Thank you. Thanks everybody for joining us this morning for the full year results presentation. As you know, we currently work in three jurisdictions. Melbourne, our corporate headquarters, and where we do our RIS development. Germany, our R&D and support for the Visage product, and North America, which is over 90% of our revenues and now our largest core of people. It is the biggest implementation group of people we have now, overtaking both Europe and Melbourne. In terms of the highlights for the year, I think I will not go through all the financials. We have some other slides to deal with it. But we did win one contract in Europe and nine in the U.S., worth a total of AUD 407 million at minimums. We completed six out of six renewals, for a total of AUD 407 million, keeping our 100% renewal run rate intact.
We have all our implementations on or ahead of schedule. Our cardiology option is gaining traction with UCHealth Colorado , Vancouver Clinic, and others. We did announce two new products in digital pathology and in our optimized reporting module. We completed, or are in the process of completing two investments, one completed with 4DX and another with EchoIQ in cardiac AI. We are further down the track with our breast cancer detection, pending FDA clearance. And we have a very strong pipeline going into FY 2027. In terms of the financials, we think all of the key metrics went in the right direction. Revenue up to AUD 261.7 million, underlying EBIT AUD 196 million. And our margins, which were already about three times our nearest competitor, we were able to get another 90 basis points, to get them just under 75%, and the underlying NPAT, again, all went up.
All the figures are there, so I will not go through them all, but happy to have some questions on them a little later on. As we had heralded to the market earlier on, currency was an issue, in as much as this time the fluctuations were more material than they have been in the past. On a constant currency basis, certainly our EBIT and NPAT were over the 30% mark, which is our benchmark that we try and achieve greater than. And the impact in dollars was AUD 11.8 million for revenue and AUD 9.9 million for EBIT, so bigger than previous years. In terms of balance sheet and return to shareholders, our cash reserves went up to over AUD 216 million. Cash and financial assets now AUD 250 million, up nearly 20%.
As a result, our total dividend increased by 25.5% to be AUD 0.69 per share, fully franked for the year. In terms of revenue growth, I think this chart does show quite strong revenue growth year -on -year. For those that have seen the chart before, the bright green is the exam license recurring revenue that has grown strongly again in this last financial year. Support is for the older contracts that we have, largely around RIS in Australia and some of the German contracts. Again, in the gray, that is recurring revenue. There is the archive data migration and the professional services on top, with professional services split across the length of the contract, so recurring within the life of the contract. The bulk of the revenue we have continues to be recurring revenue, which gives certainty going forward.
In terms of revenue by geography, again, I think it bears out that the U.S. is over 90% of our revenue and growing strongly. But in the previous year, FY 2026, all jurisdictions did increase. So that was very pleasing and added to the total picture. The other thing is our forward contracts of recurring revenue over a five-year window has increased now to AUD 1.3 billion. So a substantial increase, largely fed by the renewals and also by the material new contracts we wrote in the period. This shows year -on -year. FY 2025 was a bit of an outlier because it had our biggest contract ever in Trinity, which was arguably the biggest contract ever signed in our space just for medical informatics, Visage Enterprise Imaging Informatics.
But pleasing to say that we had our second strongest year with strong growth across multiple markets, that just about two years ago was about half what we did in this financial year. Again, another strong year for new contracts signed. Going forward, I will talk about the contract wins a little bit. We came out of the gate early with our second biggest contract in July of 2025 with UCHealth, which was AUD 170 million at minimums for 10 years. We also had one of our other biggest contracts which came late in the period, which was Beth Israel Lahey. For those that do not know, it is one of the two big healthcare systems in the Boston area. It is now going to include Dana-Farber, that was previously with another healthcare system, is going across to Beth Israel Lahey to even make it even more substantial and bigger.
We also wrote a contract with one of the largest private reading groups in the U.S. called Radiology Associates of North Texas for AUD 44 million, again, at minimums. We added archive to BayCare, who was a previous client, and that archive sale was substantial at AUD 25 million for the length of their contract. Then there were five other contracts that we have talked about, including contract with Heidelberg University Hospital with a total of AUD 55 million. So second biggest year, very good spread across different markets, nine in the U.S. and one contract but a material one in Europe. Talking about UCHealth Colorado, as I mentioned, it was our second biggest. It is full stack plus one. In other words, they took cardiology as well as our worklist viewer and archive. They are a highly respected hospital system and an academic medical center.
We went live with them in May 2026. So towards the end of the financial year, but we will get a full 12 months of UCHealth revenue coming into FY 2027. The University of Heidelberg, again, a very prestigious hospital. It is regarded as one of the 12 top hospitals in the world. It is affiliated with a German Cancer Research Institute, which is the largest and most prestigious in Europe. So it has not only increased our physical footprint in Germany, but also our presence in that high-end academic space. That went live with a full suite of products in April 2026. Radiology Associates of North Texas, as I mentioned, it is the largest fully private remote reading group in the U.S.
