Telehealth Co. Continues To See Soaring Revenues

Telehealth company Reliq Health Technologies Inc. (RHT:TSX.V; RQHTF:OTCQB; A2AJTB:WKN) will not release its final results for its fiscal year 2023, which ended June 30, until October.

But during a webcast with analysts and shareholders this week, Chief Executive Officer Lisa Crossley said that total according to estimates, revenues more than doubled from fiscal year 2022.

"Going forward, we expect that total revenues will double, more than double again, from fiscal year 2023 to fiscal year 2024," Crossley said. "So, we're certainly in a period of rapid growth. And I would say that growth is going to accelerate significantly over the second half of the (calendar) year and into 2024."

Reliq enjoyed its first profitable quarter during the three months ending March 31 with a gain from operations of CA$731,017 YoY. It also has started scoring larger contracts for its iUGO platform, including one with a U.S. health plan that operates in five states with more than 3,000 doctors and 1 million patients.

"We believe the company has hit an inflection point of accelerating revenue and EBITDA profitability," wrote Maxim Group analyst Allen Klee, who doubled down on his Buy rating.

Maxim Group analyst Allen Klee put out an updated research note on Tuesday. The company is gathering "continuing momentum," he wrote.

"We believe the company has hit an inflection point of accelerating revenue and EBITDA profitability," wrote Klee, who doubled down on his Buy rating of the stock and CA$1.75 per share price target. "Tailwinds include a significant number of larger contracts that have been won."

Klee projected generally agreed with Crossley's prediction of doubling revenue in FY 2023 and FY 2024.

"We also believe our revenue could prove conservative if the company is successful in onboarding some of the larger contracts that have been announced," he wrote.

The Catalyst: Proving Itself in the Market

Helping to drive the surge, revenues from software and services specifically increased by more than 2.5 times from FY 2022 to FY 2023, and they are expected to triple from FY 2023 to FY 2024, Crossley said.

Hardware revenues also are a "pretty compelling business model" with a greater than 50% gross margin with minimal working capital needs. This also accelerates the software revenues.

"Reliq has now proven itself in the market," Klee wrote. "Larger customers have shown better adherence and collections."

But Crossley said the biggest difference has been the clients the company is signing contracts with. Reliq also recently signed its first contract in Mexico.

The three states where the company now has the most patients — California, Florida, and Texas — make up more than one-quarter of the U.S. population with more than 90 million residents, she has pointed out.

The company has a "pipeline of over 500K patients based on current contracts announced and expect to be over 1M patients by the end of CY23," Klee wrote.

It's expected to take three to four years to have all patients onboarded, adherent, and billable, he noted.

"Reliq has now proven itself in the market," Klee wrote. "Larger customers have shown better adherence and collections."

Helping Patients at Home

Reliq's iUGO platform helps manage diseases such as chronic obstructive pulmonary disease (COPD), congestive heart failure, diabetes, hypertension, and others. Patients get audible reminders to step on a scale, take their blood pressure, or prick their fingers for glucose monitoring. The information is automatically uploaded to the cloud. 

The platform draws on data from fall detection devices, medication tracking, and vitals data to flag patients at home or in facilities who need additional monitoring.

The global telehealth market is expected to reach US$455.3 billion by 2030, with a compound annual growth rate (CAGR) of 24% from 2023 to 2030, according to Research and Markets. 

Analyst Klee noted that the platform is a "compelling offer for practitioners" as "a typical practice can bring in more than US$1 million in Medicare and Medicaid payments implanting it, Klee noted, making iUGO a "compelling offer for practitioners."

"Reliq's devices are simple to use and connect to either Wi-Fi or Bluetooth," Klee wrote. "These devices can provide real-time monitoring and identify when adverse events happen. Devices monitor health risks such as glucose, oxygen, weight, blood pressure, risk of falling, and more."

The global telehealth market is expected to reach US$455.3 billion by 2030, with a compound annual growth rate (CAGR) of 24% from 2023 to 2030, according to Research and Markets. 

"The pandemic exposed the shortcomings in the health care systems," the researchers wrote. "The government-imposed travel restrictions and lockdowns (mandated) in order to curb the spread of the virus  . . .  led to patients and healthcare institutions shifting toward teleconsultation and telemedicine."

Reliq also recently announced it has started using artificial intelligence (AI) and machine learning (ML) on the platform, starting with two clients, although the enhancements are available to all iUGO users.

Ownership and Share Structure

About 8% of Reliq's shares are owned by insiders, including Crossley, with 1.6% or 3.22 million shares. About 0.3% of the company is owned by institutional investors, including FNB Wealth Management, with 0.01% or 0.03 million shares, according to Reuters.

Other top investors include Eugene Beukman, who owns 0.11% or 0.23 million shares, and Brian Storseth, who owns 0.07% or 0.14 million shares, Reuters said.

Crossley said 91.7% of the company is retail.

The company has 203 million shares outstanding, with about 200 million free-floating. It has a market cap of CA$103.48 million and trades in a 52-week range of CA$0.76 and CA$0.46.

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2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
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