So, ladies and gentlemen, welcome to our financial year 2023 results presentation. With me on the call is our CFO, Reena Minhas. Today, we are excited to share the significant strides IMEXHS has made over the past year, underscored by robust financial growth, strategic advancement, and our constant commitment to revolutionize medical imaging access worldwide. Feel free to type any questions you may have during the presentation using the Q&A button at the top of your screen. We will answer the questions at the end of the presentation. IMEXHS stands at the forefront of healthcare innovation with two pivotal business arms: our cutting-edge medical imaging software and comprehensive radiology services. Our mission is to democratize medical expertise, ensuring unparalleled access and efficiency in healthcare diagnostics globally.
Our software solutions, now operational in 18 countries across 485 sites, and our expanding radiology services in Colombia, Spain, and Mexico, underscore our global footprint and commitment to excellence. This year, we have demonstrated exceptional business scalability, achieving significant milestones across diverse geographies. Our focus on Latin American markets and strategic product development has yielded an FY 2023 revenue of $ 19.7 million, 15% up on PCP, and 11% up on constant currency. Our underlying EBITDA of $ 0.4 million was up $ 0.5 million versus PCP. The annualized recurring revenue of $ 25 million was up 27% on PCP, and the net operating cash flow was $ 2.6 million before investing cash flows of $ 2.1 million, and financing cash flows of $ 0.1 million.
We are particularly proud of our transition to positive cash flow, a testament to our sustainable and profitable business model. IMEXHS has achieved significant growth and innovation milestones this year, marked by a key five-year SaaS contract with Grupo Avidanti, Zentria, worth $ 2.1 million, contributing around $ 403,000 to our ARR. With a robust sales pipeline, IMEXHS Cloud and Enterprise have reached 485 global installations, underscoring our commitment to global radiology services expansion. We have also strengthened our presence in Mexico with a new subsidiary, aiming to boost direct software sales. Our new value proposition software development is progressing as planned, scheduled for release in Q4 2024. In Colombia, we have secured lucrative radiology services contracts with Famisanar and the National Police Force.
Also, a contract with Grupo Avidanti, and a three-year contract with San Carlos Hospital Foundation, with a combined ARR contribution of $ 1.5 million, and supported by the installations of IMEXHS software, enhancing our position in the market. Our dedication to profitability and customer service is evident, with a focus on sustainable and improved contribution margins from recently signed radiology services contracts, and renegotiation of existing ones to address inflationary pressures. In FY 2023, our sales revenue surged by 15%, with our annual recurring revenue, ARR, experiencing a remarkable 27% increase. The financial year also saw our underlying EBITDA rise from a previous loss to a positive $ 0.4 million. The second half revenue increased by 42% on PCP, and by 23% compared to H1.
Finally, our cash balance was $ 2.4 million by the end of the year, up from $ 1.9 million in the prior year. All this is a clear indicator of our operational efficiency and financial prudence. As we turn our attention to the FY 2023 business unit results, it's clear that our strategic initiatives have translated into tangible success. In the software business, we have seen a robust 19% year-over-year increase in revenue, underpinned by the sales of IMEXHS Enterprise and IMEXHS Cloud business, leading to a 14% rise in our ARR. Our radiology arm has not been left behind, with a 12% year-over-year revenue growth and an impressive 38% increase in ARR. Overall, we are reporting total revenue of $ 19.7 million.
This is a testament to our strategic focus on high growth areas within our business, and our commitment to delivering innovative solutions that meet the evolving needs of our clients. Our total underlying EBITDA was positive $ 0.4 million, a demonstration of our maintained financial discipline, while keeping the commitment to sustainable growth. I will now hand over to Reena Minhas, our CFO, for the financial presentation.
Thank you, German. I will now run through the FY 2023 financial performance of the company, starting on slide 12, Progress in Annualized Recurring Revenue. ARR of $ 25 million as at 31 December, was up 27% versus PCP, and up 1% on a constant currency basis. ARR consisted of $ 14.5 million from radiology services and $ 10.5 million from software. The chart shows annualized recurring revenue, which is currently billing, as well as ARR, which is yet to commence billing, in a lighter shade. We've focused on getting this ARR billing as soon as possible. Turning to page 13, the income statement. FY 2023 revenue of $ 19.7 million was up 15% versus PCP, and up 11% on a constant currency basis.
The software and services split of revenue is $ 7.6 million, which was up 19% versus PCP, and radiology of $ 12.1 million, which was up 12% versus PCP. The underlying EBITDA, which excludes costs in relation to share-based payment expenses, foreign exchange movements, and the impairment charge, was $ 0.4 million positive, versus the prior year underlying EBITDA loss of $ 0.1 million. Moving to slide 14, the balance sheet. At 31 December, the company had a closing cash balance of $ 2.4 million and net assets of $ 16 million. Intangible assets of $ 8.6 million consisted of goodwill of $ 4.8 million, software of $ 2.7 million, and $ 0.9 million for customer contracts. Receivables include delayed outstanding payments from a customer. The debt is confirmed by the customer and is not in dispute.
