Now I'd like to hand the conference over to Mr. James Fitter, CEO. Please go ahead.
Thank you, Winnie. Good morning, in Australia, good afternoon to our shareholders in the United States, and good evening to those in Dublin. I'm here in Dublin with Helena D'Arcy, our Chief Financial Officer, and would like to welcome you all to today's call. Firstly, I'd just draw your attention, as always, to the legal disclaimer at the start of the presentation, and then particularly with respect to the comments around forward-looking statements. Just wanted to touch on the vision here at Oneview Healthcare, which has never been more impactful. Our vision is to power personalized, exemplary care experiences.
As a company that was founded 14 years ago, focusing very much on patient experience, it's become increasingly relevant every day that we really need to develop technology that enables care teams to be liberated and free to deliver exemplary care to patients at the hospitals in which we operate. That's never been as evident as it has been in recent years for all the obvious reasons. Quick reminder of the agenda today. We'll talk about, obviously, the 2022 year in review, some work on our product innovation. Helena is gonna cover the financial results in detail, and then we'll turn to market conditions and outlook and hopefully leave plenty of time for a few questions if there are any. Let's start with the year in review.
I'm not gonna steal Helena's thunder, and I know she's gonna do a much better job than I am, but I just wanna draw your attention to the headline figures here on slide six, but I'll defer any comment around those until we get to the financial results section. Please bear with us. In terms of operational highlights, 2022 was obviously continues to be another challenging year. I think it's worth highlighting at the start of the call that the pandemic has obviously been a challenge for so many different industries, have been impacted by what's transpired over the last few years. We really are at the epicenter of that. We are dealing with hospitals that are at the forefront of the crisis. For obvious reasons, that's had a pretty profound impact on our business.
We're gonna talk through that and go through a little bit of a visual history of the last couple of years, which I think is incredibly important. Turning to 2022, despite the post-pandemic challenges, we managed to grow our contracted beds by 23% to just under 15,000 beds. We signed the largest contract in Oneview's history in the midst of the post-pandemic recovery. We signed major renewals at three of our significant customers, one in Australia and two in the United States. Perhaps most importantly, we've seen record growth in our U.S. sales pipeline with 104% growth in RFIs and RFPs year-over-year. We have over 10,000 beds live globally. We have our first U.S. cloud customers live at BJC in St. Louis, at Kingman Regional Medical Center in Arizona, and at Oklahoma University Health.
That, again, I think reaffirms the investment we made in cloud during the pandemic. We managed to move six major software releases out during the course of the year on time and on schedule, which is a great credit to our engineering prowess. We made the difficult decision, like, almost every other technology company in the world, to trim our cost base in the fourth quarter. We've taken over 16% of the cost out of the business through a planned reduction in the cost base, which has had no impact on our ability to deliver high-quality services to our customer base. Let's talk a little more about what we've been through.
You'll recall we raised, just prior to the end of 2021, we had a $20 million capital raise, which was obviously, with hindsight, prescient timing. At that time, we were really looking to accelerate our investment, capitalize on the first-mover advantage of the cloud product. We've seen great results from that. That investment has led to a record pipeline of new opportunities in the United States. We've added over AUD 35 million in new TCB from existing and new customers in 2022.
In the fourth quarter, as we foreshadowed in our most recent quarterlies, we were anticipating some key decisions from large systems where we've been in RFP, and we were thrilled to be selected as vendor of choice for two very high-profile systems on the East Coast of the United States, both of which are in active late-stage contract negotiations. We successfully negotiated settlement of the longstanding legal case with Regis Aged Care for what we consider a very positive development for the company, and certainly delighted that it didn't prove a major distraction to management time. Continued inflation of nursing costs and the associated workflow challenges are obviously very well documented, but they have continued to validate the proposition of the Oneview solution, but placed unexpected pressure on hospital budgets.
We know that many of the customers that we had expected to make technology decisions last year were simply overwhelmed by the contract nursing workforce challenges. A lot of those decisions have been postponed to 2023. We are particularly encouraged by the fact that most of our pipeline customers have indicated to us that they have set aside budget for patient experience in 2023. A number of them specifically asked us to conduct site surveys in the fourth quarter of last year as a precursor to preparing those budget dollars.
We enter 2023 with much optimism. We talk a lot about the impact of COVID-19 on the healthcare system. I was recently chatting to the analysts at Gartner, which is an organization we have a huge amount of respect for. I won't, I don't need to read the statement here. I think what we're seeing is very strong external validation of the hypothesis that we've long had, that the workforce challenges are forcing healthcare systems to find new ways to deliver hybrid models of care. Virtual nursing is becoming an incredibly important part of that.
