SMLR - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Semler Scientific Q1 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions for how to participate will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

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

Semler Now, may Scientific. I introduce Dr. of CEO Doug Murphy-Chutorian,

Dr. Doug Murphy-Chutorian

for that provides and solutions clinical thank Semler call. efficiency providers. Good the of results financial the all first technology company is XXXX morning an growth healthcare effectiveness Semler and joining to improve emerging quarter you

our Our in innovative mission that and is to our assist software are We when care appropriate solutions and customers our options chronic evaluating our to and believe technology preventive enable market diseases. that products identify treating to develop, strokes manufacture Compared one like or and customers XXX%. before attacks intervene million $X.X to profitable $X.X quarterly from revenue Today, ago, to million year up consecutive and heart excited I’m report the events corresponding from second quarter. occur. quarter grew to

XXXX. included first to increased fourth to operations. notes approximately the liabilities quarter of principal of which the On is decreased. cash quarter a $XXX,XXX. quarter $X.XX three the such retirement ended $X.XX $X.XX notes XXXX, per share in diluted basic than XXXX, from XXXX. on March opening and Also highlight were earnings quarter Another using three of December the compared in first believe more We to months $X reduced year. grew the in other Total for quarter a us fourth Earnings XXXX basis, expense first performance existing on basic outstanding share to XX, of revenue of ended record to $X.XX for of puts share the repayment and XX, the cash per of track the in by comparing million, months XXXX, and the the interest XXXX compared quarter liabilities per share of amounting and

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

increased Engineering product quarterly was marketing was XXXX, the ended cost quarter cost the was in grew a $X.XX General administrative development quarter quarterly of includes and For March revenue. quarter of expense Sales of as expense, $X,XXX,XXX was of or revenue which to and per XX% of corresponding by the XX% revenue, quarterly compared XX, or XXXX which revenue X% $XXX,XXX revenue. share, the $XXX,XXX expense revenue. XX% percentage revenue, XX%. of XXX%. quarterly expense Operating and of XXXX, of of first Analyzing quarterly XX% is categories or quarterly basic expense of revenue. profit was revenue. Net

XXXX and April, on decrease cash uses $X,XXX,XXX, invoices by rather XX, were larger Accounts provided by these due, The items operations. sequentially by paid $XXX,XXX, included partially offset of in as $XXX,XXX. had of were primarily XX, cash notes to some of March. of which to amounting cash $X,XXX,XXX XXXX, compared grew a from repayment liabilities late reduced the receivable March of approximately to December the were As Total reasons. due principal following than $X,XXX,XXX, Semler early in interest

rent continue and the customers. payments of on current cash over our increase expect year, the from levels to we We timely course receive the if our

we of more continue of recurring expect our will average report due from discussion to pricing, In XXXX, products, statement, and XX-Q fees, our revenue Form and more revenue include cash of to the number licensing Our increasing business. usage to higher and installations flow on our grow liquidity. quarterly cash the

We and expand customers. existing from to base our to to additions customer to orders strive continue achieve

We in pattern XXXX these magnitude expect XXXX first same first usage grow quarter compared the in expect We in quarters. lowest that thereafter. quarter grew of higher fees XXXX is sequential from to revenue to and remaining the The and quarter also every in were in XXXX. lowest the fees quarterly currently in

in increase will quarter We quarter from expect XXXX. operating expenses to

operating To fashion, be we the reiterate, cash before, accrued control and meet in the intent opportunity stated to generated We note rate strong do growth at that history. to no grow we Current although year first cash change we than able from the Company’s continuing in guidance, profitable. continuing need operations. right plans liabilities million. at it’s not to and capital obligations during maintaining expenses other give faster formal are anticipate obligations profitability our financing remaining to approximately this interest full are annual arise. $X.X Currently There of or our is time. using we we existing this revenue anticipate a XXXX. intent remain revenues reserve If As plan debt anticipated additional and expenses to to will and on XXXX profitability as and totaled raise repayment our

facilities, we diseases. care for outcomes for large market in in benefit to the is with well-positioned we deliver Number standard because, our identifying the Company of room from support. we’re being that in conclude is interest continuing and for economics products, Semler remarks, continued your you please Number now, our measures. thank one, To of the could two, the think patients as of lines for cost operator, We We number for health believe questions? our patients. by disease so and those that solutions who health we patients the best healthcare there market have the vascular you improve wellness terms the patients financial work prepared with to ever. the insurance And tested penetration, preventive goal your effective relative both three, market going care is and plans, for current open believe may performance testing the industry. this further providers, number Our chronic I government of we growth. the my provide the a in establish to that QuantaFlo for year is

Operator

Investment Certainly. question Our comes Zacks first with Brian [Operator Instructions] from Marckx Research.

Your line is now open.

Brian Marckx

me great the much and pretty morning, were -- on you first another Doug, impressive. how It’s Good Doug, give the the you usage can in congrats fees can quarter? what quarter.

Dr. Doug Murphy-Chutorian

quarter. approximately in looking the don’t that number over really the be XX-Q, change going The they’re really how usage time, will quickly the fees just quarter, to know we they in were but supplies -- compares as fourth fees XX% to the of revenue, of XX% in a is usage approximately about usage here and were XXXX XXXX. $XXX,XXX. first fees in quarter And That percentage

Brian Marckx

was you sequentially that you expected? revenue and would Okay. thought still well. or -- Is that you anyway, QX that to And that increase the revenue on call, you in guidance QX is that mentioned that licensing still -- expected QX say then in as is

Dr. Doug Murphy-Chutorian

call fourth we Yes. in quarter What we anticipate. exactly in had we is said February of that XXXX, the what the last

Brian Marckx

to In with is that assume issues there terms it AR, of collectability? safe is no

Dr. Doug Murphy-Chutorian

April, some in just in is We last basis. a to well AR first be to may very rather invoices pay AR the early time increase than in March. timely days the our seems larger habitual, And collections. on done were going and from quarter, during of we’ve Historically, believe don’t prepaid Most the that Yes. of customers it it that occur time.

