Mach7 Technologies Limited

Welcome to the Mark 7 First Half FY26 Result Briefing. My name is Françoise Deberlac and I'm Head of Investor Relations for Mark 7. Today our CEO Terry Thomas and our CFO Daniel Lee will provide an overview of the first half result. We will then open it up for questions. If you have a question, please submit it via the Q&A text box at the bottom of the screen. I'll now hand over to Terri.

Thank you, Francoise. And hello, everybody, and thank you for joining us for the first half fiscal year 2026 results. Let me start with something that I think we can all align on. Sales matters. Sales fuels growth. It funds innovation, and innovation fuels more growth. And ultimately, sales drives shareholder value. Now, I happen to love sales. I've spent more time in sales than any other role in my career, and I believe it makes the business world go round. But more importantly, I know that sustainable, disciplined sales growth is what you want to see from Mach 7, and I do too. Good news is we now have an enhanced, growing, and focused team driving progress. strengthening pipeline quality, improving conversion discipline, and aligning our commercial engine with our strategy. You'll hear more about that shortly, including a guest appearance later in the presentation. So let's begin. On our vision, before getting into performance, I really want to ground us into who Mach 7 is and where we're going. Our vision is simple, but it's ambitious to be the global imaging EMR. We win by completing the patient picture with the patient's pictures, and we do it better than anyone else. Healthcare has done a strong job organizing text-based and numerical clinical data, but imaging remains fragmented. It's locked in silos across departments, different formats, and that fragmentation creates friction for clinicians and inefficiency for health systems. Mach 7 exists to solve that. Our move from archive to architecture is about making imaging accessible, usable, and a core layer of the patient record, AI-ready and truly vendor neutral. That vision sets the destination, so let's talk about how we're getting there. Now, this slide gives you a roadmap for our next 20 to 30 minutes, and I'll begin with a business overview, what we've done strategically and operationally in the first half. Dan will then walk you through the financial performance in detail. And after that, as I mentioned, we'll have a special guest appearance from our Executive Vice President of Sales, Todd Stallard, who will share his perspective on our commercial reset and how we are turbocharging our revenue engine. I'll then close with our outlook for the second half, and we'll open for questions. So let's move into the business progress. First half reflects a deliberate execution of the reset we outlined late last year. Now, I know a slide like this with the word reset front and center can feel a bit unsettling. It can sound like disruption. It's because it is. Meaningful progress rarely happens without disruption. And to me, reset spells opportunity. It means we summon our courage to evaluate ourselves honestly and make the necessary changes to unlock Mach 7's full potential. This has been a true top-to-bottom review. Our people, our structure, our technology, our office locations, our commercial models, our pricing, our cost base, and our culture. Nothing has been off the table. We've now sharpened our roadmap. We've rebuilt the commercial engine. We've disciplined our cost base. We've clarified how we operate. This was comprehensive and it was intentional. We are not here to preserve the status quo. We are here to compete. We're here to win. So when I say we're here to win, well, winning requires follow through. We are now largely through the reset phase and the scale of change has been significant, evolving leadership team members and roles, refining the product roadmap, reshaping our organization, intentionally shifting our culture toward performance and accountability. In our industry where sales cycles run 12 to 24 months, commercial impact also takes some time to fully materialize, but that doesn't mean our progress is slow. We secured our first new logo this half in quite a while, and it was a Flamingo customer. We did it quickly, and we did it differently. We listened more deeply. We aligned more directly to the customer's most challenging problems, and we positioned Flamingo exactly as it was designed, not just as another commodity product, but as a smarter way to solve complex imaging challenges. In that case, our image data orchestration on top of another vendor's radiology system. We think this customer may buy more modules from us in the future, and we're delighted to have helped solve their problems with the new product. Now, that shift in engagement reflects our development of far stronger commercial muscles. We'll address that in more depth as I give Todd the opportunity to speak to our commercial evolution while underway. Operationally, we've made some difficult but necessary headcount reductions as part of our reset. That said, this isn't contraction for contraction's sake. We fully intend to grow headcount over time, but deliberately and strategically with high standards, leveraging lower-cost innovation hubs to increase our development velocity while maintaining strong cost discipline. On the customer side, our dedicated implementation support and customer success engagement team, our flight crew, was initiated in