- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you joining us today. And welcome to the Nanox’s Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is may be recorded. to Cavanaugh conference of like speaker to now Mike host, Investor would hand over the your I Relations. Please go ahead.

Mike Cavanaugh

call. Good host us Meltzer, Officer; Chief today. Investors section released you Chief release is for Executive Nano-X XXXX. the this on September thank Officer, for Financial Limited the available ended results its morning, Imaging Daniel, financial company's The and quarter XX, of morning's Ran currently Earlier will and today, the joining website. Erez

we not would as that statements subject described include, that as relied this management's updated not those be in assumptions and statements Before in and the I and and management the regulatory be operations limited will results, based filings the Exchange but any the call current are representing date. forward-looking commercialization that Securities everyone started, today to remind manufacturing company's of expectations Therefore, process not financial and get like include Commission. a with and risks, upon to, company's be during regarding on are other difference statements to cause as such uncertainties development, subsequent activities, statements of research should matters. making may are these the company's that future. may views Factors These

and connection expenses, to release, A the press like also and refer of with our the offering call of now reconciliation Meltzer. non-GAAP over of action investors. change connection litigation the to acquisitions provide inquiry. to provided intangible to being I'd shared-based to obligation with fees amortization goodwill in impairment, will We measures information to SEC turn compensation, certain and measures primary non-GAAP additional assets, in Erez class legal GAAP is secondary differences financial with

Erez Meltzer

continue And to I'm thank to joining the Mike. we for been deliver our of you quarter able XXXX, the proud today. commercialization Nanox.ARC of of Reporting team the our has as on all system. third advance Thank our results call you,

our recent for of in I As last we'll outlook call, XXXX. our And rest achievements. an overview share of our will give the

Ran Before in turning review detail. over CFO the to call our Daniel, financial our to results

the We team progress at And will submission feedback months. goal Nanox.ARC product discuss goal. you to the deploy begin of coming a push is to remains quarter, system. the teams I'd the like hard in FDA our multi-source take minutes in the now our to the our continued September, the during the as advances It toward have most the news, process of up other forward with Union. with our the review. look I'm submission this I'm In system to to have process you is the continue insights to under now questions. Q report body CE we regulatory happy during for in into notified We call updates we engaged response. as Mark And to process. other we providing pleased know VSI, the the pursue approval with work our our scenes do of to system the end few incorporate made then Nanox.ARC toward work from and to our to to it We and I'm XXXX. any progress multi-source continuous not open the FDA includes timing (k) which multi-source regulatory the the commercialization the will FDA XXX whom and we've which European of that absorb very by submission. Nanox.ARC into proud the of behind to research

aim Nigeria begin begin to regulatory to We and once believe multiple received in see deploy We clinical approval, import ordered subject recently will intend we adopting will ship of Nanox.ARC and Nanox.ARC central first fourth deployments and in updates, XXXX. service the results to that regulatory Clinical we that the total toward we body the in Nanox.ARC Globally, have soon Nigeria of health to of the countries, license. distributors generate these Helsinki pre the provides. secure using that to multi-source multi-source quarter X,XXX organs as received conduct approval. units, the system in to continue We process system, we we other hospitals Israel our the have during early advance of the we a as the multi-source permits clinical trials trials anticipate an images trading system. Nanox.ARC of

segments, part see teleradiology care additional new to end services XXXX, second these growth to to continue Nanox.ARC These revenue by of a to of in report solution. teleradiology XXXX, and as from third million in are our segments. to intended quarter health from quarter we clients’ AI third during the services quarter top these the continue revenue services. these more these to see financial of multi-source compared revenues And our demonstrate integrated review as additions, system, new be to we and important upon and well to nine system a details. fully viability business the turning deployment, will which signed that we then continue in Ran agreements of million existing But the to XXXX. an end in ecosystem organic generate $X.X services happy Now clients’ part $X.X the for I'm the of of utility line revenue integral and businesses driven growth of clients.

to Before be in XX, we invite November audience multi-source turn with Ran I'm our to Daniel, broadcast Officer as live milestones Ilan progress I towards made turn our we over the to demonstration for over support that help limitation, call attend forward to And capacity I find made the I'd our to thank you commercialization. the for to a with happy meeting Neve With that, this continued Time, the websites. we large Chief registration accessible on additional due to medical very virtually, their want will move Financial Eastern X:XXam investors Wednesday, a financial the to Ran, like at like throughout I'd Nanox.ARC quarter. the our of link to results. scale on you review can vision we the to look remind everyone hosting we call imaging world.

