SMLR - Earnings call transcript Q1 2020

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Operator

Good day and welcome to the Semler Scientific First Quarter 2020 Financial Results Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded.

Semler Scientific would like to remind you that this conference may contain forward-looking statements. Such statements can be identified by words such as may, will, expect, anticipate, intend, estimate or words with similar meaning and such statements involve a number of risks and uncertainties that could cause Semler Scientific's actual results to differ materially from those discussed here.

due associated evolving with uncertainty with pandemic include risk other Semler results to COVIDXX the along These Scientific's business. forward-looking date new future and to these that as information release the to or note statements statements any Scientific's publicly Semler Please revision of opinions revise of or the undertakes in of events. it presentation forward-looking result this no obligation reflect only light of

filings affect Please risk for Scientific's Semler refer SEC a the statements. may Scientific's description forward-looking factors detailed and that Semler more results of to

Now Scientific. I'd like of to introduce Doug Please Murphy-Chutorian, CEO Semler go ahead.

Doug Murphy-Chutorian

presentation and for our Dennis? XXXX Rosenberg, to Good thank afternoon, first I'd you Scientific introduce the Chief quarter Marketing everybody results like today. call. you our joining Officer Dennis Semler who to financial begin will

Dennis Rosenberg

begin efficiency We to calls healthcare Semler' that always reminder about a to and Semler solutions provides technology Doug. effectiveness a of like strategy. clinical with is company providers. the our improve Thanks

our products to is develop, mission assist chronic Our evaluating market manufacture innovative and diseases. treating that customers and in

that report performance believe quarter revenue and identify company's solutions appropriate XXXX enable are options before in and our company's the pretax pleased to and software first income to intervene our care history. preventive We're to occur. like best and net heart quarter when strokes events during our attacks on the the that financial customers technology of We based was

$X.X quarter share, per number basic of three, $X.XX $X.XX per diluted one XXXX, share Number one, grew compares of was at income per from results million. to highlights revenue grew end And XXXX basic XX%. $X.XX million. to to compared earnings the to to Number Comparing million the share which year cash XX% net $X.X million share. ago. and per net $XX.X two, and $X.XX $X.X first quarter five, four, diluted quarter report Number income first follows. grew are the XX% today's pretax as Number of were

insurance and the risk usage customers. period saw our product customers company same increased to quarter, the current last orders we and home QuantaFlo from our our for compared During year, assessment from

received We new also orders from customers.

to more financial I'd turn of in ongoing Now to Weinstein improvement detail describe Finance call our Andy? VP the Accounting and Andy to in the Senior performance. like over

Andy Weinstein

the Thanks the described Dennis. distributed Please refer was today. results release market that in to close financial press at

$X corresponding of For ended XXXX, cost revenue the Operating the includes $X.X was $X.X XXXX $X.X increase XX% increase million. was which $X.X to was or or million, period an quarter compared XX% million $X.X of expense, XX, million, March an million from which from revenue of of million.

$X.X of Pretax income or billion was increase million, million. XX% was which from $X.X an $X.X

$X.X was million, increase net of $X.X XX% or million. Our was $XXX,XXX income an which from

net share $X.XX that last year. per basic per and income to per share $X.XX diluted share basic share diluted compares per Our and $X.XX share was the and $X.XX for per same period

For XX, and X% quarter XXXX, percentage basic net revenue. X%, was of XX% XX%, quarter and the categories count March was share Analyzing was in XXXX earnings expense ended X,XXX,XXX share our of and the diluted count first a our as X,XXX,XXX. was weighted quarterly average revenue income XX% expense and quarterly was revenue, quarterly of cost of our and engineering marketing was development revenue, sales expense our and administrative product general expense

of million, tax which such deferred provided net provided to from net to net a which XXXX. as March As $X.X provided an was reconciliation by cash change $X.X of at was items Semler to including due XX, $X income receivable, as $XXX,XXX. cash million operations cash $XX.X accounts of XX, XXXX, time million which adjusted provided by expense of income at March This of this had primarily increase for operations, compared $X.X million

$XXX,XXX to melting partially to used capital expenses cash and the and expenditures This amounting inventory by expenses $XXX,XXX. accrued for to million, of offset purchase was amounting $X.X other prepaid