August. we are leaning in to a culture of continuous improvement. What was working well in eUnity support, as evidenced by our class scores, is being extended into deeper and more proactive engagement with our V&A customers as the next phase. We're building institutional knowledge about our customers' environments and their needs, and we're using that knowledge to improve responsiveness, reliability, and long-term relationships. And finally, while the slide references continued progress towards CE mark in the first half, I am proud to share in January we officially received our CE mark for medical device eUnity under the EU medical device regulations. That is a meaningful accomplishment. The CE mark confirms our regulated software meets the EU safety, performance, and clinical evaluation, as well as post-market surveillance requirements. It is a rigorous and detailed process, and this milestone ensures access to Europe and Middle East and reinforces the strength and the quality of our product. Our execution is in motion. Now, as I mentioned earlier, Mach 7 completes the patient picture with the patient's pictures, and that is not just a tagline. It's real. Each day, clinicians use our software to access critical diagnostic images, but also patients themselves are logging in to view their own images with our eUnity viewer. It's powerful, and we're not just supporting workflows. We are enabling improved health care experiences. Now, delivering on that requires more than strong products. It requires a strong operating model. So as part of this reset, we're improving how we design our software, how we deliver it, how we sell it, and how we support it. And those functions are aligning around a continuous customer-centered loop rather than operating as independent and segregated functions. Customer success generates insight. Insight informs our marketing. Marketing strengthens the pipeline in sales conversions. Sales funds innovations, and innovation increases our differentiation, including our new Flamingo modules. This creates more opportunity to win and to grow revenue. That loop, it is intentional. We overlay that with a more disciplined ROI-focused cost base, an overhauled commercial engine, and a roadmap that's grounded in real customer needs and market demand. Then you have a company positioned to grow and grow with purpose. This is growth by design and designed to be profitable. Now, if my last slide described the system, this slide is about the engine. We rebuilt the sales organization with defined ownership across new customer acquisition, expansion within our install base, strategic partner development, services alignment to support long-term value, and that clarity improves speed, discipline, and conversion quality. We've streamlined operations, not simply to reduce costs, but to redeploy resources toward growth-positive capabilities and improve our communication, coordination, and ultimately our efficiency. We are investing where we see a return, pipeline quality, partner leverage, marketing, execution excellence. It connects directly back to the loop I just described. Customer insight, feeding opportunity, opportunity funding innovation, innovation strengthening differentiation. Todd will speak more specifically about how this plays out in the field, but at a high level, the commercial engine is aligned with the strategy and profitable growth. We are no longer operating in different tracks. We are pulling in one direction. Now, we have an industry-defining V&A and a well-loved zero-footprint viewer. It's fast, and these have been part of Mach 7 for years. But I want to talk again about Flamingo. And I'm going to go a bit off-road here and depart from this slide for a minute. Think of where Flamingo fits in by picturing a sandwich. At the top of the sandwich, you might have a beautiful piece of multigrain bread. It's what you see first looking down at it. It's appealing. It's sliced well. Really great texture. And there's some immediate value that you can see. Now, that's our eUnity. It's our zero footprint diagnostic quality viewer. At the base of your imaging strategy, you have sturdy bread. Holds everything together. That's the foundation, the V&A. Necessary. Predictable. Think of a thick piece of sourdough bread. Reliable. But on its own, maybe not all that exciting. What makes the sandwich compelling is what you add in between. Maybe you got some cheese and it's hot. That's AI enablement. It gives customers a practical path to explore and operationalize AI within their existing ecosystems. It's where the sandwich starts to feel a little different. Maybe you put in a layer of meatballs, our dynamic policy engine, intelligent routing and orchestration. That's what our first Flamingo customer needed. Solved a very specific, very real workflow challenge, and it did so elegantly. Maybe you put in some spinach for a customer trying to go healthy, lighter, intelligent cloud migration, reduce infrastructure burden, increase agility, maintain control. Different customers have different appetites. different constraints, different needs, different priorities. And just like we don't all want to eat the same sandwich, our customers don't all need the same solutions. Flamingo is modular by its design. Customers choose the components that solve their specific problems, whether it's layered on our products or on others. And that's the power of our true vendor neutrality. We are not forcing a fixed menu. We are