Ran Daniel

The for of press the class- due cost reconciliation the due fourth ended share-based of is expenses, our compensation. increase and mitigated of the since and an basis, loss decrease for quarter Exchange gross obligation fourth in of million and Thank same discussed well million. Nanox.AI XXXX of that and of from and in of third million increase in a and you, AI non million marketing largely gross the USARAD in period million million increase Form on the increase part net in of administrative of were to Revenue and $X.X legal of $X.X compared which as Change development of the Erez. project XXXX the loss of non-GAAP Nanox.CLOUD million the Revenue infrastructure loss was X-k our million from and profit were net in a compared the compared loss decrease applications Revenues margin We margin for company’s XXXX, quarter and for third company's loss general in connection based $XX.X $X.X and third licensing million in this our third XXXX as loss approximately of litigation comparable a million a contingent $X.X on due the largely expenses, to decrease development the an XXXX, X, of period, to morning. profit third XXXX. and a million, a of revenue net the first the company's XXXX, for to a to due Securities GAAP acquisitions. XXXX. due period of the consolidation reported was multi-source with The are December by development million $X.X from to $XX.X of XXXX GAAP XX- XXXX $X.X an the Sales third decrease Nanox.ARC million monetization on gross and in Company’s was The $X.X XX.X%. $X.X a the was consolidation the on May and And XXXX were from with the organization due research for filed million, expense profit and compared in share of quarter comparable headcount acquisitions comparable issued none teleradiology General XXXX. XXXX, $X.X US with million as mainly to the of and a of the to GAAP between of research period quarter increase $X.X expenses in with compared expenses GAAP consolidation our of quarter of change $XX.X development basis net a third labor was the in as third and in basis. services gross the Non-GAAP million expenses period financial will administrative USARAD is to and non-GAAP XXXX and and in XX, Commission The net the $X.X company $X.X marketing company liability. due Company in earnout the for which to the was quarter action provided quarter data to XXXX and the overall expenses the $X.X in and loss due for -GAAP with million quarter this revenue million, revenues as fee profit connection net since compared the the a company's present Form loss obligation million of was the $X.X and comparable $X.X file $X.X million. quarter in XXXX. of year Nanox.AI in compensation. million for the release the a mainly XXXX increase basis. in increase the was with due inquiry in the with of total and gross same same to as for Research the a results which Nanox.AI the in F gross today a of our a for of for period the XXXX. increase period was to for quarter expenses non-GAAP on A as sales was to an $X.X quarter The $X.X a

million, $XXX.X and of Turning cash in the lead add of with equipment cash, the as to due and largely facility $XX.X to of September the sheet; equivalents Korea. for $XX.X our with enter $X.X add balance and machinery for million compared we We our approximately million, bank. South items multiple we quarter XX, XXXX, securities million marketable from systems increase net and as XX, in loans publication December XXXX, property equipment and our purchasing is long of of

September of call outstanding as hand as of back XXXX. With As had XX, XX.X to was the XX.X increase shares opposed approximately outstanding will Erez. million option. shares I exercise due of The we December to to stock the XX, mainly over XXXX, that, million

Erez Meltzer

the that for once in the to Operator, weeks please begin CEO months. today. to more We third I very is like good With call open thank I'd updates the in you Ran the to the you, Thank joining coming hope us Nano’s all Q&A us there And quarter provide for recognize additional as that, of about for and do. questions. session. all feel again, update. results now financial

Operator

[Operator the up first Ladenburg. question line with Our from coming Jeffrey Cohen of Instructions]

Jeffrey Cohen

Hello, are you? fine. Just Erez and Ran. How

Nigeria moment. guess So, mark as firstly, replacement, units available be may units for that and as questions a of could stand I you you. sense at a few for us far the manufactured give they as

Erez Meltzer

we actually, to in manufacturing, process, the materials as approvals. all with say of hand terms have available, the we we is are we which work we regulatory making hand the with In are

the the get to regulation start get once we we all paperwork, the it the all we countries goes the the same So ship units. can approvals. with And other when

machines to unit Nigeria. Just the ready center answer to to customers those The there. first is, over training. expecting next demo then to demonstration. complete And is who the the the send about step are with already for engage do get The

As work we for you do BVDH with the training know, deployment that the we've indicated in and the Nigeria.

the process that's we So that do.

