Visionflex Secures $1M Virtual Nursing Deal, ARR Soars 46%, Eyes Q4 Cash Flow

Financial Performance and Revenue Dynamics

Visionflex Group Limited (ASX: VFX), a provider of virtual healthcare solutions, has reported a mixed but promising Q3 FY25 performance. The company’s Annual Recurring Revenue (ARR) climbed 5% quarter-on-quarter and an impressive 46% compared to the prior corresponding period, reaching $1.7 million. This growth underscores the increasing adoption of Visionflex’s integrated hardware and software platform across healthcare providers.

However, total revenue for the quarter declined by 11% to $0.8 million, with recurring software revenue comprising 38% of this figure. The dip in quarterly revenue, despite ARR growth, reflects timing differences in contract execution and revenue recognition, a common challenge in subscription-based models transitioning to larger-scale deployments.

Strategic Contract Wins Bolster Growth Prospects

Visionflex secured several key contracts during Q3 FY25 that highlight its expanding footprint in the Australian healthcare sector. Notably, a $0.4 million deal with the Western Australia Primary Health Alliance (WAPHA) will upgrade 180 sites with battery units, enhancing the mobility and flexibility of Visionflex’s solutions.

Additionally, the Central and Eastern Sydney Primary Health Network (CESPHN) expanded its rollout to 10 more sites, adding $0.2 million in contract value and bringing the total Visionflex deployment in the region to 42 sites. Woodside Energy also extended its offshore platform program with Visionflex, albeit for a smaller contract value under $0.1 million, signaling potential for further offshore healthcare technology deployments.

Transformative Virtual Nursing Pilot with Amplar Health

Post-quarter, Visionflex announced a significant agreement with Amplar Health, the health services division of Medibank, to deploy its virtual care platform in a government-funded virtual nursing pilot across 30 residential aged care facilities. This 15-month phased rollout carries a total contract value of approximately $1.0 million, including $0.7 million in upfront hardware sales and $0.14 million in ARR upon full deployment.

This pilot aims to integrate virtual nursing services into aged care homes, providing critical clinical support to on-site staff and enhancing personalised care for residents. Success in this project could position Visionflex and Amplar Health as leaders in virtual nursing delivery across Australia, potentially unlocking scalable models for aged care support nationwide.

Cash Flow and Operational Outlook

Visionflex reported cash receipts of $0.9 million in Q3 FY25, a 9% increase from the previous quarter, while operating cash outflow remained steady at $0.9 million after accounting for deferred interest payments. The company is targeting operating cash flow positivity in Q4 FY25, a milestone that would mark a significant step toward financial sustainability.

Following a board restructure in February 2025, key directors including Chair Brook Adcock and CEO Joshua Mundey have forgone their director fees for the remainder of the financial year, reflecting a disciplined approach to cost management amid a challenging macroeconomic environment.

Looking Ahead: International Opportunities and Profitability Timing

While Visionflex remains confident in converting multiple trial sites into larger multi-site residential aged care and corporate contracts, the timing of these contract executions means that run-rate EBITDA profitability is unlikely in Q4 FY25. Subscription revenues will be recognised over the duration of agreements, delaying immediate profitability.

The company is also progressing several international opportunities that could significantly increase contract sizes, with outcomes expected around mid-year. These developments could provide a catalyst for accelerated growth and margin expansion in the medium term.