Pinned straw:
$VHT announced their last 4C report today.
Their Highlights
Cash Highlights:
• Fourth consecutive positive net operating cash flow quarter, NZ$1.2M. A full year and a half ahead of guidance
• Volpara net operating cash flow positive for over 12 months since the start of October 2022 – approx. NZ$3.4M; and free cash flow positive for the same period – approx. NZ$730k1
• Record Q2 cash receipts from customers of NZ$11.5M+, up over 32% compared to NZ$8.8M in Q2FY23 (or over 31% constant currency) and first quarter over US$7.0M
• Volpara no longer required to provide Appendix 4C quarterly reporting updates
Software as a Service (SaaS) Highlights:
• Contracted Annual Recurring Revenue (CARR) now ~US$28.4M (~NZ$46.3M2 ), up over US$1.2M on the prior quarter (Q1FY24)
• Annual Recurring Revenue (ARR) now ~US$22.5M (~NZ$36.6M1 ), up from US$21.5M in the prior quarter (Q1FY24)
My analysis
A solid result, and an important milestone. $VHTs first 12 months period of postive cash flow. Closing cash of $13.19m is up from $11.62m a year ago.
The release details a list of significant contract renewals and expansions, as well as some new customers. $VHT also report expanding their rollout in the VHA, which provide heathcare to some 9 million veterans in the US.
There is also a further reference to the new product Quiver, which is intended to make radiologist work more productive (workflow and automation).
Below is my usual trend analysis, with trend lines based on the last 8Q. This shows just how effective Terri and Craig have been at managing costs which continuing to drive revenue.
The SP has fallen back again, presumably part of the general hit of "higher for longer" to microcaps but perhaps also reflecting a period of relative quiet on newsflow.
About to go on the call, but this looks on track to me.
Disc: Held in RL and SM
Agree with all of the above comments. Great analysis @mikebrisy - you're ability to review and quickly summarise these announcements is truly commendable, and certainly appreciated.
The big thing for me here is the 4th consecutive quarter of +ve net operating cash flow - massive in today's world and even more important with the whole 'higher for longer' narrative. This coupled with management's open, honest and transparent communications is really refreshing. As we all know, this is a crucial factor and one that I've been giving increased consideration to when evaluating companies.
One that may not get as much attention is the fact they no longer have to provide Appendix 4C quarterly reporting updates to the market. I can only imagine these reports chew up a significant amount of key management's time. This can now be allocated to business-focused, value-adding work.
Currently holding VHT, and I am a buyer at today's prices (IRL) - not a recommendation, DYOR etc. etc.
Agree solid result. it is clear now that the business is being run like a business, that is a good thing, always trade-offs involved.
there were a couple of comments that caught my attention when the salesperson commented on losing customers, being (if i recall correctly) that they go to EPIC when the customer wants a more complete integrated solution, but the client usually still takes risk pathways with them. not too sure of the longer term implications of this.
secondly, the Euro strategy is sensible but makes apparent the difficulties small companies have when deploying resources into this complex market.
i think mgt is quite transparent with the challenges and also the potential, which appears, now, to have a much better chance of achievement.
disc held
Great write up as always Mike Brissy.
Volpara is one I have held for a long time as I've always believed in their product and the potential of the business, they just struggled to keep costs under control and reach scale under previous management.
But now that they have continued to grow as well as reaching and passing the scale and profitability inflection point, it's disappointing to see the SP still languishing at the same levels it was at in 2017 and 2018.