Volpara Health Technologies Ltd
ASX:VHT
Volpara Health Technologies Ltd
ASX:VHT
Price:
1.145
AUD
Market Cap:
AU$291.1m
Add Note
Add Target
Capture your thoughts and set a target
Decide at what price you'd be comfortable buying and we'll help you stay ready.
Based on
Margin of Safety
0%
10%
20%
30%
40%
50%
Your Price Target
Linked to
current price
· In Buy Zone
Loading
Note attached
Choose the stock you wish to monitor with a price target
Popular Picks
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
Bank of America Corp
NYSE:BAC
|
US |
|
Mastercard Inc
NYSE:MA
|
US |
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
Pfizer Inc
NYSE:PFE
|
US |
|
Nike Inc
NYSE:NKE
|
US |
|
Visa Inc
NYSE:V
|
US |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
Coca-Cola Co
NYSE:KO
|
US |
|
Verizon Communications Inc
NYSE:VZ
|
US |
|
Chevron Corp
NYSE:CVX
|
US |
|
Walt Disney Co
NYSE:DIS
|
US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
Earnings Call Transcript
Earnings Call Recording
Other Earnings Calls
Thank you for standing by, and welcome to the Volpara Health Technologies quarterly results investor call. [Operator Instructions] I would now like to hand the conference over to Dr. Ralph Highnam, CEO. Please go ahead.
Thank you, Rachel. Hello, and thank you for taking the time this morning to hear about our Q4 FY 2020, which ended 31st of March, and more recent events. Volpara is a medical technology company whose cancer screening software platform assist in the delivery of personalized patient care, and this business model is predominantly based on Software-as-a-Service, or SaaS. And we're on a mission to save families from cancer. This is our fourth quarterly report as a group, following our acquisition of MRS Systems, Inc. earlier this financial year. We have much to cover, including the traditional 4C cash numbers, which again show strong cash receipts. Strong sales growth which give us an ARR of $18 million, exceeding our FY targets. Strong sales growth gets over 2017 coverage of the U.S. market, again, exceeding our U.S. -- our financial year targets. We're going to give you a preview of our financial year results and we'll talk about the rationale for the recent oversubscribed capital raise. Now obviously, all those points was achieved within the backdrop of coronavirus spreading across the world, especially our biggest market in the U.S. during February, March and April. In today's call, you're going to hear the word resilient multiple times as it's proven critical to work in the resilient industry. And being a resilient company, we're used to working virtually and with a resilient business model, and we'll dive into each of those as we go through. I'm joined today by Mark Koeniguer, our Commercial Officer based in Nashville; and Craig Hadfield, our Chief Financial Officer, based in Wellington. Both will be available for questions at the end of the main report. Let's start then with the 4C posted up earlier this morning onto the ASX platform, but also outlined in the capital raising documentation, which went up on the ASX on Tuesday as part of our capital raise documentation. We're pleased to say that during Q4, we have cash receipts for the group of $4.7 million, 300% up compared to Q4 last year before the MRS acquisition. Cash receipt showed strong growth across the group, which again reflects how well the combined organization is working, but also how resilient our industry has been so far, albeit, we have had a few request for payment deferrals. The cash in for the whole year was just over $16 million to $16.5 million. During the quarter -- Q4 quarter, we had operating net cash flow of $4.3 million, in line with expectations and our budgets. Cash on hand at the end of Q4 was $31.4 million, enough for over 2 years of run rate, especially when factoring some of the changes we're making to the company structure as part of our post-merger restructuring, which is underway now. After this capital raise, we share well over $65 million in the bank, and we'll cover the use of funds later in this call. Turning now to SaaS or recurring revenue metrics. Let me remind you that our all new quotes or any of our power products are now SaaS, although there are still some historical capital deals coming down the line. Let's also remind you that most deals we signed are 5-year contracts, which we invoice annually and were paid upfront for. That business model is obviously far more resilient in today's world than a pay-per-click model, especially when screening has stopped in most places during this lockdown periods. With our contracts, customers and peers, we've taken a view that we'll catch up on volumes once the lockdowns ease off, but we'll obviously be watching the annual invoicing and renewal process closer for any signs of market stress. During Q4, despite coronavirus, we booked our highest jump yet in annual recurring revenue of $1.2 million, some 20% up over the