The Volpara Health Technologies (ASX: VHT)
share price will be on watch this morning after reporting its half year result.
Volpara describes itself as a ‘MedTech Software as a Service’ company that was founded in 2009 on research conducted at Oxford University. Its software is used for screening clinics to provide feedback on breast density, compression, dose and quality. Its VolparaEnterprise business provides role-specific dashboards and wide-ranging benchmarking analytics to help clinics manage their business more efficiently.
Volpara’s 2020 Half Year Result
The healthcare technology business reported that its total revenue increased by 197% to NZ$6.8 million. Within that, subscription revenue rose by 148% to NZ$5.2 million and capital revenue increased 680% to NZ$1.7 million.
Annualised recurring revenue jumped to NZ$15.7 million compared to NZ4.8 million in the prior corresponding period. The total increase was partially attributable to the MRS acquisition, particularly the increase in capital revenue.
Volpara management plan to transition MRS to a software-as-a-service (SaaS) model which will generate recurring revenue. It also gained a start in lung cancer screening sector through the MRS acquisition.
The percentage of US women having one of the company’s products applied on their images and data jumped to 25.8%, up from 5.6% compared to last year.
Despite the large MRS acquisition, the company continued to increase spending on sales, marketing, R&D, an increased headcount and so on. There were also acquisition costs and share-based payments.
Volpara’s gross profit rose by 215% to NZ$6.07 million (with a gross profit margin of 89%), but the operating loss worsened by 56% to NZ$8.36 million due to the higher operating costs. The net loss after tax also worsened by 57% to NZ$7.9 million.
Volpara Balance Sheet
The company ended the period with NZ$40.2 million of cash after its NZ$58 million capital raising in the first quarter.
Outlook
Volpara will be focused on accelerated sales growth with a worldwide footprint, it’s also focusing on the APAC & Europe regions.
The company is aiming to maintain its very low customer churn and increase the average revenue per user (ARPU) whilst being cost efficient.
Volpara is aiming for annual recurring revenue of NZ$17.1 million by the end of FY20 and it will try to increase its market share to over 27% of US women.
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