NUIX ANNUAL REPORT 2024 NUIX (ACN 117 140 235) // Copyright © Nuix Limited, 2024. CONTENTS Nuix: Our Foundation for Growth 2 Nuix Neo 4 FY24 Key Financial Metrics 6 Vision and Values 8 Case Study 10 Chairman’s Letter 12 CEO’s Review 14 Sustainability Report 16 Board of Directors 34 Directors’ Report 36 Auditor’s Independence Declaration 48 Remuneration Report 49 Financial Report 74 Consolidated Financial Statements 75 Notes to the Consolidated Financial Statements 79 Consolidated Entity Disclosure Statement 133 Directors’ Declaration 135 Independent Auditor’s Report 136 Shareholder Information 143 Corporate Directory 147 NUIX CREATES INTELLIGENT SOFTWARE TO ENABLE OUR CUSTOMERS TO IDENTIFY RISK, EVIDENCE AND VALUE IN LARGE AMOUNTS OF UNSTRUCTURED AND STRUCTURED DATA NUIX (ASX:NXL) // ANNUAL REPORT 2024 1 NUIX: OUR FOUNDATION FOR GROWTH $211.5m ANNUALISED CONTRACT VALUE 400+ 75% 5 years OF CUSTOMERS HAVE A TENURE WITH NUIX OF OVER EMPLOYEES COLLABORATING THROUGH 4 KEY CLIENT-FACING HUBS: SYDNEY (HQ) WASHINGTON DC LONDON FRANKFURT 2 NUIX (ASX:NXL) // ANNUAL REPORT 2024 OUR PLATFORM centred around our world leading data processing engine, amplified with AI and simplified with enterprise automation OUR CUSTOMERS leading global and local government agencies, law firms, corporates and advisories OUR REACH offices, experts and partners in key business and political centres CREATING VALUE we sell our platform in three customer-centric solutions: • Data Privacy • Forensic Investigations • Legal Processing & Review NUIX (ASX:NXL) // ANNUAL REPORT 2024 3 A STEP CHANGE IN OUR CUSTOMER OFFERING NUIX NEO™ IS AN AI-ENRICHED SINGLE PLATFORM THAT HELPS CUSTOMERS IDENTIFY, PROCESS AND UNDERSTAND COMPLEX DATA, IN WAYS THAT ARE… LAUNCHED FY24 FASTER EASIER SMARTER DO MORE, SAVE TIME On-demand scalability and significant efficiency benefits for users REDUCE FRICTION End-to-end, web-based, automated, template-driven platform AI ENRICHED SOLUTIONS Leverages Nuix AI to risk-assess and prioritise most relevant information 4 NUIX (ASX:NXL) // ANNUAL REPORT 2024 ONE PLATFORM FOR A BROAD RANGE OF COMPLEX DATA CHALLENGES COLLECT IDENTIFY & COLLECT PROCESS INGEST, PROCESS WITH AI ENRICHMENT REVIEW REVIEW & ANALYSE ACTION REPORT, PROTECT, DELETE & EXPORT DATA PRIVACY • FOI Response • Data Breach Readiness • Data Breach Notification • PII Identification and Remediation INVESTIGATIONS • Fraud • Insider Threat • Serious and Organised Crime • Corruption LEGAL • End-to-End Discovery • Early Case Assessment • Legal Processing • Litigation and Case Management INTEGRATED, AUTOMATED, NO CODE UI, AND SCALABLE ARCHITECTURE NUIX (ASX:NXL) // ANNUAL REPORT 2024 5 FY24 KEY FINANCIAL METRICS ANNUALISED CONTRACT VALUE (ACV) $211.5m UP 14.0% ON FY23 STATUTORY REVENUE $220.6m UP 20.9% ON FY23 NET DOLLAR RETENTION 112.9% UP 3.7% ON FY23 NUIX NEO ACV $12.1m UP 195% ON 1H24 UP 14.0% ACV ($m) FY24 $211.5m FY23 $185.5m FY22 $162.0m UP 20.9% Statutory Revenue ($m) FY24 $220.6m FY23 $182.5m FY22 $152.3m UP 3.7% Net Dollar Retention (%) FY24 112.9% FY23 109.2% FY22 96.8% UP 195% Nuix Neo ACV ($m) FY24 $12.1m 1H24 $4.1m FY23 6 NUIX (ASX:NXL) // ANNUAL REPORT 2024 UNDERLYING EBITDA $64.4m UP 38.7% ON FY23 STATUTORY EBITDA $55.9m UP 60.2% ON FY23 UNDERLYING FREE CASH FLOW $24.7m UP 171% ON FY23 OVERALL FREE CASH FLOW $11.9m UP >100% ON FY23 UP 38.7% Underlying EBITDA ($m) FY24 $64.4m FY23 $46.4m FY22 $29.2m FY24 $55.9m FY23 $34.9m FY22 $12.1m Statutory EBITDA ($m) UP 60.2% UP 171% Underlying Free Cash Flow ($m) FY24 $24.7m FY23 $9.1m FY22 $-2.5m UP >100% Overall Free Cash Flow ($m) FY24 $11.9m FY23 $-12.9m FY22 $-21.5m NUIX (ASX:NXL) // ANNUAL REPORT 2024 7 UNAFRAID _ TO DO THE RIGHT THING, QUICKLY TEAM NUIX _ FIRST AND FOREMOST HERO OUR CUSTOMERS _ AND INNOVATE FOR THEM TAKE OWNERSHIP _ AND FOLLOW UP RESILIENT _ WE LEARN FROM THE PAST AND ARE OPTIMISTIC ABOUT TOMORROW TO BE A FORCE FOR GOOD BY FINDING TRUTH IN THE DIGITAL WORLD VISION AND VALUES NUIX (ASX:NXL) // ANNUAL REPORT 2024 8 NUIX HAS TRULY EMPOWERED US TO IDENTIFY AND MANAGE INSIDER RISK WITH UNPARALLELED EFFECTIVENESS. THEIR SUPPORT AND CONSISTENT DELIVERY OF RESULTS HAS FIRMLY ESTABLISHED NUIX AS ONE OF THE CORNERSTONE CAPABILITIES IN OUR ARSENAL. Program Manager US Federal Agency NUIX (ASX:NXL) // ANNUAL REPORT 2024 9 Government departments worldwide face an overwhelming number of Freedom of Information (FOI) requests, often unable to meet deadlines or manage backlogs efficiently. These requests are complex, involving vast amounts of data which makes processing them time-consuming and labour-intensive. Facing this challenge, one large government department sought a solution to increase the speed of FOI responses, freeing up FOI officers for other critical tasks, while achieving cost and resource savings – ultimately better serving the community. NUIX NEO DATA PRIVACY SOLUTION Partnering with Booka Consulting, Nuix demonstrated a powerful solution capable of ingesting, sorting, categorising, and interpreting huge volumes of unstructured data. The solution was customised for the FOI process, giving the government department robust, repeatable and automated workflows. With an intuitive interface Nuix Neo Data Privacy for FOI was not only customised for FOI requests, but instantly useable. NUIX AND BOOKA CONSULTING REVOLUTIONISE FOI PROCESSING FOR LARGE GOVERNMENT AGENCY IMPRESSIVE RESULTS – MINUTES NOT MONTHS Before using Nuix, it was taking 6 weeks to complete a FOI request, now it could be done in 12 hours. The implementation of Nuix Neo Data Privacy transformed the department’s FOI processing capability in terms of speed and accuracy, ingesting and analysing over 3.5 million documents, then delivering the critical 5,000 documents related to the FOI request swiftly. This dramatically reduced the manual workload of the team, allowing the FOI officer to focus on critical decisions and better serve the community. Encouraged by the success of the Nuix Neo Data Privacy solution, the government department now plans to leverage the solution to identify and remove high risk data from their systems, including PII and other sensitive information. ABOUT FOI REQUESTS IN AUSTRALIA The Freedom of Information Act aims to ensure government-held information is managed as a national resource. Statistics from the OAIC annual report show approximately 34,200 FOI requests were made to agencies and ministers last financial year. This represents a significant and continued increase in FOI requests. CASE STUDY 10 NUIX (ASX:NXL) // ANNUAL REPORT 2024 USING NUIX NEO DATA PRIVACY THE FOI OFFICER – WITHIN AN HOUR – HAD A COMPLETE UNDERSTANDING OF THE ENTITIES (PEOPLE AND ORGANISATIONS) IN THE CASE. THEY ALSO HAD AN AUTOMATED TABLE OF CONTENTS WITH ALL RECORD TYPES IDENTIFIED AND HAD APPLIED FOI RULES FOR AUTOMATIC REDACTIONS. Jason Pepper CEO, Booka Consulting CASE STUDY NUIX (ASX:NXL) // ANNUAL REPORT 2024 11 FINANCIAL PERFORMANCE Nuix’s Annualised Contract Value and revenue grew again over the financial year, in excess of our strategic objective. This growth demonstrates not only the resilience of our business model but also the increasing demand for our solutions in a rapidly evolving market characterised by continuing exponential growth in data creation. Annualised Contract Value rose by 14.0% on the previous year, to $211.5 million and Statutory Revenue rose by 20.9% to $220.6 million. This revenue growth, coupled with cost containment resulted in strong growth in EBITDA, up 38.7% on an Underlying basis to $64.4 million, and up 60.2% on a Statutory basis to $55.9 million. Significantly, the year saw the launch of Nuix’s new unified platform, Nuix Neo, and three related use case solutions. Nuix Neo is a fundamental shift in our customer offering, with very significant efficiency and usability benefits for our customers. While the early rollout was deliberately aimed at selected customers, Nuix Neo achieved very good growth in its very first year, contributing $12.1 million to the company’s full year ACV outcome. Nuix’s growth trajectory is supported by our solid financial position, which was further enhanced by stronger cash generation over the financial year. Characterised by a stronger cash balance, an undrawn debt facility, and an equity market valuation that increased significantly over the year, Nuix’s financial position provides the Company with the foundation and necessary resources to pursue further growth initiatives. Growth in the share price of more than 260% over the financial year was indeed strong validation of the steps we have taken and the positive outlook for the company. STAKEHOLDER ENGAGEMENT A significant highlight of this year was my first visit to our people and operations in the United States, a market which contributes more than half of Nuix’s ACV. This trip provided me with valuable insights into our operations, our market position, and the opportunities that lie ahead. Engaging directly with our customers and clients in the US has reinforced my confidence in our strategic direction and our ability to execute our plans effectively. It was an opportunity to see firsthand the impact of our efforts and to engage with stakeholders who are integral to our success. CHAIRMAN’S LETTER As I reflect on the 2024 financial year at Nuix, it is with great pleasure that I present this Chairman’s Review, highlighting a period of significant progress, achievement, and optimism for your company. Our journey this year has been marked by solid growth, strategic successes, and a reaffirmed commitment to excellence and innovation. OUR JOURNEY THIS YEAR HAS BEEN MARKED BY SOLID GROWTH, STRATEGIC SUCCESSES, AND A REAFFIRMED COMMITMENT TO EXCELLENCE AND INNOVATION. NUIX (ASX:NXL) // ANNUAL REPORT 2024 12 THE NUIX TEAM: DELIVERING ON OUR MISSION One of the most exciting aspects of this year has been witnessing the energy and enthusiasm of our staff, including our Executive Leadership Team (ELT). Their dedication, vision, and strategic acumen have been instrumental in driving our success. The ELT's commitment to innovation and excellence has fostered a dynamic and forward- thinking environment that permeates throughout the organisation. Their leadership has been crucial in navigating a rapidly changing environment and capitalising on opportunities for growth. In September 2023, we notified the market that Sue Thomas was retiring from the Board by rotation and that she would not stand for re-election at the Annual General Meeting. On behalf of Nuix, I extend my thanks to Sue for her contribution to the Board in what was undoubtedly a challenging period post-IPO for the company. In May, we announced that Chad Barton, Nuix’s Chief Operating Officer and Chief Financial Officer, would step down following the release of the FY24 results. Chad’s contribution to Nuix’s transformation over the last few years has been important and valued. I offer my thanks to Chad and best wishes for the future. Our mission to be a Force for Good continues to guide us. We remain committed to operating with integrity, fostering a positive impact in the communities we serve, and contributing to the greater good. Our ongoing efforts in this regard reflect our core values and our dedication to making a meaningful difference. In closing, I express my thanks to Nuix staff, the ELT under Jonathan’s leadership and my fellow Directors. Your hard work, insights and commitment have been the driving forces behind our achievements. Thank you also to our shareholders for your continued support and belief in our vision. Together, we will continue to build on our successes and drive the future of Nuix. Robert Mactier Non-Executive Chairman ROBERT MACTIER 13 NUIX (ASX:NXL) // ANNUAL REPORT 2024 DELIVERING ON OUR OBJECTIVES Nuix creates intelligent software – our platform approach is centred around our world-leading data processing engine, increasingly amplified with our AI technology, and simplified with enterprise automation. Our business is truly global, with 85% of our ACV generated outside Australia. With more than 400 staff around the world we service a high quality customer base, three quarters of whom have been with us for more than five years. At the start of the year, we set ourselves ambitious strategic objectives relating to new product rollout and financial performance. We have met the strategic objectives we set, and in several cases, exceeded them. We said we were targeting around 10% ACV and Statutory Revenue growth in constant currency. We exceeded that objective in ACV and by quite a significant margin in statutory revenue. ACV at the end of the year came in at $211.5 million, a rise of 14% on the prior year. An important driver of ACV growth was the lift in Net Dollar Retention, which rose to 112.9%, up 3.7 percentage points on the prior year. Statutory Revenue rose a pleasing 20.9% on the prior year, to $220.6 million. We said we wanted to achieve a successful rollout of Nuix Neo and associated solutions to Early Adopters. We achieved that, with the launch of the Nuix Neo platform, including Data Privacy, Investigations and Legal solutions. Nuix Neo contributed $12.1 million to ACV in this, its first year, representing about 45% of overall ACV growth for the year. We wanted to broaden our sales focus to further drive new business. During the year we saw good growth in component sales through new customers and new offerings, with particular strength in Rampiva and Advantage. Nuix Neo sales to both new and existing customers were also a significant contributor to growth. We wanted to achieve operational leverage in the business by growing revenue faster than operating costs. That operational leverage is evident in the strong EBITDA growth delivered over the year, with Underlying EBITDA up 38.7% to $64.4 million, and Statutory EBITDA up 60.2% to $55.9 million. And lastly we wanted to be Underlying Cash Flow positive for the full year. We delivered Underlying Cash Flow of $24.7 million, up 171% on the prior year, and not only that, but overall we were cash flow positive to the tune of $11.9 million, up from negative $12.9 million in the prior year. These were ambitious but achievable targets that we set for ourselves at the beginning of the year. I’m very proud of the hard work by the Nuix team to not only meet the strategic objectives we set, but in several cases, exceed them very significantly. FY24 marked a significant step forward for Nuix’s transformation. Building on the foundations laid down in the previous year, we have focused on executing on the strategy, accelerating the innovation cycle and scaling globally. In alignment with our strategy, during the year we deepened our engagement with existing customers and expanded to new customers, while continuing the wholesale modernisation of our license agreements. We have accelerated innovation by releasing Nuix Neo, our next-gen unified platform and three comprehensive solutions for Data Privacy, Investigations and Legal. And our people practice of driving a high- performance culture and enhanced sales operations continues to be scaled and optimised globally. I am pleased that the hard work of the team has been rewarded by strong results and am humbled by both the tenacity of the team and the emphatic reception of customers and partners. But I am also clear- eyed that we are only at the early stages of the transformation, and remain ambitious for more. Through all this change our purpose of being a Force for Good in the world has been a guide, and we continue to embed this philosophy into our operations. The purpose guides how and to whom we sell, how we build our products and particularly with respect to Responsible AI. It also guides whom and how we hire, as well as all the hundreds of small decisions that we take each day guiding our behaviours and conduct. CEO'S REVIEW AT THE START OF THE YEAR, WE SET OURSELVES AMBITIOUS STRATEGIC OBJECTIVES RELATING TO NEW PRODUCT ROLLOUT AND FINANCIAL PERFORMANCE. WE HAVE MET THE STRATEGIC OBJECTIVES WE SET, AND IN SEVERAL CASES, EXCEEDED THEM. NUIX (ASX:NXL) // ANNUAL REPORT 2024 14 NUIX NEO: A STEP CHANGE IN OUR OFFERING At the beginning of the year we flagged the launch of our new unified platform, Nuix Neo. Nuix Neo is an AI-enriched single platform that helps customers identify, process and understand complex data, in ways that are faster, easier and smarter. The Nuix Neo platform facilitates a streamlined approach to common use cases for our software, utilising tuned AI language models specific to each challenge. Further, the platform enables our customers to harness the power of our proprietary AI technology, making the process of understanding data more intelligent and incisive. The inclusion of technology from our acquisition of Rampiva has meant an additional element of automation and orchestration capability, providing even greater efficiency benefits for our customers. Over the course of the year, Nuix delivered on its product roadmap, releasing three use case solutions to early adopters in the timetable articulated. Data Privacy and Investigations solutions were launched in the first half with the Legal solution following in the second half. To complete this ambitious product roadmap in twelve months is a real credit to our talented R&D team, and completes the three core use case solutions that will be important drivers of Nuix’s growth into FY25 and beyond. Nuix Neo represents an important step change in our customer offering, one which is already contributing meaningfully to growth. This new offering, along with our commitment to our existing component- style offering, means we have an additional opportunity to drive growth. JONATHAN RUBINSZTEIN OUR PEOPLE: DRIVING OUR CULTURE The successes that Nuix achieved over the last year would not have been possible without the remarkable contribution of our people. Nuix’s People and Culture Team introduced a wide range of initiatives over the year, which are already contributing to furthering Nuix’s culture of innovation and growth. Key initiatives in Learning and Development included the Nuix Learning Fund and Career Development Tool, while the creation of our Diversity, Equity, Inclusion and Belonging Strategy is an important step in building an authentic culture of inclusion. Another important initiative was the launch of Nuix’s wellbeing strategy. This comprehensive new strategy incorporates benefits across a range of work-life elements, from mental and physical health to digital, social and financial wellness. As part of this approach, Nuix employees are offered two wellbeing days each financial year. Our people can use these days to support their overall wellbeing in the ways that best suit them. You can read more about these People initiatives in our Sustainability Report. In closing I want to pay credit to the Nuix team for a remarkable year of delivery, across both our R&D advancements and our financial metrics. As I’ve said before, there is always more to do, but the innovative foundation we’ve created, and will continue to build on, means that we’re still just at the beginning of a really exciting journey. I also take this opportunity to thank our customers, partners and shareholders. We’re very proud of what we delivered in the last year, and look forward to delivering further into the future as we pursue our journey of growth and innovation. Jonathan Rubinsztein Group Chief Executive Officer 15 NUIX (ASX:NXL) // ANNUAL REPORT 2024 SUSTAINABILITY REPORT 16 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NUIX (ASX:NXL) // ANNUAL REPORT 2024 17 PEO At Nuix, we are on a mission to be a force for good in the world. We want to be a company that inspires, and makes our people, customers and community proud. Our team is made up of passionate, purpose-driven individuals from around the globe who create world-class products and technology. We solve challenging problems for our customers – in a fun, dynamic and inclusive environment. We make software that helps our customers solve some of the world’s most complex cases. To further drive impact in our communities, this year we enhanced our volunteering leave offering for our people to two days per year. THE NUIX WAY A FORCE FOR GOOD OUR STAFF FOOTPRINT 49% AMERICAS 37% APAC 14% EMEA 41% RESEARCH & DEVELOPMENT 41% SALES & DISTRIBUTION 18% GENERAL & ADMINISTRATION OUR PEOPLE NUIX (ASX:NXL) // ANNUAL REPORT 2024 18 PLE Committing to our Culture, Designed with Intention. We know that creating a great culture doesn’t happen overnight. Culture is all of us; it’s all the time, and it’s in all the ways in which we interact at Nuix. We have five core values that guide us at Nuix. They’re our TRUTH, and they underpin everything we stand for. We remain focused on our transformation journey to build a strong culture aligned to our purpose, brought to life by our TRUTH Values. This year, we gave every member of Team Nuix the opportunity to put forward their views on what behaviours we cherish from our past and what behaviours we want to develop to take us forward on our journey. This feedback culminated in the development of the Nuix TRUTH Behaviours to underpin our Values. Through this collaborative and people-led process, our people built behaviours to underpin our culture. THE NUIX WAY OUR TRUTH TRUTH UNAFRAID _ TO DO THE RIGHT THING, QUICKLY TEAM NUIX _ FIRST AND FOREMOST HERO OUR CUSTOMERS _ AND INNOVATE FOR THEM TAKE OWNERSHIP _ AND FOLLOW UP RESILIENT _ WE LEARN FROM THE PAST AND ARE OPTIMISTIC ABOUT TOMORROW OUR VALUES SUSTAINABILITY REPORT T TAKE OWNERSHIP • We get it done, see it through • We take the initiative to go above and beyond • We own our mistakes and find solutions R RESILIENT • We see challenge as an opportunity • We approach change with a growth mindset • We look for ways to improve and move forward U UNAFRAID • We challenge the status quo • We innovate to be better every day • We love finding new ways to make a difference T TEAM NUIX • We embrace the strength of our collective diversity • We trust each other to get the job done • We share our knowledge, feedback and ideas to grow together H HERO OUR CUSTOMERS • We champion customers and their cause • We all impact our customer success • We relentlessly find solutions for our customers 19 NUIX (ASX:NXL) // ANNUAL REPORT 2024 OUR PEOPLE BUILDING PRIDE IN NUIX Two years ago, Nuix embarked on a further journey of cultural improvement. A new strategic direction was formulated and implemented to combine our leading edge products and loyal customer base, with a business strategy to drive growth and reduce complexity. Part of this cultural improvement was to rebuild trust and pride from our people who have lived, and are living through the transformation. The strategic direction helped to provide our loyal staff members with greater direction and certainty, and also helped us to attract top talent to join us on our journey. I’D DESCRIBE THE CULTURE AS RESPONSIBLE INNOVATIVE COURAGEOUS Dr Abdullah Azfar Senior Solutions Consultant I’D DESCRIBE THE CULTURE AS TEAMWORK TALENTED SMART Sarah Coady Senior Solutions Consultant I’D DESCRIBE THE CULTURE AS AMBITIOUS SMART INTERESTING Gabriel Sandrussi Head of Platforms I’D DESCRIBE THE CULTURE AS SMART FAST TRANSPARENT Vidhya Natarajan Product Manager PRIDE Nuix Engagement Pulse Check April 2024 “I AM PROUD TO WORK AT NUIX” 84% POSITIVE RATING NUIX (ASX:NXL) // ANNUAL REPORT 2024 20 OUR PROMISE TO OUR PEOPLE SUSTAINABILITY REPORT JOIN NUIX. MAKE AN IMPACT. PURPOSE Our people are driven by our purpose to be a Force for Good. PIONEERS At Nuix, we are not big tech – and we love that. Nuix is big enough to make a real difference in the world, but small enough everyone can have an impact. PRODUCT Our cutting-edge technology helps our customers solve big data problems. We are truly unique and a leader in our field. PEOPLE Our people are smart, passionate and values-led. Our team is made up of some of the brightest minds and most passionate people in the software industry. WE USE NUIX TO HELP INVESTIGATE SOME OF AUSTRALIA’S LARGEST PRIVACY BREACHES. IT ALLOWS OUR EXPERTS THE FLEXIBILITY TO CUSTOMISE OUR ANALYSIS AND AMPLIFY THIS WITH THEIR EXPERTISE IN AN ENVIRONMENT WHERE NO TWO MATTERS ARE THE SAME. Partners Specialist Advisory and Restructuring Firm NUIX (ASX:NXL) // ANNUAL REPORT 2024 21 OUR PEOPLE At Nuix, we are committed to fostering our team’s professional growth and providing our people with the tools and resources necessary to help them reach their career aspirations. This year we implemented two key initiatives as part of this commitment. LEARNING & CAREER DEVELOPMENT NUIX LEARNING FUND Dedicated learning funds allocated to every Nuix team member. This fund is designed to empower our people to take control of their career journey at Nuix and invest in learning that will enhance their skills, knowledge, and capabilities. CAREER DEVELOPMENT PLAN We created a dynamic career development tool to allow our people to tailor their career development plan to their unique goals and aspirations. This tool enabled our people to create a personalised plan to help them better communicate their aspirations with their leader and seek the necessary support and opportunities within Nuix. NUIX (ASX:NXL) // ANNUAL REPORT 2024 22 SUSTAINABILITY REPORT BUILDING A CULTURE OF INNOVATION The annual Nuix Hackathon encourages our people to collaborate and innovate through a global, company-wide event. Over an exciting two days, teams across all our departments come together to brainstorm, design and develop cutting-edge technological solutions. This event not only showcases our team’s creativity and technical excellence but also reinforces our commitment to continuous improvement and forward-thinking solutions for our customers. By encouraging experimentation and cross-functional teamwork, the hackathon has become a pillar of our efforts to drive innovation and continue to develop world-leading technology. HACKATHION 23 NUIX (ASX:NXL) // ANNUAL REPORT 2024 OUR PEOPLE DIVERSITY, EQUITY, INCLUSION & BELONGING At Nuix, we believe the wide array of perspectives that comes from diversity sparks innovation and creativity that delivers great outcomes. Fostering this diversity makes us more agile, flexible and productive. We aim for equity and fairness for all of our team members and are committed to building an authentic culture of inclusion. We want all employees to feel comfortable to bring their whole selves to work and to feel safe and supported. To enable this, in FY24 we created our Diversity, Equity, Inclusion & Belonging (DEIB) Strategy. UNDERSTANDING Understanding the diversity of our people This year we created a set of information gathering questions to better understand the backgrounds and identities of our people. The questions address ethnicity, sexual orientation, religious or spiritual belief systems, disability and gender identity. They are optional, confidential and are used to better prioritise the diversity initiatives we create for our people. AWARENESS Building awareness and understanding Throughout the year, we worked to increase awareness of a diverse array of topics that fell under the umbrella of DEIB. Topics we addressed included accessibility, gender diversity in the workplace, the LGBTQ+ community, and mental health in the workplace. Our guest speakers provided insights into these areas and resources for continuous learning, which has continued prompting discussions about inclusivity in language, in our own product, and in our wellness initiatives. GENDER DECODING Attracting gender-diverse tech talent pools To attract a more gender-diverse pool of talent in the heavily male-dominated technology industry, we have adopted a ‘gendered language’ decoding tool to ensure our job advertisements are balanced in their terminology. Leaders are additionally coached by our talent acquisition team to eliminate bias from their decision making. These initiatives have positively impacted the proportion of female new hires. At the end of June 2024, females represented 29% of Nuix's workforce. Females comprise 5 of the 12 members of Nuix's Executive Leadership Team (42%). WHAT OUR PEOPLE SAY… Nuix Engagement Pulse Check April 2024 “I FEEL VALUED AND ACCEPTED AT NUIX REGARDLESS OF MY BACKGROUND, IDENTITY OR DIFFERENCES” 86% POSITIVE RATING “I BELIEVE I AM TREATED FAIRLY REGARDLESS OF MY GENDER, RACE, ETHNICITY, AGE, SEXUAL ORIENTATION OR OTHER CHARACTERISTICS” 86% POSITIVE RATING NUIX (ASX:NXL) // ANNUAL REPORT 2024 24 SUSTAINABILITY REPORT WORKPLACE GENDER EQUALITY AGENCY (WGEA) 2024 At Nuix we are committed to a diverse and inclusive workplace. As part of this commitment, we are pleased to now participate in the Australian Government’s Workplace Gender Equality Agency reports. These reports have been lodged and are available on the Nuix website. We are committed to improving Gender Diversity year on year at Nuix. Over the coming year, we are focussed on the following key areas of opportunity: Gender Pay Gap – Nuix commits to closing the gender pay gap which will include conducting a global pay gap analysis. If there are any like-for-like pay discrepancies these will be corrected in the annual Reward Cycle (or as identified). Female Representation – Nuix commits to increasing female representation across Nuix, through targeted recruitment strategies and practices to increase the female talent pool. Increasing Awareness – Nuix provides behaviour and culture training for all leaders and team members to build awareness around unconscious bias and the role we all play to build a more inclusive workplace. CELEBRATION Celebrating the cultural diversity of our people Throughout the year we held many virtual and onsite celebrations. We embraced global cultures through office gatherings – where we shared traditional foods and held conversations about the community’s history – as well as through internal communications, to increase our people’s awareness and appreciation for other cultures. At our Herndon, USA and Sydney, Australia Offices we celebrated Holi, which is the “Festival of Colours” in India, with traditional sweets and poppers. The end of Ramadan, Eid al-Fitr, included a traditional tea tasting in the Herndon Office and a bring your own dessert in other offices. In the Sydney Office, we celebrated Pride Month, drawing awareness to how we build a workplace where everyone can be comfortable being their true selves. We also recognised International Women’s Day with a panel and lunch hosted in both the Sydney and Herndon Offices. We have raised awareness of these cultural celebrations by our people sharing their experiences through recorded videos to raise better awareness and understanding. 