We are currently working with this customer on timing of payment, and this issue has been escalated to Colombia's Superintendency for Healthcare, who has the authority to compel commercial compliance. Slide 15 summarizes the cash flow. The cash balance at 31 December was $ 2.4 million versus $ 1.9 million at the end of the prior year. Net cash flow from operating activities was $ 2.6 million for the year. Net cash flows used in investing activities includes payments for software development and licenses of $1 million, and payments for PP&E of $ 1.2 million. Debt of $ 1.3 million at 31 December was up slightly versus $ 1.1 million in the prior year. I will now hand back to German to take you through the strategy and outlook on slide 16.
Thank you, Reena. As we move forward, our strategy is centered on empowering radiologists with our Radiologists with Superpowers initiative, including advanced AI-enhanced software solutions, exemplary customer support, and efficient implementation process. Our product roadmap includes significant updates to our Aquila system and the rollout of our Universal Viewer enhancements, aiming to set new industry benchmark in radiology software. We are proud to share with you the key advancements in our radiology software platform. Leveraging advanced techniques, our team has developed a novel architecture for Aquila, our flagship RIS/PACS system, aligning with the high-demand market requirements. The minimum viable prototype, MVP, for the new value proposition of Aquila is for evaluation at select test sites. Our Universal Viewer have received substantial updates to enhance stability, performance, and user experience. In tandem with these technological strides, we have refined our IMEXHS Patient Portal, prioritizing patient confidentiality, including single sign-on.
These enhancements are underpinned by a back end optimized for a multi-tenancy, ensuring efficiency and scalability. Importantly, we are achieving these milestones while maintaining fiscal discipline, consuming a similar level of investment as in 2023. Our commitment to innovation and excellence continues to drive us forward, setting new standards in the industry. FY 2024 is a pivotal year for our software and radiology service. Our agenda is twofold: to roll out a compelling new value proposition in software-... and to expand our margin in radiology services. Firstly, we are rolling out a new value proposition that is designed to place us at the forefront of the radiology software market.
This includes enhanced digital security, ensuring the highest standards of data protection for our clients, elevated service levels to deliver un matched, support, and maintenance, integrated AI, harnessing the power of artificial intelligence to provide insightful diagnostic tools. Unique tools tailored specifically for radiologists, improving efficiency and accuracy. This proposition is not just a product, it's a commitment to our enterprise-level client. It's targeted towards an ideal client profile that values innovation and excellence. Furthermore, we are developing software sales capabilities in hard currency economies, particularly in Mexico and Central America, to strengthen our market position and to take advantage of growth opportunities in these regions. Secondly, we aim to drive and accelerate strong sales growth in 2024. This will be supported by the strategic enhancement in our product offerings and by tapping into new existing markets with vigor and determination.
Thirdly, we are committed to achieving solid renewal price increases as we go into 2024. This reflects the added value that our updated offerings bring to our customers and the confidence we have in the quality of our services. Now, turning to radiology services, we have four key focus areas: margin expansion through operational excellence, cost optimization, increased margins from new contracts, and renegotiation of existing ones. Focus on growth in the ideal client profile, tightening working capital management, and most likely to remain providing services in Colombia. We are on a journey of transformation, and FY 2024 is set to be a year where we build on our strengths and unlock new opportunities. Looking ahead to FY 2024, we anticipate revenue between $24 million and $ 27 million, with an underlying EBITDA between $ 1.5 million and $ 3.5 million.
Our focus remains on driving ARR growth, capitalizing on our robust sales pipeline, and expanding our margin in radiology services. We are committed to delivering sustainable growth and value to our stakeholders while advancing our mission to transform medical imaging access globally. In conclusion, our FY 2023 results not only reflect our financial resilience, but also our strategic foresight and operational excellence. We are poised for continued success, underpinned by our innovative solutions, customer-centric approach, and determined commitment to enhancing healthcare outcomes worldwide. Thank you for your attention. We will now welcome any question you may have.
So, German, there's a few questions from Iain Wilkie. So, Iain, hello. I might just let you in so you can ask your questions, because you've got a few. Give me a second. Hi, Iain, are you there?
Sorry, there. Can you hear me now?
Yes, we can hear you.
Okay, great. I've probably actually forgotten a couple, a couple of questions I was sort of shooting along as, as I went, but, I guess one of the main ones was, you know, with that, revenue growth guidance, obviously that's, that's quite a large range. Is, is that based on the assumption that there might be a, a large-larger or, or a combination of, of contracts, one-off contracts, which are likely to hit towards the end of the year?
Hello, Iain, and well, thank you for the question. Essentially, our revenue guidance is relying on recurrent revenues, mostly on recurrent revenues. The FY 2023 results are showing that we are mostly delivering through multi-year recurring revenue contracts. And this is what we are expecting for 2024. So this revenue guidance range is coming from existing lock-in revenues. Not only the revenues that are coming from already installed contracts, but the contracts to be installed during the year, during the early part of the year. Plus the most solid part of our pipeline that should add on top of this, but essentially, we are relying mostly on recurring revenue deals. Marginally, we may have some one-offs, but this revenue guidance is supported on that.