XXXX. of our million items, equity As a XX, at March now $XX.X stockholder's is these result

which Our the liquidity shortly. quarterly be XX-Q, report Form Form more filed discussion cash our the when SEC include on XX-Q our flow with and cash and statement

fee and produced COVIDXX contracts. new fee In in Request Our of for XX% license gain fee two $X.X installations quarter overall fee fixed XX% to to license billing than total variable largest arrangements of license fixed were comprised X% less other revenue quarterly for customers the quarter. of pandemic were revenues. net first and XXXX sales changes and revenues license amounting and an the due million $X.X revenues were approximately Fixed quarter, the approximately million $XXX,XXX. equipment the for

to visits. other mandating fee variable our Because monthly distancing affects we home started are in occurring in executive due social to future are fiscal in restrictions. shelter or the full on decreased based similar not indicative results volumes the orders quarter, or any first largely the experience of usage and from Test quarter late revenue the during effects quarter place of year. This have which arrangements, COVIDXX first

In fee license variable April software and revenues compared March XXXX XXXX fixed fee license approximately approximately decreased decreased revenues our X% our by to monthly XX%.

during provide Although believe expenses guidance, similar manage that uncertain exceed and place QuantaFlo services Semler we medical time customer intends Scientific services and pre-COVIDXX the to interest other in lifted changes times. with are at product in such revenues will costs the related and We conservatively preserve or line its or to restrictions do formal resume. shelter in return nonemergency these these cash in not activity our

consultants. has decreased salaries been and the levels. decreased. our expected reductions are expense Travel XXXX spending measures been quarter usual a cost-cutting decrease on expenses vendor fee Operating have maintained to at staffing, inventory second included date of result of during To as and that

operations. to or the plans we any at April business plan these the are pandemic cash more to COVIDXX XX, on XXXX, XX, adjustments. increase not material the quantifiable, our compared at due of XXXX, effects Cash primarily to March to do Until spending our changes business make

continue Dennis and Dennis. to ask I'll remarks, the concluding provide discussion Now

Dennis Rosenberg

infrastructure again XX In the of employees XXXX that or expanded its to number XX headcount increase now. to an We plan for first quarter hold of employees. and Semler

of are communicating and have and it. using for experience comfortable working we in As Also our in place years, training a XX been out our web-based have virtual homes. we we company

no additional plans reserve our to capital this opportunity right or also as as We to raise is change arises. There plan the at financing time. need

For the time to NASDAQ list to being the up exchange. we don't plan

Our goals products. to existing the and services product and new are services to invest to continue in upgrade and data

the potential We products also to license customers provide continue services in to value in look in will that R&D at invest and enhanced to both future. now order our and

work for because the outcomes benefit cost chronic the the provide for is improve We health patients health Semler government Scientific deliver positioned for of we the by may identifying preventive plans, from insurance We with those facilities economics believe and patient. well patients diseases. care wellness We the providers, effective solutions measures. that who

in performance record In conclusion the both an of was company the of terms the of with financial achievement for patients first number being tested and quarter XXXX our products.

decline nonemergency activity want will in reiterate product pre-COVIDXX shelter As but we or interest similar lifted restrictions to believe and exceed medical customer as we to and related such in I our business have we services that discussed, or a at in in time place resume. return April, seen services our are QuantaFlo

continuing company and Thank the your interest in you support. for your

open and please happy Doug, lines, operator the questions. Andrew be to I your will Now address

Operator

Please Brooks Street Capital go comes ahead. first question from The instructions] Lake O'Neil Markets. from [Operator

Brooks O'Neil

Good and on terrific afternoon, appreciate your congratulations commentary all another guys. quarter. We

quantum on guess any mentioned I a think start have type of questions, opportunity you and patient? more pretty interaction I you virtual of dependent My into flow turn So a between now virtual right I or base I'll product with sense very think of some medical familiar kind I to is the it's you a still but see service. with provider number Dennis, think Can being operations.

Dennis Rosenberg

I face-to-face We it dependent with that. are you this that certainly would encounter. at Yes. looking provider a at is on agree point

Brooks O'Neil

Okay.

give your view of conditions the see had could color, how Secondly, meaning have as or the to over side I'm might customers am business of type and the with on any our market business color, relates communication I not side now fee themselves customers how but interaction curious fee on it customer-specific they us you about any if of color fixed time? kind your of you adjusting variable they

Doug Murphy-Chutorian

fee the kind Andy? Andy question about answer customers, fixed of the

Andy Weinstein

direction Sure, are contact. We customer will XX up. ones its say if a do coming some say delay just or the could with every in in will we some ones asking stable basically in until and find same back days, billing the it XX

