SMLR - Earnings call transcript Q3 2021

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Operator

Good day, and welcome to the Semler Scientific Third Quarter 2021 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [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. of identified estimate, such meaning, actual or statements a be expect, may, and results can that involve intend, uncertainties from anticipate, words number here. to statements differ by Semler those as words will, such could materially Such cause and discussed Scientific's risks with similar other potential associated Scientific's recent with investments These risks to associated due arrangements, Semler uncertainty risks and the evolving distribution entities Scientific's with with complementary Semler include continued COVID-XX products, new pandemic, business. risks with in along statements Please opinion to note or information presentation date - Semler release to that these in events. obligation forward-looking future forward-looking of this or revise statements this light only reflect Scientific's result of and of no revision the the new as undertakes publicly it of any presentation these to forward-looking refer risk the results that Please a for Scientific's filings statements. description and Semler more Semler of detailed may Scientific's these affect factors SEC like introduce Semler would I CEO of Scientific. to now Doug Murphy-Chutorian, ahead. Please go

Doug Murphy-Chutorian

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

Dennis Rosenberg

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

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

our stockholder our million approximately month. enable believe quarter $XX.X of base. position additional that the of of at raise saw million of we plan our no and the our were in fixed-fee will We Company's could third license are shares last is this to market Semler's cash history. liquidity report to I'm NASDAQ pleased move expansion you quarterly uplisted capital and We time. XXXX sure highest the all the revenue end enhance this the at of of to $X.X that There

do by $XX.X nine results increasing September higher we to of reserve by higher at million. million. ended or right XX, change the follows. the Comparing of million. by net to from need as Cash opportunity XXXX, our financing arises. $XX.X months corresponding million, $XX.X the today's However, XXXX, plans $XX.X highlights to the by Revenues was end the to report was are to the higher were period $XX.X XX%, million. XX%, quarter XX%, income Pre-tax Net increasing income increasing increasing was of as

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

Andy Weinstein

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

XXXX, increased September includes income For of the and diluted share increase XX% $X.XX compared per period an $X.XX which to per of million, basic revenues expenses the share from ended of $X.X or million. compares quarter Operating and headcount income corresponding $XX Net $XX.X $XXX,XXX, XXXX, decrease XX, as of to cost expenses were million, $X.X for or million. per decrease $X.X X% XX. to million, The $X.X a Pre-tax to with expanding as million. change a $X.X share $X.XX $XXX,XXX, that or revenue $X.XX million, expenses net share, associated of income was an XXX of per from to diluted increased was increased increase personnel Net XX% $X.X $X.X XX% per compared basic $X.X million. from were of share. and such primary or our business was reasons this from due million, million,

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

to was $XX.X an or from September $XX.X the expenses, increase with income or which revenues $X.X $XX $X.X compared For $XX.X million. from Operating million. million, $XX.X of an income from or revenue of net nine period ended an were months million, which to XX% cost XX, million the million, of $XX compared million, Pre-tax XX% $X.X corresponding XXXX, of of $XX.X million. XXXX, million, $XX.X of Net million, increase million. of XX% was million, XX% an was increase includes $X.X increase or

Our $X.XX net and per $X.XX $X.XX share, which diluted was basic income diluted and a per $X.XX per basic to share per compares share per share share.

of nine administrative X,XXX,XXX, the of revenue nine and XXXX, and revenues, net share of and revenues. expense general the XX%, percentage months and months revenues, expense basic diluted share expense was XX% was X% of of XX% of revenues, was amounted for nine the of was product a nine expense marketing the September months Analyzing X,XXX,XXX. development count September was of For earnings sales cost the income average and to nine engineering ended the the and months months nine of was ended count our categories as months the XX, XX%, XX, weighted