Jeffrey Cohen

coming the order us Can size you to give the sense Nigeria. over a year? of of Specific the

Erez Meltzer

I'm and to know stick or going as indications. don't, or future further to later We you it until other

relation. numbers given main But so haven't was and we of make given the we course, a in We far, future. far. changes haven't reason, The so numbers

Jeffrey Cohen

give accounts And over the a utilization trends, it, utilization Got us and growth? of jumping and okay. growth can account you sense to teleradiology, and/or number of

Erez Meltzer

you Okay, Ran, like address this to question? would

Ran Daniel

Yes. account of growth Jeffrey, total we The is approximately calculate you now, yourself and had an so as this additional rate probably. quarter. four, accounts the right, can nine

Erez Meltzer

least of XX:XX, And what we us would terms But time, of we at few the growth the the still some numbers much when the, start approvals, customers, where the the as the those a for lot we as are waiting -- in see of we that that between is of been I the that with readings. the a the the now, now, are have pretty accreditation the time of for they sort growth I in are terms or see have always, say all rate, you gap in XX:XX and majority, and future Basically, generating there do well. a have always, XX% say waiting licenses revenues. see that and quite we we we signed, right right customers revenues, of, would can

Jeffrey Cohen

down about what Okay, see I so but more is you sense third anticipating the and a the got talk than written can of there's low was for would you year a us the number, number it, of more impairment goodwill quarter? for then fair, quarter, balance goodwill millions the that could couple any a of breakdown, give for

Ran Daniel

other Yes. us to the to complete answer process months it there credentialing before are new new takes And just we a it the once accounts, geologist go said, just then my to my us takes I client. to They're accounts, through get to complete as as three the answer. two

using. at a comes discount long two as This that Federal rate for is from the Reserve but impairment, to in we there impairment what as there the increase needed. really, to the are the And factors, goodwill few no needed. impairment to that goodwill, ones -- As that's quarterly is examine is be impairment we the specific the should least patient main goodwill we're wasn't the we changing quarter, do required first, to expect was are continues the if then And rate, basis. a

to So we through process. go had the

impairment to can for coupled fact consider that the your will go estimates the going quarter, for As third for the as we question change but any will by may And consider we'll in quarter, the That is the to whole have through Reserve. have, price, process also no impairment, done the right? forward, we there's fourth be expense, for you with our Federal discount have that XXXX. be and

Erez Meltzer

expanded the we imagine, by the can will way started be that you will of the once be obviously, Now, art, all the deployment into services teleradiology growth.

Jeffrey Cohen

the expect would going as one permutations clearance Do at far be as you then anticipate a it, review, Got we FDA that forward. and where for stand obviously, things that, finally, option. [inaudible] the should

would additional be that that back questions, they are The the permutations we be could few with second what see? would

Erez Meltzer

a are we FDA the I have spoke process of we of What single FDA team Nanox.ARC says increase could one use or that for business the see generation thing Okay, strategy path said it we changed think that the indicate years the And, it it is it emphasized the of the timing frankly continue the done now. priority and step it saying stepwise regulatory we whole see don't approach from in to FDA likelihood that as think intend process I as the to we to bit XXX the well Q next the a or the the answer and world, the questions the that of utmost its products bet I dialogue speaking, the and that, Having everything we from Nanox world, submission from right this generate. to the FDA. last develop submission. clearance as (k) saw as that to whole year will this the about FDA future we and we as we but system, little none with three that order we have using submission the in with

