves
2022
$000
2021
$000
(171,641)
2,910
–
(654)
4,053
(175,040)1
(168,731)
(171,641)
(2,681)
7,873
5,192
5,797
(8,478)
(2,681)
(163,539)
(174,322)
1.
In the prior year ended 30 June 2021, a total of 38,961,408 options were cancelled on completion of the offer for cash (calculated as the Offer Price
less the exercise price of the options). The Company concluded that on 18 November 2020 when the Prospectus was published, optionholders
would consider it being more probable than not that their share-based payment arrangements would be cash settled (for an aggregate sum
of $175,614,000). On the basis that part of the service period was outstanding and being performed between 18 November 2020 and listing on
4 December 2020, a portion of the amount for which the options were cancelled ($574,000) was recognised in profit and loss as a cash settled
share-based payment.
8.3 Acquisition of Topos Labs, LLC
The Group acquired Topos Labs, LLC (‘Topos’) on 20 September 2021, a developer of Natural Language
Processing (‘NLP’) software that helps computer systems better understand text and spoken words at speed
and scale. The Group has commenced activities to integrate the acquired intellectual property with the
powerful Nuix Engine and anticipates that it will be a valuable add-on for users of our Nuix Workstation software.
Topos’ Artificial Intelligence-driven NLP platform is designed to reduce the workload on data reviewers and
analysts by surfacing relevant or risky content faster. NLP models can be defined directly through the no-code
user interface, reducing the time that non-technical business users need to identify risks in an organisation’s
data. Topos is then also able to present the risk assessment of confidential, sensitive, and regulated content in
user-friendly dashboards.
In the period since acquisition to 30 June 2022, Topos incurred a loss of $3,345,000, inclusive of $2,385,000
for employee benefit expenses related to payments for expected milestone achievement that are treated
as being separate arrangements to the acquisition (see below), and amortisation of acquired intangibles of
$917,000. Included in this loss since acquisition, are post acquisition revenues of $105,000.
114 Nuix Annual Report 2022
If the acquisition had occurred on 1 July 2021, management estimates that consolidated revenue would have
been $37,000 higher, and consolidated loss for the year would have been $667,000 higher. In determining
these amounts, management has assumed that the fair value adjustments, determined provisionally, that
arose on the date of acquisition would have been the same if the acquisition had occurred on 1 July 2021; and
that the employee benefit expenses related to expected milestone achievement are incurred from acquisition
date only.
The Group incurred acquisition-related costs of AUD $775,000 relating to external legal fees and legal due
diligence costs. These costs have been included in ‘general and administrative expenses’.
A. Consideration
The following table summarises the acquisition-date fair value of each major class of consideration
transferred.
Cash
Contingent consideration
Total consideration
Notes
9.1
$000
6,868
12,999
19,867
The agreement provides for three mechanisms where payments can be made:
• USD $5,000,000 upfront cash payment;
• Up to USD $18,500,000 in cash payments for achievement of milestones paid to selling shareholders;
• Up to USD $1,500,000 in shares of Nuix Limited to employees (who may or may not have been selling
shareholders) for the achievement of milestones.
Cash payments for achieving milestones for specific shareholders who previously held a total of 23.25%
of the share capital of Topos, are contingent on their continued provision of employment or services as
a contractor post acquisition. Issuance of shares to employees upon the achievement of milestones is
contingent on their continued employment post acquisition. As a result, 23.25% of the contingent cash
payments and all of the share-based payments are separate arrangements and do not form part of the
consideration for acquiring Topos.
The impact of treating these arrangements as separate to the acquisition and as employee benefit
arrangements in the year ended 30 June 2022 has been that an employee benefit expense of AUD $2,385,000
has been recorded in relation to partial satisfaction of the relevant service periods towards points in time that
milestones are anticipated to be achieved. To the extent that a milestone is not anticipated to be achieved,
no recognition of employee benefit expenses is required, and should there be a change in expectations on
achievability of milestones, this is to be adjusted in profit and loss on a cumulative catch-up basis.
Contingent consideration that is part of the arrangement to acquire Topos, as its purpose is to verify or
establish the fair value of the acquired business and its payment is not contingent on continued employment
or service provision is measured at fair value as described in Note 9.1. The acquisition date fair value
of the consideration assessed to be part of the arrangement to acquire Topos, was determined to be
AUD $12,999,000.
Nuix Annual Report 2022
115
Notes to the consolidated financial statements continued
B. Identifiable assets acquired and liabilities assumed
The following table summarises the recognised amounts of assets acquired and liabilities assumed at the
date of acquisition.
Cash and cash equivalents
Unbilled receivables
Brand
Intellectual property
Assumed obligations relating to existing customers
Total identifiable net assets acquired
$000
7
24
89
6,693
(45)
6,768
Fair values measured on a provisional basis
The fair value of the assets acquired and liabilities assumed had been initially measured provisionally, as the
Group was pending information related to the determination of tax bases of acquired assets, and could have
received further information about contingent liabilities that exist as of acquisition date.
These measurements are now final, and there have been no changes to the provisional accounting for these
acquired assets and assumed liabilities.
C. Goodwill
Goodwill arising from the acquisition has been recognised as follows:
Fair value of consideration
Fair value of net identifiable net assets
Goodwill
Notes
A
B
$000
19,867
(6,768)
13,099
The goodwill is primarily related to growth expectations, expected future profitability, the skills and technical
talent of Topos’ workforce, and expected synergies to be achieved from integrating the NLP software into the
Group’s existing products. Goodwill has primarily been allocated to the Nuix Group CGU and is deductible for
tax purposes in the United States.
Significant judgments and assumptions
When accounting for business combinations using the acquisition method, significant judgements are used when
determining whether arrangements are a part of, or separate to the business combination, and in determining
the fair value measurement of consideration paid, and of the acquired assets and assumed liabilities. Where such
acquisitions include earnout arrangements forming a view on whether they are expected to be achieved can require
significant judgement.
Determining whether arrangements are part of the business combination
An acquirer is required to identify amounts that are not part of the exchange for the acquiree. Such amounts are not
included in the accounting for the business combination, but rather are accounted for as separate transactions in
accordance with other relevant accounting policies.