We went live with breast imaging in April of 2026 and, just recently about a week ago or week and a half ago, went live with the rest of RANT . It will greatly increase our presence in the private market. Another academic came relatively 2/3 of the way through the year was University of Maryland. It is an academic medical center known for its R Adams Cowley Shock Trauma Center that became the leading center of trauma treatment in the U.S. and globally. It is based out of Baltimore, Maryland, and it was a reference site for a key Visage competitor for many, many years. So, a good one to win from a tactical point of view as well as footprint. As I mentioned before, Beth Israel Lahey, it is full stack. It is a very highly respected hospital system, academic teaching center, as well as community and specialty hospitals.
It will now include the Dana-Farber Cancer Institute. So it, plus our other client base in the state of Massachusetts, will give us by far the biggest share of the hospital systems in that state. In terms of contract renewals, I will not go through all of them. We announced them as they came, but it was six out of six, and it allowed us to maintain our 100% client retention record. I think the interesting things with renewals, they were all for a five-year period, so the full contract term, and they were all for higher per transaction dollar values than the original contract done previously. So again, keeping in the way that we have been able to do renewals with increased pricing and for a minimum of five years and sometimes actually longer. In terms of implementations, it was our busiest period ever.
There were 16, if we include Trinity, the four cohorts, because Trinity is so large, it had to be done in bits. Having said that, some of the cohorts, particularly one and two, were as big as doing an NYU as Big Bang, so they are huge. So four were completed in the financial year. UCHealth was completed in May. FMOL and VISN were cloud migrations. New Heidelberg University Hospital, as we mentioned, 12th best hospital in the world, went live towards the middle of the second half. To round things out, RSNA 2025, which is our biggest conference of the year. Many of you heard me speak about it. That was our busiest to date and provided a very solid number of leads going forward.
In terms of implementations, we often get asked, particularly by the analysts that are on the call, when the sites go live and how completed are they? So we have decided to include this slide. You will see that as of 30th of June 2026, Trinity was 75% complete, a number of the others 100% complete. I mentioned RANT which was 10% complete at 30th of June, is now 100% complete as of two weeks ago. The new sales that we made subsequent to that in terms of the RANT, Beth Israel , TidalHealth and St. Luke's, which we announced, I think a week and a half ago, obviously they are still in the pre-implementation planning phase, but will be live on the dates that we have put in that go-live targets.
Now, the only thing about go-live targets is sometimes the client will push the target out a week or two or a month, due to internal things. By and large, we have never to date been the hold-up for a go live. As you can see, the amounts we did in the last fiscal year, 16 was most probably our record. In terms of Trinity, this was our largest contract ever. It has a national footprint. As I said, the first four cohorts were done by June 26th. We completed the fifth cohort in July 20th of 2026 and just after the end of the financial year. That cohort 6 and 7 are around 13% remaining. We have now done about 87% of Trinity by volume. Pretty much all of that will contribute, 12 months worth into FY 2027.
A material step up in terms of transaction numbers and value. We have always said, and I think it is becoming more and more prevalent, that our implementation capability is a competitive advantage. We are able to do very large-scale projects, in a quarter to a fifth of time of industry norms, like in Colorado. Getting Trinity live within such a short window has never been done before. We think it is a huge differentiator for us, particularly as the market now is looking to move and move to cloud quite rapidly. Being able to implement quickly and complete those implementations has turned out to be a very big strategic plus. Just going through two or three other quick things. Most of you would have been aware we made some strategic investments. One was a AUD 10 million investment in 4DMedical. It will, for two years, maturing in July 2027.
The terms of the deal were basically if the share price doubled, then we would get double our money back. If it went more than that, which it clearly has, we would be able to get equity based on that. We did book an unrealized gain of AUD 172 million as of 30th of June. Clearly, the final result will depend on the 4DMedical share price in July of next year. EchoIQ was another investment, similar but slightly different. It was AUD 10 million convertible notes with an option to do another AUD 10 million at the same strike price, assuming if EchoIQ receive FDA clearance for their EchoSolv, which is the heart failure algorithm currently in with the FDA. It has a coupon rate again of 12.5% and there are options attached should the share price continue to improve.
Again, a two-year window and the end value of that investment will largely depend on the EchoIQ share price at the time. In terms of AI progress, a few quick things. I know there has been an enormous lot of talk about AI in the market, but I think a few things have stood to be true. Healthcare and AI are ideally matched. Matter of fact, speaking to some of the founders of the big AI companies, they say the number one market where AI could have the most impact is in healthcare. Imaging is at the vanguard of that. 75%-80% of FDA-approved algorithms in healthcare are for imaging. But like everything in healthcare, it is a highly regulated environment. There is FDA in America, CE in Europe, and TGA here. The important thing about healthcare is unlike other areas, it is mission-critical.