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

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

$X.X of and report quarterly of which or of our $X.X our include liquidity. XX% XXXX, of XXXX on compared from the flat $X.X quarter We the other period statement million, quarter will million, approximately expect were revenues approximately for of $X.X two software million, the to corresponding our XX% and more license period corresponding from comprised and license XXXX, quarterly X, software XX-Q In increase to is revenues. third the fee or XXXX, cash fee and Equipment of flow approximately an million. customers of an third $X.X XXXX. cash $XXX,XXX, fixed our XX%, discussion $X.X or revenues million, November of on which In million. Variable revenues respectively were sales Form were largest about increase file XX%

nine months XX, ended largest XX% For XXXX, our the September respectively. customers comprised XX%, and

increase of million, in believe nine million, or XX, be or we Variable prior or corresponding in-home XX% XXXX, had, third seen compared per test of from compared quarter $XX.X were second software For ended increase COVID-XX approximately other $XXX,XXX, either and quarter our the fee million. the new rebounded from testing or first periods, fee due effects the a strongly XXXX $X.X in from revenues fee decrease may market, XXXX, about XXXX we the revenues XXXX, months million, which sequentially license the which of of of of the the to XX% September to effects an fixed in software seasonality XXX% due change $XX.X approximately $XX Did sales period were million. license of fee half XXXX. that Variable license an is $X to to due in the COVID-XX increase to which both. $XXX,XXX, pandemic from the of haven't $XXX,XXX. or $XX.X were Equipment approximately million, an of revenues is revenues the in

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

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

Dennis Rosenberg

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

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

for more experienced web-based comfortable virtual our it. using with for have and and company than a we communicating out are in Also, years of customers training and are been have our XX in We working homes. we place

As believe in nearly the as XXXX, as experienced variable license revenues quarter COVID-XX quarter of of but third Andy much second effects the mentioned, not some during we of XXXX. fee

XXXX QX and Investor Conference, in Colliers we September. Lake XXXX continued Street our Investor by Relations both activities During Conference, the the XXXX, participating in BIGX

hosted Semler's We also road-shows by participated brokerage non-deal who that stock. were cover various in investor firms

participate will virtual we XXXX, to in QX During non-deal road-shows. continue

meetings host information during XXXX, in January Morgan Please San Conference. plan overlapping Healthcare let San will like investor we to is be Francisco, in XX, the the Susan press that in-person Francisco Susan's you our if week contact of would J.P. meet. We releases. also know Noonan to on

that services Form and our products with give The for near R&D existing the and at XXXX to of the which Management in commercialize may for begin new customers. installations in-license to quarter upgrade our companies. new from are August Our and of can report will software more the signed our to Form our provided product product and SEC we XX-Q service customer recent the provide and developed the information one revenue Form product of about customer of quarter because data SEC first companies. quarter, to this usage licensing end enhanced first private the about other of May SEC our our internally businesses. we products, may in the the XXXX, with value filed we to becomes services recurring limited In future. XXXX We filed March up filed our product revenue to more XXXX, information XXXX, in third are business. distributing and product, that second service it XXXX grow goals private the XX-K to continue these the Overall, of in numbers three material with arrangements if in annual with we and continue believe some our our now to in increased XX-Q

base as new in further from Our QuantaFlo the establish industry. standard orders our our and additions a to to to to be continue to product customer goals expand existing of customers make care

market to grow intent Semler Semler XXXX continued this to XXXX, of testing market a of For remainder than activities. expenses support continued our and in operating Operating that is annual profitability expenses growth. expected than are cash current increase revenues profitable. larger faster vascular is rate generation to growth in room the so disease at in business. for remain believe from there penetration, expects We and annual Scientific's is the for to It anticipated Scientific

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

The cash XXXX quarter was third of record revenue. a generation for Company in license our and quarter fixed-fee of terms

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

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

Operator

Thank comes Colliers Bauser from Securities. with Please you. Instructions] Kyle go first ahead. [Operator Our question

