SMLR - Earnings call transcript Q2 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Semler Scientific Second 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 in 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 opinions 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 and description filings for that a

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

Doug Murphy-Chutorian

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

Dennis Rosenberg

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

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

$XX.X quarter million; XXX%, revenues are net of $X.X increasing to XXXX, were million; to pretax income, increasing quarter follows: the to during by cash to financial XXX%, by the increased that second quarter XXXX the at report company's income history. increasing pretax was $XX.X today's XXXX, the our in second by end. net of as the of pleased company's quarter higher income of higher was from highlights are based We second million; and report higher revenue best quarter million to was on to performance net the results XXX%, Comparing $X.X

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

orders new customers. received from also We

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

Andy Weinstein

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

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

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

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

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

equity of stockholders' as Our $XX.X is XXth. June million

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

which million approximately $X quarter In of largest the an of our comprised compared million. license from second quarterly is corresponding or XX% XXXX, of XX% increase fee revenues. $X.X Our two and software period $X.X to were XXXX of the respectively fixed million, customers XX% revenues

to sales other $X.X volumes limited of the test were software from of patient second social of experienced visits. license COVID-XX Scientific other Equipment mandating fee $XXX,XXX, which XX% revenues an in were representing approximately year, Semler decreased XXXX, million quarter $XXX,XXX. approximately Last $X.X million, distancing related increase variable or an restrictions, from revenues $XXX,XXX orders and Our and shelter-in-place increase $XXX,XXX. due similar or executive

As the and in Semler have exceeded restrictions resumed to business late medical nonemergency such services been XXXX, pre-COVID-XX around levels. lifted Scientific's even returned has country or

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

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

Dennis Rosenberg

end XXX was At XXX of compared quarter to the headcount the of first XXXX. second employees quarter at end XXXX,

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

virtual QX we our Innovations Conference Conference Raymond June. James April Healthcare by During participating in XXXX, the and continued in activities in Human Relations Investor Needham the Health

various stock. participated firms also investor roadshows that non-deal by hosted brokerage cover in Semler We

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

uplift firm, us NASDAQ However, which once communicate consulting process to we listing the working with on plans and expect are is a definitive. advising our to

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

give private XXXX annual companies these our continue number Overall, recurring and grow of about more more businesses. Management if, to our to and of further nothing product, of of usage in increased have because licensing business. the this product will products to material become future, We in revenue they report information at installations the we revenue time. may our from believe

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

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

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

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

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

our position have also We strongest cash since inception.

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

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

Operator

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

Brooks O'Neil

okay. to extraordinary ask, that's Pretty few I'd have quarter. that like I if a questions

that significantly nicely cost I First, revenues up were quarter-over-quarter, the but of noticed quarter-over-quarter. revenue declined

there? happens. could that how you know on even what's going don't But describe I First,

Doug Murphy-Chutorian

adjustment. difficulty the came increased essentially, take of because revenue a this in And you having in question? the could the Andy inventory may further. be with phone the he's of was a onetime cut. in case quarter of some because [every] hedge The maybe Andy, in XXXX hurry cost more inventory, first primarily

adjustment inventory done similar no was second quarter. it's So in

will improved. I cost -- So of the revenue

Brooks O'Neil

noticed, I released noticed were in look the numbers up that obviously, call. $X quarter-over-quarter. But a minutes few I over other had current only when the about million between you them to assets

fair the million what's You in it to that. purchase obligated I equipment, that purchased private again, had that to of that would one mentioned on with assets? of some the big think or But current Andy going mentioned assume from other you're $X inventory you've do companies of increase be

Doug Murphy-Chutorian

receive similar inventory, for a There’s two commitment. we or possibilities, make commitment we

[property], company, we're be a also made commitment we where about about. talking inventory there's how any of in the describing crew haven't we we And describe them. million. queue the took what $X in were from restriction commitment made we going to So much inventory taken a And second the more we first and the at that

So it not the is yet. times [crew]

is this question a to chief for the crew So where wait out. you to have come

Brooks O'Neil

you you're on have any you cash Do the this going growing pile thoughts sheet? balance to have of about use how

Doug Murphy-Chutorian

been It money but the a investing couldn't have But the future. that we think And to it's get to have. we've going seen in the we're if in enough Certainly, satisfy Well, we people is project. main we to growth not anticipated to that more of we see also focus more matter get, that -- same. of the continue have new and products.

