Okey-dokey. Let's get started everyone. Thank you. Good morning. Welcome to Alcidion's third quarter, FY 2026 Appendix 4C business update. For a presentation this morning covering the three months ending 31st of March, 2026. Before we begin, I would like to acknowledge the traditional owners of the land on which I'm presenting to you today, which is the Wurundjeri people of the Kulin Nation. To acknowledge the lands from all of which you are joining me today, and I pay my respects to elders past and present, I do extend that respect to all Aboriginal and Torres Strait Islanders people who have joined us on the call today. I'm also joined on the call by our Chief Financial Officer, Matt Gepp. I'm gonna take you through a presentation covering key financial and commercial highlights for the third quarter.
All attendees will have an opportunity to ask questions at the conclusion of the presentation. If you'd like to ask a question, please use the Q&A function at the bottom of your screen, and we'll aim to answer as many of them as possible. Any questions that are similar in nature, we will try and sort of combine together. If we run out of time, in answering your question, please send it through to investor@alcidion.com and we'll seek to answer those as soon as we possibly can. Just a reminder that the webcast is being recorded today, and it'll be available on web, on Alcidion's website later and will be sent out to, a link will be sent out to all shareholders. Let's get started.
Q1 was a strong quarter for Alcidion, and it saw us deliver several new customer wins, along with expanding several longstanding contracts. It also saw us advance our AI strategy and to continue to progress various pipeline opportunities. In the U.K., we continued to build on the relationships we have with Hywel Dda in Wales and South Tees through expansion of both their contracts to include Miya Emergency, or what we often refer to as Miya ED. Those expansions provide a really great indication and demonstration of the land and expand strategy, which we've been seeing has been increasingly successful for Alcidion, particularly in the last, you know, 12 months to 18 months, where we're starting to see customers that have been using the product long enough that they're now starting to come back and look at additional modules.
We also, excitingly, secured our first Miya Precision customer in Queensland via a five-year contract with Gold Coast for the use of our remote patient monitoring module of Miya Precision. We see a significant market opportunity for remote patient monitoring, particularly given the data that is available out there supporting the beneficial recovery that patients get when they're at home, a lso the ability to reduce patients being readmitted for the same conditions or for chronic conditions. With Queensland, also, presents an attractive market to us as we expand s o we're very excited about that new customer acquisition. We secured several multi-year extensions for existing contracts, including for PCS or the outpatient administration system. You know, this continues to demonstrate these long-term customer engagements.
As we continue to sign renewals of those longer term contracts, it strengthens Alcidion's recurring revenue position for many years to come. As I've spoken about a few times during the quarter, we did also announce at the beginning of the quarter that we had been selected as preferred provider for University Hospitals Sussex to deploy our Miya Precision platform for their electronic patient record. Contract negotiations are ongoing with that.
We expect to sign that contract in May, and a significant portion of revenue will be recognized alongside that contract when it is signed. As we get to the end of Q3, we've got AUD 43.8 million able to be recognized in this financial year. Noting that doesn't include any contribution from the U.S., well from the University Hospitals Sussex contract, and I'll talk a little bit more about that when we get to the outlook section.
Just looking briefly at the highlights and perhaps digging into a few of them in a little bit more detail. During the quarter, we delivered new sales with a combined TCV of AUD 11.7 million, which was spread across six or seven contracts. 90% of the sales relate to recurring product revenue and the balance relating to the implementation services associated with implementing our products. We also expect to see that revenue split percentage going forward. Typically, most contracts have around 10%-15% of the TCV related to services delivered by our team to implement the solution.
At the end of Q3, we had AUD 43.8 million of contracted revenue, reflecting both the sold and renewal revenue, and new sales that we've, expect to be recognized in this financial year. It increased modestly on Q2. As only a portion of the new sales that we won in Q3 will be able to be recognized given the timing. We're getting close to the year-end. A portion of it will be in this year, but in actual fact, it will set us up well for the start of financial year 2027. The cash receipts for the second quarter from customers were AUD 14.5 million, which helped drive the positive operating cash flow of AUD 1.7 million for the quarter.
The product development and operating costs were AUD 3.4 million with, for the quarter, and it, as we expected, that's higher than prior quarters as it reflects payments that were made for third party partner products associated with the recently expanded Leidos contract and then provision of Mizaic to North Cumbria, which I talked about at the half year presentation as well. We continue to remain very focused on our own product suite in terms of selling it, but we do position ourselves as a modular EPR platform, and that platform creates an ecosystem in which partners can be connected into to the system, strengthening the Alcidion Miya Precision position within those customers. The staff cash costs remain well controlled. Staff costs down on the prior two quarters, albeit noting Q3 is historically the lowest period for cash staff costs.