116 Nuix Annual Report 2022
Determining what is part of the business combination involves an analysis of the relevant factors of the
arrangement. The following factors are considered in assessing whether a transaction is part of a business
combination or is separate:
• The reasons for the transaction: whether it is primarily for the benefit of the acquirer or combined entity, rather
than primarily for the benefit of the acquiree or its former owners before the acquisition;
• Who initiated the transaction: understanding who initiated a transaction may provide insight into whether it is
part of the exchange for the acquiree;
• The timing of the transaction: may also provide insight into whether it is part of the consideration.
When it can be demonstrated that an arrangement, such as an earnout milestone, is designed to prove the value
of the acquiree and there is no related post-combination service requirement (whether contractual or implied),
management have concluded that such an arrangement is part of the consideration for a business combination.
This assessment is made on a milestone by milestone basis.
Measurement of fair values at acquisition date
Accounting for business combinations using the acquisition method requires the measurement of consideration,
and the acquired assets and assumed liabilities at fair value.
Contingent consideration:
Contingent consideration includes but is not limited to obligations to transfer additional consideration to the former
owners of the acquiree if specified future events occur or conditions are met. Contingent consideration may include
the issuance of shares in the acquirer or distribution of other consideration (e.g. cash) on resolution of contingencies
based on, for example, post-combination revenues, or other factors. All contingent consideration is measured at fair
value on the acquisition date and included in the consideration transferred to the extent it is an arrangement that is
determined to be part of the business combination.
Estimating the fair value of contingent consideration can be challenging as the arrangements are often complex.
Judgement is required to determine whether a set of earnout arrangements should be treated as a single or
multiple unit of account. Where earnout arrangements have discrete risk exposures they are treated as having
multiple separate units of account, otherwise such arrangements are considered to have a single unit of account.
As observable prices for such transactions are generally not available, management has applied a scenario based
method to determine the most likely payout for each unit of account, based on the information available at the
date control was obtained. This method assessed each of the earnout opportunities and considered the goal of
the incentive payments and the payoff structures. These estimated future cash flows were then discounted back to
present value taking account of the time value of money.
Acquired intangible assets:
The accounting for intangible assets acquired in a business combination is particularly challenging, as many are not
recognised in the acquiree’s pre-combination financial statements and determining their fair values usually involves
estimation techniques as quoted prices are rarely available.
Management have used an income approach to determining the fair value of the Intellectual Property asset
acquired as part of the Topos acquisition, which requires assumptions to be made about prospective financial
information from its operations and an assessment of contributory asset charges to determine its fair value, from
the perspective of a market participant. These cash flows are then discounted using a market participants view of
the appropriate rate for the business to derive the fair value of the asset.
Nuix Annual Report 2022
117
Notes to the consolidated financial statements continued
9. Other
This section provides information that is not directly related to specific line items in the financial statements,
including information about dividends, related party transactions, auditor’s remuneration, events after the reporting
date and other statutory information.
9.1 Other liabilities
Contingent consideration
Other current liabilities
Contingent consideration
Other non-current liability
Other non-current liabilities
2022
$000
7,528
7,528
6,330
600
6,930
2021
$000
–
–
–
–
–
Information about the Group’s exposure to currency and liquidity risks is included in Note 7.
Contingent consideration payable
The Group has recognised a liability measured at fair value as of 30 June 2022 in relation to contingent
consideration arising out of the acquisition of Topos Labs, LLC. The contingent consideration arising is deemed
to be a Level 3 measurement of fair value, which will be paid over various periods from the acquisition date.
It has been discounted accordingly based on estimated time to complete a number of milestones including
the successful achievement of revenue, staff retention and product development milestones which include
the integration of the acquired Intellectual Property with the Nuix platform.
As part of the assessment at the reporting date, the Group has determined the fair value of contingent
consideration considering a range of reasonably possible changes regarding expected future performance
and outcomes from activities being undertaken to progress the objectives of the milestones. Changes in the
fair value of contingent consideration after acquisition date are recognised in profit or loss.
A reconciliation of the movements in fair value measurements of contingent consideration is provided below.
Contingent consideration
Opening balance
Additions
Foreign exchange difference
Change in fair value estimate
Unwinding of interest
Cash payments
Closing balance
2022
$000
–
12,999
767
–
90
–
13,856
2021
$000
–
–
–
–
–
–
–
The effect on profit and loss for the year is limited to the unwinding of interest on the contingent consideration
for acquisitions, which is recognised in finance costs. There has been no impact on profit and loss resulting
from reassessments of achievability of earnout milestones post acquisition during the year.
118 Nuix Annual Report 2022
Sensitivity
The fair value measurements are sensitive to reasonably possible changes in unobservable inputs to
their measurement, including the time frame over which milestones may (or may not) be achieved; the
successfulness of integration of the acquired Intellectual Property with the Nuix platform; and the pace at
which commercial activities in relation to the Nuix NLP product proceed. The contingent consideration for the
Topos acquisition of USD $18,500,000 comprises of 14 milestones with amounts between USD $250,000 and
USD $6,000,000.
Delays in or non-achievement of these milestones may result in a decrease in the measurement of the
contingent consideration, and conversely early achievement of certain milestones may bear on future
reassessments of the achievability of other milestones which could increase the measurement of the
contingent consideration.
9.2 Dividends
During the year the Directors did not declare an interim dividend (2021: Nil) and have not recommended a
final dividend be paid after 30 June 2022 (2021: Nil).
9.3 Related party disclosures
A. Parent entity
The ultimate and parent entity within the Group is Nuix Limited.
B. Interests in other entities
Name of entity
Place of
business/
country of
incorporation
Ownership
interest held
by the Group
Ownership
interest held by
non-controlling interests
Principal
activities
Nuix North America, Inc
USA
Nuix Ireland Ltd
Ireland
Nuix Pte Ltd
Singapore
Nuix Holding Pty Ltd
Australia
Nuix SaleCo Limited
Australia
Nuix USG Inc.