I think going it’s same the what to do. more of you're

Brooks O'Neil

Let one turn two me I'll then just more, it ask over. and or

this commented, receipt to describe back. the the about shares of company of just shares you I back private why and that? put it own the did perhaps in quarter, in think, You was last the Could and release the your you

Doug Murphy-Chutorian

your take out tax in, the do have you technical that up your assets. point. to Investment they XX% of companies a it XXXX that But But of invested is turns if says can it that your It you you've Act from asset. out

well doing with, company as to where So bought, -- say, municipal revalue the according to and we we the investment is we're we into at company a and fund. that you get have a situation means, if the

that. The it But to finances, of to is exist]. non investor number we want So more a to you in around [Indiscernible] include bought you shares do example, we have it reduce to for our mind if investment company [not the don't the with the act way have. of

want line. it details happy I'm through more you [Indiscernible] off to do If

Brooks O'Neil

Let ask me more. just one

was you the $X testing addressable addressable Do think TAM the the and that described kind for has think your penetration is in or I say the of still of of range artery it would market market grown has the peripheral the you share -- billion you somewhere either X%. more you're or or total in have range is the in way changed? you've about that past, disease of

Doug Murphy-Chutorian

the Dennis can you answer question?

Dennis Rosenberg

testing those Well, the and is the or Brooks, size should nurses and it’d get of the look market market primary couple that of care who at as patients different PAD you of look market, the to be in number number and as addressable there the the units physicians at a placements. of we know, ways are whether there's

in our more So with of you that is probably that to in the early number with. increasing work quoted believe penetration innings, digits lot share still still probably a We market to go. but market in we're terms is single number that good a of yet

as far as don't So of of there's either drastic changes think in thinking I any those been pieces our data.

Operator

The next Bauser Kyle Colliers. from question with comes

Kyle Bauser

all quarterly you the and updates on the Thank for congrats phenomenal results here.

guess constructive of out just sales large relates in to But becoming the it the of bring quarter, clients. are Are to in-house it willing or payers QuantaFlo and if in-house a business more like I don't kind bigger these larger of client the consider wondering becoming clients, bringing more are themselves? from the to electing HRAs? similar -- to are largest they clients low kind private to new I'm of that sounds came payers or they it they idea but to kind some to it of private your maybe farming opportunities So within aren't growth new contribute they existing as amount.

Doug Murphy-Chutorian

Dennis?

Dennis Rosenberg

things. I those think we're both seeing of

talked of other of the we've players of a different suborganizations it's breaks market it types of lot the a percent down than and terms as really they market organizations. large control, Although that about, to concentrated the in

areas. and say whether wouldn't Both seeing both start each to way are synergistic in as trend terms there's strong uptake. systems growing customer So them in they fixed we're start an We're seeing of in-home they new a either with or other, with these of license whether growth fee program. I

Kyle Bauser

mean, another to way, And line your you have traction the But in based Any I seeing in you'll uplisting. inventory a think remarks. that products be time don't I on become I have year know you based you place maybe as on sense could of material want firm the purchased And you prepared and know a have products, multiproduct you're this the asked before company it sales or material other from to still? marketplace. when non-QuantaFlo

Doug Murphy-Chutorian

the other in Well, the it the depend question? Dennis, asking but second can does part uplisting, [then] remarks of question, on of with of necessarily. that the answer the not it’s materiality my product you

Dennis Rosenberg

a on item uplisting when to first take a process developing comes in Just to we're to something products terms as the to We're but shorter in And accounts. one material, really gating It and of the with marketing when it also could it our QuantaFlo consideration happen could the in of longer. terms add part, plan term existing or accounts, of new in that. additional number strictly see not it's say. hard going in of to are conversations then accounts,

And this QuantaFlo, to so with plans. with fits, is very we all, how really much -- the their process as and their it decision-making and timing at is what if up

can't we you that. So give on definitive really anything

Kyle Bauser

Dennis, And could point, you have enough shareholders' you on an still the items the to of your before sheet. you equity gating balance shareholders. have the are some on maybe Presumably, know describe uplisting? place I that

that kind complete a of other got cover want you You've some are uplifting? diverse and considerations to before board. What

Doug Murphy-Chutorian

them. I think all we of have covered

But we a later not else application than other approved. no year get the have to -- anything thing. then do to this to waiting get we're So the to need particular in

Kyle Bauser

And QX. you headcount, mentioned perhaps the XXX how in to anticipate of Any XXX this balance over year? so lastly, trending I sense you versus think then the

Doug Murphy-Chutorian

I think don't we give guidance this point. on that

that market getting is I bigger. getting we're believes market. of more management the more that The and think

that, quarter. can't needs the main anticipate you be are out will may we up, say we've the now. people down XX well I expected But slowed in in as XX to I which, people turn And customers first you good about happening. speed but timing Our added hire to to the satisfy or tell more we quarter, things It getting second of things bigger people considering. these and are are our

Operator

Wiesenberger Instructions] Marc Our B. Riley with [Operator question comes Securities. from next

Marc Wiesenberger

would Our the that are material to a future? if the have I'm ROI any in further payers continue as quarter that stimulate their new wondering thesis second generating has that adoption. been in you that see customers the impact the signed peers from could QuantaFlo

Doug Murphy-Chutorian

signed We've more customers.

three make biggest impact. the a this So that I basic of four market. think control customers XX% customers The or about

a that hopes being have. new said, that there's that be customers look we doesn't or customers So more XX% will like But we getting be material. have we [that] to are it going

So Dennis, how it? question. to know can add I your to don't you answer

Dennis Rosenberg

the only that movement additional forward, specific care, it but Well, would towards we are not is we but thesis that is I new like, customers may seeing a of than slower -- adoption moving are generally, and correct standard all be think it moving we signing quarterly.

