SMLR - Earnings call transcript Q4 2017

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Semler Scientific Fourth Quarter 2017 Financial Results Conference Call. At this time, all participants are in a listen-only mode.

Following managements prepared remarks, there will be a question-and-answer session and our instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded for replay purposes.

Scientific may to include Semler this you begin, call conference forward-looking we would remind like that Before statements. meaning, or Such words statements and here. results with uncertainties estimate, Scientific’s cause of those discussed to such by statements similar words actual as may, that a can will, expect, risks be number and such identified differ Semler from involve could anticipate, materially it of to undertakes of Scientific’s Please obligation opinions reflect only events. this these presentation of the of any statements that or and note revise future light Semler date no results to information publicly these forward-looking as the or new in statements release forward-looking revision affect filings refer a risk description more Semler the and detailed may the Scientific’s forward-looking these Scientific’s Please result to statements. SEC for of that Semler factors

Doug introduce Chief Murphy-Chutorian, of Executive Semler I may Now, Scientific. Officer

Douglas Murphy-Chutorian

mentioned you, per for Good today’s XXXX call. all reported basic Please Thank note, $X.XX and earnings The this and refers difference per approximately joining in between share. as the all earnings per and you morning for year-end morning, released fourth quarter to earlier basic earnings earnings of with diluted operator. share. that our earnings share per share thank Semler call

solutions an company emerging begin. efficiency Let’s is Semler the that to provides clinical healthcare growth technology providers. improve of and effectiveness

is of named in software and to our to testing options like our Revenue Our are enable the excited or our expenses care report fourth that write-off revenue strokes evaluating of for We assist chronic posted treating that impairment to appropriate profit attacks gain third outpaced when the occur. per increased first are technology a vascular for fourth the more solutions heart number share included And am in we The compared $XXX,XXX approximately the mission equipment. identify such old for develop, customers a events of XXXX. is to asset profit. growth grew of disease. increase. pleased and report per is that $X,XXX,XXX manufacture of $X.XX net and QuantaFlo and was that quarter which quarter which $X.XX intervene to products market ever I customers than sequential WellChec our we innovative preventive that which believe to to quarter product, our quarterly share, continues fixed very before to orders

in of the generated addition, quarter cash and fourth XXXX, positive flow, operations both the achieved cash warrants. In exercise of which resulted from we from

the quarter Our end increased fourth cash position had at the XXXX. compared of the to by third end of quarter the $XXX,XXX

to refer Now described are please this the morning. release, financial results was distributed in that press the which

asset revenue; and $X.XX or of marketing fixed revenue; quarterly including and per expenses impairment. share of a $X.XX was product was general development quarterly quarterly engineering share revenue. was negative and compared fixed XX%. XX, the percentage or fourth the quarter ended the a For Operating of revenue of quarterly revenue by impairment revenue revenue; XXXX, the of cost XXXX categories cost or of the XX.X% quarterly XX% was revenue; $X,XXX,XXX to XX% of sales $XXX,XXX Net and the of increased the expense December quarter XX%. Analyzing includes grew administrative expense corresponding impact period $XXX,XXX as XXXX was and includes expense which profit XX.X% or expense $X,XXX,XXX the in of of asset

for to cyber $XXX,XXX will of for equipment. XX-K. Annual revenue products our investments Semler be and increase of remainder well Areas we continue proceeds installations, option the to and and greater in the Report an soon Cash proactively was due number by usage in new cash increase service assets due quarter, from response investment XX, higher September software XX, on grow to and XXXX, as items business. requests. $X,XXX,XXX, In of December months increase. in described as projects cash capital to invest accounted Form sequentially the lease expect this flow partially to The improve XXXX, pricing, to customer continue licensing fourth in detail fees activities filed offset be operating average of compared to R&D sensors, analytics. and revenue in increasing the approximately we In had to $XXX,XXX security, exercises platforms, more warrant of because over data three of of As from and recurring include XXXX, to

that strive on XXXX. to continue throughout We customer no longer additions calls the achieve achieved take after footnote, from orders mention or We of customers. will orders quarterly to I’d on timing quarters, to intra-quarter of I but previously these earnings end occur billings One expanded growth routinely to which existing calls place. our releases orders yet at such base timing today. and of describe have

for testing year Now of the that billing the in a for product first second being vascular and said, occur number of there once orders quarters end of the a were solid should which at XXXX. license again