previous Q4. That bolstered an ARR at the end of Q4 of $18 million. For reference, assuming a 12-month rolling average exchange rate, the net $18 million is obviously above our upgraded forecast of $17.8 million. And that's a great testament to the products, the business model, but also our sales team. There are some deals that moved out due to coronavirus, but we managed to keep focused to get several excellent deals over the line in the last couple of weeks of Q4. Now in these days of no travel, having a strong U.S. sales team, outstanding personal networks already in place and having a strong pipeline to follow is, obviously, absolutely vital. And obviously, our net churn of ARR remains low, although again, we're watching closely to see what happens during Q1 and Q2. I can say in early March, as coronavirus was starting to impact average unit, we did adjust our product plans to bring through as many new features as we can during Q1, Q2 to reduce any risk. At the end of Q4, we now have approximately 27.1% of the U.S. women to get screened under contract to at least one Volpara product. That's some 10.8 million women. There's also a significant percentage of women who get benefit from our products but are not under contract from legacy sites, which we will sell products under a capital sales model. Obviously, 27.1% is slightly above our target for the year of 27%. That installed base is obviously vital over this next period. With no trade shows, now is the time for us to focus on digital marketing, on the pipeline we have and mining the installed base for upselling opportunities, including to tie in Ambry Genetics which was announced and relayed to ASX just recently. That opportunity is reflected in the ARPU we reported at the end of Q3 across our entire installed base in USD 1.02. That number has now risen up to $1.04 per woman in Q4. And the contracts we signed in Q4 range from $1.45 to $3.10, depending on size and structure and products. So clearly, we have a great opportunity to really upsell and increase the ARPU over this next period. We're doing now several combined Volpara and MRS deals signed, which is obviously one of the reasons for the acquisition in June last year and some very significant ones moving through the pipeline. In short, Q4 was strong despite coronavirus. Our sales pipeline is strong despite coronavirus, albeit some deals are pushing depending upon the location of the site. Our outstanding sales team remains very active. I also note we're probably fortunate that Q1 is usually a quiet quarter for us anyway. So we remain confident at this point of beating last year's Q1 despite the crisis around the world. Let's move on to the full year results. We put some unaudited numbers into the capital raising materials, which went out earlier this week. We'll be issuing the full audit lines at the end of May. The headline number, though, is annualized revenue, which includes then a contribution from MRS over the full year. It is a non-GAAP measure, I should point out, and that annualized revenue would have been 18 -- or will be $18.3 million. Now from an accounting perspective, from an IFRS perspective, and due to technical accounting rules around business combination of how required deferred revenue is measured, we will see the accounting revenue for the full year, when it comes out, will be around $12.5 million due to a substantial noncash adjustment for that deferred revenue. Loss for the year will be around $20.8 million. It's obviously impacted by that deferred revenue, noncash adjustment, and it also includes a number of other noncash and acquisition-related costs of approximately $4.4 million. Again, those results have come out at the end of May when they're being fully audited. Let's talk now about the capital raise. In June, in 2019, we acquired MRS Systems, Inc. based in Seattle. We did that for various reasons, including data, but also installed base. By January, we felt the acquisition was running very well, and we discussed in the Board meeting in early February in Wellington that now is the right time to consider further strategic M&A. At that point, we returned to the companies around in our space, most of which we've been tracking carefully and getting to know for many years, and most of which we have a great deal of mutual respect for. That led to a focused U.S. trip in February, where I visited several of those companies. At that point, coronavirus was a minimal concern to the wider world. But by the time I got back to New Zealand, the world had changed and worked to rewrite our plans very quickly for this forthcoming year. That new plan included post-merger restructuring to optimize costs, transforming the sales process to be more remote, prioritizing new features to reduce any potential churn and also partnering to scale. And you'll be seeing again an exciting announcement this week with our partnership with Ambry Genetics. Now with coronavirus