Marc Wiesenberger

of churn or fee utilization Any customers as or patterns change from to restrictions, would in result change that in the fixed a like cancellations you highlight?

Doug Murphy-Chutorian

No, it's quite nice that we're going.

Marc Wiesenberger

trends half first back the takes some half the go your help maybe And puts year, are the what the to relative of the for Maybe expectations can you fixed into you that see the of segments? of that year? and and fee fee frame the for variable

Doug Murphy-Chutorian

Dennis?

Dennis Rosenberg

getting the towards business agnostic Well, cetera, the tested we've side be described before should et of we're that are long grows as as which faster, tested. who people

in. bounced now making fee time We've as ago testing these how now same later. of we've they since disappeared year seeing last a We year. who are reach continuing are And hands significantly members. that customers are home the market. license going due seen, to as as a period large leaving essentially year a decisions see ever their to end back home we're systems companies that best the in fixed very we're when for the at by insurance testing of the COVID, robust our market the additional We're time, described That's of far

really as up. their It's predict. for needs us just they come them. up So it's We're to hard to fulfilling

Marc Wiesenberger

fourth XXXX level Have the was and A higher fourth equipment a quarter -- first There market been quarter hasn't revenue or yet? or monetization this in into the of that -- for devices is those from there and few or build generating started benefit deployed quarter first quarter all more of the year. some me. of and sales additional been a the still potential happened devices those

Doug Murphy-Chutorian

generate six some take maybe may months of months. three or there's devices these kind to Well, revenue

maybe not for. that used being yet. into from the to So didn’t things what But is they understand a first place it's get quarter, is equipment the important used

have you all, to get of First equipment.

have the go I'm you all, has of gain Second saleman, out HRAs get salesmen, your the to trend. third all, about contract. talking And of and to

is thinking the to contract. Dennis get four the can on? or maybe could so more you comment So they take months

Dennis Rosenberg

that is they productive being way actually think which I works units this that some basic in when varying that's us. the between for is delays and when of to there we of HRAs these time ship start amounts of

variability to license hard there's get up our contracts. when they It's variable a for given customer, the dependent say, business So those case, really in there. it's on picks when fee

are systems it on those varies out there, more contracts. but utilized depending being others, their So are than some

Marc Wiesenberger

And formulated therapeutic? any a special to marketing provider credentials one all form the products? your might there be plan the or just me. administer that needed care last then new are And for order at diagnostic the Have for you actual in

Doug Murphy-Chutorian

I that we Dennis, think -- please?

Dennis Rosenberg

plan marketing and worked as ultimately the our going customers market. to how really this at we're these to are is the The guiding bring time introducing same on being wider we to

special of terms credentials, In no.

Operator

is Our from O'Neil follow-up Lake a next Brooks Street question Markets. with Capital

Brooks O'Neil

I anything led about. you was other catch-up there's thought of activity that either QX QX some And or any of side hoping couple QX? anticipate seeing if demand ask in being a you I to Was not, catch-up things would satisfied your that there in think business? in of to

Doug Murphy-Chutorian

that. give can't you I as tend all there's Dennis, answer this a can but that. good in in beginning looking contracts plans of the credible they And we year. a certain HRAs the catch-up was absolutely -- front be more catch-up than in year. to had like QX, It's this well? we bit. little The After have may don't. than information I do seen last more We you sides, But from to a demand the for

Dennis Rosenberg

I partially it XX,XXX the as satisfy US growing, these growing With demand. Well, a XX they're the I kind Medicare day companies perpetual programs Advantage as growing catch-up turning people catch-up. to lot you of is mode think quickly in age of a define how are with in think

we of So there's then as of I our towards and sense factor. of a a And of we're customers, as among catch-up what move think there. kind that's acceptance new, current doing standard greater a care

growth all there's around. So

through well to terms that's missed catch that year, to trying the during its worked of way maybe quarter second pretty of I system. were In last test think up the

Brooks O'Neil

to Let and but little the this, in maybe from of I kind ask want about quarter, provide is, I guidance. more But would never being side. unusual is other equal, all you sustainable? XX% in me anything call asked but this know quarter or was think margin XX% or don't fantastic you of a that think do the bit just course, you and one is out you Obviously, gross it just nonrecurring else which,

Doug Murphy-Chutorian

meantime, the is it For sustainable.

say going or to at what say, can that XX% You over being yourself sustainable. be not to -- and is. XX% look to it and have XX% That be said, XX% expect you get is about you possibility it's it's relatively a

Operator

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

Dennis Rosenberg

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

Operator

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

now may You disconnect.

Semler Scientific (SMLR) 2 Aug 212021 Q2 Earnings call transcript