SMLR - Earnings call transcript Q3 2020

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Operator

Good afternoon, and welcome to the Semler Scientific Third Quarter 2020 Financial Results Call. [Operator Instructions] Please note that this event is being recorded.

Before we begin, Semler Scientific would like to remind you that this conference call may contain forward-looking statements. Such statements can be identified by words such as may, will, expect, anticipate, intend, estimate or words of similar meanings. 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 risks other Semler risks to COVID-XX the along These Scientific’s business. these the of or presentation, revision to that only new publicly release obligation information note forward-looking forward-looking of Semler or reflect Please any results Scientific’s to as revise of it statements date future and this these events. the of undertakes no statements opinions in light that of may Scientific’s Semler filings a the SEC and risk description forward-looking factors Semler Please refer to these affect more for results Scientific’s detailed statements.

introduce Now like Murphy-Chutorian would I Scientific. to Doug of Semler

Doug Murphy-Chutorian

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

Dennis Rosenberg

begin and always solutions calls care of Semler’s company We reminder about is to effectiveness Semler technology providers. that provides Doug. clinical a efficiency like strategy. the with Scientific a health improve our to Thanks,

manufacture enable market options products our and to We Our before appropriate mission treating and evaluating and heart intervene diseases. when and like preventive innovative attacks identify our events customers is to solutions that software customers believe occur. technology chronic that are and in our develop, strokes care to assist

to at was increased $X.X third quarter XXX%, report was higher best to of Cash to to in based to third follows. XXXX $X.X highlights quarter our increasing of on XXXX, income financial end. million. history. higher that $XX.X of quarter million. $XX.X pleased the are report the quarter Pre-tax Revenues performance of company’s We results XXXX income by to net were revenue XXX%, company’s income the increasing net during the million higher from Net was million. the increasing the quarter and as are by second today’s by Comparing XX%, pre-tax

potentially expand call, PAD. recent working Quantaflo beyond new our our to for of investment I brief product give end in the product in companies the offering areas Towards will commentary about

describe our President Now our Vice Weinstein, Andy? in Andy performance Senior financial and will more Accounting, detail. of Finance

Andy Weinstein

refer Please the market in results described press was Dennis. today. Thanks, financial release to distributed that the before opened the

was share. share third to and quarter third year. in same XXXX, diluted share, share per of million due ended million, third a to per you was basic income revenues of $X.XX When revenue, quarter or in decrease in Net income increased was an of per or quarter net XX% XX% expenses, million After benefit allowance, release income or the $X.X of increase $X.XX XX, $X.XX of million. $X.X to a $X.X of primarily $XX.X million diluted net the the $X.X XX% and $X.X Pre-tax were compared million. $X.X quarter the September benefit which the the of valuation which the million. net the per increase XXXX, million in third XXXX of includes share million XXXX, basic XX% was $X.XX net per which $X.XX in income or during to from and share decrease per by $X.X basic an $X.X which of compared period million tax the $X.X of XX% was million, from The $X.X excluding per tax million, XXXX. recorded million income $X.X share period corresponding exclude tax were was For to compared $XXX,XXX $X.X compared to the of Operating XXXX $X.X XXXX. or third $X.XX million million, cost of a last quarter compares income the quarter diluted $X.X

and the the earnings of expense diluted XXXX, of ended third and quarter X,XXX,XXX. Analyzing revenue, count was XX, quarterly product quarterly was quarterly expenses, quarter X% total count X,XXX,XXX, was quarterly XX%. revenue, expense categories weighted basic a revenue. of was X% of in was revenue. of as was September and XXXX, development and cost XX% revenue and percentage and quarterly share expense the average of General the administrative the was Engineering For marketing XX% operating revenue. expense of share Sales

of XXXX. is $X.X to September cash of of XX, September which of As million increase XXXX, million, Semler XX, as compared $XX.X had million an $X.X

as XXXX. result a our is stockholders’ of of As million XX, equity now these items, $XX.X September

the the XX-Q to report with statement more by the quarterly include will of million. our grew quarter XX-Q XXXX, liquidity. $XX.X shortly. be Form discussion on and will Form quarter of our In second third flow Our cash and The compared SEC filed of cash cash XXXX