Nuix Technology UK Ltd
USA
UK
Nuix Philippines ROHQ
Philippines
Topos Labs, LLC
USA
2022
100%
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
–
2022
2021
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Sale of
Licences
Sale of
Licences
Sale of
Licences
Holding
Company
Holding
Company
Sale of
Licences
Sale of
Licences
Business
Support
Sale of
Licences
Nuix Annual Report 2022
119
Notes to the consolidated financial statements continued
C. Transactions with other related parties
Macquarie Corporate Holdings Pty Ltd
Macquarie Corporate Holdings has an interest of 30% in Nuix (2021: 30%), which allows it to exercise significant
influence over the Group. As a result, Macquarie Corporate Holdings and by extension all related entities of
Macquarie Group Limited, are related parties to Nuix.
In December 2018, Nuix entered into an alliance agreement and software licence agreement (in support of
the alliance agreement) with Macquarie Group Services Pty Ltd (‘MGS’) relating to the unlimited use of certain
Nuix software and related support and maintenance for a term of ten (10) years, unless terminated prior
by MGS. Both these agreements were entered into with the unanimous approval of non-Macquarie Group
nominee Board members and without shareholder approval prior to Nuix becoming a public company.
Under the agreements MGS pays Nuix an annual licence fee for a licence to use Nuix software, and the related
support and maintenance services for the licence.
In the year ended 30 June 2022, in accordance with the alliance agreement, the pricing for the arrangement
for years four, five and six was agreed at a total amount of $2,681,217.
Amounts recognised in revenue during the year under the agreements were as follows:
• $1,961,861 was recognised as revenue from the licence renewal in June 2022; and
• $186,579 was recognised as revenue from the provision of support and maintenance covering the last
five months of the initial three-year period, and the first seven months of the renewal period.
As of 30 June 2022, $579,497 remains as deferred revenue in relation to the ongoing support and
maintenance which will be recognised on a rateable basis until 5 December 2024.
2022
$
2021
$
Transaction
Outstanding
balance
Transaction
Outstanding
balance
Sale and purchases of goods and services
Sale of license to related parties
1,961,861
1,802,201
Support and maintenance
Rendering of professional service
Underwriting fees
Purchase of service from other related party
Sale of goods to other related parties
186,579
4,703
–
–
–
–
–
–
–
–
–
112,083
–
14,462,295
36,215
–
–
–
–
–
–
8
120 Nuix Annual Report 2022
9.4 Auditor’s remuneration
Audit and review services
Auditors of the Group – KPMG Australia (2021: PricewaterhouseCoopers)
Audit and review of financial statements – Group
Audit and review of financial statements – controlled entities
2022
2021
495,000
1,468,586
78,000
–
573,000
1,468,586
Other auditors
Audit and review of financial statements
25,244
68,623
Assurance services
Auditors of the Group – KPMG Australia (2021: PricewaterhouseCoopers)
Other assurance services
–
3,403,507
Other services
Auditors of the Group – KPMG Australia (2021: PricewaterhouseCoopers)
Advisory services
Taxation advice and tax compliance services
188,616
8,000
–
660,503
Other auditors
Taxation advice and tax compliance services
32,654
6,136
Following a competitive tender process, PwC resigned as auditor and KPMG have been appointed as auditor.
It is the Group’s policy to engage KPMG on assignments in addition to their statutory audit duties where their
expertise and experience with the Group are relevant. Nuix engaged KPMG to perform advisory services prior
to statutory audit engagement.
Nuix Annual Report 2022
121
Notes to the consolidated financial statements continued
9.5 Parent or the Company financial information
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share option reserve
Retained earnings
Total equity
Loss for the year
2022
$000
35,343
219,617
254,960
990
3,850
4,840
2021
$000
89,397
205,763
295,160
24,669
2,645
27,314
250,120
267,846
370,696
370,696
(168,722)
(171,632)
48,146
68,782
250,120
267,846
(20,609)
(13,546)
Determining the parent entity financial information
The financial information for the parent entity has been prepared on the same basis as the consolidated
financial statements, except in so far as investments in subsidiaries are recognised at cost.
9.6 Contingent Liabilities
The Group has determined the below matters to be contingent liabilities. No liabilities have been recognised
in the financial statements in relation to these matters.
Sheehy litigation
In November 2019, Nuix compromised a claim and formal proceedings brought by former CEO, Eddie Sheehy
(Mr Sheehy) under which Nuix agreed to consent to a form of declaration proffered by Mr Sheehy being
made by the Supreme Court of NSW in the form of Judgment. Pursuant to that compromise, the Supreme
Court made a declaration that ‘453,273 options granted over unissued shares of Nuix held by Mr Sheehy
are exercisable on the occurrence of a sale of [Nuix’s] business’ in accordance with an options agreement
between the parties made in September 2008 (the Judgment). In accordance with the Judgment, Nuix’s
options register records that Mr Sheehy holds 453,273 options, each over one share at an exercise price of
$2.00 per option and without an expiry date.
Despite the 2019 Judgment, on 23 October 2020 Mr Sheehy commenced proceedings against Nuix in
the Federal Court of Australia alleging that Nuix has acted inconsistently with the terms of the 2008
options agreement and has acted in an oppressive, unfairly prejudicial, unfairly discriminatory and/or
unconscionable way against him. Mr Sheehy seeks orders to the effect that a sale of business for the
purposes of the 2008 options agreement has occurred and that he is now entitled to exercise, and has validly
exercised on 27 January 2021, his 453,273 options in return for 22,663,650 shares in Nuix as a result of a 1 for 50
share split conducted by Nuix in March 2017. Mr Sheehy alleges that it was an implied term of his 2008 options
agreement with Nuix that ‘if the shares of [Nuix] were split by a particular divisor, upon exercise of the options
[Mr Sheehy] would be issued with the number of shares set out in the 2008 Option Agreement multiplied by
the divisor, and that the exercise price of the options would be the exercise price divided by the divisor’.
122 Nuix Annual Report 2022
Mr Sheehy seeks declarations as to his alleged entitlements, compensation and damages.