enabling choices. That flexibility creates opportunity and potential for rapid differentiation, and it opens new revenue pathways, including as a standalone entry point. So Flamingo is now available for sales within our customer base as well as to new customers. We signed our first customer in the second quarter and have been in discussions with several others, including addressing EMR integration challenges, AI wants and needs. cloud strategies, and how to help customers mitigate risks related to other vendor lock-ins. Driven by real customer needs, we're prioritizing the next Flamingo modules to develop. Our pipeline is progressing, and we're being disciplined about quality over quantity, as well as ensuring good product customer fit. We expect Flamingo-related support of growth in our ARR from this half onward, It won't be overnight, but it is strategic for a customer-focused growth strategy. Now, RS&A, it was a strong event for Mach 7. It added some great momentum to our transformation. Our team had some deep, high-quality conversations rather than just quick booth interactions. We engaged with numerous existing customers, strong prospects, and numerous partners as well. It was an efficient way to strengthen our pipeline and clearly articulate the Mach 7 Flamingo story as we continue our shift from archive to a broader architectural offering. and our message, it resonated. Our booth was often full. Our team engaged in problem-solving discussions about AI, interoperability, workflow orchestration, and cloud strategies. We presented in the AWS booth, and we also hosted a customer event that was well-attended. It created space for relationship building and deeper exploration of the challenges our customers are facing. RSNA reinforced, Mach 7 has a credible and differentiated story to tell. And next will be HIMSS and CIM, two relevant conferences to strengthen our market presence as well as our pipeline. Now, one of the reasons I took this job is the size and scope of imaging as an industry. It's a big space. It's a growing space. And as a nurse, I love that we have the opportunity to make a positive impact on health care. The total addressable market here is significantly larger than what I worked in previously, and the macro trends support what we are building. Healthcare is structurally resilient. People keep getting sick, and imaging demand does not disappear even in down economic cycles. Diagnostic imaging continues to grow, not just for diagnosing illness, but increasingly for wellness monitoring and even guiding treatment. Imaging volumes are rising and data complexity is rising with the addition of digital pathology, an area of high innovation for Mach 7 and also an emerging area for our industry as a whole. And health systems need smarter ways to manage and activate that data, including some very, very large data sets, especially in digital pathology. AI and medical imaging is expanding rapidly, but AI only provides value if it's accessible. So we are positioned well at the intersection of imaging, AI enablement, and data independence, helping health systems unlock the value of their broader imaging ecosystems. Now, I believe a key to success is focus. You need to speak to someone, and if you try to address everyone, in the end, you speak to no one. Our ideal customer profile centers on academic medical centers, large integrated delivery networks, and teleradiology groups. We know these customers. We already serve many of them, including some very well-respected names in our industry. I personally do love to speak to customers, which I try to do weekly, and I even get out and visit customers, real face-to-face interactions. And I'm delighted to have personally visited two of the organizations on the screen over the past month, and I heard firsthand how our software is stable, improving access, and supporting complex clinical workflows. They value data independence, AI readiness, a lower cost of ownership, and fast image access. Smaller sites, veterinary clinics, those kind of non-focused customers, we still serve but through partnerships versus directly, which then supports our focus and our profitability. Now, one of the most important lessons I've learned in sales is this. Knowing your customer is essential, but it is not enough. You must clearly understand your value-add points of difference, defend them, and continuously expand them. That's how you avoid commoditization. That's how you protect margin, and it's how you win. So for Mach 7, differentiation starts with true vendor neutrality. We give customers control over their data without forcing replacement of their existing niche or specialty imaging systems. We layer that with AI enablement and intelligent orchestration, our Flamingo dynamic policy engine, supporting complex routing and workflow automation. Now, security is another key advantage for Mach 7. Healthcare is one of the most targeted industries for cyber threats. Our BitSight security rating of 750, which is categorized as advanced, sits above industry average. BitSight is an independent third-party cybersecurity rating platform used by large enterprises, government agencies, and people like our big target customers. This isn't self-reported marketing language. It's externally measured and validated performance. That credibility strengthens trust and supports enterprise sales conversations. You add sub-second image access speed and strong price-to-performance value, and you