SMLR - Earnings call transcript Q4 2021

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Operator

Good afternoon, and welcome to the Semler Scientific’s Fourth 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] 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 meanings, and such statements involve a number of risks and uncertainties that could cause Semler Scientific’s actual results to differ materially from those discussed here. Scientific’s uncertainty Semler the along Scientific’s risks with continued risks COVID-XX with include associated with associated new Semler risks due ongoing to pandemic, other These business. distribution arrangement light statements future any Please note of date forward-looking revision publicly obligation to this of release Semler events. no in opinion and undertakes revise only these the it reflect of presentation to that or as Scientific’s the new forward-looking information these or results statements of SEC filings the Scientific’s a more may Please Semler of Semler refer and for detailed description statements. risk affect to that factors these Scientific’s results forward-looking

During per the with the Semler will press prepared basic in adjusted Semler and of the share, were in cost a Scientific’s not includes addition fourth the illustrate non-GAAP also financial Relations discuss its the call, and reconcile is measures, of section diluted which of and adjustments. financial non-GAAP Investor write-down as revenues. in GAAP Scientific not These of income to quarter considered its measures and earnings lieu website inventory release, percentage available also revenues, effects in accordance should on on certain of be measures. which financial GAAP

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

Douglas Murphy-Chutorian

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

Dennis Rosenberg

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

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

the report today’s in the end net income million. revenue We’re during performance XXXX. XX%, $XX.X our December was results higher revenues for XXXX pleased the corresponding were on to was the that report million; at Comparing income based by million the company’s the The ended XX%, best year period to and history. $XX XXXX of of year company’s by financial highlights follows: increasing increasing was increasing are to million; cash to of as $XX.X net higher by XX, $XX.X

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

Andrew Weinstein

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

corresponding of For of million, $XX.X $X.X the million. quarter the period ended cost XX% that of of was $XXX,XXX, increase noted an X% XXXX, a or due million, termination million the million. million, of which the to $X.X a revenue of decrease Operating inventory from December was $X.X compared of fourth revenue $XX.X It $X.X XX, XXXX, expenses, reflects XXXX our write-down to agreement. distribution be of includes from quarter or should

percentage before taxes and of for $X.XX Net income share basic was diluted adjusted and $X.XX note same $X.XX inventory share, of was million. basic that the was as $X.XX and a write-down, this per share, at of or as share last per adjusted was share revenues, income accounted which income unchanged of per share a X%. per million, Net the $X.X per of $X.X a per $X.XX XX% from basic million decrease revenues cost diluted $X.X taxes; diluted period which basic Please compares and per share; Excluding $X.XX was income to per revenues share, million, percentage net net diluted during year. excluding XX%. the before $X.X and write-down $X.XX $X.XX share per

of unchanged at development expense income XX% Sales Engineering the was expense product share revenues, XX% XX, quarterly excluding expense ended XX%. For XX%. count revenue $X.X percentage and quarterly write-down million was categories And and of was expense X%. in in was revenue. diluted cost of X,XXX,XXX earnings a quarterly adjusted was revenue, the XXXX quarter as Analyzing the of share the of and revenues a of quarterly and percentage count December shares, of fourth XX% inventory, was administrative and of revenue, the as of shares. marketing basic XXXX, was quarter General net cost was the revenue. X,XXX,XXX

increase were compared an was share million, million, per the our termination $X.XX diluted and XX% was as per an year reasons of of – million. Operating $XX.X income was compared of For net as million. such in compared annual an share, compared agreement. $X.XX to increased $X.XX per revenue XXXX compared or XXX diluted The to distribution million $XX increase XX%, cost or associated million, of of $XX.X share. or which was million such income personnel quarter XXXX increase $XX the to basic expenses increased XX%, or XXXX, $XX.X increased $XX.X Net $X.X due $XX revenue of and the $X.XX to primary with million. the write-down million. headcount basic of increase $X $XX.X $XX.X XX million was as an expanding share to due million to and $X.X $XX.X Pre-tax XX%, fourth expenses, of to Net of was million, compared per costs, includes income to charges business, change million to extent for inventory this from our which

was adjusted share, and million, write-down before inventory $X.XX net and diluted accounted basic taxes Excluding income the diluted share the per share. of basic $X.XX which per per before share for $X.X $X.XX per taxes, $X.XX

the distribution revenues, of was was was of revenues, share excluding percentage revenue, of sales administrative share expense expense of XX% marketing of net a of per a revenue, due previously of of count diluted in agreement; net income write-down and calculated revenue adjusted of general as X,XXX,XXX $X.X a income and share XXXX, of percentage inventory cost As was the of earnings annual annual XX%. XX% using categories basic expense and revenues and XX% and adjusted X,XXX,XXX a as XX%, the development In million was Analyzing revenue, percentage shares shares. of XXXX revenue, cost and earnings annual was Engineering X%. unchanged in expense annual at to our the was was was annual discussed termination product revenue. X% count

