Yeah.
Yeah, great. Good morning, all. Thank you for those who joined early in waiting. Welcome, everyone who's just joined. So today we will be going through the PharmX FY 2025 results presentation. My name is Tom Culver. I'm the CEO. We also have Zoe Hillier, our CFO, presenting today. We'll be taking you through FY 2025 financial and platform metrics, some business highlights, as well as P&L and cash flow. I'll also be providing an overview of the business and our FY 2026 strategy. You'll note in the pack that we have provided a fairly detailed appendix. So should you want any additional details on, say, platform metrics, transactional insights, or a deeper understanding of our services, you will find that detail in the appendix. However, of course, we will leave time for Q&A. So please, throughout the presentation, you can add questions to the Q&A tab in the meeting.
Or we ask that you wait to the end of the presentation, raise your hand, and we will unmute you and allow you to ask your question then. So without further ado, we are very pleased to announce strong results for the year-end through June 2025. We've had a very positive and strong result on our revenues, with a 13% increase of total revenues across our business, coming in at AUD 7.53 million, just a little bit under AUD 900,000 increase on the previous year. We've seen an 11% increase in our gateway revenues, which is very positive given the maturity of that business, as well as a nearly 200% increase in our marketplace revenues. Again, a very solid outcome. We know the platform is new and growing, but this is, again, extensive growth in the platform and a threefold increase in revenues compared to FY 2024.
We've maintained a strong gross margin with a 1% increase, and in a year of investments, where we have invested in people and technology and developments, we have a positive EBITDA and a very strong cash balance. Our strong results are supported by excellent platform metrics, displaying strong growth over the year, as well as illustrating the impressive strides made over the last two financial years. Our total platform GTV, so gross transaction volumes, have increased 18% year on year. This is an illustration of, I guess, a forward-looking indicator of the increased volumes that are coming through our platform as the market grows and as our capture of the market also increases. Recently, we've also seen a 20% increase in our volumes-based ARR, so this is the amount of revenue we generate on a volumes-based versus an account fee basis.
For those of you who've been following our business, you will know this is a key strategic focus for us, and so a very pleasing result and a demonstration of the execution to this part of the strategy. We've also seen a shift in the origination of orders throughout the markets, and again, those of you who follow our business and this industry will understand there is a general trend from pharmacists moving from being a traditional medicinal distribution hub to a community-centered retail store, and we're now seeing this across our platform with a 7% increase in general retail sales on the year and a 4% increase in OTC medicines for the year.
As we look at our business and think about where the volume growth has come from, but also the impact on revenue, we look at our increase around our connections and those insights that are driven. Our focus has been on increasing the number of suppliers that operate within our network, a total increase of 16% in that number over the last year. This, in turn, leads to an increase in total and what we define as active accounts or revenue-generating accounts across the business. These are what lead to an increase in our order flow through our gateway and also an increase in order flow across our marketplace, all of which drive revenue and are forward indicators of revenue and growth to our business.
In addition to strong financial performance and strong growth in those leading indicator metrics, the PharmX team has delivered several notable outcomes throughout FY 2025, as well as completing a series of proof of concepts that will inform our FY 2026 roadmap. As we think about what these are in a quick overview, it's the focus on new partners and market expansion. So throughout FY 2025, we integrated with market leaders such as Toniq, which secured access to 99% of the New Zealand market, as well as new market vendors and distribution platforms such as LS Retail and Healthyl ife, among many, many others. We've expanded existing accounts through the renewal and expansion of key contracts, such as with the NDSS, through wholesalers, as well as pharmacy groups that both secure and widen services with those parties, often resulting in recontracting to new commercial and extended commercial terms.
We resolved some operational things within our business throughout the year, leading with the early termination of the Alchemy revenue share agreements. We've also implemented a team restructure, but also expanded the team. We've improved our priority and metric tracking, and all of this has resulted in increased productivity and efficiency. We've also delivered new platforms and enhanced our existing platforms again, which are driving growth throughout our business both today and our ability to scale in the future, so the rollout of our Supplier and Pharmacy portals, enhancements to our e-com platform, the delivery of our analytics platform, which supports both our internal services, our product services, as well as a standalone revenue-generating business unit. We've delivered a new growth-focused website, as well as infrastructure upgrades that modernize our platform through management, data flow, and security.
