Mach7 share price jumps on solid quarterly update

Nikhil Gangaram | January 23, 2020 1:35pm | More on: M7T

The Mach7 Technologies Ltd (ASX: M7T)share price jumped more than 3% in early trade after the company released its second quarter update for FY20. Mach7 shares have since pulled back slightly and are now trading for $0.74.

How has Mach7 performed for the second quarter?

Mach7 provided its second quarter report for FY20 to shareholders earlier today. The quarterly update saw Mach7 report $0.5 million positive cash flow, which is the second consecutive quarter of positive free cash flow for the company.

Other highlights for the second quarter included a successful capital raise of $20 million and $3.6 million in cash receipts from customers. In addition, Mach7 signed 2 new customers and extended 7 contracts. At the end of the second quarter, Mach7 reported a cash holding of $23.3 million.

Mach7 also provided shareholders with a update on its 12-month free cashflow positive target. The company announced in March 2019 that it expected to be free cashflow breakeven for the 12 months ending February 2020. Mach7 reported $2.4 million in positive free cash flows for the 10 months ending 31 December 2019 and the company fully expects to achieve its target.

What does Mach7 do?

Mach7 provides digital data management solutions for hospitals that allow a clear and complete view of patient records. The company’s enterprise platform Management Studio aims to improve diagnosis delivery, reduce care delivery delays and costs, and improve patient outcomes.

Mach7’s Vendor Neutral Archive is essential to the company’s core enterprise imaging solutions for physicians and radiologists. The company also sells picture archive and communications systems and has 2 revenue models in software as a service and upfront licensing.

What is the outlook for Mach7?

Mach7 currently employs more than 40 staff in the US and Asia-Pacific region and the company estimates that it has a global addressable market worth in excess of $US3 billion. According to the company, the advantages of Mach7 technologies include the customers controlling their own data, ease of installation, low hardware requirements, and an attractive price point.

In addition to current contracts, Mach7 signed 2 new customers in the second quarter – Strategic Radiology and Adventist Health Tulare – and also signed new contracts with 7 existing customers.

Mach7 aims to use the $20 million it raised in the second quarter to accelerate the company’s commercial strategy. Mach7’s growth acceleration is expected to come in the form of acquisitions of complementary technologies that could strengthen the company’s existing product offerings.

At the time of writing, the Mach7 share price is currently trading 1.36% higher at $0.74, after hitting an intraday high of $0.77 earlier.