SMLR - Earnings call transcript Q4 2020

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Operator

Good afternoon, and welcome to the Semler Scientific’s Fourth Quarter 2020 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded.

Before we begin, Semler Scientific would like to remind you 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 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. distribution uncertainty our the of Scientific’s recent products other continued risks COVID-XX potential business. include other and with with associated investments new risks due with evolving to pandemic, complementary risks These associated along Semler arrangement and entities the in no result Please of statements obligation these of or release forward-looking the to any or only these presentation, revision future forward-looking this that reflect Semler revise of note opinion new information and of to Scientific’s light statements as date it undertakes events. publicly Scientific’s refer to may filings Please in detailed more description Scientific’s Semler the Semler these that SEC factors for statements. a risk forward-looking results of affect

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

Doug Murphy-Chutorian

our introduce and like who Dennis? afternoon, call. I’d to results you will fourth today. quarter Chief you everybody. begin today Good Thank Marketing to year-end Rosenberg, for Dennis our joining us Officer, for for us

Dennis Rosenberg

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

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

that quarter on to company’s performance fourth in financial report history. pleased the pretax was company’s and revenue based We net the of our are XXXX during the income quarter best

cash million. XX% at Revenues and income net $XX.X to Net to increasing increasing of was $X.X the to the income follows. $XX.X history. Comparing was report were quarter the $X.X pretax in quarter Pretax by million higher highlights end. higher of increased are and company’s of income the XXXX, of fourth net increasing million today’s in fourth had year by XXX% XX% our from higher We million. quarter terms best XXXX to as by to also results revenue

our quarter, company saw and usage our and from from current insurance increased QuantaFlo product customers. the During customers assessment we orders for our home-risk

orders received also We new from customers.

Finance comparison the Andy Senior financial a financial Now, our Accounting performance of including performance President will year our our more in and XXXX. Andy? detail, for Vice describe full Weinstein, of

Andy Weinstein

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

was annual After marketing sales in $XXX,XXX compared Operating to increase a the or year an of XX% million, revenue. was $XX.X X% categories revenues X% development of expense valuation. diluted XXXX, and In in a of expense annual per increase was reflected was of net income of percentage $XX.X recorded diluted net $XX share. $XX.X a annual $XX.X of per $XX.X XX% compared $X.X XXXX by of compared million XXXX, $X.X includes cost or general a were of which tax $X.XX XX%, decrease cost and in or of $X.XX per in of share XXXX, and the revenue, per XXXX and XXXX, Pretax revenue, to was of X,XXX,XXX. share XXXX, share recall annual earnings was million administrative excluding million. tax expense an of a annual product engineering a the revenue, revenue calculated X% to million, Analyzing and share XX%, X% net $X.XX income million, $X.X income million expense Please and share as XX% million. earnings Net For million or XXXX. was per basic expenses, of revenues, million. basic of or income and count compared or full share, compared that to or the were income million the release million which diluted $XX.X million increase and from $X.X using X,XXX,XXX an $X.X count million XX% increased benefit to basic of $XX.X was $X.XX $XX.X

the $X.XX compared XX% the year. increase per Net XXXX, includes period $X.X December XX% XX, XXXX, the income Operating was of represents million expenses, per share which same $X.X per of million the $XX.X and $X.X to $X.X an diluted compares income and share million, and of and increase period XXXX. basic unchanged million, million per that’s $X.XX ended to of Net corresponding diluted that was revenue from $X.XX million. quarter For an last of period from $X.XX share, during basic or was cost or which $X.X revenue share per from $X.X corresponding share million. was

For revenue, quarter XXXX, revenue, diluted quarterly quarterly of basic and expense the count and earnings XX% percentage of expense the XX%, the XX, development was was expense December quarterly X,XXX,XXX, quarterly quarter income XXXX, the of net and the fourth engineering of expense Analyzing revenue share was X,XXX,XXX count XX% was of was X% was cost product of categories share sales administrative shares. general revenue, and revenue. ended in marketing and represented as the and X%

