Good morning, everyone, and thank you for joining us today as we present our results for the first half of FY 2024. I will be referring to a presentation lodged with the ASX on Friday, 30 August. With me on the call is our CFO, Reena Minhas. And let me take you through an overview of our business, highlight the key results, delve into the financials, and conclude with our strategy and outlook for the future. Turning to slide five... Sorry, four. Turning to slide four. Our company is unified under a single vision: to democratize access to medical imaging expertise. We achieve this through our two complementary businesses. First, our medical imaging software business provides cutting-edge cloud-based solutions that empower radiologists with advanced imaging tools.
Secondly, our radiology services segment focuses on outsourcing imaging facilities and teleradiology to hospitals and medical centers, providing critical services where they are needed most. Together, these businesses form the backbone of our strategy to make high-quality medical imaging accessible worldwide. Turning to Slide five. Our global footprint continues to expand as we scale both our software and radiology services. On the software side, we operate in 19 countries, reaching 518 sites. 3,326 radiologists use our software, and 27 distributors in 16 countries support our go-to-market strategy. For radiology services, we are present in Colombia, Spain, and Mexico, managing 36 radiology centers with over 160 in-house radiologists. This broad and growing presence underscores our commitment to delivering high-quality reports. Slide seven, business highlights.
Looking at the highlights from the first half of FY 2024, our business continues to demonstrate resilience and scalability across multiple geographies, driven by an attractive product offering and a disruptive business model. Our focus is now on converting this growth into positive earnings and cash flow. We have prioritized sales efforts in Latin America and concentrated on product development projects that offer a clear path to profitability in the near term. The sales pipeline remains strong for both our IMEXHS Cloud and enterprise radiology solution, positioning us well for future growth. From a financial perspective, we reported revenue of AUD 13.8 million, which is up 57% year-on-year and 32% on a constant currency basis. Our underlying EBITDA was AUD 0.3 million, down slightly by AUD 0.2 million compared to the prior corresponding period.
Our annualized recurring revenue stands at AUD 29.6 million, marking a 21% increase versus the previous year. On slide eight, operational highlights. Operationally, we have made significant strides in the first half of FY 2024. Outcomes include the renewal of a key enterprise software contract with Colsubsidio under improved terms and pricing, expected to contribute AUD 575,000 to our ARR. We also secured a contract in Colombia, valued at AUD 790,000, for the supply of biomedical equipment and implementation of our Aquila Enterprise solution. Our sales pipeline for IMEXHS Cloud and Enterprise remains robust. We continue to expand both our services delivered and the number of sites for existing software clients. Contracted price increases were achieved for both new and existing customers.
The enterprise new value proposition development program remains on track and on budget, already delivering improvements in software resilience and service response times. It is also delivering productivity gains for our own radiologists. In our radiology services, we recently signed a new contract with a Colombian client that is expected to contribute 564,000 to our ARR. Turning to slide nine. Our financial highlights for the first half show our sales revenue increased by 57% year-on-year, and 32% on a constant currency basis to AUD 13.8 million. Our annual recurring revenue grew to AUD 29.6 million, a 21% increase from the last year. Underlying EBITDA for the period was 0.3 million, slightly down from 0.5 million in the prior year.
Recurring revenue continues to drive our financial performance, making up 95% of the total revenue at AUD 13.1 million. We closed the half with a cash balance of AUD 1.9 million and have reduced our debt to AUD 0.9 million. Slide 10, business unit results. In software, our revenue growth has been driven by full year effect of 2023 contract wins, upselling for existing clients through extension to new sites, adding new technical capabilities, sales to new clients, and price increases for existing and new clients. Almost all new sales have been in U.S. dollars. Sales investment in Mexico, Ecuador, and El Salvador is also gaining traction. Revenue is up 40% on PCP and ARR up 9% versus 31 December 2023.
Our radiology growth in the half has been driven by existing customer volume growth, some additional services, price increases, and new customers. Revenue is up 70% on PCP and ARR up 36% from 31 December 2023. Key focus for the second half is margin improvement. I will now hand over to our CFO, Reena Minhas, to take us through the financials.