We also completed market-wide product and brand customer research that informs the development roadmap for us, but also refreshes our brand identity and reinforces our commitment to the market and the industry, as well as delivering a number of enhancements to our internal enablement systems. So the implementation of AI tools across the business, implementation of a new CRM, as well as automated marketing capabilities, product analytics, and sales enablement support, all of which, again, drive greater efficiency within our business, drive stronger results, and drive additional scale as we look forward. I'll now hand over to Zoe who'll take through profit and loss and cash flow.
Great. Thank you, Tom. Good morning, everyone. So as Tom mentioned, I'll now go through some more detail on the financial results for the year. I'm really pleased to be able to present a strong set of results for PharmX for the year-end of 30 June 2025. Revenue for the year was AUD 7.5 million. This was a 13% increase on the underlying revenue in the prior comparable period. There has been strong growth in activity across both the gateway and marketplace platforms, driven by growth in new suppliers added, growth in our transaction value, and growth in account connections. Total operating costs were AUD 5.9 million, which is AUD 1.1 million more than the prior year. This increase in operating costs was driven by our investment in resources, specifically development resources, sales and marketing capability, and IT infrastructure to rebrand and reposition the business for continued future growth.
People costs have increased by AUD 976,000, technology costs up by AUD 173,000, and marketing costs have increased by AUD 129,000. Importantly, this additional investment has enabled the successful launch of the supplier and pharmacy portals during the year and has driven an improved gross margin, which is up 1% from the prior year. EBITDA for the year was AUD 1.6 million compared to AUD 1.8 million in the prior period. This is a significant achievement considering the investment that has occurred during the current year and the fact that the result for the comparative period also benefited from the allocation of some overhead costs into the pharmacy software business prior to its sale. Amortization for the year was AUD 1.3 million, which is an increase of 5% on the prior period due to the ongoing investment in product development and the capitalization of those costs.
Performance rights costs for the year have also increased through an initiative to incentivize and retain our talent with a reward-aligned business performance and share price. Tax expense has increased with the prior year benefiting from some additional one-off deduction items. The profit before tax for the year was AUD 79,000 , and there was a net loss after tax of AUD 264,000 for the year. In the prior year, the loss was AUD 1.8 million, which included a net cost of AUD 380,000 related to the now-settled dispute between Fred IT Group and PharmX and an accounting loss on the disposal of the pharmacy software business of AUD 1.9 million. Next, I'll discuss cash flows. So receipts from customers were up 14% on the prior year, and a positive underlying operating cash flow of AUD 902,000 was delivered, even with the increased investment into people, sales, marketing, and IT costs.
The statutory operating cash flow was an outflow of AUD 8.1 million, which included the payment to Fred IT of AUD 9.9 million, which was made up of the original judgment sum of AUD 8.1 million and an additional AUD 1.8 million relating to costs and interest payable in accordance with the final orders issued by the Victorian Supreme Court on the 8th of August 2024. This is the final payment in relation to this matter, and no further payments will be made. As Tom mentioned earlier, during H1 this year, the group executed a deed to terminate the revenue share agreement with Alchemy relating to the acquisition of the PharmXchange intellectual property. AUD 275,000 was paid in total to settle this acquisition, which was a saving of AUD 824,000 compared to the liability that was originally recognized. There was no P&L impact related to this.
The positive operating cash flows, together with the revenue share savings and the deferred consideration of AUD 1.3 million received in the year from the sale of the pharmacy software business, have been used to fund the ongoing investment in new product development during the period. AUD 1.7 million has been invested into intangible assets during the year. This includes the launch of the Supplier Portal and the Pharmacy Portal. Financing activities in the prior period related to the return of capital that was paid in December 2023, of AUD 4.5 million. Excluding the payment of AUD 9.9 million to settle the Fred IT legal matter and the deferred consideration received for the sale of pharmacy software business, the total outflow for the year was AUD 321,000.
We have ended the year with a very healthy AUD 4.2 million in the bank, and this provides us with the ability and capacity to continue to invest for our future growth. I'll now hand back to Tom to discuss more around our strategy and future plans.