$XXX,XXX. amount in XXXX, by was of reconciliation quarter $XXX,XXX, third offset income for $XXX,XXX. which of the to primarily to expenses of amounting revenue $X,XXX,XXX, purchases addition cash to other prepaid operations provided amounting the receivable amounting amounting loan amounting net and company accrued amounting deferred used accounts other cash provided a $XXX,XXX to expenditures private of payable $XXX,XXX, $XXX,XXX, income, inventory current a by partially by was $XXX,XXX, and net to cash in During This amounting net liabilities to to to and accounts to $XXX,XXX expenses to provided capital

COVID-XX the other the second approximately increase an and of late experienced $XXX,XXX, quarter. $X,XXX,XXX were fee license We XXXX, of customers the revenues of Equipment license compared which fixed quarter, Variable largest XX% an quarter of In respectively, X%. $X,XXX,XXX, X,XXX%. $XXX,XXX software $X.X in into effects quarterly $XXX,XXX or first an the XXXX continued XXX%. software were revenues. second to quarter or third two comprised increase or increase approximately sales of which revenues fee were is million, Our the of of XX%, and

decreased quarter in fee may XXXX the expenses levels. have cost-cutting business increase included Until cannot inventory date, third of the services more while non-emergency to its staffing, quarters. to medical reductions quantify and resumed XXXX expenses decreased consultants. future effects begin travel around during As pre-COVID-XX payroll taxes the restrictions lifted employees. as To have on we and of and usual salaries and maintained our threat country, quarter at as hire is fourth a were returned of the expenses result measures even over, Operating of that pandemic Operating the in on exceeded are decreased. levels, have been we spending vendor has

Although not with expenses intends we do provide in Semler in costs guidance, to its line manage revenues. Scientific formal other and changes

continue and will I ask Dennis? concluding Dennis provide discussion Now to remarks. the

Dennis Rosenberg

count an In was quarter head X. of the third increase employees, of XX XXXX,

as We the notwithstanding to possible, COVID-XX normal continue to operate as close pandemic.

Also, plan right in capital to training our a in of we and than plans it. to have time which have Board is better There when new yet are the customers The firm to opportunity to We We experienced up-list is company place financing governance a NASDAQ change have years, or XX we our in time. necessary market meet member need and as also our with point comfortable add the we Directors, and this company a market. of not to do web-based as We for to raise its homes. requirements. arises. been at more communicating did reserve NASDAQ for are plan working additional virtual using no out

continue and quarter participating plan non-deal virtual call, last third hosted Riley, we actively Street As on B. to investor participating conferences virtual the conferences virtual stated H.C. Lake in activities our increased Securities. Colliers by and Investor by shows. road We we in Wainwright in Relations our Securities,

chronic the we that discuss that our second the In further of private Our on companies XXXX, In the a notes new regard, occurred value Puerto acquired to to future or investments information the continuing $X.X purchase other R&D is new the Scientific Semler these care made the of the upgrade your note syndrome. material private product they and financial become second used and providers, securities the three agreements fourth we three and chronic the Thank directly commitment effect and than in companies from time, identifying of and we in company for the of and area; we is new a you wellness this make on loan your in economics Rico the material area; these securities third The in quarter and investment to areas: by in services All we second an three, to by which positioned we data. the the goals quarter customers. of believe Form services patient. seek who the health a third the new equity in company. limited support. distribute may company detail None of We In and company. investment care second better number produced and arrangements stock preventive in in from Two be At first the these existing a we XXXX, se. services develop interest product or the working we investment with company FDA-cleared number today investment products cash to company we number third this improve may to are fourth third improve both to the disclose area. company for an our because And these XXQ and following In in of of patients made amounting line metabolic and benefit to per results an the of deliver patients And in private are working plans, equity quarter. data to two, the our clinical product if for new million practitioners. bridge and in those inventory continue of for the to management cardiovascular in had the can work may the no enhanced positive and for product the XX,XXX company primary in-license basis an common equivalent. conclusion, solutions a be health some for information convertible $X,XXX,XXX. used the All securities and deal announced in sequelae cost-effective provide product loan product with $XXX,XXX product and about an provide the diseases. facilities, its products. working all disease aspects measures. of the in Management company exclusive will U.S. in Also, government shares one, to insurance soon debt equity made of market outcomes equity transactions bridge a to well a filed business. about

