Mach7 Technologies Limited (ASX:M7T) Managing Director and CEO, Mike Jackman discusses the company's enterprise imaging solutions for the healthcare sector, the size of the market and how Mach7's solution delivers better patient outcomes.
Jessica Amir: Hello, I'm Jessica Amir for the Finance News Network. With me today is Mach7 Technology Limited (ASX:M7T) CEO and Managing Director Mike Jackman. Mike, thanks for coming, and welcome to the network.
Mike Jackman: Hi. Thank you for having me.
Jessica Amir: First up, Mike, for those who aren't familiar, just give us a quick introduction to Mach7.
Mike Jackman: Mach7 is a software company that's focused on providing solutions to hospitals and clinics to enable doctors to have access to all the relevant clinical information for patients. And our system is uniquely designed to integrate the harder things to do, like images or data from medical devices that are not very compatible, or with legacy applications and things like that, that we all bring together. Once that data is all in one place, which is our platform, then we can run applications and provide viewers and mobile device enablement so that you can access the data and provide the health care.
Jessica Amir: Thanks, Mike. Now, can you tell me about the enterprise imaging solution and the size of the market opportunity?
Mike Jackman: Yeah. So, the enterprise imaging market is actually growing at about a 6 per cent compounded annual growth rate, and it's projected to be as big as four billion dollars globally by 2024. Today, the market is about two billion as a total. It includes what we call the archiving space, which is known as a Vendor Neutral Archive, and the PAC systems, which are the diagnostic applications that the doctors use to diagnose the patients. Mach7 actually has evolved from only supplying the archive to now supplying the PAC system and the archive, so we expect Mach7 to see a lot of that growth and be able to address a lot of that market growth.
Artificial intelligence applications, which are going to take advantage of the data that sits on the data platform from Mach7, are projected to be an additional 2.5 billion dollar market for medical imaging and AI by 2025. So, the enterprise imaging industry has evolved from, you know, departmental systems that had been digitised, to now departmental systems that need to be connected inside the hospital across an enterprise. The healthcare enterprises keep growing and growing. Hospitals are getting acquired. As they get acquired, you need to connect them all. They all come with different vendors and different makes of systems, so they need technology that can connect it all. So, the Mach7 platform has not only the ability to aggregate it and consolidate it, we have a very powerful connective workflow engine that connects it all. And once that data is all in one place, then we can provide it and give access to doctors, whichever applications they need to use at the point of care to diagnose the patients.
Jessica Amir: Brilliant. Thanks, Mike. Now, can you tell us about the products and your solutions?
Mike Jackman: The data platform is the foundation, and then we offer enterprise solutions like the Vendor Neutral Archive and the enterprise viewing of that. We also offer diagnostic solutions like the PACs for radiologists, and also for cardiologists. And then we offer connected health care solutions. Some of our customers just need the connectivity across all those hospitals and clinics and everything else. We have a powerful engine that does that. And now that you have all that in place, this is the perfect solution to take advantage of artificial intelligence as it's coming down the line.
Jessica Amir: Thanks, Mike. Now to your sales and distribution, what can you tell us?
Mike Jackman: The largest market is in the U.S.. We primarily go direct in the U.S., except six months ago we started a strategy to also go indirect so that we can reach a bigger part of the market. Our main customers are large academics, large health systems, we even have states, the whole state, and countries like Qatar, and we just won Hong Kong, the territory of Hong Kong is the deal, so we have very large deals that we deal with direct. But, to reach that middle market, like we call it the middle healthcare America market, which is smaller hospitals and clinics, more effectively, we've partnered with a couple of partners in the U.S., IDS Health and Vaso, who also had other solutions that are complementary to what Mach7 offers. We've signed up distributors in Latin America, in Europe, we're in the U.K., we're in Netherlands, we're starting something in Germany, and we're developing those markets through distribution. So that revenue and opportunity will be hitting us in the next 12 to 24 months.
Jessica Amir: Now, can you give us a snapshot of your finances?
Mike Jackman: Yeah, so the company is about AUD$9 million in revenue, Australian, and AUD$8.6 million actually, Australian, in the last fiscal year. 7.6 of that came from the U.S., where we saw 16 per cent growth. We just won the largest ever deal in Hong Kong, so our revenue profile in terms of being mostly U.S. is now going to be changing going forward. The Hong Kong deal was HKD$81 million dollars Hong Kong, so we're pleased that our contracted annual recurring revenue just grew about 23 per cent last year. So we're up to AUD$5.3 million. AUD$5.3 million out of that AUD$8.6 million is actually contracted annual recurring revenue. And we expect that to grow. That doesn't include the wins at Hong Kong. Just Monday we announced another very important win called Sentara, which is a health system in Virginia that has 12 hospitals. Bought the Vendor Neutral Archive from us, the data platform, in 2014. They awarded us a USD$2.6 million dollar contract for our VNA. Since then, that project grew up to a USD$9 million dollar, over 10-year period contract with Sentara. Now, they just awarded us the PACs part of that project, which will be an additional amount.
Jessica Amir: And lastly, Mike, before we let you go, where would you like to see the business this time next year?
Mike Jackman: I expect everyone to see additional contracted annual revenue growth. Our focus, we're a cloud SAAS company. We are focused on growing our subscription business, our recurring revenue business, as we drive towards our key financial goals.
Jessica Amir: Wonderful. Mike Jackman, thank you so much. It's been very insightful.
Mike Jackman: Thank you very much for having me.