Thank you, Zoe. I'll now give you an overview of the business and strategy for FY 2026. To start with, our purpose remains to make a difference to healthcare by reimagining how the industry connects. I think it's an important statement to understand where we sit in the industry and how we see our role. As we look at what the industry is and how we think we fit in its future, the ANZ pharmacy market remains highly attractive as we see it. It's forecasted to grow at 7.6% CAGR to 2030. This is driven by population growth, demographic shifts, and increased needs for digitization.
Regulatory controls such that prevent national consolidation, limiting vertical integration and preserving the fragmented landscape, which we benefit from, as well as a rising need for tech-enabled workforce expansion and digital innovation in the supply chain, all indicate that PharmX will maintain its strong position in the industry for many years to come. Positioned at the heart of the pharmacy network, connecting the industry, streamlining inventory management, and enabling smarter business decisions through data-driven solutions, PharmX genuinely offers critical industry infrastructure for the entire ANZ pharmacy network. We operate and are connected to 99% of pharmacies, so 7,000 pharmacies across the region trade through our platform, and we facilitate that trade.
We're connected to all major POS and IT vendors, which again facilitate trade and GTV across the market, integrated with all major integration partners, including government departments, as well as all wholesalers and hundreds of leading suppliers, all of which are mobilized by PharmX and the role that we play. That said, it's clear we're built from complexity, and we are delivered at scale. We are creating the world's best multi-channel ordering experience for the pharmacy sector with that 99% pharmacy coverage across Australia and New Zealand. We enable a single integration to the entire pharmacy network. We reduce time, we increase accuracy and efficiency, and we support scale and modernization for our partners. We do this through the delivery of a number of core product suites, starting with our PharmX Gateway. This is an enterprise-grade EDI solution, purpose-built for the industry.
As we look at our PharmX portals, together, they reduce friction, enhance visibility, and drive engagement across both sides of the network and are the first stages in moving us into what we define as our single platform solution. Our Supplier Portal is a proprietary self-service platform that enables global and local suppliers to trade with the entire network in as little as a day, leveraging the PharmX Gateway. Our PharmX portal is the first time that we're able to provide pharmacies with a PharmX interaction point for gateway transmissions, bringing a high level of utility and engagement with our business. As we look at our e-com solution, this is currently in the form of PharmXchange, but it's currently being integrated into the single platform and rebranded and leveraging the gateway network and our other solutions, reducing manual processes, increasing transactional efficiency, and unlocking new revenue opportunities.
Our analytics solution are tools that enhance operational efficiency for our customers, deepen our customer relationships, and drive continuous improvement in our customer businesses, as well as our services. So we develop tailor-made solutions, both technical and marketing, to form partnerships and help our businesses and our partners grow. So what sets us apart? Why is it that this network operates with us so fully? We are seen as the trusted multi-channel total network solution for seamless support to pharmacy trade. We are the industry's first choice. We've been around for a little over 18 years. We have 93% brand awareness, and over 80% of pharmacies cite our integration capabilities as a key differentiator. We have an unrivaled network coverage, as I've explained. We have a whole-of-market technology that is modern, cloud-based architecture, and most importantly, delivers very high availability, stable, and secure systems to the entire market.
We've got extensive analytics with unrivaled longitudinal data. We have the most products and the greatest range in one place with over 120,000 available SKUs, and we operate in a market that has supportive trends. The market remains highly attractive, driven by those demographic shifts and those trends that we're seeing in the industry. Our FY 2026 strategy centers on finalizing the development of our single platform, deepening relationships with existing partners, working to provide more for more in a value exchange, increasing the number of suppliers across the PharmX network, which in turn drives revenue and engagement from pharmacies, increases volumes, and enhances both our analytics capabilities and grows our total addressable market. We're focused on four key pillars to deliver these outcomes.
The growth is going to be driven through an increased focus on the use of AI, investments in operational excellence, platform automation, digital enablement, and increasing commercial resources to increase the efficiency and the velocity of our business and accelerate, importantly, the take-up of volume-based engagements through platforms such as our Supplier Portal, which is a SaaS-based model. As always, we intend to achieve this while maintaining prudent cost controls with the goal of funding essential investments from our cash flow, and to summarize, we're back to our strong balance sheet. We've got a clear strategic roadmap. We've demonstrated growth over the last couple of years with the new strategy. We've got a highly experienced and embedded team and favorable market conditions. We're well positioned to capitalize on opportunities ahead and continue on our growth trajectory.
