Mach7 Technologies (ASX: M7T) banks on renewal program, disciplined cost management to maintain positive cash flows in FY24

Highlights

• Mach7 Technologies develops innovative image management and viewing solutions for healthcare organisations
• Cash receipts of M7T in 1HFY24 increased by 74.2% YoY to AUD 15.50 million
• JM Financial Group Ltd. has highest stake in M7T with a shareholding of 11.76%

Mach7 Technologies Limited (ASX: M7T) is a global healthcare imaging software firm that allows healthcare providers to locate, connect and share diagnostic image and patient care intelligence as per the requirements and make informed decisions. The company operates across 15 different countries and caters to over 165 customers.

In the first half of the financial year 2024 (1HFY24), the company reported 18.9% YoY drop in the revenue to AUD 13.30 million, underpinned by short-term effect from delay in revenue recognition related with rise in subscription sales orders in 1HFY24.

Cash receipts during the period grew by 74.2% YoY to AUD 15.50 million, driven by ARR renewals and timing of contract milestones.

Meanwhile, operating cash flow increased on YoY basis, reflecting growth in cost management system and receipts. 

Top 10 shareholders of M7T

The top 10 shareholders of M7T have around 42.63% shareholding in the company. JM Financial Group Ltd. and Australian Ethical Investment Ltd., have the maximum stake in the firm with a shareholding of nearly 11.76% and 11.14%, respectively.

Recent business update

On 24 April 2024, the company shared that during the third quarter of the financial year 2024, sales orders stood at AUD 7.4 million, compared to AUD 11.3 million in previous corresponding period. With this, YTD sales orders reached AUD 56.9 million.

As on 31 March 2024, annual recurring revenue run rate stood at AUD 22.3 million and contracted annual recurring revenue reached AUD 28.2 million.

Outlook

In FY24, the company expects to deliver sales orders of more than AUD 60 million, on the back of growing interest in its product suite and renewal program. Revenue of AUD 27 – 30 million is anticipated in FY24 with opex growth of less than 15%. The cashflow is expected to be positive in FY24, underpinned by disciplined cost management, enhanced receipts predictability for subscription contracts and increased renewal fees.

Share performance of M7T

M7T shares closed 0.75% higher at AUD 0.670 apiece on 27 May 2024. In the last one year, M7T’s share price has increased by 19.64%, while in the past three months, it has dropped by 4.29%.

The 52-week high of M7T is AUD 0.985, recorded on 28 July 2023, and the 52-week low is AUD 0.520, recorded on 6 June 2023.

M7T Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 27 May 2024. The reference data in this report has been partly sourced from REFINITIV.

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