SMLR - Earnings call transcript Q1 2021

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Operator

Good day and welcome to the Semler Scientific First Quarter 2021 Financial Results Conference Call. [Operator Instructions] Please note 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 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. These risks include continued uncertainty due to the evolving COVID-19 pandemic, risks associated with Semler Scientific’s recent investments and entities with potential complementary products and new distribution arrangements along with other risks associated with Semler Scientific’s business. publicly forward-looking date Semler it forward-looking of obligation revise these as opinion undertakes statements that of to the result new of this or future in note light statements to information Scientific’s reflect only no any of Please revision the or these events. release presentation, and forward-looking refer Semler Scientific’s Semler detailed risk the of may to SEC affect more Please factors results Scientific’s statements. these in description filings for that a

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

Doug Murphy-Chutorian

Good and for you like joining our us Dennis Officer, for first you for Dennis? would call Marketing Rosenberg, today. introduce afternoon, I who thank everybody, the us will our Chief quarter today results to begin to call.

Dennis Rosenberg

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

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

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

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

new We orders customers. from also received

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

Andy Weinstein

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

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

million Our $X.X per was share, $X.X $X.XX share of year. pre-tax share Net which same $X.XX net $X.X basic income compared to compares per $X.XX million, was share income which an per Net or from XX% to was $X.X of was basic per per or and increase diluted income XX% period an million. $X $X.X and million, million. increase diluted last share $X.XX the during million

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

to $XX.X had XX, of as an million, of Semler XXXX. As $XX.X XX, million, that’s and of March XXXX, March $XX.X increase of compared cash million

as million equity XXXX. March $XX.X of is stockholders’ Our XX,

which of Form XX-Q discussion more our on We flow X, statement expect before include to cash and file our will XXXX, or cash annual May liquidity. report on our and

sales $X.X revenues were In our of from an XX% XXXX, XX% Variable quarterly Our of quarter two fixed XXX% $X million, $X.X XXXX $X.X to approximately largest and $X.X respectively, and were license were fee at XX%, revenues. compared an million, first software of of or million increase fee customers million unchanged $X.X other the million. corresponding million. revenues the or $X.X comprised approximately of period increase from million. software license Equipment

guidance, we is cash services provide the our customer the on management in generating opinion inventory increasing, not of continuing is staffing annual It as profitability do we are team consequently, Although well. revenue intent formal that our XXXX. our and growth, product are interest increasing during continuing and and and

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

Dennis Rosenberg

quarter fourth compared employees was the the quarter At of XXXX. XXXX, XXX end first end XX at of count to head

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

additional have for a comfortable communicating place more for than virtual out and in homes. years, plans no and to financing company with web-based as is using are we We XX been opportunity time. this have experienced it. our capital we’re in also customers reserve We There arises. need change training or our our Also, raise and working of at right plan to the

During conference QX investor by virtual XXXX, Investors activities participating Relations hosted we Wainwright. continued by a in our H.C.

do During in a not yet market. to we virtual have non-deal to We XXXX, when to time in firm we uplist the and NASDAQ will continue point roadshows. plan virtual participate conferences

However, a we process. on working NASDAQ with are listing the firm us which advising is consulting

the to Our commercialize services and to three XXXX, arrangements products for developed to information about and March and the R&D with our enhanced which and provide companies. customers. SEC provided private our new fiscal In products limited the in-license we Form year continue last product internally in with to upgrade existing other goals some are value recent our services to XX-K data services filed

Semler at with this which another in April of Under shares have issued We following. inventory. sellers. exclusive we an the for of selected except nothing made except investment our our including to agreement to right in into XXXX, In Puerto for shares of and agreement, distribution to for exchange stock report put accounts, in time the one company XXXX. purchase product exercised companies agreed the common common this United distribution $X of stock private in a for million States, private the marketing to the further entered Rico, we We

in preferred Management will about company products if, XXXX. future, they December and annual numbers product, believe of from information recurring hold usage our will and XXXX revenue become business. transfer, the more more our private grow this increased we product to revenue companies continue provide continue stock of we business. licensing this of private acquired these of Following installations the the in our shares of material in in to Overall, because we to

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

adds assets for XXXX, purchase our lease. the of quarter continued of of first the During we which inventory, some to

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

invest in to value with the of in continue future. that products We R&D, providing enhance customers now new goals the and to our

first tested The quarter number for financial company of was of with of products. patients record both terms our in being our performance XXXX a quarter and the

since strongest our cash have inception. also We

future. your company you the support. your for optimistic for the are in continuing interest We Thank and

