Release Date: August 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Oneview Healthcare PLC (ASX:ONE, Financial) reported a 16% increase in contracted beds year-to-date, indicating strong demand for their products.
- The company has a high customer retention rate, with some clients having been with them for over a decade.
- The partnership with Baxter International is providing unparalleled access to the US market, enhancing growth opportunities.
- Gross margins have improved significantly, up 20%, with absolute gross margin up 73% to an all-time high since going public.
- The company has successfully transitioned all customers to their Android Care Experience Platform, simplifying operations and reducing complexity.
Negative Points
- Significant revenue delays were experienced in the first half of the year due to health system consolidations and construction delays.
- Operating expenses increased by 25%, reflecting additional hires to support upcoming Baxter implementations.
- The company reported an operating EBITDA loss of EUR 0.9 million higher than last year and a loss after tax increased by EUR 1 million to EUR 5.5 million.
- There is a projected national shortfall of over 350,000 nurses in the US by 2026, which could impact the adoption of their technology.
- The Australian private hospital market is experiencing procurement challenges, affecting potential growth in that region.
Q & A Highlights
Q: Just to understand all your commentary around the delayed revenue. I'm just wondering to what degree have the costs associated with that revenue already been incurred?
A: In terms of OpEx, there's not really an impact because the main OpEx cost would be labor in some way, shape, or form. But as we haven't delivered that revenue, we haven't performed much in the way of services against it. Most of that revenue is hardware revenue, so we have incurred some cash outlay. Our inventory figure is higher than it was at the end of the year as we purchased the equipment in advance for both those projects. (Helena D'Arcy, CFO)
Q: Are you seeing any change in competitive activity or any change in market dynamics as these sort of new players gear up or change hands?
A: Two of our competitors have been acquired. One was acquired by a vendor in the digital signage space with no healthcare experience, and the second, GetWellNetwork, was acquired by an AI holding company. Additionally, Stryker acquired Care AI, a new entrant in the virtual care inpatient space. This indicates that bedside technology is becoming a more interesting value proposition, especially around workforce challenges. (James Fitter, CEO)
Q: AI chatbots are pretty much everywhere at the moment and I think pretty expensive to develop. Can you just talk through the process about your decision to develop one internally rather than still fit something that might already be out there?
A: It's actually a pretty light touch from our point of view. We curated and loaded all of our product knowledge, release notes, annual reports, and 4 Cs into a proprietary version of Chat GPT. This allows our staff to query that information, driving significant internal productivity. We also plan to make this available to customers and the Baxter sales organization. (James Fitter, CEO)
Q: Can you elaborate on the impact of health system consolidation on your business?
A: Health system consolidation is a double-edged sword. For example, NYU Langone has standardized on our technology platform every time they acquire a new hospital. Our largest contracted customer has acquired another health system, and we expect that if we continue to deliver value, it will open doors to another 4,000 beds in that one customer alone. (James Fitter, CEO)
Q: What are the key drivers for your business growth moving forward?
A: The Baxter partnership is a significant driver, providing us with unrivaled access to the US market. Virtual care is another key driver, with the growth rate of virtual nursing across the US growing at 30-40% per annum. Our MyState Mobile product also represents the future, and we are seeing significant interest in this area. (James Fitter, CEO)
Q: How are you addressing scalability challenges?
A: We are focusing on enhancing our application used to configure our platform, implementing a best-in-class PMO tool, and standardizing our deployments. These initiatives aim to reduce dependency on highly skilled engineers and make our processes more efficient. (JP Howe, COO)
Q: Can you provide more details on your AI strategy?
A: We have made a significant investment in a unified cloud data platform, which provides a solid foundation for AI. We are targeting the launch of a pilot in Q4 of this year and plan to bring product features to market in the first half of next year. We are focusing on driving better patient engagement and education through AI. (Niall ONeill, COO)
Q: What are the financial highlights for the first half of 2024?
A: Recurring revenue was up by 8%, and total revenue was up by 7%. Gross margins increased by 8 percentage points, and operating expenses increased by 25%. The operating EBITDA loss for the year is EUR 0.9 million higher than last year, and the loss after tax increased by EUR 1 million to EUR 5.5 million. (Helena D'Arcy, CFO)
Q: How is the Baxter partnership progressing?
A: The Baxter partnership is delivering unparalleled access for us in the United States. Baxter has over 100 opportunities in their internal pipeline, and we have a very collaborative sales process. We are confident that this partnership will add between 3,000 and 5,000 beds per annum from their customer base. (James Fitter, CEO)
Q: What are the key product updates delivered in the first half of 2024?
A: We launched MyState Mobile, the second iteration of our digital door sign, and our new digital whiteboard. These updates are part of our connected patient portfolio, which includes patient television, patient tablets, digital door signs, and digital whiteboards. (Niall ONeill, COO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
