Release Date: March 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Craneware PLC (CRWRF) achieved record interim results with double-digit growth in revenue and adjusted EPS.

• The company has a strong customer base, including over 2,000 hospitals and 10,000 clinics, providing a significant market for its products.

• Craneware PLC (CRWRF) has formed strategic partnerships with major companies like Microsoft and Oracle, enhancing its market position.

• The company has a high level of recurring revenue, with 90% of its revenues being recurring in nature.

• Craneware PLC (CRWRF) has a strong balance sheet with cash reserves exceeding total bank debt, providing financial stability.

Negative Points

• Despite strong financial performance, the company's growth rate of annual recurring revenue (ARR) trails its annual revenue growth.

• The company faces challenges in capitalizing R&D expenses due to the mix of different stages of R&D projects.

• There is a significant portion of the market still untapped, with 60% of the total market available for its products.

• The company's expansion sales, while successful, do not immediately reflect in the current year's financial numbers due to accounting practices.

• Craneware PLC (CRWRF) is operating in a complex and evolving healthcare market, which may present regulatory and operational challenges.

Q & A Highlights

• Warning! GuruFocus has detected 8 Warning Signs with CRWRF.

Q: Can you elaborate on the strategic investments hospitals are making to improve financial and operational efficiencies? A: Craig Preston, CFO, explained that hospitals are focusing on generating revenues and delivering margins to invest in their mission of providing community care. They are making strategic investments in financial and operational efficiencies, leveraging the TriS platform and strategic alliances like the one with Microsoft to strengthen their operations.

Q: How has Craneware's financial performance been in the first half of fiscal 2025? A: Craig Preston, CFO, reported double-digit growth across key P&L measures, achieving $100 million in revenue for the first time in a six-month period. Adjusted EPS grew by 18%, and operating cash conversion exceeded 100%. The company maintained a 30% EBITDA margin, with 90% of revenues being recurring.

Q: What are the key drivers behind Craneware's revenue growth? A: Keith Nelson, CEO, highlighted the expansion sales across existing customers and significant competitive wins in new hospitals. The company has also leveraged its partnership with Microsoft to enhance its offerings and expand its customer base, contributing to revenue growth.