Pro Medicus Limited (PME) Earnings Call Transcript & Summary

Thank you for standing by. Welcome to the Pro Medicus half year results briefing. [Operator Instructions] I would now like to hand the conference over to Dr. Sam Hupert, CEO. Please go ahead.

Thanks, and thanks, everybody, for joining us on this presentation. For those that have not met us before, we are a Health IT company specializing in Enterprise Imaging and Radiology Information Systems. We work in 3 jurisdictions, Melbourne, Australia, our corporate office; building in Germany, our R&D base for the Visage product; and U.S., which is our largest market. The company has 2 product streams Visage RIS, which as the practice management side of the practice, billing, scheduling and interface for payers and Visage 7, which is the clinical side that fits the radiologist desktop, and it's the product we sell in North America. In terms of the half year results, I think a few key things. It was a record half for us. We had 4 contract wins in North America plus a major renewal of U of Florida. And importantly, we completed 3 very large-scale implementations in Inova, Allina and Novant. We had the RSNA, which is a big conference in Chicago at the end of November, beginning of December, and I think it was our busiest today. We are progressing well with our other ologies and AI, which I'll talk about a little later. And we think the first half forms the base for a stronger second half, and we'll talk about that as well. In terms of the key financial metrics, again, we feel they're all headed in the right direction. Again, the profit after tax grew by over 30% period-on-period and revenue was up 28.3%. And because of that, we declared a fully franked dividend, interim dividend of $0.13 per share, which is up over 30% period -- period-on-period. In terms of the revenue split, the salmon color at the bottom is transaction revenue, which, as you can see, grew as expected with the blue, which is support revenue, which is also recurring did grow as well. And in total, the revenue grew and we think in a healthy fashion. In terms of the actual highlights themselves, as I mentioned, we did have the U of Florida renewal, which was actually at a higher per transaction rate and for a longer period in the original contract. We had 3 sales we announced as a group back in August, again, to show the segmentation of the market that we deal in. It's not just the high end, but also in the medium and some of the smaller practices and things such as all 3 products or full stack and cloud enabled there. We did announce a new midsized IDN contract in Luminis Health. We did the 3 implementations and, as I mentioned before, RSNA 2022 was our most successful to date. The operational model used in the vast majority of our contracts, particularly in North America and Australia, again, it continued to deliver results. We saw upside as our client volumes grew, and it is providing us with an annuity style revenue stream with far greater predictability. We believe we showed good operating leverage. It's a highly scalable offering. We don't have any CapEx in as much as we tend not to provide hardware and cloud, no hardware at all. Our training and installations that is charged as professional services, we have continued to contain our cost base. And as in previous periods, the margins continue to grow as our footprint increases. So financial year '23 year-to-date, we are tracking ahead of budget, I think our Chairman mentioned that in November, and that continues to be the case. We are seeing client volumes like-for-like at above pre-COVID levels, indicating growth either organically or through acquisition. We're seeing the ramping up of the 3 major contracts that we implemented in the first half and supplementing that several of the small implementations, including Montage and Bay that we announced back in August. And then early in the new year, we've got over that fairly quickly announcing 2 major academic in U Washington based out of Seattle and Samaritan Health, another midsized IDN. In terms of the markets we work in, clearly, we still are the most successful in the Tier 1 academic space. U Washington will add to that in this half because they are regarded in the top 20 hospitals in the U.S. and they have a particularly strong radiology program, and we continue to work on opportunities in this academic space. I think the other thing that's really occurred -- seems more prevalent even though it was occurring in the background is our penetration of the integrated delivery network space or IDN space. It is the largest single segment of the market. We did have existing clients in that space in Mercy, Sutter Health, Intermountain and more recently Medstar. But we have gained fair momentum in this space with 6 sales to IDN's over the last 18 months. All of the sales have been from more than 1 Visage product, the trend that we see as positive and continuing. All 6 opportunities are either fully or will be fully cloud deployed and we are seeing an increased network effect in this market segment. In terms of the RIS, it contribute to growth in the Australian business, which was up approximately 10%. The key contracts that we had with Lumus previously Primary Healthcare and I-MED, the 2 biggest providers in Australia. The Lumus rollout is now complete. It is transaction-based. And as they continue to add new practices, we get some of that upside. There is increased market interest in new opportunities. And I think it's clear to say we are the undisputed leader of RIS in Australia. So what makes us different from others. I think we are #1 in the 3 key areas of speed, functionality and scalability. And we believe, if anything, we've extended our lead in terms of technology leadership and our domination of these 3 brackets. Things that are driving adoption, including large data sets, many of you have seen this slide before, but we just saw a very interesting analysis in the U.S. where breast imaging and screening is rapidly transitioning to breast tomosynthesis and 2D mammography. That is creating a massive data silos for practices simply because mammography is in hundreds of megabytes. Breast tomosynthesis, which is like multiple mammograms in one image is in the gigabytes. And we've seen a massive transition to DBT or breast tomosynthesis. So we see breast imaging as almost a canary in the coal mine. When networks crack within an organization, imaging networks, it's almost always breast imaging that is the first one to crack the network and make it too slow to use and hence one of the things working in our favor. Legacy technology. The reason for that is it's compress and send. You have to compress the file, send it down the network and a workstation at the other end has to unpack that file and then do all the manipulation locally. The other thing is the entire file must be there for that manipulation to occur and the files are just getting