Nuix rejects Mr Sheehy’s claim in its entirety and has defended the proceedings. In particular, Nuix maintains
that the dispute was properly compromised and validly determined by the Judgment issued by the NSW
Supreme Court in 2019 and it is not open for Mr Sheehy to seek to re-litigate the issue, that Mr Sheehy’s
options were not the subject of the 2017 share split and that, in any event, no ‘sale of the business’ of the
kind contemplated by the parties in the 2008 options agreement has occurred with the effect that none of
Mr Sheehy’s options are presently exercisable at all.
The matter was heard over a four-day hearing from 27 June to 30 June 2022 and included the presentation
of opening submissions, lay evidence and expert evidence from both parties. A further one-day hearing was
held in August 2022, in which counsel for Nuix and Mr Sheehy provided closing submissions.
If Mr Sheehy’s new claim were successful, it may result in an additional 22,210,377 shares becoming issuable
in relation to Nuix’s equity-based compensation schemes and/or a potential damages payment. Mr Sheehy
alleges that he has suffered damages in the range of $96.9 million to $182.4 million depending on the date
at which the shares should have been issued and the manner in which he alleges they should have been
disposed of. Nuix filed evidence in response to the quantum of damages sought by Mr Sheehy on 14 April 2022.
If Mr Sheehy is unsuccessful in relation to his claims, he will not be entitled to any payment from Nuix.
ASIC Investigation
As previously disclosed to the market, ASIC has been conducting an investigation in relation to potential
contraventions of the Corporations Act concerning Nuix. ASIC’s investigations relevantly concern: 1) the financial
statements of Nuix Limited for the period ending 30 June 2018, 2019 and 2020; 2) Nuix’s prospectus dated
18 November 2020; and 3) Nuix’s market disclosures in the period between 4 December 2020 to 31 May 2021.
As advised to the market on 10 February 2022, Nuix has been notified by ASIC that it has completed the aspects
of its investigation relating to points 1) and 2) above and has determined that it will not take any further action in
relation to those matters. The aspects of ASIC’s investigation relating to Nuix’s market disclosures in the period
between 4 December 2020 to 31 May 2021 is not yet complete.
Nuix believes that it has complied with its accounting and disclosure obligations and continues to cooperate
fully with ASIC’s investigation.
Class Action Risk
On 22 November 2021, Nuix received a class action claim filed in the Supreme Court of Victoria by Shine
Lawyers on behalf of Mr William Lay and persons who acquired interests in Nuix shares in the period between
18 November 2020 and 30 May 2021. In essence, the claim alleges that Nuix contravened provisions of the
Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth) and the
Australian Consumer Law in connection with its disclosures concerning its forecast FY21 revenue. The claim
does not identify the amount of any damages sought.
On 23 November 2021, a second class action claim filed in the Supreme Court of Victoria by Phi Finney
McDonald on behalf of Mr Daniel Joseph Batchelor and persons who acquired interests in Nuix shares by
subscription in its IPO or in the period between 4 December 2020 and 29 June 2021. The claim relates to
information contained in Nuix’s Prospectus and Nuix’s disclosure concerning forecast FY21 revenue and
alleges that Nuix contravened provisions of the Corporations Act 2001 (Cth) and the Australian Securities and
Investments Commission Act 2001 (Cth). The claim covers similar subject matter to the claim filed by Shine
Lawyers which was announced on 22 November 2021 and does not identify the amount of any damages
sought. Mr Batchelor’s claim has also been commenced against Macquarie Capital (Australia) Limited and
Macquarie Group Limited as co-defendants.
Nuix Annual Report 2022
123
Notes to the consolidated financial statements continued
On 10 March 2022, Nuix became aware of a further overlapping class action claim filed against it in the
Supreme Court of Victoria. This class action claim was commenced by the Banton Group on behalf of Stella
Stefana Bahtiyar on behalf of persons who acquired shares in Nuix in the period between 18 November
2020 and 31 May 2021. As with the other two class action claims which have been filed, the Banton Group
claim related to information contained in Nuix‘s Prospectus and Nuix‘s disclosures concerning its forecast
FY21 revenue and alleged that Nuix contravened provisions of the Corporations Act 2001 (Cth), the Australian
Securities and Investments Commission Act 2001 (Cth) and the Australian Consumer Law. The claim did not
identify the amount of any damages sought. The claim also named some other parties associated with the
initial public offering, including Directors during the relevant period as co-defendants.
On 16 June 2022, a hearing was held in the Supreme Court of Victoria to seek to deal with the competing and
overlapping claims made in the three class actions so that Nuix will face, in effect, only one class action in
relation to the relevant allegations.
On 23 August 2022, the Supreme Court of Victoria handed down a decision in relation to the three competing
and overlapping claims filed against Nuix. The Supreme Court of Victoria ordered that:
•
the proceeding commenced by Banton Group (which had sought to join a number of Directors as co-
defendants) be permanently stayed; and
•
the proceeding commenced by Shine Lawyers and Phi Finney McDonald be consolidated.
Nuix disputes the allegations contained in the consolidated claim and will be defending it.
Bank guarantee
The Company had obtained a bank guarantee in the amount of $746,460 to secure certain obligations of
the Company that arise under a commercial property lease. Subsequent to the termination of the Facility
Agreement with the Commonwealth Bank of Australia post balance date, this obligation is now cash backed
by the Group.
Accounting policies – contingent liabilities
A provision is recognised when:
•
•
•
there is a legal or constructive obligation arising from past events or, in cases of doubt over the existence of an
obligation (e.g. a court case), when it is more likely than not that a legal or constructive obligation has arisen
from a past event;
it is more likely than not that there will be an outflow of benefits; and
the amount can be estimated reliably.
In some cases, it may be disputed whether certain events have occurred or, particularly in the case of a legal
claim, it may be disputed whether there is an obligation even if it is clear that there is a past event. In such cases
of uncertainty, a past event is deemed to give rise to a present obligation if, after taking account of all available
evidence, it is more likely than not that a present obligation exists at the reporting date. Otherwise, such an
obligation is a contingent liability.