25 NUIX (ASX:NXL) // ANNUAL REPORT 2024 WELLBEING OUR PEOPLE At Nuix, we aim to create an environment that builds a resilient and vibrant workplace that leads the way in employee wellbeing. In 2023 we were excited to launch our holistic wellbeing strategy to our people to demonstrate our commitment to supporting wellbeing. Our comprehensive new program aims to provide a diversity of benefits across many aspects of our team’s work-life – from mental and physical health to digital, social, and financial wellness. We want our people to thrive holistically, because we believe that when they are at their best, so is Nuix. Employees are offered two Wellbeing leave days in every new financial year. Employees can use these days to support their overall wellbeing in a way that is meaningful or helpful to them. 576 WELLBEING LEAVE DAYS TAKEN IN FY24 BY 305 EMPLOYEES 26 NUIX (ASX:NXL) // ANNUAL REPORT 2024 SUSTAINABILITY REPORT OUR WELLBEING PROGRAMS Mental Wellbeing We will create and sustain a positive mental health culture at Nuix. We will provide tools, support, education and storytelling to reduce the stigma of mental health. Benefits launched: • Two Wellbeing Leave Days per annum so our people can proactively support their wellbeing or manage it when they need it most • Dedicated Wellness Hour each week to prioritise self-care or attend Nuix Wellbeing Education sessions Physical Wellbeing We will create an environment where our people are empowered to prioritise their physical health. We will provide time, benefits, and education to support this goal. Benefits Launched: • Global Step Challenge • Massage Therapy sessions • Chair Yoga Sessions Digital Wellbeing We will create a healthy balance between technology and human wellbeing by promoting mindful and responsible digital health through tools, boundaries and empowerment on digital use. Benefits Launched: • The Nuix Way – a Guide to Meeting Effectiveness • Zen Day Wellness Hour • No Meeting Zones throughout the week to enable our people to focus and deliver • 3pm Friday Finish throughout summer so our people can disconnect a little early to recharge Social Wellbeing: We will foster a sense of belonging and inclusivity among our people and communities by creating meaningful engagement and connection opportunities. Benefits Launched: • Nuix Vibe Tribe initiated to build meaningful connection and engagement opportunities across our teams • Two Force for Good Leave Days so our people can have impact and do good in their communities through volunteering opportunities • Coffee Vouchers to build Nuix in‑person communities Financial Wellbeing We will empower our people to achieve financial security, independence, and peace of mind through meaningful benefits and education. Benefits Launched: • Partnership with HSBC where our people can access discounted financial advice and education sessions across most of our locations • Financial Education Sessions NUIX (ASX:NXL) // ANNUAL REPORT 2024 27 ENVIRO ENVIRONMENTAL RESPONSIBILITY ENERGY CONSUMPTION AND EMISSIONS In accordance with the Paris Agreement targets, Nuix acknowledges the goal to limit global warming to below 1.5 degrees Celsius above pre-industrial levels. Nuix has taken steps to understand our impact on the climate, including tracking our emissions so that we can better consider ways to reduce them. The measurement of our Scope 1 and 2 emissions in FY24 follows the framework that we established in FY22. Nuix’s operations are not highly carbon intensive, with our emissions and associated environmental footprint largely attributable to our leased office locations. Nonetheless, Nuix is committed to monitoring and reducing environmental impacts to the lowest amount possible, and offsetting remaining amounts to maintain carbon neutrality. FY24 Scope 1 and 2 Emissions (tCO₂-e) 288 tCO2-E Scope 1 Scope 2 99% 1% Scope 1 and 2 Emissions – Total and per FTE FY24 FY23 FY22 (base) 294 288 288 Scope 1 & 2 Emissions (tCO2-e) Emissions/FTE 0.62 0.64 0.67 Nuix’s Scope 1 emissions are related to refrigerants at our office locations, while Scope 2 emissions are mostly due to electricity consumption at those offices. As our main direct use of energy is from our office locations, Nuix actively seeks out energy efficient buildings. Nuix’s Sydney headquarters, for instance, is based in an office with a 5.0-star NABERS rating for both energy and water. Nuix’s Scope 1 and 2 emissions for FY24 totalled 288 tonnes of CO2-e, in line with the prior year. Average emissions intensity per employee rose slightly as staff numbers fell but overall office floorspace remained unchanged. Nuix continues to examine ways to improve both measures, particularly given that our office locations are by far the largest contributors to our Scope 1 and 2 emissions. In line with the prior year, Nuix fully offset all Scope 1 and 2 emissions for FY24. Offsets have been purchased associated with native forest regeneration projects in Australia¹. These carbon farming projects work with landholders to regenerate and protect native vegetation, harbouring a number of indigenous plant species providing important habitat and nutrients for native wildlife. In playing its part in emissions reductions, Nuix is closely monitoring the pending changes to the requirements for Australian-domiciled companies. We will enact further initiatives relating to emissions management and other climate-related issues in the near term to meet the expectations of our stakeholders and the broader community. 1. Project ID ERF101849 Serial No 3,797,717,155; 3797,717,454. NUIX (ASX:NXL) // ANNUAL REPORT 2024 28 NMENT SUSTAINABILITY REPORT 2. The Cloud – Amazon Sustainability (aboutamazon.com). 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 a stated goal to power operations with 100% renewable energy by 2025 and reach net-zero carbon emissions by 2040. 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 surveyed2. 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. E-WASTE – HARDWARE RECYCLING Nuix recycles unwanted or used computer equipment, avoiding this equipment contributing to landfill. Nuix has also implemented a program to repurpose old laptops for reuse and resale after the secure deletion of data. Nuix works with a provider holding ISO 14001 certification for environmental management, combined with a focus on ensuring secure disposal from a data protection and intellectual property perspective 29 NUIX (ASX:NXL) // ANNUAL REPORT 2024 SECURITY DATA SECURITY AND PRIVACY PROTECTING CUSTOMER DATA Nuix utilises sophisticated cyber security practices as part of its technology. Along with implementing security through the design of our products, Nuix staff are trained to understand and protect customer data and digital assets. In FY24, Nuix’s Information Security Management program underwent a security assurance reassessment process which included: Infosec Registered Assessors Program (IRAP) PROTECTED level, ISO/IEC 27001:2013, ISO/IEC 27017, ISO/IEC 27018, and SOC2 Type 2. These compliance and assurance programs will be renewed and maintained again in FY25, with IRAP being reviewed quarterly. Nuix utilises multiple availability zones in AWS for our Software-as-a-Service (SaaS) applications to support data sovereignty and resiliency, including in Canada, Germany, Australia, the United Kingdom and the United States. Nuix understands that our global customer base operates within a zero-trust security model; completing these security assessments shows our customers and stakeholders they can rely on us to protect their most sensitive data. PLATFORM VULNERABILITY MANAGEMENT Vulnerability management at Nuix incorporates three distinct elements: code vulnerabilities, SaaS infrastructure vulnerabilities and corporate infrastructure vulnerabilities. Nuix utilises industry standard code quality, dynamic and static code analysis platforms and follows common vulnerability scoring system (CVSS) for remediation. Nuix also partners with industry leaders in cyber security to undertake regular testing, maintenance and uplift of its systems. PROTECTING OUR CORPORATE NETWORK Like the SaaS solution, Nuix’s Corporate Network utilises a robust set of controls to protect and defend the Company’s assets. Corporate infrastructure is regularly tested and verified by independent technology partners in collaboration with the Nuix team. Nuix recognises that this is a dynamic environment and works with industry leading third-party cyber security organisations to review and implement new processes and technology to continuously strengthen its cyber security posture. NUIX (ASX:NXL) // ANNUAL REPORT 2024 30 SUSTAINABILITY REPORT NUIX (ASX:NXL) // ANNUAL REPORT 2024 31 WE RAN A PROOF OF CONCEPT: IT PRODUCED RESULTS IN 7 MINUTES – IT WOULD NORMALLY HAVE TAKEN 2 WEEKS TO ACHIEVE THE SAME RESULT. Forensic Team Global Telecommunications Company GOVERN GOVERNANCE AND RISK MANAGEMENT The Nuix Board believes that good governance underpins strong business performance and is essential to retaining the trust and goodwill of Nuix’s stakeholders, including shareholders, employees, regulators and customers. The Board takes responsibility for the overall strategy, culture and risk management of the Company. The Board provides leadership, strategic guidance and oversight for the Executive Leadership Team and the Group as a whole, to promote behaviours in keeping with the Company’s Values and to support the Group’s long-term sustainable growth and profitability. The Board works collaboratively with the Executive Leadership Team to set the strategy, risk appetite, compliance systems and risk management framework for the Group. The Board also satisfies itself on a regular basis that these are being implemented and that the Company is reporting in an accurate and timely manner. The Board is committed to the highest standards of corporate governance and recognises that this is important to all of Nuix’s stakeholders, and particularly to those regulators who are Nuix customers. The Board regularly reviews the Company’s governance and risk management frameworks to ensure that they promote sustainable, ethical and socially responsible business practices. Nuix’s Corporate Governance Statement and investor website provide full details of our corporate governance policies and charters. GOVERNANCE APPROACH NUIX (ASX:NXL) // ANNUAL REPORT 2024 32 NANCE SUSTAINABILITY REPORT RISK MANAGEMENT OVERVIEW Risk management is integral to Nuix’s objectives of creating and maintaining shareholder value, and to the successful execution of the company’s strategies. Good risk management seeks to enable the pursuit of opportunities while managing risks and achieving compliance with applicable laws, regulations, and contractual obligations, while meeting or exceeding stakeholder expectations. We are committed to investing in and maintaining effective risk management systems and a strong risk culture. 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 Our Risk Management Framework (RMF) is aligned to the ISO31000 Risk Management Standard and outlines our approach to managing our strategic, financial and non-financial risks. Our RMF outlines the mechanisms through which we deliver reliable products and service to our customers and retain the trust of key stakeholders. We regularly review the RMF to ensure it remains fit for purpose and is operating effectively. 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 meets at least four times a year during which it considers risk reports, key risk matters and management's performance against the RMF. Accountability for each of our principal risks and our key compliance obligations is assigned to one or more members of the Leadership Team. Management committees are established, where necessary, to manage and oversee heightened risks, make decisions and/or track risk remediation activities. PRINCIPAL RISKS Nuix’s primary focus is on the identification and management of principal risks which could impact current or future business performance. Details of these risks and associated mitigation strategies are set out in the Directors' Report. Details on Financial Risks can be found in the Financial Report. In relation to Contingencies, (ASIC investigation and Class Action Risk), details are provided in the Financial Report. MONITORING + REPORTING COMPLIANCE MANAGEMENT TRAINING + AWARENESS THREE LINES OF DEFENCE RISK MANAGEMENT STRATEGY RISK MANAGEMENT PROCESS POLICIES + PROCEDURES RISK APPETITE + CULTURE RISK MANAGEMENT FRAMEWORK 33 NUIX (ASX:NXL) // ANNUAL REPORT 2024 DIRECTORS Jonathan Rubinsztein Executive Director and Group Chief Executive Officer Jonathan has been the Group Chief Executive Officer since December 2021. He 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) since November 2021, and previously was the Managing Director and CEO of Infomedia Ltd, (ASX:IFM) an ASX-listed SaaS company, from March 2016 to October 2021. 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 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. 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 (Exec) from University of New South Wales and is a Fellow of the Australian Institute of Company Directors. Robert Mactier Non-Executive Chairman Robert has been a Non-Executive Director of Nuix since October 2021 and was appointed Chairman in February 2023. 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 Iress Limited and Kinetic IT Pty Limited and was formerly a Non- Executive Director and Chairman of ASX-listed ALE Property Group (ASX:LEP) from 2016 to 2021 and WPP AUNZ Limited (ASX:WPP) from 2006 to 2021, as well as Non-Executive Director of NASDAQ-listed Melco Resorts and Entertainment Limited (NASDAQ: MLCO) from 2006 to 2017. 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 JP 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. Jeffrey Bleich Non-Executive Deputy Chairman Jeffrey has been a Non-Executive Director of Nuix since 2017 and was appointed as Deputy Chairman in February 2023, after stepping down from the role of Chairman. Jeffrey lives in Piedmont, California, USA. Jeffrey has over 30 years’ experience in the legal, government and technology sectors. Jeffrey served four years as the US Ambassador to Australia from 2009 to 2013 and as special counsel to President Obama in 2009. He is currently a Visiting Scholar at Stanford University, Chair of the Board of the Jeff Bleich Centre on Democracy and Disruptive Technologies at Flinders University, and serves by appointment of President Biden to the President’s National Security Education Board. In addition to these roles, Jeffrey has served as a Court-Appointed Special Master and Mediator in the United States District Court, Chief Legal Officer of General Motors-owned Cruise LLC, a San Francisco-based autonomous vehicle company. Jeffrey clerked for Chief Justice of the United States Supreme Court, and practised law as a Partner at Munger, Tolles & Olson LLP from 1992 to 2009 and 2014 to 2016. He also served 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 legal practice focused on cyber security, technology, complex international disputes, as well as high profile pro bono matters before the US Supreme Court. 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. BOARD OF DIRECTORS NUIX (ASX:NXL) // ANNUAL REPORT 2024 34 Alan Cameron AO Non-Executive Director Alan joined the Nuix Board in January 2023. Alan is a respected company director and lawyer, with experience across a range of legal, corporate and regulatory roles. Alan was Chairman of Property Exchange Australia Limited (PEXA) from its inception in 2011 until shortly before it listed in June 2021, and completed his extended term as Chair of the NSW Law Reform Commission in May 2022. A former partner (and managing partner) of the firm now called Ashurst Australia, he was Commonwealth Ombudsman and later Chair of the Australian Securities Commission (ASC) and Australian Securities and Investments Commission (ASIC). Alan is currently Chair of .au Domain Administration Limited and of the ASX Cash Equities Clearing and Settlement Advisory Group. Alan graduated in Arts (BA) and Law (LLM) from The University of Sydney; he also holds an honorary Doctorate in law from that university, and is a Life Fellow of the Australian Institute of Company Directors (AICD). Jacqueline Korhonen Non-Executive Director Jacqueline joined the Board of Nuix in October 2021. 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. 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 was a Non-Executive Director of NetComm Wireless (ASX:NTC) from July 2018 until August 2019. Jacqueline is currently a Non-Executive Director of MLC Insurance, Auswide Bank (ASX:ABA) since April 2021. Since February 2023, Jacqueline has also been a Non-Executive Director of the Civil Aviation Safety Authority, a federal government body charged with regulating aviation safety in Australian Authority air space. 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. Sir Iain Lobban Non-Executive Director 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 United Kingdom. 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. Sara Watts Non-Executive Director Sara joined the Nuix Board in January 2023. Sara is a Non-Executive Director and Audit Committee Chair with experience across a range of sectors. In addition to Nuix, Sara currently serves on the boards of Syrah Resources (ASX:SYR) since June 2019, Trajan Scientific and Medical (ASX:TRJ) since March 2021, Uniting NSW. ACT, the Sydney Opera House Trust and the National Anti-Corruption Commission’s audit committee. Before moving into her non-executive career Sara was CFO of IBM Australia/ New Zealand and Vice-Principal Operations at the University of Sydney. These roles gave her a solid grounding in finance, risk, technology, and international operations. Sara is a Fellow of the Australian Institute of Company Directors, and a Fellow of CPA Australia. She holds a Bachelor of Science from the University of Sydney and a Master of Business Administration from Macquarie Graduate School of Management. 35 NUIX (ASX:NXL) // ANNUAL REPORT 2024 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 2024. 1. DIRECTORS The following persons were directors of Nuix Limited during the year and up to the date of this report unless otherwise stated: • Robert Mactier Chair and Non-Executive Director • Jeffrey Bleich Deputy Chair and Non-Executive Director • Jonathan Rubinsztein CEO and Executive Director • Sir Iain Lobban Non-Executive Director • Jacqueline Korhonen Non-Executive Director • Alan Cameron Non-Executive Director • Sara Watts Non-Executive Director • Susan Thomas Non-Executive Director; resigned 18 October 2023 2. OPERATING AND FINANCIAL REVIEW The Operating and financial review for the year ended 30 June 2024 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. The following commentary should be read with the consolidated financial statements and the related notes in the Financial Report. Non-IFRS 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-IFRS 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, see definition of Non- IFRS measures in section 2.4 of the Directors’ Report. 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 since 2000, 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. 2.2 Significant changes in state of affairs The Group acquired all the shares of Rampiva Global, LLC and Rampiva Technology, Inc (collectively Rampiva) on 1 July 2023, a workflow automation and job scheduling provider. The Group also entered into a Facility Agreement with The Hongkong and Shanghai Banking Corporation, Sydney Branch (HSBC) to provide an AUD $30,000,000 multicurrency revolving credit facility. There were no other significant changes to the state of affairs of the Group during the year. DIRECTORS’ REPORT NUIX (ASX:NXL) // ANNUAL REPORT 2024 36 2.3 Business strategies During the financial year, Nuix made significant progress on building and commercialising its unified platform, Nuix Neo. Nuix Neo is an AI-enriched platform that helps customers identify, process and understand complex data in ways that are faster, easier and smarter. Accessed through a browser-based, collaborative interface, Nuix Neo places Nuix’s market-leading processing at the centre of an integrated, solutions-based platform. The platform includes end-to-end automation, investigative analytics and AI-enabled workflows. Nuix Neo creates a new, extended customer offering, with the capability to be deployed on premise or in a customer cloud and enables on-demand scalability through a consumption-based subscription model. Nuix Neo represents the underlying platform for specific use case solutions. During the year, Nuix created and released three Nuix Neo use case solutions: Data Privacy, Investigations and Legal. Leveraging the capabilities of the Nuix Neo platform, these use case solutions offer a step-change in Nuix’s customer offering. 2.4 Group performance Statutory revenue for the year was $220,617,000, up 20.9% on the prior corresponding period. Statutory revenue can display a greater degree of variability than Annualised Contract Value (ACV) due to the accounting treatment of multi-year deals. The proportion of multi-year deals for the year rose slightly to 31%, from 30% in the prior year. Annualised Contract Value (ACV)1 Annualised Contract Value (ACV) is a non-IFRS 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 2024 was $211,506,000, up 14.0% compared to 30 June 2023, driven by stronger net upsell to existing customers, including sales of Nuix Neo, and continued low churn. Sales of Nuix Neo contributed approximately $12,137,000 to the overall ACV outcome. Subscription ACV is a component of Total ACV and is an important indicator of ACV that is generally recurring in nature. Subscription ACV grew 18.2% year on year to $200,806,000 comprising 95% of overall ACV. “Other ACV”, comprising short-term (less than 12 month) and perpetual licences, and services ACV, fell 31.9% on the prior year, to $10,700,000 on lower perpetual licence sales. Regionally, North America achieved the strongest growth in ACV, up 18.8% in the financial year, to $114,146,000. EMEA ACV rose 6.4%, to $53,285,000. Asia Pacific ACV rose 11.8% to $44,075,000. Traditional module-style licences contributed the largest proportion of statutory revenue, although revenue from consumption-style licences is increasing as a proportion of overall revenue, driven by the growth in Nuix Neo and Discover SaaS. Stronger revenue growth combined with general cost containment meant statutory EBITDA was materially higher than the prior corresponding period, up 60.2% to $55,867,000. Sales and Distribution expenses were higher over the financial year, on investment in key roles and growth-related expenses. Research and development spend was lower in the year compared to the prior period, as several efficiency initiatives were implemented. As a proportion of revenue, research and development spend fell to 24%, compared to 33% in the prior year. General and Administrative expenses rose compared to the prior year in relation to ATO review and derecognition of R&D deferred tax asset, along with higher equity compensation costs. Legal costs related to litigation matters of $8,547,000 (net of insurance recoveries) were slightly higher than the prior year amount of $7,816,000. The Group reported a Net Profit After Tax of $5,026,000 for the financial year, compared to a Net Loss After Tax of $5,589,000 in the prior corresponding period. 1. Annualised Contract Value (ACV) is an adjusted, non-IFRS measure and does not represent Total Revenue in accordance with Australian Accounting Standards or Nuix’s accounting policies or cash receipts from customers. ACV is used by Nuix to assess the total contract value of its software contracts on an annualised basis (removing fluctuations from Multi-Year Deal contracts in Nuix’s Total Revenue which results from its revenue recognition policies). The calculation of ACV at the end of the relevant financial period adjusts Total Revenue to account for: A) Revenue generated from Subscription Licences with a term of 12 months or more, as well as Consumption Licences which exist at the end of the relevant financial period as if those contracts’ revenues were generated (and recognised) in each financial year on a rateable basis over the relevant contract period, expressed on an annualised basis; B) last 12 month contribution from short term Software Licences (including Perpetual Licences) or other Software Licences with a term of less than 12 months, excluding Consumption Licences; and C) the last 12 month contribution of services and third party software sales. 37 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Directors’ Report 2.5 Group financial position The Group had a closing cash balance of $38,032,000 at 30 June 2024, up 28.5% from $29,588,000 in the previous financial year. Operating cash flow reflected the increased operating leverage achieved. Even including the impact of legal fees related to litigation matters, and payments associated with the acquisitions of Topos and Rampiva, overall free cash flow was strongly positive, rising to $11,888,000, up 193% on the prior year. The overall increase in cash and cash equivalents was driven by stronger customer receipts and general cost containment. Research and development continues to be funded by operational cash flow. The $30 million revolving credit facility established during the year remains undrawn. 2.6 Risk management The Nuix Risk Management Framework (RMF) is 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. Whilst we have a variety of strategic, financial and non- financial risks that could affect business activities, financial position or operating and financial performance, these are assessed and managed. 