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

Operator

Instructions] first Street with Markets. O’Neil today question Lake Brooks Capital Our comes from [Operator

Brooks O’Neil

Good Extraordinary afternoon guys. quarter.

is suggests there? out everything about I would hear it I what think the the how the like to is most But that thing it about future.

Doug Murphy-Chutorian

good. Very

Dennis Rosenberg

Brook. well. Thanks Doing

Brooks O’Neil

Good.

couple ask of me Let a questions.

in estimate of First, on the QX way coronavirus quarter. revenue impact you the have conditions been catch-up of in highlighted, can impact I’m Dennis, might in more had curious that been you any the captured second QX if normal? any

Dennis Rosenberg

there we’ve as considerably, Well, the was still assessment be tested that business, this slowdown, the think numbers market picked the in that the members can who you overall clearly, see there the certain fee are you or That patients the know, And effect. past variable quarter. I year. business. from dynamics of third big that is in up that discussed number And should are home in a in risk are as –

So that were bottom need of fourth line. and quarter and in those second ones be the to test kind incentives from done the to the That’s are quarter. third patients, postponed

Brooks O’Neil

be could or i.e., new a and ask us areas But to use the couple lot all operations? That’s three risk they I distribution to related helpful through product it you you primarily the payer probably through you assessment already or opportunities the recognize have. initiatives Okay. reluctant give then dynamics two, whether, lot business than basic of it the you product say selling of am questions about mentioned. Quantaflo, market margin a or the would maybe directly of I you revenue curious profile to more about as new helpful. you through a – are about sold I product help to if the understand be going you like And for same strategy would color home could well? example, a would these for any the

Doug Murphy-Chutorian

to that customers be well may the it But reluctance we because them of the It a it’s it. in to existing choose customers do get. sell expand understand it process. the existing We another marketing we to to to you – about way as benefit work intend give the as well. sold to Brooks, as may talk they

revenue, So you the we decide. being talk to that are we we’ll want to the information follow important terms and you when the that closely said, gets it to to to more try company, have in and impart going ready time give And when we of it’s meaningful it. it more time are it to about

Brooks O’Neil

that understand it I completely. Great.

– you new would say a customers. just at the roughly customers me customers you having that existing you XX% ask you quarter. I Let comprise largest this little curious if to revenue two two of you bit big attracting be whether about all those willing success to believe complement am highlighted are

Doug Murphy-Chutorian

Dennis, answer can you this?

Dennis Rosenberg

Sure.

As talked growth and case quarters, among was we within that to the customers as well seen And in in have quarter. third see we the about previous growth new as continue customers. current

movement areas. the seeing both So answer is in we’re

Brooks O’Neil

to that company thinking underway whether you’ve also an new these outside you those or I more exclusive organic opportunities One about to Can products. or some product on the had say shifted Great. whether products that to focus to recollection efforts develop some are opportunities? the beyond opportunities bring outside new initiatives, you into ongoing have

Doug Murphy-Chutorian

This doing to you inside will add well, about anything? along work and going we’re we when is you do want completed. tell Dennis, it’s it

Dennis Rosenberg

No.

say about. as effort just as that well ongoing, we that talked are it to and Just optimistic about we is what

Brooks O’Neil

us become have And to it as you a plan sheet? with bigger can Great. just cash will and with the grows, or balance you it bigger pile is, question last if the presence I do the anything, on share then what,

Doug Murphy-Chutorian

the gained about quarter. made And – this Well, a investments few sixth million along we sequential we to quarter $X.X way.

some do major is into acquisitions, but what make with maybe corner. to intend this take don’t we ourselves we proprietary it, to want the So

maintain. some more? to about can have Andy? we you So Andy, talk that

Andy Weinstein

way that It And opportunities. in cash quarter. opportunities second those what both, for happening of use the Sure. everything see If would maintain us. pile able to could be I best think other do is, we a that’s continues cash to and I for the be it both did

Brooks O’Neil

Great.

