EKSO - Earnings call transcript Q2 2022 | Ekso Bionics Holdings, Inc.

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Operator

Hello, and welcome to the Ekso Bionics Q2 2022 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to David Carey. Please go ahead.

David Carey

Thank you, operator, and thank you all for participating in today's call.

Officer. Bionics Davis, Sherman, Officer; President Wong, Chief Ekso Executive and and from Interim Scott Officer; and Financial me are Chairman Steven Chief Jerome Joining Chief Operating for Earlier the today, released Ekso financial second of XXXX. Bionics quarter results is A on website. the available copy press company's the of release

could make statements laws, Private Before the we statements including forward-looking of and within to or to provisions Litigation undue of call federal are Reform are Any securities will harbor safe actual the are like this business statements. or Accordingly, made statements of these assumptions. expectations call the our you statements, deemed these material risks or statements or our landscape financial should those estimates that the to meaning cause begin, operations during remind that involve by which results XXXX. products and pursuant statements. strategy, of I management current Securities should materially on and expectations various place future made that of management's All Act be events not operational differ regulatory would governing forward-looking be statements include These forward-looking upon this you implied during statements. anticipated our historical forward-looking from reliance based the not statements facts regarding that uncertainties to

Bionics' today, events information, and speak as CEO, now or businesses, with Sherman. only obligation, revise Exchange update otherwise, a whether see our the the Commission. For I associated to or by any regulatory and filings our projections, Steven outlook operational XXXX. XX, disclaims which intention or statements required Ekso other over financial forward-looking except law, please of with call or list of Securities Ekso description July our turn will any uncertainties as Chairman because new the to of and risks future or of

Steven Sherman

us everyone continued revenue in today. We team. and growth reflecting for achieved you David, joining the thank second you, Thank our to the by quarter, strong execution

the benefits are awareness innovative inpatient raising now strong patients. successfully network ability market Administration, devices and demand our the EksoNR MS Drug that This with with U.S. to of help EksoNR and larger are facilities Food to are patients, And We poised us the patient operators. rehabilitation by the with is resulting use with in giving clearance bringing recent a significantly population. to we

EksoWorks devices business benefits productivity customers Our the to more overhead as safety continues clearly deliver. key and large EVO Ekso our momentum understand build with they that

a Financially, position. growth We contributor this in segment a the our be significant in to future. cash to expect we are solid

Our constantly improving dedicated team professionals are efficiencies. of

and to customer is commercial is Our maximize core by our management deepening team responsibility, shareholder is motivated relationships, value. which team

Davis. Operating Scott Now turn and to over the I will Chief our Officer, President call

Scott Davis

company Steven. generated achieved in led with operators. you, Thank reflecting delivered We this revenue. $X.X resulted second quarter, of XX% traction our which Ekso of This major the the growth quarter. strong continued are couple million milestones positive in making network revenue revenue Bionics a segment, growth of year-over-year EksoHealth by momentum we

standard choosing engage history. order it that First, of and we our of multiunit We're neurological in now team's was delivered highlights are purchases. in make order rehabilitation. commercial entirely to accomplishment believe EksoNR of on operators care Ekso's efforts capital the this large proud largest This to network who comprised with their

on I'll opportunity to leading in moment. using MS to the need Steven addressable clearance in as this just total gives but expands devices, our the a our with touch only XXX(k) for Second, market more it FDA's rehab use not mentioned, exoskeleton patients market. also EksoNR more patients meaningfully

restricted continues to by performance units, COVID majority capital budgets previously a EksoNR quarter. of up. purchases. XX as for which Turning were opening the back are booked Demand to capital our We improve