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

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

decrease from XX%. of $X.X revenues change liquidity. for an March largest revenue X%, in In while were price or variable-fee corresponding from approximately XX.X% software fourth of our million of December license revenues related our arrangements comparisons software This by million, in to happened decrease testing or XX%. more $X.X fee-per-test of the earlier higher to decrease $X assessment include and software or had half annual XXXX, Notably, January XX.X% $XX.X increased or approximately of were $X.X million, revenue first increase And pandemic, the of corresponding customers period the of quarter second our million a January or XXXX XX%. testing in Variable-fee which by million, the and to preliminary in XXXX, behavior XXXX, cash compared as We the January the file XXXX, comparing annual expect risk XX.X%, sales XX%, of license software X health and by half In report cash is Form COVID-XX our XXXX, approximately license and million were of customers. comprised as numbers of by million, timing fee the in revenues approximately million, QuantaFlo our volume evidenced XXXX increased customers to or in compared our market, increase home half rebounded and of other effects equipment first of of our XXXX, approximately Variable-fee XX-K sales $X were The increased software in half due is stack license monthly to the ordering fixed-fee variable-fee variable-fee revenues an license the XXXX and plans strongly approximately XX.X% inverse to In statement, of when decreased XXXX. will and $XX.X period of software around revenues, were $X.X were and quarterly a compared XXXX. discussion XX%; to due on $XXX,XXX to license or of increased less on quarter testing are XXXX an meaningful second compared to revenues. believe saw sharply that testing and XXXX respectively seen $XXX,XXX of XXXX All $XXX,XXX, XXXX, a approximately opinion. XXXX other in with In the X%. volume the year license revenues XX%. by increase insurance $X.X revenues XX%, of revenues fourth variable-fee equipment and fixed XXXX, revenues million of fixed-fee COVID-XX a XX%. increased approximately licesnse pattern license by license while in which unaudited. makes monthly of of We fixed-fee the new XXXX the flow

continued are annual not we during we generating growth, and do continuing Although, provide cash profitability, on revenue guidance, formal intent XXXX.

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

Dennis Rosenberg

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

continue changing normal and possible, to pandemic, as close rules to regulations. ever We the notwithstanding COVID-XX operate as and ongoing

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

the revenue insurance year. variable-fee behavior timing in years, testing was when new for change mentioned, QuantaFlo Andy assessment in in risk of of from our previous We COVID-XX our believe related greater XXXX the in revenues customers. due of fee-per-test a the to always second ordering effects health half was pattern license variable the plans As

newly this However, in we pattern future if XXXX know do or continue will observed years. not in

the and is believe fourth to fourth services services to But a can began and Our mentioned, the other Insights. a to Insulin internally new adding existing our distributing commercialize provide Andy to continue we enhanced value to or we products, private in-license Insulin as announced, developed data as distribution of which upgrade Insights quarter, goals are agreements R&D distribute previously and customers new services In we a product company. products, to we’re a one that previously use customers. terminated with distribution and product made our product. and Mellitus an And software prepaid end this to in customers outpatient begin We Insulin optimize software a million quarter, insulin Insights customers we to for we healthcare signed XXXX, product April By into XXXX. in the we $X quarter of may the pursuant October agreement of investment XXXX, licenses. the up first to service of which Health several in program the these for entered dosing. can that provider in

as private We investments XXXX and product known test also a made is another company, in whose Discern Dx, SYNAPS for early fall Alzheimer’s disease. now

initiatives material yet new to and are Our early our not business.

