Alcidion Group Ltd
ASX:ALC
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Alcidion Group Ltd
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Thank you for standing by, and welcome to the Alcidion Group Limited quarterly results investor call. [Operator Instructions]I would now like to hand the conference over to Ms. Kate Quirke, Managing Director. Please go ahead.
Thank you, Ashley. Good morning, everyone, and thank you very much for joining us today for our financial performance update for Q3 for the financial year FY -- that we're currently in, 2020, which will cover the 3-month period until 31st of March 2020 and a broader business update as to how the business has been traveling this first month into the fourth quarter. Today, I'll be referring to the Appendix 4C quarterly cash flow report and the business update that was lodged this morning on the ASX. Also joining me on today's call is Colin MacKinnon, Alcidion's Chief Operating Officer and Chief Financial Officer. And at the end of the call today, we'll be happy to answer any questions from investors. And if you follow the instructions about how to lodge those questions, it would be lovely to hear from you. Obviously, we're living through a time and situation that has changed the world as we release this quarterly update, and we're operating in a very different environment to when we last reported back in January. Firstly, I really hope all our shareholders are well and they're managing in a world where social distancing and isolation present us all with a variety of new challenges to deal with. And against that backdrop, that -- I'm pleased to report our business has been able to respond well to the current environment. Our business has adapted to remote working. We've been able to continue in support of our customers, progress new installations, do all of the things our customers expect of us, but with minimal interruption. And I'm really grateful to our staff for the way they've gone about moving to working from home and the support that they are continuing to show Alcidion and our customers in the health care sector. Of course, the health care industry is at the epicenter of dealing with this COVID-19 pandemic. And we've moved to support our clients with the introduction of not only remote support, of course, but with new algorithms and risk alerts within our software solutions to help them deal with the management of COVID-19 patient -- positive patients. We've worked with our customers as their priorities have changed over the last quarter, as you can well imagine. And we've done that to help them prepare for any impact the surge of patients is going to -- may have. Of course, keeping in mind that across our customer base, there's different experiences in the Australian and New Zealand health care system compared to what the U.K. is facing. During the quarter just gone in Q3, we developed a new COVID-19 assessment tool for Patientrack that helps hospitals identify any potential cases more quickly. And we did this working with one of our customers who's one of our longest-standing Patientrack customers in the U.K., Western Sussex Foundation Trust. And we worked with them to develop the tool, which offers the guided series of questions to staff on the ward about the patient's symptoms and circumstances. And it also allows us to track their vital signs or observations. And then a combination of those allows us to report to health authorities and to people within the trust in a digital manner rather than on paper. And then aligned with that desire to support all our customers at the moment, as they're going through this very trying situation, we provided that free of charge or at no cost throughout all our existing current Patientrack customers who wish to take it up. Also Patientrack being used without charge by the new emergency NHS Nightingale Hospital that's been deployed in Manchester, one of several emergency hospitals that have been set up across the U.K. to support a surge in patients. The one in Manchester has been set up in the Manchester convention center. And we offered it under the terms of the existing contract that we have with Manchester University Foundation Trust. They were actually the very first Patientrack site in the world, and they're also our largest Patientrack site. And this is allowing us a high-profile platform to demonstrate the capabilities of Alcidion and our solutions, at the same time, showing support for what is our largest and longest-standing customer in the U.K., and we're very pleased to be in a position to be able to assist. As tragic as this pandemic is, it certainly highlights the power and the value of our technology to give hospitals a site-wide view of what's going on in their hospitals with their patients, with their clinics as well as the ability to better manage the flow and resources and to manage risk. And we've really seen our customers use our tools to prepare for any potential surge. And these recent events have also brought into focus the value of our technology in assisting with the management of patients in a remote setting outside the hospital setting, and this is very important because initially from the COVID-19 perspective, patients who test positive that don't require hospitalization can be monitored at home using our technology, and then we can look for a deterioration. And if patients are deteriorating, then the hospital can be alerted by our dashboard and a response enacted as required. What's really important about that is, obviously, we're dealing with the current situation, but hospitals across the world are looking to treat more patients outside of the 4 walls of the hospital, so this is allowing us to demonstrate that this is a solution not just for now, but for the future as we continue to deal with chronic patients and more complex patients and an aging population. For Miya Precision, we've developed a COVID-19 dashboard specifically and a mobile solution using