My name is Robert Bazzani, Chairman of Mach7 Technologies, and on behalf of the board, I'd like to welcome you to Mach7's 2024 Annual General Meeting. Today's meeting is being held as a virtual meeting. Shareholders will be able to ask questions through the online platform and to vote electronically when prompted. This process will be discussed shortly. If we experience any technical issues that impact the meeting, I'll assess the circumstances and communicate further with you. If it isn't possible, you'll be emailed instructions on how and when to rejoin the meeting. I'm informed by our company secretary that, in accordance with the company's constitution, a quorum is present, and I declare the meeting formally open. I'll begin by introducing my fellow directors joining us today: Mike Lampron, CEO and Managing Director; Dr. Eliot Siegel, Non-Executive Director; Ms. Rebecca Thompson, Non-Executive Director; and also joining us today are Ms.
Dyan O'Herne, Chief Financial Officer, Ms. Françoise Dixon, Investor Relations Manager, our company secretarial team, Mr. Tony Panther and Ms. Jessica Cahill, and the company's auditors, RSM, represented by Mr. Mathavan Parameswaran. The order of events today will be as follows. First, I'll say a few words about the past year for Mach7. Mike Lampron, CEO, will then provide an overview of the business and our FY24 results and our FY25 focus. Then we'll turn to the formal business and the resolutions of the meeting. Lastly, there'll then be an opportunity for any general shareholder questions to be answered before I close the meeting. Our Company Secretary, Tony Panther, will now explain the process for voting and submitting questions.
Thanks, Rob. Voting on the resolutions will be conducted by way of an online poll. If you've already submitted a vote by proxy, your votes will already be counted towards the poll. You do not need to lodge another vote unless you wish to change your proxy instructions. If you proxy vote and vote again today, your vote today will override and replace your previous proxy vote. So if you've already voted by proxy and don't wish to vote again, don't vote on the poll today. If you've not submitted a vote by proxy and wish to vote on the resolutions today, you can do so by following the instructions that will be shown on the screen. When the poll is declared open, a poll window will appear on your screen. This will show all of today's resolutions with voting directions for each resolution: either for, against, or abstain.
To vote, simply select the direction in which you would like to cast your vote, either for, against, or abstain. The selected option will then show as being marked. To submit your vote, simply click on the submit button when the poll is about to close, and you'll have the ability to change your vote up until the time voting is closed. Voting on all resolutions is allowed up until the time the poll closes, and we'll open the poll after Mike's presentation, and a poll window will then appear on your screens. Shareholders wishing to ask questions via text, please note the following instructions. Select the Q&A icon located at the bottom of your screen. Type the questions in the message box and press the send arrow. Your questions will be addressed at the appropriate time.
Given the online format, we may experience some time lag, and this may cause some delay in your text questions or comments coming to our attention. We encourage you to lodge them as early as you can. Shareholders wishing to speak and ask a question, in that case, an audio question facility is available during the meeting. If you prefer this method, please follow this process. Select the raise hand icon located at the bottom of your screen. You'll be placed in a queue and authorized to speak when we reach the Q&A session. Prior to asking your question, please state your full name and who you are representing. Back to you, Rob.
Thanks, Tony. Before moving to the formal part of the meeting, I'd like to provide an overview of the 2024 financial year. I'll then hand over to our CEO and Managing Director, Mike Lampron. Mach7 develops innovative management and viewing solutions that form the core of an integrated enterprise imaging system. Our solutions are highly competitive as they stream disaggregated patient data across the entire healthcare facility while saving our customers and healthcare professionals both time and money. Our products rank highly amongst competitors as judged independently by the KLAS industry rankings. FY 2024 has been a transformative year for Mach7 as we laid the foundations for future growth. We executed on a refreshed strategy, further secured our customer base with a record renewal program, continued investment in talent, product innovation, and autonomous processes to enhance service delivery and our market competitiveness.
We achieved our FY 2024 guidance for sales orders, revenue, and OPEX growth and were cash flow positive, a significant achievement as we transitioned to a predominantly subscription sales model. We also delivered record results and strong growth in high-quality contracted recurring revenue, CARR, and annual recurring revenue, ARR, and we note that the amounts shown here are in Australian dollars. In FY 2024, Mach7 delivered record sales orders of AUD 61.3 million in total contract value. This strong result was driven by a large renewal program demonstrating strong retention among Mach7's existing global customer base. Renewals accounted for AUD 37.5 million, or 61% of our total sales orders, the highest in the company's history. Mach7 delivered revenue of AUD 29.1 million, which was marginally lower than the previous corresponding period and at the high end of our revised revenue guidance of AUD 27 million-30 million.
The marginal decline was due directly to the short-term impact of the accelerated subscription transition, with 83% of our sales orders relating to subscription fees and maintenance and support fees. We generated AUD 22 million of annual recurring revenue. That's a run rate calculated by annualizing revenue that's earned by or from subscription fees and maintenance and support fees, and for clarity, excludes professional services and capital license fees. This run rate was AUD 5 million higher, or nearly 30% higher, compared to what it was in June 2023. Annual recurring revenue will continue to grow as new customers achieve first productive use and existing customers renew at increased rates, or they achieve first productive use on our add-ons. Our contracted annual recurring revenue was also up to AUD 27.9 million, an increase of AUD 7.3 million, or 35% from June 2023.
