Volpara Health Technologies Ltd (ASX: VHT) shares will be one to watch on Tuesday morning following the release of the company’s 2020 first-quarter report (1Q21).
Volpara Health Technologies is an ASX-listed but Kiwi headquartered ‘MedTech Software as a Service’ company, founded by Ralph Highnam in 2009 based on research he conducted at Oxford University.
Volpara’s software is used by breast imaging/screening clinics to provide feedback on breast density, compression, dose and quality. Our lead investment analyst recently interviewed Volpara CEO Ralph Highnam for our Rask Rockets 2020 program.
Volpara Quarterly update
Here are the highlights from the quarter:
- Cash receipts from customers of NZ$5 million, up 112% compared to the first quarter of its 2020 financial year
- Net cash outflow was NZ$3.7 million
- Volpara has NZ$67.5 million of cash in the bank, providing ample headroom for acquisitions or increased marketing and sales during COVID
- Annualized recurring revenue (ARR) rose NZ$1.1 million during the quarter, to NZ$19.1 million
- Churn, or the number of customers who give up Volpara’s products, “remained negligible” highlighting the importance/stickiness of its product suite. However, some legacy maintenance contracts were not renewed.
- On COVID, the company says it continues to “monitor the pandemic closely” after more confirmed cases throughout the USA — its most important market
Looking forward the company said it had a “reasonable quarter” after a very strong fourth quarter.
“Q1 saw the emergence of COVID-19, but we’re very heartened by the strong cash receipts, negligible churn, and the fact that we got a significant number of new deals over the line,” CEO Highnam said.
“However, we remain fully cognizant of the challenges ahead and are carefully plotting out new strategies so we can emerge from this crisis strong—COVID-19 will go away, cancer will not.”
Behind the increase in ARR during the quarter, the company said it was a combination of new customers, together with some upselling activity (NZ$450,000).
Importantly for analysts, for new customers onboarded during the quarter, the pricing continued to increase. The average revenue per woman (APRU) screened in the US ranged between US$1.87 and US$4.40 depending on the size and structure of the customer’s contract.
Across the entire group, APRU was NZ$1.70 (US$1.09) during the quarter, up from NZ$1.61 (US$1.04) three months ago.
You can read our analyst’s full investment report on Volpara Health Technologies by clicking here. It’s free.
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