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

Operator

Please Bauser [Operator first come ahead. Instructions] go from Securities. Colliers Kyle will with Our question

Kyle Bauser

all the Congrats Thanks today. phenomenal on Great. for update here. the quarter

inventory. million product you So, purchasing $X mentioned

the talk have I purchased you inventory. Is $X.X a to are if or And able same diagnostic this this million of about is therapeutic product? previously think yet? you a

Doug Murphy-Chutorian

signed we Kyle, in in, have we that different in This in was second a but invested the product. one was XXXX, it’s first XXXX. agreement a one and XXXX, another company distribution

Kyle Bauser

a the into was even And to million a got until it of Okay, sales those does when the $X products I little material, I last margin, inventory, in almost months product potentially, it. gross of XX what know is sales. don’t might of get become kind I mean? bit million details more about we mean curious $X you am which products. they XX% of material just if these XX% want learn of

Doug Murphy-Chutorian

we than have going sooner later. is be think to date, but don’t We that a

in depends marketplace. the So, to to the the I It have period don’t you. how companies time on do get

Kyle Bauser

look Admittedly, about we We the was outsized those at bucket $XXX,XXX. then the Got math, and quarter, an of envelope But your reason. that’s came variable to increase in maybe of so largest And customer saw back updates. think QX time, same then sales – down an to sequentially. $XXX,XXX use it. forward I the about the

that that a is to or your client is cadence choosing the decline QuantaFlo, payer understand practices of the here? trying utilizing COVID So, of just function aren’t an function to pulling largest from outsource devices HRA a disruption or to just QuantaFlo

Doug Murphy-Chutorian

the Dennis the I part answer second will question. of ask

The person Dennis? at first largest outside indeed is using the is same And time. the customer part an

Dennis Rosenberg

mix not patients know this to ability the of and offer from them fee with offices reaching talked don’t we in But being our Yes, are pulled there about, And to customers a and going we they That’s on. fixed or flexibility see is customers a the the systems. test clinics. we test. the want either home deal in systems you as how of good

a the them get need and, them to how say, benefit that’s to think flexibility we on to I So, gives as test. it people they they that

Kyle Bauser

per-use shift then that for from margin little And an down use, increase Has changed a it. basis? were happens, mix to you gross gross pricing margin given I just think, device Okay. but typically, appreciate when a on the fixed I Got in fee lastly, it. the seeing came per bit.

Doug Murphy-Chutorian

earlier, prices. we our have As that I – treat better, we maintained it’s talk – but about customers don’t a said we we are always little the

Kyle Bauser

in all Okay. back I Got will update. it. the queue. for jump Thanks

Doug Murphy-Chutorian

you. Thank

Operator

Capital question next Street ahead. Our Markets. come with go will O’Neil Lake Please Brooks from

Brooks O’Neil

to forecasting you. a for again job want afternoon once Thank Good of doing results. terrible guys. I apologize your humbly

I can’t my crushed estimate And keep guys up. best, again. but my trying I am You

Doug Murphy-Chutorian

encouraging. very That’s work. data that for Thanks

Brooks O’Neil

up. Right. Keep got Alright. say. it Keep up, Doug. all to it I That’s

kind business? with So first mix do continuing COVID is or is pent-up a of some but of on and a following think benefited whatnot, a backlog kind on level, your about of this natural you I have performance QX broader Kyle, demand or you have think thinking maybe of that developed might because shift from growth question the do

Doug Murphy-Chutorian

one? Dennis, can you take that

Dennis Rosenberg

Yes.

to it’s the I system we a year-to-year. for that not there of sure. backlog from the as is hard financed, way, big But have discussed, is think know issue

through the I think everybody can a think the gives X they test that the So, growth. sure ability insurance proactive different lot they to these large need home be them natural its momentum having customers covered. And of after testing make ways of in gets the company to in going people that positive I

backlog was in sure or not really am issue quarter. I a the So, first big is an issue

Andy Weinstein

Dennis. issue is agree in think don’t the This was I quarter. with first backlog I Andy. a Yes. big

Brooks O’Neil

Great. perfect. That’s

new the am of to not what am those is, answer, little the that projects from a area. to your kinds business think mean super-comfortable Semler? going are can it’s not through speaking of you new future are bit So as scalability investors’ more But or of today? dynamics can and working business to the etcetera, from about on you similar business, of going the profitability I theoretical of ask I I a you we in the Semler products obviously but to your second distribution perspective, think services maybe it, I channel. extraordinary core see related base other business about the question to having product know the importantly, same about I kind characteristics dynamics of talked it’s question, specifically But envision you you have products

