Mach7 (ASX:M7T) share price slides on mixed FY21 result

The company’s share price ended the day on a down note.

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a concerned medical doctor examines an Xray from an imaging machine in a hospital setting.

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The Mach7 Technologies Ltd (ASX: M7T) share price ended Monday’s market session in negative territory. This comes after the healthcare imaging platform provider released its full-year results for the 2021 financial year.

At the closing bell, Mach7 shares finished down 3.52% to 96 cents.

Mach7 share price backtracks despite record sales orders

The Mach7 share price fell today following the company’s mixed result for the 12 months ending 30 June 2021. Here are some of the key highlights:

  • Sales orders (total contract value) of $25.6 million, up 95% on the prior corresponding period (FY20 $13.14 million);
  • Total revenue of $19 million, up 1% (FY20 $18.9 million);
  • Earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $1.8 million, down 155% (FY20 EBTIDA profit of $3.3 million); and
  • Net loss after tax of $9.3 million, down 5,627% (FY20 $0.16 million).

What happened in FY21 for Mach7?

Mach7 delivered its most successful sales order increase on the back of 2 large contracts by premier hospital networks. They included Trinity Healthcare and Adventist Healthcare, realising a combined value of $13.2 million.

The sales order mix consisted of 20% Software-as-a-Service (SaaS) subscriptions, a significant improvement on the 3% in FY20. Mach7’s eUnity product, acquired in July 2020, predominately fuelled the growth.

The remaining sales orders were made up of capital sales (perpetual or term licenses) and services contracts (migrations). They represented 72% and 8%, respectively.

Mach7’s annual recurring revenue (ARR) soared by more than 80% to $10.9 million, accounting for now 57% of total revenue. Professional services revenue was stable at $2.2 million, with capital software license fee revenue decreasing by 42% to $6.0 million. The latter is due to a phased rollout which will see a solid order book for FY22.

At the EBITDA level, currency exchange losses mostly affected the result. Notwithstanding currency movements, EBITDA would have made a small loss of $0.7 million. This is attributed to incorporating Client Outlook in 202, and the delay of sales orders until FY22.

What’s next for Mach7 in FY22?

Looking ahead, Mach7 advised it remains on track to achieve revenue of $27 million for the current calendar year.

This is underpinned by the first-half recording revenues of $12 million, as well as the 50% current ARR run-rate of $13.4 million. In addition, the sales and service book valued at $8.3 million is expected to be recognised in the second half.

Mach7 stated that with these revenues, it will be generating a positive EBITDA.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MACH7 FPO. The Motley Fool Australia has recommended MACH7 FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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