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PROPHECY INTERNATIONAL HOLDINGS LRD (PRO) - AI Meets Data: Prophecy and Complexica Join Forces

• Andrew Musgrave

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The merger of Prophecy International Holdings and Complexica represents a watershed moment in Australian enterprise technology. As artificial intelligence continues to transform business operations worldwide, this strategic combination creates something truly unique in the ASX landscape – a comprehensive, end-to-end AI technology company with deep expertise and global reach.

What makes this merger particularly compelling is how perfectly complementary these businesses are. Prophecy brings four decades of experience in enterprise data management, having evolved from an on-premise software provider into a sophisticated cloud-based data platform handling integration, security, and analytics. Complexica contributes cutting-edge AI optimization capabilities honed over twelve years as an "AI-first" company, long before the current wave of AI enthusiasm. Together, they address the complete technology stack required for successful enterprise AI implementation.

The practical impact of this combination becomes clear when examining Complexica's work in trade promotion optimization. By analyzing thousands of variables across product economics, pricing sensitivities, cross-product impacts, and external factors, their AI technology creates optimized promotional strategies that deliver measurable ROI. Now, with Prophecy's data orchestration capabilities integrated into the solution, customers gain a seamless path from raw data to actionable AI insights – solving one of the most significant challenges in enterprise AI adoption.

For investors seeking meaningful exposure to the AI revolution through an established, enterprise-grade vehicle, Complexica Group offers a differentiated opportunity. With over 500 major enterprise customers globally, proven AI technology, and the combined expertise of two highly specialized teams, this merger creates a platform for sustained innovation and growth in one of technology's most promising sectors. Subscribe to ASX Briefs for more insights into innovative Australian companies transforming global industries.

Andrew Musgrave Host

Welcome again to ASX Briefs, where we speak with leaders of innovative ASX listed companies, and today we're joined by Matt Michalowicz, the Director of Prophecy International Holdings Limited, a leading Australian enterprise software company with global operations in cybersecurity and contact centre analytics. Matt is also co-CEO of Complexica PTY Ltd, which recently agreed to merge with Prophecy. We are also joined by Jonathan Drake, who is current co-CEO of Complexica Pty Ltd and will be the incoming co-CEO of the merged entity, which incorporates Complexica and Prophecy. Matt, Jonathan, thanks for joining me today and welcome to the ASX Briefs podcast. 

Matt Michalewicz Guest

Thanks for having us, Andrew. 

Andrew Musgrave Host

Now, there's been plenty going on with Prophecy at the moment, the merger, the bringing the two companies together so we'll be able to unpack that today. So first of all, Matt, you have a dual purpose here running Complexica and also serving as a non-executive director on Prophecy's board. So, for listeners who may not know Prophecy that well, how would you describe its core strength in a sentence or two? 

Matt Michalewicz Guest

Prophecy is a data platform software company and deals with really everything data for large enterprises, whether it's the security and compliance aspects of data integration, harmonization, orchestration, to providing standardized data feeds into other systems. So, it's best described as a data infrastructure software company with a data platform product. 

Andrew Musgrave Host

Okay, and how has your experience serving as a senior leader on both Prophecy and Complexica helped to shape your view of the strategic logic behind this merger? 

Matt Michalewicz Guest

So, as a Prophecy Director, the business evolved over the last decade from an on-premise software company sold on perpetual license that really dealt with certain aspects of the data equation, into a full-service data platform offer that is sold subscription SaaS only through the cloud. And on the Complexica side, which is an AI-first company since its inception day one, the data requirement for AI systems has intensified during that same period of time. So, as we built up Complexica and had a stronger requirement for clean data feeds into the AI models and systems, at the same time, Prophecy had evolved into exactly the type of software product company around data that we needed as a prerequisite to our own systems and that shaped the view of putting them together and the synergies between the two companies. 

Andrew Musgrave Host

Okay, now Prophecy has been around for more than 40 years and Complexica closer to 20. So, two very different histories. So, what was the tipping point that convinced you now was the right time to bring them both together. 

Matt Michalewicz Guest

Yeah, similar to the last answer that I gave. The companies have evolved significantly over the last five years, in particular, and most notably over the last three. Complexica is only 12 years old, one, two, so much less than 20. It has always been an AI company, whereas Prophecy has had many iterations and many reinventions, starting as a billing system in the ERP space, et cetera, and then morphing into other solutions. So, as both companies have gone through very different, like you said, histories and trajectories, the evolution of their product set their offer and their strategic direction over the last three years created this perfect synergy of putting them together. 

Andrew Musgrave Host

Okay and we'll move over to you, Jonathan, the incoming co-CEO of Complexica Group Limited. So, can you share a recent example, perhaps from a customer win or deployment that really demonstrates the practical impact of Complexica's technology? 