our mobile MEMRe, our mobile EMR. And it's been optimized for both in hospital and at-home monitoring in near real time. And we've been working with both ACT Health and the Murrumbidgee Local Health District on this as part of their rollout of Miya Precision and Miya MEMRe. One of the positive developments I really want to highlight today is the broadened engagement we have now with Murrumbidgee Local Health District, which is initially for a 12-month period. As many of you will know, Murrumbidgee had the opportunity to pilot Miya Precision as part of the New South Wales Health-funded proof of concept. And we're pleased to see that Murrumbidgee is going to extend the rollout to an additional 300 doctors. But also that in this initial phase, we'll be implementing a dashboard solution for monitoring their COVID-19-positive patients remotely. Our business, to be honest, has experienced limited negative impact from the pandemic, even in the U.K., which has been much harder hit than we have seen in Australia and New Zealand. We have had some revenue recognition milestones pushed out to the next financial year. But these projects will proceed, albeit at the slowest pace, and that's generally as a result of front-line workers who were part of the project team being moved back onto the front line in anticipation for additional patients. We continue to sign new contracts, many of which involve working with new customers, specifically on their response to COVID-19 as well as their broader needs beyond that. And alongside this, new sales opportunities are being found and pursued by our expanded sales team, and our sales pipeline, therefore, remains strong. The drivers -- as many of you know, the drivers for adoption of our technology, they're as strong as ever, regardless of whether the pandemic is in play or not. But it's been really evident by continued commitment from governments and health care providers to invest in technology, even while coping with the current emergency, which bodes well for us in the long term. However, of course, we shouldn't lose sight of the fact that the pandemic is putting health care organizations under immense pressure. In some circumstances, this has actually led to an expedition or an expediting of some purchasing decisions. But we are really mindful that it could impact the speed of procurement and deployment of purchase systems as this crisis plays out. Therefore, while we're still executing on our growth plan, and those of you who have seen the previous presentations lodged around what our growth plan is with the ASX, that has involved us investing for sales growth, investing potentially for new geographies, potentially into additional marketing. What we have done is look at the -- look, sorry, look at the -- scale back some of our spending. But look at our spending in some of the areas where the growth strategy we were targeting, such as things like geographical expansion or moving into new territories and such, might not be the best time to do it. So we've been able to look at scaling back some spending without it necessarily impacting our immediate revenue plans. Of course, there's been a reduction in spending around travel costs and costs associated with our large marketing events such as conferences and exhibitions, which I wouldn't expect to see any of those being held potentially through to the end of this year. So the cost reductions are likely to continue for some time in those areas. Should this crisis be protracted, both for the health sector and the broader economy, and if we see this begin to impact our expected business performance, we're confident we've got enough current cash reserves and an ability to further reduce expenditure. So as it's such, it leaves us well positioned to respond if there is a protracted impact on the health care market. However, as we stand right now, we're very fortunate to have a strong balance sheet with a customer base that's comprised largely of public sector customers who have long-term contracts in place that provide a good pipeline of contracted revenue for Alcidion. This gives us confidence that we're well placed to maintain current business operations for the duration of this pandemic. As a result of that, we have not had to reduce staff. And where appropriate, we're actually proceeding with the recruitment of staff that are integral to our long-term strategic growth plans. You will maybe have noted, we did an announcement that during the quarter, we appointed a new General Manager for sales for the Australia/New Zealand region, Steve Lutz. He, along with the appointment of Lynette Ousby, who has been appointed as a General Manager for U.K. sales, and 2 new U.K. sales people that were also recruited during the quarter, completes our plan for the expansion of the sales team. At this point, we've more than doubled our sales capacity since January. And we're very much looking forward to the impact this should have on our revenue growth over the next year. As many of you have heard me say before, the sales cycles in -- for our technology into health care can be complex. And of course, there's a time lag between bringing on new sales capacity and the subsequent signing of new contracts. Steve has a great deal of experience, many, many years working with Cerner. Many of you have heard me talk about Cerner as one of the largest electronic medical record providers. And with just under 1 month on board, he's really excited about the opportunities for the platform and the growing pipeline that's presenting. Similarly, Lynette has that feeling around the opportunities in the U.K. So -- and I really look forward to introducing both of them over time to investors in the coming months. We also appointed a General Manager of People, Place and Culture, Amanda James. As a growing organization, as Alcidion is, we plan to execute an aggressive growth strategy. It's really important that we both attract and retain the very best people we