Our year-on-year performance remains strong with uplifts in revenue and activity across all of our key metrics. We continue to be that dominant independent ordering network in the region. We've got a strong strategic growth agenda that's supported by tailwinds, as well as a strong forward-looking strategy and a well-governed expert team. And we have well-managed costs resulting in growth uplift. So that today concludes our FY 2025 investor presentation. We will now open up for questions. Just as a reminder, you can put questions through the Q&A tab or the chat tab in the call, or if you raise your hand or simply unmute, you should be able to ask a question. Looks like we have no questions, so hopefully that means it's all been extremely well explained and everybody has got everything well understood. Oh, here we go. We have a question. Thank you, Michael.
Yeah, hi Tom. Thanks for the presentation. It's Michael from MST. Can you provide any further breakdown of revenues between gateway and marketplace and maybe just any insights around where you expect the largest driver of revenue growth in FY 2026 on the back of the new strategy?
Yeah, so I mean, as we've said before, we don't break down our revenues across marketplace or data or gateways until marketplace and data are deemed to be material, so essentially, once they're making 10% of our revenues, so they both remain under that threshold, so we won't break down additional detail. In terms of your second question, though, we certainly see marketplace as a key area of revenue growth for this financial year, and we expect strong outcomes once we deliver the new e-commerce platform in early November and start to migrate existing customers across and focus on growth of new customers into that platform and essentially migrating suppliers and order flow away from our gateway and new order flow from our gateway to our marketplace under the new commercial model.
Got it. Thank you. Maybe one more, just quickly, just on the - can you comment on the competitive environment? I know, obviously, your position is extremely strong, but has that evolved or do you see that evolving at all?
Yeah, absolutely. I mean, the competitive environment hasn't changed dramatically over the last couple of years. There's essentially two competing platforms in market, one marketplace called Directo. Now, those familiar with us will know that Directo is both a customer and a competitor. They're a competing marketplace that operates through our gateway and processes their transmissions through our gateway. And then we have a competing EDI platform called MedView owned by Fred IT. Now, I won't comment in too much detail on Directo, but they maintain a customer of ours, and we would like to strengthen our strategic alliance with them over the coming year. In terms of MedView, they are a small platform that, from a comparable basis, is currently relatively insignificant. To put that in perspective, we run about 60,000 accounts between pharmacies and suppliers. We suspect they've got something in the range of 3,000 to 5,000 accounts.
More notably, though, we are strengthening our relationship with Fred IT, who own MedView, and we hope to be able to work more closely together in the market rather than compete throughout the financial year.
Tom has a couple of Q&A that you can see now as well. So first, one was from Christian. Do you want me to read them out?
No, no, it's okay. I've got them now. So I have a question here from Christian. Thank you. Sorry, I just need to open it. I have one question. Could you share your perspective on the product roadmap? What are some of the key milestones delivered to date, and what do you expect to deliver in the coming financial year? So again, those of you who will know, we started a new project in essentially February of this calendar year, which was the development of our single platform. This has been a very rapid development throughout the year, as well as being supported by a number of other developments.
So what was delivered this year was essentially three core solutions: our analytics platform, which is an entirely new build of our data capabilities across our entire business, the delivery of our Supplier Portal, which is an entirely new way for suppliers to engage with our business, designed really to lower barriers to entry to the market and lower barriers to entry to access our network, as well as our Pharmacy Portal, which is our most recent release. So as somebody with a strong product background and a strong product business, for a mature business like ours to develop and deliver three new platforms, which have received very strong feedback and are providing high utility both to existing and new customers, that's a very, very strong outcome.
As we look at what is coming throughout the next financial year, we have also completed a number of proof of concepts that sit around new product features, new product lines within those suites, so within the Supplier Portal and the Pharmacy Portal, which will be rolled out this year, as well as the delivery of our new e-commerce platform in early November. We will then start to phase through towards the later part of the year as we start to migrate existing customers as well as enhance our EDI capabilities. So we have a very significant amount of work in front of us, but I think what we can say about the last financial year, most pleasingly, is that we have proven time and again that we are able to deliver on time, on budget, in very, very short time frames.