Okay. And I guess just, you know, with a recurring revenue number now of about $ 25 million, I mean, just that, that range, the lower end of that range is actually below that number? Can you sort of make some comments on that, or is this sort of more maybe a bit of more prioritization in the services area where there's some unprofitable contracts potentially?
Well, yeah, obviously, the ARR is a good fundamental for the following year revenue outcome. The closing ARR, as you said, was $ 25 million. So, big proportion of this is already installed and billing, but there is an additional proportion that has to be installed through the year, and that will start generating revenues gradually down the road. With that number, we have a big confidence that we can obviously achieve the lower, at least the lower end of the, of the, of the range, plus the expectation of new sales that have to be completed, contract signed, and deployed to start generating revenue. So we expect a significant contribution to the ARR, but also to land revenues during the year.
The possibility of having some one-offs, which is not our preferred business model, will add on top of that.
Okay, fantastic. I think I had a question in there about, you know, just your free cashflow and how that sort of, how you're looking at that versus, you know, obviously your underlying EBITDA range. Is that gonna match quite closely, you think again, this year?
I think, Iain, just subject to obviously software capitalization, so we capitalize the development costs and any investment in CapEx that we might make subject to the deals that come along.
Okay, no worries. Thank you. I can't remember if I had any other ones in there, sorry.
Did we talk about the pipeline for software yet, or?
Yeah, we have one from-
Oh, yeah.
Okay. Sorry, go ahead.
Yes. Sorry, sorry, German. Just last one was just on the forward pipeline. What are you sort of seeing just really the mix specifically on the software components, but the mix between enterprise customers versus your sort of smaller contract sizes. Is there any sort of weighting more towards now towards the larger enterprise or some-
Okay. A few elements to give you context. We are not—we have not provided guidance on the pipeline, but what we can say is that during 2023, the pipeline constantly grew. There is a larger proportion of the pipeline coming from, still from the SME segment, small to medium segment. But with the new value proposition we are developing, aiming to more complex customers, we are expecting to increase the enterprise side of the pipeline.
Even though we already have several, because after progressing in each geography, the early stages are we experience normally more sales in the SME segment, and then we start to jump gradually into a more complex centers. We have been getting much more maturity in geographies like Mexico, Ecuador, Peru, and some of the Central American countries, where we are already experiencing this transition into more complex sites.
So the situation or the phenomenon is that as soon as we establish a footprint of SME segment installations, we get the reputation, and we are more efficient in going higher in complexity, and this is already happening and feeding our pipeline, changing the proportion, which has been traditionally more loaded for the SME segment, but is now moving into a direction. And this will be supported or enhanced by the new value proposition that is addressing to be much more competitive in this high-end.
Fantastic. Thanks, guys.
Thank you.
German, there's just one final question from Roger. Why are we not considering the Asia market?
Yeah, well, it's definitely a very interesting market, but given we have taken the decision two years ago to move into a profitability direction, one of the key strategies for moving into a profitable status, we have found that is the focus. And we have decided to be focused on the market where we already have good traction, good pipeline, good result, good footprint, which is Latin America. Definitely, in the second half, as we assess the first half of the year results, we will start looking for different avenues for growth.
But, Asia, given there is a different time zone and, for the operational headquarters, and, there is no traction at all, for us at this point, and no distributors, is gonna be like a second priority. We will, most likely assess when we decide to expand outside Latin America, countries like, U.S. But, definitely, for the current strategic plan, we will keep focused on the Latin American region, and all the guidance we are providing, and, the whole budget is relying on the results from, the region where we already operate. So in summary, it's gonna be it's something that we have to assess in the second half, probably for following years, but not for the current year.
Okay, thanks, German.
Do we have any other question?
Yeah, there's just one final question from Roger again. Why are we not seeing regular communications in the Australian market to generate interest and potential investor support? So I can ask you.
Well, yeah.
You go, you go.
Share the answer.
Yeah.
First of all, Roger, well, the part of our cost reduction plan two years ago included some optimization of our investor relations costs. And we have downgraded that, which is also obviously one of the reasons why there is less communication. But recently reactivated this late in the previous year. And after getting a profitable direction and better numbers, we started to reinvest in IR and in AR, and you will see soon results. We have already created some regular communications to our investors community, and we are in the plans to enhance, well, the exposure of the company across the investors community. Reena, I don't know if you want to add something else.
Probably not too much more, German, but just, yes, I mean, we're doing our quarterly reports and obviously our half year and annual reporting as well, and we release all our material announcements to the ASX. As German said, we did implement a new investor relations program this year, where we're sending comms out to shareholders, investors, et cetera, on a more regular basis. That's probably all. Is there any more questions? If there's not any more Q&A, German, we can probably wrap up.
Thank you again for making the time this morning for listening to the full year results presentation. Thank you for your continued support as investors. Have a good day.