Adjusted EBITDA that excludes unrealized net foreign exchange movements and non-cash share-based payment expense was minus AUD 2 million compared to AUD 2.5 million in FY 2023. This is mainly a reflection of the short-term decline in revenue associated with the subscription transition. We maintained a disciplined approach to cost management with operating expenditure growth in line with FY 2024 guidance. Net profit after tax and before amortization was minus AUD 1.2 million, again a consequence of the short-term revenue decline from the subscription model. Cash receipts were a record, nearly AUD 35 million, and we reported positive operating cash flow of over AUD 3.5 million. Our FY 2024 cash flow positive guidance was achieved due to disciplined cost management, increased fees for license renewals, and improved predictability from subscription fee contracts.
Importantly, the financial position of the company remains strong, with no debt and AUD 26.2 million of cash on hand at 30 June 2024, our highest in over four years. During the year, there's been a significant renewal at board level, which has brought fresh perspective and expanded skill sets. As a non-executive director of the company, I was delighted to accept the chair role last October. In September 2023, we announced that Ms. Rebecca Thompson would join the board as a non-executive director. Rebecca brings an extensive and deep skills and experience in financial markets and a strong understanding of Mach7, which has proven invaluable. We've also made changes to our remuneration structure following feedback from our investors and shareholders. For example, we no longer award options to directors.
While this is common practice in the United States, which is where our operations and our people are predominantly based, it does not align with the expectations of the Australian market. As we look to the future, Mach7's innovative products form the core of an enterprise imaging strategy that enables healthcare providers to make more informed decisions and deliver exceptional patient care. These results that we achieved in the past FY 2024 would not have been possible without the hard work of our CEO and Managing Director, Mike Lampron, his leadership team, and the staff across North America and our Asia-Pacific regions. I'd also like to thank our customers and shareholders for their ongoing engagement and support. As a board, we do not believe the current share price reflects the intrinsic value of our company or its long-term prospects.
We believe we have the right strategies in place to deliver strong returns for shareholders and positive outcomes for employees, customers, and most importantly, their patients. I'll now invite Mike Lampron to address the meeting. Thank you.
Good morning, everyone, and I'd like to add my welcome to today's AGM. Let's start off with the first slide, please. As Rob illustrated previously, FY 2024 was an important year for Mach7, and the metrics in this slide really demonstrate that. We had 80 contract wins for different components of our software, which covered a wide variety of use cases across multiple different departments, what we refer to as ologies, in both the acute care and ambulatory care segments. This included 19 renewals, which demonstrate the strength of our long-term customer relationships and the value that our products are bringing to those customers, and during the year, we completed 32 implementations, which remain a key focus as our customers only find value in our software when they reach what we call first productive use, essentially a term we use once a system is used outside of testing.
First Productive Use is also a standard contract term that's generally a precursor to recognizing annual recurring revenue, whether that's subscription or support services. We also secured about AUD 51 million of forward revenue. This is a secured book of business over the next five years. Next slide. This is a great slide. When we compare our performance to FY 2022 to FY 2024, we see marked improvement across the company. Over the past two years, we've created a stronger and more diverse business. It's reflected in these key metrics. I mean, we show the CARR increasing by 61%, ARR increasing by 53%. Our sales have continued to grow consistently year over year, and our cash has continued to be solid, even with our ARR-type sales orders increasing by 162%. This transition, this model transition, is really important.
It's an important point for us and probably the greatest measure for how the company is doing. We have migrated from a capital to subscription sales model. We're probably never going to be 100% subscription, but we are substantially subscription, which means our business is really geared towards keeping our customers, meaning we have to pay attention to make sure we continue to have a low churn rate, low attrition, and we have to grow from within our installed base. That's the land and expand model that we've had in place for several years now, and net new customers, of course, to continue to build out that book of business. Recurring revenue is now representing 72% of the total revenue and on the rise, and our ARR is now covering 75% of our operating expenses compared to 65% in FY 2022.
This number continues to average up as we reach first productive use with our customers. You see that backlog conversion from CARR to ARR, so keep an eye out for that CARR number. We're in a strong financial position, and we maintain a disciplined approach to cost and cash management, as Rob had suggested. Next slide, please. We operate in two key markets. For the purposes of this presentation, we consider the Middle East to be part of the APAC market. And in the North American radiology market, it's forecasted to grow at a compound annual growth rate, CAGR, of 7% per annum over the five years and by 12% per annum in Asia-Pacific. So we have a growing market. With the medical imaging landscape, it's still changing. We still have a fragmented imaging market and a continuing shift towards ambulatory from acute care settings.
There's other factors here too, especially outside of the U.S. Increasingly, there's a trend toward non-physician practitioners or NPPs reading studies in doctors' offices, more on the ambulatory side and more outside of the U.S. But what it's doing is it's also these clinicians, these practitioners, they're not needing the advanced features that a radiologist would require. And it's paving the way towards further use of enterprise and universal viewers and increasing the demand for a seamless and simple integration to practice management systems, which is especially true, like I said, outside of the U.S. Some other trends we have seen, we continue to see legacy modality vendors lose market share in the healthcare IT segment. We're seeing consolidation of healthcare providers. We're seeing a growing demand for centralized imaging with IT, making the CIO an increasingly important part of the decision tree.