Operator

Our the in of next question [inaudible]. from line queue coming

Unidentified Analyst

doing Hope well. Congrats Hi. everyone's progress. on the

So update on know starting off, is special any there Ghana I on made contract? a the process you quarter. last approval

is the bit what there? environment kind So color you more provide could where little And of regulatory in on a you if Ghana? stand just

Erez Meltzer

the You asked about deployment? Ghana

Unidentified Analyst

right. that's Yes,

Erez Meltzer

we now. processes. which once it. get we'll future we know, be for it as of And as you the the we But information, did now with did with do, we will the that as waiting Nigeria, in up any we do do approval, soon preparations. We shared needed And in with the then did we as meantime, it other we agreement. then all it, clearance to public We're regulatory we'll the until not as way, signed is the signed, release the do or course, the countries, then, by the we'll have

doing the tomosynthesis that then, initial see US, So already with said the trainings, checking all units. that's doing of in customers, cetera. to availability standalone, cetera, and at terms we digital all et the telecommunication the have the be done the et training meeting the that of try the is of outside the deployment itself, we're say, as we scale of Nanox.ARC And XD internet what needed since infrastructure, basically, expect to show in we where

that dialogue inform we'll we when know to the cetera. getting FDA, their can as of the right will the all approach the in cetera, we namely step, US deployment the actually the distributors, do to et the get now the and know preparation, as Our the meeting better processes, preparation get FDA, and next with we're it, is even require soon making the customers, countries et in regulatory only in

then so And the can we get we forward. actually clearance, move once fast

Unidentified Analyst

That with Ghana are units. But more If of annual fee? there credit contract? us know associate letter contract. is you a minimum guess a sounds XXX the I on just to I one disclose you great. provide able the with

Ran Daniel

always will. the between and is difference There able

Erez Meltzer

soon is say say. to will the as And that we we as have answer something

Unidentified Analyst

Or it be to And are for you Okay. reading do And then to ahead those in do Nanox? latter, the to is you guess, if outsourced looking have Nigeria? radiologists deployment, that the And of I those scan in read be expect radiologists are were scans? financially place? motivated

Erez Meltzer

now the on both. on in everything we be based did future, work now, Right know that change studies underground which Nigeria, the we right and it the based will but may that in

Operator

question from Suraj the Next in queue with of Kalia Oppenheimer. line coming

Suraj Kalia

commercialization, you? Ron. Erez, for workflow the Good morning, us So, Erez, are let's to for you in look give off of bunch would -- these How How say Nigeria? can Erez, you Israel? hey, as what questions. or expected is products how in Korea, just i.e. happens the of happens manufacturing What happen. look ceramic what especially through glass us to Japan, workflow facility, happens begin in in walk kind kit, your

Erez Meltzer

it's is next interesting, on a week. funny, asking It's are and for you what actually but promo

being currently be -- and it the in said in of Israel are done to All the you be do manufactured we're planning it the XXth future the and will from explained as as are the assembly prospectors, on whole done, the the Israel. Korea, and done in On being we see chips we Day, more the the of will the tubes in will outside future, in being Art other flow, other are of Korea, will day, in in part suppliers. past, in installed the and have integration

in actually Nigeria, be box in And system but In is about assembled it place and So are a Nigeria, to shifts deployed. specifically fully Israel. to when shipped the other you and countries. secure it be the will that they to in the installed going same asked and

do of to in of all center, the system we be course, of a the have will with demo the radiologist to operators, And country installation, have connection will initial maintenance do the on center the the do operating says the to planning And we we're have deploy the a right we tech now site, the every and network, the work ground. demo of going Nigeria, sometimes future. already, are system, the partners on to we work all in the explore We unit. in We and partners the with afterwards. to the premise, we're training training doing on ready as the to demo else the even do we that units be the we're maintenance what of the center then in install well. Nigeria, first We going other that to to training

the a it of few not only it's them. be So one, but will

have dialogue We in hospitals as the way engaged well. customers other already a Nigeria, countries in with by and ourselves in

addressed So detail that's I in the answer to actually I hope that your question.