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 of the notes to the Financial Report and on Contingent Liabilities are provided in Section 9.7 of the notes to the Financial Report. Risk and Potential Consequences Mitigations Employed Accreditations & Certifications Nuix has information security accreditations and certifications which facilitate 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. • Investment in maintaining our information security accreditations and certifications • Internal auditing against certification security control standards • Annual independent certification audits • Review of new accreditation and certification opportunities in jurisdictions in which we operate Attracting Talent & Retaining Key Persons Nuix’s success is dependent on attracting talent, retaining key persons, and fostering a high-performance and values driven culture. • Purpose led business strategy, vision and value statements underpinned by our Code of Conduct • Regular engagement surveys to better understand employee experiences and views • A remuneration strategy to attract, motivate and retain individuals with performance linked reward • Board and Committee oversight of people and culture strategies and programs • Flexible work policies and hybrid work model • Learning and development frameworks to support career growth • Key person risk assessments and succession planning NUIX (ASX:NXL) // ANNUAL REPORT 2024 38 Directors’ Report Risk and Potential Consequences Mitigations Employed Business Continuity, Third Parties & Resilience Nuix’s operating model places high reliance on the availability and reliability of third-party core infrastructure, 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. • Nuix SaaS architected for high- availability across multiple regions and AWS availability zones • Third party due diligence processes • Incident management, disaster recovery and crisis plans Crisis and continuity plans in place and regularly tested 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 inadvertently breach contractual obligations and be subject to customer or vendor claims and disputes. To win or retain business, Nuix may need to agree to higher contractual liability caps which may exceed professional indemnity insurance limits. • Global in-house Legal function which provides review and oversight of agreements 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 where applicable • Implementation of an upgraded contract management system • Professional indemnity insurance policies with limits informed by risk profile Cyber & Information Security The risk that Nuix, our partners, third parties or customer base is impacted by a cyber event which causes loss, harm, damage, or disruption. Use of our products involves the processing and, via Nuix Discover SaaS, the cloud hosting and storage of customers’ data which can include privileged, confidential, sensitive, proprietary and 3rd party data and Personally Identifiable Information (PII). There is a risk that a cyber event could result in a security breach which compromises customer data. Such an event could result in litigation, customer terminations and liability claims, regulatory enforcement action, remediation costs and damage to Nuix’s reputation and brand. A cyber incident could cause disruption to customer services and critical Nuix 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. Our information security costs may also increase if customer, regulatory or accreditation minimum standards increase. Whilst Nuix does not collect and store significant quantities of sensitive and PII data, there is a risk that Nuix fails to adequately protect data that it is directly responsible for. This could result in a breach of privacy obligations. • Cyber risk and security plans and investment • In-house expertise supplemented by external vendors to identify, manage and oversee information security risks • Physical and logical separation of environments and duties across SaaS and Corporate IT • Multi-factor authentication and least privileged access to SaaS environment • High grade encryption of customer data • Regular 3rd party penetration testing and secure code reviews • Market-leading third-party tools to protect and monitor the SaaS and Corporate IT environments • Tested crisis, incident management and recovery playbooks • Data security management certifications (ISO 27001:2013, ISO 27018:2019) • Privacy Policy, Privacy Officer and a Privacy Compliance plan 39 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Directors’ Report Risk and Potential Consequences Mitigations Employed Sustainability Nuix seeks to conduct its business responsibly, ethically, and sustainably. This includes ensuring that our technology is not used for unethical or illegal purposes. Failure to meet sustainability commitments, expectations, or manage our sustainability risks, could harm our reputation, impact performance, limit access to capital, result in legal action or impact our ability to attract and retain talent. • Clearly documented governance structures and accountabilities • Sustainability initiatives and reporting • Calculation of enterprise scope 1 and 2 emissions base and purchase of carbon credits to fully offset • Modern Slavery Statement and Policy. Periodic review of vendors using an 3rd party risk intelligence tool • Dedicated Management Committee established to review and approve any deal with an elevated ethical or social risk profile, inclusive of those in jurisdictions designated higher risk. • Diversity, Equity, Inclusion and Belonging initiatives Financial Risks Nuix is exposed to a variety of financial risks including foreign exchange (FX), credit, impairment of intellectual property, and liquidity. If financial risk management strategies are ineffective, financial performance may be impacted. There is a risk of error in financial reporting due to inadequate or ineffective financial processes and controls. • Budgeting, cash-flow forecasting, FX sensitivity and financial performance monitoring and reporting processes • Capitalisation policy, monthly capitalisation reporting and annual impairment testing • Early engagement and consultation with external auditors/professional firms on significant deals and key accounting policies • Strategic operating plan linked to Leadership Team Short- Term incentives • Global and local Insurance Program aligned to our risk profile and contractual obligations • Refer to Section 7.1 of the notes to the Financial Report for more detail on how Nuix manages its financial risks Funding & 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. • Board approved capital, funding, and liquidity management strategy • Strong relationships with investors and banking partners. • Treasury Policy and working capital management thresholds, processes and controls • HSBC revolving debt facility • Refer to Section 7.1 of the notes to the Financial Report for more detail on how Nuix manages its financial risks 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. • Intellectual Property Review Committee which meets regularly in partnership with external IP experts • Process for registering trademark, copyrights, and patents • Contractual safeguards (e.g., non-disclosure agreements) prior to any proprietary disclosures • Corporate IT information security program NUIX (ASX:NXL) // ANNUAL REPORT 2024 40 Directors’ Report Risk and Potential Consequences Mitigations Employed Legal & Regulatory Compliance 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. • Regular review of key compliance risk areas by the Audit & Risk Management Committee • Policies, supported by board and 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 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. There is a risk that Nuix may be party to new litigation which may have a material impact on future financial and operating performance. • 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 Market, Customer & 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 global economic conditions, adverse geopolitical events or a change in business and government spending could adversely impact financial performance. Nuix may not meet customer expectations or our sales enablement and account growth strategies may be ineffective. Nuix has a number of large customer accounts who may choose not to renew with Nuix at the end of their agreements. This may have a material impact on the achievement of sales performance and growth targets. • Multi-horizon customer centric strategy • Diversified customer base across industries and geographies • Sales enablement, opportunity pipeline 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 Negative Publicity & Reputational Damage Negative publicity could impact Nuix’s image, reputation and standing in the eyes of our customers, employees, investors, and other stakeholders. Examples of potential triggers for negative publicity may include adverse litigation outcomes, behaviour and conduct matters, external cyber-attacks or not meeting investor, customer and other stakeholder expectations or our compliance obligations. For example, a cyber event could impact customer trust in Nuix products or impact the perception of the value of certain Nuix products such as our Data Privacy solution. Negative publicity and the resulting reputational damage could have wide ranging implications impacting the share price, customer churn or downsell, software value, retention of key persons or make it more difficult to raise capital or access alternative financing options if required. • A media relations strategy which seeks to nurture relationships and help educate audiences about Nuix, our brand identity, purpose and values • Active investor relations management and engagement with the investment community • Market disclosure policy and supporting approval processes • Value statements underpinned by our Code of Conduct • Crisis Management Team, and tested Crisis Management and Communications Plans 41 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Directors’ Report Risk and Potential Consequences Mitigations Employed Open-Source & Third-Party Software Nuix uses third party and open-source software in our products. This introduces Nuix to potential security, intellectual property, reliability and licensing compliance risks which may impact our customers, execution of our product roadmap or events which result in financial loss. 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. • Register of third party and open-source libraries and licences by product • Tools to monitor and report on the security profile of open-source code • Vulnerability management and remediation tools and practices • Contracts in place with third party software providers 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 sales partner performance, competitor product and incentivisation offerings or competitor M&A activity. • Partner program focussed on strategic partnerships and mutually beneficial relationships • Alliances and Partnerships strategy with dedicated leadership and program management team • Partner portal, enablement, training, marketing development funds and quarterly business reviews Product Functionality & Performance 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. • Highly skilled engineers and product development employees • Software Development Life Cycle including review and testing of code prior to release, as well as internal testing prior to General Availability • Vulnerability management and remediation tools and practices • Customer service and Product support system integrated with engineering software development lifecycle Product Strategy & Technology Innovation 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 or the carrying value of our software. There is a risk that technological advancement and innovation could disrupt the industry and impact the appeal, value and profitability of our product suite. • Technology and product roadmap linked to strategy and informed by customer feedback • R&D investment as a percentage of revenue benchmarked and aligned to market • Highly skilled engineers and product development employees • Product Development Framework used to test new concepts with customers as part of the delivery model • Continuously evolving our technology stack to enable innovation and drive efficiencies • Elevating our focus on A.I technology advancements and implementation within our software. Underpinned by investment in Responsible A.I governance frameworks and processes NUIX (ASX:NXL) // ANNUAL REPORT 2024 42 Directors’ Report 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, however, in recognition of its importance, climate change risk is addressed separately in the Group’s Sustainability Report that is to be included with the Group’s Annual Report. 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 No 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. COMPANY SECRETARY The details of the Company Secretary in office at the date of this report is set out below. Ilona Meyer LLM. LLB GradDipLegPrac. GIA(Cert). GAICD. AMIIA. Ilona Meyer is the General Counsel and Company Secretary. Ilona joined Nuix in August 2022. Prior to that, Ilona was the Head of Legal & Compliance (ANZ) and Company Secretary of Boehringer Ingelheim. Ilona has also held senior legal roles with private and public companies, including ResMed, Ruralco, Medtronic, 3M, NTT and Computer Associates. Since joining Nuix, Ilona has engaged closely with the Nuix board and its committees as a lawyer and company secretary. 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 Performance rights Ordinary shares Options Robert Mactier – 175,000 – Jeffrey Bleich – 135,000 – Jonathan Rubinsztein 3,904,125 894,927 – Sir Iain Lobban – – – Jacqueline Korhonen – 19,753 – Alan Cameron – 23,800 – Sara Watts – – – 43 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Directors’ Report 8. SHARE OPTIONS Unissued shares under options All options were granted in previous financial years. No options have been granted since the end of the previous financial year. At the date of this report, unissued shares of the Group under option total 2,646,937, and have an exercise price in the range of $2.00 to $5.79 and a weighted-average remaining contractual life of 2.5 years. Shares issued on exercise of options The Group has not issued any ordinary shares of the Company as a result of the exercise of options during or since the end of the financial year. 9. 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 2024 and each director’s attendance at those meetings is set out below. Full Board Remuneration and Nomination Committee Audit and Risk Management Committee Held1 Attended Held1 Attended Held1 Attended Robert Mactier 12 12 - - 4 4 Jeffrey Bleich 12 10 6 6 - - Jonathan Rubinsztein 12 12 - - - - Sir Iain Lobban 12 11 - - - - Jacqueline Korhonen 12 12 6 6 - - Alan Cameron 12 11 6 6 3 3 Sara Watts 12 12 - - 4 4 Susan Thomas2 4 2 - - 1 1 1. Number of meetings held during the time the director held office or was a member of the committee during the year. 2. Resigned on 18 October 2023. NUIX (ASX:NXL) // ANNUAL REPORT 2024 44 Directors’ Report 10. DIRECTOR INFORMATION Robert Mactier Non-Executive Chairman Robert has been a Non-Executive Director of Nuix since October 2021 and was appointed Chairman in February 2023. 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 (ASX:LEP) from 2016 to 2021 and WPP AUNZ Limited (ASX:WPP) from 2006 to 2021, as well as Non-Executive Director of NASDAQ-listed Melco Resorts and Entertainment Limited (NASDAQ: MLCO) from 2006 to 2017. 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 JP 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. Jeffrey Bleich Non-Executive Deputy Chairman Jeffrey has been a Non-Executive Director of Nuix since 2017 and was appointed as Deputy Chairman in February 2023, after stepping down from the role of Chairman. Jeffrey lives in Piedmont, California, USA. Jeffrey has over 30 years’ experience in the legal, government and technology sectors. Jeffrey served four years as the US Ambassador to Australia from 2009 to 2013 and as special counsel to President Obama in 2009. He is currently a Visiting Scholar at Stanford University, Chair of the Board of the Jeff Bleich Centre on Democracy and Disruptive Technologies at Flinders University, and serves by appointment of President Biden to the President’s National Security Education Board. In addition to these roles, Jeffrey has served as a Court-Appointed Special Master and Mediator in the United States District Court, Chief Legal Officer of General Motors-owned Cruise LLC, a San Francisco-based autonomous vehicle company. Jeffrey Clerked for Chief Justice of the United States Supreme Court, and practised law as a Partner at Munger, Tolles & Olson LLP from 1992 to 2009 and 2014 to 2016. He also served 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 legal practice focused on cyber security, technology, complex international disputes, as well as high profile pro bono matters before the US Supreme Court. 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. Jonathan Rubinsztein Executive Director and Group Chief Executive Officer 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) since November 2021, and previously was the Managing Director and CEO of Infomedia, Ltd, (ASX:IFM) an ASX-listed SaaS company, from March 2016 to October 2021. 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 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. 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 (Exec) from University of New South Wales and is a Fellow of the Australian Institute of Company Directors. 45 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Directors’ Report Sir Iain Lobban Non-Executive Director 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 United Kingdom. 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. Jacqueline Korhonen Non-Executive Director 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. 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 was a Non-Executive Director of NetComm Wireless (ASX:NTC) from July 2018 until August 2019. Jacqueline is currently a Non-Executive Director of MLC Insurance, Auswide Bank (ASX:ABA) since April 2021. Since February 2023, Jacqueline has also been a Non-Executive Director of the Civil Aviation Safety Authority, a federal government body charged with regulating aviation safety in Australian Authority air space. 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. Alan Cameron AO Non-Executive Director Alan joined the Nuix Board in January 2023. Alan is a respected company director and lawyer, with experience across a range of legal, corporate and regulatory roles. Alan was Chairman of Property Exchange Australia Limited (PEXA) from its inception until shortly before it listed in June 2021, and completed his extended term as Chair of the NSW Law Reform Commission in May 2022. A former partner of the firm now called Ashurst Australia, he was Commonwealth Ombudsman and later Chair of the Australian Securities Commission (ASC) and Australian Securities and Investments Commission (ASIC). Alan is currently Chair of .au Domain Administration Limited. Alan graduated in Arts (BA) and Law (LLM) from the University of Sydney. Sara Watts Non-Executive Director Sara joined the Nuix Board in January 2023. Sara Watts is a Non-Executive Director and Audit and Risk Management Committee Chair with experience across a range of sectors. In addition to Nuix, Sara currently serves on the boards of Syrah Resources (ASX:SYR) since June 2019, Trajan Scientific and Medical (ASX:TRJ) since March 2021, Uniting NSW. ACT and the Sydney Opera House Trust. Before moving into her non-executive career Sara was CFO of IBM Australia/New Zealand and Vice-Principal Operations at the University of Sydney. These roles gave her a solid grounding in finance, risk, technology, and international operations. She is a Fellow of the Australian Institute of Company Directors, and a Fellow of CPA Australia. 11. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS Nuix has provided deeds of indemnity to all Directors and Officers of Nuix and its subsidiaries for potential liabilities and costs that may incur for acts or omissions in their capacity as Directors or Officers of Nuix or its subsidiaries. The liabilities 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 Nuix. During the year, Nuix 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 amount of the premium is prohibited by the confidentiality clause of the contract of insurance. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. NUIX (ASX:NXL) // ANNUAL REPORT 2024 46 Directors’ Report 12. 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. 13. 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 9.5 to the Financial Statements. 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 and Risk Management 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 and Risk Management Committee Chair 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, as they did not involve reviewing or auditing the auditors’ own work, acting in a management or decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards. 14. 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. 15. 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 19 and forms part of the Directors’ Report for the year ended 30 June 2024. This report is signed in accordance with a resolution of the Board of Directors. Robert Mactier Chair Sydney, Australia 9 September 2024 Jonathan Rubinsztein Director Sydney, Australia 9 September 2024 This is the Directors’ Report, signed by Robert Mactier, Chair, and Jonathan Rubinsztein, Director on 9 September 2024. The page reference in relation to the Auditor’s Independence Declaration should be read as referring to page 48, as opposed to page 19, to reflect the correct references now that the Directors’ Report has been presented in the context of the annual report in its entirety 47 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Directors’ Report AUDITOR’S INDEPENDENCE DECLARATION 19 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. 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 2024 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit KPMG Trent Duvall Partner Sydney 9 September 2024 NUIX (ASX:NXL) // ANNUAL REPORT 2024 48 NUIX LIMITED AND CONTROLLED ENTITIES A.B.N. 80 117 140 235 A.C.N. 117 140 235 ASX Code: NXL REMUNERATION REPORT 1. Who is covered by this report? 52 2. Our value proposition 52 3. FY24 – Executive KMP remuneration at a glance 52 4. FY24 Executive remuneration outcomes – in detail 55 4.1 Overview of Group performance 55 4.2 Linking remuneration to performance 55 4.3 Total fixed remuneration (TFR) 56 4.4 FY24 short term incentive outcomes 56 4.5 FY23 long term incentive awards (vesting) 61 4.6 FY24 long term incentive plan (LTIP) (grant) 63 4.7 Retention & incentive grant 2023 (one-off grant) 65 4.8 One-off awards 66 4.9 Legacy option awards 67 4.10 Executive KMP remuneration statutory table 67 5. Non-Executive Director remuneration 68 5.1 Overview 68 5.2 Fee pool and schedule 68 5.3 Legacy options held by Non-Executive Directors 69 5.4 Non-Executive Directors – statutory remuneration 69 6. Remuneration governance 70 6.1 Responsibility for setting remuneration 70 6.2 Use of remuneration consultants 70 6.3 Details of Executive Service Agreements 71 7. Further information 71 7.1 Executive KMP and Director share ownership 71 7.2 Other transactions and balances with KMP 73 49 NUIX (ASX:NXL) // ANNUAL REPORT 2024 LETTER FROM CHAIR OF REMUNERATION AND NOMINATION SUB-COMMITTEE Dear Shareholders On behalf of the Remuneration & Nomination Committee (RNC), I am pleased to present the Remuneration Report (Report) for Nuix Limited (Nuix or the Group) for the year ended 30 June 2024 (FY24). FY24 – building momentum The CEO and executive leadership team have continued the transformation of Nuix and are building momentum on its growth journey. The Nuix team have demonstrated successful execution against its strategic plan as well as pleasing financial results. This year, Nuix delivered $211.5 million of Annualised Contracted Value (ACV) 14.0% growth from the prior corresponding period (PCP). Nuix additionally delivered growth in other key financial metrics with $220.6 million of Statutory Revenue (up 20.9% from PCP), EBITDA of $55.9 million (up 60.2% from PCP) and Underlying Free Cash Flow of $24.7 million (up 171.4% from PCP) excluding legal fees relating to litigation matters and M&A activity. 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. Consistent with our approach in FY23, we adopted a balanced scorecard approach under the FY24 short-term incentive (STI) for the KMP in line with market practice. Their STI was assessed against a mix of financial and non-financial measures. An overview of our executive remuneration framework for our Executive KMP is outlined in section 3. Remuneration changes made in FY24 As the Company continues its transformation journey, the Board is committed to ensuring the Group’s remuneration framework: • Is aligned to Nuix’s strategy and is fit for purpose. • Is structured to focus executives on the growth drivers that will create long-term shareholder value; and • Provides market competitive remuneration in the highly competitive global technology sector that will attract, retain and motivate executives. With these guiding principles and following a comprehensive review of market practices, the new long-term incentive structure for KMP in FY24 comprised of: • Long-term Incentive (LTI) plan contingent on achieving key financial and share-price based performance hurdles over three years. This is an ongoing plan, intended to be granted on an annual basis. • One-off Retention & Incentive plan contingent on achieving share-price based hurdles and continued employment over a three-year period. This is a one-off plan granted in FY24 only and is designed to retain and motivate our executive team during this critical period of transformation for the organisation and at a time where continues to be significant external pressures impacting the Company. These long-term incentives were delivered in equity as Performance Rights. Details of these incentive programs were set out in the 2023 Notice of Annual General Meeting Resolutions for shareholder approval of equity to be granted to the Chief Executive Officer & Managing Director, with all resolutions approved by shareholders. NUIX (ASX:NXL) // ANNUAL REPORT 2024 50 Remuneration Report Linking FY24 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. In FY24, having regard to the Group’s performance during the financial year: • The FY24 STI outcomes achieved 85% of target for Executive KMP, reflecting the positive 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 any KMP. • Sign on equity awards vested in FY24 to the following KMP: Jonathan Rubinsztein 142,349 Chad Barton 42,017 Michael Smith 96,603 Warren Brugger 103,986 Executive changes In May 2024, we advised that Chief Operating Officer & Chief Financial Officer, Chad Barton, was stepping down at the end of August 2024 following the release of the FY24 results. We are grateful to Chad for his commitment to Nuix, considered counsel and tireless work ethic, and wish him well in his next steps. The Company has commenced the process of searching for a new Chief Financial Officer as part of an orderly transition. Conclusion The Board will continue to monitor Nuix’s executive remuneration framework and seek feedback from our shareholders to ensure that it provides the right balance between attracting, motivating and retaining our executives to deliver on our strategy to support our customers, while meeting the expectations of the Group’s shareholders. 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 Nomination Sub-Committee 51 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report REMUNERATION REPORT – AUDITED 1. WHO IS COVERED BY THIS REPORT? This Report outlines the remuneration arrangements in place for key management personnel (‘KMP’) of the Group in FY24, 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 FY24 KMP are set out in the table below. Table 1: Overview of FY24 KMP KMP CURRENT POSITION TERM AS KMP Executive KMP Jonathan Rubinsztein CEO and Executive Director Full Year Chad Barton COO/CFO Full Year (ceased as KMP on 30 August 2024) Warren Brugger Executive Vice President, APAC and Global Alliances Full Year Jonathan Rees Executive Vice President, EMEA Full Year Michael Smith Executive Vice President, Americas Full Year Non-Executive Directors Robert Mactier Independent Chairman Full Year Jeffrey Bleich Independent Deputy Chairman Full Year Alan Cameron Independent Non-Executive Director Ful Year Jacqueline Korhonen Independent Non-Executive Director Full Year Sara Watts Independent Non-Executive Director Full Year Sir Iain Lobban Independent Non-Executive Director Full Year Sue Thomas Independent Non-Executive Director Ceased as KMP on 18 October 2023 as resigned as Non-Executive Director 2. OUR VALUE PROPOSITION At Nuix, we strive to cultivate the loyalty and passion of talented employees who aim for excellence and contribute to making the world a better place through software that helps our customers be a force for good, by finding truth in the digital world. We recognise that remuneration is only one of the reasons why our people come to work every day and our broader value proposition is key to our ability to attract, retain and motivate world-class talent to deliver on our vision. We seek to create a supportive and inclusive workplace that fosters high 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 not only drive business performance and meet the expectations of our stakeholders and community but should do so in a way that aligns with our values (see Section 3). In FY24 Nuix continued its cultural transformation work as we embedded our TRUTH values and behaviours through all our people practices. 