can, that we can support them and provide them with all the opportunities they need to grow and learn. The actual strength of Alcidion is our people and the great culture that we're building across the Alcidion Group. I'm really looking forward to the contribution Amanda is going to make to ensuring that Alcidion is the place that everyone wants to come and work. Bearing in mind, the nature of our workplace may even fundamentally be changed as we go forward and as a consequence of new sort of social isolation and working environments that may need to be put in place for a longer period of time. With that lengthy introduction, I thought maybe I'll turn to detailing a little bit more on the financial performance for Q3. I'm very pleased to report both a quarterly increase in Q3 contracted sales and the sales pipeline that remains healthy despite the COVID-19 virus beginning to impact things from about the middle of Q3. We're starting to see -- we're starting to have those conversations with customers. Alcidion during the quarter signed new contracts and extensions to existing contracts with a total value of $4.2 million. $2.4 million of this revenue is expected to be recognized in FY 2020, bringing our total sold revenue for the financial year '20 as of the 31st of March to $17.2 million. So that figure has now surpassed the full year of FY '19, which was $16.9 million, and it positions us very well as we enter Q4. I do want to point out, though, that we made an adjustment of $600,000 to the FY 2020 sold revenue that was reported for Q2, between Q2 and Q3. This reduction is due to some revenue milestones being delayed into next financial year. And that's as a result of customers slowing down implementation of projects so they can increase their focus on planning for and responding to COVID-19's possible surge. These projects are continuing, and we are seeing some people in Australia and New Zealand revising some of those decisions, obviously, where we haven't had the same degree of surge at the moment. But the achievement of all of these milestone will continue. That will just fall into FY '21 in terms of revenue recognition. Of the $17.2 million of FY '20 sold revenue, $10 million of that is recurring revenue, which is a 37% increase on that, that was reported at the end of Q3 for FY '19, the previous corresponding quarter in the previous year. We've spoken previously in these calls and in investor presentations of our planned shift toward recurring revenue in our revenue model as more of our products are sold on a subscription-based model. This year-on-year increase reflects that shift. And while what that means is less revenue is recognized upfront under the model, it adds more certainty to our revenue base over the next 3 to 5 years, and it smooths out some of those revenue discrepancies that we get between Q1 to Q4 and so forth. Of course, this will take time because we still have customers who are given a capital budget to spend by the government. We often see that in the U.K. and who need to often spend that in the current financial year. So we will still have a mix of that for some time. Other -- the 5-year sold revenue figure to be recognized through FY '25 remains healthy, increasing to $41.6 million, which includes the $17.2 million that we've talked about as being able to be recognized in FY '20. As I mentioned a bit earlier, the contracted sales increased quarter-on-quarter in Q3, which provided a very solid start to the second half of this financial year. And I'd just like to outline and a few of those contracts that are considered significant but may not have met the threshold for announcement from an ASX perspective. One of those was Calvary Health Care. I did mention back in the February investor presentation slide deck that went out that we signed a contract with Calvary in January 2020. Under that agreement, we're implementing a data warehouse across all Calvary sites, which is 15 public and private hospitals, 17 aged care facilities and a network of community care centers. The contract doesn't include any of our licensed software products for use in the clinical setting. It's actually more about providing a data analytics platform across all of the facilities, which is really an important step in anyone looking at what their IT strategy is because it allows them to look at across the whole of their services and identify and manage the performance of all those services across multiple facilities. This project is progressing well, and we continue to work with the customer in a remote manner. We also signed a further agreement with eHealth New South Wales to complete the development phase of the New South Wales Health Child Digital Record project (sic) [ Child Health Record project ]. That was always going to be a project that was done in phases. As each phase -- A phase was completed successfully, the next phase could be contracted. It's progressed well and it's nearing completion now. Building on that successful project, we've also been recently, in this quarter, Q4, been selected by eHealth New South Wales to be the system integrator for a similar connected project, which I'll mention shortly. Additionally, during Q3, we won a competitive tender process with Townsville Hospital and Health Service for the implementation of Smartpage. And this -- it was a competitive tender. And what's really important about this, it's our first contract for Smartpage in Queensland. So we're really looking forward to partnering with Townsville to deploy our solution and help improve their clinical communication and task management in their health service. On today's call, I'm very pleased to also note several important contracts that have been signed in April, so Q4, subsequent to the end of the third quarter. These are as follows. The -- you will have seen announced to the ASX a contract, a 5-year contract extension and renewal agreement with NHS Fife in Scotland, which is the largest NHS Scotland