starting to settle down with the lock-ins in early April, we started having contact again with those companies we met in February, most of which are in various forms of distress, either due to lack of capital sales or they're using pay-per-click models where they're getting no clicks. Now with the resilience we were showing, the Q4 results and ongoing positive cash collections continued in April. We realized we had a great opportunity to emerge very strongly from this crisis compared to other companies. Talking with our brokers, Morgans and Bell Potter, and also in 4 months our share price has had a strong recovery that led us to conclude that we should raise money now to further strengthen our already strong balance sheet to raise and take advantage of any opportunities that might arise over that period of time. Of course, we'll only do an acquisition if the deal makes total sense, the price is right and effective of the times we live in. Thus, we also asked here to capital raise $35 million, being a $28 million placement and a $7 million share placement plan at $1.30, a 10% discount to the last closed share price. Thanks for the great work by our finance team, Board, Morgans and Bell Potter, we had a heavily owned and subscribed $28 million raise, strongly backed by existing investors in Australia, New Zealand and major new Australian institutional investors. The SPP is now underway. With that, we've obviously covered a huge amount of material there, and I understand -- totally understanding that there was a material to read that's gone up on the ASX. So with that, I'm very happy to open the floor to questions for myself, Mark Koeniguer or Craig Hadfield. Thank you.
[Operator Instructions] Your first question comes from Bill Macdiarmid from Ord Minnett.
I just got a few questions. The first one, in this announcement, you mentioned there'll be some cost-saving opportunities. Can you just talk a little bit about what parts of the business those costs will be coming out of and approximate quantum, please?
Okay. Yes. Well, so obviously, we merged with MRS last year. And our big focus for the last 9 months have been making that merger work exceptionally well, which it has, and we're extremely pleased with every single person in there. But as part of reassessment of the whole budget in February-March time, we already identified several opportunities to improve how we function, also where we had some duplication resources, but also where we could move some resources back to New Zealand where resources are cheaper. So it's a mix of some of the kind of graphical design people, 1 or 2 engineers in Seattle have come out, a few people in Wellington in -- around the core engineering team. And we're a very innovative company going into R&D. So we're very focused on doing that. But just some of the -- some periphery people around that team here in Wellington, we decided to let go unless we can talk to consultants at this point around that. And I guess we're pulling back a little bit on some focus in Asia and Europe because we do believe Asia and Europe is going to take some time to recover. We're obviously going to save quite a lot of cash from travel costs this year. And we're going to save quite a lot of costs from not attending trade shows. So I think overall, it's between 10% to 15% of costs coming out the business at this point.
Okay. Great. No, that's very helpful. Can you talk a little bit about your clients as well, what they're experiencing specifically? Are they being shut down completely? Or are they just experiencing a level of disruption?
Yes. So we talked around that a bit earlier as well. And the fact is it's very variable on where you are in the world. So here in New Zealand, Australia, we do have quite a lot of users, and many of those are in lockdown. So they're only being symptomatic with it. So if you've got a lump in the breast, you can go and get x-rays done. And obviously, Volpara will be scoring you for those cases. Places like New Zealand where we're going down to level -- Australia and New Zealand. So Australia will be heading that way as well pretty soon. Elective surgeries and screening are starting to be talked about ramping back up. And then in the U.S., it really depends on where you are in the U.S. So in New York, so in almost total lockdown and we're really hearing and seeing very little volumes of women being imaged there, whereas other places more in the Midwest are restricting what they're doing, but still being 20%, 30% of what they were doing previously. And obviously, as we're watching carefully and then several U.S. states are really starting to open back up now, Georgia, for example. And as part of that, then those states are likely to start screening again. Those ones over in New York we expect will remain locked out for a further few weeks or so. So yes, I mean, there's a lot of variability in that depending on where you are in the world.
