The Volpara Health Technologies Ltd (ASX: VHT) share price is under the spotlight after reporting a record FY23 result.
Volpara offers software relating to screening for cancer. It helps better analyse breast screening images to understand and advise on risk, while also providing software for healthcare professionals to do things more efficiently.
FY23 half-year result
Here are some of the highlights from the report for the 12 months to 31 March 2023:
- Revenue rose 34% (or 20% in constant exchange rate terms) to NZ$35 million, compared to initial guidance of NZ$33.5 million to NZ$34.5 million
- Underlying EBITDA (EBITDA explained) improved 57% to a loss of NZ$6.1 million
- Net loss after tax improved by 40% to NZ$9.8 million
All three of its core products – analyics, patient hub/MRS and risk pathways saw strong revenue growth of 30%, 33% and 49%. The other (small) revenue categories of lung and genetic lab interfaces (along with other items) saw increases compared to last year.
Volpara has estimated that it has a software product that is used in more than 40% of the breast screening volume in the US. But, a significant portion of customers only use one Volpara product, giving “an excellent opportunity for the company to cross-sell additional products to its existing customer base.” Being successful with this could be a big boost for the Volpara share price.
The ASX healthcare share said that overall operating costs have “stabilised”. Stable costs with soaring revenue is a helpful combination.
FY24 guidance
Volpara said that it has set its guidance for FY24 revenue in constant currency terms of between NZ$40 million to NZ$42 million, which would be an increase of between 15% to 20% compared to FY23.
It has also guided that it expects to make underlying EBITDA of between NZ$0.5 million and a loss of NZ$2 million.
Volpara had a cash balance of NZ$12.7 million at 31 March 2023. It’s hoping to reach profitability, but it has established a NZ$10 million revolving credit facility with Kiwibank which could provide funding without diluting ownership.
Final thoughts on the Volpara share price
The ASX healthcare share is getting closer and closer to breakeven, while demonstrating strong revenue growth.
If it can sell more software to existing customers, then this would be a helpful boost for the average revenue per user (ARPU).
I think Volpara is a very promising business, and the lung cancer screening could provide an unexpected boost later this decade.
