Oneview Healthcare PLC

Thank you for standing by and welcome to the OneView Healthcare FY23 Preliminary Release presentation call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. If you wish to ask a question via webcast, please enter it into the Ask a Question box and click Submit. I would now like to hand the conference over to Mr James Studer, CEO. Please go ahead.

Thanks very much and good morning everyone in Australia. Good afternoon to those here in the United States where I'm calling from and in Dublin, Ireland. Good evening to my colleagues who will be joining me very shortly. Firstly, just the usual legal disclaimer around, particularly around forward-looking statements which I encourage you to read. I'd also just remind you that all amounts in the presentation are in Euros, which remains our reporting currency, unless otherwise specified. And of course, we are referring to our full year results for the year ended December 2023. Joining me on the call today is Helena, our Chief Financial Officer, Niall, our Chief Product and Strategy Officer, and JP, our Chief Operating Officer, who are going to be updating you on a couple of the key developments in their respective sessions. Just a reminder, our vision is to power personalised exemplary care experiences. And the agenda today, we are going to obviously look at the 2023 year in review. Niall is going to speak to one of the key growth drivers, which is our virtual care strategy. He's also going to talk about MyFairMobile, which is the product formerly known as BYOD, which we very successfully launched here in Los Angeles. I'm currently at the Bias Healthcare Conference. very large gathering here in Los Angeles, and we had a fantastic response to the launch of that product. And then JP is managing the Baxter partnership for us, and he's going to provide some real updates on where we're at with the Baxter partnership. Of course, I will then conclude by sharing our book on 2024, and hopefully there'll be plenty of time for your questions. So we'll start with the 2023 review. I'm not going to steal too much of Helena's thunder and Steve's high-level numbers should come as no real surprise because we telegraphed them in our 4C, which we released at the start of January. So, total revenue for the year is at €9.4 million, recurring revenue at €6.6 million. Very pleased with the improvement in growth margin, which has improved by 6 percentage points, and of course, very pleased with a strong cash balance to finish the year. But as I said, I'll let Helena discuss these in more detail in her section. Most importantly for any company is, of course, new customer adoption. I think everyone who knows the company knows that we are in the elephant hunting business. We have a very elongated sales cycle, which has always been challenging. But we have had a very strong hypothesis that as a result of the changes during the pandemic, that we were seeing renewed demand for bedside technology. And that was certainly evidenced by 2023 representing a record year for net new loaders. Importantly, SixMet new logos and importantly the geographical distribution. Obviously the United States and Australia have been our key markets for many years but we were really encouraged to win our first new business in New Zealand where we will be deploying at the new Dunedin Hospital and of course in our own backyard at the new Children's Hospital of Ireland which is a very important win particularly for our engineering resources who are obviously largely based in Dublin. So a very exciting year in terms of new customer wins, and, of course, in the United States, both Capitoff and University of Miami, which are now all of these projects... Oh, sorry, I beg your pardon. Capitoff, University of Miami and Aviv are all now live and up and running, and they're currently in progress deploying at ADNI, at the Children's Hospital, and workshopping the project for the new Dunedin Hospital. Perhaps equally important are the expansions and upgrades that we enjoyed during the year. So we have extended our partnership with Blumengrad in Thailand for a further three years. We've completed a thousand-bed expansion at NYU Langone Health, who are not only our flagship customer on the East Coast of the United States, but also our co-design partner for the MySpace mobile project, which I think many of you are aware of already. At BJC Healthcare, we are midway through the deployment. We've deployed four of the 10 expansion hospital sites in our lives. We're also in the process of fully migrating BJC to cloud, which again reinforces the investment we made in our cloud product. And we were very pleased to sign our third consecutive extension at the University of California in San Francisco, who of course were our first customer in the United States And this brings many of these partnerships to over a decade long, which is a great testament of the value we're delivering across the enterprise. In terms of financial highlights, again, we want to focus on the contracted bed growth, which has been 45% over the last two years, so running around at 22%, 23% annual growth rate. Our annualised recurring revenue is at 7 million euros, or just under 12 million Australian dollars. This year was a really important year. The decision we made last year was to sunset our Gen 2 product, which is our Windows product, which we end of life on the 31st of December. And as that, we have seen some tactical change from three customers that were unwilling or unable to migrate to Android hardware. We'll have a look at the financial impact of that in a second, but it's been reasonably positive from our perspective. In terms of the after-tax loss, if we exclude the one-off treatment of the Regis Legal case in 2022, we improved our operating loss by nearly 3 million euros, or 27%, which is a sign that we've been very disciplined around cost control and obviously starting to see the benefits of revenue coming on stream. And of course, I want to thank everyone on this call who participated in the capital raise, which we completed in August. Thank you for those institutions that were so supportive and of course for the Share Purchase Plan where we had 180% oversubscription of the FPP, which we are very grateful for. So in terms of highlights, as I mentioned, JP is going to give an update on the Baxter partnership. Very exciting news as we've just received, as we intimated in the 4C, we just received our first purchase order from Baxter yesterday. JP will speak to that in his presentation. We've been selected as vendor of choice for two further US enterprise customers, which represent an additional four and a half thousand beds. As I just mentioned, we've enjoyed multi-year renewals of two major contracts at Binnigrad and UCSF. We've added over 15 million Euro or nearly 25 million Australian dollars in new total contract value from existing customers through upsell and obviously through new customers added during the year. We just completed yesterday the full launch of our Myfay mobile product which is now commercially available. The pilot went live at NYU Langone in Long Island in February and Niall will be sharing further information around that. As I mentioned, we completed the capital raise. We continue to see a very strong sales pipeline reflecting Gartner's assessment that interactive patient care has finally after quite a long journey, reached the plateau of productivity, which we are very excited about. As I mentioned, BJC is in full expansion mode. We've seen a 9% growth in contracted beds during the course of the year, and as I mentioned, with a further 4,500 beds in contract negotiation. We're going to talk a bit about meal ordering today. I think everyone should be cognizant that we published a very interesting case study with Omaha Kibbs, showing that they now have 95% adoption of digital meal ordering and have seen an 87% reduction in food waste, which is a very powerful testament. I mentioned the new logos we've already added, and I also wanted to thank Shareholder Support for the appointment of Barbara Nelson and Mark Cullen, who were both appointed to the Board of Directors during the course of the year. So to give a visual of what I was just discussing around, as I mentioned, the year-over-year numbers mask what's been a pretty busy year around on the implementation side. We saw a 190% increase in live bed installation during the year with 1,950 beds coming on live. But as I mentioned, we have seen some tactical turn with three customers for a similar equivalent number of beds that have... chosen not to renew. These were entertainment only lower margin beds. And as you can see in the fourth bullet point here, the beds we turned on this year had an average revenue per bed, which is 94% higher than the beds that we did not renew. So everything else being equal, those beds will result in an additional million euros in recurring revenue in 2024. You can see here we have this large group of contracted not yet installed beds, which are primarily the BJC expansion, the Children's Hospital of Ireland and Catholic Health, which we are actively scheduling for delivery this year and in some cases early into 2025. And we have the 4570 beds that are currently in contract negotiation. We'll share a little more granularity on that later in the presentation. So very positive momentum in the bed funnel. 