We see a trend for enterprise imaging that isn't changing. It requires simplified management, though it needs to be scalable both financially and technically, and it needs to be ready to work in a growingly complex environment. All of this is mandating investment in technology from our customers, and it presents a growing opportunity for us to capitalize on what we think of as the replacement cycles within the medical imaging market. Next slide, please. This slide, I'd like to explain from the top down. What differentiates Mach7 from others in the industry is that we really truly are a platform, and our purpose is to make sure that not only our software, but the software of other third parties is integrated and working to give healthcare providers the capability to make more informed decisions.
One of the things we really pride ourselves on is our ability to develop strong customer relationships and customer intimacy is a component of our business that is really important to us, and it drives a lot of our behavior. From a technical perspective, as we start to go down and in blue, we can either deploy our product on-prem or in the cloud. We are integrated with all the major hyperscalers, AWS, Azure, Google, have customers across all three of those platforms. We also have customers who use private cloud solutions, although the bulk of our customers continue to use an on-prem solution. Very important to understand the difference. Just because we have moved to a subscription model doesn't mean we have moved to a cloud model. We give our customers flexibility and freedom to make those choices. Our software specifically revolves around data management and image viewing.
It allows our customers to grow and take advantage of new technologies as they're developed over time. We develop our own workflow orchestration toolsets, and we improve interoperability with other leading industry experts in this space. This gives customers the ultimate flexibility in their technology choices, and that's reflected in our tagline. Mach7's tagline is independence through innovation, and that's what we mean. We mean to give our clients the opportunity to make choices and not force them into a complete ecosystem. They can take the best of what they can find and take advantage of that set. Our VNA is super robust and feature-filled, offers a lot of great benefits to our customers, and this is a differentiator for many in the market who are what I would refer to as bit buckets.
They're great for storage, but lacking the intelligence to properly manage and distribute data in a meaningful way, and of course, we work across the spectrum of traditional radiology practices and teleradiology practices in both acute and ambulatory space. So overall, we have a solution that's just highly performant. It's a measurement that tends to be pretty subjective in our industry, but we believe our time to first image is as fast or faster than anyone in the market. Our viewer is a zero-footprint viewer, which means there is no software to install. This makes it all very user-friendly for the IT departments, the security departments, as well as all the end users, so on this slide, we're really concentrating a bit on sales orders, and there's a couple of important points here.
First, Mach7 has delivered record sales orders over the past four years, with CAGR of 28% in U.S. dollars. Sales have never been an issue here at Mach7. There is a long sales cycle, though, which means that sales orders are lumpy, especially when viewed on a quarterly basis. This lumpiness will probably continue over time, as it does for everyone in our business. If you look at any vendor in our business, you'll see that there's lumpiness quarter over quarter in net new sales orders. But as our install base and ARR grows, we see more predictable revenue numbers from our business and more predictable expenses. That's a level of maturity as we gain a bigger book of business. Our pipeline overall is getting stronger, especially at this time of year when our funnel starts to build up.
Our sales cycle, like I said, is still 12 to 18 months. We've got a great sales team with RSNA happening in just a few days. We expect to see further development in the funnel, and we've already booked demonstrations for RSNA as an example, with an increased traffic flow of about 30% of demonstrations already reserved higher than last year. Our focus on FY 2025 is bringing in those net new logos, and that's reflected in this pipeline chart. 80% of the FY 2025 pipeline, FY 2025 pipeline, right? Not the full funnel, but the FY 2025 pipeline is focused on net new logos at this time. That does not mean that our install base won't be being a big contributor to our revenue numbers throughout the year or our sales numbers. We will still continue to grow through expansions, add-ons, renewals from our existing install base.
And that, again, highlighting our land and expand strategy, but you'll have seen that we signed some significant expansions already. But these net new customers, that is a focus for us right now. And to help further that commercial effort, we have recently introduced a new product that some of you may have seen called UnityView in the past two weeks. We've had about 30 new opportunities come in already over the two weeks, highlighting the importance of these sort of partnerships. More to come on UnityView further in the presentation. Next slide, please. So we get questions all the time around KLAS rankings and how important KLAS is. We're currently ranked in the top three for the universal viewer category and top four in the VNA category in the live data.
Data is updated on a monthly basis, and then KLAS comes out with rankings once a year in the February timeframe. We've seen a really solid improvement across both categories during the year. This year, as one of our strategic priorities, we have invested in customer intimacy. We believe this can be a key differentiator for us and is core to a healthy recurring revenue-style business model like we now have. Our continued investment in the support services team has played a pretty important role in improving those scores, and we feel that as older scores age out, it's based off of a 12-month running tally of the system, that our scores will continue to improve. I'd also add that these data points are an important source of customer feedback.