too big regardless of bandwidth. Our model is totally different. We don't know if anyone has been able to replicate it. And what we do is we take the file near real time, we render that file to all the 3D advanced visualization and then stream the pixel. So we don't actually move the file. It's one of the key ingredients behind the on-demand nature of our product that's virtually instant and one of the key features that will allow us to work so well in the cloud. So if you look at our map of Visage 7 streaming technology, you see the -- at the top, we have all the other ologies hanging off it. We have research packs, and we have a whole number of other modules, including our archives and worklists. So the whole concept is the streaming technology that's streaming back in is the central piece of the entire suite of product that hangs on and around it. The 3 different contracts that we won, Montage health - the regional IDN; Bay Imaging - the private radiology group that was very familiar with our product as they have been railing for Sutter Health now 5 years and using the Visage platform and decided to then acquire it for their own private practices. And CHOP, which is the only one of the 3 yet to be implemented, that will be implemented within the next 6 weeks. That is the Children's Hospital of Philadelphia, one of the top children's hospitals in the U.S. So I think these 3 deals do indicate that we can address a far bigger market segment than people thought before, and we can get to the smaller and medium-sized IDNs as well as the larger ones that we've traditionally dealt with. University of Florida renewal, again, 7-year $15 million contract. I think the key thing is both sites are now on a transaction-based model, whereas one was on a more capital model before. So they now can be put on to the same model and they've renewed for a longer period than the original contract. Luminis Health. This was the last one we did in the half. It's a 7-year $15 million transaction-based contract at minimums. It is a well-regarded IDN based out of Annopolis, Maryland. It is the full stack, which is all 3 products; Viewer, Worklist and Archive. It is to be fully cloud deployed, and as I mentioned earlier, it certainly helps increase our footprint in that very large midsized IDN market. It's one thing to sell it, another thing to put it in. We believe that one of our key strengths is the way that we are able to seamlessly and rapidly implement these systems, taking what used to be, in some cases, a 2-year plus process and bringing it down literally to weeks, months and weeks. All of our implementations are ahead of schedule. Those -- that we've recently sold all being scheduled for -- at the end of this half or early next half. And then as I mentioned, these 3 big IDNs that we implemented back in the first half, it's cleared the base to enable us to take on new business. So why the people buy us when we're the most expensive, and I think it's becoming more and more prevalent in the market that we have a proven ROI and that ROI is not just financial but also clinical, which is equally, if not more important. We allow the radiologist to do more or do things they otherwise couldn't do or would take too long to do previously. So clinical outcomes is a key one for us. We believe we are moving the needle. There are a few examples that we talked about initially, at our AGM. And just to reiterate, we are doing some very interesting work with Dr. Mariam Oboian at the Yale, who is a top pediatric neuroradiologists. And we are doing work that will allow us to segment, in other words, core out a tumor in 3D views. Currently, most of the measurements of tumors are very poor approximation in a fixed plane 2D. And we are seeing very interesting results around that and greater accuracy, and there are some trials around that being done at the very moment. And then we do things that are not just AI related. We did do a joint development with NYU Langone, where the head radiologist, Dr. Michael Recht, always believe that patients really don't understand what a radiologist does. So they had an Instagram that said, "Your radiologist is the most important doctors you've never met," Which I thought was very clever. So this allows radiologists to do a quick 1-minute video of a normal anatomy and normal x-ray and MRI of the shoulder and then show the patient's MRI and what -- where the pathology is or where the anatomy is slightly different. And that's accessible by patients through the NYU portal, and it's been a resounding success, not just with the radiologists, but also with the patients and the referring clinicians. Then the topic which is a hot topic in radiology at the moment as it is in other areas of medicine but radiology, in particular, is the concept of burnout. Radiologist has to read many, many, many more images in the same amount of time, and it's putting abnormal stress on the system, and you can pick up any radiology magazine it will be in front or the center. I think what we've been able to do is certainly we've been able to -- and we've been able to measure this increased radiologist throughput and productivity, in some cases, by up to 50%, but pretty much in all cases, 25% plus. Now this is same radiologists, same type of exams. They're just able to do more in a day or in their parlance they don't feel as tired at the end of the day, but in essence, they've actually done more than they used to be able to do. So it is becoming a very important factor in purchasing decisions and it's a key differentiator between our technology and others. In terms of our growth strategy, many of you will have seen this slide, we are -- the key thing is to expand our footprint to new clients, which we will continue to do with the additional sales that we get. Transaction growth in the existing numbers, as we mentioned, like-for-like, they're greater than pre-COVID levels. So all of our clients are doing more work albeit organically some of it is industry growth, some of above-industry growth, some of it is via acquisition. We have new product offerings, and we started in the U.S. years ago with Visage 7 viewer. We then supplemented that with the open archive and then 18 months ago with the Visage Workflow Manager or Worklist. And as you would have noticed in our recent sales that we are getting a number of clients and increasing number that will take all 3, which obviously increases the total contract value. But it has another benefit for us. It makes the implementations that much easier because we don't have to interface to third parties. We don't have that complexity, which we can and do handle, but clearly, it's easier if we have all of the bits ourselves. I will talk a little bit more about extending to new geographical markets, Germany being the key one at the moment. Last -- we have had a number of recent wins over the years in that market, and we are looking to leverage off those