Operator

question Thank with David Trickle Lavigne Research. next you. from And comes our

open. now is line Your

David Lavigne

of is quarter, really, around can a is Great And the gross that’s on expansion just really trying around there can that fixed just to pricing, most whether Hey, Dough. you don’t function tell I great. think that me I get I item? of give component I’m -- items whether understand, margin of kind I that. think arms But, maybe line I any color you and am my line was the product maybe did arms maybe Can extraordinary. that give of a that of there but

Dr. Doug Murphy-Chutorian

Sure.

cost we call revenue. percentage called of margin that think it gross the the -- or I you of what

to I think, the because software in that indicated that we’ve predominantly should that improve. we’re a continue past product

it over of than have the been Some of more some three hardware years. has depreciated placed that we out is threes,

goes of it as away depreciation. the So, cost

contract cetera. et of of terms we kind in with quality where efficient also and our fulfillment, with manufacturing work We’re who do people internal

the there. suspect to out expensive would that -- -- money years in said is upgraded its could are we more creep just what per be clearly, getting product the installations basically Because that should using it couple And we of what -- So, product There remember, of QuantaFlo if seems component average It’s license you continuing, tests, thinking. that we et whole had improve. improve more paying that more and that’s our slightly more doing up a past. And doing. ago, also to And continuing to in a have installation predecessor. is was revenue cetera, maybe the the if we the than of increasing numbers. the

is But, multiple like continue get how little It’s said, I standpoint, I to as pretty more think, it better. factors. improvement. but there your feels are go going we a it hopefully much So, from high, probably can

David Lavigne

might was or it, guess, out somewhere arms be. wondering just what scale. And I even seems there’s to maybe that I to my not a at is it I whether that ceiling guess, was around really -- there, like trying get I

Dr. Doug Murphy-Chutorian

Yes.

David Lavigne

you. Thank Okay.

Operator

our Capital. Thank you. [indiscernible] GHC comes next question And with from,

Your line now is open.

Unidentified Analyst

are significant terms spend. some it’s Can where I me? you you you products, continue had level. hear whether bit drive high expenses of this a you trying talk product about relatively a in a us Maybe the opportunity is insight to because question could R&D still into give regarding to

Dr. Doug Murphy-Chutorian

I’m requires we we the you Operator, If think business can to still continue hear are me, on? us investment. here.

large required make in analysis, We indicated improve to particularly and et cyber like security, which cetera. data that to to things product, the continue have customer into responsive it customers, going a past in needs the investments

what that’s we anticipate. So

terms was in anticipate substantial in we this of approximately XX%. to Now, decrease in R&D down is the believe think quarter But, percentage I previous versus quarter going X% R&D. I particular of revenue at was that can a don’t

to to costs; we in there. to product the do absolute percentage. think avoidable we’re expenses A, trying think the And do. around although We I best we spending the B, here. where reduce dollars that maintain make want want out want two fact, we dollar And outcomes. they But, healthcare that’s increase that do and to continue terms, reinvest will the In improve R&D to in business. we’re in healthcare to things to essence may

Unidentified Analyst

second opportunity you business, for the get once more here. question, is this penetrated HMOs an into My big there international

Dr. Doug Murphy-Chutorian

certainly is international an There opportunity.

point at not have this pursued it. We

Unidentified Analyst

that that of cost may be any forward or going sell studies there us help terms saving? are lastly, studies then, the any And Are in there ongoing efficacy, may out? this coming using pending product the

Dr. Doug Murphy-Chutorian

a in and beforehand for really the done themselves and We’re that the the healthcare demonstrate thought benefits individual done that needed the in fact, we be frequently customers, to were studies device good position that economics. pilot and

So, we’ve way. that lot if seen will, a you testing of of, device

So, some unlike a out all come in some companies you where are that’s work have we always in news, which the predominately next done healthcare having that industry, the study regard. with groundbreaking

are news So, be There are may that time expect in publications present. the But will will, who various people that. not you driver, doing terms much. do if and of not there is not primary focus the from we to it time;

Unidentified Analyst

the own research that mainly individual it’s So, confidence? gives their them internal and plans

Dr. Doug Murphy-Chutorian

we’ve are work; in And That’s done then, there. they we’ve right, publications. put

users come out the with they’ve publications from cetera. some new see our the help et sure organized to of may data, make You

anticipate we’re opinion. definitive But, -- study not be needs there is trying in done a to that. to So, our we that

organize. at company time. in putting this effort to not point we’re necessary And think we that’s So, don’t

Operator

no showing closing Dr. questions over this I I’m the call would to like Murphy-Chutorian queue further remarks. for And in back time. Dough turn at to any

Dr. Doug Murphy-Chutorian

today. everybody us you, operator. to I thank And Thank want for joining

progress. obviously pleased forward quarter. the the And with events I a in soon to on last very our updating you Have look We’re continued day. good

Operator

gentlemen, a may and great disconnect. Everyone, this you all have day. does and program conclude your Ladies

Semler Scientific (SMLR) 1 May 182018 Q1 Earnings call transcript