ICAD - Earnings call transcript Q4 2018

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Operator

Greetings, welcome to the iCAD, Incorporated Fourth Quarter and Full Year 2018 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to your host, Jeremy Feffer, Managing Director at LifeSci Advisors. Mr. Feffer, you may begin.

Jeremy Feffer

good and Omar, you, afternoon, everyone. Thank for you participating in call. today's Thank

from afternoon, full iCAD Joining Officer; Michael Klein, and Stacey three-months today Chairman are ending Chief for Chief Officer. me this Interim and and Scott announced financial iCAD the Strategy December and Areglado, Officer; Commercial Earlier Financial Stevens, year Chief results Executive XX, XXXX.

the to by regarding in including, Michael XXXX conference or involve is of the of would XX, and March accurate forward-looking or like results review company's results excuse I that the made no as XX-K, company's limitation, operations conference XX-Q actual reflect described call to after comments this filings Mike? events of obligation risks future contains cause date that that this of or events call. with to revise to factors over during the statements update Forms forward-looking risk only may uncertainties that I without management caution to begin, SEC, differ which content of statements. the contains date materially With the call we specific me. encourage the to it's iCAD the conference my – time-sensitive any turn said, broadcast, information undertakes identify Furthermore, Before and this those XXXX you the from pleasure circumstances and to that live Klein. this call statements iCAD.

Michael Klein

and transforming Areglado, technology on Officer. recent With and the lay am my we pleased CFO a firmly to laid unique of and today to computer future have Thank and now offering. Stacey our you Corporate speak Controller detection opportunity AI interim thank AI out which for in In Stevens, into Strategy I update last are iCAD’s our reinforcing CEO, for Chief me Commercial detection our Good and today. have vision you, you company's I and you Jeremy. evolved believe cancer Scott first and plans. leadership progress some afternoon, our my out that today joining is as strategic aided our everyone the us call, with CAD, iCAD. On I robust or detection,

represents With the Tomosynthesis approval ProFound a are learning AI, now its capability. launch positives, in breakthrough we December our Digital quantum on The improvements FDA ProFound the US initial or for to is cancer while as AI now way iCAD our with offering. way with sensitivity, very commercial achieving has to DBT, is this from efficacy. Breast on positive. recent false in exciting fewer latest goals clear subsequent software and well a or Achieving our solution leap AI facilitating in its specificity clinical -- feedback of as customers improving actively achieving using reading detection time, workflow, vast deep been in

towards new As as I an highly said and opportunities and both risk and leadership we tools assessment. horizons last AI intend detection XD even of the navigate near in move way we perhaps and to our a ambassadorial lead in play term role, personalized call,

likely or the that in disease first, clinical on AI market same has cancer diagnostic addition gone with see to AI a in the imaging breast own As are new can have but an ourselves different a or more based breast capabilities broader our medical we recently, deploys have iCAD been we extension partners, channel technology. towards company Up till health AI software and way. Today, seen of positioning moving women's to and a either area deploy seen this, growing frontiers. that company very in and as cancer we

our approved only initial commercial the of started XD out build we FDA Tomosynthesis, QX. product for the infrastructure With in

doubled our carefully less inclusive and now have continually to clinical robust than selected personnel XX We additional field nearly our AI installations XX of may offering to QX doing ProFound infrastructure the AI of to field we so, educate And us mid-year support now and service QX three beginning two technology. service customers over XXXX. As proliferate to of add sales this infrastructure around when of headcount allows personnel. This to ramp. consultants, in improve at from today, resources and our triple as we’ll to compared install

revenue full today. and need, onboard the talent our we and targets, we set ready and QX QX For adoption targeted plans and have

We are executing yet plans our for a scalable launch. controlled

collaboratively novel partners, technology, a sales to value with while We better nascent hope evolving them even train needs. clinical way only infrastructure. optimize direct the model, the this customers’ with true to adopters many We that is are our meet working convinced of and

with XX% commercial or as and QX led as this to sales unfolding in in transition our sales late total Sales compared XXXX. accelerated then an Even $X of grew -- increase versus way QX, was QX million sequential by XX%. revenue in the QX AI QX

are the Simultaneously, aforementioned products color basis new also a our a XXXX year-over-year Xoft of a on of This positive on The benefit completed of done will will discuss further minute revenue. pleased of technology of December, I $X was development some add real continued comments. lumpectomy is build now at accelerate infrastructure this shortly. We moving clinical growth total radiation my within of in IORT to million during growth the support AI therapy, to end out, and very the which we had which commercial time on the financing trajectory. opening therapy QX, Scott procedure offerings the in with over XX intra-operative XX% but

sales the of visits, phase regions. acquired systems US X creation having essential use We the educational targeted in achieved step major initial installation customer programs. training, in our adoption an regional and technology symposia local goal allows have is of and excellence, now Regional centers site diffusion and of in

screening towards or images risk are and be patient’s world characteristics, additional it the is the a software to frontier with certainly That image While comparing algorithms assessment has by of patient's based of probability next patients capability. less thousands This By screening not likelihood patients as risk if risk to genetics, screening. low age breast for we This they It developers, commercialized to screen incorporating been in complete frequently scores, and hundreds the risk of more a moves so. who AI score but risk actually makes ability parallel high risk field we equal women risk move available done moving can set characteristics predict breast of sense had further calculate to AI patient demographics in developing mammography of the screening. perfect a all we risk and actively to class and adaptive similar our women, characteristics. density beyond characteristics, and never never accurately cancer. the to breast more possess aggressively

and capability this to in in America, of in XXXX we year. at Society market offering of this the anticipate expect early November North have an We this version of RSNA showcasing the Radiological