board. It serves a population of -- one of, sorry, not the. I think Glasgow might be a bit larger. It serves a population of over 300,000 residents, and it's also one of our foundation customers. They first trialed Patientrack back in 2011, and using -- they initially used it in its major acute hospitals, and now they're going to -- in their major acute hospitals on a year-by-year basis. So they would sign up at the end of each year for another year. But now this contract is going to extend that to a fixed 5-year contract, which gives us a surety over those 5 years, and they're also going to extend it across all the beds in the [ board ]. So we're very pleased to be able to continue that and expand that long-standing relationship. In early April, we signed another contract with eHealth New South Wales, as I just alluded to. And that was to support its development of a pilot of the national Digital Pregnancy Health Record. We have a very strong relationship partnership with eHealth New South Wales. We're building the child digital health record. We have, for many years, supported their total integration environment. And this project builds on our current success with the digital health record. And it further demonstrates our ability to deliver large-scale IT solutions that involve a lot of the integration of many different health systems. And I've said many -- and I often say this to our team, that the best sign of success of customer satisfaction for us is customers that sign extended contracts with us continue to engage us for more work. So we're very pleased that eHealth New South Wales is continuing to be committed to working with us in partnership. Murrumbidgee Local Health District, as I mentioned earlier, has signed up to use our Miya Precision platform for an initial period of 12 months, following the completion of the proof-of-concept innovation challenge at Wagga Wagga Base Hospital. Additionally, Alcidion will also deploy Miya MEMRe to an additional 300 clinicians across Murrumbidgee, and we'll implement a dashboard solution for the monitoring of COVID-19. This will enable both in-hospital and remote work monitoring. The value of this is around close to $500,000. And in terms of the New South Wales proof of concept, as I have said many times before, it is, in fact, a project that New South Wales still needs to report on. Understandably, they have been very heavily focused on their response to COVID-19. And we assume that they will get back to that proof-of-concept report when the current pandemic is over or at least their initial response to it has subsided. On the customer front, we also achieved several significant milestones in Q3. In March 2020, our ACT Health announced that they'd gone live. They actually went live before Christmas but wanted to wait until the new year to announce that they're live with Miya Precision at 2 of their campuses, covering 600 beds, and I'm pleased to say very actively using Miya Precision. And we also continue to deploy a number of new patient track sites in the U.K. As I mentioned on the last quarterly, we're now at a point where we can sign a Patientrack site and get them live generally within the quarter. We continue to invest in building our market presence in both Australia and the U.K. in Q3. Prior to the COVID-19 restrictions coming around being deployed in the middle of March, we did launch our mobile EMR product, Miya MEMRe, in the U.K. market, receiving some very positive initial feedback from health care providers. And I was very pleased that I was able to be at the Digital Health Rewired Conference in London, which is one of the largest health care IT conferences in the U.K., and I suggest potentially the last one that we'll be able to do in 2020. And it was really excellent to be able to meet with some customers and to see the engagement of our team around Miya Precision and Miya MEMRe. Turning to the cash flow. Our cash reserves remain strong. At the 31st of March, the company had cash reserves of $15.9 million, including a term deposit of $7 million, which matures in the next 3 months. The Q3 net cash outflow was $1.2 million compared to $1.08 million in Q2. While the cash receipts in Q3 of $4 million were 9% down on Q2, operating cash outflows of $5.2 million were down by 16% on Q2. And that's a result of the deferred strategic investments and reduced operating costs around travel and our ability to decide where discretionary spend is deployed, depending on how quickly our customers are engaging with us for future sales. While we are continuing to invest in growing the business, we're continually reviewing each of these planned investments based on the evolving situation. And we have the capacity to further cut back on these investments should this be required at any stage. We're currently comfortable that we're striking the right balance between being financially cautious in the time of uncertainty and also wanting to position the business so it is best positioned for the recovery that will follow this current crisis. And there is no doubt that as we come through this health care -- our health care industry and health care market is going to be looking at what could have been done differently and how could they be better positioned. If there are future pandemics, what do they need to have in place. And certainly, one element of that is going to be information technology that allows them to respond and to be best placed to deal with any surge in patients. As always, I would like to thank the staff at Alcidion for their efforts to provide high-quality service to the health care sector during what has been a very difficult time. I'd also like to sincerely thank the Alcidion shareholders for their continued support. At this point, I'm going to conclude my commentary on the business update. Very much like to turn over to you, as investors, for any questions you may have or may want to push -- put to either Colin or myself. Thank you for listening.