Our contracted of subscription remain unrecognized and revenue under rate XX% cumulative our million model. strong at $X.X approximately conversion with renewal

trend, are the witnessed to the customers have proposition agreements, we EksoNR. encouraging Additionally, increasingly value whereby an which our of their indicates committing multiyear confidence in subscription

to a strong solid our region. and generated the booking our our lucrative, Europe Dakota number the The operator well, in pleased strength For international underscores McKennan, customer in a of secured we in partnerships recorded Sioux that quarter, In bookings particularly example, a recently APAC, in in multiyear Falls, network state, Europe. market, In subscription. have Avera to South in EksoNR investment we're as a indirect adding optimism. first

to as years come. important in growth We drivers regions continue see the to these

living for sclerosis discussion it device means million and a for to of exoskeleton is are excited According National are in U.S. need. to device our first bring group to is the with the use receive our for with patients MS what nearly for diagnosed FDA clearance more X.X and with to the With EksoNR clearance Now people X the minutes, multiple EksoNR rehabilitation FDA globally. MS MS. patients on Society, MS. in patients someone we in this, than the a broad of indication million X MS Every there and business.

us MS training and clearance. study novel robotic walk. led a the the Pilar to it diagnosed her joined impacted the story Dr. facilities EksoNR. access patients potentially with with the wearable MS to as worsened, XXXX, their one by was disease of from Foundation, in data robotic how Ghaith at device, the provided have an these receive in that help them to in Foundation, using improving pilot I'd of evaluating Pilar to rehabilitation. ability and exoskeleton supporting Kessler EksoNR of like a this share Santillana benefited Androwis a Now their from progression will mobility a Kessler MS patient

in how Dr. the do. had months to balance, robotic Pilar the care posture like At said X-week rehabilitative with Pilar what training hers. progress and our for see many the stand that training Pilar's exoskeleton As an may learned gate part suggest with findings improves of the of mobility I initial important future could and cognition X-week people straight improve proud end of the saying as of up MS. more and stories exoskeleton quoted was to success study, and therapy done mechanics. and session, Andreas We're physical hope role never play X

an with inroads workplace to several the on our employee and segment, safety head counts making that productivity sizable significant provides. customers progress large with can with from We're industrial update EVO EksoWorks. Turning who features benefit

energy We and continue the to verticals. in aerospace see demand automotive, primarily emerging solar

result is strategy in customers, developing which like current longer quarter. Our did a towards this can it cycle sales geared larger

quarter, delivered For approximately of EksoWorks second revenue. the $XXX,XXX

EVO number of customer energy country, the ramps As industrial a across construction, remain educating access committed to green wider verticals. of manufacturing we to up general and and expanding

our verticals mentioned, vast billion. previously we've represent As $X of addressable approximately target industrial a market opportunity

to our so challenges the commercial workforce. supply ensure building the not success chain of market. on forward, associated customer to business. our customers' effect global many and to and on supply the moment awareness other mitigate on immune focused like Moving businesses, engagement and we're with our its I'd tight comment to plans the take safety team is Like to a our

than Our devices more unique are comprised of components. XXX

we're As with pleased discussed healthy demand the environment. earlier,

manner, that we in and manufacturing we financed can use for future greater supplies, orders a This we cash decision comes well when of well timely that do well made impact ensure with advance parts To pressures. in a order can market inflationary so. margins. current environment. pressures, the prepared to we Nevertheless, gross ordinarily in of and, with led through when would increase need navigate fulfill are resulting in to our has our to the combined and current However, an

burn. professionals managing team expenses experienced an us prudently our of have to our manage We our business, limit cash allowing and

to highlight County. currently Bay in We're like new moving a update. across our I'd in a San facility in San Francisco Marin headquarters the process briefly of corporate Finally, Rafael the to

aligns management, our needs. administrative headquarters with new current Our manufacturing and

to expect quarter. move the during We third this complete

commercial Looking we by half the that year, engagement of ahead the of of opportunities. to levels the growing cautious by Driven are second progress the international strength our our remains encouraged customer outlook increasingly of and our team, optimism.

with outcomes. most significantly the exoskeleton than exoskeletons XXX are devices among unique studied wearable innovative the demonstrating in patient Our improved publications industry more

clearance MS, who in EksoNR we excited to the our of receiving FDA are game-changing bring with Now patients are solutions for a number greater to need.

