ICAD - Earnings call transcript Q4 2019

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Operator

Greetings and welcome to iCAD, Inc. Fourth Quarter and Full Year 2019 Earnings Conference Call. [Operator Instructions].

As a reminder this conference is being recorded.

It is now my pleasure to introduce your host, Brian Ritchie. Mr. you Thank begin. may Ritchie you

Brian Ritchie

Thank you participating Thank for afternoon and today's call. good on everyone. you Devin

Joining iCAD Areglado, Officer; results ended Stacey Earlier me December Chief afternoon, for Stevens, and from this and President; are the Michael XX, X and XX announced XXXX. Scott iCAD Chief months Officer. Chairman Financial financial Klein, months Executive

uncertainties and contain that this conference during results we I forward-looking involve Before statements, made begin, operations would comments like regarding risks iCAD. of and by future to management the caution call

encourage Securities described you results actual and factors without the in the to with I risk review the those cause XX-Q and limitation or forward-looking filings statements. company's events Forms XX-K the specific may including, which to identify Exchange differ Commission, that from , materially

of no contains broadcast, or this to of conference that the time-sensitive the as of date undertakes this live update call. only circumstances statements Furthermore, reflect call this iCAD information obligation of XXXX. conference events accurate is or to after date the any revise February XX, content

to it's With over the call Klein. Mike? to turn said, my pleasure that Michael

Michael Klein

am and Thank on Scott everyone, and good I you call thank joining today's today. Stacey CFO, Stephens Brian To our Brian's Areglado introduction and our us by repeat you for afternoon joined President.

to and on both details provide pleased an future progress goals strategic points. update have to are the opportunity performance, current We our on our and financial growth and

an quarter. year-over-year, software in to business XXXX. detection business XX% sequential the report of fourth grew revenue pleased same a third our license detection to growth the sales XX% I of the the in detection compared on quarter am XX% Of For over basis as iCAD the that impressive increased XX% XXXX grew revenue period

year XD We infrastructure clearly detection our dramatically first revenue of throughout XXXX. is achieved as systems now goals AI while as goal XXX exceeded our We a and over basis. mammography. simultaneously in XX% new our commercialization launch for on XD of of well building software XXXX selling XXXX full-year ProFound revenue up these expanding

last to our to largest are Siemens quarter the we logic transaction. effort a clinical, mammography beginning in Now of several major This dozens I world-renowned pleased transaction report medical the the markets. center. into order months large recall for Radiology. concluded the U.S. nationwide account sale a this exclusive at In with account direct with announced mentioned time was a have growing SimonMed, technology. on our iCAD's Jefferson after of GE secured at as whole prior history quarter with a an major in call large that the first third installations you of XD I number we academic levels deal a administration may and intensive account compete six million enterprise am with we this with mammography that technical $X.X In

also across We deal of not XD in mammography with we all double-fold large The Fuji ourselves One accounts purchased. be systems business points sales at at the in are point but our directly here channels partnership utilizes are only is vendors mammography may cycle. Banner technology. [$XXX,XXX] of we mammography Banner point into Health. or closed selling takeaway CD when the capturing with another very sale is two

position US the point are ourselves systems over process. to this each in be tomo data installed According they mammography at MQSA XD new sales involved XXX track to We quarter.

have X,XXX there Europe robust units engagement sales opportunity to already selling capability. we as installed distribution an where our second an sales are even steadily more market. X,XXX the and The installed U.S. build point XD in systems This plus in over now is is installed in begun a the active into additional

the over increase point in resulted are channels. either in has same period distribution direct typically or approach more These selling XX% through than an in profitable OEM direct XXXX. sales dual in This XXXX our sales sale

in ProFound XXXX installed upgrades installations new and targets of total XD obvious AI of XD ProFound are base XXX In ProFound to over of XD. our earlier With CAD and exceeds software own versions X,XXX technology these installations for AI X,XXX for along are with systems systems. sales AI now

this From this product screening ProFound the panorama manifestation risk of drive continuing was our a ProFound capability roadmap a age screening in panorama evolution at product and we are based to standpoint to introduction catalyst December. of The from prevailing clear adaptive model. towards invest for unveiled [indiscernible] technology. is currently

differentiation solutions and technology that and Panorama to has of had of enhancing provide we the has elements. impact on edge Already continuing to value a their patients. increase three goal an healthcare physicians iCAD AI it leading-edge systems,

is images score. generating of first probability and the viewing a The current cancer