that in care. services we to position products current However, future our to we current permits growing and valuable to or which may patient any information turn our offer, believe in and guide customer products services provide them base, better us

grow cause XX.X% We study potential and that were XXXX, X-year for was patients a at short-term has an existing of study, they may added they numbers risk screen by PAD. individuals become increased to customers. lower previously and cause risk positive adverse increased Thus, year, XX% use undetected years QuantaFlo associated and will aged mortality in supports patients, to Scientific that prospective product morbidity conducted, at annual for further was the clinical found reported of potential large PAD drive testing installations and In with the extremity mortality independently of our for. population and QuantaFlo peer-reviewed of positive concluded area. asymptomatic with our the risk screening older morbidity believes screening Overall, patients because a of care patients up. or there believe long-term customers major XXXX, the XX and the to of businesses. XX% Advantage adoption of result that to to it continue all follow X In undetected product Medicare living of XX,XXX recurring from and licensing PAD the also increased revenue events, a mortality versus Semler used have for cardiovascular XX% and MACE, XX% highlights of a for one we and that PAD new In tested years. metropolitan the product, in QuantaFlo an all this authors independently benefits revenue The population QuantaFlo at usage to more with positive was that standard this of for negative in brings the our and has level. care. in or increased management believe PAD Furthermore, were PAD PAD February a risks study

to that is products to market activities. expects our testing Our from than job build customer and a to of and are current be goals from to expected the to industry. generation from new to expenses cash wage the larger believe in vascular XXXX, additional continuing expand pressure our market Operating make current to care infrastructure to levels in as new establish opportunities. Semler desire continue orders the of increase introduce our disease operating further inflation standard existing and QuantaFlo customers, for penetration. to customers, base to support product We our Scientific additions due business market continued profitability In our

So continued there is room growth. for

year to cash our generation. with now of continue net the a goals XXXX and of providing in our and record company was for future. R&D We to terms products in enhance in value income customers the revenues, invest that new

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

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

Operator

We begin from question will the Instructions] Brooks Markets. Street with [Operator O’Neil Lake Our Capital session. is now coming question-and-answer first

You may ahead. go now

Brooks O’Neil

provide – color by on I guys. you I’ll can you a the off there’s afternoon, if couple arrangement guess, asking highlighted. Good any terminated you if questions. why distribution have I start that just

Dennis Rosenberg

you? are felt to today. how served Brooks, our was better We Hey, products we’ve that that attention highlighted the

where that’s so And we’re our directing attention.

Brooks O’Neil

maybe a you or result in to business some factors? dynamics pattern And you Okay. just may fixed-fee you the in anything order that of see changed if the the business. of in highlighted January the causes COVID Make think as then curious, of that sense. have that about I’m terms business other

Dennis Rosenberg

not have the as far indicate of seen end as anything We fixed-fee that to license the business.

Brooks O’Neil

to lot it’s going Okay, of obviously, products then, of be great. some services. new in And a these and interest

take stab just I’ll one. a at So

anything financial it us have somewhat software – will Or that can to you relates the it tell to about you product, underlying QuantaFlo? you of it of to similar product, would As be different? product? dynamics sort characteristics expect diabetes Would the financial

Dennis Rosenberg

software being, similarities product. similarities there say I’d some The are and differences. it’s also a

So cost The different. to financial be which we impact measures, in for in products. terms be the benefit measurements customer margins quality as be potentially to software ultimately, line should as the may benefit with revenue of well as But slightly savings well. improvements, going believe there’s HEDIS in

Brooks O’Neil

customers some you much diabetes But would existing would product? customers. to interest you be know, it I your of want And to talk existing new Sure. your don’t the guess that – fair have in shown about software

Dennis Rosenberg

they have. Yes,

Brooks O’Neil

you any that’s that reaction a highlighted. chance to you just more new it me more type article population customers? any say? early thing? and And or going testing patient Or is ask on you too from then of one Have feedback Do let be the get cool. obviously, think testing, QuantaFlo to Okay, long-term the of study to driver more, customers had

Dennis Rosenberg

I be think too adoption. helpful early this but in support supporting to of of it’s terms say, only can type ultimately,

Brooks O’Neil

Right.

my Thanks got. I’ve all That’s lot taking questions. a for Okay.

Dennis Rosenberg

Thank you.

Operator

Securities. Colliers Kyle with question next comes from Our Bauser

go now may You ahead.

