Visionflex Faces Revenue Headwinds but Targets Profitability by Q4 FY25

Financial Performance and Revenue Dynamics

Visionflex Group Limited (ASX: VFX), a provider of virtual diagnostic healthcare technology, released its Q2 FY25 quarterly activity report highlighting mixed financial results. The company’s Annual Recurring Revenue (ARR) climbed 8% from the previous quarter to $1.6 million, marking a robust 114% increase compared to the prior corresponding period. This growth underscores the expanding demand for Visionflex’s subscription-based software and support services.

However, total revenue for the quarter declined by 11% to $0.9 million, with recurring software and support revenue comprising 37% of this figure. The dip reflects the historically quieter Q2 period for enterprise sales conversions, as well as some delays in procurement processes. Despite this, Visionflex’s CEO Joshua Mundey expressed confidence in the company’s strategic direction and pipeline maturation.

Key Contract Wins and Strategic Partnerships

During Q2 FY25, Visionflex secured several significant contracts that demonstrate its growing footprint in healthcare technology. A reseller agreement with Spark Health, a subsidiary of New Zealand’s largest telecommunications company, Spark New Zealand, was signed, with initial orders delivered in November 2024. This partnership opens a new geographic market for Visionflex’s virtual care solutions.

Additionally, Visionflex expanded into the private health insurance sector through an agreement with BUPA to supply its Geis cameras to all 57 of BUPA’s aged care homes, supporting over 5,000 residents. The initial order was valued at $0.2 million. The company also embarked on a three-site trial in Queensland’s Darling Downs region under the Government’s Indigenous Wellness Connect initiative, aiming to improve care models for Aboriginal and Torres Strait Islander communities with chronic conditions.

Cash Flow and Capital Management

Visionflex reported cash receipts of $0.8 million for the quarter, a modest 3% increase from Q1 FY25. Operating and administration expenses were reduced to $1.8 million from $2.4 million in the prior quarter, aided by the absence of $0.2 million in annualised payments made previously. The operating cash outflow improved significantly to $0.5 million, supported by a $0.5 million government grant.

To bolster its balance sheet, Visionflex completed a $1.5 million share placement to institutional and professional investors and drew down $1 million from existing convertible note facilities with cornerstone investors. These capital injections provide runway as the company advances its sales pipeline.

Outlook and Profitability Targets

Looking ahead, Visionflex remains focused on converting its substantial pipeline of opportunities, despite some procurement delays experienced in Q2. Several material contracts are expected to reach the selection stage in Q3 FY25. The company is targeting run-rate EBITDA profitability by Q4 FY25, contingent on securing these larger enterprise sales.

CEO Joshua Mundey emphasised the company’s commitment to prudent cost management and strategic growth, positioning Visionflex to capitalize on the increasing demand for integrated virtual healthcare solutions across metropolitan and community settings.