The to probability change second back trajectory scores years over similar the typically risk several ability changes and images, woman's to characteristics. feature the third prior cancer of at to is women capability compare look a comparing is time over historical images probability with the and

Therefore subset that to that each predictive gather of create score woman. we incorporate woman a comparative we her the personalized images a individualized discrete millions images for from would risk for comparative

this the the incorporate risk algorithms. of is our further rather this part patient of QX we in iCAD key Institute. into to the continue researchers As AI with our acceleration is Karolinska of efforts with foundation at factors efforts initiative the institute, our ability This

recall million over a risk annually were associated cases Images for with factors that the access exclusive over may individual images risk women. years. along from You massive XX,XXX eight breast characteristics nearly scores. allows Therefore risk have participants and captured two images gathered XXX,XXX and agreement and collection our to we of to access

core predictive a the produce the indeed prior based precision us proposition and This a prediction history in value images similar risk compared and ProFound with of our score both great Panorama. women most year's of with today's to combination enables on to risk factors. knowledge woman factors is with that Our personalized one unique and other own is risk for

comprised invaluable radiology expertise and thought and patient use Their mammographers Now we develop of information. leaders advisory continue clinical world-renowned to our useful to how for protocols pathways our medical extremely and risk collaborative efforts care is this board with and technology technology. best new what increasingly Panorama adoption both of We an movement serve beta risk ProFound vanguard adapter early in may believe to be Panorama to as testing for rapid insuring can iCAD the clinical and screening. us

Now radiation our therapy Xoft let's switch to business.

anticipate clinical personnel our We continuing innovation, list sales focus are Xoft initial when on addition in commercial an to of potential. adoption or in gradual and rather studies we late XXXX the

over revenues by revenue. driven Our XXXX X% of prior revenues year of were a which QX much was slower a QX doubling up had but previously

all XXXX us to the established cancer new for treatment development in indications clearance mid body offerings ICAD's Xoft applicators Radiation and with areas several of accelerate treatment. radiation treatment new in pursuing financing Therapy the reimbursement clinical and IORT allowed exciting $X we we continuing a now are or accelerating new the and million FDA trials to for IntraOperative for for with are rollout anywhere of staged support cancer

application neurological of world using IORT XXXX for results metastases were clinical As the Xoft ago in resection. trial just patient first was we was that excited that just at example reported new patients States. Louisville were clinical neurosurgery. technology driven in with the this issue surgical a of the announce The to metastatic team treated as deployed United treated by The large University weeks the part several one strong in brain interest of with cancer September

single chemotherapy Included a of pair was XX for technology the in glioblastoma were this IORT of radiation fraction of following Xoft or of surgical study without the patients and and iCAD's publication use was treated without with treated The TMZ. Xoft immediately details matched using group recurrent resection who GBM. a XX of

group for chemotherapy therapy. was the beam with with XX group The overall survival as September of post-operative concomitant routine XX sequential with and Xoft or comparison external months Medium of was treated XXXX. radiation adjuvant IORT

XX patients overall The other of months. XX group Xoft for receiving the not was survival IORT

patients significant As survived IORT sites XXXX, with Xoft the September being are whereas IORT as primary none brain is XXXX. has glioblastomas. potential recurrent Xoft of for metastatic procedure patients emerging groundbreaking as [abtract]. beyond treatment results of the of brain as and capturing XX cancer and X December pair in extend XX need matched the review other to still societal alive address unmet they group an are of tumors of were for the the the Treating line still and treated well life submitted that in

and of the positions. technologies. see We and cancer physicians survival Xoft patient of adoption center is as of uniquely gatekeepers of brain tumors diagnosed system cases GBM nervous most each common are to almost months. with malignant Worldwide the of a XX type actively novel aggressive one able primary brain brain influence the of clear Treatment example with of to XX approach is working year. XXX,XXX and tumor involves medium just these drive of care which

both We with neurology in are neurosurgery approach a similar by in and GI. that in working pursuing as surgeons

a capability simply technology. initiating we Xoft applicators are as colorectal electronic have or soft the even an they treatment Increasingly nor product product as indicated of Therefore, unique influence simple technology Xoft X-ray cancers. system not core to studies physicians of similarly prostate X-ray care. for IORT soft recently that as novel us platform with of a as do emerging as developed see Center well a is brachytherapy seen