Thank you, Germán. I will now run through the first half of FY 2024 financial performance of the company, starting on slide 12, Progress in ARR. ARR of AUD 29.6 million, as at 30 June, was up 25% versus 31 December. ARR consisted of AUD 19.7 million from radiology services and AUD 9.9 million from software. The chart shows June annualized recurring revenue, which is currently billing, as well as ARR, which is yet to commence billing, in the lighter shade. We focus on getting this ARR billing as soon as possible. As you can see from the chart, we have made good progress in converting customers to billing status over the last year. Slide 13, the income statement. Turning to page 13, first half revenue of AUD 13.8 million was up 57% versus PCP and up 32% on a constant currency basis.
The revenue included a one-off sale of AUD 0.7 million. Underlying EBITDA, which excludes costs in relation to share-based payment expenses, foreign exchange movements, and the impairment charge in the prior year, was AUD 0.3 million, down marginally versus AUD 0.5 million in PCP. This also includes a prudent decision to provide a credit loss provision of AUD 0.3 million for a delayed outstanding receivable. Revenue growth is anticipated to deliver margin improvement in the second half. Moving to Slide 14, the balance sheet. At 30 June, the company had a closing cash balance of AUD 1.9 million and net assets of AUD 15.1 million. Intangible assets of AUD 8.1 million consisted of goodwill of AUD 4.5 million, software of AUD 2.7 million, and AUD 0.8 million for customer contracts.
Debt of AUD 0.9 million was down from AUD 1.3 million at 31 December. As I mentioned before, the receivables include delayed outstanding payments from a customer, but the debt is confirmed by the customer and is not in dispute, and management expects to receive the full balance. While the customer has reduced their overall outstanding amounts over the past 12 months, the company has taken a decision to take a possible credit loss provision of AUD 0.3 million for this customer. Slide 15 summarizes the cash flow. The cash balance at 30 June was AUD 1.9 million versus AUD 2 million in the PCP. Revenue growth in the half consumed significant working capital, leading to net cash used in operating activities of AUD 1.5 million.
Net cash from investing activities of AUD 0.1 million included AUD 0.8 million for the sale of an MRI scanner, which was partially offset by payments for intangible assets of AUD 0.6 million. Net cash from investing activities was AUD 1 million, with AUD 1.5 million raised via placement to strengthen the company's balance sheet and to support growth, offset by repayment of borrowings of AUD 0.4 million and transaction costs of AUD 0.1 million. I will now hand back to Germán to take you through the strategy and outlook.
Thank you, Reena. Turning to slide 17: New value proposition. Looking ahead, we are committed to advancing our new value proposition, positioning us as the provider for the most advanced, secure, and AI-enhanced radiology software solution in the market, while positioning our company as the best post-sale services provider of the industry. It will give us competitiveness and access to the high end of the market. Turning to slide 18: Product and software updates. We are integrating new features and enhancing our platform security with ISO 27001, and HIPAA certification readiness in progress. We continue to deliver unparalleled customer services with top-tier performance metrics, and have implemented an efficient DevOps strategy, allowing us to roll out new features swiftly and effectively. Turning to slide 19, focus for FY 2024.
On the software side, looking ahead, we are committed to advancing our new value proposition, positioning us as the provider for the most advanced, secure, and AI-enhanced radiology software solution in the market, while providing the best post-sale service to our customers. There is still further to go for the development, but we expect to make significant progress in Q4 in rolling out the new capabilities. For the radiology services, we are seeing continued improvements in radiology services pricing, cost control, and recurring revenue growth, which are delivering on our expectations. Maintaining our attention on margin improvements is the key. Turning to slide 20, FY 2024 outlook. We are forecasting revenue between 24 and 27 million, representing a 22% to 37% increase over FY 2023.
We expect underlying EBITDA to be in the range of AUD 1.5-AUD 3.5 million, an improvement from AUD 0.5 million last year, with current indications pointing towards the lower end of this range for the EBITDA and to the superior part of the range for the revenue. The key drivers behind this growth include our recent contracted recurring revenue, the expanding pipeline of opportunities, price increases, and upselling to our existing customers. We are also seeing continued improvements in radiology services, pricing, cost control, and margins. Thank you for your attentions. I would now like to open it up for any questions you may have. Do we have any question?
No questions currently, Germán.
Okay.
