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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Thank you for standing by, and welcome to the IMEXHS Limited FY '20 Results Investor Call. [Operator Instructions]I would now like to hand the conference over to Dr. German Arango, CEO and Co-Founder. Please go ahead.
Thank you very much. Good morning, and thank you for joining us for the presentation of IMEXHS FY '20 results. I am Dr. German Arango, CEO and Co-Founder of IMEXHS. And with me on the call today is Reena Minhas, our Chief Financial Officer. Today, I will begin by providing an overview of the 2020 result and our business, before handing over to Reena, who will cover the result in more detail. I will then address our strategy and our 2021 outlook before opening up for questions. We are very pleased with our performance in 2020. Slide 5 shows that we achieved good growth across our key financial metrics, both on a reported and constant currency basis. Sales revenue of $10.9 million was 41% higher year-on-year and 59% higher on a constant currency basis due to new contract wins and renewals. Recurring revenue of $8.5 million increased by 29% year-on-year and by 45% on a constant currency basis as we continue to focus on subscription revenue growth. Annualized recurring revenue, or ARR, was $10.1 million, up 19% year-on-year and 33% higher on a constant currency basis. Our EBITDA loss of $1.3 million improved by $3.3 million year-on-year, and IMEXHS is in a sound financial position with closing cash of $10.8 million at December 31, 2020.Slide 6 provides an operational overview of the full year. Demand for our solutions remained strong, although there was some slowing in decision-making among larger operators as a result of the pandemic. A key achievement in 2020 was the launch of Aquila in the Cloud in response to COVID-19 and the need for a rapid radiology solution for small to medium-sized operators. Our expansion into new markets continued to plan with key appointments made in Australia and the U.S.A. We opened our new office in Miami and secured our first U.S. customer adding 2 more in February 2021. We received ANVISA certification in Brazil, which allows us to operate in LATAM's largest market and CE certification for the EU. In 2020, we also entered into a number of strategic alliances that allow us to offer additional functionalities such as Vital's advanced visualization tools. Slide 7 shows that we continue to make important investments in software development and AI during the year. This included the redesign of Aquila, our radiology information system, with multi-tenant architecture to create a new business model in Aquila in the Cloud; enrichment of Stella, our AI engine, with new algorithms; as well as new functionalities for Braviz, such as functional MRI rendering and dynamic tractography DTI. For those of you who are new to the company, I would like to take a few minutes to give you a brief overview of IMEXHS. Slide 8 shows that our global footprint currently covers over 250 sites in 15 countries and over 2,000 radiologists use our imaging solution, which are developed by software engineers based in Colombia. Turning to Slide 10. IMEXHS is a provider of medical imaging software solutions that are fully web and cloud-based. Our HIRUKO platform is a critical system that provides solutions for all complexity levels. We have a customer retention rate of over 95% and have never been displaced by a competitor. Turning to Slide 11. Our new business model Aquila in the Cloud continues to generate strong interest and provide small and medium-sized customers with a low-cost medical imaging solution. Launched in May, it is a highly scalable business model that is supported by an extensive and growing network of distributor partners. At December 31, Aquila in the Cloud had contributed $945,000 in ARR, and we had signed 48 deals by February 24, 2021. Slide 12 shows that our competitive advantage is based on 4 key strengths, which reflect: our accessibility from any device or browser; the disruptive nature of our innovative technology; our flexible and scalable modular solutions that are suitable for all complexity levels; and finally, our affordability, which is enabling us to democratize access to high-tech medical imaging software. Slide 13 shows that our HIRUKO platform consists of our core platform, which includes PACS and VNA systems, our enterprise imaging system, which customizes specific workflows toward different clinical departments and our advanced post-processing elements, which is our most sophisticated layer. Our platform also integrates advanced visualization tools from third-parties such as Vital, which is available in the cloud for the first time via the HIRUKO platform. Slide 14 show that our HIRUKO -- that HIRUKO integrates all the steps of our radiology imaging workflow into a single platform, which means it can also measure the metrics of a business and produce statistics in real time. Slide 15 shows our unique streaming technology. Our experience with bandwidth limitations means that our technology uses server side rendering to stream the pixels to any web-enabled device, resulting in fast and efficient image delivery. Turning to Slide 16. We provide radiology services for a small number of contracts to access images for training, algorithms and AI data sets. IMEXHS has also developed an AI tool for detection of viral pneumonia and another for natural language processing. I will now hand over to Reena Minhas, our CFO, to cover our 2020 financial results in more detail.
