Vancouver, British Columbia–(Newsfile Corp. – March 28, 2022) – Kovo HealthTech Corporation (TSXV: KOVO) (the “Company” “Kovo”) — a leader in healthcare technology and Billing-as-a-Service — today reported its annual financial results for the fiscal year ending December 31, 2021.
96% YOY Revenue Growth
Kovo posted 96% year-over-year (“YoY”) revenue growth in 2021 driven by a combination of organic growth of its core SaaS-style medical billing software and services business — and two strategic acquisitions that delivered accretive growth throughout the year.
Kovo finished 2021 with Annualized Recurring Revenue (“ARR”) of approximately $15 million CAD ($12 million USD) — which represents +243% growth over 2020 and an increase of +600% over the past two years — reflecting a combination of organic growth and accretive growth related to the Company’s successful acquisition strategy. During 2021, the Company posted the largest revenue in its history, achieving on the higher range of its 2021 guidance and closing out the year with revenues of $7.3 milllion CAD ($5.9 million USD). Adjusted EBITDA* margin for 2021 was approximately 4%, in-line with the prior year — and, as previously disclosed, the Company anticipates Adjusted EBITDA of approximately 10% in 2022.
Kovo Now Processing $250M CAD ($200M USD) in Medical Billing Annually
“In addition to successfully going public, integrating two accretive acquisitions, securing financing to power future growth and expanding our clients served to more than 1700+ healthcare providers, Kovo and its subsidiaries are now processing over $250 million CAD in total billing claims annually,” explains Kovo CEO Greg Noble. “As the Company officially closes out 2021 in a position of strength, we anticipate 2022 to be a step-change year for Kovo, our clients and our shareholders,” he says.
RCM Operations Generating Consistent, Positive Monthly Cash Flow
“Kovo has now reached a new milestone of predictable growth where the Company continues to consistently and reliably deliver positive cash flow from its RCM operations, adding to — and improving — our working capital month-over-month,” explains CFO Inder Saini, adding that the company is on-track to meet the 30% organic growth target (exclusive of acquisitions) outlined in its initial 2022 guidance earlier this year.
Listed in thousands USD unless otherwise specified
Revenue for the year ended December 31, 2021 was $5,904, the largest in the Company’s history and 96% higher than revenues of $3,019 for the year ended December 31, 2020. Results were on the higher end of the guidance provided in Q3 2021 of $5,300-$5,700.
ARR as at December 31, 2021 was approximately $11,800, a 243% increase over 2020, reflecting the combination of organic and accretive growth related to the completion of two successful acquisitions in 2021.
Annual and quarterly revenue growth was generated by a combination of new sales and the acquisition of new clients via the M&A transactions.
The Company completed its 12th consecutive quarter of positive Adjusted EBITDA reflecting the long-term operating discipline with the organization. Adjusted EBITDA increased to $242 for the year ended December 31, 2021 relative to Adjusted EBITDA of $135 for the year ended December 31, 2020. Increase in Adjusted EBITDA reflects the impacts of efficiencies extracted from the acquisitions as well as organic growth for the Billing-as-a-Service business. Adjusted EBITDA margin was 4% for the year-ended December 31, 2021 (year-ended December 31, 2020 — 4%).
The Company successfully completed its public company listing on the TSXV in June 2021.
The Company completed two acquisitions in the year of Midwest Medical Billing (“Midwest”) and The Cvikota Company (“Cvikota”) adding revenue and positive earnings as the Company builds on its core Revenue Cycle Management (“RCM”) business.
Kovo filed a non-offering prospectus on May 26, 2021 as part of its go-public plans. The firm’s common shares began trading June 4, 2021 under the symbol ‘KOVO.’
Kovo was successful in acquiring new debt in 2021 through a non-revolving senior secured multi-draw term facility with Flow Capital Corp which has a maximum loan amount of $7,000 and a $600 Paycheck Protection Program loan which became 100% forgivable when the Company used the proceeds to cover qualified expenses.
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