There can't be downtime and certainly there can't be any errors or hallucinations because people, health and welfare are at stake. The other thing we've seen time and time again is AI must be embedded in the complex workflows used by clinicians. It is not well accepted if it runs in a window on the side, and it must be trusted. People need to know that this is not just a black box. They need to understand the clinical evidence and support behind it, in order to use it. We think we're ideally placed to benefit from AI. We are the gatekeeper for image-based AI to now 11% of the market in the U.S. and growing. Anyone that wants to fully integrate the AI output that's image-based, needs to integrate to, in our instance, the Visage desktop.
It is a very important place to be in the value proposition. We have the ability to embed AI into our core Visage offering, which we think again, will be a strategic advantage for it. Importantly, we have a capital light strategy. We don't need to invest billions in data centers, and we don't need to invest hundreds of millions of dollars producing foundation models, like many others do, to get the result that we're aiming for. I think we're incredibly well-positioned being the gatekeeper and adopting a capitalized strategy. Things that we've done, as I mentioned, breast cancer detection, we did that with NYU. We're at pending FDA clearance.
We've done the investments with Elucid for cardiac CT, 4DMedical, and EchoIQ for the cardiac heart failure, and we've extended our research collaborations agreements with UCSF, Mayo , NYU, and others, that will help us not only do the sourcing of the algorithms but help in the clinical validation process, which is such an important part of it all. We are looking at a growing number of third-party AI algorithms to integrate into the platform on a curated basis. The team is the same team that leads our Visage development because both Malte Westerhoff and Detlev Stalling, the two co-founders of the Visage platform, have PhDs in this particular area, so well-suited. We have Ming, who is our PhD medical scientist based out of Yale that also is part of the team that looks and assesses the third-party algorithms.
Our products, we've made very significant progress on our concept of one platform. Unlike others that have various products that are all different and different code bases and run on different servers, ours is the one platform, one code base. No one has ever done this before. We started with, obviously, diagnostic imaging, including all breast imaging and advanced visualization in the one desktop. We've extended that to cardiology, which is doing well. We've now extended it into the areas of digital pathology, and we're replacing something not pixel based, but something that was always part of the radiologist's desktop. Which was the reporting system, because radiologists dictated in the past and used voice recognition to create a clinical opinion or report, as we call it.
We've now bought out two products that we think fill out the mix, which is the digital pathology and the AI optimized reporting system. Very significant steps taken in terms of new product, as well as ongoing updates to the Visage 7 platform. Arguably our biggest year in development that we've had. The things that always make us different that continue to be the same in terms of legacy technology is compress and send. Many of you've heard me say this before, files are just getting too big. Ours is totally different. We use a streaming technology. We don't move the file, we just stream the pixels.
A bit like the Netflix of diagnostic imaging, but it's a lot more sophisticated because it's two-way streaming, and adaptive streaming, depending on bandwidth, depending on network, depending on number of pixels that need to be streamed, et cetera. Here's some new data points. There's some new CT called photon-counting CT, where you have up to 10,000 images, each image over half a meg, so that's 5 GB right there. High-density breast tomosynthesis can be 6 GB plus a study. Digital pathology, a massive between 6 GB and 20 GB, a set of slides. There's a new form of breast ultrasound called opto-acoustic, where the files are 10+ GB . You can see that as new equipment and new technologies come out, the files are growing exponentially, and the old compress and send technology just is not able to cope.
The other thing driving the industry is not just the size of the images, but the number of images and the number of radiologists around to read them. The shortage has continued. It's acute. Pretty much every group worldwide is on the hunt for radiologists to just do the work volume that they currently have, let alone additional work. The fact that we are able to increase radiologist productivity whilst maintaining the same or better accuracy, to the degree we do, is, again, a very strong strategic advantage for us. Cloud has been a big thing for us again. Many people talk about it. We believe we're the only ones that can do full cloud, even to this day. We celebrated our fifth anniversary of our first cloud kind in MedStar in 2020. Every single implementation since in the U.S. has been 100% cloud-based.
The market is beginning to understand the delta between hybrid cloud and real cloud, and I think that's playing as, again, a big plus for us in the RFPs we deal with. Open archive, again, I won't go into too much, but as we go more into cloud, we do more and more open archive. Not only as full stack with new clients, but also some of the clients that were originally on premise. As they move to cloud, they will adopt archive, and we've had a number of instances of that. There's less and less on-premise work, as a result, going forward. The workflow, another key part, it allows for a lot of workload distribution dynamically. It's a very intelligent product.
It has been well received by the market, and again, part of that full stack strategy that has played out significantly over the last 24 months, and particularly in the last year as well. Visage 7 | Reporting. This is the new one. This was announced at SIIM in 2026. We have had our first implementations, which are in Europe at the moment. It replaces third-party product, and it allows radiologists to have one single desktop that includes not only everything to do with image, but now also the reporting. We are looking to bring it into the U.S. early calendar year 2027. We think it has a lot of incredibly good features, including AI optimization for drafting and revision, which will make the radiologist far more productive. Of course, it will have complete integration between image and text, both being Visage. So measurements come straight across, areas of interest come across.
