Earnings call transcript: ImExHS Q3 2025 sees 3.7% stock rise post-results

ImExHS Ltd’s stock saw a 3.7% increase following the release of its Q3 2025 earnings call, reflecting investor optimism despite a mixed performance in its software segment. The company reported a positive operating cash flow and notable growth in its annual recurring revenue, contributing to the positive market reaction.

Key Takeaways

• ImExHS’s stock rose by 3.7% to $0.29.
• Annual recurring revenue grew by 24% year-on-year.
• The launch of the AI-enhanced Aquila Plus software suite.
• Positive operating cash flow of $1.2 million.
• Debt reduced to $1 million.

Company Performance

ImExHS demonstrated robust performance in Q3 2025, with a significant increase in its annual recurring revenue (ARR), particularly in radiology services. The company’s strategic focus on AI-enhanced solutions, as evidenced by the launch of Aquila Plus, positions it well in the growing global PACS market, which is expanding at a rate of 6-7% annually.

Financial Highlights

• Group ARR: $36.4 million, up 24% year-on-year.
• Software ARR: $11.7 million, a slight 2% decrease from the previous quarter.
• Radiology Services ARR: $24.7 million, up 18% from the previous quarter.
• Operating Cash Flow: Positive $1.2 million.
• Cash Position: $3 million at quarter-end.
• Debt: Reduced to $1 million.

Outlook & Guidance

For the full fiscal year, ImExHS projects revenue between $27.5 million and $28.2 million, representing a growth of 4-6.6%. The company aims to achieve an underlying EBITDA of $1.3 million to $1.6 million. Strategic priorities include scaling its software offerings, strengthening its sales pipeline, expanding its partner network, and maintaining working capital discipline.

Executive Commentary

Executives emphasized the strategic importance of AI in their offerings, with one stating, "We don’t use AI as a buzzword. We use it to deliver measurable efficiencies and better service levels." The focus on product innovation as a core strategy was highlighted with the remark, "For us, the product is the strategy."

Risks and Challenges

• The slight decrease in software ARR could signal challenges in maintaining software growth.
• The competitive landscape in the PACS market may pressure pricing and margins.
• Economic fluctuations could impact healthcare spending and investment in new technologies.
• The company’s new pricing strategy, with potential increases of 15-45%, could affect customer retention.
• Maintaining operational efficiency amid a company-wide transformation requires careful management.

Q&A

During the earnings call, analysts inquired about potential contracts in their final stages and the company’s new pricing strategy. Executives highlighted the Oncalife contract, which is predominantly services-based, indicating a strategic shift in revenue composition.

Full transcript - ImExHS Ltd (IME) Q3 2025:

Company Executive (Likely CEO), ImExHS: Good morning, and thank you for joining us. We will keep today’s update focused: The financial turning point we achieved in Q3, where we are concentrating execution for the next phase of growth, and how Aquila Plus positions our software business for scale. After that, we will open for Q&A. With me on the call is Reena Minhas, our CFO.

I’m excited.

ImExHS is one company with two independent but complementary engines. First, IME software, cloud-native medical imaging software sold on a subscription-based software-as-a-service model across 18 countries. Second, REMAP Radiology Services in Colombia, a clinical operation that provides reading and reporting services supported by our own software stack.

Next slide, three.

Global PACS is a $6.5 billion market today, compounding at approximately 6-7% a year. The shift we are all seeing is the move from static systems to agentic AI, AI embedded in real-world workflows to triage, prioritize, draft, and accelerate reporting. That shift matters. Because imaging volumes and data are compounding across modalities and specialties. AI is becoming the practical layer that absorbs this growth. We have been working with AI, principally machine learning, in production for five to six years. We don’t use AI as a buzzword. We use it to deliver measurable efficiencies and better service levels. That is precisely where ImExHS is positioned. Software that handles rising volumes reliably and affordably. Demonstrated with more than 550 sites tightly installed. Supporting more than 3,400 radiologists. To report approximately 9 million studies per year and more than 6 million patients to access the images and results.

On slide four.

Over two years ago, we started a company-wide transformation. People. We strengthened leadership. Finance, operations, and the layers beneath them. Processes, the quality function matured, documentation, SLAs, and escalation paths were rebuilt. Systems, we implemented modern document management and systems management, optimized CRM and HR, and then pushed automation targets into every department, many delivered with AI. The aim was simple. Better service, lower cost, stronger margins. You see that in the results. Sustained improvements in underlying EBITDA. Stronger operating cash generation. Disciplined working capital management, and lower debt. We have flipped from negative to positive while protecting customers. Help desk automation and tighter SLAs have reduced effort for users and improved first-time resolution. This execution discipline is now our baseline.

On slide five.

