Alcidion Group (ASX:ALC) used its Q2 FY2026 Appendix 4C and quarterly business update to outline continued sales momentum, a major contract expansion with Leidos for the Australian Defence Force, and a post-quarter selection as preferred provider for a large U.K. electronic patient record (EPR) opportunity. Management also discussed cash flow seasonality, deployment activity, and guidance expectations for FY2026.
Contract wins, expansions, and a new preferred provider selection
Management said the company carried positive momentum from Q1 into the December quarter, citing contract wins, expansions, renewals, and multiple go-lives.
After quarter-end, Alcidion announced it had been selected as preferred provider to University Hospitals Sussex NHS Foundation Trust (UHS Sussex) for a new EPR solution. Management emphasized that contract negotiations were still underway but said it expects total contract value (TCV) to be at least AUD 35 million, subject to modules selected and contract period. The company said it is discussing an initial seven-year term and is targeting contract finalization early in Q4, with deployment to begin soon after.
Management positioned Sussex as the company’s third EPR contract, following North Cumbria and South Tees. It also said the deal could become Alcidion’s largest U.K. contract to date based on current expectations, while noting it was not yet able to provide additional detail beyond the minimum TCV indication.
Quarterly financial snapshot and cash flow seasonality
For Q2, the company reported:
- New sales TCV: AUD 15.4 million, with the majority related to the Leidos expansion
- Recurring mix: about 62% of new sales related to recurring product revenue, with the balance largely services tied to implementation (notably for Leidos)
- Cash receipts from customers: AUD 8.5 million
- Operating cash outflow: AUD 1.9 million, which management attributed largely to December timing factors
- Cash at quarter end: AUD 14.2 million and no debt
Management said the December period typically produces timing-related volatility in cash collections, with collections falling either side of year-end. It noted an accounts receivable ledger of about AUD 10.7 million at quarter-end and said roughly AUD 8.8 million had already been collected in the first week or two of January. Management also stated the business generally has very few bad debts and usually collects within 30 days where that is the contractual payment term.
On costs, management said staff cash costs remained controlled, with Q2 staff costs up about 3.7% year over year, which it described as broadly in line with inflation and salary increases.
Leidos expansion details and long-term contract profile
The company described the Leidos/ADF expansion as a AUD 12.3 million TCV increase covering the remaining 2.8 years of the first five-year commitment within a “5+5+5” structure. Management said the expansion adds about AUD 2.5 million in annual recurring revenue (ARR) and that the overall JP2060 contract now has ARR in excess of AUD 5.5 million.
Management also referenced extension options running out to 2036 and said the long project duration underpins Alcidion’s financial stability. It further highlighted the company’s modular approach, including continued development and release of new modules. As an example, management pointed to an Emergency Department (ED) module developed over the past couple of years that is live at two U.K. sites and included in the Leidos expansion rollout, with additional market interest cited.
Renewals and deployments, including first site in Wales
During the quarter, Alcidion renewed NHS Lanarkshire for a further three years, continuing delivery of Miya Observations and Assessments (formerly Patientrack). Management said the TCV was over AUD 1 million and framed the renewal as supportive of referenceability and growth in contracted recurring revenue. The company also renewed several smaller contracts in the U.K. and Australia.
On delivery, management said teams remained busy with implementations. The quarter’s most significant go-live was at Hywel Dda in Wales, where Alcidion went live with Miya Flow, Miya Precision, and Miya Observations and Assessments. Management described Hywel Dda as the company’s first site in Wales and said it expects the deployment to help demonstrate value to the broader Welsh market. Management added that Q3 was expected to be even busier, with several key go-lives scheduled in both the U.K. and Australia.
Guidance, pipeline commentary, and strategic themes
Management said that by the end of Q2 the company had AUD 43.1 million as a minimum level of contracted revenue expected to be recognized in FY2026, which it said was 40% higher than the same period last year and already 6% higher than full FY2025 revenue. The figure excludes any contribution from the Sussex preferred provider selection and any other potential second-half deals.
For FY2026, management refined its guidance and said it expects EBITDA and operating cash flow to be at least in line with FY2025, citing anticipated upside subject to finalizing the Sussex contract and the timing of any additional new or expansion contracts in the second half. It reiterated that the second half is historically stronger for customer receipts and said it remained confident of being cash flow positive.
In Q&A, management said Alcidion had delivered positive cash flow each year since FY2021 except FY2024, and reported FY2025 operating cash flow was materially positive at AUD 5 million. Management also said the company delivered maiden positive NPAT in FY2025 of AUD 1.7 million.
Management also addressed several strategic topics, including:
- NHS Integrated Care Systems (ICS): Management said Miya Precision can integrate trust-level patient data and EPR data across multiple EPRs at an ICS level, but noted it was still assessing how changes in ICS roles may influence digital decision-making.
- Canada: The company said work with a Canadian consultant has focused on assessing opportunity for Miya Precision in patient flow, with upcoming activity including a workshop session in March in Ontario and attendance at e-Health in Halifax in June.
- Middle East: Management said discussions are progressing with potential partners and emphasized due diligence in selecting the right go-to-market partner, with further meetings planned during an upcoming trip.
- AI: Management said the company is using AI internally across requirements, development, and testing, and referenced modules released in the past year including Miya AI, Miya Scribe, and Miya Summary, along with an AI service intended to support use of Miya Precision data with AI while considering safety and ethical requirements.
On resourcing Sussex if the contract is finalized, management said it expects to staff the project predominantly from existing capabilities, with potential to add one or two roles in the U.K. and incremental support resources closer to go-live.
About Alcidion Group (ASX:ALC)
Alcidion Group Limited, together with its subsidiaries, engages in the development and licensing of healthcare software products in Australia, New Zealand, and the United Kingdom. The company offers Miya Precision, a consolidated fast healthcare interoperability resource (FHIR) based platform to deliver smart healthcare; Smartpage, a smartphone and web-based system for hospital communication and task management to address the requirements of clinical and non-clinical users; Patientrack, a real-time patient monitoring and risk screening solution; Silverlink, a patient administration system; and ExtraMed, a clinical and patient flow management software.