Okay. All right. And then just finally for me. Can you talk a little bit around any potential concentration for invoicing? Or if you had a sort of big invoicing period specifically? And also, I know your contracts were sort of partly struck off volume, at least the point of negotiation. Can you give us your thoughts on any tension that might create with renewals going forward?
Yes. So I'll let Craig come in to that one in a second, Will. But yes, I mean, we've been -- cash collection in Q4 and then cash collection in the last few weeks has been outstanding as you invoice people and it's being paid. We have had a couple small sites, total absolute, that have got no volumes, that can defer premiums. So obviously, we're going to be tracking and watching these invoices very carefully. And I'd imagine what we talked about just now, it's going to vary depending on where you are in the U.S., how these sites react to it. It's also going to vary if they're a small site or a very big site where what they paid to us is quite minimal compared to the overall budgets. Craig, do you want to talk around any big invoicing periods? Not sure if Craig is still on that.
I'm sorry. I was on mute. I'll jump in here, Ralph. Yes. I'll just reiterate what Ralph said there that we've had very strong cash positions in the first sort of 3.5 weeks of April. And we don't really have an invoicing period in the year which is concentrated. We have contracts spread right around the year. If I had to say there was one, it's probably around the April, May time frame because of a lot of deals closing at the end of Q4. And -- but we are obviously actively monitoring and engaging with all those customers as we invoice them, knowing that some of them will be under financial pressure. We have had 1 or 2 customers ask for deferrals, and we're dealing with those -- each of those on a one-by-one -- on a case-by-case basis, but it has definitely not been material at this point. And none of them are asking to not pay. They're asking simply to delay payment for 3 to 6 months.
[Operator Instructions] Your next question is from Scott Power from Morgans.
Congratulations, Ralph, Craig and the rest of the team. Great results. Ralph, can you just talk about that Ambry Genetics deal a little bit more? And just how that will add to your ARPU going forward?
Yes, Scott. So I'm going to ask Mark Koeniguer to come on and talk on that one. Obviously, it's a very exciting deal and I do believe upon successful clinical implementation, we'll get 3% or 4% of -- when we're at the site with Ambry Genetics. I think it does increase ARPU between $1 and $2. So it could be very powerful for us and getting us towards that ARPU targets we talked about. But let's have Mark come on and talk around the overall picture and why Ambry is such a strong partner for us.
Great. Thanks, Ralph. So with Ambry, if we just step back for a minute, again, we're trying to combine our companies, meaning MRS and Enterprise into a platform sale, all focused on risk stratified screening. With that platform, a part of that risk assessment is the end-to-end solution. And of course, if we can pass results in various forms, we mean over to Ambry for genetic testing, it makes our platform that much more powerful, and we're able to provide our clients an end-to-end solution all the way from density risk assessment to the risk assessment model itself and then pass off onto the genetics company. That end-to-end solution is something our customers are looking for, and Ambry completes that process. It would allow us then to sell more risk models. And as Ralph just mentioned, it will increase our ARPU by $1 to $2 for those tests. In this current world, it also makes a difference because these sites come back online, they're going to want to manage highly dense women and women at high risk first in terms of priority. And I think we can help them with that process going forward.
Great. Mark, while you're on the line, I might just ask a question about possible consolidation of some of the clinics over in the U.S. We're hearing that the hospital sector's struggling, there's potentially going to be some consolidation there. Are you hearing or seeing anything on the ground in terms of some of the clinics over there, maybe at the smaller end, but are looking to be bought out by some of the larger players?
Scott, I've not heard anything specifically in that regard. I think that it won't surprise me. But fundamentally, there's a little bit of a shift at the bottom end of the market every year where there's sites that are divested or acquired in that smaller clinic market, so that's kind of an active market to begin with. So it wouldn't surprise me, but I haven't heard of anything big on the horizon.