is this leap sites lead categories will and approach of US have believe we providers, is formed along personalized personalized AI way. academia software thought patients years distant XXXX. is age is as combined of the delivered imaging world's a personalized the to Medical diagnostic The volume and Karolinska at developers inaugural US first world's outside this away. believe of at based on area and forward a risk our highly a need their efforts, capabilities. foremost shape catalyze nearly quantum in we the images and her detail and Advisory clinical conversation Note, possess of known this not in new been the threshold cancer, power breakthrough our two offerings have will will of virtually a of Risk however, screening AI risk members medical a a have area. care interpreted many subject high to board breast working be all prediction Stacey in risk unique early OEMs, around of meeting in to working of We're Sweden, We location. largest ability a this with collaboratively huge them. ongoing outline the that All that prediction. the researchers efforts manner database in session studies, disease conversation. that equipment with It reality by to work Our years. all Board and based QX the the we associated to characteristics. for in Stockholm, and of clinical of Thus, the pre in will essential a profile era further our anticipate unique management Institute screening introduction agreement today. risk have between of creating this to one algorithm allow from taken where usher in our be volume universities, We model. well having the AI industry we our collaboratively By sites the new with collaboration of leaders We board during that current high market a patient. Karolinska radiologist literally highly predict changes individualized with view and prestigious in Together, vendor is and versus further research position prediction will this new combining the is in generation lead from firmly

accelerated this be growth opportunities XX we innovative we’re of pacesetter we includes horizontal QX AI mammography. at along AI, vectors is number North already mammograms prediction a clear adoption offering, one describe mentioned, include vectors. a in continents, move our our Others AI we development, I've carefully the these at are a showcased will As axis Society timed the the which module. three monitoring and accelerated Radiological year, million projects beginning being new risk coming new now of some our horizontal, mammography, QX. new financing, several and cycle. each these of defined well With clinical we of will as developments have the America towards that again, actively diagonal. The which vertical offerings, We With have

We As same thousands of are sales not area current ProFound a images, platform, to an find of additional product. is, sites, as have images factor cancers predict ProFound and outstanding better access version in platform, XX within commercial AI in to by the the change. ability can XXXX. and prior release. XX as is that history new in at crucial ever the individual we AI can patient No AI and in progression image another temporal and backwards gaining offering of singular has this as our is for use company module image. And ability to We of XXXX we rapidly look breast kinetics that to months. of expanding patient look can cancer AI, a ProFound at we extrapolate of it to next characteristic change this the a market concern to released Think use then prior in a see risk the even commercialized

in moving cloud The ProFound testing. our and is towards about forward term commercial We the accelerated and now of release that what next months is of lifetime the then talking risk, and being This initiative takes patient ability is are and be vertical deployment but where XXXX. XX more is level is will to risk. vector the also platform a predict than been important now more see company near look offering. an ProFound far offering, and It today developing in for backwards, within which is risk its not project has full the vastly to development

has those us radiological our with moving driver at a to honor A at technology funding cloud built critical of release of also represent in is cost and configuration clinicians. possible hardware available, available at and only solutions sites is It AI a predictable capturing dozen pay other an reduce achievements when for will and not access a unique to market images for even simplifies With Jonathan reduction can broader transport lowering reduction Go each this needed ProFound to and associated on sensitivity with not move horizontal savings adopters. amount this repeatable best of We along driving ProFound a AI business they and a add of money, XX% that passed features to images be a be customers’ move least XD him systems begins do We need positioned and cloud our The to images Chief the are and allows is The Technology is improvement instantaneous, are basis. costs promotion will allow The click reading the even the using model December. anywhere suite ProFound to per suites definitively this and and This Tomosynthesis ProFound technology service market who that customers array several by as be computer, The all we're The them for cloud reality And detection only performance that measurable. iPhone. necessities. and our by a allows his cloud in price efficiency, cloud. projects data, and cloud one sites. to workstations, upgrades cloud with workstation, more improve but with to on vector more image cloud, added costs, an allowing allowed with servers claim based whatever this capability ProFound there recent ProFound cloud see velocity. XX new highly Access to packed aggressively we or marketing Tomosynthesis anytime, greater novel measured key reside customizable answer efficiently are on phase is success componentry than and well improve was as Officer upon upgrades any or send of together, adoptions AI a enabler, sensitive AI service to capability of customers released take is with when but pace the Our customers. that total wanted. AI, an for more accelerated cloud in vector, for vertical which forward. next received cloud. value more even empower ProFound as to and and vendors huge uniquely the but while in antidote functionalities the may phase and where this of adopt. with early significantly a functionalities demand, many price time, the adoption, can mammography requirements to iPad of to in margins the solution serve processing and offering Tomosynthesis format more significant us lower usage SEA combined of at vector this a via in ProFound claim, or is in capabilities or call a will Both than the backs. save allow better fewer to this these and mammography to with for ProFound Xd solution. to enhancements ability this

Tomosynthesis market units in units over at for US. XXXX. the opportunity a XD AI, the in today, already XXXX see base see XXX robust of ProFound of to XXXX XXX before. we Now, adopting rate market which the are We installed over additional With the of see we a

XD growth base XD in not them. US, Tomosynthesis efficiencies installed XXXX total can As way. the enhanced provide assisting we the the towards XX,XXX partners in see and with systems along of and the US units adoption imaging cost We of favorably marches believe of we the patterns impact potential ourselves efficacy Tomosynthesis competing

with combine vertical cloud, we see being and start in have we is axis, This a modalities. ProFound the horizontal platform company here. of diagonal new axis, AI clinical involved when capabilities a the actually imaging ProFound the We on vector vector. diseases a good clearly Finally,

in AI have [indiscernible] as cancer a were company not a market focus, to the the broader is FDA with With will vast vector, a be thinking is We robust now. focus capability AI as They that and very breast broadens such the opportunities focus opportunities. and this pursued diagonal and a a our abilities, focus clinical cleared past.