2023 really has been a really important year for the company, setting us up for the growth that we're embarking on right now. And I think it's fair to say that 2024 is the most exciting time in the company's history. We've really enjoyed great success from the investment we've made in cloud. We know how much it reduces the complexity of deployment. But perhaps more importantly, cloud is what has really facilitated the ability for us to now deliver the MySafe mobile solution on the patient's own device. It's also, it was called out by Baxter as a very clear factor in their decision to choose us as their preferred partner in this space. Some important data points here that probably won't come as any surprise, but 88% of global cloud decision makers are adopting cloud. We see that in our own conversations with customers where almost every conversation we have with an existing customer has adopted a cloud service strategy. All but one of the contracts we signed in 2023 are for cloud, and as we've observed earlier, are materially higher prices than our legacy Gen 2 contracts. So MicroMobile, as I mentioned, we had the full product here launched here yesterday. It's been extremely well received. We've had fantastic feedback. The genesis of this is very simple but very powerful. It is our response to what we've known for many years is that hospitals do not like or do not have the desire on all the resources to deploy capital in patient rooms. So up until now, we've had to rely on the ability for the capital budget to vote in favour of patient engagement. And what we know, also sadly, is that as enthusiastic as the patient experience and nursing teams may be, often when we go into the capital budget, we run into competing priorities. And we know that the hospital needs to buy a new prevention robot, they want to upgrade their MRI machines, And sadly, patient experience has fallen down the list of priorities. Being able to deliver this now on the patient's own device is something that is expected in the digital world we live in. Most importantly, it's going to expand our addressable market in a really meaningful way. We know already in the conversations we're having with US customers that we're never going to be in a position to deploy hardware in the room, but being able to make this interface available on a patient's device is going to be a game changer. And it's going to open us up to new markets. So right now we continue to focus our sales energies in the United States and Australia, but we have, as I think we've discussed earlier, identified the UK, Canada and Germany as markets that are of interest to us. We have no ambitions to tackle any of those in 2024. although we may certainly look at some exploratory work in the UK towards the end of the year. I'll leave Niall to talk further about that as we move forward. So the product usage and utilizations across our 10,000 beds, we had nearly three quarters of a million OneView admissions last year. This is resulted in substantial time saving. Importantly, we know entertainment is still a key component of the platform. And you can see here the utilization stats that patients are using the OneView platform for television for over eight hours a day and using the tablet for nearly 12 hours a day, which are significant increases on 2022 levels. You also see we've had a really meaningful increase in assigned education. But I want to just talk a little bit about our vision for new ordering because, as I mentioned, the Omaha case study has been incredibly powerful. And I think it's a place that we can deliver really meaningful ROI. And I just want to socialise a few numbers here. If you think about the 700,000 admissions that we had last year, you know, if we assume that we can get the same sort of penetration rate that we're enjoying at Omaha and 90% of the patients use the device to order their meals electronically, we have 640,000 patients using the meal ordering. Our typical length of stay is three days. So that would equate to effectively nearly two million patient days where patients could use it to order their meal. Typically, our patients order two and a half meals a day, but let's assume it's four million meals ordered during the course of the year. We know from the work we've done with our user group that nurses believe that every time they're using the OneView device to order a meal, they're saving about three minutes of nursing time. So those four million meals would equate to 12 million minutes of nursing time, which is nearly 22 years of nursing time saved in any given year from the 10,000 beds we have live. That's a huge driver of value. We know from conversations with an existing organisation we're talking to that they think from moving from their current solution, which is entirely paper-based, to one view could save them over $2.5 million a year. So it's very, very impactful and something that is another key driver of our MyStay Mobile solution. So let me pass it across to Niall now, who's going to do a quick recap on the product innovation 2023 and then talk a bit about virtual care and MyStay Mobile. Thanks, Niall. Thanks James. So just to share some of the innovations that our team have been working on this year. We target between five and six major software releases a year and this year we did five software releases on our core and bedside hardware platform and then the first release of our MySQL mobile product as well. I'm going to talk a little bit more about that and how that's part of our growth strategy for 2034. We enhanced the virtual care API that we delivered in 2022, so we added support for additional workflows, so these are observation workflows as part of virtual nursing, which is enabling virtual nurses or virtual sitters to observe patients one way through the one view hardware at the bedside and to be able to prompt patients that that observation is happening. We did work around simplified pairing and many of our customers use tablets paired with televisions and the user experience and that was originally designed a number of years ago and before Airplay and Chromecast became the norm and so we have simplified the user experience for pairing to better align with those consumer pairings. As James mentioned, meal ordering is an incredibly important part of our value proposition. It's described by customers often as our killer app and a significant driver of efficiency. And so we continue to make enhancements to that feature to make it easier to use and also to add support in new customer workflows. And we've made changes to support diversity, equity and inclusion programs at our customers this year for patients, who are undergoing gender reassignment. It's obviously very important for them that they see their preferred name on the system, so we've made modifications to support that in collaboration with our customers. We've also made technical improvements to the platform, and this is really to continue to improve the scalability of the platform for our enterprise customers as our customers grow in size and complexity. and also to ensure the security and stability of the platform as well. Just a comment on the photo that you see in the right-hand side there. So we enjoy extremely collaborative innovation partnerships with our customers. This is one example. So this is NYU Langone Health. We sent a serious delegation to our Dublin office