Your next question comes from John Hester from Bell Potter.
Ralph, just in relation to the consensus revenue number that's sitting there on Bloomberg at the moment, it's currently around about $18 million last time -- or it was last night. So the number that you're going to report is below what the market was kind of looking for. And we haven't really heard anything much as far as or at least about this adjustment that Craig referred to. So perhaps if I could just ask the first question here to Craig, can you just put a little bit more color around that adjustment, please, Craig?
Sure, John. So under accounting standards -- this will be a little bit technical. But under accounting standards, when you acquire a business with deferred revenue -- or firstly, when you acquire a business, the accounting standards give you 12 months to do the purchase price allocation. So that's allocating the price you paid to the various parts of the business. Obviously, we didn't do that in September. We could -- the acquisition that just happened. And it takes quite a lot of time to work through the various bits and pieces. So we did that and finalized it in March. Part of that is you have to look at the deferred revenue that you bought. So when we bought MRS, they had about $3.7 million worth of deferred revenue. You have to value that. And unfortunately, the way you value it is, how much would it charge for you to effectively hire a third party to extinguish that obligation on your behalf? It doesn't really have much to do with anything else other than that. And that came out at about $1 million. And therefore, you have to take a $2.7 million hit to the revenue line item. And that's what we're seeing now. It is a one-off adjustment. So it will hit revenue this year. There's still a little bit to unwind in FY '21, about $400,000. But it is quite standard in the tech space. And yes, it's filtering through now.
Okay. And that's not all noncash?
John, I'll just -- yes, that's completely noncash. But the other point I'll make is the annualized revenue, which we -- previous presentations last year, which we expected is exactly on track, $18.3 million. And obviously, the SaaS business, the numbers that we will take a lot of focus on is cash in, which is $16.5 million. It would have been higher if we had the first few months of MRS in there as well and the ARR. So...
Yes. Got it, Ralph. And the other questions I had was in relation to the old MRS business. It had a fair chunk of revenue set from capital sales. Is it reasonable now to assume that, that is pretty much completely evaporated, and it's just purely SaaS revenues now that you've talked about extensively, obviously, but I'm just wondering if some of that gap is -- might be due to capital sales that perhaps have been assumed are no longer relevant.
Yes. John, I'll let Craig kind of jump in a bit more. But, yes, certainly changing capital to SaaS in the 1st of December last year has changed things. We did get a couple of delays in installing. That didn't help either. But it's just the whole company are geared towards SaaS. Some people -- salespeople are, yes, criticized all around now selling SaaS because the prices were getting obscene are much better than under the...
Yes. No. It's just that I'm coming from the perspective of just purely from forecasting and if we just shouldn't be -- should be completely disregarding capital sales, then that's fine. It's just that any assumptions that might have been capital sales should be now sort of left behind.
Yes. Craig, do you want to make a note on that and I'll -- and the capital sales that we've seen?
Yes. So John, we've also -- still continue to see some capital sales. A lot of MRS' customers are still on MRS 7 and not on Aspen yet. So we are actively trying to move a lot of those customers on to Aspen. But the ones that choose not to move at this point for whatever reason, whenever they want additional products, new licenses, et cetera, et cetera, those will be on a capital basis. So in previous years, MRS was at a run rate of approximately $2.5 million of capital sales. We're forecasting quite a lot less than that going forward. And it will slowly diminish over time as it has with Volpara, but the key there is we are focusing a lot more on SaaS now so we get those recurring revenues going forward. But I would give that $2.5 million quite a reasonable headcount going forward.
Okay. We'll start with 50% this year from there. Finally, just in relation to the commencement of new contracts. So you had a great quarter there in the March quarter, your biggest on record. I'm just trying to get a sense of -- a minute ago, Ralph alluded to some delays in installs. And I'm just trying to get a sense now, of that $18 million that you've got that's annual recurring revenue, so a good chunk of that has been signed up in the last 6 months or so. So of -- as we head into FY '21, what proportion of that $18 million would you expect to book to actual revenues in FY '21?
