By M. Marin
NASDAQ:VQS | TSX:VQS
READ THE FULL VQS RESEARCH REPORT
Consolidating & pursuing growth in 2022…
In 2022, VIQ Solutions (NASDAQ:VQS) intends to continue advancing its growth strategy, including through expanding its suite of product and service offerings and integrating recently acquired operations. The company expects to reach about $50 million in annual revenue, as it integrates Auscript and TTA and reflecting the Queensland courts contract.
… while growth prospects expand…
The company expects the companies it acquired in 2021 to accelerate expansion in their respective regions and believes that it can also leverage Auscript to expand globally, including via cross-promoting its growing suite of products and service offerings. For instance, VIQ introduced NetScribe in the U.K. and Canada following the TTA deal and continues to rollout FirstDraft.
… organically, via recent M&A and through strategic relationships …
VIQ is expanding its suite of product and service offerings organically, via M&A and through strategic relationships. The partnership with LegalCraft that enables VIQ to offer Lexel in the U.S. is an example. LegalCraft focuses on technology innovations for the legal sector. VIQ is the first LegalCraft strategic partner to offer the flagship product Lexel in the U.S. Lexel enables law professionals to collaborate securely to prepare cases for trial. As its offerings grow, the company believes it can address a greater portion of its targeted addressable market.
… & positive margin impact expected, as product mix shifts…
Moreover, the ongoing roll-out of FirstDraft, Auscript Australasia services and other AI-powered offerings is expected to accelerate revenue growth and shift the product mix towards higher margins. FirstDraft converts audio files to text quickly, leveraging the VIQ speech recognition engine, enabling faster turnaround than under prior methods. The company also believes it has a significant opportunity to leverage Auscript Australasia technology to improve overall margins and offer innovation to customers and transcriptionists across Australia and potentially globally, as noted.
2022 expected to be a year of consolidation, but tuck-in acquisition(s) possible
VIQ has historically leveraged strategic M&A to complement and enhance organic growth. Following the two key acquisitions noted above, the company expects to consolidate its new units and overall organization in 2022 and therefore does not intend to proactively seek prospective M&A candidates. Nevertheless, we would not be surprised to see a smaller transaction if VQS finds an attractive tuck-in opportunity.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.