It's not just about the score we're getting, but this helps us align our customer feedback with our actions, ensuring that we're delivering what is being asked of us and not delivering what we think the customers need. There's an important component of voice of the customer that comes through KLAS. It cannot be ignored. Next slide, please. So this is turning to our business objectives. Number one priority is providing solutions that compete at the enterprise level in selected market segments. As an enterprise company, we want our product to be used across all of the ologies, not just radiology. And the more complex, the better for our software, the more value our customers get. We are in the acute care and ambulatory care market in North America, APAC, and the Middle East. We compete in segments that we can win in, and we support driving growth for the business.
We'll continue to drive innovation within our business, and we remain dedicated to achieving long-term profit. We had an opportunity this year to make a small investment back in the business and felt and continue to feel like that was the best use of our cash. This investment has led to a stronger, more capable business that we believe will deliver better short-term and long-term growth for the company. Those are great examples. Next slide, please. So a little bit about our roadmap. We remain focused on two main products. Our roadmap is driven by our desire to enhance and continue to build on those two core products to help our clients achieve better patient outcomes. We do that by listening to the voice of the customer. That's very important in our roadmap. We listen to our customers. We take their feedback into the building of our products.
And with this in mind, we've established three strategic pillars for the business. Next slide. As I have already said, customer intimacy is being driven throughout the organization. And think of that as an overarching initiative for the business. And we believe this to be a differentiator, like I said, to our business and involves everyone in the company. But from a product perspective, our three strategic pillars are cloud enablement, service and supportability, and integration and interoperability. Next slide. So digging into those a little bit more, cloud enablement is a big, broad topic. Currently, although we can be deployed and managed through hyperscalers, and we are, we have work to do with our products to make them more "cloud native," meaning building our products so they can actually take advantage of the scaling opportunities the cloud can provide.
Currently, we and our clients need to spend far too much time dedicated to infrastructure and scaling. With this work that we're doing, we can cut considerable time from deployments and give our clients a more performant system that's easier for them to maintain. From a service and supportability perspective, we also continue, as I mentioned, to have an eye towards profitability. As such, we need to ensure that our products are easy to deploy and easy to support. Making improvements in our core product helps us in both regards. We'll ultimately lead to better margins in the medium to long term. A great example of this service and supportability pillar would be our 3D engine that we have built in-house and will be commercialized in the second half of this fiscal year. This will save us over AUD 1 million annually in royalty fees.
That's a great example of investing in service and supportability for better medium to long-term growth for the business. On the integration and interoperability pillar, from my opinion, this is arguably the most important of the pillars. One of the things that separates an enterprise solution from a departmental solution is the ability to allow for integrations across third-party solutions. This can be anything from EMRs to modalities to treatment planning solutions. There's hundreds, if not thousands, of opportunities here. Our ability to use standard-based integration methods in combination with an emphasis on usability will allow our customers to get the most from their software platform. Our new partnership with UnityView is a great example of this pillar, and I think it is going to lead to a lot more conversations with our customers into the future.
For slides 19 through 21, what I'm trying to do here is I'm offering you a glimpse of these pillars and how they're incorporated into our product roadmap. I'm not going to go into detail on these slides, but they will offer you a great representation of how we are executing against these three initiatives. If you could please move on to the next slide, and the next slide, and the next slide, and one more. Right, so here we are looking at UnityView. This is a reflection of our latest partnership. Mach7 currently offers a worklist to its customers. It's used outside of radiology a lot. Sometimes it's used inside of radiology too, but it's only available through our VNA, meaning you have to be a VNA client to utilize our worklist, and it doesn't have all the functionality offered by the UnityView product.
There will still be times that we sell our own worklist, and there'll be times when we partner with others. As an example, we partnered with Nuance for the VA contract. However, UnityView is more than a worklist. Our proprietary integration with them with this product makes it one of a kind, and we think this is going to resonate very well with our prospects. We'll specifically be targeting workflow challenges within the IDNs and radiology group practices. IDNs, as an example, have typically grown through acquisition and acquiring aging disparate imaging solutions. UnityView can provide an opportunity for these organizations to bridge those legacy solutions with a modern imaging work infrastructure without having to perform a costly, disruptive lift-and-replace strategy. On the ambulatory side for the radiology practices, oftentimes these practices, they're reading for multiple hospitals, multiple imaging centers, multiple specialty clinics.
This process can be quite challenging from a workflow and efficiency perspective with systems that were built, frankly, for departmental use. So UnityView provides a common reading workflow across disparate solutions, which can greatly improve the efficiency of radiologists in this workforce. I would invite you all to, at some point, you can click on the link that's at the bottom of this slide to watch a short video to find out more about UnityView. You can also go to our website and see the product video from there as well. So it's a small one-minute video that I think does a great job explaining the product for you. Next slide, please. So this slide gives you an idea of some of the key areas that we'll cover with UnityView.
Key among those features is the federated aspect of the solution, as I said, working across multiple solutions, and the fact that a migration is not necessary to see the immediate impact of the solution. That's really important. Migrations are costly, and they take a lot of time. Finding value right out of the box is hugely important to our clients. Next slide. So as we start to take a look at long-term drivers, we've had significant tailwinds that will benefit Mach7 as we enter our next phase of growth. These include strong long-term demand for enterprise imaging solutions, the continued growth of our recurring revenue base, and the addition of new logos and opportunities created by our investment in product innovation and customer intimacy. And finally, we believe further long-term value can be created through AI partnerships like those we've established with Nuance. Next slide.