and technologies or inherent of scores and with We cancer Xoft have and two These afablation, colorectal the of treatments. indications the brain have aforementioned innovative its laser in treatment have as other to cryotherapy and cancers uses from roots for Xoft may terms indicated technologies this medical valuable recently prostate dozens ablation. capability. along such of Some derived broad of adoption of spawned the core believe us core potential companies technology core that applications similarities RF frequency

of to technologies certain and mentioned progress. alternative calls forward this at abstracts payments Clinical be codes reviewed we helpful upcoming study as well pending meeting. still adoption these for as and year results the radiation oncology geographic as the at Xoft submitted key of would offerings been location. new accelerant codes indications society shows reporting a to enhance look efforts IORT They're We be and accelerating to to presentation prior updates has in for clinical the key potential on

not obviously or for updates see any welcome adoption. future codes of requirement we near a as IORT we more on in them announcement as however these accelerant final the While an growth to the

patient treatment and included can images that therapy our scores IORT detection comment with today along we to they for treatment will IORT prediction to course know and have a cancer our We that of breast all to to knowledge on profile. eight just We risk final cancers are As their in in both capability radiation of clinician minutes follow-up ability well want be current our year know images and of eight detection radioactivity lumpectomy. a every be without treat of dramatically prior and their we and can current images read similarly AI read without our probability women six IORT deliver want personal breast weeks also about later access know prior embarking with therapy. to their this to limit as able to increase want beam Xoft as to detection a without ability capabilities. Similarly to external on ten campaign the care terms of women woman businesses know both breast during we women want to

inc continue Affiliated senior team. indicating Dalton remains that the is Managers by the Nate our both founders iCAD. advisor. a I'd to invaluable new Nate and corporate to forward in Officer. We AMG building Executive a public of and markets Inc. and a global iCAD decades his of companies. directors. member the executive capital firm look of contributions President conclude has me positions significant director of build has Nathaniel our AMG as market of at like strategy a Group we welcome and including Operating we to held Chief Officer, where Counsel, board one in he continued asset Chief He capital of range Let or experience to management General have to

can turn of over he provide results. more Scott financial the call to With that comprehensive and will I review Scott? a our now

Scott Areglado

Mike. afternoon everyone Good you thank and

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

December GAAP I measures fourth summarize reconciliation XX, release. earnings a for of at ended end to find our of our the non-GAAP results our will financial the now can XXXX. quarter You

fourth we to with of the million with improvement As fourth Mike are the $X.X million mentioned compared as revenue quarter total XXXX XXXX. pleased results or XX% quarter of representing of of the an $X.X

by driven as $X.X $X.X by million business million XX% compared be of XXXX. strength results our or $X.X fourth to top-line grew Our quarter to the which continue of in the Artificial to Intelligence million

has AI are one our year. quarter are available commercially ProFound pleased noted of growth results the for sequential we the product. versus U.S. prior quarter another Mike of another Therefore, As indicator in now as been the with which of AI we double-digit ProFound our also impressive commercial success view

As I been discussed in on several prior are tracking have key there business. AI we've trends calls our

for XX% overall approximately XX, our commercial revenue AI as direct the Mike accounted ended infrastructure our XX months business grew December XX, XX% the months noted the and ended at December the As of the investments compared beginning XXXX the in reflecting XXXX to year. in sales for of XX

both XD the representing XX% and grew contributor with growth business sales O-U.S. the a significant OEM U.S. in to Our overall

driver has revenue the primarily overall sales. XD of U.S. significant our been continues Our to and business increase be

will and XD for both growing primary We to expect continue are XD O-U.S. markets remain as O-U.S. the

Moving on quarter improvement. basis a gross million of was XXXX profit on million representing $X.X as of $X.X to for fourth profit, gross a to dollar the quarter fourth in $X.X pure million year-over-year XXXX compared the

XXXX was the XXXX costs translated respectively. of to margins basis to XXXX which in comparable fourth quarter in XX% as in In our implementation customer for we improved experience percentage quarter profit gross ProFound the XXXX. a XX% fourth quarter On resulting gross XXXX of in an higher slightly and prioritized detection of of the XX% compared XX% and of AI