Interactive Patient Care is the category that Gartner refer to us as. I will just call out the observation here that by 2025 they're expecting nearly three-quarters of all new global private patient rooms to take advantage of the kind of work we do. As I mentioned , you know, I think for a lot of us, the last three years has been a bit of a blur. It's years have sort of mingled into each other. I thought just having a little bit of a visual of what we've achieved during the three years, it was very apparent very early on in the pandemic that we needed to change the way we do business. We needed to be very respectful of our customers' challenges.
It was crystal clear that they were gonna be preoccupied with saving patient lives, not necessarily investing in new technology. On this graphic, what we've detailed here below the line are what we call the enablers. The work we have done, that we've chosen to do during the pandemic to make us a better, stronger company, coming out of the pandemic, of course, not knowing how long it was gonna last. Above the line are the commercial milestones we achieved despite the pandemic, and I think there's some really important items to talk about here.
As those of you who know the company well will know that in April 2020, our technology leadership team, Declan, JP, Niall, really recognized very early that we needed to use the opportunity that the pandemic was presenting to move to the cloud. We knew we weren't gonna be able to get access to hospital rooms. We knew that speed to deploy was gonna be critical. They launched very quickly our Cloud for COVID solution, which we deployed at NYU Langone in New York in 400 beds at the height of the pandemic. That was a huge achievement, huge milestone, reaffirms the partnership we have with NYU. It also gave us the catalyst to say we need to lift the entire product to the cloud.
That, of course, required a very significant investment in our, in our back-end security. So achieving ISO certification, both ISO 27001 and ISO 27701 were hugely important milestones. Then we also made an investment in the OEM hardware that we have long talked about as a potential driver of expansion business. If we didn't have a Telux set-top box, we would not be in a position to have won the expansion of business that we've just won with BJC. This investment in hardware is challenging, it's difficult, it requires capital on our part, but I think we've seen a very significant return on investment from those decisions. Of course, we signed our first Australian cloud customer with Northern Health in mid-2021.
We renewed our long-standing partnership with Epworth, which dates back to 2014 and is now due to run through to 2027. I think that really points to the stickiness of the business. The one thing we all know, everyone on this call understands how challenging the sales cycle is. Selling enterprise software into large healthcare systems is incredibly complex, but it's also incredibly rewarding because it gives you the opportunity to build long-term partnerships with organizations like Epworth that stand the test of time, and it really creates meaningful long-term value. In October 2021, we signed our first cloud customer in the United States with Kingman Medical, and we signed an extension for our first U.S. customer, UCSF, in California.
That relationship likewise dates back to the opening of their hospital in 2014. At the end of 2021, I think there was a sense of optimism, and a sense that perhaps the pandemic was slowing down. Of course, we had the arrival of the Omicron wave. That really proved another setback to our customers' ability to invest in technology. On top of that, of course, we had the war in Ukraine and all the associated inflationary pressures, supply chain challenges that came with that. We have obviously worked very hard to alleviate supply chain challenges. As you'll hear from Helena, that has consumed some capital but has left us in a very good position coming out of the pandemic.
Again, the enablers, we continued to work on our security with a surveillance audit, HIPAA compliance. We launched the first version of our patient feedback feature. We launched the first version of the Digital Door Sign, which I'll talk about shortly. Completed that Gen 3 migration at Epworth, then as I mentioned, some further extensions at Sydney Kids and Iowa. Signed the largest contract in the company's history in May 2022 with BJC. Won a couple of small new logos in Pennsylvania and Chicago. Just in the last few weeks, we have a commitment from NYU to deploy a further 1,000 beds, which again is a fantastic endorsement of the product. It's been a long journey.
It's obviously been a particularly challenging time for revenue generation, but we feel as though we have used these three years extremely well to put the foundations in place for our for the future. Just turning to contracted beds. As mentioned earlier, we're now just shy of 15,000. We have got the two large expansions that are our flagship North American customers. Again, I think that speaks volumes to the value that they're driving from the investment they've made in Oneview. We now have over 70% of our contracted beds are in North America, so we're very much becoming a U.S.-centric customer. The level of engagement we have in the pipeline is the strongest we've had in the company's history with some very interesting customers.