Jonathan Drake Guest

Sure, Andrew, Complexica's technology is deployed across a range of industries and use cases, so there's broad applicability of the AI technology that we've built. But there's a common thread amongst those, which is that Complexica's strength is applying AI tech to solve business problems that are of significant complexity. You know data hungry, many variables, many possible outcomes, and I'll just use one example, practical example that nicely illustrates that, and that would be the creation of optimized trade promotion plans, where Complexica does that at the enterprise scale in the FMCG space. So, it's a useful use case to illustrate the types of complexities that our technology deals with. So, in order to produce an optimized trade promotion plan so this is, you know which products, at which time, should be placed on promotion at which particular price. Now there's a range of interrelated issues that need to be considered. 

You know, for example, the underlying unit economics of any particular product how much does it cost to make or buy, you know, and what is its normal sell price and the margins associated with that. 

And then, if you're considering promotional activity, there are a range of factors that would influence, you know, the change in marginal volume. 

So, for example, how sensitive any particular product might be to changes in its pricing, which will vary in terms of consumer behaviour, depending on which product you're talking about. 

What is the impact of placing one product on promotion on other products, for example, products that might be bought together or products that a consumer might now not purchase because they're now purchasing the one that is on promotion? And then you can add in external factors like seasonality, competitor activity, supplier support for promotions, and all of this influences the underlying economics of promotional activity for any particular product. And that's complex enough just for one product. But the objective is to arrive at an overall plan that can provide an optimized solution for sales volume and margin across many hundreds or even thousands of different products, all of which having their own characteristics. And that problem is of sufficient complexity and data hungriness that it's well suited to AI, and we do that on both the supplier and retailer side, across enterprise, to provide a decision augmentation tool for a business user to make decisions that they could make more effectively than they might without the use of AI for a return on investment. 

Andrew Musgrave Host

Okay, And the merger with Prophecy brings together different but highly complementary capabilities AI and optimisation on your side, and compliance, analytics and integration on theirs. So how do you see those pieces fitting together? 

Jonathan Drake Guest

What's really great about bringing the Prophecy and Complexica businesses together is how well the respective technologies and capabilities will click together in a product sense. 

Prophecy brings with it data aggregation, orchestration and analytics technology that is really going to be transformative for the Complexica offering. Invariably, in a customer deployment at the enterprise scale, there is the need to aggregate data from lots of different sources and lots of different forms and that can be a very challenging for the customer, intensive, expensive, time-consuming exercise. And the ability to bring some really effective technology to achieve that with software as part of the Complexica offering is going to be transformative for us. And, in addition to that, security and monitoring of that data where the security of artificial intelligence and the data going into it is an issue of increasing importance as AI becomes more widespread. And then moving up the chain, the types of problems that Prophecy customers are looking to solve at the enterprise scale are exactly those problems that I just mentioned in the previous question Andrew in terms of the complexity and data hungriness of those problems, but the significant value that can be added if they're solved effectively. So, if you put those things together, what you get and what we're going to build is a true end-to-end AI technology that will span all the way from putting the data together, analysing it, aggregating it and then producing those optimised outcomes. 

Andrew Musgrave Host

Okay, now, as you think about where the combined business sits in the ASX landscape, how do you plan to position Prophecy or, as its planned to be renamed, Complexica Group for investors, who want exposure to AI, but through a more mature, enterprise-grade vehicle.

Jonathan Drake Guest

The opportunity that we have here is to create something that is quite unique on the ASX. Complexica has been creating artificial intelligence technology and has been a thought leader in artificial intelligence for a long time, well before the advent of ChatGPT or LLMs. You know we have academic pedigree in this space. We've published books and articles and we've got long experience deploying artificial intelligence directly into the enterprise space and the opportunity we see is to take that and to combine it with the great business that Prophecy has built over a period of many years. That includes international scale, more than 500 main enterprise customers and thousands of individual sites across globally recognised household names. 

So, if we put those things together, we can create something which is really differentiated in terms of an opportunity to get some exposure on the ASX to the AI tech space, but with a business which has pedigree, is differentiated and has that scale and enterprise reach which really sets it apart. 

Andrew Musgrave Host

Okay, now just to wrap things up. Why should investors and customers alike be excited about the journey ahead for Complexica Group? 

Jonathan Drake Guest

Well, for customers, it's the opportunity to, with a single vendor of scale, of pedigree, of capability to access a real end-to-end artificial intelligence solution which will help them at the beginning of their journey in terms of harnessing AI, understanding, putting their data together and really seeing that orchestrated and deployed into an effective AI tool to deliver real actionable ROI. You know, for investors, in terms of excitement, you know there's a real opportunity to create something that's differentiated on the ASX, that can provide that capability which is pretty unique. And I guess overall you know why I'm really excited about the transaction is the ability to bring together two really great businesses with not just technology but also two really great teams of qualified, experienced and motivated professionals to really build a platform for innovation and expansion over the long term. You know the excitement amongst our respective staff is palpable and we're really looking forward to what's next. 

Andrew Musgrave Host

OK, well guys, Matt, Jonathan, it's been great to chat today. Exciting times ahead for both companies, obviously. So, we wish you all the best and we look forward to further updates from the company in the upcoming months. 

Jonathan Drake Guest

Thank, you, Andrew. Thanks very much, Andrew. 

Andrew Musgrave Host

That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.