Mach7 Technologies : Quarterly Activities/App 4C Business Update

21 July 2022

DIA RELEASE 2

Fourth Quarter & FY22 Business Update

Mach7 Delivers 30% Sales Order Growth for FY22

FINANCIAL HIGHLIGHTS:

• Record sales orders FY22 $33.2M (TCV¹); up $7.6M or 30% yoy; Q4 $6.4M
• Record cash receipts FY22 $28.2M; up $7.2M or 34% yoy; Q4 $9.7M
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•	Positive operating cash FY22 $6.7M; up $5.6M or 493% yoy; Q4 $5.2M
•	Cash on hand 30 June 2022 $25.8M; up $7.3M or 40% yoy; $20.6M at 31 March 2022

• Revenues for FY22 expected to be $26.5M to $27.5M

• Annual recurring revenue (ARR) run rate $14.4M; up 8%

•	Patent Infringement litigation case dismissed
•	Quarterly investor webinar to be held at 9.00am AEST Thursday, 21 July 2022
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Melbourne, Australia; 21 July 2022: Mach7 Technologies Limited ("Mach7" or the "Company") (ASX:M7T), a personalcompany specialising in innovative medical imaging software solutions for healthcare providers, is pleased to provide this quarterly update, for the period ending 30 June 2022, in conjunction with the release of the Appendix

4C - Quarterly Cash Flow Report.

SALES ORDERS

F r the second year in a row Mach7 hit the highest annual sales order on record. Up 30% on prior year with continued low churn.

Mach7 has produced its most successful year in its history for sales orders of $33.2 million TCV1 (FY21 $25.6 million TCV), showing 30% sales order growth over the prior year. Pleasingly, customer churn remains very low (<2%). Sales orders continue to be the best measure of the Company's financial progress from year to year, the timing of cash receipts and revenue continues to be varied quarter over quarter. Both cash and revenue can be affected by contract milestones, revenue recognition rules and the continued diversity between capital and subscription agreements.

FY22 Sales Orders of $33.2 million TCV comprised of $19.4 million (or 58%) in ARR sales (Support & Maintenance Forcontracts and Subscription licenses to be recognised as revenue upon the customer achieving first productive use (FPU), $10.5 million (or 32%) in Capital Software sales (immediately recognised as revenue in FY22), and $3.3 million (or 10%) of Professional Services sales (to be recognised over time upon the achievement of

implementation milestones).

Y22 was markedly high in sales orders from existing customers of $15.3 million (or 46%), demonstrating an increase in usage by existing customers as well as the Mach7 software showing true value to the install base over time. This also validates the long-standing land and expand approach and its effectiveness.

FY23 Sales Orders target is expected to be around $36 million, which is 20% more than the FY22 target of $30 million.

1 Total Contract Value (TCV) means capital software license fees, professional service fees, and annual subscription and annual support over the life of the contract.

Level 4, 100 Albert Road	T: [phone]	1
South Melbourne, VIC 3205	[e-mail]

New Customers, expansions and renewals Q4 and FY22

Mach7 signed $6.4 million TCV in sales orders in Q4. This was comprised of $1.5 million (or 24%) from New customers, and from existing customers a further $3.2 million (or 50%) in Renewals, $0.4 million (or 6%) of add- on orders, and $1.3 million (or 20%) of Expansions. The overall sales orders for the FY were $17.9 million from New customers (or 54%), and from existing customers a further $15.3 million (or 46%) being $8.0 million (or 24%) in Renewals, $5.2 million (or 16%) of Add-on orders, and $2.1 million (or 6%) of Expansions, for a total of $33.2 million TCV in sales orders for FY22, as follows:

SALES ORDERS FOR

ARR Sales

Capital

Professional

FY22 TOTAL

%

FY22 TCV

(Support & Maintenance

Software

Services Sales

SALES ORDERS

contracts and

only

Sales

(TCV)

Subscription licenses)

