Mach7 Technologies Limited

Good morning, everyone, and welcome to the Mark 7 FY25 result briefing. My name is Françoise Dixon, and I'm Head of Investor Relations for Mark 7. Today, our CEO, Terry Thomas, will provide an overview of our FY25 result. We will then open it up for questions, which will be answered by Terry and our CFO, Diana Hearn. If you have a question, please submit it by the Q&A text box at the bottom of the screen. I'll now hand over to Terri. Thank you, Francoise.

All right, next slide. For those of you who don't know who we are, Mach7 is an imaging-focused vendor. We provide advanced data management and diagnostic viewing solutions to healthcare organizations all over the world. We quite love that we do something that improves healthcare. Next slide. Here's our agenda. So I'm gonna give a business overview. We're gonna go into our fiscal year 25 results. We'll talk a little bit about Outlook and then we'll have some time for Q&A. Next slide. All right, diving right into our business overview. So first of all, the foundation of this slide is we have a strong financial position and we have no debt. That was important to me even when I took this job. So as I look at assessing the business, long-term profitable growth is a big driver for me. And this slide gives you four of the areas where we've actioned already in the business. First of all, leadership renewal, me coming into this space as the CEO, but I'm also making changes in our leadership teams in terms of individual people, but also how we engage with each other, bringing some fresh skills in, some fresh perspectives, new expectations. A big part of that is a very customer centric approach to the entire business. We've overhauled our customer designated team. So how we assign our staff and how our staff engage with customers. And I'll go into that a little bit more in a minute. But we're also leveraging one of our biggest strengths, which is a really sticky and strong customer base as really a foundation. for us to be able to innovate not just upon them, at them, around them, but with them, and to engage them directly with our product leaders, our engineers, our executive team. Everything we do will be considering compelling customer value as part of our go-forward plans. Then finally, we're a global company. Our headquarters are in the United States. We've got a secondary headquarters in Canada where our cost base is a little bit lower and we've got some amazingly talented and experienced engineers and developers that are contributing to our innovation. But the other area, we've got a team of people in Malaysia. I flew out there, I met with them, and I was really impressed by the depth of knowledge and the willingness and even hunger to engage more collaboratively with the rest of our company. We will be leveraging that global footprint to be able to optimize our resources, provide more innovation and a better experience for our customers regardless of where our customers sit. Next slide. All right, so key strategic priorities. Value-centric growth. That's what, you know, the words that you hear within the halls of or the virtual halls of Mach 7 is, where's the value? How does this fit with what our customers need and how are we going to grow? So first of all, one of the very first questions I dug into and an area that is ongoing focus for us is defining our ideal customer. Who are we serving? I want to ensure that our roadmap, our marketing, our positioning is aligned in such a way that people can look at it and see themselves if they're a buyer in everything about Mach 7. So we need to make sure that we really lean in and understand who is currently and who is the best buyer for us in the future in terms of acquiring our technology and paying good money for it. Transforming our customer facing operations was one of the very first things instituted when I came in as CEO. We've completely dissolved the difference between services and support. We've taken away silos and we've created a new flight crew structure. in which each customer has a designated team and will deliver measurable improvements in customer satisfaction, which I'm happy to address later. And then the last thing, compelling customer value. Our innovation should not just be something that is different or something driven by one customer, but we need to know that it's aligned with what our buyers need, that we're solving real pain points, that we're Doing our innovation, based on a deep understanding of our customers world and bringing a new chief innovation officer in is to help drive that. So we can know not just deliver strong innovation overall but innovation that is compelling enough to drive sales and a referral base that continues to grow and expand. Last thing I'm mentioning, by the way, leveraging AI tools. I am delighted to say accessing Copilot, GitHub, getting our developers using AI tools, quick quote, how did we ever live without this? So we are leveraging AI, but we're doing it in a way that is controlled and safe and should accelerate our development. Next slide. All right. I mentioned this twice already, transforming our customer engagement. We have created a whole different structure in a completely revolutionary way in how we engage with our customer. Each customer will not have to tell their story. Who am I? What version am I on? What level of knowledge do I have about the software? what are my priorities what are my interfaces instead they will work with a team who knows them so each customer has their team and it's a multi-disciplinary team some technical people some less technical people some very experienced people some people who are less experienced but have more time on their hands to invest in understanding everything about that customer all of this led by our advocate for advocate for customer experience or ace execs The beautiful thing about this is it helps our customers be more efficient and gives them a consistent experience. But the other thing, our staff get to know the customers. Our staff get to care about our customers. I've told our staff I want them to know not