Let's turn a bit to product innovation. As I mentioned, we have had to respond in real time to fresh challenges being posed by the pandemic, and the one that was most apparent was the need for hybrid nursing to be adopted. In the same way we've all moved our own businesses to a virtual care model, it's become very important for health systems to allow their care teams to connect with the patient in the room via the television, as you can see in this image here, with a camera mounted on top of the television, and that capability is provided through our virtual care API. We have a number of partnerships in this space. We are agnostic when it comes to partnerships. We obviously need to be Switzerland.
We have quite a public partnership with the folks at Caregility, where we've done some really interesting work. We're also working with three other major virtual care providers in the United States market, and we'll really be determined by the needs of our customers. Having an open API obviously enables that capability. Talk about the Door Sign in a second. Analytics is another part of the business that we've really doubled down on. Nikki Federman, who runs this business for us in the United States, has done an amazing job working with customers to really understand what data they need in order to justify the investment we're making in our product. We're seeing some really impressive results, which is speaking for itself.
Patient feedback is something that we have long had on our roadmap and has finally come into fruition this year. Primarily, it's been delayed because we felt it was really important to understand the sophistication of patient feedback, the notification framework that allows us to trigger different surveys based on different market conditions. We're seeing very good results from that innovation. Offline mode was another request from our cloud customers. Obviously we wanna make sure that in the unlikely event that the cloud environment is unable to be accessed, that patients still have access to entertainment. That was delivered in the fourth quarter of last year.
The team continues to make significant improvements in scalability because most of the conversations we're having now are with healthcare systems that have thousands of beds, not hundreds of beds. The product development was really focused around the care team challenges. We know that nurses have really been struggling to deal with workload. There was a global nursing shortage prior to the pandemic. It's only been made worse during the pandemic. The feedback we're getting from customers is what can we do to use integration with EMR to provide real-time notifications that help the care team to do their job. We're surfacing precautions, notifications that are automated and delivered from the electronic medical record, which allows the care team to rely on them.
On the left, you'll see the Digital Door Sign, which has just been deployed at Kingman in Arizona, and My Stay Overview, which is about to go live this quarter, which effectively is the digitizing of the whiteboard or marker board, as they're sometimes known in the United States. This is a great example of agile, collaborative product development. We just didn't sit here in Dublin and dream up what we thought this product should look like. We have taken the time and effort to send our product teams to meet with customers in the United States to effectively develop a solution. The whiteboard you see on the left-hand side of this slide is still commonplace in almost every hospital room in Australia or the United States.
The feedback we got was that nurses felt they couldn't rely on the quality of the information because they know themselves that they're too busy to keep the information up to date, keep it contemporaneous. Their ask was, how could we automate that information so that they knew they could rely on it? The team spent a lot of time sitting down with multiple U.S. customers, workshopping their needs and requirements. Nikki hosts a nurse focus group, which meets on a quarterly basis, and a customer community of practice that has really enabled us to build a product that we think is really fit for purpose, scalable, and has had a fantastic reception in the market.
Just wanted to add a little bit of perspective here from an article that was published last week that really caught my eye. It's something that we've long advocated the importance of virtual nursing. I'm not gonna read these quotes, I would encourage you to read the entire article. I think it gives a really good sense of the challenging and ever-changing framework that is providing further validation for the work we do here at Oneview. Just a quick reminder of those contracts. As I mentioned, BJC has been a fantastic customer in the heart of St. Louis since 2016. We've been deployed there in 945 beds for the last three years. We've just commenced the expansion into 10 additional sites.
We've begun at the Shiloh facility. We're going live at Belleville in the second quarter of 2023 and at Missouri Baptist in the third quarter of 2023. We have a very structured and exciting rollout plan for BJC. Similarly, at NYU Langone, where we've been deployed in over nearly 700 beds for the last four years, we're really thrilled that they have given us a statement of works to expand to a further 1,000 beds, of which 870 are scheduled for delivery in the next six months. It's great to see the urgency that is now being reflected by our customers as they come out of the pandemic.
As I mentioned earlier, a couple of smaller logos in our home market of Chicago in the United States and at Cardinal Medical Center in Pennsylvania. With that, let me pass the microphone to Helena, who's gonna talk us through the financial results.
Thank you, James. The first slide there shows our capital structure and our equity and current market cap. Moving on to the income statement. Recurring revenue is up by 16%. Total revenue for 2022 was EUR 8.9 million, down 8% on the prior year. This reduction is due to lower non-recurring revenue. Some hardware revenue for the BJC ex-expansion contract has been booked in 2022 as the implementation of the contract has commenced. The recurring revenue from this contract will start to be recognized later in the year and in stages as each hospital site goes live. The gross profit margin percentage is 5 percentage points higher at 60% this year due to the higher proportion of software revenue.