Things that used to plague radiologists, we have been able to solve by this integration being the same product, the same code set. Cardiology imaging, again, I will not talk too much about it. Most of you heard about it. We did release it a few years ago. We are seeing a lot of increased traction. Our first really big contract was with UCHealth, but we have now signed a number of others, both with existing clients, some with existing clients, some with new. So we call it full stack plus one, and we are seeing more and more RFPs where there is diagnostic imaging and cardiology together. Definitely not all of them, but an increasing number. Digital pathology, as we mentioned, this is a new product. We have it working in Europe, and we are again look to bring it to the U.S. early in calendar year 2027.
It will round out our diagnostic imaging platform. It is different to the diagnostic imaging market, which is 100% digital pathology, that the market is less than 10% penetrated for various reasons. One of the key ones being that the color slides that are produced in digital pathology create very big files, and the cost benefit has not been there until recently. But we are seeing increasing interest from prospective clients and new clients in digital pathology. So this will be an important part of the product mix. The RIS. Again, we have been able to eke out some growth in Australia with some new bolt-on clients, as well as increased volumes from some of our big users. We are the undisputed market leader in RIS in Australia.
Clinical outcomes, we talk a lot about the money, but we are moving the needle in terms of what radiologists can do and at what speed, and therefore the clinical outcome that they achieve. I think this is fundamentally important because not only do we make them quicker, we make them more capable and in many cases, more accurate. The growth strategy, we often get asked about it. I think it is the same that we have had that has been working. Win new clients, which is footprint, and as we have grown our market share, and the market share of 11% is on a higher figure. We used to estimate the market at around AUD 670 million. We now estimate it with organic growth somewhere around AUD 690 million. So the 11% is of that AUD 690 million. The launch of new products, we have just talked about that.
And the enter new geographies, we think our position at Heidelberg University Hospital, which is so preeminent, so prestigious, will provide us with an excellent base, not only to expand within Germany and surrounding areas, but in the future, also other parts of the EU. Just mention that, AUD 690 million and 11%. Whilst it is a material figure, we still have an enormous amount of runway. Pipeline is the second last thing I will talk about. It has been robust. We did have a big year of sales, but on the flip side of that, we have had an increased number of inbound RFPs across all market segments. And we have opportunities at various stages of maturity in the pipeline and various sizes. It is a diverse and robust pipeline. And a reasonable portion of that came out of RSNA 2025, which was our biggest.
Yes, the pipeline has been robust, and we see opportunities across a lot of segments. We are now, there is the latest U.S. News Best Hospitals. We are greater than 50%. We do 11 of the top 20 hospitals. So by far the largest provider systems to that client base. We are growing in the IDN space. We are growing in the private market space. So academics, IDNs, private market, all of them have improved for us in the last fiscal year. RSNA 2025, as I mentioned, was huge for us. It was there that we were able to do an Apple Store event. I think it is the first time in Chicago an Apple Store has been used for such an event. There were over 450 people there. This is a photo of just some of them.
And it was showing how the Vision Pro is being used by some of our clients. Incredibly well attended and interesting, some of the groups that attended have shown increased interest in the product, citing that store event as showing that we really are at the pointy edge when it comes to new product development and new technologies. This is the team, biggest ever, and we think it will be replicated, if not outdone, by RSNA later this year. In summary, we had our record financials. Cloud was a big advantage. We had our second biggest year of contract wins with six out of six renewals. New products, cardiology, increased penetration, and strong pipeline, which will set us up well for FY 2027. Thank you for that. And we open up to questions.
Thank you. If you wish to ask a question via the phones, you will 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 ask that questions be limited to two per person. Please rejoin the question queue for any follow-up questions. The first phone question today comes from Josh Kannourakis from Barrenjoey. Please go ahead.
Hi, Sam, Danny, and Garry. Thanks very much for taking my questions. Can you hear me okay?
Yeah, that's better now. Yeah.
Perfect. Just the first one, just with regard to the implementation. Obviously that's all going on track.
Yeah.
If we look across to 2027 now, you obviously have those uplifts coming through. What's your expectations in terms of once the go-lives happen, to be able to achieve above the minimums as you have been doing historically? When we look at, I think, consensus around AUD 340 million or so for next year, it feels like a lot of next year's growth, feels like it's covered by that. Is that fair to say at the moment where we're sitting?
Yeah. There are a few things as we mentioned in our corporate presentations. A lot of the implementations that we did in FY 2026 came in the second half and some late. That's just how they occurred. That wasn't intentional. It's when the clients were ready. So 2027 will get a big leg up with those now being 12 months. Trinity cohort 5 was third week of July, so as good as 12 months. All the rest, BayCare, Colorado, first four cohorts. Then, yes, you're right, because it takes roughly six months from signing for the groups to be ready to go live. We know that some of the ones that are there like Beth Israel, like University of Maryland, et cetera, will fill out the rest for the financial year.