Can't patients. closed. they're So seeing to them. pay doctor's fully not offices don't blame are They want while

come us doing is we're they're they're when going XX% what saying are they pandemic asking is to back delay we're over. seeing cases when this of the that So billing, to almost

getting but delaying billing customer from could again. it's when just going Of see type course the basically magic of they we're to that's in over, the question communication is the be until the patients is our

Doug Murphy-Chutorian

and they from in to follow-up, Okay. And more see have the they field, anticipation got because stuff a they're the potential opportunity starting go doing of customers, to us are mandate but over. into down

but we we before we're going know So that's don't the we we had think exceed thing I hit. rate why to say COVID

Brooks O'Neil

you June April indication get Doug. thinking of a seen a, were how going that Great. will very or see might patients where following likely there top helpful That's this during to to a moment? or ultimately And is seeing for there patients is that be second, period that just catch-up in have been seen do you that on or any are at be about May July on

Doug Murphy-Chutorian

this Dennis, question. you answer

Dennis Rosenberg

when is has in this the are this whatever point. make point, postponed really on the think in this but customers looking up Brooks things very It's again, much operative at the that that action at dependent get back Sure. to point. at thought of I been minds they

Brooks O'Neil

customer if in talk COVID have of customers have spot am month might over last as Sure. I'm a again, customer feel been I the described bit but any about the a you areas specific you geographic hot concentration little Could two? makes that sense. curious about That concentration? not that or asking just you

Doug Murphy-Chutorian

I the exactly, as it's we're the all that we kind but The of and places colder as to places places we're over at. warmer all are such, that but basically over. country answer opposed

we York is it So example us, result but with down I put a for doesn't New good note think for a [ph]. patients

So to than better it's situations. -- better most do

Brooks O'Neil

regard two you related your and new there I been of again, curtailed and as feel I just not answering might say we're look am whether product that sort with can has my you're you but delayed, new to to to opportunities seen products ask new you curious taking before. continue of all. or have note, you that product at so ancillary question. if a emerged current that's Thank environment, not the curious And for any product, sort I'm much see get specifics progress then making one me or about or more, am or Let progress asking

Doug Murphy-Chutorian

delay, with The some question the basically product be we're at some new area, new because may companies we solve. but problems is we're be on experiencing looking track I but may customers getting that it into things aggressively think could we're

So you transpires. not wait anyway it this telling but optimistic we're I am and have much to information what and see about

Operator

Dougherty Kyle Please from comes question go next Bauser The from & ahead. Company.

Greg Bogdanski

actually for you for is questions. Thank This Kyle. on guys Greg Hi. Bogdanski taking

So bit like mentioned seems home and it be home wait more been will there year you you're many patients if end on Can but the events here first as seeing the out haven’t anyway. of pushed later what provide for one, wellness conduct these exams? the this a the simply until HRA year I majority to will color of as usual

Doug Murphy-Chutorian

you'll Dennis It's answer question. same of as basic kind well? that

Dennis Rosenberg

a see in concentration the home occurring We of towards end what with the off throughout Sure. year and the the visits year.

on pick visits are they can whatever to in far they visits have ones customers to our up back they their up. who reduced normally the part home As make things those of that's be year, dependent but addition in doing extent the latter to looking the home HRA as wouldn't when

Greg Bogdanski

some do then that quarter you think pairs it utilizing administer see are payers electing the to themselves remaining with finding are flow option new in large we'll quarters? And you to coming the or HRAs the to rather go large implementing than

Doug Murphy-Chutorian

basically customers increased we're of but directly predict, also the of but up from kind the is delayed. getting we're we signing everybody HRAs, and insurance for fee plans new think I guys the uses

as we but We the haven't do let we're and of trying interest. generating many month restrictions I up, to these the think April, as as as many cases in we can been are before did guys as doing

going going But even to as the they're to companies only to their cases, the say are to do scales, ask HRAs you do the maybe insurance more. but not

is this know what So but we we hope don’t yet.

Greg Bogdanski

pandemic. Medicare and diagnose quantum sense client this the then installments client? just there a How this patients you're and channel COVID Since despite to has utilization as advantage is into in flow how subscriber PAD still been

Doug Murphy-Chutorian

have see, years. largest you the consistently one, the been the older client, Well active orders ordering new or client, the through as

ago the I okay. think year you revenue a unchanged, if was our see you look had and back percentage they of

So little a little it maybe a depends. or it down up

think we So a and guys the to it's have grow. good going I continue relationship or with

Greg Bogdanski

lastly then if there deploying may, regarding plans cash? your additional And Okay. updates are any I for