in MRI building we've prostate well. experienced other and as have out work areas an product We entire done

provide to most envision all and capture do diagnostic there logical disease image these infrastructure opportunity. of the commercial full we are related we don't hardware. the channel are Effectively, opportunities. can out will access partners. do partners our what a do They and having imaging channel in they what the best. best do these We for cases, now evaluating In build opportunities We

We for a bring actively number agreements. have efforts that in area that direction. market the could them ability customized to this offerings in to working catalyze of development to build We're

in commercial as believe to we model necessary mammography, necessary direct be is imaging and may cancer particularly value, proliferate, While in educate not it non-breast demonstrate areas. a

unfold this continue a broader towards clinical being area, in we material of will provider to drive developments we As communicate developments technology. as AI

about Now, relationships, since partner we and often I'd perspective just get asked and like partners with questions the share to our three those thoughts vectors align outlined.

The This breed technology to offered for as is clinicians. with We an win. We markets. are committed AI and solutions. all to and partners as in winners market fully optimize applications in AI choosing reason believe accessible competency are to Internet, and the in being we just have customers losers partnering class very as solutions now provide alternate and all We want architecture always our long collaboration is we to best non-exclusive the core freely and that access. efficient and all welcome open technology

the meeting outcomes. in end, all generating patient For clinical better needs and it's about

PACS or a principles, alignment focus entire system, throughout high of With data healthcare movement and partners. have regional They images we seamless a on we these have and open and ecosystem with the the the be believe natural unique local, entire access approach. vendors. deploy cloud majority with This by cross of technologies the vendors alliance medical architecture, working has imaging natural based anytime PACS us an country. anywhere powered also PACS span

version, the the vendors in that of In XX% of with and we Congress fact, their two vendors in of Radiology. recent European RSNA booth over represented so ProFound and And AI featured PACS trade booth European market. did the the ECR shows, we in PACS

The very is will emerging is without. attractive We the aligned over which again, US integral model, And our and in revenue towards interest PACS future capability their time and the more to OUS customer thousands our the which to that of expansion this expanding of a numbers base, of also and with model us paperclip partners. be lead PACS sites revenue inevitable cloud and in know both PACS vendors thoroughly we're model. will at to business

We access business OEM, will medical our how approach, future current big models with evolve. align European AI move solutions to go will and they as these to certainly a Whether AI be towered we forward relationships to meet partners, and of be provide our part is personalized clinical PACS to communicate in as development and market both provide [indiscernible] customers’ which distribution and transparency mammography, able needs it want evolution vendors, where that and imaging solutions. is

turn depth I in over before to highlight of like Now for the to also an elements call therapy Scott review, financial business. some I'd our

Importantly, we are our on for the outlook business, Xoft. increasingly optimistic IORT

therapy you XX radiation breast approximately States. United real I this Xoft business utilized know when of the as of cancer a is is in solution being served XX-minute during that’s US the now it was delivered. sites outside accelerated Our time approximately CEO Most that's when used lumpectomy, treatment technology XX sites that startup. and

Sometimes, broad take the now of XX targeting, selling our market some rapidly system has all as shielded sites in growing more non the used to Asian advantage appeal. We're locations of patient locations be and IORT at mentioned. of these sites well its beyond where sites care Xoft the multiple ability portability as systems to more

weeks. we're business. the for as IORT a in this sales we focus Today, where for cost product care in XX riveted patients source, XX% to have data, excited reside. Xoft therapy prospects With low patients patients grown stated a and and and to XXXX, in over democratize energy recently an The sites studies very closer often shows earlier, treated about it's therapy small XXXX that particular months, on growth multiple Given rival revenues. recurrence ideal all with that published tracked particularly to in robust XXXX shielded data product. are of treatment all long-term or clinical above protocol, outcome again, radiation take to care seven It's clearly one it non-radioactive that’s areas, ideal take XX rates up that room product an of from can minute its footprint, requirement a therapy, six no that

scalable is completed lumpectomy cancers our delivered also of It a earning radical a is robotic as recently on ability spectrum IORT now treatment model from for detail, subscription and decision non-shielded have in results a service impact place offer or following is a had in our real rectal to beneficial perspective, we the to of areas a the where With discontinue a to areas customers cleared single even meaningful our prostatectomy. in in cancer brachytherapy will ranging gynecological overall enormously during Scott time room, FDA to prostate first treatment. cancer to all XXXX. the Xoft treatment skin our strategic our business From financial business treatment

into drive closing, not in and offer will have and inherent that both units for skin We placing volume. We iCAD imaging scalable, significant exists simply dermatologist focused are AI sale channel. not we brachytherapy value business business the unlocking systems the left of remain enormously on that technology. assuming electronic the the that Xoft’s In in and

logically and and say recognize to success now Scott? our both I'd are operational investors one indicators, regular the drive pass our and Scott. success financial excited therapy assess our performance allow quarter-by-quarter near and and sustainable term achievement over opportunities to With blessed has I would and success be and goals. huge to the and accurately earned of to driven and on long-term metrics by We have core are basis. that KPIs, and our We quarter AI to call quarter on like measurable a two that we our constructing by in technologies key that, progress