[Operator Instructions] Your first question comes from [ Brendan Aglias ] with Cowen and Co.
Look, I was just wanting to know a little bit more color on the composition of your $10 million of recurring revenue. Is that made up of primarily Patientrack? Or is there...
No. I mean there's quite a number of -- recurring revenue is all subscription-based revenue or any revenue that a customer has signed up for more than 1 year in duration, so multiyear duration. So it is actually made up of some Patientrack contracts that are multiyear, such as the Fife one. It is also made up of any Miya Precision contracts that are ongoing. So in ACT Health, Northern Territory, Western Health, they are all multiyear contracts for Miya. And it's also made up of any services, revenue contracts or managed services where we might be providing multi-year, 3 years' worth of services to New South Wales' health ESB, for example. So in that sense, it's a combination of those.
[Operator Instructions] Your next question comes from Thomas Tsiakis with Henslow.
I just had a quick question around -- I know that with Europe and the U.S. have been identified as markets for Alcidion going forward, obviously, sales staff has been employed now to kind of have a bit of a push in the sales side. Does that sort of change now with COVID-19? Is the UK more of a focus? Or is it still the Europe and U.S. going forward?
Definitely expanding into new geographies is going to be of a lower priority during this period in terms of our ability to travel to those geographies. The U.K. has always been a very significant focus for us. So that continues. We have got a very -- a team of 6 people now -- 5 to 6 people in the U.K. who's very focused on sales, so that's what they're going to do. We're continuing to research potential new geographies so that we're well placed when travel restrictions are removed to be able to consider that. So whilst we haven't stopped completely looking at the opportunities in new geographies, we have to recognize that there would be a certain amount of travel needed to actually set those sort of things up. So I think we're going to continue to research into these areas, but very much focus on the significant opportunity we have in the U.K. and here in Australia.
Your next question comes from [ Peter Lim ], a private investor.
My question is really about whether or not Alcidion is able to provide additional visibility over the pipeline growth, i.e., the total value of the RFP that Alcidion is currently engaging, i.e. they have actually submitted a proposal for consideration. And also in your view, given what's going on, do you guys have any views on when Alcidion is expected to be free cash flow breakeven?
Yes. Thanks, Peter. Look, I think in the current times, both those questions are difficult to predict because, first of all, around pipeline, we have [ on it ] a new sales team. We have our existing sales team, but we have a sales team that is [ cross-cutting ] and going after to a new pipeline. So the pipeline is still very fluid in its movement, mainly because we've got new people on board, and we're also analyzing the impact of COVID. So at the moment, movements around the pipeline would be somewhat lumpy. But the overall trajectory is a growth trajectory. And I expect, as Tom and Dan and the team in the U.K. are able to stretch out to their contacts, that we will see that pipeline considerably increase in terms of percentage. But it's difficult at the moment, I think, to monitor that in any way that would make a great deal of sense or be able to be extrapolated. Similarly, the cash flow-positive discussion, we are currently on a growth trajectory. We are very committed to being able to realize the investment that we know the Alcidion product set can deliver for shareholders as we engage with our customer, and we are able to translate that pipeline into contracts. But in terms of where we're at right now, with such a fluid situation, it is difficult to be able to predict with any certainty at all when we may move to cash flow. Certainly, our plan at the moment is to continue to invest over the next few quarters to ensure that we are able to deliver on the very significant opportunity that is in front of us.
Your next question comes from [ Bill Mitchell ], a private investor.
Kate, I note that Malcolm visited the U.K. a couple of months ago extensively. I can't recall seeing any feedback as to what -- any outcomes he achieved. Are you able to enlarge on that?