just our customers' names, but our customers' kids' names and kids' pets' names. So stronger relationships will provide more continuity for our customers, more efficiency for our customers, and it will drive the Mach 7 loop. You might wonder what in the world is the Mach 7 loop. Next slide and I'll tell you. So the Mach 7 loop. This is the concept of how do you compound growth by leveraging that reoriented and completely overhauled customer success infrastructure. The fun and knowledgeable and engaged and connected flight crew. When executed well, which I'm confident that we are doing, will create stronger customer value, it will create positive stories for marketing, it will create more referrals, it'll enhance our reputation in the industry, and this will all support growth of our sales. I look at that, we're leaning in on Mach 7 speed and the flight theme to be able to take off and really invigorate our company and create space for us to be able to continue to innovate. So take that chief innovation officer, the team of developers, quality assurance people, product leaders, really reinvest in the business to be able to unlock additional revenue growth, which then opens up the ability to sell to more customers, do a great job providing customer success, enhance the size and scope of our flight crew, and continue on building more and more momentum over time. So that is the Mach 7 loop. Next slide. All right, so that's a little bit about what we're doing right now, but I'm gonna go back and look at fiscal year 25 results. We have a very strong foundation in place for driving to our future growth. We've delivered good performance across our key metrics. This is in line with our guidance, including the fact that the revenue growth of 16% exceeded our OPEX growth of 9% on the prior corresponding period. We demonstrated good cost discipline across the year, especially in the second half with OPEX only up 3% on PCP, and we delivered some significant profit improvement, which drove operating leverage and made further progress towards recurring revenue covering OpEx. We met our objective of being operating cash flow positive in fiscal year 25, and we implemented a buyback program in H2. Fiscal year 25, 6.3 million shares acquired for 2.2 million since March of 2025. Next slide. All right. So, a summary of key financial metrics, all of these are in Australian dollars. I want to highlight the strong growth in recurring revenue, which was up 20% to represent 75% of total revenue and 80% of OPEX compared to 72% in fiscal year 24. Contracted annual recurring revenue was up 8% in line with our updated guidance and ARR increased by 7% on PCP. Adjusted EBITDA recorded a solid improvement on the prior year and we were profitable on a net profit after tax before amortization. And we had closing cash of 23.1 million and I love no debt. Next slide. All right, we've covered most of this already, however, this tells the story about how we've transitioned well to a high quality recurring revenue model, the product split has remained consistent year on year. Next slide. Alright foundational book of business here's a bit more detail on sales orders for fiscal year 25. It illustrates the value and the importance of our existing customer base, one of Mach 7 strengths. Our ARR type sales accounted for the majority of our sales orders again, and we're doing well in our shift to a primarily subscription model. Next slide. All right, strong revenue growth and cost discipline drive our EBITDA improvement. This is a summary of our P&L, and it shows solid performance during the year. You can see we've got a good foundation for future growth, strong revenue base, good financial position. We're trending in the right direction related to profitability when you look at our EBITDA and net profit improvements. Great progress in recurring revenue covering OPEX, and I find it super positive to see this improvement in profitability, which I believe to be our end goal. Now, slide 16, outlook. All right. As demand for imaging continues to grow, we are well positioned to take advantage of that growth. It's quite interesting when you look at not just in the United States, but across the world, there's a shortage of radiologists and there's a need for technology to support the importance of imaging and diagnostics throughout the world. Our new customer engagement model, I think, will really provide good dividends. It's an approach that should drive more and more momentum for our company overall and drive more sales. And then, as I mentioned in the very beginning, we're going to leverage our team's strengths across our different markets, enhance our ability to engage with our customers in our biggest market, North America, but also opportunities in Asia-Pac and other parts of the world, and leverage the fact that we are a global company. Now, we are engaging in a comprehensive strategic review, and we will release details of that new strategy in a few months. It is very important to me that we don't attempt to boil the ocean. I don't like a peanut butter approach where we try to do everything. So focusing on that ideal customer, focusing on our key differentiators, and making sure we have very strong alignment between what we're doing in terms of our roadmap, we're deliberate about charting our future, our engagements with our customers, our sales priorities, and our marketing priorities will be aligned behind a strategy. And we've got several different directions that we are in deep exploration on. And we'll provide more information about that to you in the future. As I mentioned, our buyback, while it remains on foot, we are pausing activity in that on-market share buyback program pending completion of that strategic review. And we will provide guidance when our new strategy is released in a few months. All right. Our standard disclaimer. And I think we're ready to open up for questions.

Thanks, Terry. I'm going to start with a couple of questions we received via email from Michael Hayes. The first one is, what has been the customer response to the new customer-facing model and ACE teams?