[Edaily Reporter NA EUN-KYUNG ] Coreline Soft Co., Ltd.(384470)has secured 77 new medical institutions in Germany through July of this year. Compared to last year, when new contracts totaled only about 10 for the entire year, this represents a 7.7-fold increase in just seven months. Notably, since only about 40% of the new orders secured in the first half were reflected in first-half revenue, the pace of installation for the remaining contracts and the transition to lung cancer screening are expected to be key points to watch for the company’s German business in the second half.

According to Coreline Soft Co., Ltd. on the 3rd, the company’s new client contracts in Germany totaled 55 in the first half of this year, with an additional 22 signed in July, bringing the cumulative total to 77. Last year, the company secured approximately 10 new clients in Germany annually, indicating a steep increase in contracts this year. When combined with 18 additional orders from existing clients—including product add-ons and upgrades—the total number of new and additional orders through July of this year reached 95.

Coreline Soft Co., Ltd.’s growth in German contracts is driven primarily by its lung cancer screening AI solution, “AVIEW LCS Plus,” and its screening operations platform, “AVIEW HUB.” AVIEW LCS Plus is a solution that quantitatively analyzes major thoracic diseases—such as pulmonary nodules, chronic obstructive pulmonary disease (COPD), and coronary artery calcification—using a single low-dose computed tomography (LDCT) scan. It goes beyond simple nodule detection to support comparisons with previous images, long-term follow-up management, and repeated readings.

AVIEW HUB is a platform that integrates the management of lung cancer screening programs involving multiple medical institutions and reading centers. It connects imaging and reading data between scanning facilities and primary and secondary reading centers, and supports multi-center reading, quality assurance (QA), data anonymization, and standardized screening procedures. In particular, it serves as an operational infrastructure that enables medical institutions to conduct screenings and follow-up care according to the same standards in nationwide or regional lung cancer screening programs where institutions are geographically dispersed.

Contracts Up 7.7-Fold… 60% of Which Will Be “Recognized as Revenue Soon”

An increase in contracts does not necessarily mean an

immediate

increase in revenue at the same time. Medical AI requires time—from contract signing through hospital system integration, security reviews, installation, and training—before it can be deployed for actual screening. However, approximately 40% of the 55 new contracts secured in Germany during the first half of this year were reflected in first-half revenue.

According to separate internal calculations, the contract value for new orders for which invoices were issued by August 12 totals approximately 500 million won. However, the timing of invoice issuance and the recognition of revenue for accounting purposes may vary depending on contract terms and the timing of installation and service provision. The remaining contracts are expected to be converted into revenue sequentially in the future, depending on the schedule for system implementation, integration, installation, and the start of actual diagnostic services at each medical institution.

The company did not provide specific guidance on the growth rate of German revenue for the second half of the year. However, given that a significant portion of the orders secured in the first half has not yet been reflected in revenue—and that 22 new contracts were added in July—the pace at which existing contracts are brought online, along with new orders, is expected to be a key factor determining overseas performance in the second half.

Overseas performance is already showing a clear growth trend. Coreline Soft Co., Ltd.’s consolidated revenue for the first half of this year was 2.885 billion won, a 45.7% increase year-over-year, while overseas revenue rose 123.0% to 1.786 billion won, accounting for 61.9% of total revenue. In particular, second-quarter overseas revenue reached 975 million won, marking the highest quarterly figure in the company’s history. This represents an increase of approximately 20% compared to the first quarter’s figure of about 811 million won.

Growth in Europe was even more significant. European revenue surged by approximately 198%, rising from about 358 million won in the first half of last year to 1.066 billion won this year. Of this, initial onboarding revenue—including installation and training associated with the expansion of new locations—totaled approximately 540 million won, a 925% increase compared to the same period last year. The company views this as a leading indicator that could lead to recurring revenue in the future, such as usage-based billing and maintenance fees. Currently, revenue in Europe primarily consists of initial sales generated during the process of setting up new hospitals; however, once actual screenings begin, revenue linked to the volume of tests will be added.

Focus on

PPU After Initial Deployment… Usage-Based Revenue Up 146%

The key metric to watch starting next quarter is the actual volume of screenings. At medical institutions where usage-based billing (PPU) is applied, revenue increases in tandem with the rise in the number of actual lung cancer screenings following system implementation. The business flow proceeds as follows: contract → installation and integration → initial revenue → commencement of screenings → increase in screening volume → recurring PPU revenue.

This shift in revenue structure is also reflected in Coreline Soft Co., Ltd.’s overall business performance. In the first half of this year, recurring revenue from pure software (SW) sales totaled 1.37 billion won, a 67% increase from 818 million won in the same period last year. The proportion of recurring revenue within total SW sales also rose by 18 percentage points (pp), from 43% to 60%.

In particular, pay-as-you-go revenue—which is generated based on actual usage—rose by 146%, from 114 million won in the first half of last year to 281 million won this year. Revenue from term licenses also increased by 66%, from 578 million won to 957 million won. In contrast, revenue from perpetual licenses decreased by 18%, from 1.105 billion won to 908 million won.

This indicates that the company’s revenue model is shifting from one-time perpetual licenses to a structure based on term licenses and recurring revenue tied to actual usage. In Germany as well, it is expected that the extent to which this shift in revenue structure will expand can be confirmed once the number of actual screenings increases following the installation of systems at contracted institutions.

The expansion of the contract in Germany is driven by the inclusion of low-dose computed tomography (LDCT)-based lung cancer screening in statutory health insurance coverage, which began last April. The German lung cancer screening system operates through a network connecting primary screening facilities and secondary specialized interpretation centers. Since dual interpretation and inter-institutional data sharing are required, a system capable of managing the entire screening process by linking multiple institutions is more important than installing an AI analysis program at a single medical facility.

In particular, lung cancer screening involves a series of steps even after a nodule is detected, including comparison with previous images, re-examination, analysis of growth changes, dual interpretation, and long-term follow-up. As the number of screened patients and the volume of data accumulate, the value of a system capable of reliably and repeatedly managing the entire screening process—rather than individual AI functions—increases from the perspective of medical institutions, which is why demand for software is also rising.

77 New Customers Alone… 18 Additional Orders from Existing Customers

Additional demand is emerging not only from new customers but also from existing clients. As of last July, there were a total of 18 additional orders from existing customers, including the introduction of new products and upgrades. There were also cases where customers first adopted lung cancer screening AI and subsequently purchased other thoracic CT analysis products, such as those for coronary artery calcification (CAC) or emphysema.

A representative of Coreline Soft Co., Ltd. stated, “Not only are we securing new customers in Germany, but we are also seeing cases where existing customers are adding other products and features based on their actual usage experience,” adding, “We are simultaneously pursuing the acquisition of new clients and the expansion of our product portfolio among existing customers.”

Coreline Soft Co., Ltd. offers not only AI for lung cancer screening but also a portfolio of chest CT-based products that analyze chronic obstructive pulmonary disease (COPD), emphysema, and coronary artery calcification (CAC), as well as “AVIEW HUB,” a platform that supports multi-institution image interpretation and operations. If the company can expand its supply scope to products analyzing other diseases after initially entering medical institutions through its lung cancer screening AI, it can create a structure that simultaneously drives growth in new customers and increases revenue per existing customer.

Kim Jin-guk, CEO of Coreline Soft Co., Ltd., stated, “The national screening market is not one that can be established overnight; rather, the process of building a foundation that can operate stably over the long term within the workflow of medical institutions is crucial.” He added, “Based on the track record and operational experience we’ve accumulated at major European institutions, we will continue to build a sustainable AI screening infrastructure.”