The Volpara Health Technologies Ltd (ASX: VHT) share price has surged 5.47% to $1.44 this morning. This follows a positive business update for Q2. Let's see how Kiwi medtech company finished off the first half of FY21.
Strong Q2 performance
Volpara announced a record performance in the second quarter for FY21. Annual recurring revenue (ARR) jumped to NZ$19.9 million, adding NZ$850,000 on the prior corresponding period. This was underpinned by a mix of significant upsells and new contract wins.
Volpara highlighted that the increase in ARR was driven by deals completed through its major original equipment manufacturer (OEM) partners. Most notably, Fuji Medical & GE Healthcare, were selling Volpara software with their x-ray machines.
The average revenue per user (ARPU) also rose to US$1.16, a jump of 6% from Q1 FY21. A large portion of these contracts in the Q2 period ranged from US$1.75 to US$4.30. Volpara advised that this was helped by the increased sales of its integrated breast care platform.
In addition, the company advised that at least one of its software products was used by 27% of women in the United States. Volpara noted a slight drop over the quarter due to COVID-19-related cost pressures, with customers opting for generic breast cancer screening. To combat the competitor threat, the company said it was advancing the integration of a breast care platform.
What did the CEO say?
Volpara CEO Dr Ralph Highnam welcomed the result. He said:
This was a very strong Q2 and was particularly pleasing for the company, given we made a substantial change to our marketing strategy and reshaped our US commercial team midway through the quarter. The momentum we now have, with the expanded digital marketing and increasing OEM interest, bodes well for the rest of the year.
COVID-19 has been challenging for many companies, so I'm very pleased with how we've adapted to the 'new normal'. We now intend to accelerate our plans around upselling the installed base to migrate our customers to SaaS contracts and the powerful new integrated breast care platform we've now formally released. That platform is a game-changer for radiology practices.
Volpara share price summary
The Volpara share price hasn't moved much since its dramatic fall in March, reaching 79 cents. With a market capitalisation of $343 million, Volpara is still a long way off its 52-week high of $2.17 achieved in late 2019. The company's shares finished trading yesterday at $1.37.