Yes. So yes, Malcolm did and then had to come back and promptly put himself in isolation for a while, of course. The -- Malcolm's trip to the U.K. was around marketing and building awareness. So supporting the sales team in the U.K. to build that pipeline. So he met with a number of NHS trusts and pitched our solution, with the intended outcome that, that would have a positive impact on the pipeline. He presented to several large NHS trusts. But straight after that, obviously, COVID hit the sites in the U.K. fairly heavily. So the role of the sales team now is to follow through on those presentations that Malcolm did and translate those into pipeline opportunities.
Your next question comes from Gordon Burdekin with Burdekin Superannuation Fund.
I kind of like the idea of your remote customers. I really like the possibilities of what that could do for the company if it became big Australia-wide, worldwide. You can put a doctor in everyone's house almost. Have you looked -- have you considered expanding on this at all? Or are you intending on looking at it?
Yes. Thanks, Gordon. Look, if you look back on our investor presentations that we did back at the time of the capital raise in November and the subsequent one in February, we talked about 5 key areas for our strategic plan for the next 3 years. One of those, first of all, expanding ANZ sales, expanding presence in the U.K. around sales and marketing, scaling up the business so that we were ready to deploy efficiently when these sales came through, looking at geographical expansion. And the fifth pillar was moving to out-of-hospital care, supporting out-of-hospital care using the Alcidion platform. The COVID-19 opportunity has actually allowed us to speed that up as an opportunity perspective. And so we are very much focused on what and how we use our platform for remote monitoring of patients out of hospital. Our first foray into that was the project in South Australia with [ MPP Connect ], where we're working with some other partners to monitor patients who have had a cardiac arrest in hospital that have been treated in Adelaide. They've then gone back to their rural environment, and they're continuing their cardiac rehab program. We are working with others to collect that data about -- they need to weigh themselves, take their blood pressure, have they done their steps every day and so forth. And we feed that into a dashboard so that people can monitor that they're sticking to their rehab program. So then Phase II now has been this rapid deployment of the COVID-19 capability. But the conversations that we're now having with people like Murrumbidgee is this is great. We want to do this for COVID, but where we see the real opportunity is how we're going to monitor our chronically ill patients who would be better off in home than in hospitals. So this is absolutely on our strategic plan, and we are actively looking at opportunities for this beyond the COVID-19 situation.
[Operator Instructions] Your next question comes from Sebastian Weitmann with Blue Ocean Equities.
Okay. A quick one. I guess when you first merged the 3 groups, that was sort of the idea of cross-sell. Can you talk about some of the success you've had on that to date? I guess this -- the signing of the Townsville Hospital contract, obviously, with Smartpage. Is the scope to roll out the other products across that group? If that's sort of working [indiscernible]?
Yes. Anywhere we get -- I mean, we're seeing -- bringing the 3 companies together has, first of all, it's given us an opportunity to sell the complete product suite. Where -- so it's enhanced our proposition to people like ACT Health who had Patientrack that have since taken Smartpage and Miya Precision. We went into Dartford, where they were looking for a full electronic patient record. So the only way we would have been competitive there was to have the combination of Smartpage, Patientrack and Miya Precision to provide them that full capability. And of course, we then brought in our partner, Better, with the medications management product. So anywhere, I think, that we can look at strengthening the proposition we have to the customer through the combination of the product is a significant opportunity. But we also have those sites where they are only looking at initially to go in a small way or deal with their problem like Smartpage in Townsville, but Townsville is a Cerner EMR deployment. So Queensland has deployed the Cerner EMR into a number of hospital and health services. And we know that as we're doing at Murrumbidgee, we can demonstrate significant value that we can put on top of the Cerner EMR platform. So we would hope that we will deploy Townsville into -- Smartpage to Townsville but continue to talk to them about the other capabilities we have. And that is the sales strategy that we take. We can sell our product as a coordinated EPR solution, but we can also sell them as individual point solutions to meet a specific requirement.
I guess as a percentage of your existing revenue or customer base, a large portion of them using 2 products or 1 product, I mean, how far have you sort of penetrated the cross-sell opportunity on your existing [ products ]?