Doug Murphy-Chutorian

question sorry, I'm the please. repeat

Greg Bogdanski

updates regarding additional your cash? any there Are for plans deploying

Doug Murphy-Chutorian

answer you this question? can Andrew,

Andy Weinstein

to to we at different still because these opportunities continue we're always we're find we're to interested synergistic out and look now if times, what doing actively our doing prior at at. will Yeah, conserve cash at looking there on looking looking R&D cash and would Right and and is we're but are in, strong COVIDXX. of uncertain we're something that's looking we we something it's something that and be

Doug Murphy-Chutorian

And the available on XX. we cash March in April, actually of opposed cash month increased our the of to as

think be to realize a that I and we're two, job we the to people guys they to because serve we the a able keep place, but do doing continuing up if need accounts. manner these if in everything, consolidated So good and we're we start to want again, we may quantify in

money So I that going in expand the doing, we able save to think if to be future. we're we're

Operator

from comes Please Riley B. Aman next Gulani The go from ahead. question FBR.

Aman Gulani

standpoint from to customers. I do wanted to think where you a ask you talk you are penetration when

Doug Murphy-Chutorian

Dennis, can you this? answer

Dennis Rosenberg

customers. of refer believe we to dating the early we terms We in in first it Yes. penetrations the are game as to

opportunity on So of focused within there's to lot our them the of activity that. deal expand and is that's a

Aman Gulani

margin Thank you think business? gross walk for you to I and is up, continue the then what gross the to sustainable ask margins do wanted long-term is

Doug Murphy-Chutorian

it's Well now. high very

normal a the it's operating rest be we XX% to down. don't but think think as going I to go we're going that going should you think expenses of in expenses of such. I diluting be there as kind have We times is know, imagine after further improving to percent

So is guidance. we have situation, give it -- a good don't but we don't

question your answer can't I exactly. So

Aman Gulani

upgrading, new I ask how towards to about I wanted if comment dollars much just dedicated of your data you quantum product, are wanted to can know on, flow R&D developing whether products? but your second versus

Doug Murphy-Chutorian

the and the you take second. take Dennis first product I'll

Dennis Rosenberg

Well One two Sure. outside and expanding much then QuantaFlo focused categories well. really on products falls product under actively are as as we new described. services at we products very and is that and looking

frame So I question, the reiterate you don't recall in want both I exactly to but active just how we're of those areas.

Doug Murphy-Chutorian

on expenditures of percentage expanding as is budget more increasing. percentage a as we're than And and more the new products but R&D the products, old total a our

increases spent the products. being on the are So new

to think I fashion. this we're So in going continue

Aman Gulani

high for just contract had Very diagnosed imagine that on last helpful then question and patients at the entire I the me, they're your if coronavirus. risk would

So regards to woods think out you the might place in there of the bigger to be do podcasting COVIDXX?

Doug Murphy-Chutorian

question, answer had Dennis, this means? also explain what

Dennis Rosenberg

disease, a which precursor for product, for in PAD it's arteries often leg early Sure. heart arterial disease. a testing and systemic peripheral throughout the Well it's is the it for atherosclerosis test of in specifically there growth warning attack of types often these QuantaFlo is our with an is so some since condition heart other and cardiovascular grows strokes sign if of body,

significant, PAD you our from testing forms out sure, that of consider clinicians as and deaths be when will in because cardiovascular and to on eagerness and that whether cardiovascular disease. month get know month there back eager far the I are of are to other and disease more march COVID, not customers is an our that the for deaths there know although I I'm but COVID As push fact

but to eagerness specific an back seen, get be as certainly there's that pad far that's yet the to to on before. to going testing was As COVID,

Doug Murphy-Chutorian

for they so is protective. his they the these And to in to example be are diseases, the because with want chronic risk also preventive dealt assistance do but therapy the important get vessels, because -- for to affects intention have factors [ph] COVID the may may to

that's on you may that have that [indiscernible] be with and if happened hypertension COVIDXX. you the protective So a province of

always but than and answer, is I do to or better know not. So the prevention don't

anyway key sense what we it's go people I think in see do future, the to just to to some So everything. the but have for

Aman Gulani

Got queue. in jump back you. it. I'll the Thank helpful. Very

Operator

to the question-and-answer This remarks. closing session. back Dennis any concludes to for our Rosenberg I'd turn conference like over

Dennis Rosenberg

Thank you forward for on we joining us look today you our and Good to continued soon progress. updating everyone. bye,

Operator

has The Thanks conference presentation. attending now for today's concluded.

disconnect. may You now

Semler Scientific (SMLR) 4 May 202020 Q1 Earnings call transcript