Singular Health Group Ltd (SHG) Earnings Call Transcript & Summary

Welcome all to today's investor briefing Webinar with Singular Health Group Limited. It's a pleasure to have you all with us. I'm Sari Kane from Investor Relations Consultancy Corporate Storytime. Singular Health is a Western Australian ASX-listed medical technology company focused on unlocking the value of medical imaging. Its flagship 3DICOM platform connects fragmented medical imaging so existing scans can be found, shared and used across health care systems, with 3DICOM MD cleared for diagnostic use in the United States. Joining me today are Singular Health's Managing Director and CEO, Denning Chong; and Chief Operating Officer, Dr. Martina Mariano. During today's webinar, Denning and Martina will provide an update on the company's questions, including the recently signed MOU with Florida International University, for the Florida Medicaid Imaging Repository, the PNS commercial pilot and U.S. joint venture and the company's broader pipeline of commercial revenue opportunities. If you're joining us live, today's webinar is being recorded, and you're welcome to submit your questions at any time during the webinar via the Q&A function on your screen. If we are able to address your question during the webinar -- if we're unable to address your question during the webinar, we will follow up after the session, where appropriate. Without further ado, I'm delighted to hand over to Denning and Martina. Martina, over to you to share your screen and begin the presentation. Thank you.

Thank you so much, Sari. Well, thank you so much, Sari, for the introduction, and good morning, everyone, and thank you for joining us today as we present Singular Health latest investor presentation. So over the next 20 minutes, it will be my pleasure to walk you through the progress we have made, the commercial opportunity ahead of us and how our strategy is evolving as we move from technology validation into commercial execution. And by the end of it, hopefully, you will have a clear understanding of how Singular Health is building the infrastructure to unlock the value of medical imaging and how we believe this creates a scalable commercial opportunity for this company. I will start with a quick snapshot of the company as of today. We finished financial year 2026 very strong with $10 million in cash and no debt. More importantly, as we enter this next stage of commercialization with a well-funded debt-free balance sheet, our focus is firmly on converting the technology and commercial foundations we have built into scalable and recurring revenue, particularly in the United States. But let's have a quick look at what the investment opportunity looks like today. At its core, our flagship product, 3DICOM, addresses a very simple but costly problem. Medical images already exist, but they're often difficult to find and access when they're needed. What makes our model particularly interesting is who we are targeting as the customer. We are increasingly focused on health plans, MSOs and risk-bearing networks because there are the organizations that ultimately carry the risk occurring the cost of unnecessary imaging. Our current license model is USD 800 per physician per year, which at the scale of a network like PNS equates to approximately USD 2.8 million annually. And importantly, this is no longer just a technology proposition. We now have 1,000 PNS licenses contracted, commercial deployments across Florida, Texas and Puerto Rico and a funded Florida Medicaid program, but we're going to talk about all of this. To understand the opportunity, we need to understand the inefficiency that we are targeting. Healthcare produces billions of medical images, but those images remain fragmented across hospitals, radiology groups, parks and this fragmentation has real economic consequences. Published research has estimated up to USD 20 billion of annual health care expenditure associated with unnecessary duplicate imaging. And the underlying problem isn't necessarily that the image doesn't exist, but that the next clinician can't find it or access it when they need it. So for a patient, this translates into disrupted and inefficient care. Imagine a patient, we call him Carmelo, he receives a CT scan at a diagnostic center for a headache. The imaging exam is done and the scan is saved in the PACS, the radiology database. Three months later, Carmelo is still in pain and he goes and sees the GP for the same issue. The GP knows that the CT exists, but can't access the actual imaging study. And at that point, retrieving the previous image can be more difficult than simply ordering another scan, creating duplicated costs, delays and potentially unnecessary radiation exposure. So again, the image already exists, but the problem is finding it, moving it and making it useful. 