Contingent liabilities are not recognised in the statement of financial position except for certain contingent liabilities
that are assumed in a business combination. Contingent liabilities are reviewed continuously to assess whether an
outflow of resources has become probable. If the recognition criteria are met, then a liability is recognised in the
statement of financial position in the period in which the change in probability occurs.
If a present obligation relates to a past event, the possibility of an outflow is probable and a reliable estimate can
be made, then the obligation is not a contingent liability, but instead is a liability for which a provision is required to
be recognised.
Contingent liabilities are disclosed unless the likelihood of an outflow of resources embodying economic benefits
is remote.
124 Nuix Annual Report 2022
Significant judgements and assumptions
Assessing whether past events give rise to present obligations
In determining the accounting for matters where there is a potential outflow of benefits, the key judgements and
assumptions required to be made relate to whether an obligation has arisen.
Where on balance it has not been determined that it is more likely than not that a present obligation for an outflow
of benefits exists at reporting date, such a liability is a contingent liability.
As contingent liabilities are generally not recognised in the statement of financial position (except for those
assumed in a business combination), concluding that it is not more likely than not that a present obligation does
exist, has the result that no accounting entries are booked and there is no impact reported in profit or loss.
9.7 Events after the reporting date
As noted in Note 4.7 of this report, Nuix had a Facility Agreement with the Commonwealth Bank of Australia
(‘CBA’) which was set to expire on 11 September 2022. Given that the Company has not utilised the Cash
Advance Facility over the preceding 12 months and has $46,846,000 cash available at 30 June 2022, the
Group has, post year-end, terminated the facility with CBA.
In relation to the Class Actions referred in Note 9.6 of this report, on 23 August 2022 the Supreme Court
of Victoria handed down a decision to the three competing and overlapping claims filed against Nuix.
The Supreme Court of Victoria ordered that:
•
the proceeding commenced by Banton Group (which had sought to join a number of Directors as
co-defendants) be permanently stayed; and
•
the proceeding commenced by Shine Lawyers and Phi Finney McDonald be consolidated.
Nuix disputes the allegations contained in the claim and will be defending it.
Except as disclosed above, no other matters or circumstances have arisen since the end of the financial
year which significantly affected or may significantly affect the operations of the Group, the results of those
operations, or the state of affairs of the Group in future financial periods.
Nuix Annual Report 2022
125
Directors’ Declaration
In accordance with a resolution of the Directors of Nuix Limited, we state that:
1.
In the opinion of the Directors of Nuix Limited (the ‘Company’):
a) the consolidated financial statements and notes that are set out on pages 66 to 125 and the
Remuneration Report on pages 46 to 64, are in accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
performance for the financial year ended on that date; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.1
2.
3.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the chief executive officer and chief financial officer for the financial year ended 30 June 2022.
The Directors draw attention to Note 1.2 to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Directors.
Signed:
Jeffrey Bleich
Chair
Sydney, Australia
2 September 2022
Jonathan Rubinsztein
Director
Sydney, Australia
2 September 2022
1.
The Director’s Declaration has been reissued on 2 September 2022 as there was an inadvertent omission of paragraph 1 b).
This is the Director’s Declaration, signed by Jeffrey Bleich, Chair and Jonathan Rubinsztein, Director on 2 September 2022. Page references in relation to
the consolidated financial statements and notes should be read as referring to pages 66 to 125, as opposed to pages 42 to 103, and page references in
relation to the Remuneration Report should be read as referring to pages 46 to 64, as opposed to 22 to 41, to reflect the correct references now that the
financial statements have been presented in the context of the annual report in its entirety.
126 Nuix Annual Report 2022
Independent Auditor’s Report
to the Shareholders
This is a reproduction of the authoritative version of KPMG’s audit report regarding the financial report. Page references
quoted in their Report on the Remuneration Report can now be read as referring to pages 46 to 64, as opposed to
22 to 41. This reflects the adjusted page numbers from the now completed content of the Annual Report.
Independent Auditor’s Report
To the shareholders of Nuix Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Nuix Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
• giving a true and fair view of the
Group’s financial position as at 30
June 2022 and of its financial
performance for the year ended on
that date; and
•
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
Basis for opinion
The Financial Report comprises:
• Consolidated statement of financial position as at 30
June 2022
• Consolidated statement of comprehensive income,
Consolidated statement of changes in equity, and
Consolidated statement of cash flows for the year
then ended
• Notes including a summary of significant accounting
policies
• Directors’ Declaration - reissued.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during
the financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the Directors of Nuix Limited, would be in the same terms if given to the Directors as
at the time of this Auditor’s Report.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of
independent member firms affiliated with KPMG International Limited, a private English
company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks
used under license by the independent member firms of the KPMG global organisation. Liability
limited by a scheme approved under Professional Standards Legislation.
105
Nuix Annual Report 2022
127
Independent Auditor’s Report to the Shareholders continued
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
Key Audit Matters
The Key Audit Matters we identified are:
• Contingent liabilities – Sheehy
litigation
• Going concern basis of accounting
• Valuation of intangible assets
• Revenue recognition
• Capitalisation of development costs
as Intellectual Property
Contingent liabilities – Sheehy litigation
Refer to Note 9.6 to the financial report
The key audit matter
How the matter was addressed in our audit
Contingent liability relating to the Sheehy Litigation
is a key audit matter as applying AASB 137
Provisions, Contingent Liabilities and Contingent
Assets (AASB 137) requires significant judgement
for each of the fundamental principles. The
principles we considered were:
3.
1. Does a present obligation exist;
2.
If so, can it be reliably measured, leading
to recording a provision; and
If not, a contingent liability is reported
with sufficient information disclosed to
provide the users of the financial
statements with an understanding of the
matter and where practical the
uncertainties and potential timing.
Given the uncertainty and potential significance of
an outcome related to the contingent liability we
focused our effort on the Group’s analysis for
complying with the requirements of the
accounting standard and the information used to
form its judgements.
