The Volpara Health Technologies Ltd (ASX: VHT) share price is falling today after the company announced its half-yearly results for FY21. At the time of writing, the Volpara share price is down 2.8% to $1.39.
Let's take a closer look to see what's moving the Volpara share price today.
What's driving the Volpara share price lower?
It seems, despite reporting a decent result for its FY21 half-year performance, the company's performance has failed to meet investors' expectations, if the falling Volpara share price is anything to go by.
For the period ending 30 September, Volpara received total revenue of NZ$9.5 million, up 38% on the prior corresponding period (pcp). This was underpinned by a 71% increase in its subscription revenue of NZ$8.8 million.
Annual recurring revenue (ARR) grew to NZ$19.9 million compared to the NZ$15.7 million recorded at the half-year of FY20.
Average revenue per user (ARPU) also lifted to US$1.16, up 26% over the comparable period.
Net operating cash outflow came to NZ$7.8 million, a slight improvement from the NZ$7.9 million that was recorded in the first half of FY20. COVID-19 brought some challenges to the business, affecting sales and marketing techniques which involved face-to-face contact and trade shows. As a result, the company decided to move further into the digital marketing space, and is starting to see results.
Overall, the group stood at a net loss of NZ$8.9 million, however this is an 11% upturn on the pcp.
The company revealed a holding cash balance of NZ$64.3 million at the end of the period. The jump from its NZ$31.4 million achieved at the end of FY20 was due to a recent capital raising of NZ$29.5 million.
Furthermore, the cash balance includes a NZ$2.6 million low-interest loan received as a COVID-19 relief package from the United States government.
Management commentary
Volpara CEO, Dr Ralph Highnam, commented on the group's achievement for the first-half of the year. He said:
In the face of this unprecedented challenge, we proactively modified our strategic approach on several fronts. We shifted to digital marketing, reshaped our US commercial team, and began investigating ways to address women directly to drive demand. We are focusing on R&D to generate improved products and services. And we have developed a new sales model to lower the cost of customer acquisitions.
Fortunately, we have a healthy balance sheet, and with vaccines seemingly on the horizon, the environment should correct itself in due course.
FY21 outlook
Looking towards the remaining part of the FY21, Volpara advised that it is on track to meet its expectations for the full-year. No guidance amount was given in the report however.
ARR is anticipated to grow in the coming months, but may be at a slower rate as COVID-19 is affecting its US market.
ARPU is also expected to rise despite the chance of the company losing contracts with a number of clinics. This is due to Volpara targeting MRS System customers to upgrade to its software-as-a-service (SaaS) platform. SaaS is viewed by Volpara as being much more meaningful to revenue than ARPU.
Volpara share price summary
The Volpara share price has lost ground over the past six months, falling by 6%. In comparison, the All Ordinaries Index (ASX: XAO) has moved more than 20% higher over the same time frame.
Whether or not the Volpara share price can reach its former glory when it was trading around the $2 mark remains to be seen. It will be interesting to watch the company's developments before reporting its full year-result in May next year.