The other thing is, our clients, the growth rate of the existing client base is roughly 3 x that of industry average. So obviously the bigger the base is and apply that formula, that grows as well. So it's multifactorial, but you're correct. The sales we made will cover a fair bit of that revenue upside.
Got it. Just my second question, which follows on from the market volume growth, Sam. I know there was a few concerns earlier in the year, after a number of the hospital groups and some of the reading groups and things had talked about some hits to elective volumes, and the like, as a result of some of the removal of Medicaid funding packages. Just keen to hear your view on whether you've seen any of that, and maybe if not, why not, to-
We haven't. I think there's more work out there that can be read. So that's one thing, that it's producing more.
Yeah.
When we say 8%, obviously, sometimes it's 9%, it just depends year -on -year. Some of that is acquisition, some of that's organic growth. But no, we haven't seen any slowing off, and we haven't seen any group number go down. Quite the opposite. They've all gone up.
Right. Just on that, do you think that's though due to the type of clients that you've got within the portfolio? If you looked at more of the lower end or larger sort of public related hospitals, would they have more impact to that, do you think?
It's possible, but again, that's not what we've seen.
Yeah.
Some of them are a bit more expansive. There's no secret about NYU. They're opening new centers and-
Yeah.
-they're sort of on the front foot. They're not the only ones. We see more and more of that. Maybe it is the client base, but we do spread across a whole lot, regional ones and other bits and pieces that most people hadn't heard of till we announced them. They seem to be doing pretty well too. By and large, no, we haven't noticed any decrease. Quite the opposite.
That's great. Thanks, Sam. Thanks, guys. Appreciate it.
Thank you. The next question is from David Stanton from Jefferies. Please go ahead.
Good morning, team, and thanks very much for taking my questions. Just on the previous question, you talked in the presentation at a benchmark of around 30% growth. Should we be thinking that on a constant currency basis for FY 2027 for revenue and profit?
That is where we are. Yes. In some years, as I have said, currency does not have a material impact. So what we report in the constant currency are much the same. It just really depends how much it moves around from period to period. Yes, we think that is achievable. Given we know all the sites we put on late in FY 2026, as we mentioned, Trinity and all those others. They are actually big in their own right. It is not just that they came on towards the end of the financial year, but they are big. Having a full 12 months of them will have an impact in 2027, which we know already. Then there are the other ones we are putting on. Yes, we cannot predict currency. I do not think anyone can. Constant currency basis and hopefully reported if currency does not move too much.
We are still aiming for that.
Yes. Good morning, David. Just on that, the reported number does carry just under AUD 0.5 million of currency headwind that has got nothing to do with our underlying operating performance. That is something to bear in mind. Also secondly, the growth rate is being measured off a materially larger base each year. In absolute dollar figure, the increase in FY 2026 was extensive, and it will set us up really well for FY 2027.
Understood. Second question, please. I would be interested in your aspiration for your North American PACS market share. Currently at 11%. What do you think that could get to as an aspirational target on a three-year view, please?
Yeah. That is a good question. Maybe I will answer it this way. No one has gotten from zero to 11% as quickly as we have. No one has gotten the mix of the luminary institutions in that 11% like we have. We have over 50% of them. I think when we look at it, we say, "Well, what is to stop us from getting from 11% to 12% to 15% to more?" We think we have the best technology, so we do not have technological debt. We think we have a highly optimized implementation capability. Yeah, you can sell it, but you have to put it in, and I think we are proving that. Then we are looking at what is the market itself, because it is made up of slightly different segments. The private market have different drivers to a Mayo Clinic.
They need the same platform, but they have slightly different drivers. Can we address the large majority of the market with our product? The answer there is 100% yes, because we already are. We have it in the private market, we have it in small groups, and then we have it in Mayo Clinic and NYU, and it is the same product. We have a figure out there that we believe from a TAM point of view, it could be up to 85% of the market is addressable, if not more. The only reason that 15% or 10% is not, it is purely around commercials. It is when small is too small, with all the data security and contracting.
Having said that tail is actually reducing or nearly disappearing because those clients are so small, it is not viable for them to stand on their own two feet without being part of something bigger. That 85% could in time go to 90%. We are at 11%. Where would I like to be? Well, 90%. But, obviously, step by step, we are making good progress, and we believe going from zero to 10%, when we go from 10% to hopefully 20%, will be quicker than the first 10%. We are starting to see that, going from, we were at 9%, 8%, 9%, 10%, now 11%. Bear in mind, the pie is bigger too. The number, that 11%, is now AUD 690 million. Yeah, look, I do not think there is any impediment.
It's purely how many opportunities come to market, and of those, how many we win, and we're seeing more coming and we're winning more.
Understood. Thank you very much.