Due to the subjective nature of interpreting the
accounting standard and any resultant
measurement of these types of provisions,
128 Nuix Annual Report 2022
Working with our legal specialist our procedures
included:
• We obtained an understanding of the underlying
Sheehy claim by reading the claim, the Group’s
internal documentation, and evaluation of its
position;
• We evaluated the Group’s assessment of
whether a present obligation exists arising from
past events, against the criteria in AASB 137
based on the facts and circumstances available;
• We enquired of senior management of the
Group, their inhouse legal counsel, their external
lawyer and the Directors, evaluating for
consistency and feasibility regarding the current
status of the matter, the Group’s intended plan
to continue defending the claim, the risks and
uncertainties associated, and the range of
possible outcomes, associated estimation and
timing of financial outflows;
• We assessed the competence, capabilities and
objectivity of the external lawyer and the external
legal counsel;
• We read the external legal counsel advice
obtained by the Board of Directors on the
Group’s prospects, analysing for robustness and
consistency to other sources of information;
106
assumptions tend to be prone to greater risk for
potential bias, error and inconsistent application.
These conditions necessitate additional scrutiny by
us.
• We read minutes from relevant committees,
attending audit and risk committee meetings
where this topic was tabled, analysing
consistency of sources;
We involved specialists to supplement our senior
audit team members in assessing this key audit
matter.
• We obtained and inspected external lawyers’
letters and legal opinions against knowledge
obtained from our other procedures;
• We assessed the consistency to facts and
conditions gathered across our audit work;
• We assessed the appropriateness of disclosures
against the requirements of the accounting
standards, with a particular focus on the
qualitative information included in Note 9.6 to the
Consolidated Financial Statements.
Going concern basis of accounting
Refer to Note 1.3 to the financial report
The key audit matter
How the matter was addressed in our audit
The Group’s use of the going concern basis of
accounting and the associated extent of
uncertainty is a key audit matter due to the high
level of judgement required by us in evaluating
the Group’s assessment of going concern and
the events or conditions that may cast
significant doubt on their ability to continue as a
going concern. These are outlined in Note 1.3.
The Directors have determined that the use of
the going concern basis of accounting is
appropriate in preparing the financial report.
Their assessment of going concern was based
on cash flow projections. The preparation of
these projections incorporated a number of
assumptions and significant judgements, and
the Directors have concluded that the range of
possible outcomes considered in arriving at this
determination does not give rise to a material
uncertainty casting significant doubt on the
Group’s ability to continue as a going concern.
We critically assessed the levels of uncertainty,
as it related to the Group’s ability to continue as
a going concern, within these assumptions and
judgements, focusing on the following:
Our procedures included:
• We analysed the cash flow projections by:
• Evaluating the underlying data used to
generate the forecasts for consistency
with those tested by us as set out in the
Valuation of Intangible Assets key audit
matter, our understanding of the Group’s
strategy as outlined in Board minutes and
during Board and Audit & Risk Committee
meetings we attended, and past results
and practices;
• Analysing the impact of reasonably
possible changes in projected cash flows
and their timing to the projected periodic
cash positions. Assessing the resultant
impact to the ability of the Group to pay
debts as and when they fall due and
continue as a going concern. The specific
areas we focused on were informed from
our test results of the accuracy of
previous Group cash flow projections and
sensitivity analysis on key cash flow
assumptions.
•
the Group’s key cash inflow assumptions
• Assessing the significant assumptions and
107
Nuix Annual Report 2022
129
Independent Auditor’s Report to the Shareholders continued
•
•
•
particularly, the forecast growth rate in light
of the Group’s historical results, customer
retention rates, and pricing expectations;
the Group’s planned levels of operational
expenditures, in particular those relating to
investment in sales capability and product
development, and the contingent
consideration of recent acquisition and legal
costs relating to the on going legal and
regulatory matters. We focused on the
ability of the Group to manage cash
outflows within available resources,
particularly in light of recent loss making
operations;
the analysis and advice relating to the
timing and range of outcomes of the legal
and regulatory matters against the Group
such as the Sheehy litigation, ASIC
investigation and Class Actions;
the Group’s ability to raise additional funds,
if needed, from shareholders or other
parties and the projected timing thereof.
This included source of funds, availability of
fund type, feasibility and status/progress of
securing those funds;
In assessing this key audit matter, we involved
senior audit team members who understand
the Group’s business, industry and the
economic environment it operates in and legal
specialists.
judgements in the operating cash inflows,
in particular those related to growth in
revenue, impacts of price rises and
forecast improvement in Net Dollar
Retention (“NDR”) percentage, for
feasibility, timing, consistency of
relationships and trends to the Group’s
recent and historical results, growth rates
in the industry, and our understanding of
the business, industry and economic
conditions impacting the Group;
• Assessing the planned levels of operating
and capital cash outflows and significant
unusual items, in particular those related
to investment in sales capability and
product development, remaining
contingent consideration in relation to the
Topos Labs acquisition, and ongoing legal
fees relating to the matters discussed in
note 9.6 for feasibility, timing, consistency
of relationships and trends to the Group’s
historical results, particularly in light of
recent loss making operations, results
since year end, and our understanding of
the business, industry and economic
conditions impacting the Group.
• We assessed significant forecast cash inflows
and outflows identified in scenario analysis
prepared by the Group, modelling alternates of
growth shortfalls and/or potential timing of
and quantum of cash outcomes of the legal
and regulatory matters disclosed in Note 9.6.
We assessed the cost reductions and other
mitigants in these alternate scenarios
including legal options for feasibility, quantum
and timing. We used our knowledge obtained
from other procedures, past results, inquiries
with the Group’s internal and external legal
counsel, and our understanding of the current
status of legal and regulatory matters, to
assess the level of associated uncertainty.
Details of specific procedures exclusively to
assessing the legal and regulatory matters for
relevance as contingent liabilities are set out in
the contingent liabilities key audit matter
below;
• We obtained the Group’s internal and external
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130 Nuix Annual Report 2022
counsel opinions on the likely timing and
probability of any cash outflows as result of
the legal and regulatory matters discussed in
Note 9.6 and together with our specialists
assessed the probability and timing of any
cash outflows as result of adverse outcomes
of contingent liabilities as set out in the
contingent liability key audit matter.
