The share price of Volpara Health Technologies Ltd (ASX: VHT) has risen another 3% this morning after releasing its June 2019 quarter update.
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 June 2019 Quarter Cashflow Update
Volpara revealed that its cash receipts from customers grew to NZ$2.3 million, an increase of 137% compared to the first quarter of its FY19. This came about from the significant increase of annual recurring revenue (ARR) which reached NZ$14.6 million at the end of the 30 June 2019 quarter, and this is tracking to the forecast.
The NZ$14.6 million ARR is comprised of NZ$13.6 million from Breast sales and NZ$970,000 from Lung sales. The company had forecast that Volpara’s ARR would grow by 50% to 80% and that MRS Systems would contribute at least US$4.5 million of ARR, meaning the mid-point of the forecast is NZ$17.1 million, which management says the company is on track to achieve with “very low” churn.
Volpara ended June 2019 with NZ$39.9 million of cash, which doesn’t include NZ$4.8 million of capital raising funds which were received early in the second quarter. The company has no debt.
The company also said that it’s on track to achieve a market share of 27% of US women having a Volpara product contracted to be used on their images and data after the MRS Systems acquisition and capital raising.
Is Volpara A Buy?
Volpara ticks a lot of the growth share qualities you’d want to have. A high level of recurring revenue, high margins, growing market share, no debt and rapidly growing revenue.
The main thing is the valuation, what is a good price to buy shares at? Volpara is priced for a lot of success, but it could very profitable in the next few years, particularly if it grows in other countries. I’m keep my eye on Volpara and the two rapidly growing businesses in the free report below.
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