Thank you. The next question comes from Paul Mason from E&P. Please go ahead.
Hey, team. Just a couple on the reporting tool. The first I wanted to ask about is just what proportion of your customer base you think is on the sunsetted PowerScribe 360 tool?
Yeah.
And second, related to that is just if you could give some color on whether you think that element might actually be tendered out separately across your client base or whether it requires a whole of system tender that might come up at the end of contracts before you would be able to chase it. Thanks.
Oh, yeah. I will answer the second one last. Yes, it comes tendered out. We have already received some RFIs and things. Coming back to your first question. There is this moment, there has been this fork in the road. So you are right, there was a company called Nuance, that had most of the voice speech-to-text engines. They used to be called Dragon. And they had Dragon Medical, and they really cornered the majority of the diagnostic imaging market, particularly in the U.S. There was a second group, came out of Europe called M*Modal, it is now called Fluency, I think. 3M bought them years ago. And we see some of that. Some of the groups in Australia use Fluency. They are the two big ones.
But we think there has been this fork in the road where all of a sudden, PowerScribe in its original version is coming to end of life, and people would have to upgrade to the new version now. Nuance has been bought by Microsoft a few years ago, and that is not their core business, as you know. So we think there is a huge opportunity and, yeah, that could be mid-cycle, absolutely. You could easily sell that back to existing clients. And we think because it is the same platform and image and text fully integrated, because it is the one platform. There are some big advantages there. Now, clearly, we have to sell it. There is a whole product cycle to it. But we are already off and running because it is live in Europe at the moment.
Yeah. So just on that, I was just wondering, would most of your existing customers actually probably use PowerScribe then or M*Modal or?
Yeah.
Yeah. Okay. Great. Thank you.
Thank you. The next question comes from Chris Cooper from JP Morgan. Please go ahead.
Thanks, Sam. Maybe just a quick follow-up on that one. I had a similar line of questioning, but can you contextualize what the incremental contribution might be in some way? Maybe just give us some sense of incremental pricing or maybe just an idea about the business model. Is this going to be a pay-per-click model in the way that clearly Visage is, or is this going to be something more like a subscription model?
Yeah. So it will be pay-per-click because it is a one-for-one correlation, pretty much every exam, every test needs a report. So they will pay per usage, and that is a model that is currently in the market for reporting systems. In terms of the pricing, we have not finalized it yet, but my gut feel would be, it could be material, it could be somewhere around 30%-35% additional, if they took it for everything. Depending on the modules, could be a bit more. So it is a material component. It will be a material component and add-on if people take it. Having said that, we are not the only new shiny toy on the block. There is a number of reporting tools that have either been around or are around that will try and compete with us.
I think our main advantage will be the quality of the product and the fact that it's part of the desktop, so you do not need to move data elements between from pixels to text, which is what you need. While there is competition and there will be price pressure, it could be quite material, if clients do take it.
All right. Thank you. Maybe just one more on AI, please. We are obviously seeing one of your peers in particular demonstrating very clear demand for these cardiac CT algorithms. You have obviously got your own partnership with Elucid. What are the next steps at this point for integrating that into the Visage workflow, and how could the economics for that work, please?
Yeah. So we are not wedded to one in any one AI area. So, we did make a small investment in Elucid to get inside the tent, and we would resell the product. Why would people buy it from us? Because they are already dealing with us. That is a huge thing. Also, if there is pixel-based output, in other words, image-based output, we could integrate that into the desktop. So we are in the process of finalizing reseller agreements like we will be with, and in the process with EchoIQ and others, and it will be a reseller where we get a pass-through plus an integration fee. So that is the way we see it. If it is our own AI, then we will just sell that ourselves.
Great. Thanks for taking the questions.
Thank you. The next question is from Sarah Mann from Moelis Australia. Please go ahead.
Good morning, Sam and Danny. Just a question on the renewals. Clearly you've had a good run rate this year in terms of what you've achieved. Can I just ask, have any of those discussions been, I guess, assessed against other competitors, or have they all been closed-door discussions?
I'll just have to go through them all in my head. I believe they've all been closed-door. As you know, we've been successful that way, and yeah, it's all about term and price. In some cases, people like RSU have taken additional product, at that point in time. Yeah, we were very pleased to get six out of six, maintain our record, and obviously, deal with the ones that are still ahead of us.
Right. Okay. Just on the Department of Veterans Affairs opportunity. Obviously you've transitioned over your existing Visage customer to the cloud. Can you talk about, I guess how this is impacting, or how this is, I guess, changing interest from other VA customers?
Sorry, I couldn't quite hear the last bit.
Sorry.
Transition them to cloud. Yes, that's correct.
Yeah. I'm just asking, I guess, how it's driving interest from other Veterans Affairs.