• We read correspondence received by the
Group relating to potential debt and other
sources of finance to understand and assess
the accessibility to the Group and the
associated level of uncertainty to the basis of
preparation;
• We inquired with the Group regarding
discussions and correspondence with existing
or new shareholders and read relevant
information and papers to understand their
position on equity funding options available to
the Group, and assessed the level of
associated uncertainty to the basis of
preparation;
• We evaluated the Group’s going concern
disclosures in the financial report by
comparing them to our understanding of the
matter, the events or conditions incorporated
into the cash flow projection assessment, the
Group’s plans to address those events or
conditions, and accounting standard
requirements.
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Nuix Annual Report 2022
131
Independent Auditor’s Report to the Shareholders continued
Valuation of intangible assets ($237.1m)
Refer to Note 5.4 to the financial report
The key audit matter
How the matter was addressed in our audit
A key audit matter for us was the Group’s
testing of intangible assets (including goodwill)
for impairment, given the size of the balance
(being 63% of total assets) and existence of
impairment indicators.
Certain conditions impacting the Group
increased the judgement applied by us when
evaluating the evidence available. We focused
on the key forward-looking assumptions the
Group applied in their value in use model,
including:
•
•
forecast operating cash flows – the Group’s
revenue has declined as compared to prior
year and the Group has incurred a loss
during the year. These along with the
impact of potential outcomes from ongoing
legal and regulatory matters on cash flows
increase the possibility of goodwill and
intangible assets being impaired;
forecast growth rates – In addition to the
uncertainties described above, the Group’s
models are highly sensitive to small
changes in these assumptions, reducing
available headroom. This drives additional
audit effort specific to assessing their
feasibility;
• discount rate - these are complicated in
nature and vary according to the conditions
and environment the specific Cash
Generating Unit (CGU) is subject to from
time to time.
The Group uses complex models to perform
their annual testing of goodwill and intangible
assets for impairment. The models are largely
manually developed, use adjusted historical
performance, and a range of internal and
external sources as inputs to the assumptions.
Complex modelling, using forward-looking
assumptions tend to be prone to greater risk for
potential bias, error and inconsistent
application. These conditions necessitate
Working with our valuation specialists our
procedures included:
• We assessed the Group’s determination of
CGU assets for consistency with the
assumptions used in the forecast cash flows
and the requirements of the accounting
standards;
• We considered the appropriateness of the
value in use method applied by the Group to
perform the test of intangible assets for
impairment against the requirements of the
accounting standards;
• We assessed the integrity of the value in use
model used, including the accuracy of the
underlying calculation formulas;
• We compared the forecast cash flows
contained in the value in use model to Board
approved Budgets;
• We assessed the accuracy of previous Group
cash and other key metric forecasts to inform
our evaluation of forecasts incorporated in the
model;
• We enquired with senior management of the
Group to understand the potential outcomes
of legal and regulatory matters to the forecast
operating cash flows and the mitigating
circumstances in the event of a successful
claim against the Group;
• We challenged the Group’s significant forecast
cash flow and growth assumptions. We
compared forecast growth rates and terminal
growth rates to published studies of industry
trends and expectations, and considered
differences for the Group’s operations. We did
this using our knowledge of the Group, their
past performance, business and customers,
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132 Nuix Annual Report 2022
additional scrutiny by us, in particular to address
the objectivity of sources used for assumptions,
and their consistent application.
In addition to the above, the carrying amount of
the net assets of the Group exceeded the
Group’s market capitalisation at year end,
increasing the possibility of goodwill and
intangibles being impaired. This further
increased our audit effort in this key audit area.
We involved valuation specialists to supplement
our senior audit team members in assessing
this key audit matter.
and our industry experience;
• We compared key assumptions included in the
Group’s forecast to the Board approved plan
Budget. We applied increased scepticism to
forecasts in the areas where previous
forecasts were not achieved;
• We checked the consistency of the growth
rates to the Group’s stated plan and strategy,
past performance of the Group, and our
experience regarding the feasibility of these in
the industry/economic environment in which
they operate;
• We independently developed a discount rate
range considered comparable using publicly
available market data for comparable entities
adjusted by risk factors specific to the Group;
• We considered the sensitivity of the model by
varying key assumptions, such as forecast
growth rates, terminal growth rates and
discount rates, within a reasonably possible
range. We did this to identify those
assumptions at higher risk of bias or
inconsistency in application and to focus our
further procedures;
• We assessed the Group’s reconciliation of
differences between the year-end market
capitalisation and the carrying amount of the
net assets. This included consideration of the
market capitalisation range implied by recent
share price trading ranges and broker 12
month target valuation ranges and comparable
valuation multiples to the Group’s latest
internal enterprise valuation model;
• We assessed the disclosures in the financial
report using our understanding of the issue
obtained from our testing and against the
requirements of the accounting standards.
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Nuix Annual Report 2022
133
Independent Auditor’s Report to the Shareholders continued
Revenue recognition ($152.3 million)
Refer to Note 2.1 to the financial report
The key audit matter
How the matter was addressed in our audit
The Group’s revenue is mainly derived from
licensing software products and from related
support and maintenance and/or professional
services contracts.
The Group’s contracts with customers include
commitments to transfer perpetual or term-based
software licenses bundled with support and
maintenance services. For bundled contracts, the
Group determines Software license to be a
distinct performance obligation from support and
maintenance. It is their policy that the
corresponding revenues are recognised as the
related performance obligations are satisfied.
Revenue recognition was a key audit matter for us
due to:
•
•
•
its significance to the financial performance;
the effort required to analyse the Group's
revenue recognition policy, using judgemental
criteria in AASB 15 Revenue from Contracts
with Customers for contracts with both
software product and related service and
maintenance offering contracts, and;
the significance of judgments and
assumptions required by the Group in the
determination of the relative standalone
selling prices for each performance obligation
in multiple element contracts.
