2 ASX tech shares that are growing rapidly

The 2 ASX shares in this article are growing rapidly and operate in the technology space, including Volpara Health Technologies (ASX:VHT).

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There are some ASX shares that are growing rapidly in the technology space.

The businesses that are generating the most revenue growth may have a stronger chance of producing better returns.

Below are two companies that have grown a lot and are still growing strongly:

Volpara Health Technologies Ltd (ASX: VHT)

Volpara's technology provides feedback on breast density, compression, dose and quality. Its practice management software helps with productivity, compliance, reimbursement and patient tracking.

The healthcare business recently hit US$18.6 million of annual recurring revenue (ARR). That was 60% higher, including 20% of organic growth. Volpara has said it has seen important tailwinds develop around personalised breast care, particularly surrounding assessment genetics. The acquisition of CRA Health has really helped with this, bringing a range of skills that Volpara was lacking (that's management's words), as well as a substantial installed based in the electronic health record (EHR) world.

The company has an important market share, of around a third of 12.5 million annual breast screenings. Volpara's gross profit margin and average revenue per user (ARPU) continue to rise and this is driving the business towards generating a net profit.

Volpara's executive vice president of US sales and marketing, Jill Spear, pointed out that 68% of US women don't get Volpara-level care. Ms Spear wants more of these women to get high-quality images, accurate density scoring and accurate risk assessment so that they can detect cancer early.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is another ASX share that's growing rapidly. E-commerce has certainly seen strong adoption since COVID-19 came along, but growth hasn't fizzled out as restrictions were lifted.

FY21 third quarter revenue saw growth of 112% compared to the prior corresponding period. April 2021 revenue also grew by more than 20% compared to April 2020, which was the fastest growth month last year due to the nationwide lockdowns.

As a result of strong trading over the FY21 second half to date and a belief in a permanent shift in consumer shopping behaviours, the business is doubling down on its strategy of investing to capitalise in a "once in a generation" shift from offline to online shopping in the furniture and homewares category. This will involve investing in both short and long-term growth initiatives.

In 2020, just under 10% of Australian furniture and homewares were bought online, an almost doubling of the 5% bought in 2019. The ASX share thinks that online penetration is expected to continue to climb.

During this scale-up phase, the company is just focused on revenue growth and further expanding its market leadership. This will (hopefully) result in strong double digit revenue growth, and a low single digit earnings before interest, tax, depreciation and amortisation (EBITDA) margin.

The Temple & Webster CEO and co-found Mark Coulter said:

You only need to look at the US to see how the e-commerce market is playing out, and why we remain bullish about the shift from offline to online. We are at the start of this once in a generation shift, and now is the time to put our foot down to secure market leadership and ensure we are the brand for the next generation of furniture shopper.

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd and VOLPARA FPO NZ. The Motley Fool Australia has recommended Temple & Webster Group Ltd and VOLPARA FPO NZ. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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