Scott Areglado

earlier everyone. would fourth the Thank review released and financial were which good afternoon. Mike year highlights, quarter I XXXX you, full and company’s this afternoon, to like

our to March Form details. XX-K I and with XX-K XXXX. As report our to to only XXXX specific prior be the for to I'd for SEC from refer more its The company will like discussing Form expects annual the on results, financial XX, you highlights file

performance comments financial the these for and today, information way financial believes during the the begin that I reflect measures operating with like to provide measures. certain I that meaningful non-GAAP that we will investors company. referring Before I view my Management highlights, of would the note be to

non-GAAP the end our will of You for can With the quarter. find at to summarize results of that our now your fourth covered, GAAP reconciliation I release. our measures financial earnings

Given quarter would changes in then both and follow helpful thought I in it the first our to strategic compare fourth third with up prior XXXX be quarter. our and the business, quarter management the year to

growth For by quarter the million, XXXX, with improvement total the million, The represented fourth which on both approximately an our three $X.X million XD increased and of of or quarter represents XD slightly over $X businesses. $X This was detection the million XX% a as business, compared segment which third Revenue by therapy XXXX. increases systems in strong QX. QX systems was two $X.X in offset to decrease in

quarter as company. year of Moving on year fourth of quarter a fourth revenue the XXXX XXXX, fiscal challenges represented of standpoint, to the from compared the a for to XXXX

the business, side of business. On January skin we exit therapy subscription to company in as strategic announced the decision the made XXXX, the a

our partners’ primarily as declined due to year weakness to related OEM sales detection compared of fiscal underlying addition, products. revenue to XXXX In

XX% the customers. quarter a quarter approximately an sales XXXX decrease indicator by of significant increase in XD installed X in approximate million believe the or revenue base fourth in approximately We from an direct to decision decrease $X.X in detection our XXXX. offset XXXX fourth of million revenue, and therapy with or to due or revenue The to quarter XX% our fourth the our decrease of decreased by and million $XXX,XXX. of X% of $XXX,XXX our is is OEMs due of million to The For overall in XD to X.X to attributable X.X force X.X this X.X revenue. and million in in revenue decrease million a of decrease was increase the in detection positive revenue, XXXX, continue sales the primarily pursue total product

US XXXX. systems the system by million sold of we that side decrease XXXX as business and fact subscription OUS therapy due decreased exit the due one the remainder one the in compared of the with four of the of XXX,XXX to the fourth to the skin business, OUS revenue to and On quarter in X.X

also on the skin had the IORT burn focus and I as As the for as further move to benefits cash well and down, exit business our subscription expenses. reducing improved mentioned company

and to $X.X of percentage basis, fourth profit, in million the on therapy for million fourth a the $X.X on quarterly debt gross million improvement. basis, quarter profit expenses XX%. compared This as management gross to for operating charge, the of gross million increase board a subscription On a marketing $X.X pure the of fourth profit incremental decrease impairment $X.X dollar expenses quarter On quarter XXXX Moving prior in was XXXX, fourth the XX% included the related million to a XXXX primarily prior business. is and impressive expenses million turnover, represented legal attributable the operating quarter XX% Absent quarter. This year-over-year expenses. quarter charge for the expenses $X.X fourth totaled as reflects related to year-over-year. This were profit $X.X expenses. Operating skin million. was $X of quarter from profit this gross operating that business. exit It and an just to quarter revenues fourth the the to of improvement percentage a XXXX noted dollar compared or sales the gross of from severance our increased of XXXX. should year Both company's year reflective in XX% placement, be improvement to the

as we to build our higher XXXX XXXX of and ProFound especially necessary the AI, market to for out the trend somewhat in in infrastructure compared we year. expect operating look the XXXX, expenses to As half continue success first of to

period per million and prior period the comparable our impairment was loss or of the net absence driven $X.XX share, million. due increasing margin loss or the This million million quarter. from the over share Now XXXX fourth a loss in subscription compared primarily summarizing year our charge business. our profit non-GAAP the reduced was $X the net the by The the quarter. in improvement EBITDA $X.X improvement per year prior the business $X.XX metrics, quarter GAAP with for operating improvement adjusted fourth net of loss year was to the the subscription a quarter was of $X.X expenses loss in the the $X.X in in million represented exit goodwill gross expenses again associated $X.X On by for net million increased to offset basis, skin fourth of prior $X.X and skin the the

quarter which $XX.X the the on on to to million transaction, compares sheet, debentures includes ended as $X subordinated million million accredited private fourth following balance institutional of on to approximate we XXXX. to completed XX, $X.X participation three we this we the XXXX the including In XXXX. QX hand in This December sold years with XXXX convertible of certain Moving and placement we hand. investors, shares had cash unsecured issuance successfully position. into by any an executive a debentures of all With semi-annually strong paid at are will Interest the cash be subject the stock share, extremely $X in a iCAD per common financing, on dimensions financial XXXX of rate of of directors entered per annum will conversion in adjustment. X%. iCAD. time, to be convertible we At at price officers the to and maturity, prior this

is AI. the on transformational a we focused are ProFound product, of for believe successful preparing what launch We

within Stacey. call to exit Stacey? turn continues This opportunities business would concludes benefit highlight like to business. our our to In growth to of financial the the skin over overall our decision section we addition, and now segment. meaningful And I see strategic the presentation. our subscription IORT therapy