So John, I'll answer that and then I'll let Craig jump in again. I think just in terms of delayed installs, I mean, again, it's really been variable. We had one of our biggest deals ever in the last week of March. That site said, we actually got the requirements that's getting still done, get all the training done and get ready for day 1. You're right, I was referring to a site in New York, where they said they have just no capacity to do anything, let's delay this until things settle down. So there's a lot of unpredictability around that. I mean, obviously, at this point, probably, John, I think we would expect to recognize most of the ARR over the next 12 months, and it's the point of ARR in many ways. Yes, obviously, there is uncertainty out there around certain things in certain parts of the world.
So you're saying that there's delays that's probably coming...
I'm going to add to that. So the MRS recurring revenue, which is approximately USD 5 million, that is all installed and revenue being recognized. So you can take that revenue to the bank. The other $6.7 million to $7 million of annual recurring revenue from the existing Volpara base, and we're talking probably 70%, 80% of that that's already installed with the other sort of 20% in the process of being installed. So we're probably sitting on a run rate already of $15 million, $16 million, with the remaining probably $2 million to be installed over the next period. And obviously, as Ralph has alluded to, some may get installed very quickly because they're quiet or some may be delayed. So yes, we're probably talking about $2 million that could be now or could be in 6 months' time.
Okay. Okay. That's good to know. Good to know. And then finally, last one for me. Since 1st of April -- now have you managed to close any deals since 1st of April? Or is that sort of pretty much dried up? And maybe just sort of concentrating on working that existing pipeline as opposed to going out and hunting for new opportunities, as you've sort of said previously.
John, it's a good question. We certainly have closed some deals. We've seen them come through on the -- on our internal systems, where we celebrate each deal that comes through. So yes, there certainly have been deals closed. But Mark, do you want to just give an overview of just some overall sales activity?
Sure, Ralph. So the good news is, is that the deals that were in the later stages of negotiations at the end of our Q4 into Q1, they remain engaged, working through terms and conditions, contract negotiations, IT security documents and such. And I think the great news is that they're still fully engaged, and we're moving forward with those opportunities. Engaging some of our customers in new opportunities is a little hit and miss, as Ralph referenced earlier. It depends where you are in the country. Many are still fully engaged. Others are asking them to give them some space. They've been redirected to [indiscernible] resources within the hospital. But many of our potential clients, we just held a webinar last week. We had over 1,000 participants on the webinar. So they are willing to engage with us through education and other messages that we're sending out regarding our platform and so forth. So all in all, we remain optimistic that as things come back online, we will be able to continue with the momentum that we had at the end of the quarter.
[Operator Instructions] Your next question comes from David Barton from Tui Advisers.
My question is a bit [indiscernible]. ARPU target is $10. I came in a little bit late into the call. Referring to your ARPU right now, and we are in the full process of [ getting into ] this financial period.
Yes. David, I think the quality, that wasn't -- it wasn't too clear. I think you asked about ARPU. So yes, we saw another increase in ARPU to $1.04 during Q4. And -- but having said that, in the range of deals, the ARPU on the range of deals that we did, it was $1.45 up to $3. So all those deals and all the products across the installed base, we are strongly still expecting a significant rise in ARPU across this financial year. Just around some big combination deals come through of -- obviously, MRS products plus the Volpara products. So I think in Q1, Q2, we'll certainly be talking much more about some of those deals because [ then we will know ].
Got it. And the second question has to do with your potential M&A opportunities. Is there a goal to increase the ARPU? Or is it to build greater market share in the breast area?
Yes. So all the M&A opportunities we are looking at are in breast. It's all really focused on -- we're very clear. It's been the focus. So breast is the area. And the range of companies we're looking at, many of which are quite distressed, obviously, at the moment, are ones -- one of which would significantly increase our market share and the other one would give us a good opportunity to really increase ARPU. So yes, it's a mix. We're not going to rush into anything. It has to be the right deal at the right price with the right people. And it has to work for all parties involved, just like the MRS acquisition we did last year.