As of compared which had million December $X.X cash XX, December $XX.X XX, represents million increase of to an of XXXX. Semler XXXX, million, at $XX.X

is XXXX. equity $XX.X of million XX, stockholders' December as Our

on include or to will form which XX-K liquidity. Report flow XX, cash before more expect our XXXX, March file our We of discussion on and cash statement our Annual and

the corresponding sales an XXXX, approximately approximately or million, staffing, software $XXX,XXX largest equipment/other or and which which annual software quarter. million an the or price in an until of the in or greatest equipment/other $X.X into And experienced quarter or license XXXX restrictions were fixed fee period were XXXX, $X.X payroll pandemic revenues increased country, fixed have revenues. to quarter late XX%. to XX.X% were $XX.X were revenues in the increase is were license the which sales is which is approximately have lifted XX%. of third in quarters. of the compared XX%. comprised decreased In usual Variable $XX.X million, of an levels $XXX,XXX of $X.X And available around Travel increase to-date, over, million, of as or through our of quarter, of to XX%. $XXX,XXX, salaries second revenues Act. effects of cannot were which threat been of $X.X increase non-emergency software our expenses our COVID-XX the payroll pre-COVID-XX services continued fee two first is declined the an million, XXXX arrangements In due the or of were inventory of XXXX year. future fourth the the fee business XX%. continued customers approximately the XX.X% We XXXX, XXX%. Variable software million, million, COVID-XX quantify revenues returned resumed million, of quarter license which even and fee from is levels. its $XXX,XXX fourth employee Our increase or an compared license $X.X exceeded $X effects are credit, the to XXXX increase under the in and on CARES medical to retention from we million, taxes increase due maintained

and provide customer During guidance, do opinion the is in employees, although the generating annual services during are of fourth that and not the intent hired we the product we It of quarter cash formal we several team continuing management is revenue continuing on XXXX. XXXX, increasing. interest profitability growth, our

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

Dennis Rosenberg

to right been we end pandemic. customers place are There At continue company training third experienced to we with is at plans We’ve headcount for in as XX operate years, as opportunity possible, using at XX have we’re as change virtual COVID-XX normal to financing a or communicating the was year-end this quarter arises. more of our no raise notwithstanding XXXX, working time. XX our additional out employees, and homes. XXXX. to and of than for our also close reserve to need Also, we compared comfortable capital plan and web-based in the it. the

B. our H.C. conferences, continued we Riley QX, Wainwright, Relations virtual investor securities. Lake Securities, Colliers and in FBR, participating During by street hosted activities by Investor

we time new firm We NASDAQ have road the to participate we XXXX, to better to XXXX, uplift to non-deal requirements. and yet shows. of virtual our to meet in plan not corporate independent In a conferences members added two continue we During market. in will when directors NASDAQ point governance virtual do board

and recent customers. our SEC in November Our products, products, R&D which in quarter to about for services continue services we to are information enhanced limited private services our and companies. in-license XX-Q to to goals upgrade arrangements existing value data some the filed the with three provide developed commercialize internally new since to and third XXXX, product the provided with our other and form

this at report to follows. further except nothing have We time, as

in such to private Our companies company. the bridge was of loan one repaid securities of equity

company, licensing and convertible from our sold a discuss about third of more may note we such net installations revenue these the material result of our increased had as was business. XXXX private get company business. of securities and $XXX,XXX. of a future and resulting in with of will we recurring Our a to and party, annual from more information believe conjunction the overall, we the product, these obtained securities gain in a convertible warrants product with continue companies then such along in products to note in grow of usage they third become repaid about our if revenue management the agreements to number in equity equity

customers. goal from to our and accommodate increase growth to existing expand from our to future make both infrastructure, expected to to anticipated Operating be the during expand XXXX. base customer to business. of orders are It expenses Our is our to continues intent quarter-to-quarter additions new

purchase in on our we before the amounts During be expect year to form The lease will or made March assets the XX. in add of file for to we continue disclosed with XXXX, inventory. of XX-K, purchases to which

product the believe disease larger to profitable Our annual establish We in grow revenue testing QuantaFlo market the market is as vascular standard further than a and for are to goals to for industry. penetration. our to care that continue current be of our XXXX

continued there’s So, room growth. a for

XXXX new invest who financial health We of provide insurance and products. facilities, positioned, record the benefit those, patients. our cost-effective customers both is patients in with the Semler notwithstanding plans, goals COVID-XX, of in being performance conclusion, identifying and in we providers, of providing We believe care the the number diseases. we terms Scientific for from to wellness improve tested with deliver we for government that well may products economics enhanced patients because and to the for health future. outcomes the now achievement the measures, our company for preventive that by work solutions of patients an R&D continue value the chronic with In our was the and

performance our extraordinary year. the interest given what company future, We in are support. the optimistic your in for was your for and Thank continued you an

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

Operator

first Colliers you. will [Operator Kyle question from go Please Thank Securities. ahead. come Bauser And with the Instructions]

Kyle Bauser

Great, thanks. Hi, everyone.

