Okay, let's get started. I'm sure there'll be still a few entering the webinar. Thanks, everyone, for joining us, and good morning. Welcome to Alcidion's Q2 FY25 Appendix 4C, and business update presentation for the three months ended 31 December 2024. First, I'd like to start by acknowledging the traditional owners on the land from which I'm presenting to you today, the Wurundjeri People from the Kulin Nation, and the lands from which all of you are joining me today. I pay my respects to their elders, past and present, and extend that respect to any Indigenous persons joining us on the call today. I'm also joined on the call by our Chief Financial Officer, Matt Gepp, who will be available for any questions at the end of the presentation.
I'm going to take you through a short presentation covering the key commercial and financial highlights of the quarter, as outlined in the business update and Appendix 4C that was lodged with the ASX this morning. All attendees will have the opportunity to ask questions at the conclusion. If you'd like to ask a question, please use the Q&A facility at the bottom of your screen, and we will endeavor to answer as many as possible. We received a few before the call, but not that many. So we'll bring them together as a combination of questions at the end of the presentation. Any of the questions that are similar in nature will combine to avoid repetition.
If we run out of time, we are not able to give you a fulsome answer, please send through your questions to investor@alcidion.com, and we'll seek to address it as soon as we can. And just as a reminder, the presentation today is being recorded and will be available later on Alcidion's website. So let's get started. Q2 was a very positive quarter for Alcidion, with several new sales during the quarter, which, in terms of total contract value, amounted to around AUD 13.1 million in new sales for the quarter. The majority of that was due to new customer wins. And as many of you will know, we added two flagship customers in the quarter based in Australia, and I'll talk a little bit more about the details of those new contract wins later in the presentation.
We were very close to break even on cash, with a small outflow for the quarter, and a strong second half of cash collections expected. This is a material improvement on the same period last year, by AUD 3.1 million. We're confident of the second half earnings and we maintain our expectation of an EBITDA and cash flow positive result for the full year. As I said, of particular note was the signing of two new five-year contracts in November, both of them located in Australia, and really seeking to further help our increasing presence in this market in relation particularly to patient flow command centre management. And that'll add to the referenceability for Alcidion across an important segment of the market. I'll unpack a little bit more the details of those contract wins as we move through the presentation.
Just to touch on the highlights as released this morning, during the quarter, we contracted new sales with a combined TCV of AUD 13.1 million, with approximately AUD 4.5 million of that able to be recognized as revenue in FY25. Approximately 88% of the new contracted sales are what we classify as recurring product revenue, with the balance, the other 12% being related to services, which are predominantly the implementation of our products into those markets. At the end of Q2, we have AUD 30.8 million of contracted revenue, reflecting both the sold and renewal revenue expected to be recognized over the course of FY25. Important to note is that figure does not include any contribution from the North Cumbria contract, which is now in the final stages of completion.
It also doesn't include any upside from any further new contract wins that we might achieve in the second half of the financial year. The Q2 cash receipts from customers were AUD 9.1 million, reflecting our strongest Q2 for cash receipts in the past couple of years. We delivered the operating cash outflow of only AUD 260,000, which was, as I said at the outset, a material improvement on the same period last year. And this comes from a combination of the new sales as well as the continued disciplined approach to cost management. And that's allowed us to deliver this close to break-even result, with, as I said, strong cash returns expected in the second half as well.
As of the 31st of December, the company had AUD 7.7 million of cash and no debt, and a further AUD 5.9 million has already been collected this month, in the month of January, from an expected strong second half for cash collections. So the cash position of the company is strong. The slide shows these slides here, and just to pick out a couple of graphs really to give you, you know, some important reference points and to watch some trends over time. On the left-hand side, we've got a graph demonstrating or depicting quarterly new sales. You can see we enjoyed a nice uplift in new sales this quarter. Given we have North Cumbria deal expected to close shortly, we'd expect to see further momentum to continue in that positive trajectory into the second half.
And new sales are expected, obviously, to outpace Q3 and Q4 last year as a result. On the right-hand side, this is a graph we use consistently to depict the seasonality of our cash receipts. And anyone that's been following Alcidion for a time will understand that that is it is a consistently lumpy business in respect of cash receipts, depending on when those material contracts are signed. But positive trend demonstrating here, which we would continue to expect in a positive manner throughout the rest of this financial year. In respect of a bit more detail about the business update, as I highlighted at the outset, we were really pleased to sign those two new contracts in Australia during the month of November. Both the NAL and, which is the Northern Adelaide Local Health Network and the Peninsula contracts were won in competitive tender.