sequential We XXXX. revenue in pattern and quarter magnitude currently quarterly is will quarters installations revenue quarterly XXXX. in to grew of from fees regards usage expect the quarter fees. the expected Revenue expect that fees to continued to in first this from in and and and timing licenses, We every of XXXX lowest these in that the second fourth during grow in compared The growth XXXX result XXXX lowest are highest of the same in also the in usage quarter quarter were sequential thereafter. first first

expands, operating will grow the or in We operating as expenses in expense cost of the business revenue also increase exceed currently believe other growth that words, we anticipated but and percentage believe a revenue fourth was of reached in expect of decrease old related writing-off will net X% to operating expenses quarter to our which revenue, as of revenue the continue WellChec of in impairment equipment. with despite goal in a asset another or or profitability to X% of profit fixed XXXX. during revenue, $XXX,XXX $XXX,XXX the We

to terms XX%, was revenue earnings. revenue had other quarter increased XXXX, the exceeded per In annual XXXX, results XXXX, revenue profitability. and revenue increased and year, for in ever as best of we both fourth the $X.X cash expense which $XX,XXX,XXX, Moreover, the decreased for of loss of XX% year million XXXX. XXXX operating the operations decreased loss For annual achieved both share net our Comparing and XX%, we’ve annual of from operating XX%. flow positive words,

history. QuantaFlo opportunity plan time. to met right plans relative penetration. to further of We believe our establish revenue and product We Given XXXX. no currently to and as a our over. do XXXX this meeting revenue currently we the and goals accelerate the existing revenue will our maintaining operating business care profitability large repayment expenses profitable We not annual other Company's operations. obligations standard we capital change vascular give anticipated if growth current reserve to market testing our reiterate, We to and growth although of is from able needs it first raise financing that anticipate from we recurring additional continue we in our or are the arise is maintain year To intent formal at market in that be and in as guidance, disease cash we are There during from for cash anticipate XXXX continuing to debt strong liabilities as the the the model, industry.

work and number interest provide those there's for believe the of in identifying a because year that for both is the best solutions effective economics the patients, outcomes And care healthcare positioned our improve plenty facilities, diseases. we providers, conclude who of and health benefit insurance your we preventive And continuing with performance chronic cost of of growth. So and financial health thank To Semler for by the We patients prepared we deliver continued from remarks have well growing wellness in support. ever. for for I the in the plans, the room you the may government, patients market, your We patients. testing my Company would achieved terms measures.

lines could Now you please questions. operator, the open for

Operator

Zacks of Brian first Research. Marckx with from pleasure Instructions] My will come question our sir. the And [Operator Investment line

now line Your open. is

Brian Marckx

Good morning, great another Doug another and quarter congrats great on year. and

Douglas Murphy-Chutorian

Thank you, Brian.

Brian Marckx

asset that in things is to I revenue, cost impairment right? $XXX,XXX in was you charge, clean of that that I'm model charge up said Doug, impairment the think my asset just trying

Douglas Murphy-Chutorian

It’s in G&A.

Brian Marckx

G&A. In

Okay, next good. reimbursement or right. seasonality, sounds And it of that business, the driven more or that helpful? insight can That you that would part it talk driven little bit that of just question. about fees of the All some kind answers it usage what Great. seasonality you more then drives in co-pay – there's terms business. more that mentioned like Anything the is that on a be to is

Douglas Murphy-Chutorian

year. established remain customers. decrease history levels if customers contracts they generally and don't whether for really are that being in home insurance the assessment during is that nature of in or patients or a a lists plans most more somewhat new the quarter, not is example. fourth get usage should an it from fees fees for And does have in in and fees periods. – to Sure. at usage usage their business Well increase, or That at the the insurance came work XXXX. do company business said, the to growth that as fees list I know current know the coming of during do risk kind usage the seasonal customer going plan And in usage to enough get customers members anticipate we from We say under future later will of

revenue year the fourth really third bit in the they in fees to organize So they third it, first by ramp in we or be more we in that about a and list XX-K. time the it's the quarter see in the $XXX,XXX usage of done their the the saw then get believe reported grown we as to start and XX% in fourth numbers and closer last I they second – $XXX,XXX. in XXXX We'll the previously of and exact doing quarter up. get little maybe to quarter about they've

be in they lower increasing They'll usage and will same the probably XXXX in we assume XXXX. higher fee usage would in higher say fourth amount than lower with I that should license happen. for fees We in and the the the be would start So year we'll a XXXX. but the year thing were the then for should see quarter, revenue

