CVCheck Limited (ASX: CV1) is a young and expanding information technology company based in Australia with growing revenue streams. It provides people screening and verification services to a multitude of clients including employers, industry associations and individuals via the CVCheck brand on its world-class proprietary online platform cvcheck.com which has been modified consistently at par with cutting edge technological developments and customer feedback since its launch in 2006. Over the years, the company has developed a comprehensive range of checks available across the globe.
B2B Customer Segment continues to drive Revenue Growth - The company registered a record revenue of $ 3.5 million, with $ 2.6 million coming from B2B customers following B2B growth of 24% on the previous corresponding period (PCP).
CVCheck markedly cut advertising to the B2C customer segment as the company shifted the focus toward generating higher quality B2B revenue, as a result the customer segment sales were 15% weaker relative to Q1FY19.
During the quarter, the company witnessed strong new client growth across the Care, Construction, Education, Financial, Recruitment, Technology, Telecommunications and Utilities sectors. With this, the company booked first orders from these new customers. The period also saw the company securing orders for its latest phase one white label platform (co-branding).
As a result, the Booked Annual Recurring Revenue (ARR) jumped to $ 9.6 million, taking a good leap from $ 9.2 million posted for the 12 months to 30 June 2019 (FY19), as the number of B2B accounts increased, Average Revenue Per Account (ARPA) expanded and retention remained very high.
CVCheck has been consistently focussing on product diversification that continued to propel organic growth, with several product improvements and new products launched during the September 2019 quarter, aimed at delivering an improved and more tailored customer experience. Another noteworthy development is that the company has already booked first revenues against these product updates.
Major Technology Platform Upgrades - Following several months of development and testing, CVCheck completed its latest infrastructure release that utilises a cutting-edge cloud technology, enabling the first stage of a shift to microservices architecture, that is expected to further enhance the scalability of the CV1 platform. CV1 incorporated inputs from its potential strategic alliance partners and completed development additions to its RestFUL API for facilitating the commercial rollout. In addition, the company also continues to progress with the commercial discussions concerning the launch of its phase two white label solution and will provide further updates on the same in due course.
Platform Integrations- CVCheck’s business strategy involves expanding its market penetration through accretive platform integrations with providers of human resource systems (HRIS) and applicant tracking systems (ATS). To date, integrations have been undertaken with the likes of WorkDay, SAP Success Factors, PageUp, and SpringBoard to name a few.
In line with that, on 28 October 2019, the company announced its latest integration with SmartRecruiters, a global player in enterprise recruiting software. SmartRecruiters offers a cloud-based Talent Acquisition Suite that empowers businesses to attract, select and hire people with right talent. Around the world, over 4,000 companies utilise SmartRecruiters, internationally renowned brands such as LinkedIn, Visa, Bosch, Skechers and Avery Dennison. CV1’s screening & verification technology would now be seamlessly integrated into SmartRecruiters’ suite of services.
The collaboration with SmartRecruiters comes following demand from mutual customers eyeing opportunities for improvements and further de-risking their talent recruitment and people risk management processes.
SmartRecruiters has a strong brand and global clientele which presents a significant opportunity for CV1 to accelerate and build on its expanding revenue streams from a global customer base. The live system release of the integration, which has already been executed, allows SmartRecruiters’ clients to use CVCheck through their existing SmartRecruiters’ dashboard. Likewise, CVCheck is also available on the SmartRecruiters’ marketplace.
The company is also carrying out discussions with a number of other HRIS or ATS providers regarding possible platform integrations and relevant updates will be provided to the market.
Significant cash flow improvement- For the quarter ended 30 September 2019, CVCheck recorded operating and investing cash burns of ~$ 0.2 million, depicting an improvement of $ 0.9 million on the PCP including $ 0.4 million improvement in operating and investing activities and a partial tax incentive receipt against FY19 R&D of $ 0.5 million ($ 0.1 million balance of the tax incentive received in early October 2019).
The key drivers of improvement of 38% in the operating and investing cashflow were growth in cash collections, margin improvement and continuing excellence in cost control. The cash balance at quarter end amounted to $ 5.8 million.
CVCheck has a market capitalisation of ~ $ 45.29 million. On 30 October 2019, the CV1 closed the day’s trade at $ 0.160, up 3.23% as compared to its previous closing price. It has delivered impressive positive returns of 210% YTD basis, 29.17% in the last six months and 6.90% in the last one month.
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