wins, particularly in the German market and then the [ bullish ] European market as the market opens up, particularly with cloud. And we're looking to leverage some of the R&D capability in the other ologies and AI. North American pipeline, we believe it's been -- it's extremely robust at the moment. We've seen increased intake of RFPs, particularly over the last 18, 24 months. We had our best RSNA ever. We had the greatest number of leads generated and we've already received some RFPs as a result of that, which is a lot sooner than we would normally expect given the conference finished in December, which is pleasing. Visage 7 Open Archive. I think, again, very instrumental to us. We are seeing more and more clients take it, particularly over the last 2 years. We do see an opportunity selling it back to existing clients as they have kind of contracts start to roll off with their third-party vendors. And it is a very integral part of our cloud offering and full stack solution. Workflow, similar. It's the newest of our products. It has been -- we have been -- we have sold it in 6 out of our last 6 major contracts. So clearly, a product that the market wants. It has the speed and performance of both the archive and in particular, the viewer. And so again, it's a differentiator in terms of our ability to provide full stack solutions to those clients that want it and we have seen positive traction with it. One Viewer. This is the one product that can go across all the ologies. We have made good progress, particularly in the area of cardiology, which is quite extensive. We currently did do a number of disciplines and modalities in cardiology, including MRI and CT, and we did do ultrasound, but it is adding in the cardiology-specific functionality to bring it out to a full suite. We did highlight an ejection fraction product, which we have been pivotal to coming to that point of having a comprehensive cardiology offering that we highlighted at RSNA 21. It now is in production as part of the normal product suite, and we are looking to then promote other cardiology-specific functionality in the not-too-distant future. Then the most recent was KLAS, which is the rating agency ranked #1 in Universal Viewer. I think 2 things about that. For it's been #1, it must cut across more than 1 discipline. So radiology and something else. So clearly, we are being used across more than just radiology, and it does allow for both diagnostic and review purposes. It's the first time that we've been reviewed by KLAS. And clearly, we think this is the way the industry is going away from the sort of core packs as they used to call it to a more enterprise-type viewing platform. And so we think this will give us a little bit more. And people will know us more in this market because of this recent role. CloudPACS. This is the other trend. It's been massive in the last 2 years, pretty much all of our deals that we've done have been cloud-based and the majority, if not all of them, in the pipeline, are either having cloud mandated or as an option. It gives the same ultrafast performance or if anything, it's actually even quicker than on-premise, which is counterintuitive, but we've seen them and heard back from all of our clients today. We think it's -- we are the only ones that can be -- that can actually truly put an institution's radiology business in the cloud at scale. We've proven that over the last 2 years. And importantly, we currently have large-scale implementations in Amazon's AWS, Microsoft Azure and Google GCP. So if a client has a preference or an agreement with 1 of the big 3, we're able to facilitate that without forcing them into one cloud or another, and we definitely see that as a massive advantage. This is recently released. It was a joint promotion video between Visage and AWS. We are seeing more and more interest from the cloud providers because radiology is clearly one of the biggest areas in healthcare cloud. And as I said, we believe we are leading the charge to bring large institutions into cloud. Finally, last few things. AI, which again, I know has been a hot topic, particularly lately with all the press about [ generative ] AI. But certainly, we see AI in radiology as being key in the future, it is still emerging. But we see it being embedded in equipment. We see the prioritization so that [indiscernible] which of the CTs does the patient have trauma or blood in the head bring that to the top of the list. We see it as a second set of eyes, and we see it has functionality in screening and maybe wonder in the midterm or longer term to an automated diagnosis. So certainly, we think it will emerge. It's a question of point and how -- those who have been following us know that we have certain tools included in the AI accelerator, which we use with some of our academic clients and allows us to do commercialization with third parties. And we have a dedicated team of 2 founders, I believe both PhD in Healthcare Informatics, and we have 2 people on the ground in the U.S. during the fair bit of work in background to make sure that we're ready for the new stage of AI. And finally, we too have a research center that we established in August '21; NYU Langone, which took us a little longer because of COVID. That is starting to be fruiting in the number of collaborations, including the video reports and some AI projects that we're currently working on. Finally, at RSNA, I leave with 2 thoughts, "our biggest presence today, both in terms of footprint and staff numbers" and "we generated more leads than any other years." Just to give you an idea of extent of the booth and area that we go to, this is a picture of our booth. It's quite a substantial effort at the back. There are 2 meeting rooms that are -- one of them will hold about 30 people that we have built specifically for the conference. And you can see on the left [indiscernible] across it. There's a table in there that sits 12 people plus a thin [indiscernible]. So it's quite expensive. So we did make our biggest investments, we believe that has been indicated simply because we're able to do more demonstrations and again, get more leads than any previous year. And in terms of our staff, there's just a quick photo, yours truly, kind of myself in the middle in blue but all the rest. So it is quite a big logistic exercise for us. So finally, finishing off. Most successful half in company's history. North American footprint continues to grow strongly. The full stack solution is being taken up by more and more clients, and we see that continuing. Proven remote implementation and support capabilities. So even they were post COVID, we now have hybrid model. Cloud is a massive advantage for us that we think will push us even further ahead of competition. And we think we have an unparalleled value proposition in both clinical and financial ROI. Anyway, I'll finish there. Thank you very much, and we'll open up to any questions.

