• Revenue Growth: 16.5% increase in revenue, half to half.
• Site Expansion: Over 300 sites, a 24% increase, half on half.
• Scan Volume Growth: 37% increase in scan volume.
• Average XV Fee Growth: 12% increase in average XV fee per scan.
• Operating Expenditure: Reduced by 11% over the last half period.
• Recurring Revenue Run Rate: Over $6 million.
• Capital Raising: $12.5 million placement and underwritten SPP.

• Warning! GuruFocus has detected 3 Warning Signs with ASX:4DX.

Release Date: March 02, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• 4DMedical Ltd (ASX:4DX) achieved a 16.5% revenue growth half to half, with a 24% increase in the number of sites and a 37% growth in scan volume.
• The company successfully acquired and integrated Imbio, and secured FDA approval and reimbursement for its IQ-UIP product.
• 4DMedical Ltd (ASX:4DX) has a strategic partnership with Philips, which is expected to significantly boost sales and market reach.
• The company has reduced its operating expenditure by 11% over the last half period, indicating improved financial management.
• 4DMedical Ltd (ASX:4DX) is positioned to replace the $1 billion nuclear VQ market with its superior CT:VQ technology, offering logistical and cost benefits.

Negative Points

• Despite revenue growth, the company is still not profitable and continues to spend more than it earns.
• The Australian revenue has decreased due to the roll-off of a large legacy contract, impacting overall financial performance.
• Engagement with the VA has been challenging due to political changes and cost-cutting measures, affecting potential growth in this segment.
• The company's cash burn rate is high, and recent capital raising efforts only cover one to two quarters of cash needs.
• There is a delay in revenue realization from recent wins, as it takes time for contracts to filter through the system and reflect in financials.

Q & A Highlights

Q: Revenue seems to be very flat currently, and the cash burn far outweighs your revenue. Why is it then that you have decided to raise only one to two quarters of cash in the recent placement and SPP? Do you anticipate revenue to ramp up to the point where no further cap raises are needed? A: Andreas Fouras, CEO: We have grown our revenue four times over the last two years, and the $6 million run rate doesn't include recent wins. Our costs are coming down, and with the capital raising deal, we expect an additional $18 million downstream. We feel comfortable that this capital will take us to break-even.

Q: Why do you do a SPP instead of drawing down on the at-the-market funding? A: Andreas Fouras, CEO: The at-the-money facility is great for modest capital but not suitable for significant amounts like $30 million. Traditional capital raising is more appropriate for our needs to reach break-even.

Q: When can contracts and meaningful revenue be expected as a result of the Philips reseller agreement? A: Andreas Fouras, CEO: We are in constant communication with Philips, and joint sales calls are happening daily. We expect to see contracts and meaningful revenue this financial year, before June 30.

Q: Why has the Australian revenue significantly decreased from last year? A: Andreas Fouras, CEO: A large legacy contract rolled off the books as we focus more on software products. However, the Australian business has grown by 40% recently, and new sites are expected to become active soon.

Q: What is the current status of engagement with the VA? Have you found it difficult to deal with the new Trump administration and their cost-cutting? A: Andreas Fouras, CEO: Engaging with the VA is challenging due to current turbulence, but we have long-standing connections. We are working with Philips to explore opportunities, but need the dust to settle for significant progress.

Q: How many pilot programs do you currently have underway that will result in additional scanning locations? A: Andreas Fouras, CEO: We have successfully converted pilots into paying customers, such as IPOC and Qscan. We have a few more pilots in place and expect to convert more in the next quarter.

Q: Is 4DX likely to be engaged in the Australian lung cancer screening program, and what is the likely commercial effect? A: Andreas Fouras, CEO: We are well-placed for the program and are having conversations with relevant parties. While Australia is a small market, participating in the program will enhance our reputation and provide opportunities for growth.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.