MedAdvisor : Quarterly Report and Appendix 4C

MedAdvisor Limited

ACN 145 327 617

Level 2, 971 Burke Road

Camberwell Vic 3124

mymedadvisor.com/investors

ASX RELEASE (ASX: MDR)
only	MedAdvisor growth trajectory continues, exceeding previous upgraded
	revenue guidance
	December 2021 quarterly business update
use	Melbourne, Australia, 28 January, 2022 - World-class medication management platform,
MedAdvisor Limited (MedAdvisor or the Company) is pleased to provide this update of
	progress achieved over the December 2021 quarter, alongside the Company's Appendix 4C
	Quarterly cashflow report.
	Key December Quarter highlights
personal	• CY21 operating revenue of $64.5 million exceeded previously upgraded revenue
guidance ($59-60 million) generating a gross margin of $32.2 million.
	• CY21 US revenue was US$39.6 million vs Adheris earn out level of US$32.5 million.
	• 2Q FY22 operating revenue up 17.5% to $23.2 million on a like-for-likebasis (2Q FY21:
	$19.8 million) and up 121.7% on pcp.
	○ US revenue up 15.6% to $19.9 million on a like-for-like basis (2Q FY21: $17.3
	million) and up 150.6% on pcp.
	○ Australia revenue up 30.5% to $3.3 million (2Q FY21: $2.5 million).
	• 1H FY22 operating revenue up 23.6% to $38.7 million on a like-for-likebasis (1H FY21:
	$31.3 million) and up 198.8% on pcp.
	• 2Q FY22 receipts from operations of $21.1 million up 96.8% on pcp.
	• US signed contracts for CY22 are up 64% on the same time last year, and ~15% of the
	active pipeline is composed of Dynamic Engagement proposals.
For	Business activity update
USA

• Adheris acquisition continues to perform strongly, generating US$39.6 million of revenue against an Earn Out level of US$32.5 million for CY21.

For personal use only

• 2Q FY22 revenue of US$14.6 million (A$19.9 million), up 15.6% on a like-for-like basis (2Q FY21: US$12.6 million).

• 1H FY22 revenue of US$23.5 million (A$32.1 million), up 21.8% on a like-for-like basis (1H FY21: US$19.3 million).

Revenue (AUD $M):	2Q FY22	2Q FY21	YoY %	1H FY22	1H FY21	YoY %	CY21	CY20	YoY %
MDR US - Reported1	19.9	8.0	150.6%	32.1	8.0	302.0%	53.0	8.3	541.1%
MDR US - Like for like2	19.9	17.3	15.6%	32.1	26.3	21.8%	53.0	43.6	21.8%
1.	CY21 Reported revenue translated at an average currency of 0.75 AUD/USD
2.	Like-for-like revenue translated at a constant currency of 0.73 AUD/USD (average rate for 2Q FY22)

• As at 31 December 2021, 9 digital programs were live through the pharmacy network already activated for digital programs. The digital COVID program did not go live during the quarter and was delayed to this quarter.

• Sales pipeline for CY22 has continued to grow with contracts signed currently 64% higher than the same time last year.

• Dynamic Engagement model (marketed as "Thriv"), which delivers an improved revenue model, is now live with the first program launched on plan, in January 2022.

• Work with pharmacy chain partners to digitise the network continues. MedAdvisor is now working closely with these chains to make the necessary systems configuration to facilitate digitalisation.

• MedAdvisor invested in a new line of business in the payer market, including the partnership with Cotiviti and the new eHealth partnership (refer to ASX Announcement of 7 July 2021). A significant portion of the revenue generated relates to a program to support seniors navigate health insurance plans that allow them to keep their doctor, pharmacist, and drug coverage, whilst maintaining affordability. MedAdvisor invested significantly in the launch of the program to ensure its success, with results in line with expectations.

• 2Q FY22 revenue from this line of business was A$7.7 million but was at a lower initial margin impacting overall gross margin. Moving forward, this revenue will be largely generated in the December quarter due to the open enrolment period for Medicare, with margins enhanced due to the introduction of digital and other product and business model enhancements.

Australia and rest of world

• The December quarter saw a continuation of the strong performance delivered in 1Q FY22.

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• Revenue of $3.3 million was up 30.5% (2Q FY21: $2.5 million). Revenue for 1H FY22 was up 33.0% to $6.6 million (1H FY21: $5.0 million), reflecting the increased network capacity from signing Australian Pharmaceutical Industries (API) in July and returns from investment in sales capability and capacity.

Revenue (AUD $M):	2Q FY22	2Q FY21	YoY %	1H FY22	1H FY21	YoY %	CY21	CY20	YoY %
MDR Rest of World	3.3	2.5	30.5%	6.6	5.0	33.0%	11.5	10.1	12.8%

• Annual Recurring Revenue was up 30.4% to $7.7 million (2Q FY21: $5.9 million). Pharmacy churn has remained low at less than 3% on an annualised basis, following the price rise and new premium pricing model introduced in June 2021.

• Pharmacy network grew from approximately 3,700 stores at 30 June 2021 to over 4,000 as at 31 December 2021. This has been driven in part by the signing of a 5-year contract with API in July and the Company's investment in its sales capability and capacity.