At the 31st of March, we had AUD 15.1 million of cash and no debt. We'd expect that cash position to increase significantly in Q4 as it does generally in each year. We've already covered a lot of the information here, just presenting it in a graphical form. It does demonstrate a couple of important things. On the left-hand side, quarterly new sales, the AUD 11.7 million we delivered in TCV in Q3 it was down on the prior year. You will see that there is no necessarily consistency in TCV sales quarter on quarter. It depends where that sale lands. In last year, we signed North Cumbria EPR contract in Q3. We'll expect a similar type spike in Q4, providing the UHSussex contract is signed.
On the right-hand side, this highlights the clear seasonality in our cash receipts and the material uplift we typically see in that final quarter. Given the guidance we've given to the market on cash position, we expect to see a similar uplift to that in Q4. As I mentioned in the opening comments, in the U.K. market, we've continued to build on our existing relationships with both Hywel Dda and South Tees . Shareholders may, hopefully will recall Hywel Dda as a new customer, secured last year with a five-year agreement to implement patient flow, which was using the Flow, Access, and Command modules of Miya Precision. Miya ED is one of our newer modules. It is deployed at Southampton and Hampshire. It will now be going into Hywel Dda and South Tees.
The South Tees add-on of ED is very interesting in that they're a long-standing customer and they're one of our first EPR platforms to be rolled out in the U.K. The addition of Miya ED replaces an existing emergency department product that they're using that was in play at the time they bought Miya Precision, and we didn't have Miya ED at the time. It demonstrates, you know, both our ability to innovate, create new modules, and continually go back to sell them to our customers. I think at a time when healthcare funding is constantly being scrutinized, we're particularly proud of the ability to really rapidly commercialize and innovate new functionality and get that out to our customers.
I recently visited University Hospital Southampton, where a similar deployment as what we'll be doing at Tees has been done, where we replaced the same ED system. It was really fabulous to walk around the emergency department and hear directly from the clinical teams there how fundamentally it had changed the delivery of patient care from a safety perspective and a quality perspective in their ED as voiced by them. In March, we signed a five-year contract with Gold Coast Health to deliver an end-to-end remote patient monitoring service, which will enable that health service to extend virtual care into patients' homes.
As I mentioned at the outset, there's overwhelming evidence to support the view that patients recover better at home, and there's also the significant challenge of demand in our healthcare systems, which is seeing our healthcare systems looking to look at other ways of delivering care. Remote patient monitoring as a capability enables clinicians to safely and securely monitor patients' care from their home via real-time connectivity and communication, and it feeds directly back to a central monitoring capability, but also into the patient record, which in the case of Queensland is the Oracle Electronic Patient Record. We're very proud to commence this relationship with Gold Coast, who represent, you know, an important new customer for us.
It provides us not only an initial entry into one of the more digitally progressive healthcare organizations in Australia, which Gold Coast is, but allows us to expand our market presence generally and also to have that first deployment into Queensland. I just wanna point out, whilst it's strategically a significant contract for Alcidion, and will hopefully be the start of a long and fruitful partnership with Gold Coast, it doesn't meet the ASX requirements for disclosure. I know some shareholders would like us to announce these type of contracts. However, they don't meet the actual guidance from ASX in terms of the threshold. I think really importantly, it is in the best interest of the Alcidion business that we don't expose commercially sensitive pricing information to our competitors if we do not need to.
Given the size, and, you know, the increasing population of Queensland and their willingness to advance digital maturity, this state represents an attractive market for us and one where we're currently underrepresented in terms of presence. You know, it really is an important win for us. During the quarter, we further expanded our partnership with North Cumbria, adding our Smartpage non-clinical communication module to their EPR offering. That adds to Smartpage clinical, and the Mizaic, the contracts that they have expanded during the time. Over the past 12 months, you know, North Cumbria amongst several others have been great examples of that land and expand strategy for us. If you look at the 10-year period of that North Cumbria contract, the TCV now is just under AUD 50 million.
