This morning cognitive science specialist Cogstate Limited (ASX: CGS) posted a net loss after tax of $823,948 on revenue of $35 million. The net loss was slightly narrower than last year's loss of $1.04 million, with revenue climbing 28% over the prior year.
The company did post positive operating income (EBITDA) of $143,416 and the net loss was within prior guidance.
The company blamed the failure to turn a profit on "an increased investment in the clinical trials business to increase resources…and unforeseen delays in the execution of sales contracts in the second half of FY17…impacted earnings".
However, it heads into FY 2018 and beyond with operations looking up, as it boasts it has "contracted future Clinical Trials revenue of $37.5 million, of which $18.9 million is expected to be realized during the 2018 financial year".
The group's CEO is ebullient over the future of the business describing it as possessing "an exceptionally strong sales pipeline" and "sharp growth trajectory".
It also flagged that investments made this year that took their toll on the bottom line should support "capability and capacity" across the business over the years of projected expansion ahead.
In total staff members in the clinical trials business increased from 57 to 75 over just a single year, which contributed to the fall in gross profit margins for the year from 71% to 67%.
In July 2017 the company also received approval from the U.S. healthcare regulator the Food and Drug Administration to market one of its latest medical device and software products for commercial distribution in the U.S.
As at June 30, 2017 the company had no debt and cash on hand of $9.3 million, with a market value a touch over $100 million.
Despite a marginally softer-than-expected second half, Cogstate continues to head in the right direction and operates in a large addressable market of brain function measurement that is complex and highly regulated.