Another incredible for here. thanks all the updates quarter,

largest on bucket from part, in sales throughout maybe and pent-up demand? significantly, the maybe, Or Was could like of since they year we outsized new of So fee things, clients back other see the the the this? to strength installations up stepped online. are some fixed this side fully quarters your paused in

Doug Murphy-Chutorian

existing record Andy, and more? growth this [ph] This these new a also, answer investors for We customers areas. you in is both and saw Andy? categories. could of

Andy Weinstein

of agree No. both you. with I

did our some current demand did increases additional from a I decent add think was amount customers. there we and pent-up customers of plus we new see

I do actually with that both. had increase So, the to think

Kyle Bauser

at Thank the thinking Got of massive of side XXX,XXX nearly sales back fee things, imply new in equipment envelope quarter math a saw and And of variable you. would if on step up look we the another the X,XXX quarter it. the we and to to strength this seen of – any made have new this be seem channel, you the HRA that I correctly? slowing so And part in about placements in business? doesn’t seasonality down the the am

Doug Murphy-Chutorian

Yes.

ahead. think yes, I please – go

Andy Weinstein

new is would installations based our when a little hardware customers you in it sales have. how mean, agree cyclical many come on with the I and I Yes.

we when fourth going installations good that’s quarter, news the see So, us, lot in that, there be customers. to do installations to new meaning with a are of our

envelope, the some make of back does at sense. that So, thinking

Doug Murphy-Chutorian

have but we specify the don’t like… you own. have differently Yes. if but numbers, your things you

Kyle Bauser

pop the just $XXX PAD into I’m it diagnostic companies onto to of it. I the past HRA lastly, massive you come if space any for radar? your QuantaFlo in may, this and diagnostic new given space market is, you how the PAD other under-developed the entrance Got clients. assuming you know Right. expect then I And to said have into seen the Yes. is that kind

Doug Murphy-Chutorian

Dennis?

Dennis Rosenberg

as predominantly many a past market indicated fast to our point this blood have provide with size outside in you of seeing the testing the the lab. and believe on Doppler that PAD product; you vascular out that in pressure-cuffs, we seek lab. these given of market. expect traditionally as that type done we’ve the done companies results Today, are be devices as into digital also, potential the may do competitors specialized PAD we effects machines is had And to minor market, we And that are Kyle new market companies of the No, entrance out there point vascular with enter space. used this

Kyle Bauser

and great updates Okay, congratulations understood. on all for year. a Thanks the

Dennis Rosenberg

Thanks, Kyle.

Doug Murphy-Chutorian

Kyle. Thanks,

Operator

Street Please Capital And question be ahead. the from next Lake O'Neil with go Markets. will Brooks

Brooks O'Neil

there to of Kyle’s follow kind whether how I’m was a you QX Kyle’s this business you new questions, on impact revenue can just a in the the rate baseline a variable QX, can business. think much was rate Yes. you up of the of pent-up growth QX, about elevated want run Good to that QX curious million rate run for demand quarter. that obviously, help guys. that us COVID fee got one revenue afternoon, – from $X.X or unlocked think if I from business is us? tell What in

Doug Murphy-Chutorian

comment on dig Dennis, Okay. that? what you can we do it

Dennis Rosenberg

Sure.

know how Brooks, as we – So, hi are you? and

Brooks O'Neil

Thanks, Fine. Dennis.

