Think Research Corporation (TSX-V:THNK) has reported record sales for the first quarter to March 31, 2022, driven by continued growth in the company's software and data solutions segment, and said it is on track to meet its growth and profitability targets.
Revenue came in at $20.2 million, a 142% jump from the first three months of last year and 6% higher than the fourth quarter of 2021.
"We are very pleased to report record revenue for the first quarter of 2022, which we achieved despite facing some program setbacks in clinical research and clinical services caused by the Omicron COVID-19 outbreak in January," Sachin Aggarwal, Think's CEO said in a statement.
READ: Think Research expects to realize $9M in cost synergies by end-2022
Due to major contract deployments, the software and data segment grew by 41% compared to Q4 2021 and contributed $8.5 million to revenue in the quarter. This offset a $1.4 million decline in revenue in other business segments, attributed to delays in clinical research and clinical service operations associated with the Omicron outbreak.
"Our software and data solutions segment served as a solid offset to these unforeseen events and helped to augment our overall performance until the affected revenue streams recovered in the latter part of the quarter,” Aggarwal said.
“Think's results in the first quarter of 2022 prove that our diversified revenue streams afford us resilience and greater sustainability, and as a result, we believe the company is on track to meet our internal growth and profitability targets."
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) improved to near breakeven in the period with a loss of $0.3 million, boosted by stronger revenue and realized synergies.
The company announced last week that it expects to realize $9 million in cost synergies this year as part of its cost optimization program.
On the back of these improvements, Think has advanced its goal of generating positive adjusted EBITDA in 2022.
The company said it plans to grow revenue with improving margins “by becoming an increasingly essential provider of data solutions for healthcare practitioners everywhere, enabling them to deliver the best possible outcomes for all patients”.
This plan involves:
- Adding more users to current licenses by promoting adoption and usage;
- Increasing revenue per user by increasing the number of content services and data solutions that a licensed user adopts and uses regularly;
- Monetizing licensed users directly, over and above facilities licenses, through various methods such as Think's direct-to-user clinical education offerings;
“The objective of this operational focus, both in the short and long-term, is to generate organic revenue growth with improved margins, and to realize positive Adjusted EBITDA,” Think said.
The company said its cash balance of March 31, 2022, was $6.1 million, down from $6.3 million at end-December last year.
Think Research is an industry leader in delivering knowledge-based digital healthcare software solutions. The company's focused mission is to organize the world's health knowledge so everyone gets the best care. Its evidence-based healthcare technology solutions support the clinical decision-making process, standardize care, and improve patient outcomes.
Contact the author at jon.hopkins@proactiveinvestors.com