Visionflex Group Limited (ASX:VFX) provides proprietary software and hardware that connect third-party medical devices to support practitioners delivering virtual care. Its Annual Report for 2026, covering the year ended 30 June 2026, describes a shift towards subscription revenue, lower Debt and a restructured cost base.

FY26 financial results

The group reported an after-tax loss of $0.1 million, compared with a $3.1 million loss in FY25. Revenue from continuing operations was $4.2 million, compared with $4.7 million, a decline of 10%. Software and support (SaaS) revenue grew 27% to $1.7 million and represented 41% of total revenue, up from 29%. Hardware revenue was $2.3 million, down $0.5 million. Gross Margin expanded to 86% from 78%, and customer cash receipts grew 8% to $4.9 million.

The underlying normalised EBITDA loss was $1.6 million, compared with $2.5 million. The loss before income tax from continuing operations was $596,219, compared with $3,731,804, and included a $1,625,006 Fair Value gain on conversion of convertible notes that is excluded from the normalised measure. The company notes that normalised underlying EBITDA is a non-IFRS measure not specifically reviewed by its auditor.

Recurring revenue and customers

Annual Recurring Revenue closed the year at $1.95 million, up 3% on the 30 June 2025 balance, which the company says was more modest than targeted. It described a transition of part of its aged care subscriptions from Primary Health Network-funded arrangements to operating-funded subscriptions, a change that takes time. The report refers to subscription upgrades across existing customers and subscription pricing uplifts during the year.

Balance sheet and funding

Group borrowings were reduced from $2.5 million to $0.6 million, supported by a share consolidation approved at the 2025 Annual General Meeting. At 30 June 2026 the company held $1.6 million in cash, with a further $1.05 million available under undrawn facilities: $0.85 million under a convertible note Facility from its cornerstone investor, Adcock Private Equity, and up to $0.2 million under a Research and Development funding facility established with Advanced R&D in the fourth quarter. The company completed a workforce restructure in February 2026 to align its cost base with a smaller, more focused organisation.

Operating environment described in the report

The report describes the group's progress as a reshaping of the Business towards recurring, subscription-based revenue, with debt reduced progressively over several years. It notes that Capital Markets have been less supportive of small companies still investing for growth, and that the transition to operating-funded subscriptions takes time. Segment commentary refers to growing recurring subscription revenue as a stated objective for the coming year, alongside a product roadmap for its video consultation component. Revenue deferral from the SaaS timing is described as a timing difference in revenue recognition.

Risks and sector context

Total revenue declined 10%, hardware revenue fell and ARR growth of 3% was below the company's target. The group is still loss-making at the EBITDA level, and the smaller after-tax loss was helped by a non-cash fair value gain. Its Balance Sheet relies on facilities from its cornerstone investor, and the report includes a Going Concern note in its estimates and assumptions. Some sales cycles for virtual care depend on funded programs, and part of the aged care subscription base is transitioning between funding sources, with the outcome described as ongoing.

For sector context, the company refers to a market in which capital markets have been less supportive of small companies still investing for growth.

What to watch next

Items to watch include growth in annual recurring revenue from the $1.95 million base, the proportion of revenue from SaaS, progress converting aged care subscriptions to operating-funded arrangements, use of the $1.05 million of undrawn facilities, and further cost and debt reduction.