3DICOM integrates into the workflow to simplify it. So before ordering another scan, the clinician can check for previous imaging. And if the relevant study exists within the connected network, it can be retrieved and viewed at the point of care with our FDA-cleared browser-based viewer. The clinician can then make an informed decision about whether another scan is actually necessary. So rather than relying on the patient to physically move imaging between providers, we connect the imaging workflow itself and make the existing image available whenever is needed. Importantly, 3DICOM does not require health care organizations to replace their existing infrastructure. We sit between the systems where health care data already lives and the people who need to use it. The platform can retrieve imaging, visualize it through our FDA-cleared clinical viewer, securely transfer it using an FTP and increasingly enrich that workflow through ImageIQ analytics and AI. And the same infrastructure can serve multiple audiences. Health plans benefiting from cost saving from duplicate scan, providers accessing patient imaging at the point of care, diagnostic centers through digital distribution and stronger referrals and patients with portable imaging records. So really, this is one underlying platform with multiple use cases and multiple revenue opportunities. And moving medical image at scale requires way more than just a viewer. Our technology stack combines connectivity into existing imaging infrastructure, our proprietary and FTP technology, an FDA-cleared browser-based cloud viewer, AI-enabled functionality and a mature, secure and compliant environment. So the strategic asset isn't simply viewing an image, it's really the infrastructure required to find it, move it, secure it, visualize it and ultimately analyze it. The medical imaging market already has very large and capable companies, but they generally approach the problem from 2 different sides of the market. On one side, you have PACS imaging exchange and archive vendors. They are very good at storing, accessing and exchanging medical images within their network, but their customer is typically the provider and their commercial model is generally aligned with the provider ecosystem. On the other side, you have utilization management and RBM companies. Their customer is the payer and their objective is to manage imaging utilization and costs. But those decisions are typically based on clinical information, utilization data and claims rather than retrieving the actual prior imaging study as part of the workflow. So 3DICOM sits between these 2 models. We provide the infrastructure to find, retrieve and move the full imaging study while aligning our commercial model with the payer or the risk-bearing organization that carries the cost of the scan. So our differentiation isn't simply the technology, it's the combination of imaging access with payer side economics. So effectively, you have a different customer, a different position in the workflow and ultimately, a different business model. And this positioning also creates several barriers to entry. There is a technical challenge of retrieving and moving imaging across this connected networks and systems. There is our proprietary technology, including MFTP, the regulatory and security infrastructure and the commercial relationships required to sell into payers and risk-bearing organizations. So competitor would need more than just a viewer. They would need the technology, the regulatory framework, the payer relationships and the commercial model around it. And this brings me to how we intend to scale in the U.S. because our strategy is increasingly partner-led and PNS has been particularly important in establishing this model. Now PNS or Provider Network Solutions, is a managed service organization, an MSO. They operate across Florida, Texas and Puerto Rico with a network of more than 3,500 physicians and 4.2 million members under management. They gave us a commercial entry point into the U.S. market and through the newly established JV, Singular Imaging Solutions U.S., this relationship is now consolidated into a broader commercialization channel. Singular Health owns 60% of the JV. And importantly, our existing PNS license agreement remains outside of it, we also retain 100% of our license revenue and 100% ownership of our IP. So the real value for us is access and scalability. This provides us with capital-light route to market, leveraging established networks and relationships rather than building a large direct U.S. sales infrastructure ourselves. And this channel works alongside our own distribution channels, such as CG1 and Marin & Sons, but also our U.S.-based sales team. So the map here shows what the strategy can potentially achieve. Our current activity is concentrated around Florida, Texas and Puerto Rico. But some of the organizations we are engaging with have a footprint extending well beyond these markets. Of course, it doesn't mean that Singular automatically gains access to all of them, but it demonstrates why this partner model matters. A successful deployment with the right network can create a pathway to broader distribution without Singular having to build sales infrastructure state by state. The Florida Medicaid Imaging Repository is a significant step in demonstrating the platform at scale. The state of Florida has provided USD 3 million in funding, of which approximately USD 2.5 million, so 85% of this funding relates to Singular Health-led technical delivery pending the execution of the formal agreement. Why this is important? Well, the strategic value goes well beyond the initial project revenue. A key component is the clinical and economic validation of the impact on duplicate imaging within a real Medicaid population. If we can demonstrate measurable outcomes at this scale, Florida can become an important reference implementation for broader deployments within the state and for conversations with other health plans and states looking at addressing the same problem. And the compounding effect is a significant one because every connected network can generate utilization data. We can measure retrievals, avoided scans, utilization and potentially translate those into verified savings outcomes. Those outcomes can then become evidence that can support the