Oh, no, large, huge. What has happened with the Veterans Affairs is it has now gone to a whole of VA RFP process, which they have not released yet, but they said they will. In the past, various VISNs could buy on their own, and they have taken the Veterans Affairs Teleradiology project and the new PACS project and bundling it into a whole Veterans Affairs RFP, which is due to come out, well, they say within 60 days. But with the government, you never know. Certainly, two things happened with VISN 23. First of all, they were a viewer and archive client, and then they actually acquired worklist from us in the years. So we actually took them into cloud and added worklists as well.
So they are full-stack cloud, and as you know, it is the VAEC, which is that hyper-secure cloud that you have to be in and get all these ATOs to work in and whatever else. So we have cleared all the hurdles for that, and we believe we are the only ones that have been able to do that, the only company to this point in time.
Great. Thanks very much.
Thank you. The next question is from Peter Meichelboeck from Select Equities. Please go ahead.
Hi, guys. Thanks for taking my question. Just on the operating cash flow. I think it was up 15% over the full year, but it was flat in the second half versus PCP. I gather that's got a fair bit to do with the timing of the implementations that sort of came towards the end of the year. Just wanted to check if there are any sort of one-offs or any other timing issues in that second half.
No, we haven't, Peter. In terms of capital, we've obviously invested into 4DMedical and some share buybacks. So, that has an impact on the actual growth of cash. But by and large, our capital priorities haven't changed. We still fund our R&D and delivery capability whilst maintaining a strong balance sheet, and return any surplus capital through fully franked dividends.
Yeah. I was specifically just thinking about operating cash flow, when I was looking at that. I guess, look, the second part of my question was going to be sort of following on from the implementations. I mean, historically, you've had a fairly consistent sort of second half bias in terms of revenue, given the status of where this year's implementations or FY 2026 implementations have come through. Should we be thinking a similar revenue seasonality in 2027? I know it depends on what other contracts come along this year, but just given that sort of implementation that you had in 2026, could we be looking at 2027 being a bit more even in terms of revenue seasonality?
Well, there are two things to that. The pattern is what you would expect from us. So where revenue steps up as each implementation goes live. We have four Trinity cohorts in FY 2026, and you see how all went live at different points throughout the year. So the revenue contribution builds rather than arriving in one step. That is very much reflected in our absolute numbers and revenue growth in the second half. This build positions us really well for FY 2027. Now, on that, secondly, FY 2027 will be bigger. As you already mentioned, a lot of these contracts that were implemented towards the latter end in the second half of 2026 will now come to full fruition in FY 2027. So you will see a step-up from there.
Yeah. The question is, do you see a step-up, second half 2027 from first half 2027? There always is because we put more and more on. Given that there will be such a big step-up in first half 2027 already, the question is how big will the delta be? There will be a delta. It just really depends how quickly we bring on the new contracts in the first half.
Great. Thank you.
Thank you. The next question is from Madeleine Williams from Canaccord. Please go ahead.
Thanks for answering my questions. Just firstly, the contracts that you have been winning, and the cycles that the company goes through. I am just wondering if you can comment on if you are seeing anything in terms of the cycles, in terms of the contracts that you are winning, and how that might look over the next couple of years. The second part to the question is there any consideration of the staffing situation and I guess your capacity to take on additional contracts?
Yeah. I think a few things about the contracts, that we see now and what has happened recently. The market is a lot more attuned to cloud and starting to understand what is really cloud and what is not. The market is also a lot more attuned to implementation capability. In the old days, everybody took three years to do a site. Regardless of who you chose, you figured it was going to take you two or three years of pain, and that was standard. That has now changed because more and more people are aware that we can do these things because we have done it for their peers. We are seeing a different dynamic in the industry and that network effect we talk about in terms of our sales.
The last dynamic is because we have more product. We tend to sell more at the get-go, not to everybody, but to the majority, bigger TCVs. Sorry, the second part of the question?
Staff.
Staff, yeah. With staff, yeah, that is the balancing act we go through all day, every day. In other words, how to right-size things. Obviously, we bring on new staff. You look at our cost base, it has gone up in a very measured way. We bring on staff across the organization trying to predict where we need them, so that when we did Trinity , we were able to do it on time. When we did BayCare and we did UCHealth , sure, it was tough because they were all so compressed time-wise, but we were able to get them all done. I do not think at this point that we see any constraints staff-wise to taking on new business. We have never, ever been held up for a go-live, and we do not intend to be.
We know what is coming down the pipe with the ones we have got and clearly with the ones that we hope to get. We try and look forward and understand what sort of staffing requirements we will have. The last thing is, because we do it so much quicker than others, we can recycle the teams so they are not out on site for three years. They are out on site for a few weeks, then they rest up, other teams go out, we have a lot more flexibility by rotating the people that we have.
Thanks for that. The second question is just in relation to cardiology. There's crossover in hospitals and things like that, but they are quite distinct departments. I'm just wondering what your thoughts are as it relates to any additional investments in staff that you would need to really go after that market, considering that it is seeming like it is a pretty big opportunity with the expanding products.
