Thank you, and good morning, and welcome to today's Investor Briefing. Thanks to all of you for joining us on such short notice. I'm Brent MacGregor, I'm the CEO, and I'm joined today by Anita James, our Chief Financial Officer. Today's call is intended to provide you with an update on our quarterly performance and to give further context to the information in our quarterly activity report and our Appendix 4C for Q3 of FY24, which we released this morning to the market. Today's release is the company's first quarterly report. The initiation of these quarter- this quarterly reporting has been requested by the ASX due to our current cash position. That said, it provides us the opportunity to give more regular updates to the market on our progress and pathway to cash flow positivity and delivery of our strategy.
I will not be opening the lines to questions at the end of today's call. However, we will be addressing several questions that we've received from the market that we believe encapsulate the key areas of inquiry for most investors. If you have other questions that are not answered on today's call, please reach out to us through the contact page on our website. On that note, let's jump to slide 3, which is our quarterly activity summary. Now, what you'll see on this slide is we've made encouraging progress in the quarter in the key initiatives that will drive our success in the near term. We made further progress in improving our margins and in right-sizing our cost base, with AUD 3.1 million of annualized benefits delivered in the quarter.
This included the implementation of business efficiency initiatives, and that will deliver AUD 2.5 million in annualized benefits, and further pricing, which is delivering annualized benefits of about AUD 500,000. These initiatives will accelerate earnings and cash flow improvements in the periods ahead. We continued work on driving penetration of Penthrox in the Australian hospital segment with encouraging results. Volumes reached a new benchmark level in this segment in the quarter, and the number of purchasing hospitals has increased. Now, pleasingly, we saw the launch of Penthrox in a prominent trauma hospital here in Victoria. Now, in Europe, volumes also remained strong. We saw record in-market volumes in the Nordic region, and we also saw volume in France remaining steady, which is truly a testament to the stickiness of Penthrox.
You might recall, we removed direct promotional activity in France at the start of this fiscal year, whilst we contemplated the optimal commercial model in Europe going forward. Following a detailed review of our operating model, we are pursuing a partner-supported strategy for select markets to drive Penthrox growth over the long term. Specifically, we continue to progress partner negotiations for distribution of Penthrox in France and in Switzerland. Also i n the quarter, the group progressed preparations for submission of the MAGPIE pediatric study data to the European Regulatory Agency. A successful outcome here, which would lower the age indication from 18 down to 6 years of age, will broaden the addressable market for Penthrox in these markets, and we expect to submit our dossier in the coming months.
In relation to US market entry, you will recall in February that we noted we were exploring funding options to progress preclinical studies necessary to commence the phase III for Penthrox in the US. In the quarter, following an evaluation of resourcing needs and funding options, we have decided to pause further investment in this work. This also includes investment in our next-generation device. Again, we detailed in February the non-clinical studies that were necessary before commencing the phase III, and it is clear that pursuing partner funding for this program of work would not be in the interest of shareholders at this time.
So as such, we believe that accelerating the penetration of Penthrox in Europe and in Australia, and achieving cash flow positivity, will deliver greater shareholder value in the near term, while providing us with enhanced funding optionality for U.S. market entry in the future. The group remains confident that an attractive commercial opportunity exists for Penthrox in the U.S., and in the last 12 months, we have developed a much deeper understanding of the U.S. market potential for Penthrox, sales channels, potential partners, and opportunities to maximize value. In addition, engagement with the U.S. FDA in October has increased clarity on the clinical pathway to U.S. market entry, which has improved our estimates of project costs and timelines. So pausing investment here does not impact the access we have to the U.S.
On the contrary, market entry will remain open to us, and we'll recommence market entry activity at the appropriate time. So let's move to slide 4. This is our quarterly cash flow performance. I'm pleased to report that our progress for Q3 has been in line with our expectations. At a top line, we delivered revenue of AUD 8.6 million, with year-to-date revenue now at AUD 23.8 million. Performance in the quarter was slightly higher than the average of the preceding two quarters, due mostly to higher sales in the Pain Management segment. Cash used in operating activities was AUD 3.9 million in the quarter, higher than the average of the preceding quarters due to changes in working capital.
Excluding the working capital movements, our underlying operating cash flows have improved, and we're seeing a strengthening trend in these operating cash flows with pricing and efficiency benefits delivering improved cash results, and we expect this to continue. Cash used in investing activities in the quarter was AUD 1.2 million, mostly related to finalization of the MAGPIE pediatric trial in Europe and preparation for that regulatory submission the company wants. Ultimately, our closing cash balance for the quarter sits at AUD 10.7 million. Moving now to our final slide. In summary, we're seeing the benefits of pricing and lower costs positively impacting our earnings. Outside of working capital changes, our operating cash flows are improving.
Our key priority is to achieve cash flow positivity in the near term, and we have a pathway to achieve this outcome by the end of FY25. An unrelenting focus on continuing to improve our margins and accelerating growth in our existing markets will deliver this outcome. Finally, to our outlook for FY24, this remains unchanged. The company expects underlying EBIT in FY24 to be strongly improved on FY23, driven by higher average Penthrox prices and lower costs. So that concludes my comments on the release. Let's address some questions we have heard from the market, and we'll kick off by me passing over to Anita to address the first few questions. Anita?