Doug Murphy-Chutorian

you so. hope answer? Dennis, We can

Dennis Rosenberg

Whether to have will we although on. customers bringing turn feasible, transplanting benefit certainly what there see. leverage fruition, that what products That’s we think marching kind the guarantee of the think But high-level of how that and is no we is I that you we distribution other our that stated, going towards. eyes to to comes as type that’s we benefit the QuantaFlo set are to is certainly really brings and question level have it’s that that can’t out. of to

Brooks O’Neil

but Great, glad I Dennis. that, you hear am – to expected That’s I that. say

So, balance to is sheet. up on for beginning pile the me. question cash Obviously, the last

the high-level can in perspective you adding forward? a You but the company us of taken other a going of of number of from you view best of how give view of direction some kind improving the of steps cash growing have the and uses products, performance the

Doug Murphy-Chutorian

products that future. of We invest exciting it get doing we about takes or new that would us, to cash, everything these products, off said, and to but very but – ground. in R&D may don’t share any thing in products intend any new buybacks dividends change These – salespeople I say is per the are this se, the to think being

R&D, in maximum yet. trying to predict we But to can’t right I are the the core building achieve concentrate and So, now, businesses results.

Brooks O’Neil

another Congratulations terrific Okay. on quarter.

Doug Murphy-Chutorian

Thank you.

Operator

Marc Please come Riley question ahead. B. next Securities. Wiesenberger will go with Our from

Marc Wiesenberger

have I And your is my Thank could to fee the as well your additional you Since about am near-term? across questions. might taking appreciate there fee you. are rollouts Good fixed you if both capability you see as the the base. I there afternoon. utilization wondering in for customer that fixed anything that variable talk seeing foreshadow activity the fee customers,

Doug Murphy-Chutorian

Well, are called a where position we the we of intended to to get care. standard

consider Some as already. people this can us of do you But standard care illuminate Dennis, question?

Dennis Rosenberg

per customers’ see there certainly growth and I typically. the over continued in fee, fee patterns. mentioned Yes. What to test. And longer we mean time as seeing in fee usage are we are usage systems customers’ current in is in in new the is in growing fixed fixed we variability tend place call,

seeing those either flexibility home offers earlier, ability to of I this our powerful the is And are customers, a growth of at the areas. office kind business. of be testing all that said piece as we So, or in the in our

So, we positive very on both of our those business. segments of are

Marc Wiesenberger

From list HRA the how far their years? have progress that providers Understood. through to talk thus patient your prior about and relates point view, Sure. can the of you made

Doug Murphy-Chutorian

it get list at patients the Well, list, as And to year. they throughout the year out pressure this – they done they calendar added and year. beginning get patient the the more to feel get go or of the

the first the now, is at fantastic. usually, was a But it So worst quarter quarter. look quarter,

the in by this encouraged area. growth really we’re So

Marc Wiesenberger

general in well there setting. of used kind locations setting other Are or as primarily could for as future? you QuantaFlo in venues the practitioner major is that home appropriate QuantaFlo the Sure. being any see the

Doug Murphy-Chutorian

answer Dennis, can this? you

Dennis Rosenberg

key now. the are those settings Well, Yes.

in testing to well. testing. spread We fruition diagnosis as recognition PAD also elsewhere. wider see locations standard We’ll future it in how specialists’ of have locations the in of and the as as is PAD some PAD and think well, care of that part But systems feasible have hospitals to early placements to growing see and other comes of I

that opportunity as more other locations becomes doing widespread, As and think more is well. testing there in for I

don’t this things They buses see there of scenarios like these also. health play also types at opportunities major there. but and We health are point, a out fairs, other role

Marc Wiesenberger

inventory cadence product? expect a final the Thank purchase Great. maybe one talk more of me, about the And then then bit $X we for one that you. the profile little can you the should million and of margin

Doug Murphy-Chutorian

We about generally you don’t prices, as talk know.

to feeling we us. at for segment larger market. can to So your a comment Dennis, we soon the well? new the it excellent of it going of how as for I it we’ll margin think have But is be test decision make to it contract. a fully give work of wait don’t going that the there’s we’re going that but test have to to and haven’t that yet we In or the to a get price to and we decided general, start to A sure we was market, you about part how see. reason us, it sell talk

Dennis Rosenberg

Yes.