Kyle Bauser

question Great. updates. new for some Thanks, the Doug, these products. on Dennis, Maybe on follow-up and Brooks a Andy, of

launching little Insulin work outpatient you office would be most or how bit talk like Insights, and business setting. economics Can to about just the that? guess, the mean, for fixed-fee a in HCC another your to So the a they code I sounds reasonable the point are what for after I on go likes of curious, perspective I’m the is look here? economics payer way the in kind payers? there

Douglas Murphy-Chutorian

is And is in that. said, savings Well, as the and also the the insulin in so cost treating know, most also business. well diabetes the economics that the [ph] important, Dennis cost thing profitably as we that you be think dosing measurements, the the HEDIS Insights] is as savings things [Insulin they’d are, of interested it

– primary program to do, managing care it of care take a in are has easier should we because make we interested people. guy these these whoever their what the be very patients diabetes So for for

on primary XX% of diabetics managed not state] the care disease entered are [ph]. the insulin For by [chronic

a part. very So important it’s

Kyle Bauser

Okay, it. got

And going first? all patients you after in so, to like I group? like it is is to guess, patients II? age above? of there be an you’re just Do kind of following go terms opportunity? on an you up that, of cohort I, after have going of Medicare Type to Are Advantage the Or Is going the this Type go idea

Douglas Murphy-Chutorian

above, that first for a States in the it is there lot – are charging the are people. there will it, of context likely quite that United on per in probably Type diabetics it’s because so month. member million per maybe All And X.X the II, of PMPM, insulin

a it’s margins, model. exciting our business keeping so it’s very with are software opportunity. like in margins The So

So early we’re the pleased very with showing.

Kyle Bauser

just curious, more then this in-home that out Okay, patients kind diagnostic Discern is it. in home test Or have of other to to already the got to an Just that I roll them? that the the And that directly product with a done to you’re briefly market. the testing Is how for like home exams? wellness the out. you send can kind opportunity looks of at channel plan you bring evaluators going with looked the that

Douglas Murphy-Chutorian

that product I yet. think that disturbing not we’re with

go as care by opposed Alzheimer’s, is, managed the get patients primary it primary also because have the the will to health care see practitioners, it’s that to a no XX% we But plans roll appeal out activities] and product [low care to to So of with [ph]. it’s primary very soon. thing

page will landing important get our accurate. And product, to very their we very site. our it’s So put site and to it’s a

So you for doing. yourself can see what they’re

we talk So about I not more think will than that. it

Kyle Bauser

lastly, in I’ll you’ve I’m curious back to NASDAQ. there of eventually relisted of queue. if Appreciate and the color, formal what kind guidance, seeing of you’re be kind out full volumes appreciated. And Thank it. you. Okay. any thought kind year kind Got that would jump thoughts now of just then and just about putting January you’ve

Douglas Murphy-Chutorian

about we’ve it. Yeah, thought

to last approach, to decided like increase to give this idea it to an think, and had and the because our wanted businesses seasonality or I January on compared that in you real, in this the January because was huge to month, terms of is where we year, we say channel of a fee-per-test. we compared last for from December looks

it’s pattern, but So same sure. probably the can’t we following be

Kyle Bauser

much. Thanks in I’ll so queue. turn understood. Okay, the back

Douglas Murphy-Chutorian

Kyle. you, Thank

Operator

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

ahead. now may You go

Marc Wiesenberger

Thank you. Good afternoon.

the back going of is across seasonal that customer? all to variable-fee just your variable-fee Or that is talked primarily your Just about, dynamics largest with customers? you

Douglas Murphy-Chutorian

Dennis?

Dennis Rosenberg

course, of primarily one is largest It it’s, variable-fee. our data, just early with month. But

a or many is bring. broad we let it’s So alone first going about the But rest other too quarter, can don’t what year, think make to indicator. assumptions I the customers of

Marc Wiesenberger

Got it.

for to and then an comparison, January know December. to because appropriate the apples-to-oranges But has think things. that’s comparing it is or you’re some difficult a I holidays of And Okay. context, maybe kind December that

kind just terms the of actually I’m how represent much December revenue wondering variable-fee of quarter. in So does in

Douglas Murphy-Chutorian

Andy?