have a differentiated rating that resonates. So knowing our differences, step one, extending and defending them through Flamingo modules, a solid dedicated customer engagement with the flight crew, and disciplined execution. That's where things start to hum, and it's where focus turns into competitive advantage. So let's turn to execution in the second half and our main priorities. First, sales momentum. We are focused on bringing in new customers, increasing proactive engagement within our install base, and accelerating opportunities in Asia and the Middle East. We're doing this with pipeline discipline by prioritizing quality, conversion, and alignment with our ICP, not pursuing revenue at the expense of long-term margin. Second, execution. Our flight crew model is now operational, and we've organized our teams into structured pods based on customer archetypes, like full suite customers, partner-led accounts, VNA-only customers, allowing us to build deeper expertise and deliver more consistent outcomes. We've also introduced company-wide week plans to increase visibility, accountability, and predictability. and execution is becoming measurable and repeatable, not variable and personality-driven. Third, leadership and organizational readiness. We've refreshed over half of our leadership team and we'll be onboarding an experienced CTO to strengthen platform scalability and engineering discipline. And finally, cost discipline and structural leverage. We're investing in growth-critical capabilities where the ROI is clear. We're optimizing our location strategy, including transitioning from a large, underutilized headquarters to a smaller, more nimble, cost-efficient, technology-enabled hub that can flex in size and foster collaboration and ongoing innovation. Our objective is disciplined, profitable growth, sustainable expansion, and execution that compounds. We've taken on some hard actions, we've aligned the organization, and now we begin to drive results. And with that overview, I'll hand over to Dan to walk you through the detailed first half financial results.

Thank you, Terri. I'm pleased to walk everyone through Mach 7's first half fiscal year 2026 results. This half was a period of intentional transformation for the business, strengthening our foundation's sharpening our commercial execution and positioning ROC 7 for future growth. The first half reflected lower capital license activity as we undertook a strategic commercial and organizational reset. While this impacted reported revenue, the underlying fundamentals of the business remained strong. Recurring revenue was resilient. and 85% of total revenue, representing a strong and stable base. We maintained excellent gross margins of 92%, demonstrating the scalability of our platform and services model. Operating expenses decreased by 6% as our disciplined reset efforts began delivering early efficiencies. And critically, Mach 7 remains in a very strong financial position with 18.5 million in cash and zero debt, giving us the flexibility we need to execute on our strategy. Revenue for the first half was 13.7 million, down 23% on PCP. This reflects lower capital license sales during this reset period. Recurring revenue of 11.6 million declined 8% from PCP and now comprises 85% of total revenue. Total car of 26.1 million and ARR run rate of 23 million were down just 8% and 2% respectively on a constant currency basis. While EBITDA and net profit after tax were impacted by the revenue mix shift, Our cost reduction initiatives and high margin profiles support improving operating leverage as activity rebuilds in the second half of fiscal year 2026. Our revenue mix continues to evolve towards subscription and the maintenance and support model. Professional services and capital licenses were lower, which we anticipated during this transformation phase. Our ARR run rate remains stable at 23 million, supported by our installed base and renewal performance. Product revenue remains balanced with a 55-45 split between VNA and the eUnity Viewer. Sales orders for the half came in at 10 million in total contract value. While lower than PCP, we saw a significant shift toward high-quality recurring revenue, which again represented 85% of sales orders. Capital software sales came primarily from expansions within our existing customer base, a positive indication of customer satisfaction and platform value. Professional services orders were lower as expected during this reset, but we anticipate an uptick as new deployments come online. Our foundational book of business remains strong and provides a solid platform for future growth. Despite the revenue decline, gross margin remains strong at 92%, reinforcing the scalability of our model. Operating expenses improved by 6% as our reset initiatives took effect. Adjusted EBITDA tracked lower in line with revenue, but we are seeing early evidence that the cost-based realignment will create meaningful leverage as we move forward. Cash receipts were $12.5 million, and we ended the half with $18.5 million in cash and zero debt. We continue to operate with financial discipline, and our balance sheet provides the capacity to execute our go-to-market and product strategies without compromising stability. We expect improved momentum in the second half as sales execution benefits from our reset, partner alignment continues to strengthen, and customers progress into deployment and expansion cycles. Thank you. Back to you, Terri.