• Significant transaction growth continues due to the COVID-19 vaccination rollout. To date, more than 3 million COVID-19 vaccinations have been administered through pharmacies in the MedAdvisor network. COVID-19 vaccinations utilise the MedAdvisor PlusOne booking functionality, which contributes to transaction revenue, and provides an important source of patient sign ups.

• Patient numbers at 31 December 2021 were 2.4 million (30 June 2021: 2.0 million). During 2Q FY22, MedAdvisor upgraded to its new V6 platform, which provides greater speed, responsiveness and improved user interface. To date, feedback has been overwhelmingly positive on the customer experience.

• Gross margin for 1H FY22 was 82.5%, reflecting an improvement of 2.4% on 1H FY21 due to a lower cost to serve post re-platforming.

• MedAdvisor has launched new functionality for PlusOne in the UK. The customer feedback continues to be strong in reducing follow up with GPs and efficient ordering. MedAdvisor will be investing in sales capability in Q3 to drive adoption which has been slower than planned.

Financial update

• $23.2 million in operating revenue was reported for 2Q FY22, up 121.7% on 2Q FY21, and on a like-for-like basis was up 17.5%
• 1H FY22 reported revenue of $38.7 million, up 198.8% on 1H FY21 and up 23.6% on a like-for like basis.
• For CY21, the Company reported revenue of $64.5 million, up 20.1% on a like-for-like

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basis, and $32.2 million of gross margin at a rate of sale of 49.9%. This exceeded the previously upgraded revenue guidance of $59-60 million and was similar in terms of dollar gross margin.

Revenue (AUD $M) - reported1	2Q FY22	YoY %	1H FY22	YoY %	CY21	YoY %
MDR Rest of World	3.3	30.5%	6.6	33.0%	11.5	12.8%
MDR US	19.9	150.6%	32.1	302.0%	53.0	541.1%
Total	23.2	121.7%	38.7	198.8%	64.5	250.1%
Revenue (AUD $M) - like for like2	2Q FY22	YoY %	1H FY22	YoY %	CY21	YoY %
MDR Rest of World	3.3	30.5%	6.6	33.0%	11.5	12.8%
MDR US	19.9	15.6%	32.1	21.8%	53.0	21.8%
Total	23.2	17.5%	38.7	23.6%	64.5	20.1%
Gross Margin (AUD $M)	2Q FY22	YoY %	1H FY22	YoY %	CY21	YoY %
MDR Rest of World	2.7	33.5%	5.4	37.0%	9.4	11.1%
MDR US	7.3	(5.0%)	12.9	7.7%	22.8	11.4%
Total	10.0	3.1%	18.3	15.0%	32.2	11.3%
Gross Margin (% of sales)	2Q FY22	ppts var	1H FY22	ppts var	CY21	ppts var
MDR Rest of World	82.3%	1.8%	82.5%	2.4%	82.0%	(1.3%)
MDR US	36.6%	(7.9%)	40.1%	(5.2%)	43.0%	(4.0%)
Total GM %	43.1%	(6.0%)	47.3%	(3.5%)	49.9%	(3.9%)
Impact of new payer related programs:
Underlying Gross Margin	53.4%	4.4%	53.6%	2.7%	53.7%	0.1%

• 1. CY21 Reported revenue translated at an average currency of 0.75 AUD/USD
  2. Like-for-likerevenue translated at a constant currency of 0.73 AUD/USD (average rate for 2Q FY22)
• 2Q FY22 saw the commencement of a new line of payer related programs in the US market designed to improve the ease with which patients can change and improve their health insurance plans. MedAdvisor has continued to run Secure Digital programs with Cotiviti and has now run 7 programs with some of the largest health plans in the US. As part of the initial launch, MedAdvisor made a significant investment in respect of gross margin, which ensured the overall successful renewal of the programs for CY22.
• Underlying gross margin for CY21 after excluding the impact of the investment in the above-mentioned new line of programs was 53.7%, up 0.1% on CY20.

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• Net operating cash outflow in 2Q FY22 was $(3.0) million adjusted for lease payments, with cash receipts of $21.1 million, in line with 1Q FY22. Cash at 31 December 2021 was $5.3 million.
• 2Q FY22 cashflow was impacted by two timing issues:

1. As part of the new payer program, the Company received all revenue, and paid all product costs within the quarter, whereas typically, programs usually have product costs paid the following quarter resulting in the timing of payments being brought forward from Q3 FY22 to Q2 FY22. No further payments are required to be made for this program.

• 1. A delay in the commencement of the COVID-19 awareness program resulted in a slippage in invoicing ($4.2 million), which negatively impacted cash receipts for the quarter and consequently closing cash. This cash is expected to be received in the current 3Q FY22.
• In addition to cash on hand and following the receipt of this $4.2 million plus available facilities from PFG of $5.5 million, the Company will have ~$16 million of available cash and facilities.
• Debtor days for 2Q FY22 were 42, down from 63 days in 1Q FY22, reflecting the improvement in payment arrangements from our largest customer, as well as the increased level of revenue for the December quarter.

AUD ($m)	MedAdvisor	MedAdvisor	Total
	US	ROW
Receipts from customers	17.6	3.5	21.1
Payments to suppliers and employees	(14.4)	(5.1)	(23.7)
Net cash flow from operations	(1.0)	(1.6)	(2.6)
Lease payments classified as financing activities	(0.3)	(0.1)	(0.4)
Net cash flow from operations inc lease payments	(1.3)	(1.7)	(3.0)

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