The legal case which the company took against Regis Aged Care back in December 2020, was negotiated and reached commercial settlement in April 2022, and the proceeds of AUD 2 million were received soon after. Operating expenses increased by 23%. At the time of our equity raise at the end of 2021, we did commit to investing in our sales and marketing capabilities, both in terms of headcount and also marketing expenditure. We are seeing validation of this spend and the large growth in inbound RFPs and also in our sales pipeline. We continue to incur very high costs for both our GNO and professional indemnity insurance premiums. This is in line with general insurance trends. The operating EBITDA loss for the year is EUR 7.15 million, 22% higher than last year.
Higher non-cash share-based payment for our value charges are driving an increase in the loss after tax to EUR 10.9 million for the year, compared to EUR 8.2 million in the prior year. Turning now to the balance sheet. Inventories increased significantly with the purchase of a large number of set-top boxes in order to fulfill customer demand, which are scheduled to be delivered to customer sites later in this year. Prepayments also increased significantly due to advanced OEM hardware payments, which are payable at the time of ordering this hardware. The company finished the year with cash balances of EUR 6.4 million. Turning now to the cash flow statement. Total operating cash outflows were EUR 8.9 million. Included in this cash movement are the Regis legal case settlement proceeds, the upfront OEM hardware payments, and the sales and marketing resource ramp-up cost.
Due to supply chain delays, these OEM devices are expected to be delivered in early 2023. Once delivered to client sites, the proceeds of the sales of this hardware will become receivable. In order to conserve cash, we instigated a headcount reduction program in the last quarter of 2022, which will result in annual savings of EUR 2 million with no impact to customer service delivery. COVID has acted as a catalyst for the company to embrace hybrid working. On the back of this, we have downsized our office footprint with annual savings of approximately EUR 250,000. I'll hand back to you now, James.
Thank you, Helena. Let's turn now to market conditions and the outlook for 2023. I'm very pleased to report that we are starting 2023 with a record sales pipeline in North American market. As we've talked about, we know the pandemic has validated the business case for what we do. Last year was frustrating because we knew we had demand that was unable to be fulfilled because operational budgets were consumed by the workforce challenges. That lingered longer, I think, than either we or our customers expected. However, as I mentioned earlier, we know many of our prospective customers and existing customers set aside budget for 2023.
Really thrilled, as I mentioned, to be selected as vendor of choice for two very significant opportunities in the United States. Looking forward to finalize those negotiations in the coming weeks. We also see a couple of really important drivers. I think the one thing that continues, we continually hear from the market is they want us to try and lessen the dependency on hospital-supplied hardware. We're doing some market testing at the moment with a very interesting new product initiative, which we think has the potential to significantly shorten the sales cycle and the implementation cycle, and most importantly, to expand our addressable market in a pretty meaningful way.
We're testing this with a couple of customers in the United States and Australia, and we hope to be able to share some more news around that in the middle of the year. The other thing that's increasingly apparent is the potential demise of the patient pays entertainment only model in Australia. This is a model that has been around since the 1980s. It's what we call a legacy model, a dinosaur model that unfortunately has proved a bit of a blocker to our product in the Australian market. Increasingly, we're hearing that patients are reluctant, unsurprisingly, to pay AUD 10, AUD 12, AUD 15 a day for free-to-air TV.
The conversations we're having with many of the hospitals that have adopted that technology is that they've now recognized that using the television in the room to deliver virtual care services, deliver meal ordering, deliver educational content is a no-brainer. I should stress that none of our customers globally charge patients for entertainment. They are driving all of the value they're driving from the Oneview solution is through improved operational efficiency. It's a key point of differentiation and something that we believe is setting us up for potentially some material growth in the Australian market. As we foreshadowed last year, we are sunsetting our legacy Windows product in the middle of this year.
That's gonna drive further operational efficiencies for our engineering teams and hopefully lessen some of the hardware complexity and accelerate our regression testing. Then finally, as Helena has already mentioned, I think we were a little bit ahead of the curve in terms of our headcount reduction. It was pretty clear in the third quarter that we weren't gonna see the sales conversion that we'd anticipated. We have strategically downsized the organization, but as Helena mentioned, there's been no impact on our customer-facing teams, and that's gonna drive real savings for us in 2023.