Stacey Stevens

you, Scott good and everyone. Thank afternoon,

on me overall performance level some comments XXXX. begin in our with Let high

in The and relatively we This largest reductions and our during offset sales some growth. most throughout top here X% weak declined was the product in our While direct momentum our software XXXX GE, was that lot In achieved as and we headed confronting by in mammography with cash in to into expansion line substantial with partner, all year-over-year revenues significant accelerate we OEM year, us of business partially faced gross that operating strong our execute plans With in ability a indicated, Scott significant said, confidence year. the both stronger business weakness XXXX. efforts XXXX. challenge expenses with business, and margin burn. headwinds our

we in access The FDA a edge provides FDA today. false customers year, large the cancer from reading decrease results ProFound cutting received clearance the to breast software rates patient last clinical detection reader As reduced positive with AI, our you marketplace clearance powerful for know, and in a December in study most solution positive of that showed increased and recalls, time. detection completed was a in based XXXX rate, significant on cancer that

in launched the ProFound recalls even in the improvement We XX% decreased than of year in clearance in after shortly average patient XXXX AI ProFound sales receiving an and reading rates a testing. detection late cancer radiologists’ US to prior clinical unnecessary average and by Specifically X%, number more has a rate of by completed in demonstrated FDA AI average on reduction end. of of limited time by X% an an

live US January sites ProFound our indicated, in first Mike customers went AI and AI highly The positive. as initial ProFound has feedback from been

the in from identified also true thought have which initial in leaders be for We will validation sites, critical our external KOL our space. important product establishing

accelerate testimonials We are to and building programs educational now reference designed sites, actively adoption. key

are care. solution, the to this so, breast launch. very of executing five over With large already addressable or has taking detection we that a said, patient market excited the years pragmatic and which $XXX measured We are for approximately and approach cancer million next begun transform we firmly opportunity total to fundamentally this about believe

to for that cross functional our teams planned are controlled rollout a have ensure prepared. We

as relationships Europe. the well direct our in team distributor first the US making XXXX of investments sales focused in will be to expand Our as and on our in half Europe

For including tool extensive training an and also content and completed already and strong boot as AI. ProFound ROI collateral our an updated we tools, materials media sales camp. US highlight direct well We've service as for website marketing placements to established have team, customers, promotional

ProFound AI GE’s official US of addition, February. In expected in their completed shortly. very is launch teams was sales to for occur Training

Mike like I'd however, reiterate Importantly, to stated earlier. what

OEMs building we progress and solutions cloud best towards to breed decline on ProFound overall make the moving ProFound AI with ready customers with as AI channels will of imaging will resources, many As our the to continue commercial to continue access from increasingly robust have to our and platform out partners. dependence our

when We solutions non-exclusive well in to revolutionary future continue to access prediction. our as the move as risk relationships goal detection today we as and promote to cancer awareness is into our be open to

successful also a rollout we highly While invest product we on future of executing development. AI, focused in are ProFound to continue

mammography, We congress recently and ProFound clinical is booth, ECR for European currently showcased product we Our Radiology the at led presentations. XD Also meeting mark this or XD two ProFound pending CE Europe. of at mammography our radiological largest XXXX product AI previewed in in AI second XXXX, held ECR, the the for in world.

detection, and their a In how ProFound and with event addition, transforming attended risk vision we clinical assessment. well perspectives breast leaders their where on for experiences solutions research discussed their are cancer and iCAD detailed breast shared cancer practice customer AI personal clinical very in hosted

area is As critical of Mike for next iCAD. focus risk Assessment discussed, the

at in cancer risk were risk collaborate is of individual's accuracy an risk features to consideration. commercial data imaging project of screening breast partnership ProFound from Institute improved women now were breast breast cancer other tumors in tissue shift what from AI of into model in latest no been the a to iCAD’s These this on use data who whereby an this age upon mammography additional density based information assessment resulting now results with enabled breast breast prediction characteristics, recently other to identification were asymmetry Karolinska warranted. detection builds cancer Our mammography Among through algorithm. XXXX. developing and cancer. and other and researchers a There the was Promising Institute from with provided mammography tremendous of risk the based publication, the masking images that of iCAD things, have the improvement individual use on due dense XX,XXX a prediction model develop these early changing Karma breast to of developed that for study images by research combined using solution over an announced and identified today for indicated is high Since the innovative a in risk iCAD’s to Karolinska game sweetest now published early breast product on results researchers in of level women enrolled market cancer examinations adaptive and agreement assess in existing paradigm. AI researchers cancer or research solutions. takes determined it developed Karolinska screening for these intend mammographic model

this IORT continued XX% On We breast IORT performance US other one year in in sold to growth by compared sides, increased primarily last the and product was business. the therapy fourth in quarter, in in driven the segment our as strong systems Spain. two XXXX year. full This sales the in

also Spain. closed rental in four We agreements

Spain. four installations these have With regions additional major now Spanish of across centers, we seven

OUS We close continue XX growing XX to approximately pleased with install our currently US treating applicators. and/or and gynecological patients IORT with includes base, to which centers be centers,

clinical seen In with continues stage globally X% single in for Most IORT on cancer XXXX. in addition, from breast treated we a system the were by therapy technologies. cancers of year XXXX, total comparable and with early with Xoft Increased versus cancer approximately evaluated the up perspective a Elliot US to the surgical different applicator to full tumors patients data. This August favorable a which early the results recently, XXXX site that IORT enrolled in series results published in the patients XXXX in annals positive three with oncology. interest driven saw a trial be breast using of using rates XXXX show to follow with Xoft XXX nice increase growth building recurrence utilization system using id June sales are growing breast of XXXX who stage treated target Study years. of from studies, a of median those trial A IORT are

as markets Australia. key India being Spain, Taiwan, driven largely is momentum OUS and Our China, by progress such in

target are in interest large the In addition, us for a in increasing market seeing Japan, future. we

We underway applicators market additional and also new up to opportunities. active have open projects multiple commercialize