It's important to note that Alcidion has won all competitive patient flow tenders in Australia that we've gone through for over the last 12 months. And that just continues to demonstrate the strength of the Miya Precision platform in supporting our healthcare services to deliver, you know, positive benefits and releasing time to care when they deploy our Flow, Access, and Command modules. The first contract that we signed that I want to talk about is the NALHN. They're one of the largest local health networks in South Australia. They provide a range of public hospital, community, and home-based services to around 400,000 people across metropolitan Adelaide. The initial focus for that contract will be to support patient flow management and their command centre, but also mobile access to real-time data and clinical messaging, as well as real-time data from their electronic patient record.
As I said, that was a competitive tender process. The value of the contract's around AUD 4.5 million over five years. Importantly, this contract marks our first deployment in a new territory or a new state in South Australia, which is the founding state of Alcidion, and so it's been particularly exciting for us and especially our staff located in Adelaide, which is one of our largest, or in fact our largest office in terms of staff numbers. Shortly after signing that, we also announced a new partnership and contract with Peninsula Health, which is a major public health service group that serves a diverse region across the Mornington Peninsula and Frankston areas of Victoria. Similar to NAL and Peninsula, we'll utilize the Miya Precision platform to support real-time patient flow management, mobile access to consolidated data from their electronic patient records.
And, that data will be, you know, sitting on top of their electronic patient record as well. Peninsula also recently announced a decision to merge with Alfred Health and a couple of other smaller health services to create Bayside Health. And we're really looking forward to this as an opportunity to demonstrate the power of Miya Precision to connect data across those health services, thereby hopefully reducing the need for them to replace or change their underlying systems that provide that data. We're continuing to see increasing demand for Alcidion's platform to support patient flow. We continue to demonstrate really tangible benefits. Nick White and Kaye Hocking are actually over in the US at the moment about to present at a patient flow conference there.
The benefits that we are realizing as a result, not only of the study that we did at the Alfred, but across a number of our other customer bases. And so that continued evidence base is really important as we seek to bring new customers on, but also to expand the opportunity that Alcidion has around the world. As I said before, and it can't really be overstated how important the ability to demonstrate those positive benefits are in order to show how our platform helps to improve efficiency around the flow of patients from admission, from ED through to admission through to discharge, relieving time to care, releasing more bed availability, and supporting our clinicians in what is a pretty challenging healthcare environment. Following on from that Peninsula Health partnership, I also want to highlight how significant our presence now is in the Victorian acute care market.
We're currently deployed in some of the largest healthcare groups, including Western Health, Alfred Health, Hume, and the Hume Rural Health Alliance. We continue to demonstrate those benefits, and we're, you know, increasingly that ability to show real value is a differentiator for Alcidion in these markets. During the quarter, we also renewed several key contracts. Notably, we renewed for a further two years the contract with Sydney Local Health District for the use of Miya Precision to support virtual care and remote patient monitoring. We also signed a two-year renewal for the use of PCS, our patient administration system module at Northumbria Foundation Trust in the UK, which is a trust that is also part of the ICS or Integrated Care System that both South Tees and North Cumbria are part of.
These renewals continue to reinforce the strength of the customer retention that we have and highlight the critical and embedded nature of our platform once we are implemented with a customer and demonstrating those benefits. As of the end of the Q2 , as I said, we have approximately AUD 30.8 million of contracted and scheduled renewal able to be recognised. Importantly, it doesn't include any potential from North Cumbria, which I've said is well progressed and in final stages of approvals. We entered the second half in a strong position given that Q3 and Q4 are our highest periods for customer receipts and would expect to see that trend continue with a material uplift in H2 customer receipts compared to H1. For reference, the debtor ledger at the end of Q2 was AUD 8.2 million, of which we've already collected AUD 5.9 million.