next commercial conversion. So the cycle that we're trying to establish is very simple: deploy, measure, proof and sell. And critically, independently verified savings data is also what could ultimately enable the savings share component of our revenue model and the FIU project can help us achieve that. So if we step back, the commercial progress over the last 2 years has been significant. We entered the U.S. through the PNS MOU in November 2024, signed the commercial agreement in June 2025 and commenced deployment soon after. Our 3DICOM MD cloud viewer received FDA clearance in January 2026, followed by the delivery of 750 licenses by March and our first major PNS payment in April. We now have Florida funding, the FIU relationship and MOU and 3 different pilots live and a number of opportunities in the pipeline, while also working on the renewal of the PNS pilot, which is anticipated by the end of the calendar year. The commercial model is designed so that the value of the network can expand after the initial deployment. There are 4 potential revenue layers. First is the core physician license at USD 800 per physician per year, which is live today. Second, AI-powered tools such as ImageIQ that is currently modeled at approximately $200 per physician per year and is still under validation, and we're going to talk more about it in a second. Third, a potential share of independently verified savings generated from reducing unnecessary imaging. And fourth, the infrastructure and repository programs, such as the Florida one. Importantly, while some of these additional revenue layers are still being validated, the model already has contracted and funded revenue base today. Contracted PNS licenses represent approximately USD 800,000 in annualized recurring license revenue and USD 2.5 million of the funded further program is expected to relate to the Singular Health-led delivery. So we are not starting from a theoretical revenue model, we are starting from contracted and funded activity with additional opportunities to expand the value of each connected network over time. AI-powered tools such as ImageIQ allow us to expand the economic opportunity within those connected networks. What is ImageIQ? You know by now that 3DICOM focuses on identifying and retrieving relevant prior imaging. ImageIQ takes us one step further, supporting the decision around which examination or modality is most appropriate based on the patient's clinical presentation and available history. So the 2 solutions address 2 different sources of avoidable imaging expenditure. 3DICOM targets unnecessary duplication, while ImageIQ targets potentially inappropriate imaging at the point of ordering. And together, they expand both the clinical value of the platform and the revenue opportunity within innovated connected network. So probably the easiest way to think about the economics in this one: our unit of scale isn't really 1 license, it's one connected network. PNS has approximately 3,500 physicians and at USD 800 per physician per year, a fully licensed PNS size network represents approximately USD 2.8 million in annual license revenue. If we add ImageIQ to that, this takes us to USD 3.5 million per network. And based on the AMA data, we estimate around 354,000 U.S. physicians working in commercial ACO practices. And at the current licensed pricing, this represents approximately USD 283 million in annual license opportunity. And this USD 283 million represents the license-only opportunity within the estimated commercial ACO physician segment. Beyond that, there are 3 potential expansion pathways: ImageIQ, verified savings share and the wider U.S. physician market. We deliberately show these as conditional upsides rather than forecast revenue because savings share requires independently verified outcomes and the commercial model outside of risk-bearing network might be different. So this slide is deliberately transparent about what has been proven and what still needs to be proven. We have demonstrated technical integration because imaging can move between systems that were not built to interoperate. We have demonstrated commercial validation because customers have paid for the technology. So the next stage is demonstrating verified savings, customer renewal and expansion and repeatability across additional networks. The PNS renewal currently anticipated by December is expected to be an important commercial milestone, while further gives us the opportunity to begin producing the outcome evidence that is required for the next stage. So if you bring everything together, we believe that Singular Health is moving from technology validation into commercial execution. We have an FDA-cleared platform and proprietary technology, a funded balance sheet with no debt and demonstrated commercial traction through PNS. We have a revenue model that is capable of expanding from core licenses into ImageIQ, verified savings share and infrastructure programs. Our partner-led U.S. strategy gives us access to payers and provider networks without requiring us to build a large direct sales organizations while further gives us the opportunity to demonstrate the technology at the state scale. But perhaps the most important thing is that these are not separate products or separate businesses. They are just different ways of monetizing the same underlying interoperability infrastructure. So our objective now is very straightforward, connect more networks, expand the value of each connected network, prove the savings and use that as evidence to drive the next deployment. Thank you for your time.