Andrew Weinstein

there’s there’s mean, I days. That’s to December, is in people we travel January. Yeah, good January But less business also look to a why that question. to compared

is of year, in haven’t matter drastically the are days tested that dip, each be the there getting less probably seen December. fact although, So but people would we it

Marc Wiesenberger

Right.

how terms quarterly of does in the represent that variable-fee So revenue? much

Andrew Weinstein

in assumption it’s Like the falls not less large. that’s say. but to But like kind hard said, I there December, off, doing December It’s that are testing. days you make of usually

it to hard percentage what it’s say is. So exactly

Douglas Murphy-Chutorian

the we quarter. fourth see to in years, first previous off In quarter fall the didn’t compared

so this year the it. saw we And is first

So to us. it’s new

because So happen report, we before. don’t have any it trends to didn’t

Marc Wiesenberger

Got it.

which light largest variable-fee the in that believed customer. customer was you excess with that year-over-year? largest does of on XX% XXXX, could about publicly Your variable-fee fixed-fee what potentially And was what shed contract your push dynamic? in announced a that Can seen be growth or push some extension rate to

Douglas Murphy-Chutorian

about comments for I think but that don’t But think I we are we by encouraged we our have customers. to reserve that, them. speak

So to judgement make listen you accordingly. to have earnings your their calls and

Marc Wiesenberger

it. Got

Okay.

prior if insight in XX% had that was people kind provide in of how previous of does the Moving QuantaFlo get years? of XXXX? prior how on, in relative percentage And that did that can someone those XXXX the XXXX, to patients did years? you to tested retested And compare to of year? kind into tests Meaning, compare

Douglas Murphy-Chutorian

But year it we We year. and don’t test out numbers to that numbers. could every that. try was for more don’t testing [ph] a terms I the fantastic say them, of it’s in give hit but last quantify than view going – we done, QuantaFlo

Marc Wiesenberger

customer new And Medicare of payers in directly of business the churn the Has your XXXX? member kind your of expectation Medicare entrance or newer Advantage wins? the for impacting development in what’s Advantage new resulted

Douglas Murphy-Chutorian

Dennis, can you comment?

Dennis Rosenberg

growth We as customers within continue the well see current to as customers. new with

test in we’re which able home through of the partners, program to ways. Medicare So test get from no under. you number Advantage And focusing that at But different to Medicare overall between is through companies larger movement feeling they’re know, to a up generally patients, to there’s in matter HRA ability Different steam. we’re as continuingly going fixed-fee, one our to be another. picking Advantage are office company

of to increasing to good of number and thing us, Advantage them growth get Medicare the So is to we’re in a annually. general an able

Marc Wiesenberger

customers Could talk maybe and stratify all Okay. at beyond maybe net retention your, about that? of then and X say, you revenue looks how let’s that top across that kind

Douglas Murphy-Chutorian

churn seeing Andy And Dennis, seeing? comment well. about you comment can we’re as can a make maybe the not or

Dennis Rosenberg

percentage small we’re we’re are that. seeing this the shutting. then testing no, saying, is starting people customer’s do has about usually programs, not And not the where for and talked past, to programs, practice it see us, where being not any we As significant on used, we going to do in the churn sense PAD consolidation are individual is in not part machines with of if see numbers. a But we end or making

of new plus testing as this I this out, doing large importance of coming think with XX,XXX the going only reinforce we we to publication that’s study out as are is in to that’s QuantaFlo. early continue call, patients have highlighting PAD

Marc Wiesenberger

helpful. of Okay, going are then rate, the sales, for OpEx noted the rate In just operating growth final XX% to through of you in increase think from XXXX. ex-cost expenses ex-cost product And should that me. the XXXX of growth XX% one OpEx, release, terms landing versus about in XXXX rate kind averaged for Where XXXX? product we in growth of sales the of

Douglas Murphy-Chutorian

of the think a revenue I it’s matter what goes.

So example, you heard the Dennis talk about going this new report new article to customers. of that is to mainly adoption

in explain spent we’ll we’ve papers. accordingly, increasing it for a lot So money of preparation these

to So Andy? have it, done. think increase, it’s that, we I we thing get we going hope going we’re going but work a to need people increase, the if to the good because only that’s to increase

Marc Wiesenberger

Okay.

That’s could Andy be expand upon you. that, – Thank if it for you great. If would me. that’d

Douglas Murphy-Chutorian

Yeah, Andy?

Andrew Weinstein

mean, and up. support hire I call a we because salaries with I there’s that what that’s little Yeah. we people Doug we’re – going with of if mentioned is customers And revenue bit a means having that to in more new agree are the the it. thing, pressure – this good there

Operator

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

Dennis Rosenberg

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

Operator

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

You disconnect. may now

Semler Scientific (SMLR) 1 Mar 222021 Q4 Earnings call transcript