in 2023. This was paid for by them. And the focus of two days of workshops was around the hospital room of the future. So some great collaboration there. We're just moving on to the next slide. I'm going to talk through a couple of the three growth drivers for 2024 and then hand over to JP to talk about the third one, which is our Baxter partnership. But I'll start by talking about virtual care. Hospitals in the US and really around the world are undergoing a staffing crisis. This is a quote from McKinsey and from a study that they did in 2023 that really shows the scale of the problem in the US. 45% of inpatient nurses reporting that they're likely to leave their role in the next six months. An increased workload burden is the primary factor that is cited behind that intent to leave. So it's clear that there's There's a need for change. The state of quo is just not a sustainable model. Moving forward to the next slide of what is virtual nursing. It's a complex problem, but an important part of the solution is virtual nursing. So I'll just kind of talk to you a little bit about what this is before talking about our virtual care strategy and our virtual nursing strategy. So virtual nursing is where you have an expert nurse who's based in a remote command centre. So typically an organisation would have one command centre that is serving all of their hospitals. So it doesn't have to be geographically located beside a hospital, it can be anywhere because obviously it's connected via network connectivity. And these remote or virtual nurses are supporting the on-floor nurses, so the nurses who are physically in the hospital, with non-physical care. So this would be things like supporting patient education, patient observation, physician rounding, the admission process and preparation for discharge. Really the goals of virtual nursing are to improve patient safety and this happens through virtual nurses being able to reduce the interruptions that on floor nurses face that can cause them to make errors and also to provide a sustainable staffing model and the reason for this is that you often have nurses who may Yet the point in their career, as the McKinsey quote shows, that they no longer are up to the physical demands of the job. Nursing is obviously a very physically demanding job. But they still want to be able to leverage their training. And so virtual nursing gives them that opportunity to be able to do that in that remote manner. This is a really important trend in the U.S. market. And we're seeing increasing adoption and piloting of virtual nursing programs. So what is our virtual care strategy? Just moving on to the next slide. So I think this is a really important point. So this is a competitive space. Obviously, whenever you have a big firm like this, a big customer need, you have a lot of people responding to that need. And there are established vendors in the market that provide virtual care platforms. So we chose not to build a solution here to try and compete with these established vendors, but instead to leverage the platform that we already have in the room to leverage that patient television and to be able to deliver virtual care by integrating into our customers' preferred providers. And this is really important because customers may have a preferred provider that they use today. They want the flexibility to be able to change that provider in the future. And so our platform-based approach allows them to do that. So what we're doing is we're using that television as you can see in the little graphic there. That television is connected to an integrated camera and audio unit from the virtual care platform vendor and then the OneView hub device that is behind that television is controlling that television as to whether that television is being used by the virtual care platform or by the patient and the OneView system. I mentioned the virtual care API. We delivered the first iteration of that in 2022. We delivered another iteration of that to support additional use cases in 2023. And that enables any certified virtual care platform. So that's a virtual care platform that we have certified with that API to share that single screen. We certified our first partner on the API. In 2023, that is Caregility, obviously a partner we've been working with for a number of years. And we have several other leading virtual care platform vendors in the certification process currently. And what's next after this? So next for us is looking at an AI-powered virtual care assistant that can support virtual and on-unit nurses by uploading some of those common patient questions or tracking information or personalising engagements And so your virtual care model consists of a virtual care assistant, a virtual nurse, and then a non-unit nurse providing physical care. So that is our vision. Next, we're going to talk about MyStay Mobile, which, as James mentioned, is another key growth driver for us as we go into 2024. And there's really three drivers for change that are really important in creating the tailwind for this product. One is rising consumer expectations. So we all use digital technologies more in the pandemic. Across generations, I think, whether it was ourselves, parents, children, we all survived digitally essentially for a number of years. And we bring those expectations of convenience, of control, how we engage with online retail, how we engage with travel and tourism, how we engage with financial services. We bring that to our healthcare experiences. Second driver is around smartphone adoption. So smartphone adoption is at an all-time high. Under 50, you've got 97% of people in the US market having smartphones. Even you go up over 65-year-olds, you've got 76% smartphone adoption. So almost everyone has a smartphone these days. And then the third driver for change, and this is really linked to that sustainable staffing problem that I spoke about, is the need to reduce past burden for nursing. So, service estimate that up to 12% of nurse time could be freed by delegating tasks to other roles. So, for example, for patient care technicians. So, moving on to introducing MyStay Mobile. So, what MyStay Mobile is doing is allowing capital-concerned healthcare organisations to benefit from the power of the industry proven care experience platform that we've built, elevating patient care and reducing the task burden, reducing interruptions to nursing and this is through self-service and automation. We've built this on the cloud-based platform that powers our hardware-based solution at the website today. We're not building an entirely new full stack. This is leveraging all of the investment and work that has gone into that platform and all of the depth and breadth of integrations to electronic health systems to other hospital systems that we've developed over the years of serving top healthcare organisations. The difference here is we can deliver this as an entirely stacked solution. So no hardware, no infrastructure required. It's all of the features of our hardware-based solution that is in use in hospital rooms today. The only exception is live television because typically there is already a television in the patient room. We've just gone live with a pilot of MySaneMobile. We're piloting it with NYU Langone Health at their Long Island Community Hospital in Long Island. And as James mentioned, we've just launched the product to the market formally this week, the VICE conference in LA. And just moving on to the next slide. So for those of you with children, this is probably a too familiar image. What MySpace Mobile is doing is it's putting the patient at the heart of the experience, connecting them to digital information, digital tools on their own device via a really simple, easy-to-use web application. And this is another really important point. This is not an app that they need to download from an app store. They get an SMS or an email at the point of admission via integration into the electronic health record at the hospital. They get that link, and they can click on that link, and it takes them straight into MyStay Mobile. So it's really about making it as easy to use, removing as much friction as possible, and so we connect them to those digital tools and to that digital information. I'm going to hand it over to JP now to talk to us about those great libraries who are back for the partnership.

