The Volpara Health Technologies Ltd
(ASX: VHT) share price is rising after the company released its FY22 second quarter.
FY22 second quarter
The healthcare business said that it delivered record quarterly growth in net new annual recurring revenue (ARR), adding US$1.2 million, which has historically been the slowest quarter.
Volpara closed its largest contract to date, that will deliver US$2.15 million of revenue over five years, being US$430,000 in ARR.
This brings the company’s ARR to around US$20.4 million, or NZ$29 million. That’s an increase of around 10% since the end of the FY21.
Looking at its market share, Volpara estimates that it now has at least one software product contracted to be used in the breast screening of approximately 34% of US women, equal to approximately 13.4 million women.
Volpara’s average revenue per user (ARPU) was US$2.04 for the quarter, and is now US$1.46 over the entire installed base, up from US$1.42 in the first quarter of FY22.
Other highlights included entering into collaboration agreements with lung cancer AI leaders Riverain
and RevealDX and a genetics collaboration agreement with Natera.
Positive trends
Volpara said that the prevailing trend of Volpara’s customer base is their desire to facilitate personalised breast cancer care with tightly integrated breast density, cancer risk and patient reporting.
A key part of the potential growth of Volpara is increasing its ARPU by upselling to existing customers.
The healthcare business said that it expanded two large existing Analytics customers by US$70,000 and US$35,000 respectively, taking both their contracts to approximately US$250,000 per annum.
There was an expansion of another large Analytics customer to Patient Hub, Risk and Scorecard, increasing ARR by another US$132,000 to over US$200,000 at an ARPU of US$6.37.
Finally, multiple patient hub upgrades were seen moving away from MRS 7 or MRS 6 onto multi-year software as a service (SaaS) contracts.
Thoughts on Volpara and the share price
The company said it is entering the third quarter with a strong pipeline and is looking forward to presenting at RSNA, the world’s largest radiology trade show in early December.
I think Volpara is one of the ASX growth shares to watch, particularly with the fast level of progress it’s seeing and the encouraging signs of upgrading customers. I’d consider it at today’s level.