[Operator Instructions] Your next question comes from Garry Sherriff, RBC.

Two questions. First one, cash flow. That investments in financial assets that's gone up materially in the first half to $13 million versus $1 million in PCP. Maybe just remind us what exactly is that spend? And how should we think about that on going forward?

Yes. The overall financial assets haven't gone up that much. So it's just what we sold. If you're looking through the cash flow, that's just purely the amount that we bought over that period, but it's offset by amount that we've sold during the period as well. So the investments are $12.9 million, but we've sold $11.1 million through the same period. Overall, we still have $29 million of other financial assets compared to $27 million last -- same period in June.

Got you. Okay. So it's just netting off one another. That's no trouble. The next question I've got, just in regards to that tax paid, that really jumped up. I know that's not -- that's outside of your control. Again, how should we be thinking about that? It is a big jump from what it was on PCP, $12.5 million versus $4.5 million last time?

Sorry, I missed that Garry. Which will...

$12.5 million year tax paid last -- this year versus $4.5 million last year, just a very big jump. Is there anything changed there? I know it's out of your control largely, but just trying to check on that.

Yes. purely, especially after 30 June, the first half, you're doing pay as you go as you go throughout the period. And then if you lodge your return or you think you know what your return will be for 30th of June within the first half, and there's some additional tax to pay, that's when you'll have to pay it. Unfortunately, we're making -- fortunately, we're making more profit, but unfortunately, we're paying more tax.

All fine. And last one, just on new products. When should we expect some first material revenues, I guess, from other ologies and AI revenue?

I think we've always said this calendar year. So just to qualify that, we're talking about first revenues material that will be -- obviously, we'll have to wait. But we are still aiming for this calendar year.

