Kooth (KOO ), a UK digital mental health platform, released a trading update for the year ended 31 December 2022, reporting revenues of £19.6m-£20.2m, in range of market consensus, driven by 15% growth year-on-year. The company also reported high levels of recurring revenues, with an ARR of 95%. Its unaudited net cash at year-end was £8.5m and the company remains debt-free.
In the UK, Kooth reported "good progress" on its strategy to expand nationwide while NHS England transitions to its new ICS structure. The company added new commissions in Scotland, bringing it closer to its goal of establishing a UK-wide service.
Kooth explained its services were being mobilised to help reduce the burden on acute-need NHS services, e.g. ameliorating Accident & Emergency attendance by providing service to adults in need of urgent mental health support.
The company also aims to establish a presence in the US. In October, it formalised a contract with the state of Pennsylvania, which is in the early stage of roll-out and will cover 150,000 students across the state. It also reported interest from a number of other US states in its youth-focused programme, but did not elaborate.
Kooth will release full-year results in April 2023.
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Kooth's update summarised a year of growth for the company, estimated at 15%, with revenue in line with market expectations. It was also encouraging to see a solid preliminary balance sheet ahead of full results in April, that markets have celebrated today pushing KOO stock 11% higher in early trading.
The company's success speaks to increased recognition of existing long-term demand for effective mental health care, particularly in support of young people, in post-pandemic times. Specifically, the ability to provide effective mental health care through digital means is a trend we expect to see develop, with companies like Kooth blazing a trail for the wider health care industry.
Kooth's ambitious expansion agenda for both the UK and US should be exciting to existing and prospective investors. Kooth Adult added 8 new regions in 2022, and the company's new operations in Scotland and Pennsylvania represent future value inflection points. If you are interested in growth healthcare challengers, we recommend you Kooth.