Best-ever result: Volpara Health (ASX:VHT) share price jumps on half-year update

It’s been a good start to the trading day for the medical technology company

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The Volpara Health Technologies Ltd (ASX: VHT) share price is in the green in early trade today, up 2.9% to $1.06.

Investors are pushing up Volpara Health shares after the medical technology software as a service (SaaS) player released its half-year accounts before the open.

It was a record year for the provider of breast imaging analytics, winning new business and growing recurring revenue while doing so.

Here’s a closer look at Volpara’s result for the 6 months ended 30 September 2021.

Volpara share price climbs on positive result

  • Annual recurring revenue (ARR) increased by over US$1.8 million to US$20.4 million;
  • Accounting revenues grew by NZ$2.9 million to NZ$12.3 million;
  • The net loss for HY22 was NZ$8.5 million, an improvement of 4% from NZ$8.9 million in the prior period; and
  • Full-year guidance of NZ$25–26 million retained.

What happened this half for Volpara?

The company posted its “best-ever” half-year result in terms of new business won. ARR increased by more than US$1.8 million to US$20.4 million, a gain of almost 10% from the end of FY21.

This came with a corresponding increase in accounting revenues of NZ$2.9 million to NZ$12.3 million, up 30% from $9.5 million for the first half last year.

Cash receipts delivered record growth for the company this half, increasing by more than 40% to NZ$13.5 million (or 48% in constant currency).

Volpara’s SaaS segment gained more steam this quarter too, with cash receipts from subscriptions growing approximately 50% to NZ$13.1 million. On this result, receipts from capital sales decreased approximately 55% to NZ$500,000 compared with NZ$1.1 million in the prior period.

Aside from this, the company made an initial investment into RevealDx, a lung artificial intelligence (AI) company based in Seattle. It further signed a collaboration agreement with Riverain Technologies, also US-based, each to expand Volpara’s lung market penetration.

The release also notes that Volpara’s software reached the milestone of featuring in 200 peer-reviewed articles. According to the company, this “clearly sets [it] apart from the competition. It demonstrates Volpara’s commitment to providing the most clinically validated breast density software available and the continual investment in research and development of core IP”.

The net loss for the half was NZ$8.5 million, an improvement of 4% from NZ$8.9 million in the prior period. Similarly, normalised earnings before interest, taxes, depreciation, and amortisation (EBITDA) improved 4% from NZ$6.6 million to NZ$6.4 million.

The update seems to have pleased investors today. The Volpara share price also climbed when the company released its quarterly update back in October.

What’s the outlook for Volpara?

Volpara noted it is focused on delivering full-year guidance of NZ$25–26 million. It is also continuing to build out key strategic initiatives.

This includes “Analytics in Action”, a client-centred service exclusively for customers of Volpara Analytics. It is designed to help breast imaging facilities “develop a culture of continuous performance improvement and recognise technologists that meet quality benchmarks”.

It is also focused on building out its data platform of more than 49 million x-ray images and expanding its electronic health record (EHR) sales channel.

What is management saying?

Commenting on the news likely driving the Volpara share price today, its directorship said:

While clearly indicating an incredibly busy commercial HY, we also recognise that a focus for many of our employees and investors is impact. With coverage now of over 13.4M US women with at least one of our products, it is clear we are helping many women get safer, more comfortable, and more accurate breast cancer screenings. Results from studies like the DENSE trial show that such screenings lead to significant increases in the numbers of cancers caught early.

Volpara share price snapshot

Volpara is trading deep in the red over the past 12 months and has lost almost 24% in that time.

This year the Volpara share price is down around 28%, and is down almost 18% for the month.

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool Australia owns shares of and has recommended VOLPARA FPO NZ. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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