So this calendar year, Sam, for revenues, but not necessarily, I guess, material from a product.

They could be there -- I just want to temper it because it's one of those things how long is a piece of stream, but we are getting close to commercialization on a few things. And materiality is the fact that our other revenues are going up even quickly. So look, it could be material. I'm just saying we're looking at first half of this year.

Your next question comes from Josh Kannourakis with Barrenjoey. .

Sam and Clayton, first question, just with regard -- obviously, you talked about the big RSNA best ever RFPs coming a little bit sooner. You've won $84 million worth of contracts to date. Historically, there's sort of been a bit more in the second half. How should we think about, I guess, the pipeline into the second half of the year? And just what visibility you have on some of the progression of those contracts and RFPs into the second half '23?

Yes. Look, it's slightly continuing. So we're actually working on some of the opportunities from the previous year, gives us now these opportunities usually 12, 18 months, sometimes longer, they're bigger. And they're all continuing. I think the important thing is we are seeing more inbound. So as we contract with a [ number ] like Luminis and the others before in recently UW and Samaritan. Clearly, they drop out of the pipeline and to have a robust pipeline, we need new things coming in. And so I think we're happy that our conversion rate is still very, very high, much higher than the industry and then there are new things coming in to replenish it. And I think the other thing about the pipeline is -- in the past, we may have been the pitch on hold, Tier 1 academics, the 30, 40 of those, we've got 10, you now do not have much runway left. And I think some recent sales showed us a spread of opportunity across different market segments and the pipeline reflects that spread. I think that's important as well.

And Sam, just to follow up on that first question. You mentioned, obviously, the relationship and the interest from the cloud providers. Are you starting to see any leads from some of those major cloud providers? And how do you sort of see that relationship developing over time? Obviously, they've got significant sort of hooks into government and other big institutions. So interested to see how you think that could develop over time.

We don't expect any cloud provider to exclusively work with us. I don't think that's the case. But the more success we have in the world business doing the cloud, the broader the cooperation. So I think it is fair to say we are receiving broader cooperation from the cloud providers because success begets success. And also, we're one of the few, if not only ones, who have proven that we can put large-scale implementations in their cloud. So it's a known industry. So we are working collaboratively with all 3 of them. And I think the AWS video is part of the joint -- a part of the marketing budget that they allocated towards us for that joint collaboration. So yes, but we can't predict what will come our way. But certainly, we are hopeful that there will be certain leads coming.

And just second one for Clayton, the margins, Clayton, just into the second half. Obviously, you've got the RSNA impact. You might also mention just around that change in capitalization, obviously, impacted the first half by $1.25 million. Just how should we sort of think about the cost profile into the second half of the year and any other investments that you're expecting?

Yes. In terms of the capitalized, that will be repeated in the second half compared to prior periods. So that will continue. Clearly, RSNA won't. So costs should be relatively flat or go down slightly, obviously, from the marketing spend from RSNA. But in terms of margins, we're clearly with the 3 implementations with Allina, Inova and Novant and Novant being mid-December. So you didn't get much revenue from that, that should help increase the margins from the second half.

Your next question comes from Melissa Benson with Wilsons.

The first one is just perhaps for the Sam, around the One Viewer and you're speaking to adding kind of more cardiology features to that product. How should we think about -- how should we think about the pricing of that product in the sense of it being relative to like -- are you guys adding kind of a price increase if they do have those cardiology features? Are they kind of optional? And as you add more kind of comprehensive features, will that be the case? Or is it all captured within your standard kind of viewer price?

Yes. No, we're looking to sell it as a separate offering in terms of cardiology because they'll be feature function that if you are not using it for those modalities, you most probably wouldn't need it in a standard offering. It is on the same platform as purely a licensing. In terms of the pricing that's yet to be determined, but I think our research, and I think even yours in the market has shown that there is a higher per-transaction fee for cardiology specific software, but it's still to play out. I think the main thing is it will be an extension of the same platform rather than a separate product, and we do think it will have its own pricing with it.

That's helpful. And perhaps one just to clarify with Clayton around the -- you mentioned the change to the treatment of R&D expense. If you could just kind of clarify what the change will be moving forward, how R&D is kind of, captured versus the past?

Yes. It's just a lower in amount. It's an application of how we view the capitalized development costs. So it will be similar to this half. So to be -- the second half will pretty much repeat what the first half was. And then going into next year, that will consist of lower amortization.