XXXX. expect stay margins consistent However, with to we forward moving

the such million detection the investments or million expenses reflect of the from a products $X.X planned quarter the segments. fourth in the ongoing as quarter X.X in XXXX. commercials responsible XXXX development in future XXXX for investments in our algorithm to of as AI Panorama and improvements as to new well driving of fourth the million These to increase the growth infrastructure translated top-line the XX% Operating in $X.X

focus in expenses ahead of we to as in invest XXXX to of expect Looking both opportunities long growth. quarter trend near-term market on the as as XXXX quarter operating to similarly the sustainable build share continue first term fourth to well we

Non-GAAP share excludes was the fourth which per-share XXXX fourth of loss EBITDA loss $X.XX value in the XXXX. loss million net quarter loss fourth of the summarizing compared fair $X.XX for quarter GAAP the of On convertible the the $X.X our metrics. $X.X profit $X.XX as quarter net $X.X net to compared for million Now per XXXX. or of quarter per loss the non-GAAP of fourth $X.X debentures or for the million was loss million essentially a a loss or of XXXX. adjusted adjusted quarter flat share primarily was net basis fourth to the impact

sheet. Moving on balance to the

and December and as XX, $XX.X had December of cash equivalents million million to the of As cash compared XXXX company of XX, cash $XX.X of XXXX. equivalents

the the convertible conversion outstanding executed all of As disclosed filing amount our forced debentures. principal last we we week in X-K the of

of outstanding debt convertible stock first the the of reflecting the company the of and and This to overall strengthened from provision. XX, principal of in sheet amount eliminated XXXX XXXX investors reflected interest shares issued be $XX.X our repayment balance the make-whole will million financial common quarter noted, which our balance our position X.X approximately sheet. As initiative December debentures

over success during business XXXX. built of XXXX are call Stacey? highlights the the I our turn like in we concludes and look Stacey. closing, the pleased our to momentum In to in and to presentation would with of financial forward course continued the This

Stacey Stevens

afternoon you everyone. Thank good and Scott

to updates we our to around and provide footprint. our global expanding continue We accelerating XXXX at our initiatives in and in I'm XXXX our growth with the in business about are you excited aimed expect pleased strength which demonstrated

we highly our detection. breast particularly on continues more be positive. landscape from Importantly the detection patients being the workflow changing this further truly feedback first-of-its-kind market. continue is are about this The their solution their know and be of truly continues performance to in with to clinical solution having to cancer earlier revolutionary and penetrates gratifying ProFound AI faster the receive our found that and strong as customers practices is impact to cancers It's that and qualitative

that our finding exceed that results customers even are FDA We clinical claims. real-life are achieving

For implementing a locations with Michigan realizing example, group imaging biopsies imaging independent ten ProFound across AI. regional medical since XX% in largest is the reduction

Just a patients remarkable undergo impact impact when on considering having the procedures. the anxiety from stress to and not unnecessary of

with by positive events in clinical the and abstracts On at data data continued the multiple the front various new the therapy encouraged are clinical being across business on side spring. accepted upcoming we several of applications momentum

payment the to discussed for radiation US In the accelerant this IORT even oncology provide addition, an end the bundled we our previously of be in by year. business greater new patients technology to proposed and have the could as model access

an now therapy provide and our like specific both With on activities I'd cancer you that our update to with segments. on cancer detection

Let's begin with detection. cancer

the have the thrilled key for are initial We XX-month just ProFound AI we and emerging from the that marketplace. sale with completed trends cycle are

are our for these scale deals to grow. larger We closing accounts pipeline and continues

continue health system of satisfaction, improving and populations including capita one, Triple our initiative; reducing performance per crystal Improvement the we three decreasing health Institute dimensional We experience are clinician for three, believe of with the our that for for overall clear strategy customers and are we Aim pursue improving patient quality cost cost improving framework health experience message to ProFound aligned the a AI patient the well with is Healthcare using of large two is and this focused optimizing approach care. clinical while As includes the care. outcome, satisfaction on contracts a

We believe is ProFound resonating customers. are Importantly and indicates that the we selling at are the well. AI delivering c-level message to success this achieving targeted this our we message

integrated will time the growth. over group which transactions for delivery beginning accelerate purchase and which revenue to channel actively organizations serve help volume-based on, Moving engage networks we're as a largest us will with

these ProFound continue in nuance our architecture the expecting interface where and we were companies year. players an announce the PACs creates to With relationship will achieve to first to secure This marketplace. also pleased to leading national the are nationwide securing a we towards regard PACs for We available AI important AI contracts QX enabling contract with to formal be with. open our this with strategy on progress largest GPO

over remain these Nuance while do and is We a XXXX by time radiologists and facilities. companies active to of XX% contracts radiology reporting number over a negotiations healthcare PACS materialize. system U.S. with used take of in