Dennis Rosenberg

as down flexibility that in was the to in insurance COVID postponed, HRA for et far of companies was gives their that a been an patients we that and ability quickly relation for approach testing the as know, time, to business, large year, our either XXXX, move beneficial very closed our XXXX period tests cetera. their offices where extraordinary in had – as were where

in market. So, we seeing good are this growth

as the expect as to We market, rate the growth is. in far see continued what

in of We’re to just effect an have was XXXX really XXXX. going to COVID to how see much compared

Brooks O'Neil

Absolutely, that. I get

So, to expect should extraordinary you And zero? we revenue on that to I’m line results deliver line. when continue cost the to curious go of

Doug Murphy-Chutorian

never, but that’s numbers. these nice of to kind see

Brooks O'Neil

that business, you fantastic, want new – incredible. lot convertible note I about note and you’re just a of one relationships new interested it’s talk the opportunity, longer you it’s but curious, from company use? is equity cash product a that from your no since and a to the or the we sold of that the in I’m situation sort know security don’t converted financing your should Absolutely, assume

Doug Murphy-Chutorian

Yes.

first we I it and think, turned shares. further the to to comment is, notes the

so proposal is make the investment the that we but And a – and retained we about of amount otherwise. the there certain

of we So, interest. as have still an

into they a Investment interested big be was gets able who’s December. to a to but – with do cleaning to of it say way that has more shareholder the XXXX, to So of the sold things. Then, matter some in technical we discos, Act third-party,

in with our a we we basically, still So, of – who’s made shareholder, interests. little bit we but a money, have aligned

Brooks O'Neil

able the into have tell you to And anything products, million mean, makes understand of inventory of give be sense. new or new revenue? might us the other on you for that diabetes totally sense I for three any be any the quickly can great. that. details related products the you would or turn any about I the you us think $X.X That you When Okay. how can

Doug Murphy-Chutorian

comment you can Dennis, please?

Dennis Rosenberg

products reimbursement, with. Sure, inventory our terms ahead we cetera, terms have very related of in at we’re carefully have the sure. product in strategies enter looking agreement this. cetera. with Yes. of we’re in of the to market And the to we pricing, et purchased before, indicated at that planning the et terms segments and looking and relation are want which these in moving we’ve distribution of we all one specifically, with as

to So that to the make are a that do ducks quickly want in we the pressure on row super a don’t way. move right feel and sure that, we we it

product. in to relation So our thinking that to be that continues

Brooks O'Neil

Yes.

Okay.

growth ask more. to curious just me software if It’s feel Let good million kind $X the I’m XXXX. of of fixed up business. price for from a for the or think you base one two

Doug Murphy-Chutorian

this who – and Exactly. we’re to business we older are coming to continuing, our and products. that the We think clients clients, new is have use –

Andy, So, anything can interested. it? you we’re quite about say

Andy Weinstein

I on these No, do clients totally. we there adding I our and new with clients are have agree existing month. mean, you we’re – growing every

So, I agree not to him, with much that. to add

Brooks O'Neil

And cetera, what money? or employment and great. products then thinking and a to dates, are the obviously, turn continues know going bank similar Okay, do we’re just cash new your the into lastly are you’re with investing you et build, but in you to growing going to I

Doug Murphy-Chutorian

money the are the and point our projects on spending seeing Well, that future is growth. products and we’re

So, expenses, treat that tend we’re – do it, We going maybe, same the we we’ve for it. to able be the increased. to but been the we X% to example, to we to but about about going fast. future, R&D tend will XX% squeeze thing if do budget, there you like can’t would assume to so R&D, in think is

So, we do don’t future, lose in want would this the like things, to up but because we to product. we more want focus get main on to

product got main the lags lot of to it. that So, a

we product. course, to improvements the of product we – in the to make have and we to main do support minor do So what then

Brooks O'Neil

congratulations on Makes very Doug. terrific for comments much sense, you thank results. those and

Doug Murphy-Chutorian

Thank you.

Operator

[Operator Instructions] The B. ahead. question Riley. Please go Aman will with be from next Gulani

Aman Gulani

for congratulations great my thanks another on and guys. question, Hey, here. taking quarter

could appears of do HRA new providers typically, the in-home you expanding the the some mute given it Medicare are do material quarter on really existing So, either see or of seasonality care that first that lot push in their that advantage, pushing But I year? you a investments business. for that the large mean, the think with of front,

Doug Murphy-Chutorian

It is possible.

we tell that the I’d comment, the year, with the – yet. of so disclose into much want to you too first can’t don’t we are We things

So, we’ll call. what find when you the we aback take out in next or April do

Aman Gulani

Okay, fee growth of is thanks. business expectation the given for your HRA fixed side the business? And what ramp in the

Doug Murphy-Chutorian

I last but the Please, of business was in as you think can reported quarter, – that licenses value you the are of had the it’s We you Dennis. that? think what comment variable Dennis, we in about XX% be a now, future. take price. that can for

Dennis Rosenberg

patients needed extraordinary that insurance think I as flexibility back So, to getting XXXX in an the terms we of companies that in again, the refer the year tested.