Kyle Bauser

talk could start wait to before until listing. want the know you sales set updates, on mentioned with them. after thank you new But disorders, perhaps outside disclosing all investment you become going at Maybe I'll NASDAQ metabolic congratulations and from Hi, a about material the the opportunities. I products opportunity you've that for minimum.

is Just XXX wondering currently you're you QuantaFlo HCC HCC HCC XXX, that there syndrome metabolic is targeting could and called HCC I confirm contemplating, that XX. and just a think if other codes? targets

think market is addressable Just just HCC get simply another mean much higher so to is you knowledge code, here. now, love your would we'd of targeting your it that thoughts I than

Doug Murphy-Chutorian

see say Dennis, can codes. will I it, HCC that is targeting you we are

Dennis Rosenberg

other absolutely, dashboard, codes. Kyle, the our know sense beyond models also that business codes and there Yes other that just on are HCC targeting makes financing are HCC

to of are what we sense, do our way role and it's products, codes clinically impact in financially played future in doing customers. a what while the to terms with that important may go make not and both HCC things key and only upbringing So QuantaFlo, in obviously we're

Kyle Bauser

And have subscription no, and That's of relevant because are they undiagnosed seems close business, of probably client it certainly, there of some is patients not all mix think that, around, sales? one of lot your you to out how a beyond codes don't the clients or HCC a said there, hear glad but is? side that. to helpful lot them low-hanging fee client them fruit Just remaining understood. private perhaps XX% you other the do is Got and so it like that's subscription walking XX of How mostly the are physician of wondering fixed are things, and asked or kind payers? about large have other practices, subscription clients way many I another on

Doug Murphy-Chutorian

Dennis? Yes

Dennis Rosenberg

Sure.

this a are so market, business while in fee we are point, organizations, the tremendous in - we recruiting of discussed for don't the we is where opportunities in that as strong of have as in fee other concentration focus fixed have grow looking practices. knowing customers, not this variable there a hands to and individual and is terms physician the customers growing. At customers on we there So of are continuing before, well. larger that both categories, that a as in are we've for Also, few number we're

as emphases current customers, So team. expanding adding within our as both customers are, sales on of well new

Kyle Bauser

the know you be thanks. it, ramp part HRAs of more And to do race ones, wellness exams quick kind two their as year-end? I finish again per-use to Got mentioned you it. anticipate of seasonality could before sales

get that again trying of QX Just to we in sense see a bucket up pick could here?

Dennis Rosenberg

So since COVID that has throughout in in terms seven sooner business earlier gone now testing some year. that business And business, potentially slowing the we've and in all the and is period the earlier had quarters contracts of quarters talked being and effect it's we've XXXX. to the where issued this three down interesting seasonality of just XXXX because moving being say, about this is effects in vis-à-vis COVID - of no done of year had but also various are on

think, ultimately seasonality see of a have just period we'll how out I time. plays So to wait to over this

not all at we're first the going So half which go. home into predicting a We lot these pulled know of of do were the to tests that that's year. way

Kyle Bauser

asked the there? annual another Advantage administer insurers of more or or enrollees sales And to Do yeah fee themselves fixed curious, Advantage over for maybe a HRAs curious months you Medicare to question then that it, longer-term even wellness you. per-use way. that's next months anticipate to the just no, kind sales conduct surpass Medicare Got steady-state, just Thank XX exams do over helpful. the lastly, large XX than

Doug Murphy-Chutorian

test. the should per of be licenses Historically, than fee more efficiency

Kyle Bauser

it. thanks much, updates. so congrats all Got the Hey, and on

Dennis Rosenberg

you. Thank

Doug Murphy-Chutorian

you. Thank

Operator

Our Please next Street question comes Capital go Lake from Brooks O'Neil with Markets. ahead.