3. FY24 – 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 behaviours aligned with our core values and support our strategic priorities in the interests of our shareholders. NUIX (ASX:NXL) // ANNUAL REPORT 2024 52 Remuneration Report OUR VALUES Aligning with our core values and expected behaviours. UNAFRAID – TO DO THE RIGHT THING, QUICKLY TEAM NUIX – FIRST AND FOREMOST HERO OUR CUSTOMERS – AND INNOVATE FOR THEM TAKE OWNERSHIP – AND FOLLOW UP RESILIENT – WE LEARN FROM THE PAST AND ARE OPTIMISTIC ABOUT TOMORROW STRATEGIC PRIORITIES Our vision of being a force for good by finding truth in the digital world, demonstrated by these strategic priorities: 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 Anticipate future use cases Identify and monetise new use cases enabled by data processing Enhance commercial capabilities Improved financial systems and processes REMUNERATION PRINCIPLES Supporting our strategic priorities and business objectives, demonstrated by these remuneration principles: Market competitive Attraction, motivation and retention of key talent Perform & Innovate Encouraging the best from our people Acting like owners Shareholder and customer alignment Right Behaviours Encouraging behaviours aligned with our values Simplicity Simple and easy to understand Strategy Led Rewarding for delivery on our strategic priorities 53 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report OUR FRAMEWORK Our remuneration framework aligns with our values and strategy 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 Short Term Incentive (STI) • Performance period of 1 year • Assessed against a combination of ACV growth (constant currency), cost base and other non-financial Group performance measures for the CEO and COO/CFO and regional relevant ACV growth (local currency) and cost base and other non-financial Group performance measures for the EVP Americas, EVP EMEA and EVP APAC and Alliances 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 (75%) and share rights (25%) deferred for 12 months for the other Executive KMP). STI deferral in share rights, creates further alignment with shareholder interests and supports retention • STI provides motivation for the achievement of annual performance goals Long Term Incentive (LTI) • LTI drives the delivery of Nuix’s longer term objectives in a sustainable manner FY23 LTI • Delivered in performance rights and assessed against ACV growth. • Performance rights vest progressively in two tranches, the first being 1 year after achievement (i.e. August /September 2024) and the second 2 years after achievement (i.e. August/ September 2025) and are subject to remaining employed FY24 LTI and beyond • Delivered in performance rights • Long-term Incentive (LTI) plan contingent on achieving key financial and share-price based performance hurdles over three years. FY24 LTI (one-off) • Retention & Incentive plan contingent on achieving share- price growth-based hurdles and continued employment over a three-year period. This is a one-off plan granted in FY24 only and is designed to retain and incentivise our executive team during this critical period of transformation for the organisation. As part of its overarching discretion under both STI and LTI Plans, 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) KMP PAY MIX Pay mix for performance A. The pay mix for the CEO and COO/CFO at target and maximum ensures a meaningful portion is weighted towards LTI to encourage a focus on long term sustainable decision making in the interests of Nuix’s shareholders and other stakeholders. B. The EVP Americas, EVP EMEA and EVP APAC remuneration arrangements are consistent with other senior non-KMP executives. In FY24, they received fixed annual remuneration, STI and participation in the FY24 equity grants (LTI Plan and Retention & Incentive Plan) TFR STI LTI CEO 33% 42% 25% COO/CFO 40% 36% 24% EVP Americas 41% 21% 38% EVP EMEA 52% 15% 33% EVP APAC 58% 18% 24% NUIX (ASX:NXL) // ANNUAL REPORT 2024 54 Remuneration Report 4. FY24 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 FY24 performance is set out below. Annualised Contract Value (ACV) $211.5m ▲ Up 14.0% on FY23 12.0% on constant currency basis Net Dollar Retention1 (NDR) 112.9% ▲ Up from 109.2% in FY23 Subscription ACV $200.8m ▲ Up 18.2% on FY23 16.3% on constant currency basis Customer Churn 4.4% ▼ Down from 5.3% in FY23 4.4% in constant currency basis Statutory Revenue $220.6m ▲ Up 20.9% on FY23 18.0% on constant currency basis Statutory EBITDA $55.9m ▲ Up 60.2% on FY23 Gross Margin 90.2% ▲ Up from 87.4% in FY23 Share price at 30 June 2024 $3.08 ▲ Up 262.4% on FY23 Earnings per share (basic) $0.02 ▲ Up from $(0.02) in FY23 4.2 Linking remuneration to performance A key underlying principle of the Company’s executive remuneration strategy is the link between company performance and executive reward. Under the Company’s transformation strategy, Nuix has been successful in achieving its goals to date. Through strong ACV performance Nuix is building sustainable and profitable growth in FY24 and beyond. The following table summarises the Company’s performance and short term incentives awarded to executive KMP since listing. 1. Net Dollar Retention (NDR), expressed as a percentage, represents the ACV from the sale of Subscription Licences (excluding short-term Software Licences, or licences with a term of less than 12 months. But including Consumption Licences) from a constant set of customers (the “NDR Constant Customer Set”) across comparable periods (i.e. it excludes the impact of new customers acquired in the subsequent (i.e. more recent period), taking into account the impact of Upsell, Downsell and Churn between these two periods. 55 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report Table 2: Company’s performance and incentives Financial Performance STI Year ACV ($m) Underlying EBITDA ($m) Statutory Revenue ($m) Net Dollar Retention Earnings per Share (cents) Share Price at 30 June ($) STI awarded to Executive KMP ($m) FY24 $211.5m $64.4m $220.6m 112.9% $0.02 $3.08 $1.7m1 FY23 $185.5m $46.4m $182.5m 109.2% $(0.02) $0.85 $1.8m FY22 $162.0m $29.2m $152.3m 96.8% $(0.07) $0.76 $0.7m FY21 $165.9m $67.0m $176.1m 95.5% $(0.00) $2.21 $0.3m 1. Total award in cash and equity. 4.3 Total fixed remuneration (TFR) Table 3 below sets out the annualised TFR payable to the Executive KMP in FY24 based on their contractual values. Executive KMP TFR levels have been set with regard to benchmarking data within the technology sector. There was no increase applied to Executive KMP TFR in FY24. Table 3: Executive KMP fixed remuneration levels Executive KMP Total fixed remuneration (annualised)1 $ Jonathan Rubinsztein 700,000 Chad Barton 790,000 Warren Brugger 440,000 Jonathan Rees 520,185 Michael Smith 494,772 1. Excludes mandatory and employer superannuation contribution. 4.4 FY24 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 FY24 are set out in Table 4 below. Table 4: Executive KMP STI outcomes STI Outcomes (FY24) Executive KMP On Target (100%) STI opportunity1 ($) On Target (100%) STI opportunity (% TFR) Maximum (125%) STI opportunity1 ($) Maximum (125%) STI opportunity (% TFR) Value of STI awarded % of FY24 On Target STI awarded % of FY24 STI award forfeited Jonathan Rubinsztein 525,000 75% 656,250 94% 463,750 88.3% 11.7% Chad Barton 474,000 60% 592,500 75% 458,200 96.7% 3.3% Warren Brugger 176,000 40% 220,000 50% 175,120 99.5% 0.5% Jonathan Rees 331,027 64% 413,783 80% 82,757 25.0% 75.0% Michael Smith 449,793 91% 562,241 114% 483,527 107.5% 0.0% 1. Excludes mandatory and employer superannuation contribution. NUIX (ASX:NXL) // ANNUAL REPORT 2024 56 Remuneration Report B. FY24 STI – assessment of performance measures An overview of performance against the FY24 STI measures are set out in the following tables. The CEO was assessed against a balanced scorecard of financial and non-financial Group measures only. The COO/CFO was assessed against a balanced scorecard of financial Group measures. The EVP Americas, EVP EMEA, EVP APAC and Alliances were assessed against performance of the respective businesses for financial performance in order to drive performance in the respective regions in which Nuix operates, as well as non-financial Group measures. Table 5: Performance against FY24 STI performance measures for CEO STI Performance Measures Measure Weighting Outcomes Explanation Financial metrics (CEO) Group ACV 40% Achieved – 95% of STI was awarded against this measure. Group ACV $211.5m (Up 14.0% PCP) Up 12.0% on constant currency basis Group cost base 10% Achieved – 100% of STI was awarded against this measure. 100% achievement was awarded on this measure as a result of strong EBITDA result of $55.9m (Up 60% on PCP) Cost base management Actual $187.1m 0.4% under budget Non-financial metrics Group Customer Focus • Net Dollar Retention 10% Achieved – 100% of STI was awarded against this measure. Net Dollar Retention (NDR) 112.9% (up from 109.2% in PCP) 110.9% in constant currency Customer Churn 4.4% Down from 5.3% in FY23 Group Culture, leadership, and engagement • Engagement score • Turnover 20% Partially Achieved – 75% of STI was awarded against this measure. There has been a steady increase in Nuix’s employee engagement score (72% in the latest survey [Up 5pts PCP]). Voluntary Attrition Rate 9.4% (down from 12.9% PCP) Individual KPIs • Achievement against FY24 Operating Plan & Strategic Initiatives 20% Partially Achieved – 76.7% of STI was awarded against this measure. On Target (%) Achieved vs. Target (%) Maximum (% of FR) Achieved vs. Maximum (%) 100% 88.3% 125% 70.7% Key Above Target On Target Between Threshold and Target Below Threshold 57 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report Table 6: Performance against FY24 STI performance measures for COO/CFO STI Performance Measures Measure Weighting Outcomes Explanation Financial metrics (CFO/COO) Group ACV 2/3 Achieved – 95% of STI was awarded against this measure. Group ACV $211.5m (Up 14.0% PCP) Up 12.0% on constant currency basis Group cost base 1/3 Achieved – 100% of STI was awarded against this measure. 100% achievement was awarded on this measure as a result of strong EBITDA result of $55.9m (Up 60% on PCP) Cost base management Actual $187.1m 0.4% under budget On Target (%) Achieved vs. Target (%) Maximum (% of FR) Achieved vs. Maximum (%) 100% 96.7% 125% 77.3% Table 7: Performance against FY24 STI performance measures for EVP, Americas STI Performance Measures Measure Weighting Outcomes Explanation Financial metrics (EVP, Americas) Regional ACV 40% Overachieved – 125% of STI was awarded against this measure. Regional ACV $114.1m (up 18.8% PCP) Up 17.0% on Constant Currency Regional cost base 10% Achieved – 100% of STI was awarded against this measure 100% achievement was awarded on this measure as a result of strong EBITDA top line growth of $129.4m (Up 41.1% on PCP) Non-financial metrics Group Customer focus • Net Dollar Retention 10% Achieved – 100% of STI was awarded against this measure per Nuix Group result. Group Culture, leadership, and engagement 10% Partially Achieved – 75% of STI was awarded against this measure per Nuix Group result. Individual KPIs • Achievement against FY24 Operating Plan & Strategic Initiatives 30% Achieved – 100% of STI was awarded against this measure due to outperformance within Americas Region during FY24 against operating plan. On Target (%) Achieved vs. Target (%) Maximum (% of FR) Achieved vs. Maximum (%) 100% 107.5% 125% 86% Key Above Target On Target Between Threshold and Target Below Threshold NUIX (ASX:NXL) // ANNUAL REPORT 2024 58 Remuneration Report Table 8: Performance against FY24 STI performance measures for EVP, APAC & Alliances STI Performance Measures Measure Weighting Outcomes Explanation Financial metrics (EVP, APAC & Alliances) Regional ACV 40% Achieved – 105% of STI was awarded against this measure. Regional ACV $44.1m (up 11.8% PCP) Up 11.4% on Constant Currency Regional cost base 10% Achieved – 100% of STI was awarded against this measure 100% achievement was awarded on this measure as a result of strong cost base management throughout FY24 (11% below budget) Non-financial metrics Group Customer Focus • Net Dollar Retention 10% Achieved – 100% of STI was awarded against this measure per Nuix Group result. Group Culture, leadership, and engagement 10% Partially Achieved – 75% of STI was awarded against this measure per Nuix Group result. Individual KPIs • Achievement against FY24 Operating Plan & Strategic Initiatives 30% Achieved – 100% of STI was awarded against this measure due to strong performance within APAC Region during FY24 against operating plan. On Target (%) Achieved vs. Target (%) Maximum (% of FR) Achieved vs. Maximum (%) 100% 99.5% 125% 79.6% Key Above Target On Target Between Threshold and Target Below Threshold 59 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report Table 9: Performance against FY24 STI performance measures for EVP, EMEA STI Performance Measures Measure Weighting Outcomes Explanation Financial metrics (EVP, EMEA) Regional ACV 40% Not Achieved – 0% of STI was awarded against this measure. Regional ACV $53.3m (up 6.4% PCP) Up 2.8% on Constant Currency Regional cost base 10% Not Achieved – 0% of STI was awarded against this measure 0% achievement was awarded on this measure as a result of underperformance against cost base management & EBITDA in FY24 (both below budget) Non-financial metrics Group Customer Focus • Net Dollar Retention 10% Achieved – 100% of STI was awarded against this measure per Nuix Group result. Group Culture, leadership, and engagement 10% Partially Achieved – 75% of STI was awarded against this measure per Nuix Group result. Individual KPIs • Achievement against FY24 Operating Plan & Strategic Initiatives 30% Partially Achieved – 25% of STI was awarded against this measure due to the achievement of some milestones against the FY24 against FY24 EMEA operating plan. On Target (%) Achieved vs. Target (%) Maximum (% of FR) Achieved vs. Maximum (%) 100% 25% 125% 20% Key Above Target On Target Between Threshold and Target Below Threshold NUIX (ASX:NXL) // ANNUAL REPORT 2024 60 Remuneration Report C. FY24 STI terms - further detail Key terms and conditions applying to the STI arrangements for the Executive KMP during FY24 are as follows: Table 10: Description of key terms of FY24 Executive KMP STI Short Term Incentive – Key Terms Term Further detail – CEO and COO/CFO Further detail – EVP, EMEA, EVP, Americas & EVP, APAC & Global Alliances 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. 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 the 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. Once the total dollar value of the STI earned is determined, 75% will be awarded in cash, the remaining 25% will be delivered in share rights to support alignment between the EVP’s and Nuix’s shareholders. Each share right will vest into one share after 12 months subject to continuing employment. Calculation The number of share rights granted will be calculated by dividing the dollar value attributable to those share rights by the 30-day VWAP following the release of Nuix’s financial statements for FY24. The CEO’s grant will be subject to shareholder approval. Performance Measures For the CEO, the FY24 STI is assessed against multiple performance measures being: • Group ACV Growth (40% weighting) • Group Cost Base (10% weighting) • Group Customer Focus (NDR) (10% weighting) • Group Culture & Engagement (20% weighting) • Individual KPIs linked to operating plans (20% weighting) For the COO/CFO, the FY24 STI is assessed against the following performance measures: • Group ACV Growth (2/3 weighting) • Group Cost Base (1/3 weighting) As part of Mr Barton’s exit arrangements, the Board deemed only financial metrics were the only appropriate measures of performance for FY24 for the COO/CFO. For the Regional EVP’s, the FY24 STI is assessed against multiple performance measures being: • Region ACV Growth (40% weighting) • Region Cost Base (10% weighting) • Group Customer Focus (10% weighting) • Group Culture & Engagement (10% weighting) • Individual KPIs linked to operating plans (30% weighting) 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). Treatment on cessation of employment Where an Executive KMP ceases employment prior to the date of payment, 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). 4.5 FY23 long term incentive awards (vesting) A. Overview All five Executive KMP were eligible to participate in an LTI award in FY23. The awards will be delivered in performance rights and vest in two equal tranches upon the release of the Company’s financial results for each for FY24 and FY25. 61 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report Table 11: FY23 LTI awards to Executive KMP Executive KMP Maximum LTI opportunity ($) Maximum LTI opportunity (% of TFR) Value of LTI granted ($) % of FY23 LTI granted % of FY23 LTI award forfeited Jonathan Rubinsztein 875,000 125% 875,000 100% 0% Chad Barton 711,000 90% 711,000 100% 0% Warren Brugger1 83,233 30% 83,233 100% 0% Jonathan Rees 102,600 21% 102,600 100% 0% Michael Smith1 230,596 52% 230,596 100% 0% 1. Pro-rated for service period. There is no exercise price for the rights granted. The performance rights will vest and be settled by the delivery of shares when the applicable vesting conditions have been satisfied. B. FY23 LTI key terms – further detail Table12 below outlines the key terms attaching to the LTI awards granted to Executive KMP under the FY23 LTI. Table 12: Key terms of FY23 LTI awards granted to Executive KMP FY23 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 FY23 (as outlined in table 7 above) by the market value of the underlying share determined based on the 5-day VWAP following the release of the FY22 results (i.e., the start of the period that the LTI is tested against). For example, the CEO was eligible to receive up to 1,286,764 Performance Rights which were calculated as the LTI opportunity of $875,000 divided by the 5-day VWAP of $0.68. This was approved at the 2022 Nuix AGM. Performance conditions and vesting schedule The FY23 LTI performance rights are subject to performance testing against ACV growth (constant currency) for FY23. If the targets are met, 50% of the vested LTI performance rights will be available upon the release of the Company’s financial results for each in FY24 and FY25. The vesting schedule in respect of ACV is outlined below: ACV growth 3% 4% 5% 6% 7% 8% 9% 10% % payout of LTI 30% 40% 50% 60% 70% 80% 90% 100% Performance Outcome = 100% achievement against target 14.5% ACV growth for the period 1 July 2022 to 30 June 2023 Treatment on cessation of employment 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). Forfeiture and clawback 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). NUIX (ASX:NXL) // ANNUAL REPORT 2024 62 Remuneration Report 4.6 FY24 long term incentive plan (LTIP) (grant) A. Overview In recognition of the work required in transforming the performance of the Company, an LTI program was approved by the Board that provides for the issue of performance rights to KMP subject to performance testing against the benchmarks of ACV (50%) and relative total shareholder return (rTSR) (50%), with vesting after FY26. The Board has adopted the ACV measure for consistency with the Company’s reporting to shareholders and the market generally, and the rTSR measure to closely align management with shareholder interests. All five Executive KMP were eligible to participate in the FY24 LTIP. The awards will be delivered in performance rights and vest upon the release of the Company’s financial results in FY26. Table 13: FY24 LTI awards to Executive KMP Grant date fair value per performance right for each of the performance conditions Executive KMP Number of rights granted ACV ($) rTSR ($) Maximum LTI opportunity ($) Maximum LTI opportunity (% of TFR) Value of LTI awarded ($) % of FY24 LTI awarded % of FY24 LTI award forfeited Jonathan Rubinsztein 560,156 1.56 1.36 875,000 125% NA NA NA Chad Barton1 455,168 1.56 1.36 711,000 90% NA NA NA1 Warren Brugger 84,504 1.56 1.36 132,000 30% NA NA NA Jonathan Rees 100,876 1.56 1.36 157,847 30% NA NA NA Michael Smith 162,158 1.56 1.36 256,033 52% NA NA NA 1. Subsequent to Mr Barton’s departure on 30 August 2024, the FY24 LTI plan award has been forfeited. There is no exercise price for the rights granted. The performance rights will vest and be settled by the delivery of shares when the applicable vesting conditions have been satisfied. B. FY24 LTI key terms – further detail Table 14 below outlines the key terms attaching to the LTI awards granted to Executive KMP during FY24. Table 14: Key terms of FY24 LTI awards granted to Executive KMP FY24 Long Term Incentive Plan (LTIP) – 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 to each participant (including Mr Rubinsztein) is calculated by dividing the participant’s dollar value LTI opportunity for FY24 by the closing share price on the trading day immediately before the date of the grant date. Performance Period 1 July 2023 to 30 June 2026 Performance conditions and vesting schedule The FY24 LTI performance rights are subject to performance testing against the following performance conditions over the 3-year performance period: • ACV (50%); and • rTSR (50%). The ACV and rTSR targets are assessed at the end of FY26. If the targets are met, the performance rights will vest in the Company’s first open trading window following the release of its audited financial statements for FY26 in accordance with the below, unless otherwise already vested including as a result of a change of control event as outlined below. Specific ACV targets (which are compound annual growth rate targets (CAGR) over the 3-year performance period) will not be disclosed until the end of FY26 due to commercial sensitivity. In respect of the rTSR targets, this will be measured against a peer group comprising of companies in the ASX All Technology Index. 63 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report FY24 Long Term Incentive Plan (LTIP) – Key Terms Performance conditions and vesting schedule (cont.) ACV Performance (50% weighting) Level of vesting ACV targets Below Threshold 0% To be disclosed at the end of FY26 Threshold 20% To be disclosed at the end of FY26 Between Threshold and Target Between 20% and 50% determined on a linear sliding scale To be disclosed at the end of FY26 Between Target and Maximum Between 50% and 100% determined on a linear sliding scale To be disclosed at the end of FY26 Maximum 100% To be disclosed at the end of FY26 rTSR Performance (50% weighting) Level of vesting rTSR targets Below Threshold 0% < 50th percentile Threshold 50% Equal to 50th percentile Between Threshold and Maximum Between 50% and 100% determined on a linear sliding scale Between 50th and 75th percentile Maximum 100% Equal to or more than 75th percentile Treatment on cessation of employment The Board may specify in the terms of an invitation or make a determination as to how a KMP Awards will be treated on the occurrence of cessation of employment of the KMP. Applicable treatment may include: • vesting on the cessation date; • options only be exercisable within a specified period; or • lapse or forfeit of the Awards. Forfeiture and clawback In the event of an inappropriate circumstance, the Board retains the discretion to determine the treatment of Awards. Examples of inappropriate circumstance include (without limitation): • fraudulent or dishonest behaviour, serious misconduct or any breach of obligation to the Company; • acting in a manner that brings the Company into disrepute; and • any other circumstance which the Board determines in good faith constitutes an inappropriate circumstance. If an inappropriate circumstance occurs, the Board retains absolute discretion and may exercise its discretion to (amongst other things) determine that the Performance Rights (or Shares acquired on the exercise of Performance Rights) will lapse. Change of control The Board may specify in the terms of an invitation or make a determination as to how an employee’s Awards will be treated on the occurrence of 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 for us). This may include, subject to the ASX Listing Rules, with respect to each award, that: • Awards, to the extent not fully vested, will become vested and exercisable in full or in part; • Options may be exercised within a specific period only, otherwise they will lapse; • disposal restrictions or any other terms which apply to the Awards cease to apply; or • the Company, on behalf of the employee, will direct the trustee to transfer trust shares into the employee’s name. NUIX (ASX:NXL) // ANNUAL REPORT 2024 64 Remuneration Report 4.7 Retention & incentive grant 2023 (one-off grant) A. Overview The Retention & Incentive (R&I) Plan is designed to provide additional incentive to KMP to remain united and focused on the delivery, for the benefit of shareholders, of the strategic plan over the course of the FY24-FY26. The Board has strong conviction that the strategic plan, if delivered, will lead to material wealth creation for the Company’s shareholders. By structuring the R&I Plan around share-price growth hurdles and service conditions, this plan: • is fully aligned with increasing shareholder value; • complements the existing annual STI and LTI plans; and • provides strong incentive for the ELT and other critical talent to deliver across the next three year period whilst the strategic plan is achieved. All five Executive KMP were eligible to participate in the Retention & Incentive Grant 2023 (one-off grant). The awards will be delivered in performance rights and vest upon the release of the Company’s financial results in FY26. Table 15: FY24 R&I Plan awards to Executive KMP Executive KMP # Rights Allocated Value of R&I opportunity ($)1 Value of R&I opportunity as a % of TFR Value of R&I awarded ($) % of R&I awarded % of R&I award forfeited Grant date fair value Jonathan Rubinsztein 1,280,000 1,190,400 170% NA NA NA $0.93 Chad Barton 704,000 654,720 83% NA NA NA2 $0.93 Warren Brugger 384,000 357,120 81% NA NA NA $0.93 Jonathan Rees 384,000 357,120 69% NA NA NA $0.93 Michael Smith 384,000 357,120 72% NA NA NA $0.93 1. Calculated at fair market value of $0.93 per ordinary share. 2. Subsequent to Mr Barton’s departure on 30 August 2024, the FY24 R&I plan award has been forfeited. B. R&I Plan key terms – further detail Table 16 below outlines the key terms attaching to the R&I Plan awards granted to Executive KMP during FY24. Table 16: Key terms of R&I Plan awards granted to Executive KMP Retention & Incentive (R&I) Plan – Key Terms Eligibility A fixed pool of up to 6,400,000 performance rights to be issued to the ELT and other personnel who are identified or recruited to fill critical capability needs as determined by the Board. Awards The R&I Plan provides the Company with ability to grant performance rights. Each performance right entitles the holder to one fully paid ordinary share in the Company (or a cash equivalent payment at the discretion of the Board). Performance period 1 July 2023 to 30 June 2025 Vesting conditions The R&I Plan performance rights are subject to performance testing against the following share price hurdles: Share price hurdles Percentage of performance rights that will vest < $2.40 0% ≥ $2.40 to < $3.20 30% ≥ $3.20 to < $4.00 65% ≥ $4.00 100% Exercise price or Purchase price No exercise price or purchase price is payable in respect of performance rights granted under the R&I Plan. 65 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report Retention & Incentive (R&I) Plan – Key Terms Vesting and exercise Performance rights will vest and be settled by the delivery of shares (or, where applicable, cash) when the applicable vesting conditions have been satisfied. Lapsing Performance rights will lapse, on the occurrence of a date or circumstance specified in the award agreement (for example, upon failure to satisfy a vesting or performance condition). Dealing restrictions A participant may not deal with a performance right in any manner, other than as required by law or permitted by the Company’s Securities Trading Policy. Treatment on cessation of employment Where a participant ceases employment (or gives notice or receives notice in relation to the cessation of their employment) prior to the vesting of the performance rights, the treatment of those performance rights will depend on whether they are a Good Leaver or a Bad Leaver (as those terms are defined in the R&I Plan. If they are a Bad Leaver, their performance rights will lapse (unless the Board determines otherwise which it may do in its absolute discretion). If they are a Good Leaver, a pro-rated number (based on the proportion of the performance period served) of the performance rights will remain on foot and may vest subject to the performance conditions, with the remainder to lapse (unless the Board determines otherwise which it may do in its absolute discretion). Clawback In the event of an inappropriate circumstance, the Board retains the discretion to determine the treatment of Awards. Examples of inappropriate circumstance include (without limitation): • fraudulent or dishonest behaviour, serious misconduct or any breach of obligation to the Company; • acting in a manner that brings the Company into disrepute; and • any other circumstance which the Board determines in good faith constitutes an inappropriate circumstance. If an inappropriate circumstance occurs, the Board retains absolute discretion and may exercise its discretion to (amongst other things) determine that the performance rights (or shares acquired on the exercise of performance rights) will lapse. 