The CV Check Ltd (ASX: CV1) share price is edging lower today, despite releasing a positive trading update for the first quarter FY21.
In early morning trade, shares in the tech company are down 1.2% to 16.5 cents. In comparison, the All Ordinaries Index (ASX: XAO) is also down 0.9% to 6,208 points.
Let's see how CV Check tracked for the start of FY21.
How did CV Check perform for Q1 FY21?
For the period ending 30 September, CV Check reported a solid first quarter scorecard backed by the strengthening momentum post-COVID-19.
Revenue from its B2B and B2C segments recorded $2.6 million and $0.8 million, respectively. This totalled $3.4 million in booked revenue which represented a 1% decline on the prior corresponding period (pcp). The result was derived from new client wins coupled with an improved order flow from established customers, previously affected by COVID-19.
CV Check highlighted that revenue was 40% higher than the prior quarter. This was driven by a record in total website usage and account sign-ups for B2B and B2C in the last 12 months.
Annual recurring revenue rose to $9.9 million, as both the average revenue per account and number of returning customers expanded.
Net cash generation grew to $0.5 million compared with the $0.2 million cash burn in the pcp.
The company closed the quarter with a cash balance of $5.2 million, with no external debt.
Notable customer wins
During the quarter, first orders were received by an array of new customers that signed up with CV Check. The new additions included Amaysim Australia Ltd (ASX: AYS), the Australian Digital Health Agency, Sigma Healthcare Ltd (ASX: SIG), Village Roadshow Ltd (ASX: VRL) and others.
The company noted that these client wins were aided by the range of screening and verification products on offer.
Platform integrations
CV Check's strategy is to deliver growth through platform integrations with providers of human resource information and applicant tracking systems. Last month, the company successfully integrated with RealMe, a digital identity verification entity operated by the New Zealand government.
Revenue within this scope has continued to flourish, with sales reflecting a 156% increase on the pcp.
The number of employee checks per order through integrations also rose which supported business margins.
Management commentary
Commenting on the results, CV Check CEO Rod Sherwood said:
A resurgence of CV1 revenues was experienced during the past quarter with record sales being achieved for the month of September despite renewed shutdowns across New Zealand and Victoria; that trading strength has continued in October.
New client wins were strong throughout the period and a new integration was announced with RealMe, the New Zealand government digital ID platform.
CV1 was also thrilled to announce recently that it had won its first major international customer under its strategic white label initiative, NetForce Global LLC, and then back that up by winning the business of Vero Screening Ltd.