Of course, we've added further to that ledger during January as well with additional invoicing, which continues obviously throughout the course of the year in line with normal customer billing cycles. We confirm our expectation of being EBITDA and cash flow positive for FY25, noting that we're an EBITDA break-even business at around 36 million of revenue. And, as the year has progressed, we have an improving line of sight on what is able to be recognized during this financial year. The increased contract signings over the last six months have been the result of us executing on our evolving and maturing pipeline, several of those opportunities progressing through tender stage into selection stage and obviously new opportunities entering the pipeline all the time, particularly as the referenceability of Miya Precision grows. Our ability to demonstrate those benefits helps us to continue to obviously build that pipeline over time.
I'd like to thank you for your time today. That's really all I wanted to cover, but at this stage, I'm very happy to take questions and I'll stop sharing at that point. Matt will rejoin us and let me know what questions that we have.
Okay, so we had a few questions come in prior to the webinar, so I'll go through those and we've had a couple come in on the chat so far. So the first question I think you've already touched on, Kate, when do you expect to be cash flow positive?
Oh yes, I have. I really have. I think outlined that we're extremely close to cash flow positive this quarter, and as we stated in the presentation, we expect to be cash flow positive for the full financial year.
Thanks, Kate. The second question that came in is how is scalability factored into the business model and what are the plans for driving margins?
Oh, look, I mean, I think we've been performing well with the current cost base and expect to be able to continue to drive those positive margins as the product matures, and the need for development levels out. The implementation teams continue to deliver very efficiently and consistently. You know, as many people know, we scaled the business, we've cut back, in the last 12 months or so as our processes and product have matured. So, you know, I think we're really well placed, to continue to increase revenue, from the cost base that we have, we have and therefore, you know, continue to drive greater margins.
Thanks, Kate. So the next question is about pipeline. What is the size of the sales pipeline and how has it changed over the past six months, past half year?
I often get this question. We don't declare the pipeline size, and really that's because it changes as deals enter and mature. In some cases, they come out of the pipeline, if obviously we sign a new deal, but then other ones are entering and all of the deals in the pipeline vary in size so significantly. Being a platform, Alcidion is not reliant on just one single solution to drive our revenue, so we can have, EPR deals that are obviously of the potential size of North Cumbria at the AUD 30-40 million dollar mark, and then we can have, you know, modular sales where we might be, you know, signing up SmartPage for a couple of years at AUD 200,000.
So the pipeline is widely varied, you know, over the six months, the last six months, the pipeline has continued to mature. You know, it continues to grow. There are still significant opportunities in there, in the EPR market as well. So very comfortable and confident, with the maturity and also our understanding of, you know, how that pipeline may progress in the next, certainly in the next 12 months.
Okay, so there's a question come in, Kate, which, if you want, I can answer this one. Excluding NAL and Peninsula contract, excluding the NAL and Peninsula contracts, which countries did the other 5 million of new TCV sales come from?
Well, I mean, predominantly they're the UK. Well, actually the two biggest ones are the ones I talked about, Northumbria PCS, which is a sizable contract at two years, which is the UK, Sydney Local Health District. And what others, Matt, that you, there's a lot of smaller ones, I know.
There's a lot of smaller ones. So, you know, Sydney LHD and Northumbria made up the lion's share of the AUD 5 million, I think. And then there's just a lot of other smaller renewals and smaller kind of non-announceable sales in Australia and the UK and some smaller ones in New Zealand as well.
Yeah.
Yeah. So there's a good question here. I think I'll summarise it instead of reading it, but looking for rough numbers, what potential is there for expanding our revenue from the current customer base?
Oh, there's definite opportunity to do that across all of our customer base, Miya Precision customers, you know, PCS customers and so forth. I don't, I couldn't really give you the percentage at the moment, other than to say there's very few existing Miya Precision customers who bought all the modules, North Cumbria and South Tees, not even South Tees actually, they've still got some potential upside there as well. So there, you know, nearly all of our customers would have potential for us to sell them additional capacity and capabilities.
Thanks, Kate. Question on Northumbria here. Does Northumbria have an EPR system? Will we tender for it if they go to tender?
They do not have an EPR system in the sense of having gone to tender for an electronic patient record. They do some of their own in-house development.
I do not know what their intentions are, but I do not at this stage expect that they will be part of the NHS England EPR environment, but rather that they present opportunities for us to provide Miya Precision as an element of what they do.
Thank you. Back to the pipeline. Is this mostly ANZ or UK? The UK procurement has been slow. How are we seeing the cadence of tender activity playing out? Is the worst behind us?