You know, which underpins that ARR or that annual recurring revenue for Alcidion, in years well into the 2030s. We've also renewed several of our long-standing contracts for both PCS and Patientrack in the U.K., although, again, they don't individually meet the ASX disclosure requirements, that ARR continues to build, and add both to our ongoing referenceability but, that underpinning that ARR over time. I think I've covered enough on Sussex on other calls. I think most people on here probably are across it now. As I mentioned earlier, we continue to finalize the contracting process with a high expectation of signing in May.
Lastly, I just wanted to touch on, given the importance of growth in AI, I think it's worth highlighting the progression that we've been making in this space with the launch of several capabilities and modules using AI, Miya Scribe, Miya Insight, and the Miya AI service. Recently, we announced, and that was during this quarter, that Miya Precision Concept Detection capabilities have been registered as both a Class I software device in the U.K. and as a Software as a Medical Device in Australia. This capability is an AI-assisted feature within Miya Noting. It actually analyzes the clinician's free text that they're able to type in, and it codifies that information.
By codifying it automatically, one, it saves people having to do that themselves, but it also then means that the codified clinical terminology is available to support clinical decision support, to support summarization, and to support clinical documentation, which leads to, you know, much greater efficiencies in a clinician's workflow and, of course, better data quality. I will probably talk a little bit more about this, and we'll maybe go back over it when we do the full-year presentation in terms of what we're doing with AI. It is a fast-moving space. We're seeing a lot of really interesting opportunities to use it for our customers, but we're also using it very deeply within Alcidion today in terms of efficiencies in development and product manufacturing processes.
Not to mention just in terms of efficient workflow for the organization. Looking forward, as I said, Q3, at the end of Q3, we've got approximately AUD 43.8 million of contracted and scheduled renewal revenue able to be recognized, which is approximately 9% up on the same period last year. Important to note, it doesn't include any potential revenue from Sussex, which we're progressing hopefully through May. Based on that progression of the Sussex contract, we confirm our guidance of revenue expected to exceed AUD 50 million for the year and EBITDA to be in excess of AUD 5 million. In addition, the four-year operating cash flow will remain positive and is expected to be in line with FY 2025 operating cash flow of AUD 5.8 million.
Based on the above, you know, we expect Q4 to be that largest cash collection quarter for the year, supported not only by the Sussex contract but also historically it is a big quarter for customer billing. You know, the unique proposition of our business is really the ability to solve varied challenges in healthcare. I think I probably keep reiterating that as a platform, we are able to use combinations of modules to address multiple challenges in healthcare and to be flexible and responsive to those as those not only those challenges but the funding stream to address those challenges changes. We've continued to demonstrate referenceability across many areas. Certainly, the work we've been doing at Sydney LHD for five years, you know, helps to support wins such as the Gold Coast remote patient monitoring contract.
We continue to remain very optimistic about our ability for those new customer opportunities as, across geographies, as well as continuing to look at new geographies as opportunities to grow the business. At that point, I think it's probably good to hand over to give you a chance to ask some questions. Matt's gonna help us with them 'cause I think we've got a few.
Thank you, Kate. Yeah, yeah, we do have a few. I'll address the questions we got before the webinar to start with. About 12 of those. Then I'll move to the questions we've received online. I'm, you know, struggling to find a theme in those questions. There are a lot of random ones, so I'll just start from the top.
The first question, Kate, is, do you see a heightened role for value-based healthcare in the future delivery of healthcare by different jurisdictions as the focus on improving health outcomes within increasing fiscal restraints being brought to bear on Western governments?
Oh, look, I think this is being played out across different jurisdictions in different ways. Certainly, it has been a catchcry of the U.S.-type system for some time. I think what we're seeing is an emphasis on this in the NHS. The challenge remains for these large healthcare systems to restructure themselves to actually support these types of outcomes. I expect new models of care delivery, such as remote patient monitoring, to be adopted more readily than a wholesale change to the manner in which government-funded healthcare is delivered in the short to medium term. We are inching, you know, more and more towards this type of this type of engagement.
Thanks, Kate. Second question. The NT Government is reviewing their Acacia EMR delivered by InterSystems. If this contract were changed or terminated, what would be the implications for Alcidion's position in the NT?
Well, I don't see it would have any implications. We have a separate contract of long-standing that is unrelated to the Acacia contract. Alcidion was in place with Miya before Acacia was deployed on their prior legacy system. We have continued to be deployed over the top of the Acacia system. You know, we've provided Miya to NT for more than 15 years, and we've certainly not had any conversations with Northern Territory about a change to that current position.
