Mach7 Technologies Limited

just waiting for everyone to join. I can see participants ticking up. Okay, good morning and good afternoon to those of you joining from North America. Welcome to the MAC7 third quarter business update. My name is Rebecca Thompson and I look after MAC7's investor relations. Today we have Mac7's CEO, Mike Lampron, to give an overview of the quarter highlights, after which he'll be joined by CFO Diana Hearn for Q&A. With regard to the Q&A, if any attendees have a question, please submit it via the Q&A text box at the bottom of your screen. Alternatively, you can email me your questions on rebecca.thompson at mac7t.com. I'll now hand over to Mike for the Q3 update.

Thank you, Rebecca, and thank you everyone for joining our call today. I'll first start off with some highlights from Q3. This quarter, we are announcing that we have exceeded our FY23 sales order target of $36 million. I have said throughout the fiscal year that this was more of a floor than a ceiling, and I'm happy to say that we have exceeded that goal and hit $37.1 million, with another quarter of sales yet to come in this fiscal year. Our contracted annual recurring revenue is up to $20.6 at the end of Q3. moving us closer and closer to recurring revenue covering our OPEX on an annual basis. If we stay on this path, we would expect that our recurring revenue would cover OPEX over the course of the next two fiscal years, which has been a goal of ours for the last three or four years now. Our ARR is at 17.2 on a run rate basis, up from 16.4 in December of 22. And we have cash on hand of 19.4 million. So we'll cover the good news first on the sales orders front. It's been a tremendous year for us to date. In Q3, we had sales orders of 11.3, up strongly from Q3 of FY22, where we had 4.4. But I think if you look at the chart below, you see that there isn't really any seasonality to our sales. And although we had a slow Q1, we did make up for that in Q2 and Q3 was strong and we suspect the Q4 would be the same. Our Q3 sales order is comprised of 6.2 million in recurring revenue sales. And what that is, is that represents sales orders from a support and maintenance perspective, as well as any subscription fees. So those are deals where revenue is coming in on a recurring perspective rather than a capital license. These deals will not have an immediate impact to the revenue line and will be recognized over the term, typically five years from first productive use. On the capital software side, we did have 3.6 million of capital software sales that will be immediately recognized as revenue upon delivery in FY23. And with the professional services line of 1.5 million, That will be recognized as revenue on a percent complete basis over time as we deliver the services. That's a little in contrast to Q2 where the bulk of our sales orders came from new clients and the bulk of our sales orders in Q3 came from existing customers. 95% of the sales orders were from the customer base that does include Adventist Health West, which did start off as an eUnity-only customer some years ago and is now committed to the entire Mach 7 product suite across their hospital system. From a partnership perspective in Q3, partners accounted for about 11% of total sales orders, and that's broadly in line with our expectation this year. of partner contribution. We've said in the past and continue to believe that our partnerships will play a bigger and bigger role in contributing to our overall sales and our overall revenue. I think 10% is probably about right for this year. From a revenue perspective, our annual recurring revenue is currently at 17.2 million. This has increased from 16.4 million at the end of December. And our contracted annual recurring revenue continues to grow and currently sits at 20.6. This number consists of ARR plus 3.4 million of subscription maintenance fees that have yet to be recognized because for productive use is still pending. Again, very important to keep an eye on that car number. We want to see good growth on the car number. It's slow growth, but good growth. because we, again, want to make sure that our recurring revenue can cover our OPEX here in the near future. From a cash flow perspective, cash receipts for Q3 were 5.4 million. There was a net operating cash outflow of 1.3 million in Q3. With our scheduled cash collections and a strong sales order outlook, we still feel very much like we will remain cash flow positive on an annual basis. as we have for the last three years. We have a big quarter ahead of us in Q4 from a cash collection perspective. And we remain debt free and have $19.4 million cash on hand. From an outlook perspective, again, The highlight really is the sales orders overcoming that forecast of 36 million with another quarter left to go is fantastic news. We have a healthy pipeline from which to add to that number in the final quarter. From a cashflow perspective, the fourth quarter is typically really strong for cash collections and the company continues to expect positive operating cash flows on an annual basis. And as FY23 draws to a close, Mach 7 remains focused on new customers, either from a deployment perspective, so we can continue to get first productive use and continue to get these new contracts deployed, or from a sales perspective, continuing to bring in new customers from the sales side throughout Q4. And we are also focused on release of new product versions for each of its core products, the VNA and the Enterprise Viewer. We do have one more major trade show coming up this fiscal year. It's called SIM. It's during the second week of June. We look forward to showcasing our product along with meeting many of our great partners at that show. It is very much a partner show. Usually a very, very good show for us. One of the two major shows that we attend every year. And usually a good precursor to building up our pipeline going into next fiscal year. And the other thing I would draw attention to for everyone on the call, We're often asked from the community for educational opportunities, so I'd just like to alert you to a customer-driven webinar that we're hosting on May 9th with the topic of critical steps for success in your AI journey. please feel free to attend that. You can register through our LinkedIn page. We'll have a registration page up on our website tomorrow. But that's a good opportunity to hear about Mach 7, hear from a partner, hear from some of our customers, and hear their steps around AI and how that's affected by Mach 7 and the Mach 7 products. So, It won't be a lengthy webinar, but could be educational. I know many of you have asked me in the past to alert you to any educational opportunities that we have. So I think back with that, I can hand it back over to you for some questions.

Thanks, Mike. I have a question from one of our institutional investors with regard to the acumen contract, asking whether we have received any cash from that contract as yet?