The Volpara Health Technologies Ltd (ASX: VHT) share price is up more than 3% after revealing a major contract win in Australia.
Volpara is a health technology software company founded in 2009. Its software is used for screening clinics to provide feedback on breast density, compression, dose and quality. Its enterprise-wide practice management software helps with productivity, compliance, reimbursement and patient tracking.
Australian contract win
Volpara said that it has signed a five year software as a service (SaaS) contract with BreastScreen Queensland, after a successful pilot trail with BreastScreen Queensland on the Gold Coast.
BreastScreen Queensland is the third largest public breast screening programme in Australia. The terms and conditions of the contract with BreastScreen Queensland are confidential.
The contract, which is initially for Volpara’s quality assurance platform, VolparaEnterprise, allows for the expansion of services to include VolparaDensity and VolparaLive.
The initial stage will involve the roll-out of VolparaEnterprise to 11 BreastScreen Queensland services operating in Brisbane and elsewhere in the state. The BreastScreen Queensland services comprise 69 gantries and 43 sites that include 10 mobile units, covering 171 radiologists and technologists. The roll-out has already begun and Volpara expects it to go live in early 2021.
Management comments
Volpara CEO Dr Highnam said: “Public breast cancer screening programmes around the world do a fantastic job at reducing deaths from breast cancer, and they do so by operating under the strictest quality control, which can make change difficult.
“But, we are delighted to now have BreastScreen Queensland signing up to use our software, making it the second major public breast cancer screening programme in Australia signed up to Volpara products. This is news that will resonate around the world, and we are extremely pleased that our software will be helping women in the fight against breast cancer, including women in the lives of many of our long-term investors.”
Summary thoughts
These types of deals are very promising. Not only is it a good deal itself, but management can point to this contract when pitching to other large potential customers around the world, leading to more good contract wins and more growth.
Volpara is a very compelling business with a very high gross profit margin, expanding market share and growing average revenue per user (ARPU). I think it could be one to keep an eye on over the coming years.
Other ASX growth shares in the tech space could also make great investment such as Pushpay Holdings Ltd (ASX: PPH) and Xero Limited (ASX: XRO), though Xero is pretty pricey right now.