Right. And some of the other SaaS-type KPIs, so you've got CMR, ACMR and cost to acquire, are those [ beholding with ]?
We only report ARR and ARPU. Obviously, we do internally have some of those numbers. And again, going back to one of the earlier questions and comments, one of our goals this year is to really focus on customer acquisition cost, for example, and start to really start driving that down. We actually believe that -- we actually believe the whole COVID scene is really leading out to a lot more remote calls, a lot more remote presentations, a lot more remote sales. And we actually believe it's going to transform our business and actually see a pretty dramatic decrease in customer acquisition costs because there's no travel, because the salespeople can be much more productive now by basically being at home and using their networks. Yes. We don't report that. But internally, there's a lot of focus on that and a few other numbers this year in particular.
Yes. My next question is -- I mean one of the [indiscernible] is certainly around COVID and how your product is being trialed, perhaps, or maybe test through some online training with a COVID-19 emphasis. Now I know [indiscernible] certainly well, but can you explain that a bit more to a layman?
Yes. So last year, we bought -- only bought MRS. We cover between 8% and 10% of the lung cancer screening market in the U.S. So there's a lot of people out there in the U.S. using our lung cancer software. Now most lung cancers are incidental findings, i.e. you're going for a lung CT, say, for pneumonia and they find a lung cancer, and then we go to our software to start tracking all that. We're starting to get more inquiries now in the lung world because of the coronavirus because of the imaging that they're doing and where they're going. So we are launching a modified version of Aspen Lung midyear, and part of that is going to basically move from the lung cancer to more lung disease management. And it's going to include coronavirus templates in there. So we're very excited around that. As part of this new world as well and, David, of remote calls and remote training, we're doing a lot of work on -- as Mark talked about earlier, keeping engaged with customers. There is a Sydney-based company called DetectED-X, who are world experts really in remote training of radiologists. It is a very nice platform. We are working with them currently, and GE is also involved to really take and promote their free coronavirus training software to all the lung radiologists that we work with. So that press release really is all around us helping promote the DetectED-X software to ensure all our radiologists are really fully trained on how to identify and spot coronavirus.
Right. Right. Another question I have, and it's about the Ambry Genetics, and you talked about focusing on providing an end-to-end solution. Are there any missing pieces in the end-to-end solution that you don't currently cover?
Yes. So again, last year, when we bought MRS, it was for a couple of reasons. One was to access the data, but also the other reason really was to have a platform on which to build breast cancer screening around and start introducing smart AI to each area onto that platform. So as of today, we've got patient input systems and smart ways of asking patient data right upfront. All that's in the tracking system. We have real-time quality control in the form of VolparaLive! all the way through to enterprise-wide quality control with the Density solution. We resell the Transpara computer-aided detection system and so on. So at the moment, we actually have a full -- with the licensing arrangements we've got, we do have a full product suite that we can sell into those clinics. And really, we're trying to move discussion from individual products into that kind of platform discussion, as Mark Koeniguer referred to earlier. Ambry Genetics really was a missing piece at the end, which just really start to emerge over 6, 9 months as something that all the screening organizations, especially in the U.S., would like to do. As you heard, David, it was quite -- it was a privilege when a big company like Ambry Genetics approaches a company like us to use our distribution network because we are the risk experts in this -- in the radiology space.
It's really good because that is -- a friend of mine has -- mother, daughter and all the children have been genetically tested, this is here in New Zealand, and they have found to be [ virus-free ], and that genetic testing here in New Zealand, because the mother or grandmother had died, the genetics testing was free to the children. So there would be an implication of how [indiscernible] and genetics testing would [indiscernible].