So, it’s terms types much numbers what of future in two mix and in that between hard look for whether these at the to XXXX too into read the holds of the licenses.

us, tested. gives with XXXX happy and as the of both everyone criteria work. the as us to very lot market tested, we what just what into We just a or to I many possible, real see of either of trends looking at For leverage fixed are type be They’re to margin business. to get The that’s tested that’s want we’re for businesses needs whether fall to for fee. have think, people, who combination, get whether who this year and high us be home getting the indicators see to COVID kind brings back in what the

Aman Gulani

it. Got

any time that of Okay. market comment you investments, products? the can initiatives recent to some you’re working QuantaFlo, comments developed on on internal And developed any – internally could internally then that those for outside of compliment your on

Doug Murphy-Chutorian

that we’ve not and moves been it, by see of in we we quiet us, has private the they reported, a that, but do feel that rush very been but to made. reported because that you about been making don’t things We’ve some

what than it, we done but want will I say And that the when but to – to you and Dennis, to a feeling comment have you it’s first to yet. doing, it’s I more good about on have completed don’t say can I we that. not I So, know, think material be liked we’re think that?

Dennis Rosenberg

we’re sure right. approach the done, outside It’s the that that taking same products is want to make in with we everything

a product go. to of growth a with lot a We of are left position main in having stellar fortunate

do are to So, we don’t want we all on and it but our row in ducks that we a products. make drag don’t right. feet to feel the these sure want We pressure that obviously,

Aman Gulani

Got it.

me. Like the largely QuantaFlo. about And new products on your are you question talk mostly, Okay. expanding recent activity? on Can hiring last new maybe, Well for some or of on? what hires your focused focused

Doug Murphy-Chutorian

R&D the to the hires new made as well world, support operation hires We’ve All sales the supporting to the the hires, made as products, QuantaFlo, expanded several as as but of above. hires most team. we some

entirely a So, confident we continue be reasons do year we about it and is to next the one. this is do bigger that to management

So, going to be to get we’re in see that infrastructure to the growth have we the for to prepared in XXXX. place want

Aman Gulani

you. Congratulations Thank it quarter, I’ll on Great. the pass guys. on.

Doug Murphy-Chutorian

Thank you.

Operator

Advisors. from The Madison Avalon come next will Please go Woodward question ahead. with

Madison Woodward

was to on sale thanks a preferred little bit taking of call. clarify my just I the on could what’s party if for Hi, a there. just the that you the securities related little wondering going and bit elaborate and and

Doug Murphy-Chutorian

to be going soon disclosed It’s Okay. released. in that the to is XX-K be

to shareholder don’t someone, into that company. the a think also appropriate the who’s but I details, thinking main get it we the sold So, of it’s is to

interest he’s of do we a to at bought We it and for line didn’t more. a him certain it, to for. we little what it sell So, bit got it sell to

of invest a limit a to of was we if can have refer investment. it what XXXX, Act minority is – we in the to thinking company an it’s So, you investment any

we many bets products So, that we to we more want invested little on want have to to distribution take other make the and in.

steps to Dennis, want should better can that some the a that to don’t earnings. being investment. is them anything them distribution smaller But into these that But get we – all, say get want more rights to are a you this? make and get and before. eventually. to we we are maybe, product So mix if buy thing successful, that big our But is said, take that have. about first It we that hurts of companies isn’t we – we take anything had

Dennis Rosenberg

Yes.

small performance saying potential good point can that as on future of increases our look with products leveraged this eyes. distribution we in there fit really in in think is And model, to that about on placing which I us key what relationships the best. our all their that expanding idea bets into of our customers, the is or what are the expand Doug is that things is the that’s going to our future

Operator

gentlemen, question-and-answer concludes would turn our the like back closing to to remarks. for this session. and Ladies I conference Dennis over Rosenberg you. Thank any

Dennis Rosenberg

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

Operator

The has And now today’s presentation. thank you, sir. conference concluded. Thank you for attending

You may disconnect. now

Semler Scientific (SMLR) 2 Mar 212020 Q4 Earnings call transcript