ARR evolution. As of 30 September, group ARR was $36.4 million, up 24% year-on-year and up 11% since 30 June. Breaking it down, software ARR is $11.7 million, a 2% step down from $11.9 million at 30 June. That movement is essentially volume-driven. Importantly, the software pipeline is strengthened. Several deals expected in Q3 have shifted into Q4 and Q1, not lost. Radiology Services ARR is $24.7 million, up 18% from $20.9 million at 30 June, reflecting contract wins and disciplined portfolio actions. Services provide a stable base for cash conversion while we scale software.

On slide six.

Cost and cash discipline, what we do, not just what we spend. On cost and cash, our message is discipline. We have tightened credit controls, improved collections, and applied pricing and terms discipline on renewals. On the cost side, we continue to automate back office and services workflows and to optimize cloud and storage.

Also on financing, we are pushing financial discipline to reduce finance cost over time, being selective on facilities. Improving terms where appropriate and avoiding unnecessary charges.

Next slide, our focus right now. From here, we will cover three priorities: accelerate software sales, margin improvement, and working capital and cash. Then we will go deeper on Aquila Plus. Aquila Plus value proposition. Our value proposition with Aquila Plus is clear: an advanced, contemporary, and secure AI-enhanced radiology software suite delivered as multi-tenant cloud-native PACS. Implementation is fast and predictable. DevOps cadence, biweekly updates without downtime, and a straightforward path to go live. And our customer service and support benchmarks are top tier, with high uptime and strong SLAs, reflected in improving effort scores and NPS in our patient-facing portal. That combination, speed, reliability, and total cost to serve, is what resonates with teleradiology providers and ambulatory clinics and hospital networks. The product is ready for scale, and we are selling through a focused partner program alongside direct enterprise sales.

On slide eight.

Margin improvement. On margins, our plan is first. Pricing and terms discipline. We are segmenting offers, applying improved terms and conditions, standardizing SLAs, and monetizing add-ons where they clearly create value. AI triage, advanced visualization, and storage tiers. Second, automation and unit cost. AI-orchestrated workflows are already lowering service effort. We are optimizing cloud and storage and automating help desk and admin so every incremental customer is cheaper to support. Third, portfolio and mix. In software, we prioritize higher margin modules and enterprise deployments. In radiology services, we maintain a selective customer approach and exit subscale or persistently late-paying contracts.

Next slide, number nine.

Working capital and cash. Turning to cash. Discipline is holding. Receipts were $7.9 million in Q3. Operating cash flow was positive $1.2 million. And we ended the quarter with that $3 million in cash. Debt is down to $1 million. Colombia’s policy environment remains good. Even so, tighter credit controls, rephased collections, and disciplined pricing are keeping cash conversion solid and liquidity stable. We are managing for resiliency while continuing to invest to scale software.

On slide 10.

Aquila Plus status and opportunity. For us, the product is the strategy. For customers, faster work list, fewer clicks, embedded voice dictation, and AI assistant for translation evidence templates, end-to-end risk workflow with ready-to-go integrations, AI triage, advanced visualization, HL7 APIs, DNA, enterprise controls, business intelligence dashboards, and disaster recovery. For patients, Aquila Plus shortens the path from scan to answer, delivering faster report turnaround, fewer repeat visits through smarter workflows, and secure anytime access to results and images. For ImExHS, materially lower marginal cost to serve per new sales tenant. One-click tenant activation and 99.9% uptime, all of which supporting higher gross margins and repeatable rollouts.

On slide 10.

On software, the update this quarter is pipeline, quality, and channel leverage. A handful of signatures moved forward into Q4 and early Q1, but the overall pipeline strengthened. With good traction in Mexico, our partner channel has now delivered two consecutive strong quarters and is contributing the majority of software new ARR. Key wins. We won back OmniHospital in Ecuador after displacing a competitor. We renewed and upgraded Hospital San Pablo in Peru. In Colombia, Favilu renewed for 36 months, totaling $162,000 ARR. Our partner engine closed the quarter with 26 active partners across 14 countries. We onboarded high performers and offboarded underperformers. New alliances include Bukkeala in Argentina, plus two new partners in Colombia and one focused on Peru’s public sector.

On slide 12.

In radiology services. We signed Oncalife in Colombia, a one-year high-complexity engagement supported by our enterprise risk packs, patient portal, and selected AI layers expected to contribute about $1.4 million in new ARR.

Margin actions are delivering.

AI-orchestrated call center workflows and a broader cost-saving program. Revised pricing and disciplined portfolio management, including exiting subscale or persistent late-paying contracts, have strengthened unit economics and profitability.

As for the previously.

As for the previously disclosed material opportunity, scope has grown. Timing now. Looks like Q1 FY26 with no certainty of signing.

On slide 13, guidance.

We are reaffirming this year’s guidance. Revenue of $27.5-$28.2 million, up 4%-6.6% on the prior year. An underlying EBITDA of $1.3-$1.6 million versus $0.6 million in FY24. This stance reflects year-to-date performance and our expectations for Q4.

On slide 14.

Outlook and priorities. First, scale software. Strengthen and grow across the region by expanding Aquila Plus and our enterprise cloud through a balanced mix of direct sales and high-performing partners.