We complementary companies excellent predictable represent begin remain very component SaaS-based confident to these an that we add will to revenue. recurring channel distribution as with our business this its

secured substantial in Now, in turning and strategy a the by private coverage presence a made building We progress that XXXX radiology now with network built We commercial increased long-term stronger our entity a a success. distribution France. and to direct Group, largest the Europe. network in business opened XX in We established VD for French up countries. geography

the French attendees. Belgium Opinion well France On Congress hosted quarter, over Radiology the at and marketing front Key have during Leaders we with XXX the a fourth we symposium and from

Europe in in orders delivered Belgium efforts Our Greece, and late XXXX Ireland. from Austria,

believe already We visibility Europe a sales XD to we drive in to continue European have response ProFound ProFound XXXX. AI positive further strong a this with along for and launch for of pipeline robust increased sales will the AI

in launch risk-adapted market European this screening this is with terms well later program. already of set for prediction that capability suited particularly believe to is as We year the its ahead Panorama geography

early-December I'd to place RSNA, of in year at which Chicago. took show briefly trade industries now highlight the our biggest like in success

breast show included at the for hosting advances and customers presence and strong featured numerous clinical very show the our well-attended investors detection. cancer Our on leading in multiple throughout presentations events

promotional to achieved prior these As our of XXXX. our the robust sales a we in strong show, prequalified in power of efforts expect the to pipeline number highest which leads in history company's result the presentations we momentum

more October. individuals Cancer important of media had fourth placements Month quarter of value XX more individuals the in perspective, especially number million of health products. From a than messages local our social portfolio than around network. a had We about an reached breast October in and over alone national We successes in the with of unique Awareness that audience XX,XXX XXX reached across Breast we key media

be that and momentum drive expect to over this our educational strategy. able pull-through leverage time, will We help to sales we retail

Cancer globally systems in skin to we Therapy. moving therapy X XX In systems XX capital Now, on which XXXX, placed included systems. IORT

growing are treating SaaS and use our install now over systems pleased with base at multiple well are globally. centers in clinical XXX We indications

of Looking GBM continue EANS pair our results completing Mike ahead, we're for this promising presented and application. XXXX the discussed to IORT work the IORT very excited brain very at about research on and matched new future business show earlier year. the

for developed our radiation and interest business is this In We've a availability prostate to indication generating a applicator forward surgery commercial focused surgeons next significant of amount in early key look of use robotic exciting and international year. the plan this cancer for already from applicator oncologists.

cancer, late already In XXXX. the clinical the current trial has study study ASTRO in this for the rectal accepted enrolling protocol patient and finalized is goal abstract at the with detailing being presentation quarter been in first of the

In with drive multiple the coming key is performing have business to And summary, ways well number of we growth. months. in probability catalysts a high expected our

continue value. iCAD, growth, are generate for shareholder significant leadership create sustainable well-positioned We and drive really a long-term to to position

open will Operator? for we call questions. up Now the

Operator

Instructions] proceed your Securities. of question. Turkaly Dave Our [Operator Please question the you. first Thank line with from comes with JMP

Dave Turkaly

opportunities like of the mean design large sort you think and mentioned there how close. of was come your we or magnitude? would that similar a out Mike, are curious order, X.X Good is licenses. pipeline just many I that that different ASP, consider XX there the for out and is somewhere That million that that it you've an afternoon. guess, the I look one opportunities. at around sort I of common, particularly seems cover I'm like if how so many we facilities but

Michael Klein

or And enterprise they network. groups in lining purchasing aggregation is are integrated increasingly that nature, David. just in general up It’s some to of of part part are with be an delivery technology of to core in or providers healthcare large They large of with chains. very more-and-more acquiring the systems the seem

example, we an That one is was a been since SimonMed As software that's second over this systems XXX in the which an rolling quarter. year. out mentioned order earlier

would we and the in fact have pipeline to the our these deal. expect pipeline. large same deals and fact other to increase So, similar even in greater time of are size we at increasingly continue There in

I do are work want that to this the work longer same six did highlight kind particular months the David that of time big these quote. count and lot there however that when at these pipeline is things to But shows smaller a take of deals can sales on enough, with deals cycle in we keep balance.