So please raise your hand or type it into the Q&A box if you'd like.
Sarah, let me unmute. Hello, Sarah, good morning. I think you can now-
Yeah, should be able to ask a question, Sarah. I've allowed your mic, so you should be able to ask a question.
I have done... Probably, I have done the same at the same time.
Ah.
Yes, let me-
You, I won't touch it. You go, you go ahead.
It's now available. You have to unmute and proceed. Sarah, can you please unmute and then proceed to ask? Your microphone is already active.
No, it doesn't.
If it doesn't work, you can type it in the-
Maybe it was a mistake.
Q&A box. Okay.
Don't know. Any questions? Ah, there is a question, so from John. So the billing in USD, but paying radiologists in Colombian currency, so, does that make you vulnerable to forex fluctuations?
John, good morning, and thank you for your question. We actually have like a natural hedge, coverage within terms of currency, because we pay radiologists in our services company, and that company has a revenue in local currencies. The U.S. dollar billing is mostly on the software side, where we have installations across the Latin American region, and we have, let's say, exposure to several currencies. We have taken the decision to bill every customer in the region in U.S. dollars, but for the software services, for the software provision. For the radiology services provision, we bill in local currency, and we pay in local currency.
Okay, where's Q&A?
We can hear you, I think now, Sarah.
Finally. I can't find... I'm trying to type a question.
Well, you might as well ask it now.
I'm having difficulty. I'm having technical difficulties here, basically, so I'm just.
But now we can hear you.
Yeah.
Not anymore.
Yes, we do.
So s-
We could hear you, Sarah, but you've disappeared again. So please either-
Yeah. You have to unmute, probably. Or let me try to do something here. Sarah, can you unmute and try again, please?
Can you hear me?
Yes. Great. Loud and clear.
So yes, my question was, what was the, your EPS for June thirty?
Okay. Reena, can you-
One second, yeah, I'll get back to that.
Yeah.
In the meantime, I'm just gonna have a look, Sarah, because I don't have that number to hand, but in the meantime, do you wanna answer Mark Gross's question: What is the target EBITDA margin for software and radiology segments on a normalized, annualized basis? Is there any ability to increase price under existing contracts, or do they have to roll off before price rises can be put through? What is the potential to release working capital to fund the future growth of the business, so I don't know if you can see that, Germán. I might publish that, that's quite a few questions, so that you can see that.
Yeah, I can see it now. What is the target with the margin for software, as well? So, Mark, hello, morning, and thank you for the question. But I will start from the end. We have, like, a very good potential for increasing pricing, even for existing customers. In fact, we are. This is one of our main goals for the year. We have very good progress in the first half. Near to the end of the first half of the year, we have completed, for the radiology services, already renegotiation of more than 60% of our revenues. Let's say for the contracts, representing 60% of our revenues, that most have an impact in the second half.
So we have been able to improve pricing, which will deliver the benefit in the second half. And this is an ongoing process that we expect to do it across the whole list of customers we have in the radiology product. We are also working towards improving or decreasing cost and trying to collect our receivables as fast as possible. With those three elements, well, there is an additional one, that is bringing every new customer with a higher margin expectation. So with those four elements, we are expecting to have an overall improvement of the margins for the radiology business in the second half.
In terms of the software side, we are also doing a campaign to increase pricing to new customers, increase pricing to existing customers, and at the same time, try to do upselling during the renewals. And the effect of that is that we have been able to improve pricing or either do upselling in 14% of our existing customers. And for that 14%, that is representing a more than 40% increase, that is coming from the combined effect of upselling plus price increases. So it is a main goal for our team in both software and radiology to increase pricing and improve margins. Several actions have been already taken, and the effect is gonna be visible in the second half of the year.
Are you done, Germán?
Yes.
Okay. I'll just go back to Sarah's question about the EPS. So, Sarah, it's negative AUD 0.03 per share. So we go from EBITDA of 0.2, then we've got depreciation, amortization, interest expense, and we actually get to a loss, for the six months. So, so it's negative AUD 0.03 per share. Are there any other questions?
Okay, so should we finish?
Yes.
Thank you very much, everybody, for making the time this morning, for going through our presentation for the first half of FY 2024, and thank you for the continued support. Have a good day.