Kovo HealthTech Corporation (TSX-V:KOVO) has published its results for the first quarter of 2023, showing that the healthcare technology and Billing-as-a-Service company has $4.3 million available to fund acquisitions expected in the near future.
The company reported revenue for the three-month period to March 31, 2023, of $1.83 million, a fall of 36% year-on-year. The decline was due to two large RPM client contracts signed in 2021 coming to their natural end, Kovo said, after the clients moved to larger RPM companies to support their size.
Kovo CEO Greg Noble explained in the earnings statement that revenue is normally lower in the first quarter for medical billing companies as annual insurance deductibles reset. The decline is usually mitigated over the rest of the year, he noted.
Noble said Kovo is implementing a strategy of organic business development coupled with acquisitions aimed at restoring revenue growth.
The two-tiered revenue growth strategy has a projected annual recurring revenue (ARR) for the second quarter of 2023 of around $11 million, an expected 7% increase on Q4 2022, the CEO said.
To support its growth strategy, the company has $1.1 million in cash on its balance sheet, in addition to $10.3 million in a financing completed in April.
The fresh funds included a $7 million acquisition debt facility, which will enable the acquisitional growth expected for the immediate future, Kovo said.
The company completed a $2.7 million acquisition on April 20, 2023, in conjunction with the financing, leaving $4.3 million available for additional acquisitions.
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