Suraj Kalia

Fair as presumed enough. the I configuration the the And configuration. US is same areas, in Nigeria

Erez Meltzer

will good hope that question. that's have will yes. is the It's as that answer. approve hope -- the be no changes be, the and don't what a that answer and to intended use take FDA so we basically, same Hopefully, place I we will the know But will we

Suraj Kalia

about. enforce contracts fulfill, validation a at confirmed the through a How and confident orders your of with they these least that because our you are or testing. to gone Got it, X,XXX them, in finally talked years have ability not and lot so are ability old recollection is you to pre Erez, their few

color additional for Gentlemen, be questions. taking thank any So appreciated. greatly my would you

Erez Meltzer

the you in more I'm than -- are will bank bank, and that years more then is and money years where XX XX that the the learned in in place and my specific I’ve CEO for deal the as this business in one of be our transaction the one once in your so the each account. them Okay, [Zero] think thing business I says more money basically than in than confident from --

one depends confidence. on it the and in clearance and places. all any with regulations the approvals But this of terms So of processes having said that, is in

that We time the of from to use. the coming we these entities system are see do and to to with. by the business product get with the to know better are dialogue agreement see the the signed Israel some to in and A and them, to way, continuous intended progress few and time training to

basically that's answer. the So

Operator

queue question the line from next Rahul our And with coming of Rakhit Capital. in LifeSci

Rahul Rakhit

guys, better Hey, levels to I think a the if thanks health, taking Northwell for these understand questions. wondering us touch bit little IBN the could utilization generation you how maybe from forward. was on initial help at just inspection about the revenue moving

Erez Meltzer

and we of indicated I from all, with or one of that add, have but the things, a specifically IBN I the next IBN couple for that have much already agreement the The with not say that the agreement IBN. year. year last the extension revenues each higher one discussion is First installed of of will that will we or of from received coming money the

of this dialogue. a terms Northwell, continuous the is In

value few be company the and that the applications. that to in to IDN, in they adapt We least, of for they of business that more the that company part And also us model them. is an installed of bring hospitals pharmaceutical of project to future that over some the tailor IBN. IBN few we a Like kind the others developed strategic and we have, last benefits the made to the the you are and already just in of two we help as would were are AI will business, know, have install. model to think that we but final our jointly of we All are grow with would jointly not value enjoy indicate work added but applications will We what Northwell intended the insurance are to best each than we've develop process the to some and order coming place services. we have are is as soon. I the what use to planning I that say business the from They models application, business developing one the our the

Rahul Rakhit

Got it.

you. Thank Okay.

Ran Daniel

sentence. And, Rahul, just one more

from we we going have amount not are have bear Nevertheless, generate we to not, that we to have the the projects. have or preparation generated two those area. said, We projects that our in mind of revenue as two Erez indicated those in

Rahul Rakhit

that design it, no, one trials for you conduct images specifically -- color leverage that. you you intend that what are how can Can appreciate provide Got tend moving focusing initially to Thanks more on I little you. you'll the making, in tell you bit trial about Israel? questions. or Thank you a taking what just you to And on guys us clinical forward. and the -- for data

Erez Meltzer

anticipate as We is the have installed thing And will update there. The clinical hope have more be already we images that about the complete we'll sample have there. trials and of that do of results system us I share the already next we this quarter, earnings we the believe X-ray indicated will one the one room anticipate conduct is the samples it. of will to soon for call, Helsinki that during as XXXX. -- trials generate multiple these the we to we fourth the getting organs of in that permit installed received will and of leading the to in hospitals, quarter body

Operator

Thank at to Meltzer Mr. turn now you. I for closing And any questions showing am would to I this time. over call back further the no like remarks.

Erez Meltzer

time all be you to for the thank us. with taking So

week change be happen and good we, for us. to fulfill these we're For we what next everything have our have see. that hope would to make promises, And people interest for and those will those being you more hope what of the we doing. that indicate, in show I investors promises we in who I for actually world made to -- thank you like the with all to that to really

Operator

conference our for conclude Thank does today. that participation. your for gentlemen, and Ladies you

disconnect. day. Good now may You

Nano-X Imaging (NNOX) 10 Nov 222022 Q3 Earnings call transcript