Thank you, Niall. I'm delighted to be here to give you guys an update on our Baxter partnership and the bar agreement that we signed with them in May last year. We took part in a very competitive ORSP and we were delighted to be awarded that in May. As James has alluded to already, Baxter called out a number of key success factors that helped us get over the line across. our tablets, our TV and set-top box offering, which delivers virtual nursing, the all-in-one digital door sign, whiteboard and light stay mobile, as well as the fact that we're both in the cloud and the configurability of the set-top box. All of those things together are a care experience platform, and they're going to fit very nicely now into Baxter's care communications platform. Under the agreement, the CXP platform will be sold to the Baxter customer base. It has been a long time since May. Baxter acknowledged and said we need to really get this. They do this very frequently and launch new products. So we wanted to make sure that we got it right. And to date, we've engaged with over 100 different Baxter personnel across many different functions. What I'd say is that we're very now deeply integrated into Baxter's internal processes from order to cash, through project management, implementation and through their support team. We're highly aligned with their delivery methodology as well as their support methodology and we're really ready to hit the ground running now and support the delivery of the platform to potential new customers. The Care Experience platform is installed in Baxter's Customer Experience Centres in Carely, Batesville and Irvine in the States. We have lunch, the market lunch has commenced and we are going to be at every major trade show that Baxter will be attending as well throughout the year. And I'm happy to say that we did receive our first PO this week from a very high profile children's hospital in Florida for our digital door sign. And we continue to be in negotiation on the inpatient beds for that opportunity. The next slide, please. And we are engaged with the Baxter Connected Care Salesforce. So that's approximately 25 reps that are working across the United States who have a deep and meaningful relationship already established with many different hospital systems. This is gonna increase our customer base to reach significantly in the market. And as the partnership matures, Baxter are going to be empowered to implement our platform, meaning they'll run the projects and they will do the installations. So scaling this, we will be looking to use Baxter's own people in time. What this is really doing for Baxter is filling that last gap in their own product portfolio around patient experience, the digital door signs, and digital whiteboards to better connect their patients and deliver their own strategy around the connected patient room So as partnerships have gone, it couldn't have gone any better so far. We're highly aligned and very, very much engaged, and the Baxter team is very, very motivated to deliver the care experience platform to their customers, and they're very excited, as well as adding in the MyStay Mobile as well. So with that, I'll hand it over.