Looking ahead, we expect to see continued demand and volume growth from existing customers and the addition of new logos, which has been the trend in the last few years. We also expect to see growth across each of our regions: North America, APAC, and the Middle East. We know that our APAC team has been a bit quiet over the last couple of years, but we know we've got a really nicely growing pipeline with them that's really matured over the last 12 months. We have a diverse approach with our product offerings, right? Our clients find value in our components individually or as a tech stack, but our unique approach there will be reflected next week at RSNA where our product is going to be presented at over 10 booths in addition to our own.
So we've got 10 other companies that will be at RSNA that will be using our eUnity as their viewer of choice to show their technology. That's the value of partnerships. That's the type of value our eUnity can bring to clients. We're reaffirming our FY 2025 guidance for CARR growth of 15%-25%, revenue growth of 15%-25%, and for our OPEX growth to be less than revenue growth. We've provided a range here instead of specific numbers to reflect that our customers retain the option to choose either a subscription or capital license model that will adjust the revenue we take for those particular clients in a given year. We'll continue to undertake targeted and disciplined investment in our people, process, and tools, while at the same time, we look for efficiencies and cost savings that will allow the business to operate more smoothly.
So before I hand it back over to the chair, I'd just like to thank the board for their guidance over the past year. I'd also like to acknowledge and thank our team across the globe for their hard work and dedication. And finally, to our customers and shareholders, thank you for all of your ongoing support. And with that, I'll hand it back over to you, Rob.
Thank you very much, Mike. We'll now move to the formal business of today's meeting. After this, we'll address any general shareholder questions for the board or CEO, CFO in a Q&A session. For resolution-specific questions, we'll answer these as we move through each of the resolutions shortly. Our company secretary has confirmed that the notice of meeting has been sent to all shareholders and other persons entitled to receive it within the notice period.
The matters requiring consideration today are outlined in detail in the notice of meeting. The notice will be taken as read. Mach7's financial statements for the 2024 financial year, together with the auditor's report, are in our annual report, which is available on our website. Resolutions 1 through to 4 are ordinary resolutions. This means that to pass, they require more than 50% of the votes cast by shareholders entitled to vote and voting on the resolution. Resolution 5 is a special resolution. In order for this resolution to be passed, at least 75% of the votes validly cast by shareholders on the resolution must be in favor of it. As mentioned earlier, voting will be conducted by way of a poll. Votes will be counted at the end of the meeting, and results will be published on the ASX.
If you are voting, you'll be able to finalize and submit your votes up to the end of the meeting. I'll remind you at that time. The proxy votes that have been submitted will be set out in the slides for each resolution. For some context, there are about 241 million shares on issue. Shareholders have appointed the chair of today's meeting, myself, as proxy for approximately 131 million shares voting either for, against, or with discretion for all resolutions. As indicated on the proxy form and in the notice of meeting, my intention as chair is to vote all discretionary or undirected proxies held by me in favor of each resolution. Each resolution is put to the meeting. It will be displayed on your screen. As noted earlier, shareholders can submit questions during the meeting by text or verbally.
To ensure questions reach us in time, I ask that you submit them now if you haven't already. Any general shareholder questions submitted online during the meeting will be addressed after the formal business is completed. If we aren't able to get through all of the questions today, or if there are any specific questions that would be better addressed on an individual basis, we'll respond to them after the meeting. We will now open the poll for voting on the resolutions. Thank you. The first item of business of this meeting is consideration of the audited financial statements and related reports for the year ended 30th of June, 2024. The Corporations Act requires that audited financial statements and related reports be laid before the meeting.
I will now declare that these reports, which were made available to shareholders on the 31st of October, 2024, have been laid before the meeting. Although shareholders are not required to formally vote on the company's financial and related reports, I would welcome any discussion or questions on these reports. As I mentioned previously, the company's auditors are RSM and Mr. Mathavan Parameswaran, the partner responsible for the company's audit of the 2024 financial year, is online with us today and is available to answer any questions on the conduct of the audit or the content of the auditor's report. I'm advised by our auditors that no relevant questions for their attention were received prior to the meeting. Are there any questions or comments on the company's financial and related reports for the year ended 30th of June, 2020?
We've not received any questions specifically regarding those matters, Mr. Chair.
Thank you. Thank you, Tony. If there are no further questions, then I'll ask the company secretary to record that the financial report for the company and its controlled entities for the year ended 30th of June, 2024, together with the director's report and the auditor's report, have been received and considered. Now, Resolution 1 is a non-binding resolution to adopt the remuneration report, which is set out in the 2024 annual report. The proxy votes received for this resolution are displayed on screen, and we note that all open proxies held by the chair will be voted in favor of the chair. Are there any questions on this resolution?
No questions on this resolution, Mr. Chair.
Thank you, company secretary. Moving on to Resolution 2. The shareholders are asked to consider and, if thought fit, pass the following resolution as an ordinary resolution: the election of Miss Rebecca Thompson.
