Mach7 Technologies share price is up 5% on first full year profit result

The Mach7 Technologies share price has surged after the company delivered its first full year profit result and a positive cash flow.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Mach7 Technologies Ltd (ASX: M7T) share price is up almost 5% higher today after delivering its first full year profit result.

The company develops innovative enterprise imaging and informatics solutions for image viewing, storage, and workflow management. 

What were the FY20 results?

The company has delivered an increase in revenues of $18.9 million, up 102% on the prior corresponding period (pcp). This was driven mainly by higher software licence fees. 

Earnings before interest, taxation, depreciation and amortisation (EBITDA) was $3.3 million, up 181% compared to the pcp. 

Mach7 delivered positive free cash flow, up 225% to $4.7 million. The company said the acquisition of Client Outlook demonstrated the scalability of the business and enabled less reliance on investor funding.

The company's successful completion of a cost-reduction program was a key contributor to profit.

Sales orders were up 115% as a result of 29 new sales order contracts. These were from new and existing customers who ordered licence extensions, expansion licences or new products.  The 29 orders have contributed $13.3 million to the group's revenues.

Furthermore, contracted annual recurring revenue (CARR) has increased to $9 million, representing growth of 14% on the pcp. However, CARR growth was impacted by delayed purchasing decisions in 2H20 due to the coronavirus pandemic.

Outlook for Mach7

Mach7 Technologies expects the growth in CARR to resume and even accelerate during the 2H21 due to expected increased demand. This is reflected in the sales pipeline. 

In light of the Client Outlook purchase, the company is well-positioned for continued profit growth in a substantially larger addressable market. It's now a clear market leader in the provision of complete enterprise imaging solutions. 

Mach7 Technologies is in a strong financial position with more than $15 million cash in the bank and is debt free. In the future, it expects to deliver continued double-digit revenue growth, EBITDA growth and positive free cash flows. 

Mach7 CEO Mike Lampron said Mach7 was well-positioned to continue delivering great outcomes for customers, employees and investors.

"I am proud of what the Mach7 team has achieved this year – from new customer deployments of our software, the recent acquisition and early integration of Client Outlook, to delivery of proftable high growth earnings and positive free cash flow," he said.

After surging to a high of $1.15 in early afternoon trade today, the Mach7 Technologies share price is currently trading at $1.10, up 4.76% at the time of writing. It has a market capitalisation of $263.7 million.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 9 January 2025

Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends MACH7 FPO. The Motley Fool Australia has recommended MACH7 FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

Disappointed man with his head on his hand looking at a falling share price his a laptop.
Share Fallers

Why Iluka, Sigma, Wildcat, and Woodside shares are falling today

These shares are having a tough time on hump day. Why are investors hitting the sell button?

Read more »

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Share Gainers

Why Bubs, Chrysos, JB Hi-Fi, and Paladin Energy shares are storming higher today

These shares are having a good time on hump day. But why?

Read more »

Man and woman sitting at casino table playing poker
Opinions

Australia's biggest winners in 2025? My money is on these 2 ASX shares

Here’s why I think these stocks could be underrated winners.

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Opinions

Here's how I'd invest my next $5,000 on the ASX in 2025

These two investments could make a lot of sense this year.

Read more »

A view of New York at sunrise looking from inside an aeroplane window.
Growth Shares

2 ASX growth shares I'd buy that could benefit from Trump

These stocks look to me like compelling options in the years ahead.

Read more »

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Wednesday

Another good session is expected for Aussie investors today.

Read more »

Happy diverse colleagues or team of people give high five together to celebrate great teamwork and results.
52-Week Highs

8 ASX 200 shares smashing 52-week highs today

These stocks hit new highs amid a turbulent day for the ASX 200.

Read more »