Brian Marckx

Okay.

would like well want I portion And as usage that…? to sounds potentially it as as an annualized is so fees well, of about over that percentage of greater think total revenue on a the longer-term it a basis. total become probably revenue

Douglas Murphy-Chutorian

think what the what usage from difference is in of pay say, that way we as sense a little know just probably because little which there so way in the like I us, more make good in margin over for don't greater also very We But of way quarter. the a preferred sure not too license in come a so say them, in third both we faster. think actually going to year. grow the revenue license it a is fees those and to even quarter-over-quarter. hard that to have of seemed the said particularly with i.e. terms That’s in of is kind it I terms that good customers revenue grow ways recurring growth the kind fees fourth don't little I this other, and numbers organically I agnostic in history model anymore. to one fees

Brian Marckx

should Okay. fees foreseeable licensing And the grow for accurate? is you future, sequentially that that think

Douglas Murphy-Chutorian

I attempting are we will quarter. that we of And build though to that shift first in did units I to be the we have make number did for mention and that happen. second a haven't think that build

increases done. gives in us quarters two have first the it good believe baked that licenses to confidence already So what we'll we've essentially by it having into in certainly

Brian Marckx

is terms or – concerns And there side? just the issues about sheet, basis cover AR there Okay. collectability all then the on in is balance of to any any

Douglas Murphy-Chutorian

off done just a have very the Most collections, month. well also turns basis. on we hurt device accounting It even are they timely technology of We that as customers every to expanded actually our better team want if in got the AR pay year. our we doesn't last

– ability hasn't their an pay. someone to until off if turn have device they we So paid,

to So with we of and the it off very I'm payers, happy all turn have have devices net-net is really don't collections. good we

Brian Marckx

individual and I what Okay. any the kind just have mandate about, into of your from on business particular side some reimbursement, XXXX. have particularly may on generally substantive to side in you effect? that can the made is but ball, obviously anything outlook to you effect then your that And a for crystal way in on talk there Obamacare the in that just payer see insight then reimbursement sayings think meaningful you in don't and away that is that comes when Do your guess relative going that

Douglas Murphy-Chutorian

not same our that mean customers. way work That’s time in the no think course, is of or the with of our business. going we so what the kind it, in I healthcare the that part and a for government that cuts At that part do in if do same that product economic as in pay way and business such incentive customers, and is if way not they ball At that priced there substantial we what I effect is tremendous economic a crystal time, will of most they in even is that. for the like we they're very with you have deal to could from some build do our of an said We we those. have so is and there there tolerate delivered, are changes for to always that there associated the our the unusual risk to well.

Brian Marckx

I'm side year, I side PAD, last think around demand a was from it for year. believe and Douglas, diagnosis somewhere of potentially you for terms the I driving impact the that more last sure seen exercise mid on Have you're CMS business? positive Yes. in started that therapy aware paying was

Douglas Murphy-Chutorian

I in is determine the factors grow. perhaps really making maybe pay factor did We time, which play; that in thing us. a growth positive cannot well very there factors are At as point, multiple certainly same for were small it this a they

people think for are that outcomes with getting comfortable the much device, I more good. diagnosis; the patients to with the use are their

the really for want frequent forces, having make are you those paying an the therapy, of is you will which diagnosis. exercise improve when if the driving outcomes certainly that think to I for but things So early do one they're patients

I'm very it. happy So about

there be I would but certainly a it think I and it's to good for you give healthcare can't us, that for seem it's number. beneficial

Brian Marckx

Okay. Great. Thanks Appreciated. Doug.

Douglas Murphy-Chutorian

Brian. you, Thank

Operator

line with our Thank next the from Trickle of you. And David come question will Research. Lavigne

Your line is open. now

David Lavigne

Great Hi Doug. quarter.

Douglas Murphy-Chutorian

Thank you, David.