Yes. And the key point there, David, is they are very interested in genetics testing, but very few people actually qualify for it under the reimbursement laws in the U.S. [ actually going ] to do it. And a lot of that is due to the difficulty and the time resources required to kind of kind of track the data, run the models, explain to the patients. But really, by controlling the overall platform, we're in a great position to provide our whole system in a very easy, user-friendly way all the way through as we're sure that those women who need genetics testing and potentially further revenue, that they all get exactly the right thing that they need.
Okay. One last question. Now I'm obviously looking at the share price and sort of thinking about, am I going to buy some shares? And in New Zealand here, what radiologists here in the central [indiscernible] professional could I approach and actually use your software?
Yes. So we've got a very strong hold now on the private market in New Zealand. We're very -- we've always been very grateful as a New Zealand company to actually have the opportunity to help New Zealand women. And our sales team here in New Zealand have done an excellent job with certain sites over the last few years. The Auckland Eye, St Marks and Auckland Breast Centre were the first ones -- were our first customers, and they've been outstanding customers now for 5, 6 years. They provide really great care. Mercy Radiology Auckland as well is another one. And if you go online, you'll see some videos from Mercy all about how they use our software, and they use it from Density all the way through to Risk, not yet into genetics but right around through to Risk, at least at the moment, as they interpret breast MRI ] if the risk is high enough. They got 3 sites up there you can go to.
Your next question comes from Tom Deacon from Macquarie.
[indiscernible] the capital raise. A couple of questions from me. Firstly, just interested on when you guys might be looking to provide some formal guidance for this coming financial year.
Yes. Sorry. Sorry. So I didn't really catch that one. Can you clearly repeat that?
Sure. Sorry. Just wondering when you guys are looking to provide some formal guidance for FY '21.
Yes. I think -- right. So Tom, at the moment, we are going to see how Q1, Q2 settle down, and we're going to review that as we go along. Yes. As you've heard earlier from Mark Koeniguer, we remain very positive about the year ahead, but certainly, there's an amount of uncertainty out there. So we're going to wait and see Q1, and then we'll look to give you guys obviously some forecasts about where we're heading.
Yes. Cool. No, that's helpful and [indiscernible], Ralph. And secondly, just on the quarterly ARPU during Q2 to Q3, we saw a sort of 5% uplift. And in sort of Q3, Q4, sort of 2% uplift. What were the drivers there of the difference in sort of incremental gain between Q2, Q3 and in Q3, Q4? Would you be able to just break down that as just sort of size of deals, lumpiness of deals going through? Or could you give us a bit of color there? That would be helpful.
Yes. Craig, do you want to answer that one?
Yes. It really comes down to product mix and the size of deal. So as Ralph alluded to -- and a couple of very large deals came across the line at the end of Q4. Obviously, the larger the deal, the bigger the discounts, the lower the ARPU. But as we noted in the 4C, the lowest ARPU was, I think, $1.45, and that would have been for the very largest customer and right up over $3. So that sort of just really depends on product mix. But as Ralph has also alluded to, there are a number of larger deals in the product pipeline -- in the sales pipeline, sorry, where they have a number of products in the quotes, and those offers are significantly north of $3, $4, $5. So it really just depends on product mix. And we just happened to close a number of very large deals in Q4 and therefore, a lower ARPU. So a slightly smaller increase on ARPU from Q3 to Q4 than Q2 to Q3.
Yes. Okay. That's helpful. And just to clarify, on that USD 1.45, the lowest in the current quarter, was that an enterprise entered into the deal as opposed to product?
Yes. [ As opposed to ] product, so nothing else.
[Operator Instructions] There are no further questions at this time. I'll now hand back to Dr. Highnam for closing remarks.
Good. Thank you, again, for your time today and great questions. As you can tell, we're actually very engaged with our customers and pretty excited about where we are and where we're going and the opportunities that are going to arise over Q1, Q2. Although again, we remain wary of where things are going with coronavirus. And we thank you for your continued interest in our mission to save families from cancer, and we look forward to updating you by probably end of May of our financial year results. And then the next 4C in due course. Thank you for your time.