Volpara Health Technologies Ltd
(ASX: VHT) has reported its FY19 result for the year to 31 March 2019.
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 FY19 Result
The healthcare business reported that its total income grew by 62% to NZ$5.7 million. However, most pleasing was that ‘Software as a Service (SaaS)’ revenue increased by 109% to NZ$4.04 million.
Cash receipts from customers increased by 81% to NZ$5.6 million and its gross margin improved from 77% in FY18 to 83% in FY19.
During the year the company more than doubled its market share of US women from 3.2% to 7.1%.
Annual recurring revenue (ARR) increased by 86% to NZ$6.6 million and the total contract value (TCV) increased by 41% to NZ$15.8 million.
However, despite all of the positive news regarding Volpara’s top line, the net loss after tax worsened by 33% to NZ$11.7 million.
Volpara Management Comments
Volpara CEO Dr Ralph Hignam said: “FY19 was a very solid year, ending with one of the strongest quarters in the Company’s history, the highlight being Volpara’s first NZ$1 million quarter in new ARR.
“We enter FY20 knowing that many groups in the United States are pushing for density notification and increased quality in breast imaging, that the FDA will mandate density notification, and that the Netherlands’ Project DENSE results will be formally published.
Is Volpara A Buy?
The revenue growth by Volpara is impressive, but the bigger loss and increased operating cash burn wasn’t.
It was good to see that the company is now recognising more costs as research and development and not capitalising them. Hopefully the company’s increased expenditure on advertising and marketing pays off in the long run.
I’m unsure if Volpara is a buy today, it’s hard to value a loss-making business, but if it keeps growing revenue at this pace it has an exciting future ahead. The growth shares in the free report below could be even better picks.
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