since call Jerome as served like finance, as controls interim accounting to in will controller experience appointment knowledge the his our His has quarter the company's financial second over recent May and Wang, results, accounting of who of recognize to Jerome years and XXXX I'd more turning to CFO. XXXX brings than XX our discuss seamless strategy role. Before our transition. finance this and enables of a

turn to the to like I'd call Jerome. Now over

Jerome Wong

Thank words, you kind Scott. those for

in revenue EksoNR $X.X of increase for increase of financial revenue Now primarily quarter second in by the an driven on compared XXXX second sales. volume to our quarter generated of This million results. quarter of device XX%. increase Ekso summary the XXXX, of $X.X million to a second an was XXXX

margin a compared second overall profit for in gross Our gross the The margin gross of representing quarter approximately $X.X the XX% period to XX% was same for of XXXX. a million, in margin a mix. global by to product and partially favorable the due continued shortage decrease costs due in inventory was in EksoHealth the gross to primarily increase offset service supply change

quarter-to-quarter Operating expense noted the quarter were on mix, margin $X.X this XXXX. second million channel previous to the XXXX we $X.X quarter. fluctuate product quarter million from and for compared second on as tends based calls, to was As gross case of the for of

and period. sales XXXX. the activities XXXX, of XXXX, the due the June with company the XXXX million higher and with and period marketing loss loss development a associated of incurred liabilities ended with due development the research increased million compared During products. issued warrant XXXX XXXX XXXX, to of XXXX expenses $X the million quarter $X.X EksoNR expenses XXXX was warrants and the XXXX, for gain engineering the revaluation of in same for the was the on Net operating to in net compared in to Gain of revaluation warrants increased a in issued operating second and $X.X in second and of related of activity year XX, for quarter sustaining quarter next-generation prior

months distribution in an of previously sales The deferred the royalties results. recognition with increased and of the X to XX% device of XXXX, and license months a million our was revenue by XX, increase XXXX. compared first the primarily EksoNR ended XXXX to half $X same Turning million million period increase or Revenue in volume $X.X driven same period associated $X.X to for June the were agreement to the margin prepaid in that expired. to for XX%. X of ended in profit XXXX, representing margin approximately compared in months a approximately for XXXX a for million XXXX, of was the June period Gross $XX.X of million $X.X million, profit $X.X of a Operating representing for million XXXX. same the $X gross X gross compared XX% XX, gross expenses the

administrative Gain was was and the the primarily due first $X.X noncash stock-based general of half XXXX During million company half XXXX. Net XXXX. operating of due research expense half development for development issued used XXXX period the was liabilities expenses and warrants XXXX, half higher in million first the revaluation increased $X.X from $X.X product first severance XXXX, in on increase of for in Cash an comparable million. in of the XXXX XXXX operating loss the of the compared incurred of first and in $X.X and million in case with and in each compensation XXXX and warrant each activities to activities. expenses to

details you June regarding line had Operator, XX-Q strong cash million. of questions. company our As Please balance filed further see XXXX, open of a the for $XX.X now today earlier the may quarter. XX, for the

Operator

coming [Operator Instructions] R.K. Wainwright. from from today is question H.C. first Our

Swayampakula Ramakanth

Okay. multiyear A the from sales questions your quick subscription. me. It's from most great see that of couple came of to

terms in I orders. of So sorry, -- multiunit mean,

sold potential you that? do trials at little of XX got that, orders of that clients us the or gravitate this towards be color these to the point? some give And a of also you terms more with start can going more multiunit in on under when units you're you So this, bit agnostic doing clients,

Scott Davis

Okay. RK, thank your you question. for

well as the of about being we we bookings in quarter. of orders and mix five of subscription, were both those a the the that really 'XX that that two-part those So those made capital of question, a had. bookings, as of And sorry, XX -- balance -- of I'm being subscription had capital talking the

is selling the sales there, with of relative still regional we sales focus IDNs clinics focused some are out a targeting team professionals of larger and and also has smaller that terms larger as IDNs, a on smaller IDNs -- then have clinics sales well. some the are to In into our of focus the that really the but slightly

-- those continues team network a portion is that providers. our to We have work of with sales

at is look sales we've 'XX, you if of the sales over in paying the off IDNs. somewhere now really and increase but bulk to the a seen XX% years -- of customers, around absolutely XXXX. working that So larger upward really is significant as what XX% From and larger on and those we're and of XXXX XXXX in

Swayampakula Ramakanth

APAC, Perfect. And ex-U.S., especially then you in you had solid in also said numbers.