Yeah, thanks, Brent. Firstly, to a question on funding, which likely encapsulates similar questions others may have. That is, with an operating cash burn of around AUD 4 million in the quarter, what gives you confidence you won't need to raise additional capital before reaching positive cash flows at the end of FY25? We are acutely aware of the worry investors have on this front. The cash results for the quarter, on the face, imply limited runway remaining if this rate was to continue. We don't believe the burn rate in Q3 is illustrative of ongoing cash needs. In the quarter, we spent AUD 2.5 million on working capital. That is not required on a routine basis. Our levels of working capital fluctuate based on seasonality and activity in the business, and March is one of the higher points in the year.
Cash used in operating activities, excluding working capital, was around AUD 1.5 million in the quarter. This is more illustrative of our current burn rate, and from here, we expect the rate to improve in the periods ahead. We see a pathway to being operating cash flow positive by the end of FY25. If we can achieve this and demonstrate discipline in our investing activities, we may not require further funding to support the business. This has been a factor in the decision to pause activity on U.S. market entry. So the next to the question of what will drive the improvement in operating cash flow in the year ahead. There are three levers we are working on that we expect will drive improvements. Firstly, a lower cost base.
We will realize the full benefit of the AUD 2.6 million cost downs we have delivered in this quarter, whilst also avoiding the AUD 400,000 restructuring costs incurred to realize them. In addition, there is around AUD 1 million in costs incurred in the first half that won't repeat in the year ahead. This includes costs associated with project work in Europe and the U.S. in addition to European regional support costs that were removed in the first half. Secondly, higher pricing. We will realize a full year benefit of pricing benefits delivered in Q3, in addition to further price changes expected in the year ahead. Finally, volume growth. In pain, in the Pain Management segment, we expect the ramp-up in Australia to continue. Europe should see steady growth along with rest of world markets.
In our Respiratory segment, the US will continue to grow, and we expect other markets to be at least steady with this year. Successful delivery of these improvements would see us achieve positive operating cash flows by the end of FY25. This is a clear priority for the company. I'll now turn back to Brent for the remaining questions.
Thanks, Anita. So. the next question I'll address relates to the U.S. market, and it is really around: is there, are there any implications of delaying the work here? I would say again, the work, the considerable work we've done in the last 12 months in planning for U.S. market entry has provided great depth to our understanding of what is required. I feel we're at a good place in knowing what needs to be done to achieve a successful outcome here. We had a positive engagement with the US FDA, and that's provided clarity on some of the complexities and uncertainties of this project, and this has enabled us to develop more thorough plans.
The work we've done over the last 12 months has also informed our commercial expectations. On this front, we remain confident there's an attractive commercial opportunity waiting for us. Delaying work here doesn't limit this opportunity. It does allow us more time to build our knowledge and awareness of the market, which I believe will support engagement with commercial partners at the appropriate time. Next question that I want to address is: when do we expect to see meaningful uptick in sales in Australia, in the E.U. and elsewhere? I'll touch on Australia first. While we are yet to see strong unit growth in Australia, we have seen meaningful growth in several hospitals adopting Penthrox for use in their EDs. Uptake has begun.
Our task now is to get similar traction across more hospitals and leverage the experiences of leading hospitals to influence more broadly. We have medical and commercial plans in place to do this, and we expect the ramp-up to continue over the coming 12 months, really in a way consistent with most product adoption curves. Over in Europe, we expect to see good underlying growth and demand to continue in most markets. It's been very encouraging to see the results in the Nordic region, with our partner, Galen, and the same in the U.K. Same goes as well for volumes in France, which, as I mentioned earlier, are expected to remain steady until we have promotional activity re-engaged following the successful signing of partner agreements. Volumes into other global markets should also improve.
Underlying demand is growing in Canada, we expect to deliver another shipment into that market in the year ahead. Speaking of the sales growth and of these partnership agreements, another question I want to answer is: when should we expect to see a final agreement on commercial revenue from the Penthrox agreements in Switzerland and France? Negotiations on the contractual arrangements are advancing, we expect to see this finalized in the months ahead. We're already planning activities required for transition and to ensure this process goes smoothly and supply to our customers is not interrupted. Subject to successful outcomes in terms of final contract negotiations, we would expect this transition to occur in the second half of FY25. To the final question I want to address is: where do we see the business in three to five years' time?
To answer that question, I want to say I remain confident, and we all remain confident, that there's a large and attractive commercial opportunity for Penthrox globally. While volume growth has been slower than we anticipated a few years ago, the progress we are making remains encouraging to us. We have faced into the reality that adoption of Penthrox will come at a slower rate, but we routinely hear about the attraction of our product, and as a result, the value proposition remains as compelling today as it has always been. We have to change deeply rooted behaviors and ways of working, and this will take time. What we are seeing is that when we achieve breakthroughs, the product becomes embedded. The performance of Penthrox in France over the last nine months is truly testament to the stickiness of the product.
Once it's sticking in those particular accounts, it becomes very difficult for other competitor products to break through. I'll say in closing, Penthrox is a terrific product, and in three to five years' time, I expect to see it well embedded in our existing markets. Australia, U.K., France, and Canada all offer compelling opportunities for significant growth, and success in these markets will open opportunities in other markets over time, particularly in the U.S. That's the close of the question and answer period, and the close of our call, our session for today. I want to thank you again for joining our call on short notice, and we look forward to engaging with you as we go forward. Thanks, and have a good rest of the day.