+246% Year-over-Year Revenue Growth
+105% Year-over-Year Organic Growth
Vancouver, British Columbia–(Newsfile Corp. – May 17, 2022) – Kovo HealthTech Corporation (TSXV: KOVO) (the “Company” “Kovo”) — a leader in healthcare technology and Billing-as-a-Service — today reported its first quarter financial results for the period ending March 31, 2022.
+246% YOY Revenue Growth
Kovo posted 246% year-over-year (“YoY”) revenue growth during the quarter driven by a combination of organic growth of its core SaaS-style medical billing software and services business — and two strategic and accretive acquisitions the Company completed in 2021.
The record-setting quarter contributed to an Annualized Recurring Revenue (“ARR”) of approximately $12 million USD, which puts Kovo on-track to meet its previously disclosed 2022 initial guidance. EBITDA results for the quarter were neutral (0%) versus a loss of $176,000 (21%) in the same quarter last year, reflecting an improvement over the prior year.
+105% YOY Organic Growth
Excluding revenue growth attributed to its successful 2021 acquisitions, Kovo posted YOY organic growth of 105%. Organic growth for the quarter was driven primarily by two new client contracts signed in Q2 2021, confirms Kovo CEO Greg Noble, who anticipates one of those contracts will continue to benefit the Company’s cash flow throughout 2022.
Delivering Consistent Revenue Stability Over 13 Quarters
“At a time when the world economy is facing rising costs and uncertainty, Kovo continues to generate predictable and stable revenues,” explains Noble. “Q1 2022 marks our 13th quarter of delivering consistent, revenue stability and that is setting the Company up in a position of strength as we continue to explore future prospective 2022 acquisition targets,” he says.
Continued Focus on Strengthening Positive Monthly Cash Flow
“Kovo is consistently and reliably delivering positive cash flow from our RCM operations, and we continue to focus on improving our working capital month-over-month, while readying the Company for our next roll-up, accretive acquisition,” 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 released earlier this year.
Quarter Highlights:
Listed in thousands USD unless otherwise specified
- Revenue for the three months ended March 31, 2022 was $2,837, the largest in the Company’s history and 246% higher than revenues of $820 for the three months ended March 31, 2021.
- ARR as at March 31, 2022 was approximately $12,000, a 200% increase over March 2021. The first quarter of the year is historically a seasonal low for the business but the Company is still on track with its original guidance of $12,000 for the year.
- Kovo continues to consistently and reliably deliver positive cash flow from its RCM operations.
- 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 13th consecutive quarter of positive Adjusted EBITDA reflecting the long-term operating discipline with the organization. Adjusted EBITDA was $46 for the three months ended March 31, 2022 relative to Adjusted EBITDA of $70 for the three months ended March 31, 2021. Adjusted EBITDA margin was 2% for the three months ended March 31, 2022 (three months ended March 31, 2021- 9%). The Company is focusing on investing its operations with continued investment in staffing and operations. These step costs are transitory and required to support future acquisitions which will provide greater economies of scale, and return EBITDA to historical percentages.
- On April 20, 2022 the Company received approval from the U.S. Small Business Administration (“SBA”) under the Economic Injury Disaster Loan (“EIDL”) program administered by the SBA, that their loan has been modified and the funded amount has increased from $150 to $2,000. This results in working capital shifting from negative $1,668 to positive $182. The loan continues to carry an interest rate of 3.75% per annum and is amortized over 30 years.
SELECTED QUARTERLY INFORMATION
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