Finally, I think just a couple of key points to reaffirm that the global pandemic, as much of a human tragedy that it has been for so many people, it has validated the value proposition of what we do. Virtual care is now a strategic priority for every major health system we talk to. We remain, to our knowledge, the only cloud-hosted care experience platform in the world. Every customer we're talking to has adopted a cloud-first strategy. I think that's been another really significant validation of the work we've done. Healthcare in general was slow to embrace cloud, but there's been a dramatic acceleration in cloud adoption, both in the United States and Australia, in the last few years. New South Wales Health, for example, have a cloud-only strategy moving forward for their vendors.
We're incredibly proud to be the trusted partner of many of the world's most discerning healthcare systems, privileged to count 3 of the top 20 hospitals in the United States as customers. We have a very strong inclination that we're gonna add to that list because we're currently actively engaged with 3 others at the top 20. As I mentioned earlier, the validation from Gartner, leading global analyst firm, that they believe that the Interactive Patient Care market is actively moving from early to mainstream adoption on their technology or Hype Cycle. We look forward to 2023 with much confidence. I would be delighted to take any questions if anyone has any.
Thank you. If you wish to ask a question via the phone, you will need to press the star key followed by 1 on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the Ask a Question box. Your first phone question comes from Tom Godfrey from MST. Please go ahead.
Good morning, guys. Thanks for taking my questions. Can you hear me okay?
We can, Tom. Good morning. How are you?
Yeah, going well. Thanks, James. I suppose, just first question, I was keen to sort of get a sense for, given the strength of the pipeline and the opportunity for a couple of those more material North American deals to land near term, just your sense for the speed to revenue on a few of those deals, just given where headcount is in the, in the operation and the move to the cloud. Like, how sort of quickly do you think we can convert those deals into, yeah, I suppose revenues and cash flows in calendar 2023?
Yeah. Good question. Look, the good news, Tom, is that the customers are encouraging us to move fast. We've heard the term fast track a lot with the two customers where we are vendor of choice. I think you know, better probably than I do that there's a lot of inertia in healthcare decision-making and healthcare contracting. I think there is a level of urgency coming out of it that is tied directly to the operational benefit that we can deliver to nursing. This nursing is a huge pain point. It's something that obviously is front and center for every chief financial officer of a healthcare system anywhere in the world.
Chief nursing officers are under intense pressure to find a way to alleviate that pressure, and we're in the happy position that we can help them. I think we'd like to think that things are happening faster than they would historically. And we've got a number of other major RFP decisions that we're expecting in coming weeks as well. There's a lot going on.
Got it. No, that makes sense. Maybe a follow-up question. I thought some of the comments just around some of the Australian market dynamics, the move away from legacy systems from a few of the key hospital groups was interesting. I suppose the other sort of element there is, one of your listed competitors, you know, is under pretty well-documented financial stress. I suppose, what's Oneview's Australian strategy in calendar 2023, how are you sort of going to leverage those, I suppose, positive market developments to drive growth in this market?
Well, I think it's a really fascinating juncture because that competitor Speaks for about 18% of the Australian market. That model that we were talking about earlier, which we consider the legacy model, is in, you know, somewhere between 15,000 and 20,000 Australian hospital beds. The challenge we've had is that a lot of those contracts are long-term contracts that have pretty strict legalese around the provision of alternative services, whilst that vendor is in situ. Look, I think there's a pretty material opportunity there. I would stress that, you know, obviously the U.S. market is 10x the size of the Australian market. It's a market where we obviously see a more sophisticated level of digital maturity in terms of EMR adoption.
Australia's a very important market. We've got great customers down there, and I think the market dynamics suggest to us that there's a pretty interesting opportunity waiting.
Got it. That's clear. Thanks for taking my questions, James.
Pleasure. Thanks, Tom.
Thank you. Once again, if you wish to ask a question via the phone, you need to press the star key followed by the number one on your telephone keypad. If you wish to ask a question via the webcast, please type your question into the ask a question box and click submit. We will now pause for a brief moment for some more questions to be registered. There are no further questions at this time. I would now like to hand the conference back to Mr. Fitter for closing remarks. Please go ahead.
Thanks, Winnie. I appreciate everyone's time this morning. I will be heading to Australia tomorrow morning, so if anyone does have any follow-up questions or would like to meet with the company, please feel free to reach out to myself or Helena, and we'll see if we can get something scheduled. Thanks very much for your time.
That does conclude our conference call today. Thank you for participating. You may now disconnect.