So we are an excellent delivery team that are producing great outcomes. Hopefully, that answers your question, Christian. We also have a question. So we had another question about competitors, which we have covered. Expectations for growth in 2026. Again, I think we've covered that. We don't forecast as a business traditionally. Again, hopefully, most of our investors will know that. We do expect FY 2026 to be equally strong as FY 2025 with the delivery of our existing platforms, but I won't go much beyond that at this time. We will, of course, continue as we started last year with more regular updates to market so you can have a clearer view of how we're tracking throughout the year and get a better understanding of what our developments are and our focus areas. So we intend to continue to do this on basically a quarterly basis.
And then one last question, which I might hand to Zoe, which is, how should we think about cost base as we look into FY 2026?
Yeah. So thanks, Peter. During H2, we have added to the cost base. In this year, we do continue to expect to grow the cost base a little bit further, but it'll be more stable around this level going forward. So don't expect probably a decrease in the cost base at this stage going forward. We've still got a lot of work going on, especially with the development of the e-commerce platform, but we shouldn't see a lot of growth on the H2 sort of cost base.
Thank you, Zoe. And then I might get you to answer one more from Ryan.
Yeah, Ryan Payne. So with revenue, you're right. So the revenue growth did slow down a bit in the H2 of this year. That was mainly from our marketplace once the decision had been made that we were launching our new single platform, which included the marketplace relaunch of the new marketplace. We really held back on, I guess, the more proactive sort of recruitment of new suppliers and things onto our existing marketplace. So that should increase again once we pick up that drive with the new platform kind of in the first half of this year. We should start to see that wrapping up again.
Thank you, Zoe. And then one final question we have here from Rob. Thank you very much. Pharmacies are restricted market segments due to government regulations. Does the platform have the opportunity to move outside retail pharmacy to other retail segments? Thank you, Rob. From a capability perspective, yes, we do. From a strategic perspective, it is not our intention. We see our opportunity to double down on our specialism within the pharmacy space at an international level over time. Moving into new segments is doable from a technology perspective, but it has the potential to be very, very costly to grow customers in those new segments, as well as more competitive than we are in this existing industry.
There are other fragmented and regulatory-controlled pharmacy industries in different regions, but as we mature our platform, achieve our local targets, we would intend to start exploring with partners in those markets.
Great, and Kate, I just saw you added another one around the employment costs: Will employment costs continue to rise, or will there be some pullback compared to the 2025 year? Similar to Peter's question, don't expect a pullback at this stage, so FY 2026 will definitely still have sort of some of this investment and cost coming through, so more similar to the H2 level of FY 2025.
Just in regards to cost alignments, I mentioned or alluded to throughout the presentation the use of AI. We intend to maintain the current position that we're a very efficient business. We are able to deliver a huge amount with limited resources when you compare us to other businesses of similar sizes. So for example, there is a private business that does very similar services to us in a different industry, which makes a similar amount of revenue to us, but has a staff of 70. We are a much more efficient business with a staff of 25 that is able to deliver at high velocity. The use of systems, both kind of structural systems and tools like AI, enable us to do that today, and we expect that that will drive greater efficiencies in the future.
To put, I guess, a little bit of meat on the bone with what that means for us in a platform business and from a technology perspective, we recently completed an integration for a customer in 24 hours. This integration was done using our new AI systems after training and after controls put in place on which systems we're using. And that's an integration that typically would have taken us somewhere in the range of two and a half weeks. So it's a demonstration of why these things are very important to our business. We take a steady and measured approach to what AI means to us, but AI systems, efficiency, operational controls are all things that enable us to operate incredibly efficiently and produce high-quality outcomes at speed. So thank you, everyone. We're not seeing any more questions come in.
We do appreciate everybody who attended and everybody who is following our business so closely. As I mentioned, please look out for more regular updates throughout the year. And of course, we are available through the investor relations email address should you have any more detailed questions. As I mentioned as well at the top of the presentation, there is a more detailed appendix within the presentation if you're looking for more insights across our platform metrics or market insights or details around our results and products. But on that note, we thank you again, and we'll leave it there.
Thank you.
See you.