Congratulations on consider what Okay. I extraordinary a quarter. truly

Andy Weinstein

Brooks. Thanks,

Operator

from comes question Kyle Bauser Securities. with Colliers next Our

Kyle Bauser

agree Thanks we’re step-ups? that think all like just sales stick this incremental get still then see for around start COVID some I maybe Do here for I your top levels back we and bit is runway our is Maybe updates. everyone. QX within top through I will you quite we will business. Hi there mean of until phenomenal the looks fixed results on a sense account. client. the about here. It to

kind coming curious couple how am I So channel here? with months trending new you the installations see over of this of

Doug Murphy-Chutorian

it’s than Well, it quarter. was first more in the

continuing And expansion so customers it’s to and units. grow with new or new products also adding

for by working But not over. is everything So temper enthusiasm as far we’re our we is COVID concerned. us saying

don’t because about thinking has surprised. could we have store in what pretend the be to we So future

Kyle Bauser

made on side they And ground clearly, the HRA up here. Okay. really some the of business, in QX nice

of list mean by for home things QX of mean, sense curious am the to in following have of here this question, I HRAs year? on still could kind just the to the trying QX. and the completed of more your not get to from of Just up whether their case, kind are year-end ramp-up care that on I still Maybe COVID been up pretty be kind I home visit proactively of busy. therefore, going Brooks’ what’s of just need fall a thoughts? down plan slowing cases backlog sense that’s keep anticipating visits for have or caught remainder obligations took in in the of than your they QX potentially wellness and the a

Doug Murphy-Chutorian

answer you that? can Dennis,

Dennis Rosenberg

their their for everything all. have they they that worked mindset to year point. scenario anticipate this think do at the or I entire don’t that’s need at We through don’t Sure.

see to we Doug year. through as So I we said, the know be activity good of But end the of results continue will impact COVID. the future don’t what in think of will terms

Doug Murphy-Chutorian

purchases also in We third equipment saw them more make quarter. the

more generally have cases. in leads so units, they more and more So field units the speaking, to

Kyle Bauser

opportunities. into Got it. updates the Yes. the three investments on And I love different

not, rather be the a you’re obviously. looking areas same Medicare disease makes tuck in to those sell and talked about it think whether as the And what them It’s patients, I of talk straightforward about sense. adding kind a on of you at? mentioned I’m lot little of these Can maybe diseases bit. level is I I through it channels, that, particularly exploring these And guess have Or undiagnosed able diagnostics, to same, You therapeutics. Advantage, PAD. the case assuming? if prevalence mean, for similar to I you think are potentially

topics would helpful. on any any So those of color I be guess

Doug Murphy-Chutorian

you it? to Dennis, want take

Dennis Rosenberg

are Sure. that And of The detail are that metabolic know of them. least their to general. general mentioned, material not is I of I this more they X the at business, we as is area. at point we’re providing But products to part our X only at thing in probably talking But to which working regards relationship this we’re a that until syndrome, these won’t. any kind XXXX. in And point, about look in about

Kyle Bauser

following lastly it I you about other products. you for and these the rights of up that. on one then marketing I mentioned Got maybe just exclusive may How two? Okay. if know get

Doug Murphy-Chutorian

Just announced is this investment what them. in we

We about distribution. announced haven’t anything

Kyle Bauser

guys. congrats Fair you enough. alright. the the quarter much for updates and Thank Okay, so on

Dennis Rosenberg

you. Thank

Doug Murphy-Chutorian

Thank you.