Thank you, Martina. I'll just get you stop sharing your screen for us. Thank you for walking us through the latest investor presentation, showing us the commercial opportunities of Singular Health.

We'll now move into the Q&A section of the webinar, and we've received a number of questions via e-mail and preregistrations. So we'll go through as many as we can. Now on to the first question, PNS seems to be much more than a customer. How did the relationship start? And why has PNS chosen to go further with Singular Health?

I'll take that, Sari. We entered the U.S. market back in about 2023 through our master distributor CG1. They introduced us to various customers. One of them was Provider Network Solutions, PNS, and we were showing -- we're showing our technology to them. And during that pictures and during those presentations, it became very apparent that they wanted to focus on a key component of our technology, which is our transfer technology, ability to move images from site to site or places to places. Now this was pretty exciting to them because they said that they have a problem and the health care system also had a problem in terms of typical images and inability to get images as and when they needed. So as a result, we worked with them for about 9 months to work a clinical workflow, things that were specific to the health industry, how best to -- that we can develop to be adopted by physicians and they entered into the MOU with us. The contract, which was our first enterprise contract for 1,000 licenses, to which 750 has been deployed. And it's working so far, and it's still ongoing. So in terms of that, they've seen the excitement. They've seen the ability to roll this out throughout their network. And also, they've seen the opportunity to go on this journey with us, to build this system, to deploy this around the health care systems in America. So they've entered into a JV with us. And this is like a reseller-type arrangement, where anything they have introduced to us, they can roll this out and share in the revenue -- the savings component of the revenue with us. That's exciting because not only does that validate our own system in terms of what we're trying to achieve, but also validates the need for other health plans around America. They're also very much aligned to what we do. Their shareholders invested about $770,000 on market. So they're big shareholders of Singular and very much a valued partner in that respect. So they're much more than a customer, they're very much partners in what we do and very much partners in our future as well.

Thanks, Denning. That was a great answer. Can you give us some more information about this joint venture and how it came about?

Yes. So in terms of rolling this out, when they saw the actual system and how it can save their own network money, they truly believed and continue to build this model that other helped us experience the same problem. So in discussions with them, we decided to form a reselling sort of structure, whereby we own 60% of that, and they own 40% of that. And the other idea is that the licenses that we charge generally around every customer we get to keep and in terms of any savings -- percentage of savings that we can achieve other customers, we would share. It's really important to note that we set this company up a while ago, not with the intention of starting that JV immediately, but it takes time to actually set up a company and getting things right. So we never really announced it. We never spoke about it because we didn't really agree to any terms, but we knew that we wanted to do something together. And when we did actually a greater terms, which is the 60-40 split and how it was going to work, that's when we announced it. So there was a bit of a delay in terms of that news coming out only because it takes time to get these agreed upon. Now in terms of this JV, it's very important also that we realize or sort of understand that it's full PNS introduced customers. So we're not really losing 40% of our revenue or I see that gaining 60% of revenue that we would not ordinarily have. It's a great opportunity for us to get health plans and traction initially. You need a health care -- existing health care player like PNS to be on the journey with you. So that opens up doors and gets you into the doors a lot quicker and lot faster and that's what's eventuated.

Thanks, Denning. Now stepping back, how significant is it to secure a state-funded program and what could this validation mean for other state or federal government initiatives targeting medical imaging interoperability and for your credibility with large health plans?

It's a very important milestone to us. So a very significant achievement for the team and very proud of the team for getting this across the line. It moves us from provider-type services to a state-led initiative. It's a USD 3 million appropriation. It validates us from the highest level evolution of where our customers come from or where we target our customers, our health plans and MSOs. And there's no bigger health plan in U.S. than Medicaid and as such, the credibility and ability of where we are going to is robust or confirmed by this project. We're building this image repository for the state of Florida. It's a $3 million appropriation. We get 85% of that. So that's about AUD 3.5 million, and it's all going to be recorded or reconciled in this fiscal year. It uses extensively our technology, our 3DICOM platform and Gateway, our ability to move the images from sites to sites in the public system for Medicaid. And obviously, we're building a repository for them. It's a big deal. What's important about this project is that it's designed in a way that it's -- it can be replicated in other states and other programs. So your Medicares, your other insurance projects around state of Florida and around America itself, any federally funded projects that we're speaking to at the moment. It's something that can be expanded and scalable in some respects.

Thanks, Denning. Can management outline the remaining milestones before the Florida Medicaid Imagery Repository progresses from an MOU into a binding commercial contract? And what is the expected time line for each milestone?

Okay. So in relation to the milestones, we've set it out in our announcement, there were 3 phases ostensibly. We need to get definitive agreements done, which are already in process, and we'd expect that to be done over the next few months. In that, instead of waiting for Phase 2 to occur, after Phase 1, we've also started on designing the scope and finalizing the scope of works in terms of the architecture of what we're building and the population sample of what we're dealing with. So we expect delivery of all this to start deploying start of next year, within the next 6 months or thereabouts to extract the operational data that we're trying to achieve. Phase 3, which is the evaluation and the extraction of the metrics of all the savings and the success of this project is critical to us. And that will enable us to then obviously go for an ongoing use of this current project. And that gives us that annual quicker revenue top scenario if we can go for it and also give us the ability to validate again in addition to the PNS results to validate our entire proposition with our ability to save health plans, duplicate image costs.