Dave Turkaly

when GE in brand comment you specifically you for mentioned the the just where your the Hologic, mainly detection, the like new whether accounts all the and terms CAD Fuji or of And accounts. CAM/CAE, on these guys? the any different Great. customers using Could you in past and Siemens they're the that are computerized then of look and using at iCAD

Michael Klein

we is the using of I obviously Yes. technology. would that you imagine XX% a with of already installations, XX% CAD significant say that From using XXXX could to market market percentage already the form. have our some in

a have not to well AI as as So, maybe at as other accounts own are that'd XD as well opportunities platform. may not not may used on competitive be install that been able have on upgrade that our CAD that to XX% to base or XX% all these accounts be converting

FDA we mammography. for with only that's on the market XD course, clearance the the fact are one in assisted greatly of XD And for by that AI

So, a is part you're moving as continue first and to move do possible. quickly of rapidly. hearing We us we move what have as want advantage to

Dave Turkaly

accounts clear quick some that to me. a you customer the account? last they the the new, Were already is -- just yours specifically in that from these a mentioned It's big this release. And one be one of or press of are

Michael Klein

been a Yes. certain is we're may they but we answer founding have these end have of and that. only have my accounts as center with the at associated kind such lot in that of a mothership XD approach And that. installations have one locations. often may was which university these middle they the had hub the and up spoke color tertiary At typically nation earlier, some a case here the An it's is where secondary of which account and sites of some partial. a What further accounts big set

And all part that those sites imaging may are overall of system. independent tertiary be an centers

of find So, a one lot is partially to a are installed. these XXX% CAD. where accounts cases in It's that with installed

So, the vendor many all cases, And more than we've upgrade to system. opportunity to in they involved. one have

By that and are. mean there may some Siemens, or have combination Fuji Hologic, GE I they

are our advantage one we those of One one are every only compatible not we is of only that the they the in market with but systems.

we virtually a those at through different all in competitive workstations So, sales that to have of all the us gives working believe very as with them, we compatibility advantage display PACS Company all look selling visibility with with connects vendors, every that future XX that they strong channels. on, actually and

Dave Turkaly

very Thank much. you,

Operator

Thank you.

proceed Group. next from Craig-Hallum with Please question of comes the Ostlund with Capital question. Our Per line your

Per Ostlund

look later to wanted coming Panorama of I ahead everybody. year. other afternoon, Good elements to this Thanks. the

opportunity, predictive specific within opportunity is a one some in there mind So, that mammograms, the and an risk come to updated timeline there that there just behind the is there and have you you that. before about is expect if prior intention the thinking other cadence

of XXX many already. of a you of you sense a aware referenced I'm half the this pipeline related that, the have placements curious are since you the look year? measure sense second do XXX are in pent-up getting maybe a then, of to And demand XXXX, the as of how you ProFound to And Mike. ahead

Michael Klein

Yes.

respect your with question ProFound. in cadence for to first So, of terms

launch, which the our second period, the by the very half that's the But the looking actually in lines, at for and third are carefully will We be in launch ProFound quarter time again of year. first European design. of

their the of and the with at they're screening programs risk patient active model favor and even is is amenable to that model. Europe the the very screening time. looking very in adaptive this over economics course actually Their

And launch. it's with a onsite become Europe I'd work Sweden. us initial adopted the wonder in Europe of work very no So, work and we've Scandinavia or Karolinska, of sort and the why say receptive for to that just market

a XD And to fact we will XD. digital. of portion that's adopting XD growing market Europe, in because that still start is slightly moving market is than a some be And on the we'll the because XD in So, the or program actually Europe of actually analog our start. market is in still faster call in that equal good to

in Tomo diagnostic a for have at the we screening. same more use And use Europe market then for XD also time, a upfront that does

also the what have actually that allows to the is of to XD. on diagnostic heard done be So, XD actually adoption ability the to we've work the of some accelerate for ProFound

the actually later So, a we in lead which XD actually vendors XD Europe will of year but mammography course launch allow believe follow-up a AI. for this to the also that follow-on And will benefit that will of us XD then introduction. we'll in sale sale follow of for with U.S.

had Would would in that repeating second of to of in in So, do focus in half, U.S. second XD question? market primarily in size I question then U.S. the on XD believe Europe, the given the first the you be XD, mind XXX U.S. installations. the part and summary, the first with the in