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), (unless otherwise determined by the Board), a pro-rated number (based on the proportion of the performance period elapsed up to the date of the change of control event) of performance rights will vest subject to the share price hurdles being met if the relevant share price was instead the share price implied by the change of control event. Notwithstanding the above, if a change of control event occurs, the Board retains absolute discretion in respect of the treatment of the awards in the context of the relevant circumstances and may exercise its discretion to (amongst other things) waive any vesting condition and/or determine that any vesting condition is satisfied. ASX Listing Rules The R&I Plan and awards made under it are always subject to the ASX Listing Rules and applicable law. 4.8 One-off awards A. Sign-on equity for EVP Americas and EVP APAC and Alliances Nuix appointed a new EVP Americas and EVP APAC and Alliances in FY23. In order to attract executives of this calibre and wealth of experience, sign-on incentives were provided as summarised below: • EVP Americas: In recognition of incentives forfeited with his previous employer, Nuix provided a sign on grant at a face value of $300,000. The number of performance rights issued was 483,014, based on the 5-day VWAP being immediately preceding his start date (25 July 2022). The grant will be issued as performance rights and will vest subject to continuous service in the first trading window following the first and subsequent anniversary dates of the commencement date. Each vesting is subject to a continued service hurdle. In FY24, 96,603 rights (1/5) were vested to the Executive following the achievement of Year 1 of the continued service hurdle. • EVP APAC and Global Alliances: Nuix provided a sign on grant at a face value of $300,000. The number of performance rights issued was 519,930, based on the 5-day VWAP being immediately preceding the effective date of his contract (14 November 2022). The grant will be issued as performance rights and will vest subject to continuous service in the first trading window following the first and subsequent anniversary dates of the commencement date. Each vesting is subject to a continued service hurdle. In FY24, 103,986 rights (1/5) were vested to the Executive following the achievement of Year 1 of the continued service hurdle. NUIX (ASX:NXL) // ANNUAL REPORT 2024 66 Remuneration Report B. Exit Arrangements for COO/CFO It was announced that Chief Operating Officer & Chief Financial Officer (Mr Chad Barton) would step down at the end of August 2024 following the release of the FY24 results. The Board agreed the following exit arrangements with Mr Barton in recognition of his service to the Group as well as to ensure a smooth handover and transition: Departing KMP Exit Arrangements Chad Barton Chief Operating Officer/ Chief Financial Officer • Separation Payment • Eligible for FY24 STIP (to be assessed against Group financial metrics) • Earned but unvested Awards will be retained 4.9 Legacy option awards The EVP, EMEA has options that remain on foot that were granted to them prior to the IPO. These options are subject to remaining employed at vesting date. Refer to Table 17 for the number of options held and in table 10, the share-based payments include the cost of these options for this year. The former CEO (Rod Vawdrey) and CFO (Stephen Doyle) retained LTI options on departure in 2021. These options were tested against the FY23 Revenue and EBITDA performance in line with the contractual arrangements. The Board determined that 100% of the revenue target was achieved and 100% of the EBITDA target was achieved and therefore 100% of the available options vested to them. The exercise price for these options is $5.31. 4.10 Executive KMP remuneration statutory table The table below sets out Executive KMP remuneration for FY24 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. Table 17: Statutory remuneration table Short-term benefits Long-term benefits Share- based payments Separation payment Financial year Salary1 Cash bonus Non- monetary benefits2 Long service leave Super- annuation Equity Settled Separation payment Total Proportion of remuneration performance- related $ $ $ $ $ $ $ $ % Jonathan Rubinsztein FY24 694,619 309,167 7,416 – 27,399 1,019,531 – 2,058,132 60% FY23 721,181 336,000 1,961 – 25,292 719,282 – 1,803,716 49% Chad Barton FY24 774,808 305,467 – – 27,399 920,059 342,1253 2,369,858 48% FY23 820,382 303,360 – – 25,292 661,205 – 1,810,239 49% Warren Brugger FY24 452,692 131,340 – – 27,399 352,342 – 963,773 31% FY234 282,752 79,157 – – 18,771 205,573 – 586,253 24% Jonathan Rees FY24 526,155 62,068 – – 47,354 248,288 – 883,865 28% FY23 503,304 236,939 – – 19,678 254,526 – 1,014,447 36% Michael Smith FY24 336,291 362,646 – – 30,131 465,354 – 1,194,422 60% FY235 490,506 299,698 – – 8,174 362,290 – 1,160,668 42% TOTAL FY24 2,784,565 1,170,688 7,416 – 159,682 3,005,574 342,125 7,470,050 TOTAL FY23 2,818,125 1,255,154 1,961 – 97,363 2,202,876 – 6,375,479 1. Includes annual leave expenses recognised during FY24. 2. Includes benefits such as, but not limited to, the provision of car parking and fringe benefits tax (FBT). FBT included is in respect of the FBT year ended 30 June 2024. 3. The value shown represents 42.5% of the total Mr Barton’s separation payment accrued in 2024. The remaining 57.5% will payable following his exit from the business on 30 August 2024 and represented in Nuix’s FY25 remuneration report. 4. From 4 November 2022. 5. From 25 July 2022. 67 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report 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 Sub-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. Table 18: Non-Executive Director remuneration overview 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 (Sir Iain Lobban & Jeffrey Bleich) 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 19 sets out the fees (inclusive of superannuation) payable to the Non-Executive Directors of the Group in respect of FY24. The Chair and Deputy Chair do not receive separate fees for their participation in Board committees. The Non-Executive Directors did not receive a fee increase in FY24. NUIX (ASX:NXL) // ANNUAL REPORT 2024 68 Remuneration Report Table 19: Non-Executive Director fees for FY24 Position Fees for FY24 (Annualised) Chairman $240,000 Deputy Chairman $160,000 Directors $120,000 Committee chairman $20,000 Committee member $10,000 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. In FY24, these options lapsed for Mr Bleich and Sir Iain Lobban on 30 September 2023. 5.4 Non-Executive Directors – statutory remuneration The fees paid or payable to the Non-Executive Directors of the Group in respect of FY24 are set out in the table below. No fees paid or payable to the Non-Executive Directors of the Group were performance related. Table 20: FY24 Non-Executive Directors statutory remuneration table Short-term benefits Post- employment benefits Share based payments Non-Executive Director remuneration Financial year Salary & fees Super- annuation Options Total $ $ $ $ Robert Mactier FY24 216,216 23,784 – 240,000 FY23 171,041 13,549 – 184,590 Jeffrey Bleich FY24 157,773 – – 157,773 FY23 211,607 – – 211,607 Sir Iain Lobban FY24 119,516 – – 119,516 FY23 126,306 – – 126,306 Sue Thomas FY24 35,046 3,855 – 38,9011 FY23 129,035 13,549 – 142,584 Jacqueline Korhonen FY24 126,126 13,874 – 140,000 FY23 126,697 13,303 – 140,000 Sara Watts FY24 126,126 13,874 – 140,000 FY23 60,599 6,363 – 66,962 Alan Cameron FY24 122,122 13,433 – 135,5552 FY23 58,378 6,130 – 64,508 TOTAL FY24 909,925 68,820 – 971,745 TOTAL FY23 883,663 52,894 – 936,557 1. Fees for service rendered up to 18 Oct 2023. 2. Rate change effective 12 Dec 2023 for participation in Audit and Risk Committee. 69 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report 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. Table 21: 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 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 2024. NUIX (ASX:NXL) // ANNUAL REPORT 2024 70 Remuneration Report 6.3 Details of Executive Service Agreements Key terms of the service agreements of Executive KMP are summarised in Table 22 below. Table 22: Key terms of Executive KMP contracts in FY23 EXECUTIVE SERVICE AGREEMENTS Element Further detail Duration Permanent employees with an ongoing term. Periods of notice required to terminate The Group or Executive KMP may terminate the contract by giving the following notice: • CEO, COO/CFO and EVP APAC and Alliances - 6 months’ written notice • EVP EMEA and EVP Americas – 90 days 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, EVP APAC and Alliances and EVP Americas: 12 months • COO/CFO, EVP EMEA: 6 months 7. FURTHER INFORMATION 7.1 Executive KMP and Director share ownership Tables 23 and 24 below set out the number of shares held directly, indirectly or beneficially by KMP. Table 23: Movements in shareholdings not held under an employee share plan Opening balance Purchase of shares Disposal of shares Vesting of performance rights Other changes Balance 30 Jun 24 Non-Executive Directors Robert Mactier 175,000 – – – – 175,000 Jeffrey Bleich 135,000 – – – – 135,000 Sir Iain Lobban – – – – – – Sue Thomas 315,300 – – – – 315,300 Jacqueline Korhonen – – – – – – Sara Watts – – – – – – Alan Cameron 23,800 – – – – 23,800 Executive KMP Jonathan Rubinsztein 642,348 – – 252,579 – 894,927 Chad Barton 42,016 – – 189,683 – 231,699 Warren Brugger – – – 103,986 – 103,986 Jonathan Rees 4,610 – – – – 4,610 Michael Smith – – – 96,603 – 96,603 71 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report Table 24: Movements in options and performance rights held under an employee share plan Instrument Opening balance Granted Vested and exercised Forfeited Lapsed Balance 30 Jun 24 Vested and exercisable 30 Jun 24 Maximum value yet to vest1 Future vesting schedule Non-Executive Directors Robert Mactier Options – – – – – – – – – Jeffrey Bleich Options 240,000 – – – (240,000) – – – – Sir Iain Lobban2 Options 250,000 – – – (250,000) – – – – Sue Thomas Options – – – – – – – – – Jacqueline Korhonen Options – – – – – – – – – Sara Watts Options – – – – – – – – – Alan Cameron Options – – – – – – – – – Executive KMP Jonathan Rubinsztein Options – – – – – – – – – Performance Rights 2,206,022 1,950,682 (252,579) – – 3,904,125 – $2,016,420 FY25-FY28 Chad Barton Options – – – – – – – – – Performance Rights 1,686,418 1,264,799 (189,683) – – 2,761,534 – – – Warren Brugger Options – – – – – – – – – Performance Rights 641,314 485,395 (103,986) – – 1,022,723 – $673,654 FY25-FY28 Jonathan Rees Options 420,041 – – (45,834) – 374,207 241,140 – – Performance Rights 149,628 536,231 – – – 685,859 – $493,640 FY25-FY28 Michael Smith Options – – – – – – – – – Performance Rights 819,307 610,132 (96,603) – – 1,332,837 – $772,279 FY25-FY28 1. The maximum value of share rights yet to vest is determined based on the amount of the grant date fair value that is yet to be expensed. The minimum value of share rights yet to vest is nil since the share rights will be forfeited if the vesting conditions are not met. 2. Sir Iain Lobban held options through Cyberswift Ltd, an entity incorporated in the United Kingdom. There were no options or rights that we were vested but unexercisable at balance date. NUIX (ASX:NXL) // ANNUAL REPORT 2024 72 Remuneration Report 7.2 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. 73 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Remuneration Report FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2024 A.B.N. 80 117 140 235 A.C.N. 117 140 235 ASX CODE: NXL CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 75 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 76 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 77 CONSOLIDATED STATEMENT OF CASH FLOWS 78 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 79 CONSOLIDATED ENTITY DISCLOSURE STATEMENT 133 DIRECTORS’ DECLARATION 135 INDEPENDENT AUDITOR’S REPORT 136 74 NUIX (ASX:NXL) // ANNUAL REPORT 2024 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2024 Notes 2024 $000 2023 $000 Revenue 2.1 220,617 182,465 Cost of goods sold (21,645) (22,949) Gross profit 198,972 159,516 Sales and distribution (73,539) (65,039) Research and development (65,060) (58,382) General and administration Legal fees related to litigation matters1 (8,547) (7,816) Other general and administration (43,988) (35,398) Total general and administration (52,535) (43,214) Remeasurement of government grant income2 3 (3,051) – Other income 2.4 969 1,319 Net realised and unrealised foreign exchange gains 873 735 Operating profit/(loss) 6,629 (5,065) Finance costs 2.5 (890) (1,220) Finance income 2.6 292 – Fair value gain on contingent consideration 2,137 1,011 Profit/(Loss) before income tax 8,168 (5,274) Income tax expense 3.1 (3,142) (315) Profit/(Loss) for the year 5,026 (5,589) Other comprehensive income/(loss) Items that may be reclassified to profit or loss Exchange differences on translation of foreign operations (2,115) 4,074 Other comprehensive income, net of tax (2,115) 4,074 Total comprehensive income/(loss) for the year, net of tax 2,911 (1,515) Earnings per share Basic 2.8 0.02 (0.02) Diluted 2.8 0.02 (0.02) 1. Refer to Note 9.7, net of Insurance recoveries. 2. Refer to discussion on change in estimates associated with an uncertain tax position and related impact on measurement of government grant income, deferred government grant income and deferred tax assets in Section 3 of the notes to the financial statements. The consolidated statement of comprehensive income should be read in conjunction with the accompanying notes. 75 NUIX (ASX:NXL) // ANNUAL REPORT 2024 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS OF 30 JUNE 2024 Notes 2024 $000 2023 $000 Current assets Cash and cash equivalents 4.1 38,032 29,588 Trade and other receivables (including contract assets) 4.2 66,844 68,534 Other current assets 4.3 8,652 7,323 Current tax assets 3.4 1,832 1,441 Total current assets 115,360 106,886 Non-current assets Trade and other receivables (including contract assets) 4.2 21,664 12,566 Deferred tax assets 3.3 5,556 3,958 Intangible assets 5.1 243,933 244,567 Property and equipment 5.2 2,288 2,944 Right of use assets 5.3 8,277 8,647 Total non-current assets 281,718 272,682 Total assets 397,078 379,568 Current liabilities Trade and other payables 4.4 34,866 28,655 Deferred revenue 4.5 38,444 38,998 Provisions 4.6 3,177 3,000 Lease liabilities 5.3 3,189 3,028 Other current liabilities 9.1 3,949 9,839 Total current liabilities 83,625 83,520 Non-current liabilities Deferred revenue 4.5 7,683 15,947 Provisions 4.6 1,239 1,171 Lease liabilities 5.3 6,583 8,088 Deferred tax liabilities 3.3 8,548 – Other non-current liabilities 9.1 2,708 – Total non-current liabilities 26,761 25,206 Total liabilities 110,386 108,726 Net assets 286,692 270,842 Equity Issued capital 8.1 376,947 370,696 Reserves 8.2 (151,602) (156,175) Retained earnings 61,347 56,321 Total equity 286,692 270,842 The consolidated statement of financial position should be read in conjunction with the accompanying notes. NUIX (ASX:NXL) // ANNUAL REPORT 2024 76 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2024 Issued capital $000 Share based payment reserve $000 Foreign currency translation reserve $000 Treasury share reserve $000 Retained earnings $000 Total equity $000 Balance at 1 July 2022 370,696 (168,731) 5,192 – 61,910 269,067 Loss for the year – – – – (5,589) (5,589) Other comprehensive income – – 4,074 – – 4,074 Total comprehensive income/(loss) – – 4,074 – (5,589) (1,515) Transactions with owners Share-based payments – 3,466 – – – 3,466 Treasury shares acquired – – – (176) – (176) Treasury shares transferred to settle share-based payment arrangement – (176) – 176 – – Balance at 30 June 2023 370,696 (165,441) 9,266 – 56,321 270,842 Balance at 1 July 2023 370,696 (165,441) 9,266 – 56,321 270,842 Profit for the year – – – – 5,026 5,026 Other comprehensive income/(loss) – – (2,115) – – (2,115) Total comprehensive income – – (2,115) – 5,026 2,911 Transactions with owners Shares issued in relation to acquisition of Rampiva 3,041 – – – – 3,041 Shares issued in relation to acquisition of Topos 3,210 – – – – 3,210 Share-based payments – 6,688 – – – 6,688 Balance at 30 June 2024 376,947 (158,753) 7,151 – 61,347 286,692 The consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 77 NUIX (ASX:NXL) // ANNUAL REPORT 2024 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2024 Notes 2024 $000 2023 $000 Cash flows from operating activities Receipts from customers 200,224 165,188 Payments to employees and suppliers (148,199) (132,366) Interest received 63 19 Income tax paid (1,745) (277) Net cash provided from operating activities 2.7 50,343 32,564 Cash flows from investing activities Payments for software development costs (32,358) (37,233) Acquisition of Rampiva, net of cash acquired 8.3 (3,563) – Payments of consideration for Topos Labs, LLC 9.1 (1,793) (6,890) Purchase of property and equipment (741) (1,300) Net cash used in investing activities (38,455) (45,423) Cash flows from financing activities Payments of principal on lease liabilities (2,902) (2,880) Interest paid (544) (1,239) Purchase of treasury shares – (176) Net cash used in financing activities (3,446) (4,295) Net change in cash and cash equivalents 8,442 (17,154) Cash and cash equivalents at beginning of year 29,588 46,846 Exchange differences on cash and cash equivalents 2 (104) Cash and cash equivalents at end of year 38,032 29,588 The consolidated statement of cash flows should be read in conjunction with the accompanying notes. NUIX (ASX:NXL) // ANNUAL REPORT 2024 78 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. 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 9 September 2024. 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 2024, the Group is in a net current asset position of $31,735,000. At 30 June 2024, the Group had $38,032,000 available cash and cash equivalents (refer to Note 4.1) and the Group was cash flow positive during the year, notwithstanding legal fees related to litigation matters and cash payments relating to the acquisitions of Rampiva and Topos Labs. 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 net cash inflows in FY25, and the potential outcomes and timings of the regulatory and litigation matters as discussed in Note 9.7. The uncertainties attached to the unknown outcomes of the litigation matters together with the potential business impacts of the ongoing litigation matters and their attendant reputational and financial impacts, 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 a going concern basis. In forming this conclusion, the Directors have considered a cash flow forecast which considers the following assumptions, associated risks and mitigating factors: • cash flow forecasts include new pricing plans, customer migration to Nuix Neo, growth in revenue supported by the continued investment in sales capability and continued product development along with ongoing legal fees; • recent results of operating activities aligned with the Nuix strategy and improved 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 litigation action by the regulator as detailed in Note 9.7. In applying the assumptions and judgements, we have had regard to the penalty regime, views of our advisors and potential likelihood of outcomes. The Directors also have had regard to the Group’s options to appeal any adverse judgement, should one arise, and the associated usual appeal hearing timeframes. With the exception of legal fees, the forecasts do not include cash outflows related to any claims; 79 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS • the Company having entered into a debt financing agreement with The Hongkong and Shanghai Banking Corporation, Sydney Branch (HSBC) to provide an AUD $30,000,000 multicurrency revolving credit facility under a Facility Agreement, with a maturity of three years, to be used for general corporate purposes as detailed in Note 4.7. No amount has been drawn during the year. The outcomes of these indicate sufficient cash balances throughout the next 12 months. Based on the above, the Directors are satisfied that the Group will be able to continue to operate and have the ability to discharge its liabilities in the normal course of business for a minimum of the next twelve months. 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 80 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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. 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 2023. 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 2024 full year reporting and have not been early adopted by the Group. When they are required to be adopted, and whilst the Group is still assessing the impact of these new or amended standard and interpretations, 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. Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements is included in the following notes: • Determining whether the going concern basis of preparation remains appropriate – Note 1.3; • Identifying the performance obligations in contracts with customers, attributing value amongst the standalone selling price of various performance obligations identified within contracts, determining whether a significant financing component exists in a contract, and whether sales involving certain partners are where the partner acts as an agent of Nuix, or is a principal in the transaction – Note 2.1; • Determining the activities and costs that are required to be capitalised – Note 5.1; • Determining whether facts and circumstances give rise to a contingent liability, or are such that they establish that a provision is required – Note 9.7; and • Identifying CGUs and applying the required impairment tests – Note 5.4. 81 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes: • Uncertain tax treatments – Note 3; • Useful life of intangible assets – Note 5.1; and • Contingent consideration – Note 9.1. 1.9 Significant events and transactions During the year ended 30 June 2024, the Group has acquired Rampiva (refer Note 8.3), and entered into a Facility Agreement with The Hongkong and Shanghai Banking Corporation, Sydney Branch (HSBC) (refer Note 4.7). The Group also made a change in estimate relating to the measurement of historically recognised government grant income associated with accounting for R&D offsets claimed in the years FY16 through FY19 (refer Note 3). There were no other significant changes to the state of affairs of the Group during the year. 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 82 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 Employee share trust The Group has formed a Trust to administer the Group’s employee share scheme. This Trust is consolidated, as the substance of the relationship is that the trust is controlled by the Group. Shares held by the Nuix Limited Employee Share Trust are disclosed as treasury shares and included in issued capital. No treasury shares were acquired this year. 1.13 Classification of expenses 1.13.1 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. 1.13.2 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. 1.13.3 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. 1.13.4 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. 1.13.5 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. 1.13.6 Overhead allocation The presentation of the consolidated statement of 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. 83 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1.14 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 Note 9.1 for fair value disclosures related to contingent consideration. NUIX (ASX:NXL) // ANNUAL REPORT 2024 84 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 2024 $000 2023 $000 Software 212,377 176,691 Services 8,205 5,335 Revenue from events (sponsorship and ticket sales) 35 439 Total revenue 220,617 182,465 Disaggregation of revenue The Group disaggregates revenue by categories shown in the tables below: Revenue by type 2024 $000 2023 $000 Subscription licences 127,272 115,428 Perpetual licences 29,982 30,317 Consumption licences 55,123 30,946 Total licence revenues (including related support and maintenance) 212,377 176,691 Professional services 8,205 5,335 Revenue from events (sponsorship and ticket sales) 35 439 Total other revenues 8,240 5,774 Total revenues 220,617 182,465 Timing of revenue recognition 2024 $000 2023 $000 Point in time 142,909 114,933 Over time 77,708 67,532 220,617 182,465 85 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ACCOUNTING POLICIES i. Revenue recognition 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. 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 86 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS iv. Professional services revenue Professional services revenue mainly consists of fees charged for consultancy and training service. Where sold in combination with licences, and or support and maintenance of those licences, the group allocates a portion of consideration received for the professional services based on its relative stand alone selling price. Revenue from a contract to provide consulting and training services is recognised over time as the consulting and training is performed. v. Sale of licences to third party software The Group on occasion will arrange for licences to third party software to be provided a customer, in circumstances where the Group does not obtain control of the software nor provide an integrated product to the end customer. Revenue from the sale of these licences is recognised net of costs, when the contract is obtained for the third party software provider as this corresponds to the transfer of control of the goods to the Group’s customer. vi. Sponsorship and ticket sales for events The Group on occasion will host various marketing events, whereby customers can make a payment for tickets to attend and receive the benefits of networking and expanding their knowledge of the use cases of our products, and partners can pay to sponsor certain elements of the events in return for prominent locations to market their capabilities to our customers. Revenue is recognised at the time that the events are held. vii. 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. viii. 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. ix. Contract balances and other receivables Timing of revenue recognition may differ from the timing of invoicing to customers. The Group records a contract asset 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 contract asset for revenue recognised for multi-year on-premises licences, and a trade receivable when the Group has an unconditional right to invoice and receive payment. 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 of invoicing. 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. Where management have determined that a contract with a customer does include a significant financing component, the contract consideration is reduced by the financing component before allocating amounts to performance obligations, and it is recognised as interest income over the period commencing from when the financed performance obligation is delivered, until the relevant portion of total contract consideration is received. 87 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIGNIFICANT JUDGEMENTS AND ASSUMPTIONS Determination of contract term For licences to use the Group’s 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. 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 reseller partners are the only partner sales where the seller is considered an agent of Nuix. This is on the basis 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 88 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 2024 $000 2023 $000 Software 212,377 176,691 Services 8,205 5,335 Revenue from events (sponsorship and ticket sales) 35 439 Total revenue 220,617 182,465 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: 2024 $000 2023 $000 Net profit/(loss) after tax 5,026 (5,589) Add: Income tax expense 3,142 315 Profit/(loss) before income tax 8,168 (5,274) Add: Depreciation and amortisation 50,111 40,691 Add: Interest expense 890 1,220 Less: Net foreign exchange gains (873) (735) Less: Interest income (292) – Less: Fair value gain on contingent consideration (2,137) (1,011) EBITDA 55,867 34,891 Geographic Information Revenue generated by location of customer1 2024 $000 2023 $000 Asia Pacific 33,670 41,698 Americas 129,666 91,740 Europe, Middle East and Africa (EMEA) 57,281 49,027 220,617 182,465 1. The amounts for revenue by region in the following table are based on the invoicing location of the customer. 