David Lavigne

expanding give was of give you wondering, on from just even from of it give five guess guess? us don't it that of you you color and was this of specifics preponderance a so I is would be, customers that on revenue that kind their color I'm of sort throughout platform systems, the existing at know can you perspective us wondered kind what but if mix, curious just means or customers customers And what can any who thing, I about mentioned or new it it from that – any all? I curious I sort software mean of kind half question, of the I I'm now of I’m second

Douglas Murphy-Chutorian

Sure.

takes phase a Okay. to coming working a get a working, involved but it get down, we to customer couple We with we’re with of to this one the gotten long these a one main way get from don't break we start after, it going the groups. that it, orders with interested clearly insurance plans. And to experience we're maybe our see they've bigger after groups pilot started. them years And these see do some substantially large of time

of from certainly come lot important terms takes down a these have same divisions it who a very there's of the switch. breaking all going control to but we're and it long good and don't numbers, in percentage so individually. a make person one command of then of them does groups about preponderance have of we have say, it flips we So decisions that that because go to our number us where stuff central [indiscernible] are talking we're independent a and multiple of our kind let's to that They At and the time not generally groups business. are to to

and the more So kind if it. would of it at lot own you umbrella then there's a discreetness organization looked to just you they

to be said, business have establish being overall that, now. I and that whether get to have establish key of us, we forward new there love lot group, really the are customers a could do to drive so that substantially than more large yet that their terrific customers think little will and try we this is that going So it business but in so of do we we who more

laptops we many works and So that's with question. coming kind that works iOS to already. and on we to all on own of that. Android, them that the side answer we standpoint, from than prefer practitioners a a use system our their The works are one speaking on is that customers those use – tablets software platform have out have supplied we are a rather for platform because who Generally their of Windows,

revenue just software So system. equipment we're we that their to do to that happy don't on with makes they're supply running compatible our that make have have is cost of very decreases our to it that whenever sure because and us

need cetera, they're So providing their integration to in of works and these same and at better our technology, really We see these do the our that them we even a to other terms doing make lot if software all data their et continually and do software trying running business time our things other of sure we that's – goal that better, run why run customers that's helping business. things. using that

David Lavigne

a of sort like analytics proposition greater is of feel sort general? the in to you becoming value improved So offering

Douglas Murphy-Chutorian

do. I Yes,

aid to nurse’s like do all logistics things and there just easy previously I things specialist a to think how it security, we that some also do do is that or vascular want something data would cyber simple actual to have technologist. can vascular these how of then I analysis, are are the think at And do.

as accurate kind it's and it to as to our those So we use development. easy that to use, predominant things and in we're fast software really the of trying make are do

David Lavigne

those just sort of autonomy one I it groups least fair first the sales of maybe bit into maybe sale sale is these some back first the Going maybe? the and bigger of the fourth the little second so to the of to prior and than question, the a of but a it's say sale, that is third that understand shorter little maybe of easier groups, at

Douglas Murphy-Chutorian

Yes.

and they if relatively using it's think happens it is one division is and here they're more at lumpiness that to – then involved decide they start be but doing maybe get [always] and it there to point us. about will what get then we that satisfied, I want some group hopefully division of large another a and orders and surge. is too, some What we big everybody a within needs flowing these

a exciting, just them, and So we lot X% are for to more maybe to do more market X% frequently, as very we so to this have say in and I a and penetrated lot go.

David Lavigne

Thanks. Great.

Douglas Murphy-Chutorian

David. you, Thank

Operator

Thank line you. And from the Henderson of come next with our Kershner John question will Trading.

open. Your line is now

John Henderson

to Good morning, Congratulations story. I'm your guys. on of the new kind progress.

please So sound me. ignorant, forgive if I

Douglas Murphy-Chutorian

John. can okay. Thanks we in It’s calling help? for How

John Henderson

little have So and nice so me, that’s the stock to company you mention a guys interest. my

guys company here million You valuation seems for on. $X rate like run there's profitable and are a very quarterly interesting

that's the this share was if common is count my So current assuming share outside question what stock? converted first be of total would count out there, everything

Douglas Murphy-Chutorian

$X.X weighted-average diluted number was the just number of is the $X.X number the million. shares about calculated Well, that million, for quarter

X of number the at common X.X. me presumably of with end In terms everything quarter, if little so warrants average of common two shares that and over And but in that higher close X so the total was options options and outstanding, just up million to together you shares shares the would – of taken along weighted, about have under it's I the outstanding unvested take number little the probably invested the front X.X, a to of than added a million point shares, warrants. and don't maybe