Thanks, German, and good morning, everyone. I will now run through the FY '20 financial performance of the company, starting on Page 18. FY '20 revenue of $10.9 million was up 41% versus pcp, up 59% on a constant currency basis and in line with FY '20 guidance. Recurring revenue of $8.5 million was up 29% versus pcp and 45% on a constant currency basis. The strategic focus on driving subscription revenue growth continued, with recurring revenue maintaining a growing trend year-on-year and quarter-on-quarter during FY '20. Turning to Page '19. We finished the year with ARR of $10.1 million, which was 19% up versus prior year and 33% higher on a constant currency basis, reflecting increased demand for our customized solutions, the successful launch of Aquila in the Cloud product offering and further driven by contract renewals and extension. The chart shows annualized recurring revenue, which is currently billing, as well as ARR, which is yet to commence billing in a lighter shade. Moving to Page 20. I will now run through the underlying financial performance of the company, which excludes costs in relation to share-based payment expenses and foreign exchange movements. The underlying EBITDA loss of $0.7 million improved by $3.8 million from prior year, excluding the impact of software capitalization, which commenced on 1st of January 2020. Adjusting for $805,000 in capitalized software costs, our EBITDA loss improved by $3 million on a like-for-like basis. Other sales revenue more than doubled in the year, reflecting the inherently lumpy nature of large one-off sales that customers have specific requirements. Our focus continues to be on recurring revenues, but one-off sales are an additional revenue stream, which tends to be geared towards the fourth quarter. Operating expenses were up by 11%, excluding software capitalization, reflecting increased investment in sales and marketing and cost of expanding into new markets, including the establishment of the U.S. operations. Net finance expenses include $770,000 for the cost of borrowing of a related party loan, which was repaid during the year. Turning to the next page, balance sheet. We ended the year with cash on hand of $10.8 million and net asset of $15.5 million. There was an increase in both trade receivables and payables due to strong sales in the last quarter and increased investments as the company expanded into new markets. On Page 22, net cash flow used in operating activities improved by $2.6 million versus prior year. From 1st of January, we capitalized software development costs, resulting in lower operating outflow for development costs. These costs are reflected in cash flow used in investing activity. Net cash flow from financing activities included proceeds of approximately $8.3 million raised during October for the issue of new shares. Proceeds from the capital raise will be used to drive future growth, with particular focus on accelerating the expansion in several key markets, including the U.S.A., Brazil and Australia. I will now hand back to German to take you through the FY '21 strategy and outlook.
Thank you, Reena. Slide 24 shows that we are well placed to benefit from a number of macro trends in the health care sector, and we have multiple runways for growth, whether it is the expansion in our core Latin American markets, the development of new markets in the U.S., Europe and Australia, or delevering of our cutting-edge technology to create other medical imaging verticals. Turning to our 2021 development road map on Slide 25. We have a number of key priorities. We will enhance our Aquila platform with a new version, 4.0, to provide a broader product offering to potential customers in the U.S. and Australia. We will create Alula Marketplace, the world's first pathology marketplace, and develop other medical verticals, including dental, imaging and veterinary information system. Finally, we will use our rapidly growing image library for training and testing AI algorithms. Turning to Slide 26 and the 2021 outlook. We will continue to focus on expanding into new geographies and converting the strong interest in our Aquila in the Cloud offering. We now have the certifications to build on our business plan for Brazil with 2 new distributors now in place and plans to develop a new office. Although there has been some impact from the second wave of COVID-19, the outlook has improved for these markets in 2021. We are on track to achieve monthly run rate EBITDA breakeven by December 2021. I will now hand back to the operator to open it up for questions.
[Operator Instructions] Your first question comes from [ Andrew Lilly ], a private investor.
You mentioned earlier about -- fantastic result on your $11 million for the year of revenue and then your guidance. Well done to you and the team. You mentioned earlier about the 2 American clients in February '21. Just sort of what's size of those contracts? And then second question is, how is the future pipeline looking? And where are you seeing opportunities? What key target markets?
Sure. Well, [ Andrew ], good to speak to you again. Thank you for recognizing the good results we have delivered in 2020. And regarding to your question, well, we have been putting good resources in place to grow and to develop the U.S. market. In effect, we have very good traction already. And the demonstration of this is that we opened a office in the last quarter of 2020, and we already have the first 3 customers, which are essentially customers for Aquila in the Cloud. So are small to mid-sized customers, in the average of the revenues these kind of customers are. The plan in the U.S. is to start from the bottom to the top. So this is the kind of customers we are approaching currently, small to mid-sized and is a very good demonstration. Our strategy is succeeding. In terms of the pipeline, the pipeline has been constantly growing. We have not lost any significant deal. And with the launching of Aquila in the Cloud, we have been experiencing a significant improvement in the number of opportunities coming from the bottom end of the market, but also from the new markets. The pipeline, in particular, for Aquila in the Cloud in the U.S. has been growing very fast and has very good traction as well. So we expect to keep on track. These results are very aligned to our strategy. We expect to keep delivering in the same way in 2021.
[Operator Instructions] There are no further questions at this time. I will now hand back to Dr. Arango for closing remarks.
Well, thank you, all, again for taking the time to join us today. Have a good day.
That does conclude our conference for today. Thank you for participating. You may now disconnect.