New customers

$8.9 million

$6.8 million

$2.2 million

$17.9 million

54%

Renewals

$6.0 million

$1.8 million

$0.1 million

$8.0 million

24%

Add-on orders

$2.9 million

$1.4 million

$0.9 million

$5.2 million

16%

Expansions

$1.6 million

$0.5 million

$0.1 million

$2.1 million

6%

Existing customers

$10.5 million

$3.7 million

$1.1 million

$15.3 million

46%

TOTAL

$19.4 million

$10.5 million

$3.3 million

$33.2 million

use

58%

32%

10%

100%

Over the course of FY22 it remained difficult to meet face to face with new clients. Mach7 instead focused on

selling the full portfolio of products to the install base with success. There was additional success with renewals personalthis year ($8 million or 24%) signing 13 new term license agreements for five (5) year terms to the install base.

ANNUAL RECURRING REVENUE (ARR) & CONTRACTED ANNUAL RECURRING REVENUE (CARR)

ARR

Mach7 is now generating $14.4 million of ARR - comprised of revenue earned from Support & Maintenance c ntracts and Subscription licenses on an annualized basis. ARR has increased by 8% since the prior year (FY21: $13.4 million), and will continue to grow as existing customers become fully deployed (e.g. Trinity and Adventist) and as new customers continue to license the software and purchase mandatory support. ARR is now covering approximately 65% of the Company's annual operating costs.

CARR

Mach7's CARR is comprised of Support & Maintenance fees for Capital Contracts and Subscription fees for Subscription contracts. When customers achieve First Productive Use (FPU) in their production systems, Mach7 begins to recognize the Support & Maintenance and Subscription fees as revenue. Until FPU is achieved, the Support and Subscription fees are included in CARR as "contracted" amounts. CARR is $17.3 million comprised of For$14.4 million of Annual Recurring Revenue for Customers that have achieved FPU, plus $2.9 million of CARR where

FPU has not been achieved and revenue recognition for the Support/Subscription fees has not yet begun.

CASHFLOWS Q4 AND FY22

Cashflows and Cash on Hand

The company has continued to deliver its highest ever cash receipts from customers this year and has done so every year for the past five years, FY22 $28.2 million (Q4: $9.7 million) with 35% growth over the prior year (FY21: $21.0 million). This is a result of the advance upfront nature of customer payments for software where revenue has yet to be recognised. The Company has also achieved its third consecutive year of positive operating cashflows and a five-fold increase yoy, and forecasts continued positive operating cashflows for FY23 and beyond.

Mach7 maintains a strong financial position, with $25.8 million (Q3: $20.6 million) cash on hand and no debt.

Level 4, 100 Albert Road	T: [phone]	2
South Melbourne, VIC 3205	[e-mail]

This announcement has been approved by the board for lodgment

REVENUE Q4 AND FY22

Revenue and Revenue Growth

As previously noted, revenue is more closely linked to cash receipts than sales orders in a given year. Revenues in Q4 were $5.9 million and are forecasted to be between $26.5 million and $27.5 million for FY22 (FY21: $19.1 million). This represents approximately 42% growth year over year in revenue. Looking forward to FY23 the Company expects to see strong double digit growth again. This is underpinned by a delay in revenue recognition with the Trinity Healthcare and Adventist West sales orders signed in FY22 and FY21 respectively. At the customer's request, the deployment of the Mach7 solutions at these locations has been staged and is running in parallel with deployments for other customers. Mach7 expects to see more revenue from these customers in FY23.

onlyLITIGATION UPDATE

On July 8, 2022, Mach 7 received notice from the United States District Court for the District of Delaware that it

granted Mach7's request to dismiss all claims asserted by AI Visualize. The Court based its dismissal on a finding

that AI Visualize's patents were not eligible for patenting. AI Visualize's claims of willful infringement was therefore usedismissed.

AI Visualize has until August 8, 2022, to appeal the dismissal to the United States Court of Appeals for the Third Circuit. Mach7 will continue to defend itself on appeal, if necessary, and inform the market with any additional information regarding this legal action.