John Henderson

the to exercised balance all bring to cash And the is sheet? were going all or those warrants

Douglas Murphy-Chutorian

can options probably to [indiscernible] you provide really of is this price more on get average call over than and just idea The see get In you'll your to about probably of ballpark. the Yes. warrants XX-K, I try the so the the the in here, $X. details is general $X

John Henderson

uplift getting Okay. profitable NASDAQ or of for plans And there are just with being obviously terms kind market opportunity company big final medtech question, the uplift a this of in nice is any plans a year? investors of in new terms to

Douglas Murphy-Chutorian

The That after, have the back to the well it's get plan. reapply goals us equity. everything million at fairly requirement would the – need simply we've time which to in We on looked I done for to last need and easy equity to on. that shareholders you is get $X be that that do shareholders

the the year. two our was as at for So operating us are you choices equity, of come in million and let profits correct to see which end can shareholders minus the current $X.X the

and/or So now $X.X some share low too which it's to go we on the to we'd have depending of point million kind at price, think do it.

So that but dilution, money we’ve to some be equity to also in financing that. would position do in is take and of and been avoiding then be

think definite price. is a that to relist a substantial would appropriate and we were is amongst the there when but unless a it board know at So NASDAQ, the – time the stock not our reasonable also in a dilution stock way do to the comes, cause to would shareholders I interest

John Henderson

that. appreciate I

just that’s my any market competitor of market Well in opportunity, in speak? I question, and creating – terms the so kind sound like guys are specific final Okay. competing plan. of against? to And competitive a so or Is terms you very of who guys are it mean smart landscape, you the logical this

Douglas Murphy-Chutorian

prior pressure, cuff does Well marketplace. we have it it okay, in The we if more Peripheral or PAD the by predominantly be it Disease ultrasound done in the always see specifically that the nurse’s to And Doppler allows them with or and by to does Artery if solves primary think or there's in product the systems. it faster market test be time do industry a testing. of lot as is done accurately to testing, history to issues, setting care do you expertise basically technologist a done long get QuantaFlo or using a this allows aide. they product blood of of where people specialist the a it to the to vascular but have this, the didn't And instead the

American So Diabetes all of them that patients asymptomatic. testing Association, test important American very Cardiology, Heart Association College need say particularly the is of you both are most American to these because

they easier So but the them actually a no early to or prevention one hopefully is disease, make gets only have going it's when it but problem, there would and better, be because specialists test an referred there's no they're in XX,XXX way asymptomatic. to

all questioner. they says does box, She pulse check takes it’s the they They the their check have estimate box, couple a to This for Now patient questions, can and XX, do you needs QuantaFlo. risk if you you over simple are probably, over on test. example in in, cardiac you a office have their primary are checks factors. aide care is XX, comes a nurse’s temperature their a

the do your the more and think room, you that, you that we doing kind smoking, blood in lot the is needed get the So and a get when severity we're this need system think you we doctor the we to need he of a well important the if might the something gate other are front there thing but office specialist. another some exercise, types disease, of him, walks All he specialist. off concentrate started the you process think right need risk very devices, something of it of of or it's I then than that says out rather upon who fact into if into I we on pressure see there have the medicines – starts disrupted and depending place these in we to so will your say yes, brought we to people have you of here, to keeper examining the do severe report have have factors, with medical the has

John Henderson

can and Exciting a story luck. coming and bigger good be Congrats story growth the much hopefully years. Great. in little

So good Thank everything. luck you. with

Douglas Murphy-Chutorian

Good questions, Q&A John. of End

Operator

Ladies our question-and-answer today. and Thank for you. [Operator concludes Instructions] this gentlemen, session

over some Murphy-Chutorian, now the for closing to comments Mr. hand remarks, my So it's to and Executive conference Doug pleasure sir. Officer back Chief

Douglas Murphy-Chutorian

Thank future. the soon hope updating us. forward your And for you, the to our everybody with and day thank week. operator. have Have you joining progress. in today And call you support. more We very you again happy for look a We're thank I on to Bye-bye. the good to continued in good quarter.

Operator

Ladies and gentlemen, thank today's our conclude participation you you This Everybody for and does day. program disconnect. on wonderful all conference. a may have your

Semler Scientific (SMLR) 28 Feb 182017 Q4 Earnings call transcript