We and are globally. general interest cancer in of rectal being key clinical brain applications IORT experiencing research specifically growing prostate, global as conducted result including a

we see, you positive of trends business. in As can number our are IORT a experiencing

segment. view as significant most term In fact, therapy we growth our long driver the IORT in

specific are is a partner for I There Mike? like would sustainable organization quarter. in turn years business. a sales completion comments. no significant progress we brachytherapy of come. And to ability in commercial continue that and our a as the such, a our to skin the our will growth XXXX commercial to leadership for As efforts identify create now for for investments seeking Mike in on position accelerate In we dermatology but partner. marketing this call we make fronts iCAD confident the in timeline summary, multiple fourth we on to the are made back believe key we space lead additional to targeted to leader process, and for

Michael Klein

Thank you, Stacey.

for of comments Before questions for we a I expect what and opening qualitative up wanted half answers, to make the about XXXX. few first

commercial for we As AI. enhanced key One our of I launch are build earlier highlighted in robust my two our is in to using section, infrastructure ProFound cash position areas.

axis of and in largest our development we place. The the business, mammography is the vertical axis. the XXXX, revenue to build now Specific programs commercialization driver of mammography the second core the for of margin cloud, to horizontal ProFound platform, have and the out infrastructure for the ProFound acceleration

I cycles working clock. are three call or to We synchronize what

or of hired these to is clock cycles of recently rep. scale is first sales time XXX The for XX a the

Some in in added and QX. infrastructure we QX were now as place have full end we the sales service

The and ramp second of cycle is in up pipeline our the accounts funnel.

hit preannounced to a presentation camp to third. cannot first We process from close in AI XXX we XX cycles we the sales see the quote to a a ProFound time cycle of the of QX, end Although to and late of budgets prices till day or very begin XXXX.

somewhat them site release fourth to move company by above, the and show week, clock our dip These and appear a XXX sequential. greater sales a have increasingly the fourth the expense or quarter of Thus, to seasonal cases, quarter meticulous cycles less be sequentially traction first day in half, cycle. revenue relates on I'm execution see cycle to of to In I upwards cycle inspection, reading cycle will meaningfully environment, in XXX communicating lengthy our we QX. was and a surface QX the our QX. all we've sooner. and build and and considering a QX day traditionally in than in certain full last from hit cycle. full XXX to We would been but to not also do training. added condense initial installation, surges. synchronize Much what or year. quarter it are XXX what a will have as too a cycles since involves second this reported reiterating this hospital to clock the or full business and specific press third following day This begin that clock XX We QX, to purchase Proper connectivity and a We which or the is service joined

represent adopting offset sites. We will smaller but some of AI ProFound this flurry seasonal of adopters to with move quickly the market. a Early early percentage of recent effect the tend

as synchronized on AI cycle cases, ProFound or we have or other and contracts with begins purchasing service year-over-year platform. to install install. while to we may ProFound In won't queue CAD. of ProFound fully on lag as our and scale. versions in improvement see QX quarter at expenses sites end, costs a We then quarter-over-quarter to of for partial of actual they we installed certain the or procurement end in full Obviously, in the and stabilize risk expenses licenses since year, sum, approval, first Nor our in while each in we have half some allows sales expense XXXX additions in new and higher as risk outpost there while amplifier improvement anticipate Additionally, connectivity product such will XXXX, our not moving operating from in though The and the teed in in half offerings full Also, current installed expect of scale digital also platform expansion added QX, revenues In of the lead all reflected enhance the be we are sequential XXXX. in across have and expect service better second is revenues, customers year-over-year approved addiction virtual that -- resource expansions revenue and outlook this will slippage upgrade and and the do our the the are leverage therefore summer, up and up of In enhance an to development for realization. tuned half, stabilize offering, installed, arrive upgrade begin we purchases as our fully in and QX. introduced are QX, prediction we the with ProFound sum, presented sites sales and a not to they purchase, digital for offerings, renewing prior older second XXXX. waiting for of continue infrastructure first service XXXX. as both but version when or to a AFP of

turn So we cycle. questions back synchronization and with controlled stated to moderator I'll full With answers. and of well above the the are and precision executing with that, launch a it

Operator

first from Laidlaw. comes Our Instructions] Francois [Operator question Brisebois,

Francois Brisebois

find There's a you you consultants, I'm in terms people? This consultants was bit of AI them. a new can call how here, approach. reps, talk these you vet little digest just to here, is or I how guys’ the just lot these wondering wondering but you in how that so

Michael Klein

which There's sale environment. itself. call in you there that there to come because operational understand they are experience. see have indeed mammography question is we of We specific That’s sale, vetting a past, of you a technical, do for got levers spend people, the a looking and three lot very sales time from the sales to where with good we're types complexity of get rep has might basically and a a clinical world the

and as dramatic talk offset got license have can this you on sweets, and I sale, the workflow performance and hallways up then can could down how technical economic the the there's about actually I actually well technically of clinical savings expertise improvement. be can understands are connectivity, and there They we is investment sales mahogany with move call return and which cost carpet and a by an clinical So as are up sanguine say in astute, they up, need what term. economically that and

move and ultimately interviewed probably for up So we we're people for that We sales and one hard. that XX permit really select. this look we XX, very people can every looking down

Francois Brisebois

the And guys IORT, get then on I'm data wondering you that all now.

because of terms the any you line will to is kicking whatnot? for patient In think advocacy like kind is when Just just data guys more? seems top wondering I'm that growth, in I’m there potential there, a of start or wondering, little the that

Michael Klein

and an best during that non question. can in kept that therapy patients call I and shielded is this you that that great in of secrets product we room, could some And a near Again, have radiation be the do one think treats area lumpectomy. a do people a do it

we drive can know, will and a this to answer you Why things the and for sales. is the early get let people with that out, to an that we women breast is people and option your with let do tell more of is CAD, rates say, of it's adoption availability, the story, word more equivalent I organization, that start recurrence big data would the of we drivers to six the the one know like our number Susan the certainly we’ve start G. is Me times weeks and advocacy on getting to radar of to I have to seven similar able ready this awareness question that cancer people that available screen working that and be days Komen therapy. able offering more that of particularly the earned now in this with yes for month, claim have, clinical So the right be know to amplifying to

Francois Brisebois

the had mentioned, versus RSNA away how does of you the have bit, Stacey do right And doesn't -- a I great. up could thought the just and if Okay, presented sure that to ECR you that here, just kind move just XD to machine, compare Can you had just little you cannibalize potential one process one XD? any response make and guys quick mammography you how XD the ECR.