Thanks, Jesse. So that first slide there shows our capital structure and our market cap base from the late 2000s is $272 million. So looking now at our income statement, recurring revenue is up by 7%. Total revenue for the year was $9.4 million, up 5% on the prior year. This increase is due to higher non-recurring revenues. The average revenue per bed per day for live beds has increased by 13% year on year. due to the sunsetting of lower revenue Gen 2 beds and a higher mix now of Gen 3 deployments. Hardware deliveries for two US and one European customer, which were planned to ship in December, have slipped into 2024 due to unexpected project delays, and this has reduced the forecasted total revenue for the year by approximately €2.9 million, as we have flagged in our business update to the market at the beginning of January. The gross profit margin, Percentage is 6 points higher at 66% due to the higher portion of software revenue in the year compared to the prior year. Operating expenses reduced by 14%, mostly due to the headcount reduction programme initiated in the last quarter of 2022 and also the office footprint downsizing, and we continue to tightly manage our costs. The operating EBITDA loss for the year is 5.74 million, 20% lower than prior year. When you exclude 1.36 million of one-off net income from the settlement of the Regis legal case in 2022, so that we're comparing right with like, the loss after tax for the group has reduced by 27% or 3.2 million compared to the prior year. Moving now to the balance sheet. The year-end cash balance of 11.5 million reflects the 22.8 million Australian dollar or €13.8 million, equity raise, which was completed in August of 2023, and this incorporated both a placement and an oversubscribed SPP. Property plant and equipment has increased due to the capitalisation of the lease on a new smaller Dublin office. And we are currently in discussions with the Irish Revenue Commission to agree a share delivery payment for the €2.5 million debt warehouse payroll tax liabilities. which were an Irish government COVID pandemic support. And we expect in the coming weeks to agree a zero interest rate five-year repayment schedule with repayments commencing in this coming May. And that's in line with published Revenue Commissioner guidance. Turning now to the cash flow statement. The group finished the year with €11.5 million in the bank. This reflects the equity raise which took place in July and August. total operating cash flows were 7.3 million for the year. And when we exclude the one-off legal claim proceeds of 1.3 million in the prior year, the operating cash outflow is actually 3 million lower. And this was driven by customer receipts being almost a million higher in 2023 and the impact of the cost reduction programme, which I mentioned previously. And I would signal here that headcount has recently increased in the aftermath of the equity raise. as we ramp up to fulfill Baxter resourcing and the MyStay mobile development. So this is our ESG slide. ESG is important at OneView, and this slide shows our ESG principles and progress. We are pleased with our progress in furthering our strategy in 2023. And our strategy covers not only our own internal ESG impact, but the OneView solution positively impacts the ESG aspect of other stakeholders And a great example of this is the reduction or elimination of paper menus by using the one-due meal ordering platform. So that concludes the financial results part of the presentation, and I'll hand back to you now, James.