Brooks O'Neil

Good far. afternoon, guys, appreciate the so color

in probe factors little on to like have quarter. impact this the you on some highlighted that the a two more just I had bit So business may that

a or see business? help point effect you establish you that you that state evidence us - differences region, impact may had where deleterious could or think of on First, Delta your the geographic by to you have production? Could

Dennis Rosenberg

the there words, Sure, for is want over main the year. the earlier has testing I into think seven our done that pull contracts the In suddenly quarter COVID a caught in and to end don't position to shut try of backlog be the health issued done to were primarily along, get period home down, were as everything you where cruising push to year same caught testing big in they they other the feeling XXXX, the of testing the impact that know. home and the when doing been plans was at the

impact member biggest the been the think those contracts and I issue done earlier. So, earlier has lists target get to

said flares testing there Now and that Texas on the may have Florida home COVID from as actual some all of we certainly, news, well. which were an in had elsewhere, know of activities being as the impact and

Brooks O'Neil

the period half anything overall the that all penetration year far the the the Is mean is of pull call it? of you've customers compared of market existing in second of use over you Okay. to let's and de the a this that half of has the as highlighted a year Something up obviously, And growing to filling time, going so any or year? minimis is opportunity. there forward back do some we to I think in and void activity said, there you've new void you leads is - of believe growth the leave, allow know, been could of and business both that with the the QuantaFlo

Dennis Rosenberg

customers business. of and of bringing activity good to both we the new Well, our are customers expanding with in on current see sides on continuing terms

beginning as to start the that, end of prefer far year towards in the programs year. the than some customers the of timing rather of the As

shorter, calendar You just have days the home due to in the factors quarter like are testing the terms of less fourth in holidays.

course, basis, business. number we'll in see but a in emerging we going perhaps ahead. how we've And tended of a look And there continued are you mentioned, year-over-year see on is seeing than on in that Well new market, is shakes seasonality retrospect the factors as out from doubt, year-over-year know, expect that different this of this to are results important So as always a no different rather that quarterly to growth. to have I quarter-by-quarter the directions.

Brooks O'Neil

impact through forward sense there To see to Or Sure, in Delta really that's Delta, you pull lead affected and thanks. would QX case noticeable total of extent incidents? reduction activity? by pickup of occurred this that three something makes necessarily or Dennis, was that and terms the that you appears avoid in decline in in QX from some won't what negative here be QX say a be counts as in

Dennis Rosenberg

say Well, is largest trend, we're seeing towards the point HRA the across just of HRA out perhaps the that, of probably be and the a are the year. customer can't first seen, half whether customer our half least in in at with of front over-performance would and to way saying industry, by I been an HRA I what what that's We but think year. the pull we've that's board going in we've our general, entire

Brooks O'Neil

Yes, related listening operating core more. a and operating big have all of increase if targeted quarter? spending this of the I'm is characterize then of quarter-over-quarter, not business, would in curious of in I just If sort obviously, you businesses? curious increase towards How expenses to opportunity those big it expenses. the are the I anticipation necessarily a any headcount. the in was correctly, I'm one new

Doug Murphy-Chutorian

get trying a other but Maybe businesses' to primary than It's are both, current businesses due both. range which so to more run we're but successful the more, product. to a

Dennis Rosenberg

completely Doug with on is Doug I that. agree Yes -

Brooks O'Neil

a great lot. got. Okay, Thanks that's I've all

Dennis Rosenberg

Thank you.

Operator

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

Marc Wiesenberger

same? afternoon. remain so, your some year-over-year if might there it basis. the be deceleration composition for largest appears two a a the good of that on both Did customers And quarter-over-quarter and Thanks

share if dynamics would So could helpful? around it you two relationships, be the those

Dennis Rosenberg

Andy?

Andy Weinstein

in year-over-year see… not decrease I of do a all. the I the see Yes, don't customers at

Dennis Rosenberg

Deceleration.

