The Mach7 Technologies Ltd (ASX: M7T) share price is up almost 5% higher today after delivering its first full year profit result.
The company develops innovative enterprise imaging and informatics solutions for image viewing, storage, and workflow management.
What were the FY20 results?
The company has delivered an increase in revenues of $18.9 million, up 102% on the prior corresponding period (pcp). This was driven mainly by higher software licence fees.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) was $3.3 million, up 181% compared to the pcp.
Mach7 delivered positive free cash flow, up 225% to $4.7 million. The company said the acquisition of Client Outlook demonstrated the scalability of the business and enabled less reliance on investor funding.
The company's successful completion of a cost-reduction program was a key contributor to profit.
Sales orders were up 115% as a result of 29 new sales order contracts. These were from new and existing customers who ordered licence extensions, expansion licences or new products. The 29 orders have contributed $13.3 million to the group's revenues.
Furthermore, contracted annual recurring revenue (CARR) has increased to $9 million, representing growth of 14% on the pcp. However, CARR growth was impacted by delayed purchasing decisions in 2H20 due to the coronavirus pandemic.
Outlook for Mach7
Mach7 Technologies expects the growth in CARR to resume and even accelerate during the 2H21 due to expected increased demand. This is reflected in the sales pipeline.
In light of the Client Outlook purchase, the company is well-positioned for continued profit growth in a substantially larger addressable market. It's now a clear market leader in the provision of complete enterprise imaging solutions.
Mach7 Technologies is in a strong financial position with more than $15 million cash in the bank and is debt free. In the future, it expects to deliver continued double-digit revenue growth, EBITDA growth and positive free cash flows.
Mach7 CEO Mike Lampron said Mach7 was well-positioned to continue delivering great outcomes for customers, employees and investors.
"I am proud of what the Mach7 team has achieved this year – from new customer deployments of our software, the recent acquisition and early integration of Client Outlook, to delivery of proftable high growth earnings and positive free cash flow," he said.
After surging to a high of $1.15 in early afternoon trade today, the Mach7 Technologies share price is currently trading at $1.10, up 4.76% at the time of writing. It has a market capitalisation of $263.7 million.