at I looking think that point the approach which the different of etcetera, pricing, to to of of timing. there fact sense key issues, make we’re the most segments understand segments the the is in all margins, markets these carefully and

and margins pricing. we So to decide going as are all impact factors, of them, these

Marc Wiesenberger

that million Anything And more Sure. Would point, half one year helpful. be you. the out half? – to would be sum? that on maybe that but or through should Thank versus back purchase expect cadence $X we just first the spread lump

Doug Murphy-Chutorian

give big want were customers. this talking guidance to try So Maybe point. at on some I we going think to don’t to We it. that we’re

comes is a the them general, of whole market step-by-step building But in, game. in a One process. changes

all going you to we anticipate So bucket. the quickly things try correct and the the – try going are to we’re mistakes the to right – do all that in the make do maintain of to and cadence to

Marc Wiesenberger

Thank you. a great on congrats and answers your Appreciate quarter. Great.

Doug Murphy-Chutorian

Thank you.

Dennis Rosenberg

Thank you.

Operator

Our go Markets. Capital from with Please a Brooks next ahead. follow-up question Street O’Neil Lake is

Brooks O’Neil

much. Thank you very

want think you customer customer but dramatically as a, to asking curious try bit you this forward have if, grow It or was largest sure little I was customer changed of for in your that – didn’t I’m bit have or number going growth expectations a two And extremely would quickly QX. little a to just I earlier, tag-on be anomaly quite I top an to Kyle this but customer QX, any comments is maybe a of grew looks a this helpful? question like understand. in be

Doug Murphy-Chutorian

lot they different color question? I you also, is some can to Andy, will And take acquiring question work. the give this are a doing companies. first this of

Andy Weinstein

don’t change the decreasing and cadence, the in not customer I is much or Yes. first there’s think a canceling.

The a pattern on also as first customer well. growth is

Brooks O’Neil

Great. biggest for the And do then Andy, of there’s plenty to grow customer, room right? think you

Doug Murphy-Chutorian

covered. I’m sorry, this wasn’t

You to sounded lightly me.

ask can the you So question again?

Brooks O’Neil

still Sorry, Doug. give sort if thinking overall properly. it could the am significant has comment outlook wanted But on one about it long-term you of if believe I your Do growth that just I us. number potential, customer to you

Doug Murphy-Chutorian

they get customer to Absolutely. legs I have doing. that tests vacs going we’re a we concerned, all worrying established, fantastic are like Post-COVID, said, tests about the we’re ordering every got, be lot But may year. have The And the has under of cover as customers they’re the – more. many other are to doing, and patients customers because their how going they’re in have also, it tested are to they to future. as far large be

ever, done think. HRAs them than and, the getting they’re I So to sooner well, going

less doing going it’s situation, I see – said, Andy think don’t be any but as So work. don’t I favorable customers a to large I

Andy Weinstein

accurate. adjusting adjusting our we expectations down, are Yes. feel our we’re original feel We down. don’t Look, – not you expectations asked and projections our about

Brooks O’Neil

that Well, makes sense. Yes.

not me members I more. concur close Medicare virtually if I’m am, in for up, are do paying XXX Semler – forward? set covered ask you reasonably demonstrated like were to ballpark identified you a going I might trying just that premiums conditions health to but And understanding Is have one me opportunity consider the So for unlimited that there’s there mean am I if Advantage CMS it’s which to they my that conditions. incremental with you that has guys plans something that? And you – those let would

Doug Murphy-Chutorian

indication going customers different – the all are products. you maybe conclude the more right, that can of you the diagnoses large are think one Dennis, of that course, And HCC ability our I we that of ones XXX are there use or particularly to codes. have to explain? than

Dennis Rosenberg

Doug, I we that think as looking track those right that that of on definitely you’re opportunities. are terms something in certainly the that, in well focused on at

same As seem work a would of that in pan be far to possibilities. kinds quite the but it all might going numbers opportunity. of there out opportunity, it Not them unlimited way, as lifetime’s a few are are of those with

Brooks O’Neil

you Andy, Dennis, much That’s taking great. Doug, thank for questions. very my

Dennis Rosenberg

Brooks. Thanks,

Doug Murphy-Chutorian

Brooks. Thanks,

Andy Weinstein

Thanks, Brooks.

Operator

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

Dennis Rosenberg

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

Doug Murphy-Chutorian

you. Thank

Operator

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

disconnect. may You now

Semler Scientific (SMLR) 4 May 212021 Q1 Earnings call transcript