Medical imaging software company Mach7 Technologies (ASX: M7T) has signed a three-year subscription renewal agreement with radiologist platform DocPanel for the Company’s Enterprise Imaging Platform and eUnity Diagnostic Viewer.
The agreement is for a three-year subscription license with a minimum fixed fee. The total minimum value of the renewal is $1.9 million and will generate Annual Recurring Revenue (ARR) of approximately $600k. This represents an additional $500k in ARR based on minimum volumes compared to the previous contract with the new agreement effective April 1, 2024. This contract offers further upside should volume continue to exceed current contract minimums.
CEO of Mach7 Mike Lampron said, “The renewal with DocPanel marks the successful completion of the largest renewal program in Mach7’s history and creates a foundational book of business for the medium term. Our focus on building lasting relationships was reflected in our strong customer retention and the TCV increase achieved across this install base illustrates the success of our “land and expand strategy” which will provide further upside into the future.”
DocPanel is a radiology marketplace that links imaging providers and patients with a network of more than 600 US-based academic and subspecialty radiologists. Operating nationwide and covering every specialty and modality, DocPanel helps alleviate radiology resource shortages by providing access to remote, fellowship-trained subspecialty radiologists.
Lampron added, “The DocPanel renewal also highlights our ability to provide solutions in an agnostic nature to the three biggest public cloud providers in AWS (DocPanel), Microsoft Azure (Veterans Affairs) and Google (as a partner). Looking ahead to FY25, the focus will be on net new logos as our pipeline continues to grow and reflects opportunities across multiple geographies and product combinations.”
Founded in 2007, Mach7 Technologies is a medical imaging software company that enables patient care. Its Enterprise Imaging Solution suite includes Enterprise Data Management, Enterprise Diagnostic Viewing and Departmental Workflow applications.
In Q3 FY24, the Company recorded sales orders of $7.4 million, down from $11.3 million in Q3 FY23. Its contracted Annual Recurring Revenue stood at $28.2m, up 5% on PCP, and its cash on hand was $24.8m, up 28% on PCP. Despite its ongoing transition to subscription, Mach7 was operating cash flow positive in the quarter, amounting to $1.4m.
In April, the US court dismissed AI Visualize’s case against Mach7, confirming that the Company did not infringe on any patents. Moreover, in March, it signed a three-year renewal agreement with Penn State Health for its Enterprise Imaging Platform. Penn State Health is a locally based academic medical centre in central Pennsylvania.
The Penn State Health 3-year agreement consists of a Capital Software Licence Fee of $1.1m, which will be recognised as revenue in Q3 FY24, and Maintenance and Support Fees of $2m, which will be recognised over the term of the contract ($0.67m per annum).
Mach7 noted that it had a strong sales pipeline that reflects opportunities with new and existing customers across multiple regions, care settings, and product combinations. It is keeping up with the change in demand from acute to ambulatory settings. The Company noted its FY24 guidance for sales orders of over $60m, revenue of $27m-30m and opex growth of less than 15%.
The Company expects to be cashflow positive in FY24.
Alinda is a Business Reporter for The Sentiment
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