Kovo HealthTech Corporation (TSX-V:KOVO) has reported 134% year-over-year revenue growth in the year-to-date versus the same period last year, driven by a combination of organic growth and two strategic and accretive acquisitions the company completed in 2021.
The leader in healthcare technology and Billing-as-a-Service also saw its adjusted EBITDA margin for the three and nine months ended September 30, 2022, at 0.2% and 4.0%, respectively, marking the company's 15th consecutive positive.
"Throughout the summer months, Kovo continued to generate predictable revenues thanks to the strength of our Billing-as-a-Service platform and the stable demand for US digital back office healthcare billing solutions," said Kovo HealthTech CEO Greg Noble in the results statement.
"Although organic growth slowed slightly over the quarter due to US and global macroeconomic conditions and uncertainty, we're satisfied with Kovo's overall growth in 2022, and recently signed an IP licensing partnership agreement, delivering on our strategic focus to leverage our technology investment," he added.
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Revenue for the three and nine months ended September 30, 2022, was $2,520,000 and $7,966,000, respectively, being 52% and 134% higher year-on-year.
Revenue for the three-month period was, however, down from $2,609,000 for the three months ended June 30, 2022, driven by the timing of payment processing as the number of claims processed is slower during the summer months.
Annual recurring revenue (ARR) as of September 30, 2022, was around $10,300,000, an 81% increase over September 2021. The company said it is investing in new sales staff and additional marketing strategies to be implemented by Q1 2023 to augment organic growth through new channels.
Kovo HealthTech said it continues to consistently and reliably deliver positive cash flow from its RCM operations.
The company’s 15th consecutive quarter of positive adjusted EBITDA reflected the long-term operating discipline of the organization. Adjusted EBITDA for the three and nine months was $5,000 and $316,000, respectively, relative to adjusted EBITDA for the three and nine months ended September 30, 2021, of $7,000 and $137,000.
The company said it remains focused on driving performance with continued investment in staffing and operational excellence. These investments are transitory and required to support future acquisitions which will provide greater economies of scale, it added.
Contact the author at jon.hopkins@proactiveinvestors.com