I, I think, you know, as I have said before, firstly, we don't go for every tender, but there is quite a lot of activity at the moment.
So certainly that period where there was very little happening has moved on and we are seeing those Group Zero potentials, which was how the NHS England categorised some of the EPRs, coming to market and will continue to come to market over the next six months or so. So happy with that. It's not just the only, that's not the only market activity we're seeing in the UK. We are also seeing opportunities outside of England, in Scotland and Wales. We are also seeing opportunities for non-EPR engagements. So we're starting to see the focus broaden out again. And that opens up further opportunities for Alcidion.
Thank you. There's a question here regarding a presentation that you did at Smart Health, in respect of AI. Can you comment, can you articulate further on the use of AI in Miya Precision?
Yeah. Look, where there's a whole video actually being done on some of this, if you sort of, if you go to our website, you will see an interview that was done between our Chief Medical Officer, Paul Deffley, and Rebecca Wilson around, the use of AI, within Miya Precision. You know, we've been using AI in various forms in Miya Precision for some time and we're continuing to evolve that. We're doing some exciting work at the moment around the use of our, electronic noting, natural language processing, and AI to, improve documentation. There's a lot of exciting stuff, happening and I really do commend you to have a look at that video. And at some point in the future, we will definitely get Paul, to give you an opportunity to present some of the exciting stuff we're doing.
Obviously, you know, we don't want to necessarily widely reveal how we're building it into what we're doing in noting, but it is pretty exciting.
Thank you, Kate. I'll summarize this question as well. I think it's asking, you know, with the cost cuts we implemented in the previous year and NCIC closing shortly, do you think this will affect the ability to land contract wins and implement services in Q3 and Q4?
No, not at all. We have an excellent, you know, line of sight on our contracts, our resources required, and those plans are well established.
Okay. I'll answer this question because you've already answered it actually. You know, what is the contracted revenue for FY26? It currently stands at AUD 30.8 million. I think you've touched on this next one. Is Alcidion continuing with its go-to-market only in ANZ in the UK?
No, I mean, we continue to look at opportunities to expand. As I said, Nick and Kaye have been in Canada and are doing a presentation in the US right now, almost as we speak. We continue to look at those opportunities, but we have been very measured in ensuring that we don't expand ahead of, you know, capacity, but also that we don't expand to the detriment of removing our focus on the ability, the opportunity in Australia and UK, which continues to be significant.
Thank you, Kate. I think I'll answer this next one. It's around the ASX restrictions on announcements. Is it possible to announce all these smaller contracts via the ASX? So the short answer is there are restrictions around the continuous disclosure requirements. You know, we're only permitted to release information that is material to the market.
So if we announced every little sale we ever did, our code would be flooded and I'm sure we would get a tap on the shoulder from the ASX for that. So we are required to release material announcements only. So that comes to the last question actually, and that is regarding the environment in the U.K. The Labour government has committed to transforming the NHS using a technology-driven strategy. Has Alcidion noticed any changes that Labour will make a difference? And are there any signs that the NHS are beginning to speed up the process?
I think I touched a little bit on the speed of the process and where we're at with the existing EPR contracts. But there are definite signs that the Labour government is serious about making changes around in the NHS.
They're working on a 10-year plan at the moment, which we expect to see released in the first half of this year. Alcidion has provided input into that plan, and we're seeing that NHS England is continuing to support that EPR program as they wait for the 10-year plan to come out. We expect technology to feature heavily in that plan and for Alcidion to have a role to play in meeting some of the requirements of that. And I expect there to be an emphasis around connecting data across the NHS. A lot of the investment in technology has been very hospital-focused, which is important if you want to go from paper to a digital environment. But once you have that information available in a digital environment, you start to create opportunities to unlock the value of that, to deliver better, more efficient healthcare.
So, I'm looking forward to seeing the 10-year plan. In the interim, the UK is continuing to go to market for deployment of existing capital.
Thank you, Kate. That's, that's all the questions we have now. We're at 10:25 A.M. Okay.
Thank you very much, Matt. Thank you to everyone for joining us. I sincerely appreciate your continued support. Alcidion, we have obviously had some challenging times in the prior 12 months, but we are all confidently looking forward to the current financial year and next financial year, as we start to see these consistent new contracts add to our recurring revenue. So I thank you all as shareholders for your continued support and interest in Alcidion.
Thank you.