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.
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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.