Per Ostlund

course. of Sure,

teased base the you do you folks is you've AI, that throughout would quickly. poised expand to Just I But know had awareness quite one terms is widespread in already teased, it is probably more user adopt I that that that prevalent. Panorama that think was RSNA, of there there the curious at Suite Panorama ProFound a was than say

imperative the of maybe Do kind of a clinical ProFound using today? demand that you have people of already clinical out sense sense

Michael Klein

said good in led further mentioned question. my a there, Yes. it's comments I has differentiation. comments my kind in of to that our I

majority the year accounts. those Panorama in XXX the accounts as weren't going those to before purchased of it therefore opportunity aware the obviously well only we're back So, end before in But to continue and new is in not clearly we XXXX of they of our showed December. as installing

get where believe most of give even for we and initial Again, but more will year. the impact existing reason base accounts XXXX has install platform. felt is sold us, last I add that install to compelling the with be ProFound Panorama that will an say on we upgrade done what the for

So, in goal the our capability an is innovation. of with the platform introducing question and just tool but a of suite what simply gets and perception not AI sort of of continued ways whole your reality some that

it's our program however know big that that I technology not that will at that on in It will innovation I today data installed we we've new a will with if Panorama be purchase that discounted a an just price that since and new and on to included discrete would quick, come a me but included, sale. and Panorama we generation based be will be get part want launching algorithm purchase what of program to you By does later more XXX% is upgrade be lot launched Panorama keep than have what improve with since folks the innovation programs call mid-year folks us technology has we we beyond for or innovation for our say of even and is sites the let purchase a incentive like that insurance actually uptick. a technologies Panorama answer it raise and big to almost may specificity a to and us desire had ahead that pretty but along which we'll mean will separate is. obviously sensitivity a what

next here the cadence, innovation the driven yes all So a into and improvement. introduction cadence steps market of steady is logical

Per Ostlund

Excellent. Perfect.

Xoft Just to quickly switching the side. over

payment the thinking out about obviously your can that sense you to any of of are thing and they're of something eluded sense and course kind have to as any of there's final updated leaning about what Do but if CMS You of might where been you you sort consultants of that folks when updated a model. versus us communicate going go expect any proposed? telling lot are we bundled the with rule

Scott Areglado

a are quick get it be best-kept ever impossible basis. got city a a who little and town in that or this absolutely are there I'm or and daily I'll to to the make this to very chop of writing going around see comments involved it's tracks parties terms a to we turn secrets Stacey different where in seen DC has in before one comment secret rumors kept until the always we In poorly properly world over secrets a its on I've you to There no large something in clear boots matter rumors [tweet]. a know industry here halfway who what them speak consistent we has up getting and and read of and truth passing to travel are as but the on.

it bit. Stacey little to over So add I to turn color will

Stacey Stevens

your really answer Hi, right. there question no documented Per. formal is To Yes. update

we release several do of spring the release will prevailing makers been So of has of wagons relationships the still some We people July know final months societies or and the our the the are a what our precisely that final potentially type can various been reimbursement policy of winds there hearing consistently inside with and pointing when be in contacts sort that we consultants that language. the for all a of but don't is this of various and best have spring and language within CMS towards we with circle implementation. now September have

the best now in the know that's talked as we've So right about we scripts.

So something it the or business. certainly for but therapy dying certainly to not we as see our by living business accelerant we're an

not opportunities with of and going into growth that's areas. going front it's of we going from it's but have huge expanding be of so stop we're many to happen opportunities the these would in as us other other so clinical pursuing that technology icing We in happen codes areas these taking the on this application release and to to the have us when front that core expanding of to cake us bundle some

Michael Klein

while, in that's come but that add script. question just mentioned that cancer could was other area previously the because triggers I are one something codes your clearly we the really the of point In If only mentioned think breast accelerant that an not adoption. have and out. more come driving I face been we for this data to clinical let's will new going business they do have for mean we out are be in a element a

to help. that's So going

of focus the robotic changed top to generation work has terms in chain are we've our the what So prostate revenue the position of as and surgeons, the cancer the physicians the an gatekeeper philosophy, the referred area glioblastoma influence with food is where work. at often urologist clinical doing what

Of course the neurosurgeons.

is for overall areas reimbursement reimbursement The already their procedures these robust are and very robust. in the

in and these a will these they areas certainly a are all help, while we codes item So for again into of areas have movement in FDA not areas. going be clearance gating to these

move pull but are breast the side going through where on market the of as us really codes areas radiation very into I itself, advising center other earlier much high the on areas they'll not the drive and essential influence to of cancer want Again care the help say the but important in as might patient very technology the of is are all said are goo might areas cancer potentially economics to we the well. of that position So oncologist the care area the you the the economics positions, superordinately adoption. into outcomes will they in they as be obviously moving and as these which impact the breast

Per Ostlund

that of color. all I for you Thank appreciate it. Excellent.