The proxy votes received for this resolution are displayed on screen. We note that all open proxies held by the chair will be voted in favor. Are there any questions on this resolution?
No questions have been received on this resolution, Mr. Chair.
Thank you. For Resolution 3, the shareholders are asked to consider and, if thought fit, pass the following resolution as an ordinary resolution: the re-election of Mr. Robert Bazzani as a director. The proxy votes received for this resolution are displayed on screen, and we note that all open proxies held by the chair will be voted in favor. Are there any questions on this resolution?
No questions, Mr. Chair.
Thank you. For Resolution 4, the shareholders are asked to consider and, if thought fit, pass the following resolution as an ordinary resolution: approval of the issue of performance rights to Mr.
Mike Lampron, CEO and Managing Director. The proxy votes received for this resolution are displayed on screen. We note that all open proxies held by the chair will be voted in favor. Are there any questions on this resolution?
No questions received, Mr. Chair.
Thank you. Shareholders are asked to consider and, if thought fit, pass the following Resolution 5 as a special resolution: approval of the 10% placement facility. The proxy votes received for this resolution are displayed on screen. We note that all open proxies held by the chair will be voted in favor. Are there any questions on this resolution?
No specific questions received on this resolution, Mr. Chair.
Thank you. As that completes the formal items of business, I can now take any general questions from shareholders. And I would open up general questions from shareholders.
And if our company secretary could please read those out, that would be appreciated.
All right, Mr. Chair, we have some questions that have been received from shareholders and also some anonymous questions, which I'm not sure that we'll be able to answer at this point because, as we're aware, the scope of the meeting is such that it's a shareholders' meeting and we answer questions from shareholders. We're not in a position to answer questions from individuals who aren't shareholders. So we'll certainly answer questions from identified shareholders and we'll answer other questions at the board's discretion.
Okay. Thank you.
So just checking, Rob, are you able to note the questions in the question and answer panel?
Yes, Tony. And please correct me otherwise, but I have the first question from Stephen Mayne, if that's correct.
Yes, that's correct.
And I will read that out.
Could new Chair Rob Bazzani please comment on the biggest changes in board process, delegations, reporting lines, or governance that he has implemented since taking over as chair? And then could the CEO also comment as to whether Rob is more or less hands-on than his predecessor as a chair? Thank you, Stephen, for the question. I'll take that first and foremost. I would start, Stephen, by saying, and I'll put a governance hat on this, that my first point of call was engaging with the team, and in particular, the management team and the CEO and the new board, to ensure that we had alignment and agreement on a refresh strategy, which involved several sessions between management and the board. We focused very much first on a refresh strategy. From that strategy came our three pillars.
From that, we've also worked on reorganizing parts of the business, including our support teams and our professional services teams. We've also, throughout the year, implemented, as we do annually, our board skills matrix and our capability matrixes to ensure that the board has all of the competencies and capabilities it requires. And we've also set, reset our entire board committee agendas. And we also ensure that our leadership team meets regularly among themselves with our COO, CFO, and of course, there are one-on-one meetings with the CEO, and the CEO is also very engaged with all of our personnel. We also have, over the last 12 months, ensured that our governance is tight with all of the required ASX corporate governance policies falling into place: ESG, privacy policies, modern slavery, and the like.
We also follow very closely and are engaged with our company secretary on all of the ASX guidance principles. We make sure that we diarize regular meetings with all of our key investors, both for myself and for Mike Lampron, and we, as a board, are very engaged to the extent that we need to talk outside of board cycles. We do that very well, so I would say we have a very well-structured, a very well-governed, and engaged board, and a complete alignment with our management team on our strategy and our key business objectives. I might stop there, Mike, if you want to make any other comment.
Yeah, sure. I'll add on to that just a little bit. You know, I think, you know, doing an apples-to-apples comparison in relation to more or less hands-on is hard to do, right?
I mean, we had a different board, not just Rob coming in as chairman, but we had a different board. We had a different dynamic to the board, and David Chambers did a great job as our chairman. This board is doing a good job too, and understanding our business, taking the time to work with the management team and get to know the management team. I think everybody on this board feels comfortable having a voice. I feel like we've got a good dynamic of shared thought across the board. I would say that we've got a very strong relationship between the management team and the board in relation to the direction of the company and how we're going to get there and what's in the best interest of the business.
Thank you, Mike.
Now, Tony, please guide me in terms of which ones I should do. The next is an anonymous attendee, and I'll read this out. Bitterly disappointed around the lack of operational leverage within the business, coupled with soft targets such as OPEX growth. These are FY 2027 targets, OPEX growth and revenue growth. Is there any news on larger contracts we were going for earlier this year? And Mike, I might throw that one over to you. Sure. I'm happy to comment on it as well.
Yeah. Yeah. Look, I understand that we're all looking for operational leverage within the business, and I would say to everyone, and this is probably not the only question around this, is that we're always looking for ways to become more operationally successful. We acknowledge the desire that everyone has to quickly achieve profitability.