Second, pipeline and go-to-market.

Several Q3 contracts slipped into Q4 and Q1, but the pipeline is strengthened. The partner channel is delivering the majority of software new ARR, and momentum in Mexico is encouraging.

Third, margin expansion.

Continue cost savings, including AI-orchestrated call center workflows. Maintain revised pricing and disciplined portfolio mix and target software margin improvement over the next six to nine months.

Finally, working capital discipline.

Colombia’s policy backdrop remains fluid, so we are keeping tightened credit controls, rephased collections, and pricing adjustments in place to preserve cash conversion. Liquidity remains stable. A sincere thank you to our customers, our team for their disciplined execution, our board for its guidance, and our shareholders for their continued support. We are building and doing efficient business, and we look forward to your questions.

I will now hand over to Reena Minhas for the Q&A. Reena, is there any question? You are muted, Reena. Sorry.

Reena Minhas, CFO, ImExHS: Sorry. Yeah, Ian Walker’s got a question, so I will just unmute him now. Are you there, Ian? Don’t allow mic. There you go. Hi, Ian. You should be able to ask your question.

Company Executive (Likely CEO), ImExHS: Can you hear me now?

Reena Minhas, CFO, ImExHS: Yes, I can hear you.

Company Executive (Likely CEO), ImExHS: Great. Yes. Hi, Minhas. Thanks, Iman. Well done on the quarter, obviously. Just a couple of questions. Several contracts that you sort of mentioned slipped into fourth quarter or early FY26. I mean, what gives you confidence that these will close? And what proportion of the pipeline is sort of sitting in that advanced stage bucket?

Hello, Ian. Thank you for the question and for the time today. So, we have two important deals in the very final stage of the process, which means that we are waiting the final definitions. Those two contracts, one is from the software side, the other one is from the services side. As I said, we are in the very final stage, avoiding any incorrect guidance. What I can say is that we have been in permanent contact with the potential customers, and we are just waiting for a final definition.

Okay. No problem. And then just on contracts like that, Oncalife contract where it’s combined services and software, any color on what the $1.4 million in split is in terms of software versus services?

Yes. Well, this is a small proportion of software in this case, compared to the proportion of revenue that is coming from services. Is approximately 10% software and 90% services.

Okay. And how does that compare to the other similar contracts, like where they’re bundled?

It’s variable, Ian, depending on the scope of the services activity. Sometimes the scope of the services is, let’s say, wider, like in this case. Sometimes the contract is predominantly software with some services support. I can say that the range may be something in a range of 70 when there is a services and software combined contract, there is normally a 70-30% services and software to 90-10% is more or less the range where we have most of those contracts.

Okay. Awesome. And just one more from me. I mean, you’ve mentioned revised pricing. I think that was in reference to the software product. I mean, can you provide more color on any successes you’ve had over the last three to six months on maybe contract renewals that you’ve been able to increase pricing or, like, the flip side, new customers?

Yes. We have done disciplined work around initially doing our own segmentation of the market in order to create a differential pricing book, depending on the segment. This is an activity that has been based on the methodology jobs to be done, and we are trying to provide as much as possible value to every segment with differential pricing, as I said. That differential pricing is representing increases for every segment. We completed that work in the third quarter, and we started a pilot by the end of the third quarter. Some of the new sales have been done already under this pricing structure. This in regards to a new pricing and new segmentation. In regards to the existing customers and renewals, given the stickiness of our product, given the quality of the services we are providing, in every case, we have been able to increase pricing during the renewals.

Mostly because we are always in a strong position, not only to claim an index or a price increase, but also because they request from us additional services. So we create a dual effect when renewing, that is, increasing pricing and upselling. I can tell you that every single customer we have renewed during this year has been subject to price increases. Once we complete this pilot of the new segmentation and new pricing for the market that is being successful and we get full feedback from the market, in the last quarter of this year, we will fully implement it. Every single new customer will be sold with that new pricing that may represent is variable, but may represent pricing increases from 15%-45%.

That’s fantastic. Thanks, Faz. That’s all from me.

Thank you, Ian.

Reena Minhas, CFO, ImExHS: Are there any other questions?

Company Executive (Likely CEO), ImExHS: Is there any other question?

Reena Minhas, CFO, ImExHS: No. I mean, Ian here says, "No." No further questions.

Company Executive (Likely CEO), ImExHS: Great. So we give one minute more and.

Reena Minhas, CFO, ImExHS: Yeah. Sure.

Company Executive (Likely CEO), ImExHS: Close the session.

Reena Minhas, CFO, ImExHS: Nope. Nothing coming through, Ian. I think.

Company Executive (Likely CEO), ImExHS: Okay.

Reena Minhas, CFO, ImExHS: We’re done.

Company Executive (Likely CEO), ImExHS: Thanks again for making the time this morning, and thank you very much for the ongoing support. Have a good day.

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