Operator

[Operator Josh FBR. B. Our next with question Instructions] Nichols Riley from comes

Josh Nichols

that, tracking – question was going again business thanks It on not my for do HRA quarter. fee congratulations was business month. the a for often around taking margins. the variable XX% is to in EBITDA call the and on north you mentioned July, you Yes of so the see $XXX,XXX ask I last

that quarter where you of that based could into business there like reasonable big of you a are acceleration am $X It the on what in that for math on heading reasonable through month clearly, did the for I this the you a for position year. kind there? a trajectory was it’s So like seems million the kind of the Is back HRA doing be backing quarter.

Doug Murphy-Chutorian

last that over I for that we will the we in were $XXX,XXX you remind call said it.

than to was. So looks if I numbers, can’t you I had – according a that your We it we giving just for is that means $XXX,XXX. you forward-looking the didn’t quarter more – will I it’s to gave be But top math say us. math, But that statements. your be good what going the

So to as such. it leave this comment well? could better as I you think it’s Andy, on

Andy Weinstein

numbers, and your it obviously, $XXX,XXX, excess QX. Yes. of based in I on was at of north levels mean we’re

is numbers, So your math without giving reasonable. out

Josh Nichols

on how talk company I about more the first hiring to you color for you little looking in expectations add know hiring that. the And COVID that for enough. would and permit, appreciate bit plays out. Fair I most do things you up a mentioned some if depending looking you on what the and is value? areas could be what hire Could have to ramp the

Doug Murphy-Chutorian

sales Well, R&D. thing think the in also, marketing. thinking and thinking hiring we a few having into about And are about about in people hiring only We we’re G&A.

areas So to operations anticipated and the get are but guys into the to handle volume. marketing regarding have all and – enough this we the thing, sales

what it’s is want most the And to do. we this So important thing.

We be have think in thing team most the of And beginning hiring. XXXX. do to going the important a and the good rest this do year I to of we it’s

Josh Nichols

kind expect are HRA to this to margins that always in long revenue maintain to little as that the business you and margin expansion want given course, mean, did of fact the of as I pricing margins, due business? of the the has quarter. you accretive just model, Is then some had have would and good a but great ask, elevated Thanks HRA the that I bit

Doug Murphy-Chutorian

The very good. margins very, are

asked never anticipate you going if can’t I I me thing. I said know. much same they’re didn’t – be the last quarter, So to higher. you But that

this well? think can model. about have I as So business the you Andy, we comment

Andy Weinstein

you say, Did Andy?

Doug Murphy-Chutorian

Andy, Yes, please.

Andy Weinstein

we Yes. not mean margins like are. the Yes. way they the I only HRA would continue the It’s margins.

the will happen, we our margins to the good good look to at on what same. hard for products all this It’s time. our Our all very and margins are keep in general are products. but hope into see things margins And

Josh Nichols

I hop then question last queue. in will me and the back for then And

been at seems you month that we pace you’ve to that average adding X% On to excluding $XXX,XXX that It back any the is it kind that like so, – whether be the there far the as revenue otherwise? a been of to year on fixed good other to Is out through seasonality of the be as seeing of up thing think fee October, seems look on XQ, the be pace or growth see track, at the the COVID. if last so or seems company look like has about an software quarter-over-quarter. sales, that or type we additional

Doug Murphy-Chutorian

and I and think easier also with that place units getting existing customers. new to it’s customers easier

from So make about assumptions this think. performance, you can’t the I past

Josh Nichols

things easy Well, place back accelerating, queue. to in great units. Thanks. I’ll that to those it’s hear hop could the be and

Doug Murphy-Chutorian

you, Josh. Thank

Operator

will Dennis our would any closing session. like I turn question-and-answer This call for Rosenberg to back to the conclude over remarks.

Dennis Rosenberg

Thank soon you for on today, updating look and call. progress. joining continued our ends forward we to you And us today’s that

Operator

The now you today’s attending conference presentation. Thank has for concluded.

disconnect. now may You

Semler Scientific (SMLR) 8 Nov 202020 Q3 Earnings call transcript