1st Group cracks $1 million quarterly revenue for the first time
Health & Biotech
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Special Report: 1st Group (ASX:1ST) has revealed its milestone quarterly revenue, a first for the Australian online health, media and technology company.
The second quarter FY19 revenue of $1,004,000 million represents the largest quarter since the company commenced operations and is a 16 per cent jump on the previous FY19 quarter.
Back in October, with the release of its first quarterly update for the 2019 financial year, the company predicted a robust outlook with accelerated growth in annualised contract value (ACV) leading the way.
The results show $4.84 million in ACV, which is within the predicted range of $4.6 million – $5.1 million.
ACV represents the annual expected revenue from contracted customers for subscription services such as online bookings, simplified feedback, and check-in features.
One of the drivers for the increased ACV is the growing number of 1st Group sites, with inroads into markets such as pharmacy, optometry and pet services, where the company now has a leading market share.
Some of the newer sites are expected to deliver revenue in Q3, with a strong outlook predicted.
Scalable tech paying dividends
The company supplies integrated technology platforms that enable online search and appointment booking services to the healthcare services industry, as well as a range of value-add apps and online services all aimed at improving the patient/customer healthcare journey.
Managing Director and Co-Founder Klaus Bartosch said that the strong revenue reflects the unique value that the company offers to subscribers and the scalability of its systems and technology.
“We continue to have strong momentum going into the second half of the financial year. Subscription revenue growth is underpinned with the activations we completed in Q2 now starting to generate additional revenues.”
1st Group is activating previously signed and new contracts in Q2, which is expected to lift subscription revenue in Q3 and beyond.
It’s worth noting that Q2 is typically a shorter quarter with a slow-down by clients in the lead up to Christmas, however, the company expects to turn the backlog of signed contracts into revenue in the coming quarters.
The announcement also stated that customer satisfaction is up from 92 per cent to 95 per cent, with the upselling of additional products translating into growth in revenue per customer.
Confident start to FY19
Mr Bartosch told investors the quarter’s successfully delivery on previous estimates sent a confident signal to investors that the company is getting stronger.
“Delivering on guidance demonstrates our reliability and growth. We expect ongoing growth in subscribers and sites as we continue to build scale and market leadership.”
The company is forecasting ACV guidance of between $5.1 million and $5.7 million for the second half of FY19.
1st Group is expected to release its Half Year results at the end of February.