I think what we've actually found is that a lot of the deals that we've done have been new customers. So it has been the combined strength of Alcidion now as a more significant player in the market that has raised awareness amongst our customers of what we've got to offer across the board. So we're finding -- of course, we're signing renewals and extensions with our existing customers, but the combination of Alcidion's strength has actually allowed us to enter a whole new set of customers, such as Murrumbidgee, such as Dartford, such as Townsville. And that can only be good because it actually opens up a much wider [ catch ]. Many of you will have heard me talk about the fact that in health care, trusted relationship selling and selling to existing customers is really a prerequisite for success. So the more relationships we have, the more successful I anticipate we'd be.
Your next question comes from [ Rudy Al ], a private investor.
Kate, could you tell us what expected operating cash flow would be in quarter 4?
No, we're not really in a position to put that out there at this point because of the -- this is really a significantly changing position in terms of what's happening with our customers. And we are, as everybody is, making decisions on a daily, weekly basis, depending on the current situation, so what we will end up doing will be deciding in a very kind of agile manner, whether we're going to proceed to continue to invest in this quarter in additional people or whether we're going to delay that. So it's -- we're not really in a position at this point to put forward cash flow forecast.
All right. Okay. If you have to guess, and if we don't have this pandemic at the moment, at the beginning of the year, would you have envisaged that we could be cash flow positive by the end of this calendar year?
Well, I don't like to make predictions around that type of data.
Oh, just as a guess.
I'll go back to what I was saying before. We did the capital raise in November. We outlined very clearly what our strategy was, and that was to go after an aggressive growth strategy in U.K., Australia and New Zealand. That included adding additional costs to the business, which was in sales, marketing, scaling up the business. And as I've said before, there is a lag time between bringing on new salespeople and where the revenue falls. So we would anticipate that the cost will increase ahead of revenue being able to be generated.
Your next question comes from [ Steve Pike ], a private investor.
I just wanted to ask, quite a while ago, Alcidion went away from custom software solutions for customers. I guess what I wanted to ask is what's changed with the Calvary deal, with Calvary Health Care? And is there scope for more business through this deal?
So we don't do custom software solutions in our product area. But when we acquired MKM Health, we acquired a very sizable capability around technical integration services and data and analytics. And so what we're deploying at Calvary is our data and analytics capability, which is very similar to what we've deployed at Alfred Health, Austin Health we're currently deploying in Healthscope. So it's not really -- it's not what I would call custom, it's actually our data and analytics capability. In terms of Calvary, we have, just at this point, engaged for the data and analytics component. But similarly to all our customers that we would deal with, we've engaged with for that, we are obviously then hoping to demonstrate our capability across our Miya Precision product set as the data in the data analytics platform can speed Miya Precision. So we would hope that we will be able to have conversations with them in the future. But at the moment, the Calvary engagement is very specifically about deploying the Alcidion data and analytics capability.
Your next question comes from [ Warren Hoff ], a private investor.
Kate, with the South Australian remote monitoring, I assume that's between the hospitals and the patient direct. Can the patient's GP get involved with that as well?
They will be able to. We are certainly looking at how we can draw data from GP systems into the platform as well. Also, in that South Australian one, the engagement is also with community health providers. So of course, there's a lot -- and this is what we're finding with all of our customers, and it's been a very exciting path about the future of being able to help patients across the whole continuum is that there is such a large amount of data held in GP systems, in community health systems around social care and situations of patients. It's really important to their long-term care. So there's no reason why, because of the FHIR resources that we use to drive the Miya Precision platform, they are already in place to collect primary care data. So there's no reason that GPs couldn't provide data to that and hopefully have access to it as well.
Excellent. Yes. The more people using anything to do with our system, the more it acts as sort of advertising for Alcidion. Good on you.
Thank you, Warren.
There are no further questions at this time. I'll now hand back to Ms. Quirke for closing remarks.
Thank you all very much for your time today and for joining and for a great set of questions. I always like to have a good round of questions after you've talked at somebody for such a long time. It's fabulous to have the opportunity to update you on our progress and highlights for the quarter. We do look forward to providing the market with further updates throughout Q4 as they come to life. But sincerely, on behalf of the Board and everyone at Alcidion, we hope you stay safe. We hope that the current situation of social distancing and isolation is not causing you too much grief or hardship. And we thank you very much for your continued support of Alcidion.