89 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Non-current assets by geographic location 2024 $000 2023 $000 Asia Pacific 140,749 143,400 Americas 139,026 128,137 Europe, Middle East and Africa (EMEA) 1,943 1,145 281,718 272,682 2.3 Profit/(Loss) for the year The profit/(loss) for the year has been arrived at after charging the following items: 2024 $000 2023 $000 Expenses (included in general and administration) Legal fees – other 5,282 2,909 Legal fees – litigation matters1 8,547 7,816 Bad debts expense 100 956 Low value/short term leases 1,046 1,018 Employee benefit expenses, inclusive of share-based payments Support and operations (costs of goods sold) 6,058 5,929 Sales and distribution 62,691 52,646 Research and development 16,499 19,227 General and administration 19,196 15,992 Depreciation and amortisation Sales and distribution 810 1,895 Research and development 46,550 36,688 General and administration 2,451 1,808 Cost of goods sold 300 300 Interest expense 890 1,220 Remeasurement of government grant income2 3,051 – Fair value gain on contingent consideration (2,137) (1,011) 1. Relates to costs for Group’s defences to the actions brought as disclosed in Note 9.7. This amount is presented net of amounts received from insurers. 2. Refer to discussion on change in estimates associated with an uncertain tax position and related impact on measurement of government grant income, deferred government grant income and deferred tax assets in Section 3. 2.4 Other income 2024 $000 2023 $000 Government grant income 904 1,080 Other income 65 239 969 1,319 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 90 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 2024 $000 2023 $000 Interest expense 879 1,220 Finance facility costs 11 – 890 1,220 ACCOUNTING POLICIES – INTEREST EXPENSE Interest expense comprises interest payable on financial liabilities calculated using the effective interest method, unwinding of the discount rate on lease liabilities, provisions and contingent or deferred consideration. 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. 2.6 Finance income 2024 $000 2023 $000 Interest income 292 – 292 – ACCOUNTING POLICIES – INTEREST INCOME Interest income comprises interest receivable on financial assets calculated using the effective interest method, and the interest earned on contracts with customers that contain a significant financing component. Where it is determined that a contract with a customer has a significant financing component, the unwinding of the discount rate applied to the cash flows expected to be received under the contract in consideration for performance obligations delivered at a time that is greater than 12 months from the expected cash flows, is recognised as interest income. 91 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.7 Reconciliation of cash flows from operating activities 2024 $000 2023 $000 Cash flows from operating activities Profit/(Loss) for the year (before income tax) 8,168 (5,274) Non-cash charges recognised in profit and loss: Depreciation 3,681 4,305 Amortisation of intangible assets 46,430 36,386 Amortisation of capitalised borrowing costs – 14 Bad debts expense 100 956 Share based payment expense 6,723 3,514 Net exchange rate differences 279 (34) Fair value gain on contingent consideration (2,137) (1,011) Remeasurement of government grant income 3,051 – Changes in assets and liabilities: Decrease in trade and other receivables (6,736) (19,584) Decrease in deferred tax asset (11,060) (156) (Increase)/decrease in other current assets (1,365) 713 Decrease in trade and other payables (3,576) (2,585) (Decrease)/increase in deferred revenue (8,022) 5,758 Increase in employee benefits provisions 6,509 4,458 Decrease in current tax liabilities (2,223) (316) Increase in deferred tax liabilities 10,548 – (Decrease)/increase in other liabilities (103) 5,371 Increase in provision for make good 76 49 Net cash from operating activities 50,343 32,564 NUIX (ASX:NXL) // ANNUAL REPORT 2024 92 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.8 Earnings per share 2024 $000 2023 $000 Profit/(Loss) for the year 5,026 (5,589) Weighted average number of ordinary shares (basic) 323,528,786 317,375,912 Basic earnings per share (in dollars) 0.02 (0.02) Profit/(Loss) for the year 5,026 (5,589) Weighted average number of ordinary shares (basic) 323,528,786 317,375,912 Shares issuable in relation to equity-based compensation schemes 19,257,383 9,595,8601 Effect of share options and performance rights Dilutive Antidilutive2 Diluted weighted average number of ordinary shares 333,124,646 326,971,772 Diluted earnings per share (in dollars) 0.02 (0.02) 1. Comprises potential ordinary shares issuable in relation to performance rights. Options are only considered in the calculation of diluted earnings per share when the current share price exceeds the option exercise price (in the money options). With the exception of 2,623,841 options issued pre-IPO, the share options that remain on-foot and are fully vested have exercise prices higher than the current share price, and therefore do not give rise to potential ordinary shares that are used in the calculation of diluted earnings per share. 2. In the year ended 30 June 2023, 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 2023. 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. 93 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 expense/(benefit) 2024 $000 2023 $000 Current tax expense Current tax on profits for the year 1,920 1,430 Changes in estimates related to prior years 522 (312) Total current tax expense 2,442 1,118 Deferred tax expense Increase/(decrease) in deferred tax assets 5,358 (2,495) (Decrease)/Increase in deferred tax liabilities (2,517) 1,075 Decrease in deferred tax assets (initially recognised directly in equity)1 788 788 Changes in estimates related to prior years (2,929) (171) Total deferred tax benefit/(expense) 700 (803) Income tax expense 3,142 315 1. Section 40-880 deduction recognized and amortized over 5 years in respect to the IPO costs incurred in December 2020, for the portion that was recognised directly in equity. NUIX (ASX:NXL) // ANNUAL REPORT 2024 94 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.2 Reconciliation of effective tax rate 2024 $000 2023 $000 Profit/(loss) before income tax expense 8,168 (5,274) Tax at the Australian tax rate of 30% (2023: 30%) 2,450 (1,582) Tax effect of amounts which are not deductible (taxable) in calculating taxable income: Entertainment 110 32 Share-based payments 2,017 1,067 Interest expense 56 14 Difference in overseas tax rates (357) (861) Benefit of Australia R&D tax credit amortised to other income 644 (324) Benefit of United States R&D tax credit recognised in income tax expense – (968) Benefit of Australia R&D tax credit recognised in income tax expense (121) (1,221) Non-deductible R&D expenditures – 951 Recognition of permanent benefits on R&D at 8.5% – 270 Deferred tax assets not brought to account – Nuix Limited1 – 2,610 Deferred tax assets recognised in current year, not previously brought to account – Nuix Limited1 (2,610) – Changes in estimates related to prior years – Nuix Limited 145 (183) Changes in estimates related to prior years – Nuix North America and other subsidiaries 145 (130) Others 663 640 Income tax expense 3,142 315 1. In FY23, deferred tax assets have not been brought to account for tax losses incurred by Nuix Limited to the extent that they were not covered by deferred tax liabilities as the utilisation of the tax losses was not regarded as sufficiently probable at 30 June 2023. As of 30 June 2024, as the quantum of the deferred tax assets recognised in Nuix Limited that is not offset by deferred tax liabilities has reduced to nil, it is considered that there has been a change such that there are now sufficient sources of assessable income that the valuation provision against deferred tax assets recognised in Australia is required to be reversed as of 30 June 2024. Refer to discussion below for further disclosures relating to unrecognised tax assets. 95 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.3 Deferred tax balances Deferred tax assets 2024 $000 2023 $000 Research and development tax credit to carry forward – Australia1 9,870 14,433 Research and development tax credit to carry forward – United States 984 3,980 Employee benefits 3,895 2,088 Deferred revenue 8,084 6,990 Lease liabilities 2,022 2,562 Tax losses 15,250 16,384 s40-880 “black hole” deductions related to IPO costs 3,024 6,048 Others 1,837 92 Total deferred tax assets 44,966 52,577 Set-off deferred tax liabilities pursuant to set-off provisions (39,410) (48,619) Net deferred tax assets 5,556 3,958 1. As a result of a change in estimate regarding an uncertain tax position, the balance for deferred tax assets relating to the carried forward Australian R&D offsets has reduced by $3,906,000. Additionally in the current year, separate to the change in estimate relating to the uncertain tax position, there was a true up of the opening balance for deferred tax assets of $657,000 relating to estimates made in FY23 and various prior years as to the amount of R&D offsets claimed in those years. Deferred tax liabilities 2024 $000 2023 $000 Intellectual property 45,143 45,233 Right of use assets 1,699 1,975 Property and equipment 1,101 1,411 Others 15 – Total deferred tax liabilities 47,958 48,619 Set-off deferred tax assets pursuant to set-off provisions (39,410) (48,619) Net deferred tax liabilities 8,548 – 3.4 Current tax assets/(liabilities) 2024 $000 2023 $000 Opening balance 1,441 1,918 Current income tax provision (net of tax credits) (1,332) (968) Income tax payments 1,745 277 Changes in estimates related to prior years (11) 154 Foreign exchange difference (11) 60 Closing balance 1,8321 1,441 1. The current tax liability account is in a net refund position primarily due to refunds expected to be received from the US Internal Revenue Service as a result of amended returns filed in FY24. Under the tax loss carry back rules for US tax purposes, Nuix North America Inc. amended the FY15 to FY19 tax returns to apply the tax losses incurred in those years and is expected to result to a cash refund. NUIX (ASX:NXL) // ANNUAL REPORT 2024 96 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 – at the time of the transaction i) affects neither accounting nor taxable profit or loss and ii) does not give rise to equal taxable and deductible temporary differences; • 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 rather a 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. 97 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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. 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 Uncertainty over income tax treatments In the current and prior periods as disclosed in the Prospectus and previous annual financial reports, the Group has exercised judgement in recognising and measuring Research and Development (‘R&D’) tax offsets available under Australian tax legislation relating to eligible R&D expenditure incurred on eligible overseas development activities and 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 an Advance Finding and Overseas Finding for the years ended 30 June 2016 (FY16) to 30 June 2018 (FY18). As the registered R&D activities were considered to be continuing into the year ended 30 June 2019 (FY19) claims continued to be made in relation to spend in FY19. The Group has exercised judgement in prior years in assessing that it was probable that the relevant taxation authority would accept the Group’s tax treatment for the Endpoint Project for the years FY16 to FY19. This judgement remained consistent in the preparation of the Groups’ financial statements from FY20 through 1H FY24. In 1H FY24, the regulator commenced a review of Nuix’s tax affairs covering the period from FY16 to FY22. As a result of certain developments during the review and due to additional information which has been identified in the course of Nuix responding to requests from the regulator, the Group has reconsidered the likelihood of the taxation authority continuing to accept the Group’s tax treatment for the Endpoint Project. As a result, and while the matter is finely balanced, the Group considers there may be a risk that the tax authority would not accept the Group’s tax treatment for the Endpoint Project for the years FY16 to FY19 and has remeasured various tax balances. In determining the impact of this change in judgement, consideration has been given as to whether the spend giving rise to the R&D offsets in the lodged returns subject to scrutiny would otherwise be deductible for tax purposes in the year of expenditure and not treated as capital or capital in nature. SIGNIFICANT JUDGEMENTS AND ASSUMPTIONS Uncertainty over income tax treatments In the current and prior periods as disclosed in the Prospectus and previous annual financial reports, the Group has exercised judgement in recognising and measuring Research and Development (‘R&D’) tax offsets available under Australian tax legislation relating to eligible R&D expenditure incurred on eligible overseas development activities and 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 an Advance Finding and Overseas Finding for the years ended 30 June 2016 (FY16) to 30 June 2018 (FY18). As the registered R&D activities were considered to be continuing into the year ended 30 June 2019 (FY19) claims continued to be made in relation to spend in FY19. The Group has exercised judgement in prior years in assessing that it was probable that the relevant taxation authority would accept the Group’s tax treatment for the Endpoint Project for the years FY16 to FY19. This judgement remained consistent in the preparation of the Groups’ financial statements from FY20 through 1H FY24. In 1H FY24, the regulator commenced a review of Nuix’s tax affairs covering the period from FY16 to FY22. As a result of certain developments during the review and due to additional information, which has been identified in the course of Nuix responding to requests from the regulator, the Group has reconsidered the likelihood of the taxation authority continuing to accept the Group’s tax treatment for the Endpoint Project. As a result, and while the matter is finely balanced, the Group considers there may be a risk that the tax authority would not accept the Group’s tax treatment for the Endpoint Project for the years FY16 to FY19 and has remeasured various tax balances. In determining the impact of this change in judgement, consideration has been given as to whether the spend giving rise to the R&D offsets in the lodged returns subject to scrutiny would otherwise be deductible for tax purposes in the year of expenditure and not treated as capital or capital in nature. NUIX (ASX:NXL) // ANNUAL REPORT 2024 98 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Accounting standards require the benefit from the R&D offset above the 30% corporate tax rate be subject to government grant accounting. As a result, any changes to R&D offsets recognised from amounts claimed in relation to R&D activities, has an impact on amounts recognised as other income. The impact of the change in accounting estimate in the current period has been that there is a reduction in deferred tax assets of $3,906,000, a reduction in deferred government grant income of $796,000, a reversal of historically recognised government grant income of $2,666,000 and a reduction in government grant income recognised in the current year of $385,000. The impact of the change in estimate on the FY24 profit and loss is $3,051,000. The change in estimate has not resulted in the identification of any shortfall in payments for income tax in previous periods, and is a non-cash adjustment. 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 have concluded that sufficient taxable differences will reverse and/ or it is sufficiently probable that future taxable profits will be generated to allow the Group to benefit from the deferred tax asset recognized at the reporting date. Accordingly as of 30 June 2024, no valuation adjustment is required to be recognised against deferred tax assets and they are recognised in full (30 June 2023: valuation adjustment of $2,610,000 was recognised against deferred tax assets recognised in Nuix Limited). 3.5 Income tax paid by legal entity1 2024 $000 2023 $000 Nuix North America Inc 1,556 243 Nuix Ireland Ltd 113 1 Nuix Limited 11 4 Nuix Holding Pty Ltd 22 17 Nuix Philippines Regional Operating Headquarters 32 8 Nuix Pte. Ltd. 11 4 Nuix Technology UK Ltd2 – – 1,745 277 1. Refer the consolidated entity disclosure statement, which disclosures the tax residency of all entities in the group. 2. Nuix Technology UK has utilised carried-forward tax losses to reduce income tax payable to nil. 99 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.6 Franking credits Franking credits arising from the payments of income tax, by Nuix Limited in prior years until 30 June 2024 are represented below. Franking credits attributable to the Company 2024 $000 2023 $000 Franking credits available for subsequent financial years based on a tax rate of 30% (2023: 30%) 669 669 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 (2024: Nil); • franking debits that will arise from the payment of dividends recognised as a liability at the reporting date (2024: Nil); and • franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date (2024: 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 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 2024 $000 2023 $000 Bank balances 38,032 29,588 Total cash and cash equivalents 38,032 29,588 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) 2024 $000 2023 $000 Trade receivables 36,639 41,634 Provision for impairment of trade receivables and contract asset (1,791) (1,702) Contract assets 53,322 40,422 Other investment (cash backed bank guarantee) – 746 Other deposits 338 – Total trade and other receivables 88,508 81,100 NUIX (ASX:NXL) // ANNUAL REPORT 2024 100 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Presentation of balances 2024 $000 2023 $000 Current 66,844 68,534 Non-current 21,664 12,566 Total trade and other receivables 88,508 81,100 Ageing of overdue receivables 2024 $000 2023 $000 1 – 3 months 3,811 6,918 4 – 6 months 153 1,234 Over 6 months 1,169 736 5,133 8,888 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 licenses that cover a multiyear period. As the term of a license is a characteristic of the license 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 license is recognised as revenue when the license is delivered to the customer, the contractual term of the license period begins, and the customer can benefit from having the license. Refer to Note 1.10 for accounting policies and disclosures related to financial instruments. 4.3 Other current assets 2024 $000 2023 $000 Prepayments 5,464 5,504 Costs of obtaining contracts 1,677 1,485 Other receivables 1,511 334 Total other current assets 8,652 7,323 101 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4.4 Trade and other payables 2024 $000 2023 $000 Sundry payables and accrued expenses 29,439 22,397 Trade payables 3,201 4,215 Customer deposits 197 54 Payroll tax and other statutory liabilities 644 852 Indirect taxes payable 1,385 1,137 Total trade and other payables 34,866 28,655 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 in the normal course of business within 45 days of recognition or according to the payment agreement. 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 2024 $000 2023 $000 Customer-related (contract liabilities) Support and maintenance on term licences 13,528 20,669 Term licences (billed) commencing post balance date 1,804 3,890 Support and maintenance on perpetual licenses 16,026 16,077 Consumption income 7,987 7,510 Professional services income 4,924 3,060 44,269 51,206 Tax incentive-related Research and development 1,858 3,739 Total deferred revenue 46,127 54,945 Movements during the year of tax incentive related deferred revenue 2024 $000 2023 $000 Opening balance 3,739 4,916 Other income recognised in the current year (904) (1,080) Change in estimates related to uncertain tax position1 (796) – Other changes in estimates (181) (366) Additional research and development incentive – 269 Closing balance 1,858 3,739 1. Refer to discussion in Section 3 on change in estimate relating to an uncertain tax position. NUIX (ASX:NXL) // ANNUAL REPORT 2024 102 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Presentation of balances 2024 $000 2023 $000 Current 38,444 38,998 Non-current 7,683 15,947 Total deferred revenue 46,127 54,945 Revenue recognised in the year included in the opening deferred revenue balance Revenue recognised in the year that was included in the deferred revenue balance at the beginning of the year amounted to $47,399,000 (2023: $30,211,000). Transaction price allocated to remaining performance obligations Remaining performance obligations represents the total contractual commitments for which services will be performed. Remaining performance obligations include deferred revenue, which primarily consists of billings, unbilled receivables or payments received in advance of revenue recognition. The transaction price allocated to remaining performance obligations is $84,156,000 (2023: $63,814,000). Approximately 43.5% (2023: 73.9%) of the remaining performance obligations are expected to be recognised over the next 12 months with the remainder recognised thereafter. 4.6 Provisions 2024 $000 2023 $000 Current Annual leave 2,963 2,704 Long service leave 214 296 3,177 3,000 Non-current Long service leave 327 286 Make good obligation 912 885 1,239 1,171 Movements in make good obligation during the year 2024 $000 2023 $000 Make good obligation Opening balance 885 836 Charged to profit or loss 27 49 Closing balance 912 885 103 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 and obligations are discounted to a present value using a rate consistent with that of high quality corporate bonds. 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 During the year, Nuix Limited has entered into an agreement with The Hongkong and Shanghai Banking Corporation, Sydney Branch (HSBC), to provide a AUD $30,000,000 multicurrency revolving credit facility to the Company. HSBC has committed to provide the debt facilities under a new secured facility agreement (“Facility Agreement”), subject to the satisfaction of customary conditions precedent. Overview of Facility Agreement Terms: • Facility Amount: AUD $30,000,000 with an AUD $2,000,000 bank guarantee sub-limit. • Maturity of three years. • The new facility is to be utilised for general corporate purposes of the Company, other than costs associated with litigation, arbitration or administrative proceedings. • The Facility Agreement includes customary representations and warranties, undertakings and events of default and review events for a financing of this nature. • Amounts owing under the Facility Agreement are secured by the assets of the Company and its material subsidiaries. The Company has a CBA bank guarantee for the amount of $746,460 to support Nuix Limited’s obligation for a property lease for its headquarters in Australia. This obligation is cash backed by the Group. Nuix Limited’s obligations in respect to the bank guarantee are contingent only. 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 104 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 “normalize 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 FY22, 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 complete, enabling Nuix to make available to customers of Nuix platform products occurred in earnest throughout FY22 and FY23, culminating in the General Availability release of Nuix Neo in July 2023. Nuix acquired Rampiva Global, LLC and Rampiva Technology, Inc. during FY24, to meet greater productivity demands by automating data processing tasks of Nuix’s customers. The transaction brings to the Group the Rampiva team, technological capabilities, and cross-sell and growth opportunities for both Nuix and Rampiva customers. As licences of the Rampiva software are complimentary to the offerings of licences to Nuix’s software as of the date of acquisition, it was determined that the cash inflows of attributable to the Rampiva intellectual property were already substantially integrated with that of the existing cash inflows for Nuix intellectual property such that there were no changes to the identified cash generating units of the group as a result of the acquisition of Rampiva. Following a strategic review of the orchestration capabilities of the in house developed Nuix Automation and the acquired Rampiva intellectual property respectively, market trends and customer feedback, it was determined that Nuix would focus energy and investment in Rampiva as our orchestration product. This necessitated a change in estimate of the remaining useful life of the Nuix Automation intellectual property, as it is not expected that customers with licences to use Nuix Automation which extend to 30 June 2025, would renew these licences. The remaining carrying value of Nuix Automation will be amortised in full by 30 June 2025, as all customers using Nuix Automation are expected to have transitioned onto using Rampiva as their orchestration product for Nuix software. The current year impact from acceleration of amortisation for Nuix Automation was $4,516,000, with the remaining carrying value of $6,773,000 to be amortised in FY25. 105 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5.1 Intangible assets Reconciliation of carrying amount Goodwill $000 External licenses $000 Brand $000 Customer relationships $000 Intellectual property $000 Total $000 Year ended 30 June 2023 Balance at 1 July 2022 18,401 1,031 570 – 217,123 237,125 Effect of movements in exchange rates – cost 711 65 32 – 4,821 5,629 Effect of movements in exchange rates – accumulated amortisation & impairment – (64) (14) – (1,663) (1,741) Additions – – – – 39,940 39,940 Amortisation – (348) (210) – (35,828) (36,386) Balance at 30 June 2023 19,112 684 378 – 224,393 244,567 Carrying amount at 30 June 2023 At cost 19,112 3,851 855 – 380,983 404,801 Accumulated amortisation & impairment – (3,167) (477) – (156,590) (160,234) Balance at 30 June 2023 19,112 684 378 – 224,393 244,567 Year ended 30 June 2024 Balance at 1 July 2023 19,112 684 378 – 224,393 244,567 Effect of movements in exchange rates – cost (216) (13) (8) – (1,114) (1,351) Effect of movements in exchange rates – accumulated amortisation & impairment – 14 4 – 690 708 Acquisition via business combination1 3,407 – 111 139 8,318 11,975 Additions – – – – 34,464 34,464 Amortisation – (309) (297) (77) (45,747) (46,430) Balance at 30 June 2024 22,303 376 188 62 221,004 243,933 Carrying amount at 30 June 2024 At cost 22,303 3,838 958 139 422,651 449,889 Accumulated amortisation and impairment – (3,462) (770) (77) (201,647) (205,956) Balance at 30 June 2024 22,303 376 188 62 221,004 243,933 1. Following the acquisition of Rampiva, the US Dollar denominated balances of the intangible assets acquired as a part of the business combination are: Goodwill: US $2,273,000; Brand: US $74,000; Customer relationships: US $93,000; Intellectual property: US $5,548,000. 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 1 July 2023 and the year end date 30 June 2024. The balances in Note 8.3 were presented using foreign exchange rate at 1 July 2023 (1.51 AUD to 1 USD) whereas the balances in Note 5.1 were translated using the foreign exchange rate at 30 June 2024 (1.50 AUD to 1 USD). NUIX (ASX:NXL) // ANNUAL REPORT 2024 106 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 licenses External software licenses 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 asset Depreciation rate (per year) External software 20% – 33% Brand 25% – 100% Intellectual Property 10% – 20% 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. 