understand I that So number to what would like means. solid

Scott Davis

Okay.

in APAC, capital we bookings Hong X had driven market Kong. and were that were we through had that And So that bookings two Europe, in distribution in total quarter. this in

of them All Europe. in actually through distribution were

Swayampakula Ramakanth

Perfect. the And is of the so, more capital one the term? subscriptions, year of said is In there clause interest other the sense, you X multiyear then or having it end to the purchase are is obviously, subscription, and setup? multiple multiyear? And to increasingly good at a on a these it's in as if than year news side, there end what Is terms and a in second is third the that on whatever conversion more years? how

Scott Davis

reason would In capital Sure. for capital our through or direct multiyear if the programs part -- that, give are reaching program. question. when Ekso, customer. as for Typically, subscription we procurement lease has months beyond -- consider it's with will XX we we a benefits that end And Great they've the implementing new programs. we whether to XX-month talk at realize is the options, clinics we're XX program out enjoy general, purchase the rolling that they capital within selling our a about through it want subscription, we them to who within resubscribe as But a sufficient is had of of months anticipate can experience XX-month the time found to rehab using as a the what of neuro really term start of really successful And certainly, really that. driving EksoNR. because benefits. result, those period, takes that customers benefits to a a

Swayampakula Ramakanth

market you MS, to rehab? commercial number when the patients what moving real of how new But for in Then you opportunity in -- annual of And the terms of indication, gave terms the from Or us your incidents. there, is stroke that folks unit go need X different handles to to? that same both point? go other a rehabilitation different MS? the they along they out call Or are places patients is with is

Scott Davis

question. Yes. Great

we an segment can over with entirely MS indication, excited these our patients very largely are We because outcomes. new help of great

some about a things is or the this of MS having other the of that these we quite of One an of relative over patients the that have will disease. to that's with -- neuro different patient sort of have SCI their degradation continuation injury acquired patients period brain

market large this. Ekso. prolong and there's So that benefits that fight There something that can a To we health crossover. out end, the exists used like And patients yes, be health with that their Ekso, addressable is say preserve of to from them an a is treatment all this walk with and to illness this that. as MS, against and give for

For they reach this of rehabilitation rehabilitation. area certainly is it, but into would expands inpatient use who some that our an have outpatient this, spells acute patients

us but We effectively crossover continuum is care outpatient into the this have outpatient as down now, into right of bringing well.

Swayampakula Ramakanth

Then good. can before my last Very other here question jump folks in.

also has December of gone quite supply now. What status see supply XX% then quarter this a chain? quarter bit And more that is about looks this you I the handle like number mean, managing a like last up call. last it -- right I talked have chain, On than in during the And your I a on rather. inventories terms know you the the

on are over should of some your these time, reduced? does because that improve will get currently gross inventories that mean, books margin So

Scott Davis

correct. That's

last for quarters, circuit challenges even plaguing everybody. that's As with challenging. about we've Anyone couple but been have been talked us only just of something chain supply the boards been parts, it's mechanical not or dealing who's

supplies we necessary So we growing much we maintain than our did orders the place ensure would that to have aggressively more to demand. meet ordinarily

you of is margins. the is As also an result that up. -- having our on course, yes, is of see, inventory inventory the it impact that And can

ahead over environment. time, further expect we least we've in consistency as no this supply what the assuming and So degradation chain and gotten of at

are We a we to those for back we along get costs normalize. expect that, And through and over we ways margin time, move position that to obviously expect. improve the crisis begin as will us to that more is looking what

Operator

next Our Bauser coming question is Kyle from Capital. from LakeStreet

Kyle Bauser

treat on about broader and I on talk just MS a I'll really kind quarter. but Maybe if in of curious Scott, the Steven, broader how Thanks, up a whether maybe more here. opportunity, can follow kind opportunity patients Congrats more of plan the pool you mean, would kind for but on there that's And that's in it or be separately, then all is opportunity, that incidents, the this. updates new terms opportunity of terms smaller, also you of outlined I an of assessment, to what and kind opportunity, sorry on little the facilities? you bit Just Jerome of missed of attacking your if the number Scott, as prevalence strong prevalence? near-term here? opportunity? the in focused

Scott Davis

Understood. Sure.