Thanks, Kate. Another question. Dartford and Gravesham's October 2025 board meeting noted that Miya and Patientrack had proved a poor fit for their ICU's needs. What caused this, and has it been rectified?
It's an interesting question. I think what appears in board minute meetings is not always aligned with what is actually happening on the ground. Miya and Patientrack are not ICU systems. They're not actually fit for ICU. ICU runs in a very continuous monitoring environment. As far as I know, we have never proposed Patientrack or Miya as a solution for the ICU. I suspect Dartford is hoping for funding for an ICU solution. There are a couple of sort of dedicated, one that we partner with in the U.K., dedicated ICU solutions in that market.
Thank you, Kate. Last of these questions. In 2021, Alcidion indicated several NHS trusts had expressed interest in a broader EPR offering built on Miya. Can you now disclose which trusts these were, sorry, or provide further detail on the outcome of that interest?
I think probably, you know, what we indicated was that we were discussing with trusts EPR procurements, I've never made any secret of that, have kept the market updated on that and the progression towards that. As a matter of fact, you know, we have won a couple of tenders during that time, obviously signed South Tees.
We don't disclose which tenders we've bid for and which ones are currently in flight. Suffice to say, there are several RFIs, or we call it, in the U.K. they call them PMEs, pre-market engagements, in process now that we will remain active in and continue to talk to people about. You know, it is an ongoing opportunity. EPR contracts in the U.K. run for 10 years. There are a number coming up for renewal, and they will need to go to market in that way.
Okay, thank you. We have a few, quite a few questions actually come in. I'll try and bundle them up as I go. The first question is, TCV of new sales of recurring revenue is AUD 10.5 million. How does this translate to ARR? Can I simply divide the AUD 10.5 million by five years, hence ARR contribution is circa AUD 2 million?
You can answer that one, Matt.
Yeah, no, the simple answer is no, because those new sales and renewals are for varying contract lengths. Some of the renewals are for 12 months or 36 months, and similarly, some of the sales are for 2- 5 years. Unfortunately, we can't just do that simple math to get the recurring ARR.
Another question on the new sales. Of the AUD 11.7 million in sales signed this quarter, how much was attributable to new contracts or add-ons excluding renewals?
Now, I do have that answer. It's about 50% of that number is brand new sales, and about 50% is renewals.
Okay, thanks.
The next question is, what is the typical annual contract value of the sale of a Miya ED module?
It will depend on the length of the contract. You know, if you sell it to, yeah, if it's three years, five years, it depends. Yeah, it will, sorry. It will absolutely depend.
Yeah, and on the size of the hospital as well. What does the renewal of the three Patientrack/PCS contracts, I think this, that's just PCS contracts, mean for EPR opportunities for these three trusts?
Again, I don't think we said it was three. I think there was more than three if you put together all the PCS and Patientrack ones, but I might be wrong.
Correct. Yeah. Yeah. There was .
It will depend, again, I'm sorry. If it's a PCS customer who has chosen an EPR, you know, probably it means that they're not going to be replacing their PAS in the short term or even maybe in the long term. There are some Patientrack sites where Bolton is a good example, where they run Altera's EPR, but they run our Patientrack solution, and they run somebody else. As a matter of fact, there's several instances I can point to across the U.K. where they run an EPR and our Patientrack solution. Our Patientrack is really well received by the nurses, they typically do not wish to replace it.
Thank you, Kate. One for me here on the cash flow. Is the cash payment annual in advance? What is the cash receipt profile of these third party provider solutions?
The answer to that is the receipt and the cost are generally matched. If it's a 12-month in advance revenue item, it will be a 12-month in advance third party provider payment. The other point to note here is that we typically will only remit to the third party provider once when we are in receipt of the cash from the customer. Yeah, that's how we run the third party provider payments.
What is the outlook, Kate, for staff costs versus future contract wins? Can they be contained to start seeing margin scale?
I'm assuming that's EBITDA margins we're talking about there.
Yes. I mean, I think we've indicated that staff costs, whilst they will probably perhaps go up in small margins, they won't necessarily go up in line with the trajectory of the revenue increase.
Thanks, Kate. I think one for me here 'cause I've got the answer handy. Has Alcidion signed an extension with University Hospital Southampton, noting the three-year December 2022 deal has run its term?
Yeah, the answer to that is yes. We actually signed that renewal during Q2.
There's a couple here.
Questions
Matt, that I just might try and answer. Just to reiterate on ASX disclosure.