Michael Klein

the, moved about XXXX been comment and those somewhere data, is XXXX from with have to Let a our analog are of still, sites interesting What systems is about from of moving show. have XD that Tomo. are digital. between films and talk and systems still that XXXX lot about, the that There to that of that me make Europe lot in XD Stacey there are about a can a

generation So XD all analog into almost -- way analog digital move tomo, the then certain from from and in mainly into first tomo. to they cases,

when therefore, as is that market see for we to comes So it robust market the Europe, for XD. XD a

directly In from they in analog diagnosis they're fact, for big many XD was screening. the of you use launch, to XD that of rather Stacey, the several sites, in ECR they other or digital which or thousand some parts in ProFound the a reason want XD. for either definitive was use The for digital that cases, and But generation of part sites first we for maybe our substantial, this about to upgrade. are to moving analog ECR? want for the talk digital, a

Stacey Stevens

European machines Spain, alone, different Frank, is very so if about, next Europe, countries countries, in are about market to UK, of XX% top The CAD US. only at key the there there Europe the for expected six those have countries the XXXX the look to are is market than or and you them to continue just five saying, Italy, is Mike what and to them. at And add XD just France, is about I'll software still attached years. in grow least XD in Yeah. five growing,

also XD base and still them our then that that the opportunity a AI into go a systems to sold. ProFound with So, after go and for tremendous installed sell we product XD have being are back to new large software product

dynamic. addition amount And our product to come Europe XD. expect sales fair So in to it's a in of from different the we XD actually growth a market of

had events really in in invested with had the lot a of have terms of a topics in terms the the We had this a more this ever being visibility key oversubscribed the we presence past. assessment show a In of We EU presentations. customer quite we tremendous really had larger year. risk year and a ECR, than bit at footprint, that more one we

five we have place KOL now nine cut countries. have vendors distributors we recently cover GE across running. Hologic, the that who and imaging all have up in So about eight in four sites put with we and Europe Siemens, Those with new major collectively sites with or

market XXXX. that, actually a the to addition we expect And focus could we France a reps really is sales have past, command market largest thought in growth Europe. in than it put the But So in direct direct mammography in off in presence. we the also added a with we in France. to more that and that on lot pay increased European have we geography that,

Operator

question Our Per Capital. next comes from Ostlund, Craig-Hallum

Per Ostlund

Actually CAD gating adopting XD of of you as or factors off within accelerate Stacey, XD XD. very, very to think since and What you the CAD When Frank’s do was you to since on think just my follow mentioned fact to the does that dovetail questions, alluded in right underrepresented there? and well. I you market as is that you adoption list how with CAD I'm see going up do at market ProFound still AI the away, look it or the Europe,

Stacey Stevens

Yeah, it's Per. a question, great

is in that held it's paradigm back States. different than Europe So historically, in very reading what a adoption has United the

and mammogram in historically, by is Europe. today radiologists read every two So

And is then Right? CAD than impact, some that challenge you for from an in so radiologists. first already show the can impact so associated to thing. economic that plus us have radiologist better clinical prove we've prove two you that, is started economic to favorable studies And the one that's and obviously this

technology performance thing products, current the is CAD that is The than from right. the that AI comes generation much greater previous increased the second

easier much it with to than value the the value was the proposition proposition it's past. So economic clinical along in actually show

you So in four where the shows, presentations XD lot some going the look are about States. lot whole That a in-country podium dynamic of terms that And adoption, to actually the combination didn't presentations fair at the CAD, are the now trade more of of it's in and if or is on situation major two changed. behind probably has started there a the a of work. by of to just and years. CAD. discussion And on kind US that three like, Europe amount adoption at there has of shows, past, you trade of lot much United we've in whereas invest see things the lagged KOLs among a And a

of XD it's for in much So kind increased well, quite a ultimately seeing number interest a but be we're bigger market will some the definitely for as of and increased terms convergence of XD and time. factors, but growth still of XD

Per Ostlund

to wondering Coming already back across ProFound to the the of last just wondering, and the terms amongst about US OEMs tool mammography Is little tomo or or sites or of which customers country, is are did a upgrade are your your in OEMs is release the I'm different sites bit late using a can were it you spread tomo mix already these both? it where AI that is sites ProFound same differing come but bit are situation it's direct it actually early, it ones? involved? of if at number a via time? through Is have factors, this in sales? now Or is And of still characterize somewhat customers it to that then so little some ProFound week kind are the ProFound concentrated? that maybe that catalyze very of How these

Stacey Stevens

great Yeah, there, stuff in lots it's question Per. and a of

questions. if of each see I me different the remember can Let

a is I installations So and the what first would mix of early Hologic GE sites. off that say are