Yeah. We do have people that are more cardiology-focused. That's their remit. It'll be the same with pathology. They're in the mix of our current staffing numbers. We have people that in Berlin are more product-focused around cardiology, but not solely. Bear in mind, it's a lot easier if it's all on the same platform because it's already implemented in radiology. We don't have to do anything else to try and convince them to get new servers or new infrastructure or all the stuff that would hold up the sales process. Being on one platform and using one team makes it easier. But yes, you need people who understand how to speak to cardiologists, which are slightly different to radiologists. Obviously, we're staffing for that as well, and it'll be the same for pathology.
Great. Thank you.
Thank you. Moving to the webcast questions. The first webcast question is: Did the company lose any tenders to competitors during the last six months? If so, why?
I'm trying to think. Off the top of my head, I'd have to think about it. I don't believe we did. We do. Obviously, we don't win every single one. Usually, the ones we don't win are around price. Some groups don't look at the value. They just look at the price. But in the last six months, I don't think we have lost any that I know of.
Thank you. The next webcast question is: What is the addressable market outside of the U.S.A. for your Visage product? What is the limiting factor in expanding this platform worldwide?
There are two regions where we don't actively look at the moment. One is Japan, because you have to go through a Japanese regulatory cycle, and Japan is very parochial. So they tend to buy from Konica Minolta and Fujifilm that are Japanese-based companies. The other one is China. That's a black box to us, and issues about IP and IP sovereignty and all of those things that we don't think are resolved to the point where it would make sense for us to address those markets. Anything outside those two, technically, we can do. We can implement support anywhere. Some places in Europe may be language. We already have it in German, obviously English, Italian of all things, but could have it in multiple languages. So those sort of standard type of things that we would need to look at.
I think the biggest one is really the size of the market. The U.S. is just so much bigger than everything else. That's why we focus on it. But having said that, we've made a strong step by getting new Heidelberg, which is so preeminent, and that could open up other opportunities within the EU in particular. Then there's, of course, the U.K. and NHS, and the problem there is the NHS itself rather than anything else. It's the market. So things are changing. I think cloud is just starting to be distributed inside the EU, which I think will be good for us. So we are looking at opportunities there, but our main focus, certainly, as we sit here today, is the U.S. But any other region, other than the two I mentioned, we could easily do.
Thank you. The next webcast question is: As Visage incorporates more AI capabilities, do you see new competitive dynamics or partnership opportunities? For example, DeepHealth, with its expanding AI-powered and FDA-approved clinical solutions, do you see them more as an emerging competitor or a potential partner?
That is really two questions in one, I think. Look, we see a lot more partnership opportunities. It is not possible for one group to have every single algorithm. There is just too many of them. So we have a combination of our own, those we develop with partners, and third party. For groups like DeepHealth, it is possible we could partner with them on some of their algorithms. I think the thing for them is they are part of RadNet and a provider. So, they wear two hats, which could preclude them from selling their algorithms more widely. So, we could definitely look at some of their things. We have not to date, but that does not mean we would not, if it made sense.
Thank you. The next webcast question is: What is the outlook for EU sales? Why is that much tougher market for PME, and is this changing?
Yeah. The question before the last one was sort of addressed to that. But the basic idea is, the opportunities, each one is much smaller. And also Europe is maybe five years behind the way the U.S. look at informatics in our area. Cloud is just starting to come in. And then you have got things like regional. The problem is it is all funded by government. And most governments say they do not have money for healthcare. So Europe is a tougher market, but not impossible. As you can see, we won Heidelberg. So, we are looking for opportunities there and opportunities outside Germany. But having said that, we just do not believe there are as many or as large as what we see in the U.S. But we will look to do both.
Thank you. The next webcast question is: Have any existing Visage customers expressed interest in deploying 4DMedical's CT:VQ or EchoIQ's EchoSolv products through the platform?
It's a bit early for that. We think we will find some. As you know, we are looking at finalizing EchoIQ. We just the other day finalized the convertible note, which was from binding MOU to contract. I think we will see some of that, but it is a bit early for that.
Thank you. The next webcast question is: What is Dr. Hupert's view on the bill H.R.7558 passing through the U.S. Congress, and does he view this as an opportunity?
I'm not an expert on it, but my understanding, it is about interoperability of images in the Veterans Affairs. Any standard and any interoperability can only be good. Certainly, if the VA go to one platform, as I mentioned a little earlier when I was asked about VA, then that need is not fully but largely mitigated because of one platform. All the images would be available, whereas currently, it's a hodgepodge of platforms. But if they do pass it, I think it could only be good for the industry, and we don't see that as being a negative for us, quite the opposite.
Thank you very much. That does conclude the Q&A session. I will hand the conference back to Sam for any closing remarks.
Yeah. I just really wanted to say thanks everybody for your interest. I know it has been a busy reporting season, and we appreciate you being on the demonstration and webcast. So thank you.