107 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5.2 Property and equipment Reconciliation of carrying amount Office & computer equipment $000 Furniture & fixtures $000 Leasehold improvement $000 Total $000 Year ended 30 June 2023 Balance at 1 July 2022 1,324 615 1,101 3,040 Effect of movements in exchange rates – cost 454 66 146 666 Effect of movements in exchange rates – accumulated depreciation (426) (45) (115) (586) Additions 1,073 100 127 1,300 Disposals – – – – Depreciation (975) (213) (288) (1,476) Balance at 30 June 2023 1,450 523 971 2,944 Carrying amount at 30 June 2023 At cost 14,192 1,900 5,023 21,115 Accumulated depreciation (12,742) (1,377) (4,052) (18,171) Balance at 30 June 2023 1,450 523 971 2,944 Year ended 30 June 2024 Balance at 1 July 2023 1,450 523 971 2,944 Effect of movements in exchange rates – cost (100) (11) (34) (145) Effect of movements in exchange rates – accumulated depreciation 89 10 45 144 Additions 602 6 132 740 Disposals – – – – Depreciation (940) (154) (301) (1,395) Balance at 30 June 2024 1,101 374 813 2,288 Carrying amount at 30 June 2024 At cost 14,694 1,895 5,121 21,710 Accumulated depreciation (13,593) (1,521) (4,308) (19,422) Balance at 30 June 2024 1,101 374 813 2,288 NUIX (ASX:NXL) // ANNUAL REPORT 2024 108 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 33% Furniture and fixtures 20% Leasehold improvements Lower of lease term and useful life (10-33%) 5.3 Leases The Group primarily leases various office space. These leases typically run for a period of three to five years. Rental contracts are typically made for fixed periods but may have extension options. Amounts recognised in the balance sheet 2024 $000 2023 $000 Right of use assets, net of depreciation 8,277 8,647 Lease liabilities Current 3,189 3,028 Non-current 6,583 8,088 Lease liabilities 9,772 11,116 Right of use assets 2024 $000 2023 $000 Balance at 1 July 8,647 11,189 Additions 1,935 – Depreciation expense (2,646) (2,829) Reassessment 360 – Exchange difference (19) 287 Balance at 30 June 8,277 8,647 109 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Amounts recognised in profit and loss 2024 $000 2023 $000 Depreciation charge of right-of-use assets 2,646 2,829 Impact of reassessment (359) – Interest expense (included in finance cost) 178 560 Expenses relating to short-term leases 993 1,011 Expenses relating to leases of low-value assets that are not shown above as short-term leases 53 7 3,510 4,407 Amounts recognised in statement of cash flows 2024 $000 2023 $000 Total cash outflow for leases 3,422 3,441 Extension options Some property leases contain extension options exercisable by the Group of 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 $6,077,000 (2023: $6,053,000). 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. 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 110 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 Reassessment of identification of CGUs Management had previously identified that on the acquisition of Topos Labs, LLC that the group would have two CGUs until the completion of the integration of Topos Labs, LLC with the Nuix platform CGU. In May 2023, it was announced internally that the NLP team had formally joined their respective functional streams within Product, Engineering and Solution Consulting. Additionally it is anticipated that Nuix Neo (which is the product that embeds both the Nuix Engine and Nuix NLP functionality) will be available for General Availability in Q1 F24. As a consequence, management determined that the Topos Labs, LLC CGU no longer exists, and it has been subsumed into the Nuix platform CGU as of 30 June 2023. As noted in the introduction to Section 5, the customers of Rampiva prior to it’s acquisition by Nuix on 1 July 2023 were all existing Nuix customers. The existing Rampiva customers had acquired licences to use Rampiva’s intellectual property, which is complimentary to the offerings of the licences to the Nuix intellectual property. From the date of acquisition of Rampiva, its cash flows were considered to be substantially integrated with that of the existing Nuix platform CGU, and accordingly there was no changes to the identified CGUs of the group and all goodwill from the acquisition of Rampiva was allocated to the Nuix platform CGU. 2024 $000 2023 $000 Goodwill allocated to Nuix platform CGU 22,772 19,112 22,772 19,112 111 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Key assumptions in determining the recoverable amount of the Nuix platform CGU The recoverable amount of a CGU, is the higher of an the CGU’s fair value less costs of disposal or value in use. In the current period, fair value less costs of disposal derived the higher value for the Nuix platform CGU. The fair value less costs of disposal considers 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, and an estimate of the costs of disposal. In modelling forecast revenues, gross margins and expenses for the Group, management have used the FY25 board-approved budget as an input, with revenue growth of between 10 and 15% during the five-year period. The perpetuity growth rate was set consistent with consensus views on long term GDP growth rates. The measurement of the fair value less costs of disposal of the Nuix platform CGU is considered to be a Level 3 measure of fair value (as described in Note 1.15). The following inputs and assumptions have been adopted: 2024 2023 Post-tax discount rate per annum 11.8% 11.5% Pre-tax discount rate per annum 16.8% 16.4% Long-term perpetuity growth rate 2.5% 2.5% 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. As the recoverable amount of the CGU exceeds the carrying amount by more than $100 million, impairment testing is not sensitive to changes in the inputs. 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. 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 112 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 the acquisition of Rampiva has not resulted in a change to the identification of CGUs of the group, as the cash inflows of Rampiva were already substantially integrated with those of the Nuix platform CGU. Management prepared a discounted cash flow model to determine the fair value less cost to sell for the Nuix platform CGU which is based upon the financial plans approved by the Board for the year ending 30 June 2025, the closing balance sheet for the year ended 30 June 2025, expectations around realisation of assets and settlements of liabilities on balance sheet as of 30 June 2024, projected revenues, gross margins and expenses determined with reference to historical company experience, industry data, management’s expectations for the future and an estimated cost of disposal. This fair value less cost of disposal model determined a recoverable amount in excess of the carrying amount of the Nuix platform CGU, and accordingly no impairment has been recognised. 113 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 2024 $000 2023 $000 Wages and salaries Sales and distribution 59,994 51,530 Research and development1 15,326 17,052 General and administration 16,390 15,935 Support and operations (included in cost of goods sold)2 6,010 5,763 97,720 90,280 Share-based payment expenses Sales and distribution 2,697 1,116 Research and development1 1,173 2,175 General and administration 2,806 57 Support and operations (included in cost of goods sold)2 48 166 6,724 3,514 1. Wages and salaries and share-based payment expenses disclosed for the research and development function 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 $30,517,000 during the year ended 30 June 2024 (2023: $33,672,000), with the remaining amounts capitalised being directly attributable costs and incremental overheads of development activities. As per Note 5.1, a total amount of $34,464,000 was capitalised for development activities during the year ended 30 June 2024 (2023: $39,940,000) 2. Presented in the face of the financial statements as cost of goods sold in the prior year, however as the underlying nature of the expense is an employee benefit expense is now being disclosed as part of this note. NUIX (ASX:NXL) // ANNUAL REPORT 2024 114 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 Incentive Plan. Share-based compensation arrangements involving share rights are granted on various dates, and are generally for a specific number of rights which convert to shares upon vesting. The fair value of these share-based payment arrangements using share rights is generally determined to be the function of the number of share rights granted and the share price at grant date; unless the grant was subject to market based vesting conditions which are factored into the grant date fair values. Where a share-based compensation arrangement involves the use of options, the fair value of the options is determined using a Black Scholes model with inputs for 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. Vesting is dependent on continued employment with the Group and in certain circumstances meeting predefined non-market performance conditions. Non-market vesting conditions are included in assumptions about the number of options and share rights that are expected to vest. The fair values of options and share rights granted under the plans are recognised as a share-based payments expense generally with a corresponding increase in equity over the period that the vesting conditions are met. The total amount to be expensed is determined by reference to the grant date fair value of the options and share rights granted. At the end of each reporting period, the Company revises estimates of the number of options and share rights that are expected to vest based on the non-market vesting conditions. It generally recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. 115 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 6.2 Share based payments Instruments on issue 30 Jun 2024 30 Jun 2023 Options 1,882,713 3,094,383 Performance Rights 19,002,348 9,595,8601 1. Includes performance rights related to FY24 minimum revenue, EBITDA, and ACV growth targets for CEO and COO/CFO, sign-on performance rights for KMP and non-KMP executives granted upon sign-on in FY23, and special performance rights for key staff members granted in FY23. 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 was undetermined as of 30 June 2023. Details related to the performance rights are as follows: Grant name/employees entitled Number of instruments Vesting condition Vesting date Performance rights with performance hurdles Performance rights granted to KMP FY22 LTI performance rights granted to CEO and COO/CFO 573,419 Minimum revenue, EBITDA targets and employment 31 Aug 2024 31 Aug 2025 31 Aug 2026 FY23 LTI performance rights granted to executive KMP 2,930,966 ACV growth and employment 31 Aug 2023 31 Aug 2024 31 Aug 2025 FY23 STI performance rights granted to executive KMP 348,377 ACV growth and employment 31 Aug 2025 FY24 LTI performance rights granted to executive KMP 1,362,862 ACV growth, relative TSR and employment 31 Aug 2026 FY24 Retention and incentive performance rights granted to executive KMP 3,136,000 Share price target and employment 31 Aug 2026 Performance rights granted to non KMP FY23 LTI performance rights 773,922 ACV growth and employment 31 Aug 2024 31 Aug 2025 FY23 STI performance rights 81,245 ACV growth and employment 31 Aug 2025 March 2023 Special performance rights grant 2,808,325 ACV growth and employment 31 Aug 2024 28 Feb 2025 FY24 LTI performance rights 491,656 ACV growth, relative TSR and employment 31 Aug 2026 FY24 Retention and incentive performance rights 2,752,000 Share price target and employment 31 Aug 2026 FY24 Critical talent equity grant 1,327,009 ACV growth and employment 31 Aug 2026 Performance rights with no performance hurdles Sign-on performance rights granted to KMP 1,355,453 4 years service from grant date Sign-on performance rights granted to non KMP 298,432 4 years service from grant date FY23 Performance rights granted to non KMP 762,682 Employment 31 Aug 2024 31 Aug 2025 Total performance rights on issue 19,002,348 Further details of the FY24 LTI and Retention and Incentive Grant 2023 (one-off grant) are outlined in the Remuneration Report. NUIX (ASX:NXL) // ANNUAL REPORT 2024 116 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Reconciliation of the number of options and performance rights is provided below: Options Performance Rights 1 Jul 2023 to 30 Jun 2024 1 Jul 2022 to 30 Jun 2023 1 Jul 2023 to 30 Jun 2024 1 Jul 2022 to 30 Jun 2023 Opening balance (1 July) 3,094,383 4,527,969 9,595,860 1,024,634 Forfeitures (721,670) (1,433,586) (393,881) – Expired (490,000) – – – Performance rights granted – – 8,694,900 5,008,253 Grant under LTIP – – 1,854,518 3,747,337 Exercised – – (749,049) (184,364) Closing balance (30 June) 1,882,713 3,094,383 19,002,348 9,595,860 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 There were no options granted in either of FY24 or FY23, however the fair value of options granted in previous reporting periods continues to be recognised in profit and loss as the vesting conditions are satisfied. 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. C. Fair value of performance rights granted The assessed fair value at grant date of the performance rights granted during the year 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. The grant date fair values of the portion of the share rights associated with the FY24 LTIP based on relative Total Shareholder Return (rTSR) performance, and the Retention and Incentive plan one-off grant, were determined using Monte Carlo simulations. The key inputs to the valuations included the risk free rate (determined with reference to the implied zero-coupon curve from Australian government bonds), the expected dividend yield (nil, based on Nuix historical and anticipated dividend payouts during the term of the arrangements), the expected volatility of Nuix shares, and where relevant it’s correlation to each entity in the comparator group, and the expected life of the instruments. 117 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS There were 9,848,789 performance rights granted during the year with a grant date fair value between $0.91 and $1.56 which are linked to service requirements that conclude between release of the FY24 Group results and May 2028. D. Reconciliation of outstanding share options 1 Jul 2023 to 30 Jun 2024 1 Jul 2022 to 30 Jun 2023 Reconciliation Number of options Weighted-average exercise price Number of options Weighted-average exercise price Opening balance (1 July) 3,094,383 $4.42 4,527,969 $4.72 Expired during the year (490,000) $5.01 – – Granted during the year – – – – Forfeitures during the year (721,670) $5.31 (1,433,586) $5.30 Outstanding at 30 June 1,882,713 $4.42 3,094,383 $4.42 Exercisable at 30 June 1,214,055 $5.37 1,103,721 $5.08 The options outstanding at 30 June 2024 had an exercise price in the range of $2.00 to $5.79 (2023: $2.00 to $5.79) and a weighted-average remaining contractual life of 2.5 years (2023: 3.5 years1). 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. 1. Exercise price for the 453,273 options previously held by Mr Sheehy as of 30 June 2023 in the above disclosure for the prior year was $2.00. Impact of options previously held by Mr Sheehy is excluded from the assessment of weighted-average contractual life remaining in the prior year. On 22 August 2023, the Group announced it had resolved the proceedings with Mr Sheehy on the basis that the Appeal be dismissed, Mr Sheehy’s share options to acquire Nuix shares would be cancelled and that Mr Sheehy make a contribution of $700,000 towards Nuix’s legal costs associated with the proceedings. These share options were cancelled on 29 August 2023. NUIX (ASX:NXL) // ANNUAL REPORT 2024 118 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 6.3 KMP Remuneration 2024 $ 2023 $ Short-term employee benefits 3,962,669 5,067,939 Share-based payment expense 3,005,574 2,052,716 Termination benefits 342,125 440,326 Post-employment benefits 159,682 150,919 Long-term benefits – – Total 7,470,050 7,711,900 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. Share-based payment expense Share-based payment expense represents the expensing over the vesting period at the fair value of share rights at grant date. 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. 119 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in thousands of Australian dollars, was as follows: 2024 2023 USD EUR GBP USD EUR GBP Cash and cash equivalents 2,436 758 2,533 5,368 786 507 Trade receivables 7,754 246 591 2,605 702 1,588 Trade payables 298 39 4 485 97 – 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: 2024 2023 AUD $000’s Effect on equity Effect on PBT Effect on equity Effect on PBT USD +/- 3,173 +/- 989 +/- 3,345 +/- 749 GBP +/- 1,359 +/- 312 +/- 903 +/- 210 EUR +/- 1,074 +/- 96 +/- 942 +/- 139 B. Credit risk 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 At 30 June 2024, the exposure to credit risk for trade receivables and contract assets by customer nature was as follows: 2024 $000 2023 $000 Service providers 51,213 37,202 Corporates 26,095 26,899 Law firms 6,484 8,250 Government 6,169 9,705 89,961 82,056 To measure the expected credit losses, trade receivables and contract assets have been grouped based on the nature of the counterparties (see above) 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 time 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. On that basis, the loss allowance as at 30 June 2024, expressed in thousands of Australian dollars was determined as follows for both trade receivables and contract assets. NUIX (ASX:NXL) // ANNUAL REPORT 2024 120 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2024 2023 Balance ’000 Expected Loss Rate Loss Allowance ’000 Balance ’000 Expected Loss Rate Loss Allowance ’000 Current 31,506 0.4% 128 32,746 0.6% 199 30 days 2,140 1.0% 21 4,911 0.9% 42 60 days 1,158 2.5% 29 1,394 3.9% 54 90 days 488 0.0% – 613 7.7% 47 Over 90 days – 0.0% – 931 9.5% 88 Specific provision1 1,347 100.0% 1,347 1,039 100.0% 1,039 Total 36,639 1,525 41,634 1,469 Contract assets 53,322 0.4% 266 40,422 0.6% 233 Subtotal: Trade receivables and contract assets 89,961 1,791 82,056 1,702 Cash-backed bank guarantee2 746 –% – 746 –% – Other non-current investment 338 –% – – –% – Total 91,045 1,791 82,802 1,702 1. As at 30 June 2024 there were $1,347,000 of specifically identified impaired debtors, that have been provided for but not written off (30 June 2023: $1,039,000). 2. Non-current deposits relating to bank guarantee that is cash-backed by the Group, and therefore not subject to expected credit loss. The loss allowances for trade receivables and contract assets as at 30 June reconcile to the opening loss allowances as follows: 2024 $000 2023 $000 As at 1 July 1,702 1,007 Increase in loss allowance recognised in profit or loss during the year 1,231 1,389 Receivables written off during the year as uncollectible – (283) Unused amount reversed (1,131) (433) Foreign exchange difference (11) 22 As at 30 June 1,791 1,702 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 credit facilities to meet financial obligations as and when they fall due. At the end of the reporting period the Group held deposits at call of $38,032,000 (2023: $29,588,000). 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, and the need to draw on available facilities if required. 121 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The cash flows disclosed in the table below are the contractual undiscounted cash flows. Contractual maturities of financial liabilities Less than 6 months $000 6-12 months $000 Between 1-3 years $000 More than 3 years $000 Total $000 Carrying amount $000 At 30 June 2024 Trade and other payables 34,866 – – – 34,866 34,866 Lease liabilities 1,822 2,098 4,251 2,571 10,742 9,772 Other liabilities 4,045 – 2,999 – 7,044 6,657 40,733 2,098 7,250 2,571 52,652 51,295 At 30 June 2023 Trade and other payables 28,655 – – – 28,655 28,655 Lease liabilities 1,505 1,487 4,675 4,160 11,827 11,116 Other liabilities 3,712 6,377 – – 10,089 9,839 33,872 7,864 4,675 4,160 50,571 49,610 8. BUSINESS STRUCTURE This section focuses on the structure of the Group, specifically movements in issued capital and reserves. 8.1 Issued capital Movements in ordinary shares 2024 Shares 2023 Shares 2024 $000 2023 $000 Opening balance 317,499,158 317,314,794 370,696 370,696 Shares issued – acquisition of Rampiva 3,578,179 – 3,041 – Shares issued – acquisition of Topos1 1,507,065 – 3,210 – Shares issued – employee performance rights 944,384 184,364 – – Closing balance 323,528,786 317,499,158 376,947 370,696 1. On 11 April 2024 it was agreed with the sellers of Topos that 1,507,065 shares of Nuix Limited and a payment of US $1,500,000 would be made in settlement of the remaining earnout milestones. This agreement resulted in the derecognition of balances for contingent consideration and employee benefit obligations. 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 (ASX:NXL) // ANNUAL REPORT 2024 122 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ACCOUNTING POLICIES – ISSUED CAPITAL Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown as equity as a deduction, net of tax, from the proceeds. 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-based payment reserve The share-based payment 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. Treasury share reserve The reserve for the Company’s treasury shares comprises the cost of the Company’s shares acquired and transferred to settle share-based payment arrangement. Movements in reserves 2024 $000 2023 $000 Share based payment reserve As at 1 July (165,441) (168,731) Share-based payment arrangement 6,688 3,466 Settlement of share-based payment arrangements – (176) As at 30 June (158,753) (165,441) Foreign currency translation reserve As at 1 July 9,266 5,192 Foreign currency translation movement in period (2,115) 4,074 As at 30 June 7,151 9,266 Treasury share reserve As at 1 July – – Treasury shares acquired – 176 Less: Shares transferred to settle share-based payments arrangement – (176) As at 30 June – – Total Reserves (151,602) (156,175) 123 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ACCOUNTING POLICIES – TREASURY SHARES Repurchase and reissue of ordinary shares (treasury shares) When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in the treasury share reserve. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity. 8.3 Acquisition of Rampiva The Group acquired all of the shares of Rampiva Global, LLC and Rampiva Technology, Inc. (collectively Rampiva) on 1 July 2023 a workflow automation and job scheduling software provider. Rampiva is a long-term Nuix technology partner founded in 2016 to meet greater productivity demands for Nuix customers by automating their data processing tasks. Rampiva is used by customers where the cost, ease and administration of hyper-scale data processing is no longer sustainable manually. In the period since acquisition to 30 June 2024, Rampiva recorded a profit of AUD $5,696,000, inclusive of expenses for amortisation of acquired intangibles and related deferred tax expense impacts of AUD $1,588,000, but excluding any specific allocation of sales and distribution costs of the existing Nuix business which facilitated the sales of Rampiva products. Included in this profit/loss since acquisition, are post-acquisition revenues of AUD $7,664,000. The Group incurred acquisition-related costs of AUD $547,472 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. Notes $000 Cash 4,135 Shares 3,041 Contingent consideration 9.1 3,974 Total consideration 11,150 The initial cost of the acquisition includes US $2,000,000 in cash (subject to working capital adjustments on financial close), and US $2,000,000 in Nuix newly issued shares payable on financial close. As of the date of acquisition, up to a further US $3,000,000 in Nuix shares would be issued if Rampiva achieved specific ACV growth and cost management target milestones in the three years post-acquisition. Contingent consideration that is part of the arrangement to acquire Rampiva, 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 then contingent consideration assessed to be part of the arrangement to acquire Rampiva, was determined to be AUD $3,974,000. Post acquisition, in 2H FY24 it has been positively determined that the objective of these milestones have been met, and that USD $3,000,000 in Nuix shares will be issued to the sellers of Rampiva, consistent with the provisions of the Equity Purchase Agreement. The agreement allows Nuix to make a determination in it’s sole discretion that the performance objectives of the earnout arrangements have been achieved, and to remove any uncertainty for the parties to the transaction, prior to the full three year term of the earnout arrangement being completed. The settlement of this amount, notwithstanding this determination by Nuix, continues to be staged over a three-year period. The number of shares that will ultimately be issued in each of the next three years, is determined with reference to the volume weighted average price (VWAP) of Nuix Limited shares in the lead up to each of the three payment dates, where US $1,000,000 in Nuix Limited shares will be issued to the sellers of Rampiva. The Group has reclassified this consideration as deferred consideration, rather than contingent consideration as of 30 June 2024, as the payment of the consideration is no longer contingent on a future event (refer Note 9.1). NUIX (ASX:NXL) // ANNUAL REPORT 2024 124 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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. $000 Cash and cash equivalents 572 Trade receivables 885 Trade and other payables (94) Brand 112 Customer relationships 140 Intellectual property 8,368 Deferred tax liabilities (2,261) Total identifiable net assets acquired 7,722 Given the trade receivables at acquisition date were identified to be primarily with corporations with low credit risk and a short term to contractual receipt, the fair value of the receivables was measured at the gross contractual amounts receivable, and this represents management’s best estimate at acquisition date of the contractual cash flows that are expected to be collected. C. Goodwill Goodwill arising from the acquisition has been recognised as follows: Notes $000 Fair value of consideration A 11,150 Fair value of net identifiable net assets B 7,722 Goodwill 3,428 The goodwill is primarily related to growth expectations, expected future profitability, the skills and technical talent of Rampiva’s workforce, and expected synergies to be achieved from integrating the Rampiva software into the Group’s existing products. As the customer base of Rampiva is substantially integrated with that of the Nuix, goodwill recognised on acquisition has been allocated in full to the Nuix platform CGU. To the extent goodwill arises from the acquisition of Rampiva Global, LLC being $945,000 (USD $626,000 converted at acquisition date), it is considered to be deductible for tax purposes in the United States. D. Measurement period adjustments The details of the fair value on acquisition of identifiable assets acquired, liabilities assumed and goodwill determined as set out in this note are considered final, as the measurement period for acquisition accounting has closed. Accounting for the acquisition initially required assets acquired and liabilities assumed to be measured on a provisional basis, as the Group continued to obtain information relating to the determination of tax bases of acquired assets, and assumed liabilities. During the measurement period extending to the 12 months post-acquisition, adjustments have been made to increase the provisional valuation of the intellectual property by $141,000, reduce the deferred tax liabilities recognised by $1,033,000, reduce trade and other payables by $468,000 and decrease goodwill by $1,641,000 from amounts initially reported in 1H FY24. 125 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIGNIFICANT JUDGEMENTS 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. 