@AUROPAL i think you are right, i wonder if they are underpricing the product. which raises a few more concerning issues, about the unit economics. can they ever reach reasonable returns, is the product that valuable, all not great

@Solvetheriddle I think the unit economics are excellent, as evidenced by their Gross Margin and as it should be given the software solution nature of the product i.e. tiny incremental cost of goods sold.

So they should be able to reach scale and then demonstrate excellent operating leverage.

They just haven't reached scale yet and have grown their indirect costs substantinally.

@AUROPAL despite their excellent gross margin. I am looking to exit my position IRL.

They have had the time, 5yrs by my self-made-rules, and are still faffing about. Probably Ralphs fault in hindsight.

I am undecided on whether to give them another chance, and as you point out, a cap raise is probable. Hence the eye towards the exit. I'm still up 0.4% CAGR over the five years according to sharesight. hahahahaha

@reddogaustin they have definitely underperformed on getting to profitability.

I have owned them for 4 years and unfortunately bought several times and am well in the red.

I plan to hold on hoping they reach profitability but if they do a cap raise I’ll be exiting.

@AUROPAL - just saw your post. I exited $VHT after holding for several years (sounds like we bought at a similar time). I sold final tranche on 28 June 2021 in RL and 23 August 2021 on SM (can't remember why it was two months apart.)

I'm also interested in whether they can get to breakeven before raising. So, I've had a look at the numbers.

They had $11m cash and cash equivalents at end of last Q.

Cash burn for last 6 months was $7.5m ($6m from operations and another $1.4m from investing, in round numbers). For the last 12m it was a burn of $14m, and for the last Q it was $3.8m. So the rate of burn is quite consistent.

New CEO Terri is trying to turn the ship, but the impact wasn't showing in last Q.

The targeted $3m cost saving for H2 will help, as will $7-8m in FY24.

Interestingly, while headcount has fallen from 189 (Mar-22) to 155 (Oct-22), with a target of 160-165, staff costs were $4.2m in Q4FY22, $4.7m in Q1FY23 and $5.1 in Q2FY23. So while headcount numbers are heading in the "right" direction, costs are not. Similarly, Corporate costs went up $1.55m, $1.71m and $1.74m over the same three periods. The costs picture is probably looking worse than the underlying because of severance costs which hit the near term, and which have not been broken out as exceptional in the 4C cashflow statements (I haven't looked at the accounts).

My guess is that while cost savings will be achieved, some other costs will come back, so the net reduction might be less than targeted.

This might be OK if they have strong growth in receipts. Rolling 12m receipts are up 37% y-o-y, so if this can be maintained, then maybe they'll make it. The 37% is assisted by the comparison period having an acquisition, so is organic growth lower? If you pull back to HY-on-HY to get pure organic growth, the growth is 17%, which actually compounds to about the same annual number but is less reliable because there is likely unevenvphasing of receipts through the year.

If the burn rate slows, you've probably got another 2 x 4C reports to see how things are tracking. But I expect a raise within 12 months, as a base assumption.

If I held, I'd be super-focused on the January 4C. That really needs to show a dramatic difference from the established trend.

But if revenue growth holds up and a lower cost base can be sustained, then $VHT can quickly become interesting again, because of the good %GM. So I keep watching.

In the meantime, my "imaging software capital" is sitting in M7T.

Disc: Not held

@AUROPAL finally found it, or got around to it. this is what disturbs me, i am sure that Ralph put this chart in as a positive but i look at it the other way, ie if they have such a great coverage why arent they much more profitable. thye ahve been around for quite a while. so i come to the conclusion that their product is underpriced or not that attractive or some other unseen issue (s). alternatively the figures are meaningless. maybe the new ceo is more commercially minded than Ralph and can get the balance right.

dicl not held

Apologies for the late notice, but Volpara CEO Teri Thomas has had a delayed flight and can't make our Zoom meeting that was scheduled for 11am AEST today.

We've rescheduled for 4:45pm AEST tomorrow, Wednesday the 22nd of June. (all details on the meetings page).

Well, to make matters worse, I've just been told that 4:45pm tomorrow is not available either (They were the ones who suggested this as an alternate time!). Don't want to extrapolate the competency of their IR team to the wider business, but it doesn't instil confidence!

Looking to see if Friday works for them. If they stuff us around further I'm tempted to call the whole thing off..

Totally agree @slymeat what is going on. I did the same thing believing FDA regulation was very likely. I want to get a sense of what this new CEO is like and hear from her.

I wouldn't do that, I was just frustrated with the poor communication.

So they have confirmed for this Friday at 2pm AEST. They have assured me it is a LOCK!

As noted earlier, I exited last year because there was no trend I could discern over 4-5 years to making money even though they have scale. The former US CEO was only ever a US Marketing lead; I was worried about her B2C focus, and therefore relieved when she went., But this time it looks like Ralph has finally taken a nudge from the Board who must have gotten it from investors on SP decline, long before the general tech decline. ( Ralph clearly is a tech innovator, but he is not a businessman.)

Their IR has been terrible. Perpetually touting imminent FDA ruling on density, when it was/is out of their control. Maybe it will come one day. But when you cry wolf so much, people stop taking it seriously.

I have only one question for the meeting which I will post: “what is the investment proposition?” Ralph has sold us the growth, the science, the benefits, the bolt-on acquisitions. They’ve been at it for a while now. Is there a path to a sustainable business? Very keen to hear the new CEO.

$VHT still on my watch list. (My proceeds from $VHT went to $IKE and $M7T)

Bought back in IRL and on Strawman. FOMO was too hard to resist.....

Agree. This was a great discussion and an example of why Baby Giants is my current favourite podcast (long may it continue!)

However, for me Matt summed it up succinctly when he pointed out that VHT has not yet demonstrated any operating leverage at the operating cash flow level, despite significant revenue growth including via acquistion over several years. I would add to this, if you can't show operating leverage when you have a 34% share of the world's largest market, then when?

I wish them well, as they are providing a great service to human health.

Disc: Not help in SM or IRL. I bought in 2017 and finally exited in mid-2021, making a small loss. I continue to watch and would reconsider if it demonstrates any ability to make money.