Mm-hmm.
It is typically 10% of annual revenue, which puts it at, you know, if it's gonna be whatever it was last year, but if it's gonna be AUD 50 million this year, it's gonna be around AUD 5 million. We are, we have taken and have continued this for several years now not to announce contracts below that. Because unlike nearly all of my competitors, I am basically telling the market what we are charging for our software, and that is something that generally is best kept between us and the customer.
Yeah. Thank you, Kate.
Congratulations on the result. Thank you. How are you balancing sales and marketing spend across ANZ and the U.K.? What is the lowest hanging fruit from a sales perspective? Also, second part of that question, re Queensland, what does the opportunity here look like? Two questions there, actually.
Every year we look at the opportunity in respect of U.K., Australia, New Zealand, and, you know, at some point that is also including Canada and Middle East and any other market we might want to go after, as to what we need to put in place to adequately service that market based on what we think we're going to be able to achieve. That includes both the number of salespeople we have in play and certainly the marketing spend. That is done on an annualized basis. I would say there is more spend at the moment, on balance based in the U.K. than there is in Australia and New Zealand when you look at the number of people. That generally makes sense if you think about the size of the opportunity.
Having said that, there are a lot of people in the senior leadership team in Australia, based in Australia, who I would not consider as part of the sales team, but who we are actively involved in sales acquisition. It is not a black and white answer. In terms of the Queensland opportunity, we have, Queensland is very similar to Victoria in a way, although it's much more centralized in its decision-making. Noting that, you know, one of our competitors has a very strong position there in respect of a flow, a flow solution. Us being able to enter that market for remote patient monitoring is certainly something that we'll be focused on initially.
Thank you, Kate. One from here around seasonality. Is billing seasonality likely to flatten as you grow, or is something fundamental about Q4 that means this will continue?
I think the answer is yeah, potentially over time, it will flatten, but it doesn't change the fact that we have a large flurry of renewals and a lot of our new signings, like Hywel Dda and NCIC last year, and this year our UHSussex are all going to happen in H2.
Yeah, there certainly is something about, you know, late Q3 and early Q4 where we have a very high volume of renewals and it seems a high volume of new sales. Yeah, it could flatten, but it's going to take time for that to happen, I think.
Let's keep going. Just get these done. Just start at the top one there, Matt.
Yeah. Okay. Given the Hong Kong investor conference attendance and your stated interest in acquisitions, is management using that to gauge institutional appetite for a capital raising? If not, how do you intend to fund a deal, and what was the purpose of the roadshow?
Firstly, it wasn't a roadshow. I attended a conference run by an external party that a lot of Australian ASX-listed companies attended, and the purpose of that, attending that was to seek people who are interested in investing in Alcidion as a business. There was no discussion about capital raise, and I can state clearly that we are not in the process of looking at interest in a capital raise.
Thank you, Kate. Quick question on UHSussex. Do you expect an EPR to be included? Sorry, do you expect a PAS to be included in the EPR sale?
Look, I think the details of what goes into the ASX contract will be revealed once we finalize the negotiation. I think that's appropriate. We certainly, it was within our potential scope.
Thank you, Kate. The NHS transitioning from basic EPR rollouts to the frontline productivity era, how is ALC's pipeline shifting to capture this second wave of funding specifically allocated for digital optimization?
I think as I said through the presentation, the customers in the NHS in the U.K. are still trying to work out how to access this new fund. They are currently working on what I call request for information to build their business cases to access it, and it is from flow opportunities, remote patient monitoring, as well as EPR replacements. There is a lot in the mix.
Okay. Last two questions on a similar topic. Kate mentioned in Hong Kong that the first Canadian sites are expected to be signed in 2026. The other question also asks about UAE markets. How confident are you that these contracts will be signed this year, and can you provide any more information regarding the expansion into Canada?
Expected or hoped, I'm not sure exactly. I can't recall exactly what my words were in relation to Canada. We are progressing conversations with people who are very interested in our products in both the Middle East and Canada. We do need to understand the processes. Both markets are government procurement markets, and so we need to work through the processes for procurement in those markets. I am pleased with the interest that we are seeing in those markets, and we will update shareholders as soon as we have anything further to share.
Okay. We now have no open questions. Thank you for answering all of those, Kate. I think we're at the end of the webinar in that case.
Thank you very much everyone for your interest and your ongoing support of Alcidion. I look forward to keeping you updated as this quarter progresses. Thank you.
Thank you.