However, cost-out programs, they can be detrimental to short and long-term growth of the business at the same time. And we strive to find ways to become more efficient and continue to evaluate opportunities to reduce overall expenditure. But at the same time, note that we were very specific in pointing out that we were making an investment in people, tools, and process. That was important for us to be able to deliver on contracts that we currently have, to deliver on customer satisfaction demands, to grow as a business, and prepare for the growth that we've been seeing. We just had a record sales growth of over AUD 60 million last year. There's deployments associated with that. There's support associated with that. There's a lot of time and energy for the company associated with those orders, whether they are new customers or existing customers.
Those existing customers, those renewals, they take a lot of time too because that means you have to provide really good support for them in order for them to renew, right? So these are investments that we felt were necessary to make. And so we're not concentrating on cost-out right now. We're concentrating on medium to long-term growth.
Thank you, Mike. And I just would reiterate that we are absolutely focused on a path to profitability and ensuring that the business has long-term sustainability behind it. Our next question, and I may as well run through these in order. Please correct me otherwise, Tony, is from Stephen Mayne. Australian Ethical is the largest of our—
Sorry, Rob, sorry to cut in there. There is another question from Mr. Mayne as well, preceding that question, which I'm happy to read out if you wish.
Please do.
Yes, I'm not sure if I've got this.
He asks or notes, "The five most valuable U.S. big tech stocks: Microsoft, Apple, Amazon, Alphabet, and Nvidia, together worth more than $20 trillion, largely because they have enormous pricing power and are overcharging customers the world over. Could the CEO comment on which of the big global technology companies we are most reliant on and what we would do if they suddenly put their prices up by 30%?"
Yeah, sure. Well, first of all, I'm happy to say that we're not overly reliant on any of the big tech companies. Note a couple of things. Number one, we're a software-only business. We don't sell hardware. We don't sell operating systems. We don't sell databases.
So we are a software-only solution, and we don't have, beyond operating systems, specific large companies that we're using third-party components for that would really hinder our ability. Our biggest third-party component that we have been reliant on is our 3D engine, which is a program that I pointed out earlier in the presentation that we're working to organically replace that ourselves, and that'll be commercialized here in the second half of this fiscal year. But from a customer perspective, I'd say one of the biggest things that are happening from a cost perspective is really with virtualization. When VMware was acquired, the pricing for VMware has skyrocketed. And now that's not a partner of ours. It's not something that's noted for us. I mean, as a business, we'll move away from VMware. We'll move to another virtualization software company. But our customers will feel that.
I think that's probably the closest thing to one of these large big tech stocks in the U.S. that's most affecting our clients.
Thank you, Mike. Tony, would you mind reading out the questions?
Yes, no problems. So the next question, another one from Stephen Mayne. He notes, "Australian Ethical is the largest of our 5,600 shareholders with 13%. Why do they regard us as so ethical, and what level of influence and engagement do they have with the company? Have they voted in favor of all resolutions today, and do any of the proxy advisors cover us? It would be better to disclose the proxy position with the formal addresses to the ASX to allow a more fully informed debate. Will you do this next year?"
Okay. Thank you, Stephen. That's a multi-question question. I can't comment on Australian Ethical's investment strategies and how they view us.
What I can say, however, is that they are a supportive shareholder. Both myself and Mike liaise regularly with them, either on Zoom or face-to-face in meetings, and we are a tech company that serves the healthcare sector and improves patient outcomes. At the end of the day, we are here to make our patients that use and those healthcare organizations that use our products improve decision-making and also improve the lives of our patients. I can't comment on proxy advisors or who covers us. ISS does cover us. We are engaged with them, but in terms of disclosing proxy positions and the like, I can't make any comment on that. Of course, you've raised an issue for consideration for next year, and we'll consider all of the issues raised by our shareholders and questions we received today.
Thanks, Rob. The next question is from a shareholder.
They ask, "If the board does not believe the current share price reflects the intrinsic value of the company or long-term prospects and has AUD 26 million plus of net cash with no debt, will it initiate a share buyback?"
Thank you, anonymous attendee, whoever that is. That's a fair question, and in view of the disappointing share price that we see today. The board regularly reviews its capital management strategies and all the initiatives that are available to it. And a buyback at a particular time and in a particular circumstance is one such initiative, but there are others. The board is focused on maximizing returns to shareholders, and we explore all such initiatives. But we also have valuable investment opportunities, both within our existing product suite, Mike touched on these, building our own advanced visualization tools that enable us to eliminate third-party distributor fees that we currently pay.
We also have opportunities to create new revenue streams that we're looking at. Of course, we'll keep the market and our investors informed of any such capital management initiatives in due course.
Thanks, Rob. Another question from an anonymous attendee. They've asked, "Does management intend to pursue cost cuts in this business? Increase to AUD 23 million of wages across greater than 100 staff and G&A of AUD 2.3 million?"
Yeah, I think I answered that previously with my comment on cost.
Yeah. Thank you. Another question from an anonymous attendee. "If the board does not believe the share price reflects the intrinsic value of the company, why are the board and executive not buying the stock strongly for themselves on market in a personal capacity, i.e., having substantial financial skin in the game?"
I'll answer that. Thank you. That's a very fair question.
