Careteq Reports $0.26M Cash Outflow, 600 Facilities Contracted in Q1 FY26
Careteq Limited signals progress on its 1-System platform integration with a planned Q3 FY26 restart, while Embedded Health Solutions expands aged care contracts and the company navigates a significant ATO R&D tax objection.
- 1-System platform integration to resume in Q3 FY26 with specialist firm engaged
- Embedded Health Solutions contracts near 600 facilities, covering 55,000+ aged-care beds
- Net operating cash outflow of $0.26 million including one-off ATO objection costs
- Formal objection lodged against ATO amended R&D tax assessments for FY21–FY23
- Company maintains focus on sustainable positive cash flow and profitability
Progress on 1-System Platform Integration
Careteq Limited (ASX, CTQ), the Melbourne-based clinical healthtech company, has announced a strategic move to accelerate the delivery of its 1-System platform. After previous delays, the company has engaged a specialist firm to scope and price the remaining work, with plans to recommence the project in the third quarter of fiscal year 2026 and complete it by year-end. This platform aims to unify operations by replacing legacy systems, promising structural cost efficiencies and streamlined service delivery once fully implemented.
Growth in Embedded Health Solutions
Embedded Health Solutions (EHS), Careteq’s flagship aged care medication management platform, continues to show robust growth. The number of facilities under contract is approaching 600, representing an approximate 3% increase for the quarter, and now covers over 55,000 aged-care beds. The sales pipeline remains strong, with multiple opportunities progressing through advanced stages, supporting expectations for continued expansion in the coming quarters.
Financial Discipline Amid Operational Challenges
Despite the positive operational momentum, Careteq reported a net operating cash outflow of $0.26 million for the quarter, which includes $0.14 million in one-off costs related to an ongoing objection process with the Australian Taxation Office (ATO). The company has formally lodged an objection against amended R&D tax incentive assessments for fiscal years 2021 to 2023. The timing and outcome of this dispute remain uncertain, but Careteq is actively engaging with the ATO, supported by legal advisers MinterEllison.
Commitment to Financial Sustainability
Careteq’s board emphasizes its commitment to achieving sustainable positive cash flow and profitability. The company is focusing on disciplined cost control, streamlined operations, and enhanced service offerings to support this goal. With cash reserves of $788,000 and estimated funding runway of approximately three quarters at current burn rates, the company is navigating a critical phase where operational execution and financial management will be key to its next growth chapter.
Looking Ahead
As Careteq prepares to restart its 1-System platform integration and continues to expand its aged care footprint, investors will be watching closely for updates on the ATO objection and the company’s cash flow trajectory. The successful delivery of the platform and resolution of the tax dispute could be pivotal in unlocking the company’s full potential in the competitive healthtech landscape.
Bottom Line?
Careteq’s upcoming platform relaunch and ATO dispute resolution will be critical milestones shaping its financial and operational future.
Questions in the middle?
- What is the expected financial impact and timeline for resolution of the ATO R&D tax objection?
- How will the 1-System platform integration affect operational costs and revenue growth once completed?
- What strategies will Careteq employ to extend its cash runway beyond the current estimated three quarters?