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 Rampiva 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 (ASX:NXL) // ANNUAL REPORT 2024 126 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 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 2024 $000 2023 $000 Contingent consideration – 6,188 Deferred consideration 1,475 – Other payables 2,474 3,651 Other current liabilities 3,949 9,839 Deferred consideration 2,708 – Other non-current liabilities 2,708 – Information about the Group’s exposure to currency and liquidity risks is included in Section 7. Other payables Included in other payables is an amount of $2,174,000 in relation to reverse factoring arrangement that provides Nuix with predictable monthly payments for insurance premiums covering the period December 2023 until December 2024 (30 June 2023: $3,051,000). The arrangement does not significantly extend the payment terms beyond normal terms agreed with other suppliers for insurance coverage that is received and used on a ratable basis. Contingent consideration payable The Group recognises liabilities measured at fair value in relation to contingent consideration arising out of acquisitions made by the Group. The contingent consideration is designated as a financial liability measured at fair value, and is deemed to be a Level 3 measurement of fair value. It has been discounted accordingly based on estimated time to complete a number of milestones. As part of the assessment at each reporting date, the Group considers a range of reasonably possible changes for key assumptions and has not identified any instances that could cause the fair value of contingent consideration to change significantly. Changes in the fair value of contingent consideration after acquisition date are recognised in profit and loss, unless the changes are measurement period adjustments. A reconciliation of the movements in fair value measurements of contingent consideration is provided below. Contingent consideration 2024 $000 2023 $000 Opening balance 6,188 13,856 Additions 3,974 – Foreign exchange difference 29 165 Change in fair value estimate (2,137) (1,011) Unwinding of interest 326 68 Transfers to deferred consideration as contingency has been resolved (4,123) – Cash payments (1,793) (6,890) Settled through the issuance of shares (2,464) – Closing balance – 6,188 127 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The effect on profit and loss for the year is due to unwinding of interest on the contingent consideration, and change in fair value estimate due to reassessments of achievability of earnout milestones post-acquisition as indicated in the above reconciliation. During FY24, in relation to the earnout payments in connection with the acquisition of Topos Labs by Nuix, an amount of USD $1,500,000 in cash was paid in April 2024, and a further USD $2,100,000 in Nuix Limited shares was issued in May 2024 to the sellers of Topos. • Of the cash payment, USD $1,151,000 (AUD $1,793,0001) related to consideration for the business combination which had been included in contingent consideration payable, and USD $349,000 (AUD $543,000) related to consideration for post combination employee benefit arrangements. • Of the share-based payment, USD $1,612,000 (AUD $2,464,000) related to consideration for the business combination which had been included in contingent consideration payable, and USD $488,000 (AUD $746,000) related to consideration for post combination employee benefit arrangements. As discussed in Note 8.3, in 2H FY24 it was determined that the milestones to which the contingent consideration in the agreement to purchase Rampiva had been achieved, and accordingly as the liability is no longer contingent on future events occurring, the balance for the consideration has been transferred from contingent consideration to deferred consideration as of 30 June 2024. Sensitivity Generally, the fair value measurements of the milestones 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 proceed. As there are no remaining milestones for the Topos acquisition, and the remaining milestones yet to be paid out for the Rampiva acquisition have been determined to have been met, there is no ongoing sensitivity to remeasurement of contingent consideration as of 30 June 2024. Deferred consideration payable – liability-classified, equity-settled Deferred consideration represents the amount payable on acquisition which is time-based, and not subject to ongoing performance conditions. The deferred consideration is designated as a financial liability measured at fair value and deemed to be a Level 2 measurement of fair value . This measurement of fair value is determined with reference to the market-based discount rates for time value, for known amounts that will be settled at a future date. As part of the assessment at the reporting date, the Group has considered a range of reasonably possible changes for key assumptions and has not identified instances that could cause the fair value of deferred consideration to change significantly. During the year ended 30 June 2024, certain milestones to which contingent consideration was recognised on acquisition date were confirmed as having been met. As such, to the extent that these liabilities remain on foot and are subject to settlement at a later date they are no longer contingent, and have been reclassified as deferred consideration payable. The deferred consideration recognised as of 30 June 2024 relates to obligations to deliver to sellers of acquired businesses, a certain USD dollar value of shares of Nuix Limited at specific times. Deferred consideration – liability classified equity settled 2024 $000 2023 $000 Opening balance – – Transfers from contingent consideration 4,123 – Unwinding of interest 60 – Closing balance – liability classified equity settled deferred consideration 4,183 – 9.2 Fair value disclosures The carrying amount of the Group’s financial assets and liabilities approximates the fair value of all financial assets and liabilities. 1. Referred to as “Payments of consideration for Topos Labs, LLC” in the cash flows from investing activities. NUIX (ASX:NXL) // ANNUAL REPORT 2024 128 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 9.3 Dividends During the year the Directors did not declare an interim dividend (2023: Nil) and have not recommended a final dividend be paid after 30 June 2024 (2023: Nil). 9.4 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 2024 2023 2024 2023 Nuix North America, Inc United States 100% 100% – – Development and Sale of Licences Nuix Ireland Ltd Ireland 100% 100% – – Sale of Licences Nuix Pte Ltd Singapore 100% 100% – – Sale of Licences Nuix Holding Pty Ltd Australia 100% 100% – – Holding Company Nuix SaleCo Limited Australia 100% 100% – – Dormant Company Nuix Limited Employee Share Trust Australia 100% 100% – – Discretionary Investment Trust Nuix USG Inc. United States 100% 100% – – Sale of Licences Nuix Technology UK Ltd United Kingdom 100% 100% – – Sale of Licences Nuix Philippines ROHQ Philippines 100% 100% – – Business Support (Branch) Topos Labs, LLC United States 100% 100% – – Sale of Licences Rampiva Global, LLC United States 100% – – – Sale of Licences Nuix Canada Inc.1 Canada 100% – – – Sale of Licences 1. Formerly known as Rampiva Technology, Inc C. Transactions with other related parties Macquarie Corporate Holdings Macquarie Corporate Holdings has an interest of 30% in Nuix (2023: 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. Alliance agreement license 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 December 2021, confirmation of pricing and that the agreement would not be unilaterally cancelled by Macquarie for a three- year period resulted in the recognition of the sale of a licence with a three-year term in December 2021. As the licence was sold with coterminous support and maintenance, consistent with typical arrangements entered with our customers, revenue is recognised for provision of support and maintenance as it is delivered each month. As of 30 June 2024, $99,913 remains as deferred revenue in relation to the ongoing support and maintenance which will be recognised on a rateable basis until 5 December 2024. 129 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Legal fees claimed under indemnity Macquarie Capital Australia Limited has claimed $3,151,408 (30 June 2023: $1,791,910) in relation to legal fees under the indemnity provided by Nuix Limited to them under the terms of the Underwriting Agreement. This amount has not been paid. 2024 $ 2023 $ Transaction Outstanding balance Transaction Outstanding balance Sale and purchases of goods and services Sale of license to related parties 179,023 – 50,311 834,936 Support and maintenance 239,792 – 239,792 – Rendering of professional service 16,000 16,000 8,360 – Other arrangements Legal fees claimed under indemnity 3,151,408 3,151,408 1,791,910 1,791,910 9.5 Auditor’s remuneration 2024 $ 2023 $ Audit and review services Auditors of the Group – KPMG Audit and review of financial statements – Group 823,000 754,000 Audit and review of financial statements – controlled entities 78,483 82,050 901,483 836,050 Other auditors Audit and review of financial statements – controlled entities 21,339 16,793 Assurance services Auditors of the Group – KPMG Other assurance services 45,000 42,000 Other services Auditors of the Group – KPMG Advisory services 72,000 92,000 Other auditors Taxation advice and tax compliance services 15,352 4,001 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 (ASX:NXL) // ANNUAL REPORT 2024 130 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 9.6 Parent or the Company financial information 2024 $000 2023 $000 Current assets 44,304 30,303 Non-current assets 233,088 231,292 Total assets 277,392 261,595 Current liabilities 14,007 8,494 Non-current liabilities 1,224 9,552 Total liabilities 15,231 18,046 Net assets 262,161 243,549 Equity Issued capital 376,947 370,696 Reserves (159,012) (165,433) Retained earnings 44,226 38,286 Total equity 262,161 243,549 Profit/(loss) for the year 5,940 (10,036) 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. 9.7 Contingent Liabilities On the basis that 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. ASIC proceedings As advised to the market on 29 September 2022, ASIC commenced civil proceedings in the Federal Court against the Company (and its directors during the relevant period) alleging that from 18 January 2021 to 21 April 2021, aspects of the Company’s market disclosures contravened provisions of the Corporations Act 2001 and ASIC Act 2001. ASIC seeks declarations in respect of the alleged contraventions, pecuniary penalties against Nuix and pecuniary penalties and disqualification orders against the relevant directors. Nuix has fully cooperated with ASIC during the course of its investigation into these matters. Nuix denies the allegations made by ASIC and filed its defence to the claim on 23 December 2022. The ASIC claim was heard in November and December 2023 and Nuix is awaiting judgment which is currently reserved in this matter. Class Action Nuix is the subject of a consolidated class action in the Supreme Court of Victoria which has been commenced on behalf of persons who acquired interests in Nuix shares in the period between 18 November 2020 and 29 June 2021. The proceeding also names Macquarie Capital and a former Macquarie Capital nominated director of Nuix as defendants in the proceedings. In essence, the claim alleges that information disclosed in Nuix’s Prospectus dated 18 November 2020 and certain market disclosures regarding its forecast FY21 revenue and performance in the period following the Company’s IPO in December 2020 were misleading and contravened provisions of the Corporations Act 2001 (Cth), the ASIC Act 2001 (Cth) and the Australian Consumer Law. The claim seeks damages on behalf of Group Members, but no amount of damages has yet been identified. Nuix denies the allegations contained in the consolidated claim and filed its defence on 4 November 2022. The Second and Third Defendants (Macquarie Capital (Australia) Limited and Mr Daniel Phillips) have also filed defences denying the allegations contained in the consolidated claim. The matter has not yet been set down for a hearing. 131 NUIX (ASX:NXL) // ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Bank guarantee The Company has obtained a bank guarantee in the amount of $746,460 (30 June 2023: $746,460) to secure certain obligations of the Company that arise under a commercial property lease. This obligation is 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. 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. 9.8 Events after the reporting date No 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 (ASX:NXL) // ANNUAL REPORT 2024 132 Set out below is a list of entities that are consolidated in this set of consolidated financial statements at the end of the financial year. Name of entity Body corporate, partnership or trust Place of business/country of incorporation Ownership interest held by the Group Australian or Foreign Resident Jurisdiction of Foreign resident Nuix Limited Body corporate Australia – Australian N/A Nuix North America, Inc Body corporate United States 100% Foreign United States Nuix Ireland Ltd Body corporate Ireland 100% Foreign Ireland Nuix Pte Ltd Body corporate Singapore 100% Australian N/A Nuix Holding Pty Ltd1 Body corporate Australia 100% Australian N/A Nuix SaleCo Limited Body corporate Australia 100% Australian N/A Nuix Limited Employee Share Trust Trust Australia 100% Australian N/A Nuix USG Inc. Body corporate United States 100% Foreign United States Nuix Technology UK Ltd Body corporate United Kingdom 100% Foreign United Kingdom Topos Labs, LLC Partnership2 United States 100% Foreign United States Rampiva Global, LLC Partnership2 United States 100% Foreign United States Nuix Canada Inc.3 Body corporate Canada 100% Foreign Canada 1. Nuix Holding Pty Ltd is incorporated in and operates in Australia and has a registered branch in the Philippines, referred to as the Philippines Regional Operating Headquarters. The branch operations have tax obligations in the Philippines. 2. Topos Labs, LLC and Rampiva Global, LLC are treated as partnerships under US tax legislation, and accordingly their tax residency flows from that of their sole member, Nuix North America, Inc. 3. Formerly known as Rampiva Technology Inc. CONSOLIDATED ENTITY DISCLOSURE STATEMENT 133 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Consolidated entity disclosure statement SIGNIFICANT JUDGEMENTS AND ASSUMPTIONS Determination of Tax Residency Section 295 (A) of the Corporations Act 2001 requires that the tax residency of each entity which is included in the Consolidated Entity Disclosure Statement (CEDS) be disclosed. In the context of an entity which is an Australian resident, “Australian resident” has the meaning provided in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as the determination of tax residency is highly fact dependent and there are currently several different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the consolidated entity has applied the following interpretations: • Australian tax residency The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of Taxation’s public guidance in Tax Ruling TR 2018/5. • Foreign tax residency The consolidated entity has applied current legislation and where available judicial precedent in the determination of foreign tax residency. Partnerships and Trusts Australian tax law does not contain specific residency tests for partnerships and trusts. Generally, these entities are taxed on a flow-through basis so there is no need for a general residence test. There are some provisions which treat trusts as residents for certain purposes, but this does not mean the trust itself is an entity that is subject to tax. Additional disclosures on the tax status of partnerships and trusts have been provided where relevant. Branches (permanent establishments) Foreign branches of Australian subsidiaries are not separate legal entities and therefore do not have a separate residency for Australian tax purposes. Generally, the Australian subsidiary that the branch is a part of will be the relevant tax resident, rather than the branch operations. Additional disclosures on the tax status of Australian subsidiaries having a foreign branch with a taxable presence in that jurisdiction have been provided where relevant. NUIX (ASX:NXL) // ANNUAL REPORT 2024 134 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 54 to 117 and the Remuneration Report on pages 21 to 53, 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 2024 and of its performance for the financial year ended on that date; and ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; b) the consolidated entity disclosure statement as at 30 June 2024 set out on pages 118 to 119 is true and correct; and c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 2. 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 2024. 3. 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. Robert Mactier Chair Sydney, Australia 9 September 2024 Jonathan Rubinsztein Director Sydney, Australia 9 September 2024 DIRECTORS’ DECLARATION This is the Directors’ Declaration, signed by Robert Mactier, Chair, and Jonathan Rubinsztein, Director on 9 September 2024. The page references in relation to the consolidated financial statements and notes should be read as referring to pages 75 to 132 as opposed to pages 54 to 117, page references in relation to the consolidated entity disclosure statement should be read as referring to pages 133 to 134 as opposed to 118 to 119, and page references in relation to the Remuneration Report should be read as referring to pages 49 to 73 as opposed to 21 to 53, to reflect the correct references now that the financial statements have been presented in the context of the annual report in its entirety 135 NUIX (ASX:NXL) // ANNUAL REPORT 2024 INDEPENDENT AUDITOR’S REPORT 121 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. 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 gives a true and fair view, including of the Group’s financial position as at 30 June 2024 and of its financial performance for the year then ended, in accordance with the Corporations Act 2001, in compliance with Australian Accounting Standards and the Corporations Regulations 2001. The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2024 • Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended • Notes, including material accounting policies • Consolidated entity disclosure statement and accompanying basis of preparation as at 30 June 2024 • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year end or from time to time during the financial year. Basis for opinion 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 136 Independent Auditor’s Report 122 Key Audit Matters The Key Audit Matters we identified are: • Going concern basis of accounting • Revenue recognition • Capitalisation of development costs as Intellectual Property 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. 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 judgement required by us in evaluating the Group’s assessment of going concern and the events or conditions that may cast 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 there is not a material uncertainty casting 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. We specifically looked for their consistency against our understanding of the Group’s strategy as outlined in Board minutes and Audit & Risk Management Committee minutes, and their comparability to past results and practices; – Checking 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. – Comparing forecast growth rates to published studies of industry trends and expectations and assessing the significant assumptions and judgements in the operating cash inflows, in particular those related to growth in revenue, and pricing expectations, customer retention rates, consistency of relationships and trends to the Group’s historical results, growth rates in the industry, and our understanding of the business, industry experience and economic 137 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Independent Auditor’s Report 123 • the Group’s key cash inflow assumptions 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 legal costs relating to the ongoing legal and regulatory matters. We focused on the ability of the Group to manage cash outflows within available resources; • the analysis and advice relating to the timing and range of outcomes of the legal and regulatory matters against the Group such as ASIC proceedings and Class Actions; 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. conditions impacting the Group; and – 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, ongoing legal fees relating to the matters discussed in Note 9.7 for feasibility, timing, consistency of relationships and trends to the Group’s historical results, results since year end, and our understanding of the business, industry and economic conditions impacting the Group. • We analysed 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; • We obtained the Group’s internal and external counsel opinions on the likely timing and probability of any cash outflows as a result of the legal and regulatory matters discussed in Note 9.7 and together with our specialists assessed any cash outflow impact as result of adverse outcomes of contingent liabilities. • 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 138 Independent Auditor’s Report 124 Revenue recognition ($220.6 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 services. 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. Corresponding revenues are recognised as the related performance obligations are satisfied as required by AASB 15 Revenue from Contracts with Customers. Revenue recognition was a key audit matter for us due to: • its significance to the financial performance; • complexity and volume of transactions; and • the judgments and assumptions required by the Group in the determination of the relative standalone selling prices for each performance obligation in bundled 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 agreed terms and conditions in the underlying contract with the customer; and – 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. 139 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Independent Auditor’s Report 125 Capitalisation of development costs as Intellectual Property ($34.5 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 judgements, 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: the Chief Technology Officer, Chief Product Officer, Head of Engineering and Head of Architecture; – Re-performed a sample of the calculation of development costs capitalised and compared to the amount recorded by the Group; – We tested a sample of activities recorded and capitalised as development costs, checking the nature of respective activities being performed, through direct inquiry with software developer, 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. NUIX (ASX:NXL) // ANNUAL REPORT 2024 140 Independent Auditor’s Report 126 • We assessed the costs 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. Other Information Other Information is financial and non-financial information in Nuix Limited’s annual report 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 Remuneration and Nomination Committee. The Chairman’s Letter, CEO’s Review, Sustainability Report, Shareholder Information and Corporate Directory 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 in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and in compliance with Australian Accounting Standards and the Corporations Regulations 2001 • implementing necessary internal control to enable the preparation of a Financial Report in accordance with the Corporations Act 2001, including giving a true and fair view of the financial position and performance of the Group, and that is free from material misstatement, whether due to fraud or error • assessing the Group’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. 141 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Independent Auditor’s Report 127 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 description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Nuix Limited for the year ended 30 June 2024, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities 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 section 1 to 7.2 of the Remuneration’ report for the year ended 30 June 2024. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Trent Duvall Partner Sydney 9 September 2024 NUIX (ASX:NXL) // ANNUAL REPORT 2024 142 SHAREHOLDER INFORMATION The shareholder information set out below is applicable at 9 September 2024. NUMBER OF EQUITY SECURITY HOLDERS Number of holders of Ordinary equity securities: 13,781 Number of holders of unquoted options: 44 Number of holders of unquoted performance rights: 96 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: Holding distribution 09 Sep 2024 Range Securities % No. of holders % 100,001 and Over 282,432,540 85.97 82 0.60 10,001 to 100,000 24,740,451 7.53 895 6.49 5,001 to 10,000 7,610,514 2.32 1,005 7.29 1,001 to 5,000 10,549,964 3.21 4,199 30.47 1 to 1,000 3,195,205 0.97 7,600 55.15 Total 328,528,674 100.00 13,781 100.00 Analysis of number of holders of unquoted Options by size of holding: Holding distribution 09 Sep 2024 Range Securities % No. of holders % 100,001 and Over 933,248 49.57 5 11.36 10,001 to 100,000 906,292 48.14 33 75.00 5,001 to 10,000 34,539 1.83 4 9.09 1,001 to 5,000 8,634 0.46 2 4.55 1 to 1,000 0 0.00 0 0.00 Total 1,882,713 100.00 44 100.00 143 NUIX (ASX:NXL) // ANNUAL REPORT 2024 Shareholder Information Analysis of number of holders of unquoted Performance Rights by size of holding: 09 Sep 2024 Range Securities % No. of holders % 100,001 and Over 16,593,797 88.13 32 33.33 10,001 to 100,000 2,233,984 11.87 64 66.67 5,001 to 10,000 0 0.00 0 0.00 1,001 to 5,000 0 0.00 0 0.00 1 to 1,000 0 0.00 0 0.00 Total 18,827,781 100.00 96 100.00 SUBSTANTIAL HOLDERS Substantial holders at 9 September 2024, as disclosed in substantial holding notices given to the company are: Holder Securities % Macquarie Group Limited 97,635,132 29.76% Australian Ethical Investment 25,952,731 8.17% MARKETABLE PARCELS Number of holders holding less than a marketable parcel of Ordinary Shares: 1,111 RESTRICTED SECURITIES OR SECURITIES SUBJECT TO VOLUNTARY ESCROW 457,871 shares – escrow ends on 31 Jul 2025 ON-MARKET BUY-BACK There is no current on-market buy-back. NUIX (ASX:NXL) // ANNUAL REPORT 2024 144 Shareholder Information LARGEST QUOTED EQUITY SECURITY HOLDERS The twenty largest holders of quoted Ordinary Shares are: 09 Sep 2024 Rank Name A/C designation Securities %IC 1 MACQUARIE CORPORATE HOLDINGS PTY LTD 95,654,262 29.12 2 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 31,530,190 9.60 3 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 26,870,731 8.18 4 NATIONAL NOMINEES LIMITED 24,539,583 7.47 5 CITICORP NOMINEES PTY LIMITED 19,888,807 6.05 6 AD & SK CASTAGNA HOLDINGS PTY LIMITED 13,345,750 4.06 7 UBS NOMINEES PTY LTD 12,267,262 3.73 8 BNP PARIBAS NOMINEES PTY LTD9,952,690 3.03 9 BNP PARIBAS NOMS (NZ) LTD 6,829,854 2.08 10 BENNAMON PTY LTD 4,160,412 1.27 11 SOLIUM NOMINEES (AUSTRALIA) PTY LTD 3,374,132 1.03 12 SOLIUM NOMINEES (AUS) PTY LTD 3,308,138 1.01 13 BNP PARIBAS NOMINEES PTY LTD 2,324,248 0.71 14 PALM BEACH NOMINEES PTY LIMITED 2,237,723 0.68 15 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2 2,063,645 0.63 16 MR DAVID ALEXEI SITSKY 1,750,000 0.53 17 QUALITAS SERVICES PTY LTD VAWDREY FAMILY 1,580,509 0.48 18 3RD WAVE INVESTORS PTY LTD 1,500,000 0.46 19 MS BO XU 1,140,000 0.35 20 INTECH SOLUTIONS PTY LTD 1,100,000 0.33 Total 265,417,936 80.79 Balance of register 63,110,738 19.21 Grand total 328,528,674 100.00 145 NUIX (ASX:NXL) // ANNUAL REPORT 2024 This page has been left blank intentionally. NUIX (ASX:NXL) // ANNUAL REPORT 2024 146 CORPORATE DIRECTORY REGISTERED OFFICE Level 27, 1 Market Street Sydney NSW 2000 Australia +61 2 9280 0699 www.nuix.com SHARE REGISTRY Link Market Services Level 12, 680 George Street Sydney NSW 2000 02 8280 7100 (within Australia) +61 2 8280 7100 (outside Australia) registrars@linkmarketservices.com.au www.linkmarketservices.com.au EXCHANGE Nuix shares are listed on the Australian Securities Exchange (ASX) INVESTOR RELATIONS www.nuix.com/investors investor@nuix.com COMPANY SECRETARY Ilona Meyer AUDITOR KPMG Nuix (www.nuix.com, ASX:NXL) is a leading provider of investigative analytics and intelligence software, that empowers customers to be a force for good by finding truth in the digital world. We help customers collect, process and review large amounts of structured and unstructured data, making it searchable and actionable at scale and speed with forensic accuracy. APAC EMEA NORTH AMERICA Australia: + 61 2 8320 9444 UK: + 44 203 934 1600 USA: +1 877 470 6849 Nuix (and any other Nuix trademarks used) are trademarks of Nuix Limited and/or its subsidiaries, as applicable. All other brand and product names are trademarks of their respective holders. Any use of Nuix trademarks requires written approval from the Nuix Legal Department. The Nuix Legal Department can be reached by email at legal@nuix.com. This material is comprised of intellectual property owned by Nuix Limited and its Subsidiaries (“Nuix”). Any reproduction, distribution, transmission, adaptation, public display or public performance of the intellectual property (other than for preapproved internal purposes) requires prior written approval from Nuix. UNAFRAID – TO DO THE RIGHT THING, QUICKLY TEAM NUIX – FIRST AND FOREMOST HERO OUR CUSTOMERS – AND INNOVATE FOR THEM TAKE OWNERSHIP – AND FOLLOW UP RESILIENT – WE LEARN FROM THE PAST AND ARE OPTIMISTIC ABOUT TOMORROW 147 NUIX (ASX:NXL) // ANNUAL REPORT 2024