Andy Weinstein

don't see customers. deceleration the I a with larger

I talking story a different increase a not see deceleration. But But about like do somewhat I think be we're actually when of third year-to-year. an might quarter-to-quarter there's quarter. just no,

Doug Murphy-Chutorian

the said bit second quarter group, a opposed [ph] one, larger the liquids of as of the third in the and think it's as quarter other to larger he little had I that XXXX. client second the

Marc Wiesenberger

I HRA customers, But visibility your total it think their With prior have shift shift And the be obviously, virtual number to of the variants through you variable also, there, Is the a Delta to And a maybe have because years? virtual visits their new makes into out so the But are you there far providers was to maybe HRA same? assessments visibility the the And do use that surge part a relative into doing? QuantaFlo? do the the any how you of patient harder there it? or back seasonality. that called they're visits list might was fee variant, Delta which of Okay. dynamic were to in number of doing? was that they maybe,

Doug Murphy-Chutorian

Dennis, answer? can you

Dennis Rosenberg

that - Sure, there in was to a visits factor move we actual role don't The significant they rapidly that have think to a the back played virtual XXXX. you're in visits talking in I that. about moved that indications XXXX. is in-home

that, who and lot visits. granularity impact detailed reach, In of we couple they again, this last that. from kind in don't they've earlier have do our target forward. they of this we a list times they their is, so of from actual I've impact member more to And as said still terms on the visibility COVID reached, their a to physically on target think what list who of member know of pulled of that have total years home psychological rapidly. got had prevented doing They I year, being got more than typical those than is But

Marc Wiesenberger

Understood, you. thank

you care of based your on positive seeking with PAD data that could elevated the relative your factor? think QuantaFlo for pandemic that a that could out periods? be forward? Within going do And are testing or patients see patients is an there maybe going around to customer impact the And through not some overall system, prior percentage you strategy QuantaFlo dynamics can

Doug Murphy-Chutorian

performing as the present. been the has QuantaFlo as well in in past

you percentage - there it years. think I of same think be about many a So may the as with all for will positives,

Marc Wiesenberger

the of in of their But or Okay. of - you're terms evidence taking how your sick that they're conditions not care or they've pandemic, within data? seeing maybe deteriorated people have been themselves, of any because

Doug Murphy-Chutorian

I asking, but know what you're I see it. don't

Marc Wiesenberger

where a the rolling where about retail of mini talk in just the you Is maybe we stand clinic in beyond clinic radar, care in-home with QuantaFlos and can other out terms settings evaluations settings, or Maybe broader do primary on kind and stands company Okay. type environment? that of that?

Doug Murphy-Chutorian

Dennis?

Dennis Rosenberg

the that or trend is is move that things this and delegated which don't talked of continue more care That any of beyond have and testing early have we certainly, been But generally, throughout of medical about PAD the that two settings make in to is market. happening the But We announcements do is like the at we something standard as acceptance anticipate expanding area in future say. seeing we the can't time. timing towards even that that pursuing something to two have other part and so. of groups we're this you

unexpected be not at of see point. some some that would it So to

Marc Wiesenberger

play of year that? kind ideal or it, medical to Thank launch the me. into okay. answers. conventional new Is either, the Got you. home Last of there all time what in one Appreciate environment factors for an products and the practice

Doug Murphy-Chutorian

For try much difference us, comment? about Dennis, you we can of think them. I it when introduce don't a to

Dennis Rosenberg

I Yes, really that matter. but doesn't it would it varies, say think I

and usually they're comes day the day. December that the you not before and obviously Second launched not at moment But next product just not half launch a is one along you and to time when are it's things. you're so multi-phase, look generally launches, of launched

to it's weeks, occurs months launch that So a over a product. process

Christmas. other avoiding So than week it's not regard, or really that like something in obviously, Thanksgiving seasonal that times is

Marc Wiesenberger

thank very Great, much. you

Doug Murphy-Chutorian

Thank you, Marc.

Operator

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

Dennis Rosenberg

to Thank thanks, updating forward We for joining you look us everybody today. our continued progress. and on soon you,

Operator

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

now may disconnect. You

Semler Scientific (SMLR) 2 Nov 212021 Q3 Earnings call transcript