Perfect. Thanks, Alina. Let's talk now about market conditions and the outlook for 2024. So as you've just heard, we have multiple growth areas, three very clear ends of the growth. They're going to drive significant top line growth for us in 2024 and I think also significant improvement in margins. So as Helene has alluded to, the delay of hardware for a couple of customers towards the end of 2023 is going to land into 2024, which is obviously going to give us a top line boost out of the gate this year. Leveraging the in-room platform for virtual care. So the two big conversations we have going on, as I mentioned, with a couple of major enterprise groups, are really focused around what Niall referred to. Think of us as the enterprise app store at the bedside. How do we give our customers the flexibility to deploy their providers of choice, their vendors of choice on the OneView platform in a seamless way? And I think our API strategy has really delivered on that front. The commercial availability of MyStay Mobile, I can't overstate the significance of this enough. I think we've all, I think for all of our shareholders, you guys have understood how hard the sales cycle is in enterprise healthcare. As I mentioned, we're in the elephant hunting business. We're trying to get very large, very complex organisations to deploy a platform that has a very broad range of touchpoints. We never get any pushback on the value proposition of the software. The only pushback we ever get is the lack of desire to have to fit hardware into patient rooms. So that has been an ongoing challenge for the business for many years. Literally for as long as I've been here, we've heard, why can't we allow patients to deliver the solution on our own device? We can now do that as of today. The other really meaningful development here is we have not, up until now, supported iOS devices. So during the pandemic, for example, a huge number of US customers received philanthropic donations of iPads and asked us, could we deploy on the iPad? Up until now, we couldn't do that. With MyStay Mobile, we can deploy on an iPad or an iPhone. So that, again, is going to open up a much bigger segment of the market. The Baxter partnership is an incredible asset for us. I think we've been incredibly successful in winning some of the most discerning health systems in the country. The hardest thing for any small technology company is market reach. And Baxter has an unquestioned market reach in the United States. As JP mentioned, we've trained up 25 of their connected care executives. We have subsequently trained up a further 70 of their account executives. So we're, in effect, going from having a dedicated sales force internally at OneView of four people to having nearly 100 people out offering the OneView platform to US customers. We couldn't buy that sort of access. So that is phenomenal. The second thing that is important to understand is that when we originally signed the agreement with Baxter, MyStay Mobile was not a commercially viable product, so it was not part of the reselling agreements. We have just renegotiated the reselling agreements in recent weeks to make sure that MyStayMobile is part of the agreement, so they will have the ability to sell that as well. The only one I want to touch on, I mean, unsurprisingly, at this health event we're at, almost every booth is talking about AI. AI is obviously transforming the world in which we all live in an incredible way. We have embraced AI across the company. I have personally applied to and been accepted to study AI AI for Business program at Oxford this year. I'm spending one week a quarter in a very interesting cohort of professionals from around the world talking about how we can deploy initiatives across the company. We've already deployed a GitHub co-pilot 12 months ago across our engineering resources and seen meaningful productivity gains already. Unsurprisingly, we've also uploaded all of our product documentation and marketing collateral into a custom version of GPT which allows staff members to query the product suite which is again a basic but important driver of internal productivity. So we're obviously exploring ways to deploy AI externally in our product. We've got countless ideas that we're kicking around and we look forward to sharing more information about those as they come to fruition. Next thing I wanted to mention is that we have, even though it's mid-February, we just signed our first major new logo of the year, which is Mercy Health, a very large, extremely well-respected healthcare system based in the Midwest of the United States. We have a satellite office in St. Louis, which is servicing this account. As you can see here, Mercy owns 44 hospitals across seven states here in the US. We are currently deploying at their Love Family Women's Centre in Oklahoma City in April this year, and we are in late-stage red-line negotiations over an enterprise agreement for a further 2,800 of their beds, which represents just under half of their enterprise. So, fantastic organisation. They are a home to the Mercy Virtual Hospital, which some of you may be familiar with. which is one of the, I think it was the world's first virtual hospital in the United States. So fantastic new partner to add to our list. So just in summary, the three growth drivers are very clear in my mind. Virtual care is what has been driving the business over the last couple of years. As I mentioned, almost every major conversation we're in with academic teaching hospitals is how do we bring video into the room to support their hybrid models of care? MyStay Mobile, I think, speaks for itself. It's going to shorten our sales cycle. It's going to eliminate capital costs. It gets us out of the capital budget, and it's impossible to let us state how important that is. And as JP has articulated, there's been an enormous body of work going on between ourselves and Baxter. The fact we've received our first purchase order this week, I think, speaks volumes about the promise of this partnership, and I have no doubt we are going to enjoy a mutually beneficial partnership for many years to come. So just a reminder on what differentiates ourselves from the competition. We have what we believe is the most innovative technology stack in the business. We are the only cloud-hosted vendor in our space, which is a key point of differentiation. It was what helped us be selected by Baxter. It eliminates the cost of new smart TVs by leveraging our compute device behind the TV, which again was a point of differentiation they called out. We spent a lot of time building a value framework, which I'll talk about a little bit further. I think Niall has spoken very impactively around the impact of our Virtual Care API. And we're obviously very proud. We've spent a lot of time making sure that our solution is scalable. Scalability is the single most important issue when we're dealing with the institutions of the calibre of the institutions we're dealing with. And I think the fact that we have these multi-year renewals with the likes of UCSF, BJC, and NYU speaks to the value that we're delivering to our customers today. And that value is articulated through the value framework that I want to thank Nikki Fetterman, who runs this project for us internally, who's done amazing work around delivering a data strategy and a data platform that allows us to measure value for our customers across these very clear six different segments. And that, of course, results in a logo a slide globally, which I think would be the envy of most customers of our size. So that concludes my remarks, but I would be delighted to take any questions if anyone has any.

