It might be earnings season right now but, for some ASX shares, the top line is more of a focus than profits.
This is common in companies that have brought relatively new products to the market and are chiefly looking to build their customer base and take market share. In this scenario, rapid revenue growth is a prime metric of successful execution.
Two Australian companies currently on this path are ASX healthcare shares Nanosonics Ltd (ASX: NAN) and Polynovo Ltd (ASX: PNV). Both of these companies have released their first-half results for FY2023 to the market today.
So, are these revolutionary medical product sellers still delivering revenue growth fast enough to put your eyebrows at risk?
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Are these ASX shares delivering the goods?
Accelerating revenue growth
Let's start with the fastest-growing of the two companies, Polynovo. The $1.57 billion medical company, primarily focused on burns and wounds, showed the market it has high growth potential.
Polynovo achieved record revenue in the first half of FY2023, totalling $29.5 million. The figure represents an impressive 62.2% increase on the prior corresponding period. Notably, the rate of growth is the highest the company has recorded since the first half of FY2020 — suggesting a reacceleration of sales.
The company dialled up sales of its flagship biodegradable temporizing matrix (BTM) products by 67.5% during the period. Sales in the United States made the largest contribution in dollar terms, growing 61% to $22.8 million.
However, burgeoning employee and administrative expenses in the half swung Polynovo back into a net loss of $3.9 million.
Shares in this ASX healthcare company are up 3.38% at the time of writing to $2.295 apiece, furthering the company's one-year share price gain to 101%.
Slower than last year
Much like Polynovo, ultrasound disinfection company Nanosonics came in with double-digit revenue growth. However, the difference begins at the rate of growth compared to the prior corresponding period.
For the six months ending December 2022, Nanosonics recorded $81.6 million in revenue — up 35% year on year. Certainly, it's an impressive result on its own, though this is down from an increase of 41% in the previous first half.
Furthermore, the company's new installed base of 1,270 devices was down 10% from the 1,410 it rolled out in the prior period.
On a positive note, consumables and service revenue increased 34% to $55.7 million. This was up on the previous growth rate of 23%. This could be a promising sign as the company looks to follow the classic razor and blade business model.
Accelerating revenue and controlled costs enabled Nanosonics to produce a supercharged net profit after tax (NPAT). Net profits increased 167% compared to the same period last year, hitting $10.4 million.
The Nanosonics share price is currently 0.32% higher to $4.755 today. Though, where the performance of this ASX share really outshines the broader market is in its one-year return — that's up 15%.