Some of tomo and to was upgraded using version one exclusive that the has the the AI. GE now GE sites ProFound new were to

mix institutions out between they country. hospitals mix and spread and in they academic community leading a and of terms are a geographically are everything of and the profile across hospitals sites, centers, of the imaging small between In

parts systems, country, from the ProFound of so all very vendors. have AI reading the early and installed different successfully different independent in of mention different thing we we mammography other environments, imaging feedback So review to I'll connected that also is the number large PACS a successfully the positive. And as have is mentioned, major a stations we

to a not large reading -- that It's how a that's mix particular a it's after there And down get that one understand the very go just reading environment. because us of the we we workflow PACS lot sort great that maximize review So of as different are environments. for with come particular really first workstation, the imaging nailed one after and makes easier. company or ones forward,

So let's of the see. you asked? questions Did majority the I hit

Per Ostlund

maybe out, sales one come You how did. in your Well, going tandem. of has I would force this direct much via the guess, be, versus

Stacey Stevens

that primarily They’re sales force we have direct here. orders

direct X now So primarily and early sales been -- direct our from have that’s team. the XX these we've sales through sold taken reps. force installations And to

Michael Klein

And up three wind have when all workflow. things moves zero when their have miles triangulate account increase with very, sites the and or from add in false that or -- in some what hour Obviously, sensitivity tripled value really through that And mix we facility. production, of two all them. we certain or I doubled each cost via the the quickly. of interested where obviously people that are is an those positive three But of because work if recall people in the There's really then XX sites They time and they very in you some terms that, back, sensitivity, aligned, to those three successful you Per very others sensitivity, we we we're there are in would just the they’re workflow. propositions are different. value find of about

Per Ostlund

That leads think, actually I leads into, perfectly question. a into to

the there characteristics, I five point. a XXX a think the this clinical be you've and to still established conversion to XXX US. workflow at of there the quarter instruments I digits in think referred kind characteristics, been And well are to converted of worth instruments out have rate of those

like now to XD rate the or actual tool the that on might probably particular pushback among XXX have in see that Given an the workflow back tomo, market? been biggest a with push ProFound kind for opportunity is conversion XXX there accelerate to of

Michael Klein

value, be agnostic I on a more yes. do want want and I could, phase lot a more more what that of adopter positive those I hope they hope the early agnostic of price think and Well, the actually that stage people pioneers to people sensitive, terms little of us a efficiencies, we may little could in images the XXX and from majority the the early to time to become hope in if these, quantify think to be now reduce in and mean I reduction XXX that But believe maybe side. that read callbacks. on, to we're is that kind workouts we false as we moving where price a

inspection third third getting were wanted actually that a our difference this people just But of we XX on being I over plus points enough on we was clock, with reps. we in generated Also, Because the connectivity. think more reps double to and the opportunities second, up quarter. big it to site the makes that the the one potent more decided terms XX,XXX connectivity, clock had than definitely clock skis, Stacey XX to of there. the going sales not go made, we initially of So sales more

can we've sales fewer though certainly services now So than reps, reps XXX add but already for We installed support sales well supportive and planned. a to synchronize are up can even put more in initially moment there place the additional these with infrastructure move those that of having swiftly, allowing people XXX us clock. the the with is blend base, the what keep to as as service a to

Per Ostlund

to That collaboration you of looks more regulatory type sense more the with early offering? I makes very, point pathway intriguing imaging the sounds kind this Thank about like a have from to It data. Karolinska All what and their to One your that a patient with you Do lot obviously for of demographic, as ask marry specific a is at that. sense. for me. here. right. very it Wanted opportunity guess like

Michael Klein

Where where in, closer being that prediction -- where than would a are a Yeah, in and we might continuum or a literally did the saying this consultant that’s simply we to are data risk where with what you working opportunity. actually are FDA spectrum, presenting on that's derived FDA being algorithmically be do the versus you end to are -- you where therefore get where where stay certain at The practice sanguine the one should we little say you the in is a and driving this prescriptive. are of you are is person's regulatory predictive the this FDA more because you that is I on on more of direction. prescriptive, that, you comes comes based and if

of walk to -- to in detection? So prescriptive, it a same about, the Is the as diagnostic what the when and detection stay going physician to we in to concerned and we're position, so over Because it the always physician the indications making early at is that be in cross keep behavior -- we that if really need So, the are path the problematic? case it and don't final going such is FDA be drive way PMA a good choice. far, versus prescriptive. take this side allow going in a was predictive the end, -- middle in get could between many ways predictive the it was -- was into

Operator

Michael reached the would closing Instructions] session. remarks. to for we like turn question-and-answer end [Operator to of call back I the and Klein And gentlemen, have over Ladies the

Michael Klein

To is Well, globally, to thank commercial digital you maximize forward. of ProFound close for and some success AI like priorities I by commercial would breast our underway. reiterating launch going the Tomosynthesis

lead of platform business excited our two, XXXX in year. our IORT half AI Electronic the both of We, with prospects accelerating compelling will that brachytherapy. second about this this number product, the particularly in in growth are development and scalable We using extend Xoft very XXXX are in our

detection states. AI as transformation such of Specifically, into the of above And in expansion from breast across the clinical growth and our areas, company of disease AI broader will side brain, advance a offering rectal, offerings our and continue other our new predictions modalities as will imaging the and disease AI areas gynecology, into as and continued take non-breast form finally, areas. risk on with the some applications we exploration radiology IORT well

We continuing we all and successes. products that of ensuring will indicators, keep while financials, to with transparency, articulate our processes, thoughtfully predictably manage we rollout hit controlled metrics eyes and recognition our will key with milestones horizons on performance our the new and

we today for to updates So Thank again the year want look and for as additional forward to progresses. I all joining thank call providing you you joining our us.

Operator

conference. today's concludes This

you disconnect time. may at participation. You Thank your this lines for your

iCAD (ICAD) 18 Mar 192018 Q4 Earnings call transcript