indication had for what sort not using that MS of EksoNR of researchers band. the thing. out a ability to the product and this. purpose, so And new gives We've our is market using us the customers new for is MS Historically,

MS we patients. into existing teams the sales customers potential our can we've that have so what back back already outcomes with great our that can clinical this into let our And and and and about started that with have, customers our existing is they know go means them we go to

that word to is So out getting existing this our customers. term, the near doing we're just is something

into and a bit this move again, the on population. of reach little this better well expands the with us as to their doors allows continuum of facilities a broader out, care of some we knock our outpatient as further As patient aligns

one the commercial and getting out from patients. to of perspective, how and our we strengths we team, to our -- clinical the can leveraging be resourcing is marketing that teams good our it's of teams spread a well there them more are help So team, great as as and including those and our able Ekso has sales basically word

Kyle Bauser

you've it. sounds you Got already marketing now deployed towards that on this. label, of maybe resources able up on to that, like kind market And this following are and commercialization it

So of marketing incremental in should sort the and overhead how any of guess terms OpEx about potentially year? forward the think is, run I of going changing we and balance rate SG&A question of for the of strategy, the kind

Scott Davis

to don't indication. We time. changes this this We've some for anticipate relative anticipated any

Kyle Bauser

Sure. Got what housekeeping, it. in if into lastly, was comp And stock then Just handy, just EBITDA. quarter? depreciation back it's the

Scott Davis

moment. One

are that now. We up moment. . detail the on digging One just

Kyle Bauser

headquarters, then that. about sorry, digging in the of And did that QX? could maybe while briefly the of again Scott, what lastly, new is I up, that -- maybe you outline just mean we're terms you timing say just

Scott Davis

Sure.

so Richmond a sizable facility, and in timing and excited been lease rather are and -- here interesting our extremely we long-term we over in have new location So Rafael. in over San finding

the other from Richmond. of in Richmond we're just the over where San bay side We are. of County. to bay went Bridge from is not Marin Rafael one far we in the Currently, over side So the

it fits savings in. been needs to on of rightsized represents the our us all well. a It that our facility organization. facility than the as just better And So much we've for that, is top

this So in us, QX. we're are doing this it's making and but for a move we positive relocation

answer question, QX. before end in officially your be we'll . of Kyle? So that Does the

Kyle Bauser

perfect. That's

Scott Davis

depreciation back can Okay. question, And this. Jerome to your answer now

Jerome Wong

comp So all XXX, it's stock depreciation for was then QX. is and about $XXX,XXX and

Kyle Bauser

on congrats quarter. And the Great. Okay. Excellent

Scott Davis

you. We appreciate Thank it, Kyle.

Operator

over any floor session. like reached end . We turn for the our question-and-answer I'd of or to further to the comments. closing Scott back

Scott Davis

today. Thank in with largest pleased in highlighted We're you, us second growth order Kevin, company's progress our everyone thanks achievement the the purchase multiunit to our to our We're in by and and quarter. history. the revenue joining for accelerated have thrilled capital milestone quarter,

day. multiunit chain for impact is stronger relationships EVO management MS have verticals we patient across Additionally, the in network only it the it access desperately to allows that constraints, our expands doing the to with half relationships sustain future this variety pleased team We market success -- develop and use opportunity. great their our have market top that deeper gives and I'd macro industrial for -- have In Underscoring clearance options additional under us standard treatment to not And updates part are helped of Combined that to yielded as greater customer need the broader and to challenges from of but market my beyond. more FDA a a a we EksoNR difficult to Strengthening also pool all, deliveries and of for to to forward continue look patients second access pipeline to a generating we We're significantly the operators, with them Ekso support that throughout are of closing, our receiving providing rehabilitative with care this express are XXX(k) proactive of our XXXX of our We neurorehabilitation. we like our entire and solutions. elevate growth. poised shareholders. market. have the to ability supply the for year. execute momentum Thank gratitude patients. for valued you our

Operator

today's webcast. That does teleconference you. conclude and Thank

disconnect may wonderful for line We your thank at this and have you a today. day. time, You participation your

Ekso Bionics (EKSO) 28 Jul 222022 Q2 Earnings call transcript