Again, in the context of where we are, I do want to reiterate the board is of the view that this business, our company, is inherently undervalued. All directors are shareholders. I can't comment on their own personal investment decisions, but what I would say, particularly to the heart of that question, is our board has been in a share blackout period, and we don't end that period till after this AGM. I have complete faith in our board wanting skin in the game, but there are periods where we can't buy shares, and we have, as a board, been caught in that period for some time now.
Thanks, Rob. A question from shareholder Ross Marples. Ross asks, "Are you able to predict when Mach7 will start making an NPAT profit?"
I can take that one, Rob.
Okay.
Look, we've provided our FY 2025 guidance, right, which did not include NPAT.
It wouldn't be prudent for us to pontificate on NPAT beyond guidance. I would say that beyond FY 2025, we'll look to give more guidance as FY 2025 comes to a close and we start staring down FY 2026, and we can consider NPAT being one of those metrics that we guide to next year. But this year, we're sticking to the guidance we have for FY 2025.
Thank you, Mike. Another question from Mr. Stephen Mayne. He's asked or queried the big protest votes on all resolutions. What caused this?
I'm not a mind reader in terms of how our shareholders buy or sell shares. As I've mentioned, we believe the current stock price undervalues the company and does not reflect its intrinsic value. I don't know if I'd call that a protest vote. Shareholders are free to vote the way they want to vote.
There's no doubt that we, as a board, are very disappointed where the share price is, as may some other shareholders be.
Another question from Mr. Mayne on resolution four asks, "Why is the open vote so large?" I suppose the only answer we can provide there is one of the shareholders provided an open vote, and that question would be best directed to the relevant shareholder rather than the company.
I would agree, Tony. What I would say is we engage regularly with all of our shareholders. I think Rebecca would like to have a comment on this. Rebecca, if you'd like to make a comment.
Thanks, Rob. Sorry, had to unmute myself. Yeah, look, I think we have open dialogue with our investors. I personally have an investment banking background, extensive experience in listed markets, and senior executive at global investment banks and listed companies.
I think the board has a financial focus. I'm currently the chair of the Audit and Risk Committee for Mach7, and I've chaired a similar committee for ICLA, not-for-profit disability accommodation and services provider. We've got an eye to sustainability and ESG, and we feel that we are attuned and aligned with investor expectations.
Thank you, Rebecca. Back to you, Tony.
I'm not sure whether this is a statement of opinion or a question, but Mr. Stephen Mayne makes the comments, "Placements are bad. Please promise not to do one."
Thank you, Stephen. As I've said earlier, we are looking at all of our capital management initiatives. I can't promise we won't do any such things. There are many initiatives, but your comment is taken on board. Thank you.
Question from Mr. Steve Shearman, a shareholder, asks or notes, "The future success of Mach7 seems to require strong revenue growth.
Why is the CEO LTI aligned with share price and not with directly influenceable metrics such as revenue or EPS growth?"
Thank you, Tony. And thank you for that question. But what I would say is we look to our REM policy to undertake a number of different principles from maintain and retain and the like. We also have an operational team based in the United States, so we need to think about that. We believe we have put in place appropriate hurdles for the CEO's performance and including performance hurdles. Those hurdles, as you will see in the REM report, evolve or transition over the next few years to include a number of metrics that we believe will drive the long-term profitability and sustainability of the company. And that also includes metrics such as KLAS rankings, which are important for our customers.
These hurdles are carefully chosen and reflect the key drivers in the business. If the hurdles that we do choose are not met, then those rights or that performance reward is not paid, as has been the case in the past 12 months. Back to you, Tony.
Just checking through. There's a number of questions that have been raised that have been answered separately. And I think the last question, actually, I think the other questions have been addressed by answers that you've given previously, Mr. Chair.
Okay. There is a question, Tony, just on the board composition that I would like to answer. And I think, again, it came from an anonymous attendee. And what I would say is, first and foremost, Mike and I have just gone through the year that's been and the number of records in terms of sales orders, transitions to subscription, cash on hand.
And you've also seen the strong trends in our key metrics of CARR, establishing the business for long-term success. In terms of the right composition of the board, we believe we are, and we have the right composition. We do regular, and we have completed a full board assessment and skills matrix. But we are also open, and we discuss our composition and whether or not another non-executive director would be beneficial to the board. And those discussions are always ongoing while we look to improve the performance of the company as we go forward.
Those are all of the questions that have been submitted, Mr. Chair.
Thank you then, Tony. And thank you to everyone who has taken the time to submit questions. We are more than happy to listen to our shareholders and to take questions from our shareholders.
So finally then, what I'd like to do is I want to thank all of our shareholders for attending Mach7's annual meeting today. We very much appreciate the constructive dialogue and the endorsement from our investors, and we want to assure you of our continued focus to build shareholder value and profitability. Finally, I take the opportunity to thank our hardworking employees and fellow directors for their guidance and support, with all of them having worked diligently throughout the year. I now declare the meeting closed.
Sorry,
just thank you all for your attendance.
Sorry, Rob, just one thing. The poll is still open. We'll close the poll in about 20 seconds. So any shareholders still have to submit votes, please do so now, and we'll close the poll in about 15 to 20 seconds.
Thank you, Tony.