QUARTERLY WEBINAR

personalThe Company will hold a webinar with CEO Mike Lampron and CFO Steve Parkes today, Thursday, 21 July 2022 at 9:00 am AEST, to discuss the June 2022 quarterly results released to the ASX this morning.

Investors can register for the webinar via the following link:

https://us02web.zoom.us/webinar/register/WN_KMBTSfaLSoCvTVNbwCwvpg

Investors can submit questions prior to the webinar to [e-mail] or do so via the Q&A.

FY22 Result

Mach7 expects to announce its audited full-year results on 29 August 2022 and will advise details of an investor webinar call prior to this date. A full business update and presentation will also be provided at that time.

ABOUT MACH7 TECHNOLOGIES:

Mach7 Technologies (ASX:M7T), founded in 2007, is a medical imaging systems provider that develops Forinnovative image management and viewing solutions for healthcare organizations. The core of these offerings is

the Mach7 Enterprise Imaging Solution, encompassing Enterprise Data Management, Enterprise Diagnostic Viewing and Departmental Workflow applications. Mach7's Enterprise Data Management solution, consisting of a powerful Vendor Neutral Archive (VNA) and data administration tools, allows for the fast storage, access, retrieval and viewing of images across a healthcare network with connectivity to the Cloud. In July 2020, Mach7 acquired Client Outlook and the eUnity Enterprise Diagnostic Viewing technology to augment Mach7's Enterprise Data Management and Departmental Workflow applications. eUnity is a zero-footprint,FDA-approved, image viewing solution that makes images accessible on any workstation. This offers healthcare professionals consolidated access to all patient images and data, ensuring clinical staff have timely access to the right information to diagnose and treat patients. Uniquely, the company also gives customers independence to deploy its solutions either on a component basis or in a unified comprehensive platform. With more than 150 customers across 15 different countries, Mach7 has built a global network of diverse customers that range from expansive Integrated Delivery Networks, National Health Systems, medical research facilities, and large

Level 4, 100 Albert Road	T: [phone]	3
South Melbourne, VIC 3205	[e-mail]

academic medical institutions to regional community hospitals, private radiology practices, and independent provider groups. Visit Mach7t.com.

FOR MORE INFORMATION, CONTACT:

CFO, Mach7:	Investor Relations:	Registered Office:
personalForuse only
Steve Parkes	Simon Hinsley	Level 4 | 100 Albert Road South
[e-mail]	NWR Communications	Melbourne, VIC
	[phone]
	[e-mail]

Level 4, 100 Albert Road	T: [phone]	4
South Melbourne, VIC 3205	[e-mail]

For personal use only

Rule 4.7B

Appendix 4C

Quarterly cash flow report for entities subject to Listing Rule 4.7B

Name of entity

Mach7 Technologies Limited

ABN	Quarter ended ("current quarter")
26 007 817 192	30 June 2022
Consolidated statement of cash flows	Current quarter	Year to date
	$A'000	(12 months)
		$A'000

1.	Cash flows from operating activities	9,729	28,168
1.1	Receipts from customers
1.2	Payments for
	(a)	research and development
	(b)	product manufacturing and operating	(264)	(834)
		costs
	(c)	advertising and marketing	(87)	(600)
	(d)	leased assets	(168)	(355)
	(e)	staff costs	(3,942)	(17,250)
	(f)	administration and corporate costs	(87)	(2,423)
1.3	Dividends received (see note 3)	-	-
1.4	Interest received	12	23
1.5	Interest and other costs of finance paid	(4)	(30)
1.6	Income taxes paid	-	-
1.7	Government grants and tax incentives	-	-
1.8	Other (provide details if material)	-	-
1.9	Net cash from / (used in) operating	5,189	6,699
	activities

2.	Cash flows from investing activities
2.1	Payments to acquire or for:
	(a)	entities	-	-
	(b)	businesses	-	-
	(c)	property, plant and equipment	(337)	(444)
	(d)	investments	-	-
	(e)	intellectual property	-	-
	(f)	other non-current assets	-	-

ASX Listing Rules Appendix 4C (17/07/20)	Page 1
+ See chapter 19 of the ASX Listing Rules for defined terms.