The Medadvisor Ltd (ASX: MDR) share price surged 13.92% higher today after the market reacted very favourably to the company's half-year FY20 results.
What does MedAdvisor do?
MedAdvisor is an Australian software systems developer. The company has a free app that connects to pharmacy dispensing systems to automatically retrieve medication records and reduce the need for manual configuration by pharmacists or individuals.
What did MedAdvisor report?
MedAdvisor reported record operating revenue of $4.4 million for the six months to December 2019, up by 14.4% on the prior corresponding period (pcp) of 1H19. The company commented that this strong result was driven by recurring Software-as-a-Service (SaaS) revenue through a growing pharmacy network, combined with strong user-based revenue from its health services programs.
Additionally, MedAdvisor's annual recurring revenue stream was reported to have grown strongly by 31.1% year on year. The company commented that it is now deriving approximately 63% of revenue from SaaS.
Gross profit for the company increased 14.4% to $3.9 million during the period, while gross margins remained stable at 87.6%. MedAdvisor commented that these results position the company to create significant operating leverage as the business scales.
However, MedAdvisor still is unprofitable, reporting a net loss of $5.3 million. This was an increase on the loss of $4.5 million recorded in the prior year. MedAdvisor attributed this increased loss to its investment in the US, UK, and Asian markets.
Company outlook
MedAdvisor commented that the international markets in which it operates represent a significant opportunity for growth. In particular, the company noted encouraging progress in the US, which comes on the back of two recent announcements regarding two health programs and a significant investment from HMS.
MedAdvisor further commented that Australia will still remain a core focus for growth generation in the short to medium term.
Additionally, as the company's ePrescibing adoption commences in the second half of FY20, MedAdvisor sees potential for adoption in its Pharmacy channel.
Commenting on MedAdvisor's 1H20 results, Robert Read, CEO and Managing Director, said:
"1H20 has proven to be a landmark period for MedAdvisor, achieving significant milestones as it expands internationally and domestically."
"The company is now focusing on delivering the new products for our customers in the UK, Philippines and the USA, whilst continuing the business development efforts in those markets. Similarly, we are currently implementing the MedAdvisor product suite with Day Lewis, which is a very exciting project for future opportunities that it can potentially generate with the UK market," he added.