But is that in the sense that you guys are kind of getting to a point where you're comfortable you're not needing to invest more in R&D or that's being captured in other expense lines?

No. We could increase the amount of development staff we have -- it's the amount that's applicable for capitalization.

Your next question comes from Andrew King with CLSA.

Just following on from an early one, talking about the volume of contract wins in the near and medium term. Just trying to think about this in the context of whether there could be an inflection point where you do see some accelerated adoption by the remaining IDNs as they look to deploy the software, especially leading up to AI and cardiology becoming more prevalent.

Yes. Look, I think the market is $1 million. You don't have this massive inflection point where nothing happens and all of a sudden everything happens. The organizations do come out till RFP fairly late in the phase usually where they can't exist with their current system. They live it very likely, but [ are not most cases ]. But we are seeing more and more of those coming. And I think a few things are driving and data sets being the big one and breast imaging being the sort of canary in the coal mine for big data sets. So we are seeing an increase. I think the second key driver is security. And I think people have realized, cloud is far more secure than on-premise for multiple reasons. And so those 2 things are pushing more and more people to look to replace their system maybe sooner than they otherwise would have been, hence the increased numbers of RFP. And as we mentioned, look, we think cloud is a huge driver. And as far as we know, I think the market knows. To date, we're the only ones that can actually take these organizations and transparently you have to better migrate them into public cloud. And if anything, as I mentioned, performance is even higher, which is kind of intuitive to having your own data centers. So I think cloud, large data sets go and increase cadence of opportunities going forward.

Sure. That's great. And just also looking at some commentary from one of the competitors in the tax space. They recently said that they think they've overcome the functionality gap between their product and Visage when you compare it to a couple of years ago. Just wondering to kind of get your comments on the state of the competition today and how you see that evolving in the coming years?

Yes, that's an interesting one. We've always thought we're always 18 to 24 months ahead. And if anything, we think that gap is actually widened, we don't know anybody that has been able to provide reliably the streaming platform that we have, which is so fundamentals of being an on-demand system. We also don't know anyone that's been able to integrate into one product everything from basic to test its rate to very advanced visualization of Fusion 3D, 4D. So look, again, I can't talk for others. I know what we see in the market, what we compete against and pretty much most of them are still compress and send, but pretty much most of them are largely 2D and can't do all the advances. And then you've got scalability. It's one thing to do it in -- one thing to do it in a small practice, but when you get to the large sizes of Intermountain or Mayo Clinic or an NYU, scalability is mandatory, and most people can't scale to even the quarter of that.

Your next question comes from Mathieu Chevrier with Citi Group.

My first one was again on competition. We saw GE Healthcare being spun off. And then Philips was undergoing a restructuring. I was just wondering if you've seen changes in behavior or level of investments from these players and others in the last few months?

In terms of the equipment manufacturers, no, we haven't seen any change in response from GE. I think whilst they've been active with their equipment, certainly this area actually, we really have not seen anything. And I think Philips, their major play was somewhere around 2 years ago when they bought Carestream and its products and informatics business. And I think the major thing we see there is then trying to just hold on to market share, but we haven't seen any new product offering, and we certainly haven't seen cloud from either of them. So whilst it's possible in layout that they had something. And usually, they sort of telecasted, as I call it, at RSNA well in advance of its release. We haven't heard of anything and we've not heard of anything from our client side that out of these 2 are looking to bring out a new platform.

Understood. And then, Sam, you mentioned previously that there could be potential changes to EU privacy laws that could help the adoption of the cloud across health care in Europe. I was just wondering if you had any update on that, if you could give us, and I'm sorry if I missed it earlier.

Yes. Look, we here it is all progressing. I think it still needs to be ratified the [indiscernible] path. Certainly, the cloud providers, the big 3, we're speaking to are all eyeing off Europe as we speak, which is not surprising because clearly, there's a lead time for them, but I think they're looking at it as a new greenfield site certainly for cloud. There might be some things that need to be done slightly differently. You might need something like a German telecom in there involved, and some on local. Again, I'm not the one on the ground, but certainly, we do get the distinct impression it is progressing.

Understood. And then maybe I can just clarify quickly on the pricing strategy or what you can say about the pricing strategy of cardiology. I'm sorry if I missed it earlier. I think you mentioned it would be included in the overall platform price. Am I correct?

No, it would be separate. So price is separate, of course. It's just based on the same technology platform. So you won't need new hardware, it's purely licensing softly in functionality.

The next question comes from Sarah Mann with Moelis Australia. .