Release Date: February 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenue for the year reached EUR9.4 million, with recurring revenue at EUR6.6 million.
- Gross margin improved by 6%, reflecting better cost management and revenue mix.
- Record year for new customer adoption with six net new logos, including significant wins in New Zealand and Ireland.
- Successful launch of MyStay Mobile, expanding the addressable market and reducing the need for in-room hardware.
- Strong cash balance at year-end, bolstered by a well-supported capital raise and oversubscribed share purchase plan.
Negative Points
- Elongated sales cycle remains a challenge, impacting the speed of revenue realization.
- Tactical churn from three customers unwilling or unable to migrate to Android hardware, resulting in some revenue loss.
- Unexpected project delays pushed hardware deliveries for three customers into 2024, reducing forecasted total revenue by approximately EUR2.9 million.
- Operating EBITDA loss for the year was EUR5.74 million, despite a 20% reduction from the prior year.
- Headcount reduction in the last quarter of 2022, followed by a need to ramp up staffing again, indicating potential instability in workforce management.
Q & A Highlights
Q: Can you discuss the motivation of the Baxter sales force and how they are remunerated in regards to Oneview products? Does the addition of MyStay Mobile change any of those dynamics?
A: Baxter's motivation is clear; they aim to grow their business by leveraging Oneview's Care Experience platform, which complements their existing offerings. The Baxter sales force is compensated similarly for selling both the core platform and MyStay Mobile. They carry quotas for Oneview solutions, and there is a separate incentive program for Baxter reps, including a "presidents club" style arrangement for top performers. (James Fitter, CEO)
Q: Is there an opportunity to sell the Oneview product into Baxter's existing customer base?
A: Absolutely. While Baxter needs to displace competitors to sell their nurse call systems, 70% of US hospitals do not have a care experience platform, presenting a significant whitespace opportunity for Oneview products. (James Fitter, CEO)
Q: Can you provide a broad overview of the P&L impact comparing a customer with traditional installations versus the new BYOD system?
A: For a typical 300-bed hospital, traditional installations involve significant CapEx for hardware, costing between $2,000 to $2,500 per room. With BYOD, hospitals only subscribe to the software, eliminating the need for CapEx and potentially increasing gross margins from mid-60s to mid-80s. (James Fitter, CEO)
Q: Can you advise on the onboarding timeline for the order book?
A: The timeline varies significantly and is often beyond our control. Most contracted but not yet installed business is scheduled for delivery this year, though some hospitals may not open until 2025. Cloud migration has accelerated deployment, but room availability can impact speed. (James Fitter, CEO)
Q: What is the shape of the operating expense line in FY24?
A: We plan to add around 20 staff back into the business, increasing OpEx by approximately 20% year-over-year. This is to ensure we can scale to Baxter's needs. As we begin to deliver, the implementation burden will be shared with Baxter, potentially reducing costs later in the year. (James Fitter, CEO; Helena D'Arcy, CFO)
Q: How will the tax liability be reported through the P&L?
A: The tax liability has already gone through the P&L as a deferral of payroll taxes during COVID. It is currently shown as a current liability but will be spread over five years starting in May, with zero interest charges. (Helena D'Arcy, CFO)
Q: Can you talk about the incentives that Baxter salespeople are given to sell Oneview products?
A: Baxter salespeople will carry quotas for Oneview products and will be incentivized similarly to their other products. Additionally, there is a separate Oneview incentive program for Baxter reps, including a "presidents club" style arrangement for top performers. (James Fitter, CEO)
Q: Can you provide more details on the onboarding timeline for the order book?
A: The onboarding timeline varies, with most contracted but not yet installed business scheduled for delivery this year. However, some hospitals may not open until 2025. Cloud migration has accelerated deployment, but room availability can impact speed. (James Fitter, CEO)
Q: What is the expected shape of the operating expense line in FY24?
A: We plan to increase OpEx by approximately 20% year-over-year to scale to Baxter's needs. As we begin to deliver, the implementation burden will be shared with Baxter, potentially reducing costs later in the year. (James Fitter, CEO; Helena D'Arcy, CFO)
Q: How will the tax liability be reported through the P&L?
A: The tax liability has already gone through the P&L as a deferral of payroll taxes during COVID. It is currently shown as a current liability but will be spread over five years starting in May, with zero interest charges. (Helena D'Arcy, CFO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