Our procedures included:
• We assessed the appropriateness of the Group’s
accounting policies related to revenue
recognition against the requirements of
the accounting standard and our understanding
of the business and industry practice, in particular
for bundled contracts;
• We evaluated the Group's standalone selling
price allocation methodology for software license
contracts bundled with support and maintenance
against the requirements of AASB 15;
• We tested the key underlying assumptions and
data, in the standalone selling price model using
observable inputs, details of licensing
arrangements and pricing practice;
• We assessed the mathematical accuracy of the
underlying calculations in the standalone selling
price model used;
• We tested a sample of revenue recognised
through the year. This included assessing:
– Existence of underlying arrangement to
sources such as signed contracts with
customers and sales orders
The amounts invoiced to customers in
accordance with the price and usage
detailed in the underlying contract with the
customer.
–
– We checked the accuracy of the revenue
recognised against the agreed terms and
conditions of underlying contracts and the
Group’s revenue recognition policy.
• We evaluated the adequacy of disclosures in the
financial report using our understanding obtained
from our testing and against the requirements of
Australian Accounting Standards.
134 Nuix Annual Report 2022
112
Capitalisation of development costs as Intellectual Property ($42.4 million)
Refer to Note 5.1 to the financial report
The key audit matter
How the matter was addressed in our audit
Capitalisation of software development costs is
considered to be a key audit matter due to:
• The significance of the amount of
development costs capitalised;
• The judgement required by the Group in
determining whether the development
activities undertaken by them meets the
capitalisation criteria of the accounting
standards.
We focused our effort on analysing the underlying
sources used by the Group in applying these
significant judgements, the potential for bias, and
their consistency of application.
Our procedures included:
• We assessed the Group’s accounting policies
and methodology used to capitalise development
costs against the requirements of the accounting
standard and our understanding of the business
and industry practice;
• We obtained an understanding of the Group’s
software development processes and how
software developers use their project
management tool to record activities;
• We evaluated the Group’s assessment of
development activities and development costs
capitalised. This included:
– Evaluating the Group’s assessment
using our knowledge of the business
and projects, and through enquiries with
various stakeholders, including: Project
Managers and the Chief Financial
Officer;
– We inspected a sample of information
recorded in the project management
tool and assessed the Group’s
identification of activities they’ve
attributed as constituting development
against the requirements of the
accounting standards;
– We tested a sample of activities
recorded and capitalised as
development costs, checking the nature
of respective activities being performed
as one relating to an intangible asset in
development or an enhancement to an
existing software product as opposed to
research or maintenance as defined by
the accounting standards.
• We assessed the cost eligible for capitalisation
by testing a sample of key inputs to underlying
records including employees payroll information.
We also assessed the Group’s allocation of
directly attributable overhead costs against the
criteria within the accounting standards;
• We evaluated the adequacy of the disclosures
included in the financial report against the
requirements of the accounting standards.
113
Nuix Annual Report 2022
135
Independent Auditor’s Report to the Shareholders continued
Re-issuance of the Directors Declaration
We draw attention to the 2 September 2022 Director’s Declaration and its footnote regarding the
reissuance and reason therefore. As a result of the reissuance this auditor’s report supersedes our
previous Independent Auditor’s Report to the shareholders of Nuix Limited dated 31 August
2022. Our opinion is not modified in respect of this matter.
Other Information
Other Information is financial and non-financial information in Nuix Limited’s annual reporting which is
provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for
the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’
Report and the Letter from Chair of Board Remuneration and Nomination Committee. The Chairman’s
Letter, CEO’s Letter, Shareholder Information and Corporate Information are expected to be made
available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception
of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001
•
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error
• assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
136 Nuix Annual Report 2022
114
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report
of Nuix Limited for the year ended 30
June 2022, complies with Section 300A of
the Corporations Act 2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 22 to 41 of the Directors’ report for the year
ended 30 June 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Kenneth Reid
Partner
Sydney
02 September 2022
115
Nuix Annual Report 2022
137
Shareholder Information
Shareholder Information
The shareholder information set out below is applicable at 14 September 2022.
Number of Equity Security Holders
Number of holders of Ordinary equity securities
Number of holders of unquoted Options
Number of holders of unquoted Performance Rights
18,380
49
11
Voting Rights
The voting rights attached to each class of equity securities are set out below:
Ordinary Shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon
a poll each share shall have one vote.
Options
Holders of Options do not have any voting rights.
Performance Rights
Holders of Performance Rights do not have any voting rights.
Distribution of Equity Securities
Analysis of number of holders of quoted Ordinary Shares by size of holding:
Range
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Securities
%
No. of Holders
249,937,833
78.77
37,466,866
10,842,088
14,989,754
4,078,253
11.81
3.42
4.72
1.29
317,314,794
100.00
115
1,403
1,416
5,880
9,566
18,380
%
0.63
7.63
7.70
31.99
52.05
100.00
138 Nuix Annual Report 2022
Analysis of number of unquoted Options holders by size of holding:
Range
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
%
No. of Holders
Securities
3,045,084
1,046,247
6,905
0
0
74.30
25.53
0.17
0.00
0.00
4,098,236
100.00
12
36
1
0
0
49
Analysis of number of unquoted Performance Rights holders by size of holding:
Range
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Securities
%
No. of Holders
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
936,485
230,950
0
11,547
0
79.43
19.59
0.00
0.98
0.00
Total
1,178,982
100.00
Substantial Holders
Substantial holders as disclosed in substantial holding notices given to the company are:
Holder
Macquarie Group Limited
Australian Ethical Investment
UBS Group AG
ECP Asset Management Pty Ltd
Marketable Parcels
Number of holders holding less than a marketable parcel of Ordinary Shares
Securities
95,654,262
19,589,260
16,829,346
15,934,458
%
24.49
73.47
2.04
0.00
0.00
100.00
%
4
4
0
3
0
11
%
30.14
6.17
5.30
5.02
7,120
Nuix Annual Report 2022
139
Shareholder Information continued
Twenty Largest Quoted Equity Security Holders
The twenty largest holders of quoted Ordinary Shares are:
Ordinary Shares
Rank Name
A/C designation
MACQUARIE CORPORATE HOLDINGS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
AD & SK CASTAGNA HOLDINGS PTY LIMITED
14 Sep 2022
95,654,262
28,549,671
23,942,278
19,495,691
13,345,750
BNP PARIBAS NOMINEES PTY LTD
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