Mach7 Technologies Limited

Good morning everyone and welcome to the Mark 7 Q1 FY27 result briefing. My name is Francoise Dixon and I'm Head of Investor Relations for Mark 7. Today our CEO Teri Thomas and CFO Shawni Hadfield will provide an overview of our Q1 result. We will then open it up for questions. If you have a question, please submit it by the Q&A text box Thank you, Francoise.

Good morning, everyone, and thank you for joining us. Mach 7 has now delivered four consecutive quarters of positive operating cash flow. We've grown ARR 8.5% in constant currency, and we are just a few weeks away from showing a new product suite at our biggest conference, RS&A. I am delighted to be here with Shawni Hadfield, now officially our CFO. Shawni, so good to be able to drop the word interim. We have strengthened our foundation and our recurring revenue base is growing. We're also broadening what our technology can do for customers and innovating, creating new modules. So today, I'll show you how we're putting this together into a stronger foundation from which to work. Standard Disclaimer about forward-looking statements, dollar figures are in Australian dollars, and the quarterly financial information that we are sharing is unaudited. Now, for those of you who don't know us, Mach7 Software helps healthcare organizations to store, view, and share many types of medical images. We're connecting those images closely to the clinical work and the electronic health record while keeping customers in control of their data, something that will be more and more important in a future in which AI plays a greater and greater role. Now the simplest way to say what we do is we complete the patient's picture with the patient's pictures. We have several opportunities in front of us to address medical imaging more broadly than just radiology and to extend across many more image types and specialties. So from pixel to point of care, We're helping clinicians see a more complete picture of the person that they're caring for. Now, we'll start off with the financial results, and then I'll come back to how do we grow, what are we building, and what's next for Mark 7. Shawni, handing over to you to take us through this quarter's financial results.

Thanks, Teri, and good morning, everyone. I'll take you through our cash flow results for the September quarter by covering the main numbers and what's behind them. Prior Comparative Period, or PCP, is comparing to the same quarter last year. It's worth noting that the Australian dollar has strengthened against all of our functional currencies over the last year. So where it's relevant, I'll quote growth in constant currency, which shows the underlying movement without the exchange rate effect. I'll start with the big headline. We generated $0.3 million of positive operating cash flow this quarter. In the same quarter last year, we used $3.7 million. This is our fourth quarter in a row of positive operating cash flow, which Muck7 has never done before. It's also the first time in our history we've been positive in a first quarter, despite this being a traditionally low-volume quarter for annual billings. Customer receipts were $7.3 million for the quarter, up 58% on $4.6 million last year. Reflecting both growth and improved billing and customer connection. Operating payments were $7 million, 17% lower than a year ago. We're now a quarter past the FY26 restructuring and the cost base has held, while we've increased what we spend on product development. This quarter, we capitalized $0.7 million, up from $0.3 million a year ago. We've increased our investment in the Flamingo modules, Teri will talk about shortly, as well as modernizing our existing products. If you added that spend back into operating costs, we'd be close to break even, with a small outflow of $0.3 million. On the same basis, a year ago, the outflow was about $4 million. So the improvement is real, and it comes from two places, more cash coming in and less going out. This slide pulls the key numbers together. We closed the quarter with $19.3 million in cash and no debt. That's up from $18.9 million a year ago and down $0.6 million from 30 June. Three things moved cash in the quarter. Operating cash flow added $0.3 million. Capitalized development used $0.7 million. And because we hold cash in offshore currencies, The stronger Australian dollar reduced the reported value of both cash balances by $0.3 million. This is a foreign exchange translation impact, not a cash outflow. Cash receipts of $7.3 million reflect growth of our customer base across recurring revenue, capital and professional services. It also reflects the work the team has done on billing and collections. Some of you will remember that receipts in this quarter last year were lower because of timing, and we flagged at the time that some of our older administrative processes had delayed annual invoices being processed and paid. We fixed those processes during FY26 and payments are now coming through when they fall due. Most of the reduction in operating payments was in staff costs, which came down from $6 million to $4.7 million, Noting that a portion of this decrease relates to the R&D payments sitting in investing cash flows rather than operating. Administration and corporate costs also fell from $2 million to $1.2 million. These savings come from the restructure we did in FY26. Our ARR run rate, the annualized value of subscription and support fees from customers who are live, was $23.5 million. That's up 8.5% in constant currency. The growth came from existing customers expanding and from new customers like UnityPoint and AmradNet going live. CAR, which adds contracted revenue that isn't live yet, was $25.3 million. That's down 7.4% in constant currency. The majority of that decline is driven by the Veterans Health Administration ending its NTP project. So, In summary, receipts are growing, costs are holding at the low level, and we're putting more into product development. With $19.3 million in the bank and no debt, we're funding increased innovation investment from our own resources. Teri, back to you to talk us through the growth opportunities.