Thank you. If you wish to ask a question via the phone, please press star 1 on your telephone. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. Your first question comes from Dan Hurin from MST Marquis. Please go ahead.

Good morning. Thanks so much for taking my question. Unsurprisingly, I want to talk about the Baxter Transaction or the Baxter Agreement. I'd just like to ask about the motivation of the Baxter Salesforce and anything you can tell us. How are the remunerators in regards to 1G products? And does the adding of my study mobile into that agreement change any of those dynamics? Sure. Hi, Dan. How are you? So, look, I think the motivation for Baxter is pretty clear. So, Baxter obviously is the dominant provider of hospital beds in the United States. They are a very significant provider of nurse school systems in the United States and a very unified care communication platform called Vault. Two of those three things, obviously any hospital room has to have a hospital bed. There's a legal requirement to have a nurse call system. So for BACs to grow their business in the United States, they're relying on a number of growth opportunities, obviously a new construction, which is growing at about 4% per year. But for them to be successful in the bed business, they have to displace a competitor. And for them to be successful in their nurse call business, they have to displace a competitor. So one of the things they particularly like about the CareXperience platform that they're selling for us is that around 70% of US hospitals don't have a CareXperience platform. So there is a huge white space opportunity for them to demonstrate that they're bringing innovation. I think they understand that the product we offer is extremely complimentary alongside the Inertical system because we're putting more convenience and control in the hands of the patients, which is going to liberate nursing. So in terms of how they're compensated, they are compensated whether they're selling a core platform or whether they're selling MyStay Mobile. It's no different for either way. So I think they are highly energized. Certainly the engagement we've had with them to date suggests that this is something that's going to make their lives easier. They will be carrying quota form a one-view solution in the same way they'd be carrying quota for their nurse call solution. Thanks, James. And just touching on something you just said there, you talked about their opportunities to display their competitors, but is there an opportunity to sell the ones you've put up into their existing previously installed customer base? 100%. Absolutely, it is. So when I say the opportunity to display, if they want to sell their nurse call system in the United States, they have to displace a competitor. In 70% of hospitals, you know, they don't have to displace a one-view competitor because there is not a one-view competitor in the market in 70% of US hospital beds. Do you understand my point? No, no, I get it, I get it. But just clarifying, I thought you were making a point about the way that they could sell. No, I've got it. And perhaps, James, could I bother you? Could you just give us a broad overview of the penal impact comparing a custom in or an installation of a traditional versus the new BYOC system. Yeah, 100%. So I think if you think about a typical 300 bed hospital, I think you're aware of kind of APU, you know, is roughly around $1,000 per bed per annum. So you're looking at $300,000 of OPEX. But in order to deploy the OneView solution in year one, For those 300 beds, you have to deploy the tablet, but the tablet has to be mounted either on an articulated arm or on a meal table. It needs a custom case to deploy the tablet, and it needs a compute device behind the television. So you're looking at, with installation costs in a union labour market, you could be looking anywhere between $2,000, $2,500 per room in order to turn the solution on for our core platform. So you're looking at three quarters of a million, maybe a million dollars of CapEx in order to turn the solution on. So that gets you into the CapEx budget, which is the last place you want to be. So now with BYOD, they are simply going to subscribe for software for the year, and the cost of that software subscription is obviously going to be a fraction of the capital cost that would otherwise be incurred. Yeah, because as I think you're aware, when we're selling hardware, particularly if we're selling Samsung tablets, you know, we can't generate much margin on that. That's the cost plus kind of transaction. Similar to the other in-room hardware, it's, you know, it's the sort of stuff where there's a list price, pretty clear visibility for the customer. So by moving to a fewer SaaS, fewer software model, we get the hardware out of the business, which should ultimately lead to blended gross margins that move up pretty dramatically from the mid-60s where we are currently, hopefully into the mid-80s. Right, and if I could just push on that a little bit, James, putting the hardware aside, recurring revenue, the revenue and, I guess, EBITDA impact of the BYOD installation versus the traditional Well, look, we're obviously still in price discovery, but I think we feel that the value proposition, the only thing you're not getting with MyStay Mobile is free-to-air television. And I think we would argue a pretty strong case that free-to-air television has very little value. So I think the impact is going to be, on the software side, is going to be not dissimilar to where we are currently. Got it. Thanks, James. I've got some more questions, but I'll jump back into Q this time at the end. Thank you. Thanks, Dan. I appreciate it.

Thank you. There are no further phone questions at this time. I'll now hand over for webcast questions.

Hi. We have two questions in on the webcast. James, the first one I think you've already addressed is from Anup Kaira, and the question is, can you talk about the incentives that factory salespeople are given to sell one product? I think you may have addressed that when you talked about the quotas and the targets, but do you want... have you anything to add to that?

Yeah, so as I mentioned, Anoop, yes, the BACs will be carrying a quota for OneView. They'll be incented the way they would typically be within the BACs organisation. We have also put a separate OneView incentive program in place for BACs for reps so that they will be incented for the first order that they deliver and the most successful back-to-reps will enjoy effectively a one-view President's Club style arrangement which will incent them further.

Right. The second question is, can you advise on the onboarding timeline for the order book?

Yeah, look, it really varies to a pretty significant extent. A lot of these issues are beyond our control. Obviously most of the business that's contracted not yet installed is scheduled for delivery this year, although in a couple of cases some of those hospitals might not be opening until 2025. So it's really to a large extent we have accelerated our ability to deploy our product, obviously by migrating to cloud, which is taking some of the burden away. But when we're deploying in a large, complex environment like BJC, where we are deploying into operating hospitals, we are constrained sometimes by room availability, which can impact the ability at which we can move at speed. I hope that answers the question.

Okay, I've nothing further on the webcast.

Can we just check if there's any further questions on the phones before we wrap up?

Dan has jumped back in, I believe, so I'll hand it over.

Thank you, Dan Hearn. Please go ahead.

Thanks very much. Sorry, just a couple of very boring questions. I was just wondering, in the broadest terms, could you talk us into the shape of your operating expense lines in FY94? Yeah, look, I think we telegraphed during the Capra is we set out to add around 20 staff back into the business. In the fourth quarter of 2022, like every other tech company in the world, we downsized our staffing levels by about 20%. So effectively what we've done there is we've basically replenished that headcount, brought them back onto the books, with a view to making sure that we are... Baxter have made it very clear to us that they want to make sure that we are able to scale to their needs and requirements. So we've brought that headcount back on. We've obviously trained those folks up. As JP mentioned, as we begin to deliver, the implementation burden will be shared with Baxter as we continue to enjoy success with them. So we're going to step up our OPEX by, I would say, year-over-year, Helena, would it be, say, 20-ish per cent in the initial phase with the view that as we can hand off, perhaps in the latter part of the year, we might see some of that cost come back out of the business?

Yeah, that's about right, James.

Thank you. And just in regards to that tax liability, how that would be reported to the penal, that just comes through the tax law then?

It's already gone through the P&L. It's really just a deferral of payroll taxes back in the time of COVID, mainly in 2020, Dan. I guess the thing is, at the moment, it's shown as a current liability due to accounting rules because there's no way to repay it at the end of the year. But we're highlighting that it's not actually a current liability. It's going to be spread over equally in five years. starting in May, and most importantly, there were changes in the government legislation two weeks ago, and it's now annual interest charges have been foregone, and it's a zero-rate debt.

I understand. That's correct. Thanks very much.

Okay. Great. Well, if there are any questions, yeah, thanks very much. I think we'll wrap things up there.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.