Operator

you. Thank

your proceed line of Our Please with Lake with Brooks next O'Neil question Street comes Capital question. from Markets.

Brooks O'Neil

everyone. afternoon Good

it's trying pretty vendor [indiscernible] So some at level about December, pretty AI. having clear on much that talk was every there to been in

approval do Thanks you So of breast on area. to you Obviously from coming future stand perspective this lot. understand the us I'm could help competitive your one the to think hoping competition a position. other you only you're vendors? your Where business at just terms in with FDA

Michael Klein

great Brooks from opportunity we how XD into not when you others are names hear it say like based get from set, years don't on We companies Silicon results Valley or see we that players are but I we counter four they the it's question question about big obviously ago. companies and an gives from talk data sometimes a limited to be may on the only opportunities or and household a obvious us were the hear some three let's space. media where on getting because XD about based maybe those

Here's of of differentiated X,XXX Brooks every day. see. being data images we sites Tens thousands sending that day. every us the generated

have tentacles the As I've AI data basically in king these X,XXX generate in We kingdom. said sites out it's is to before not images.

to the detect today We images the the data look at images. have prior to not only but

By folks the looking we're at market the to prior get be going to images. time

four radiomics get on we three top dissonant. based we risk ago. or know two, what you today factors and that on clearly if then genomics years a put that score five of already you working believe work when technology probably if characteristics our add years valuable that's on we're score We're So in about the Karolinska that's others us talking or could of the only XX% away imaging, for was combination distant risk the and the one,

to on we're board, X,XXX a channels So just partnering I and mile risk extra the all continue that all looking like that covered shoulder believe channels extra advisory not on few and the we're that to think going units, going are mile and runners patch with there to we're that quick. that we our over move

said life. with speed speed at I've the So of at or where I moving That's of our the, earlier economies think we mantra. move

that be others launch in the and XD from on algorithm into be quick thing not let intend prior last to from this images all algorithm one vendors. will when we next based XXXX our year come installed We multiple from And moving the probably we're that half thousands ahead. which of market. XXXX do accounts, the second So images XXXX only point AI images by will but and be

even to it have too always about are bit we way that lead close. So a going as we're where may to we might are an believe sound that but going not we're that we be hubris of instrumental though people this it assume much creating of think

continue to move we forward with So velocity. great

Brooks O'Neil

Great.

Xoft, a all open real brain about approval for to One in diagnostic imaging commercialization? then capability of Second last in lot Xoft to parts things needs in opportunity and question that breast, really Then to secondly, needs of questions. in taking you these take a for Thanks have I any what third for is, mentioned I'm body. AI use door some terms happen in couple beyond the take the areas prostate, other exactly thanks whatever? the you curious have the do the what FDA of my see you quick. you breast? happen to and And for take is

Michael Klein

question. a good is Okay. This

FDA. First

XX via We on lead and is which role I it's I mention Form therapy have want much clearance when and in case the and in And we're modulated general only body for fact radiation areas. if medical and [indiscernible] reimbursement have these is don't the I distinguish launching the the in think really all clearance as is therapeutic case X the FDA everything our was anywhere but played for everything's impressed clearance a in from very radiation in [indiscernible] that that cleared FDA in K. approval system I we XX-K. use therapy to intensity essentially

have moving areas into challenge into and capability if new So the too successful already go sure you these when have launch. is that you're cleared a a new you reimbursement deeply real that are making introducing you're already before areas that that

your your get institutional but chance only Even introduction. multi-site one clinical treatment doing you to trials. by single FDA So wanted to you your are run studies to want to you though at initial and able efficacy trials, safety be clearance you have validate

in that. the are area just we brain doing specifically So

in saw outside replicate than same we're new other done U.S., The least That's that you you glioblastoma. sites study being Europe work that in was the are done work taking primary different we brain, saw the four U.S. are the and the on [indiscernible] in recurrent metastatic and matched trying at now introducing it three the As that work. in at the study into and is pair to Louisville to lesion.

you're reimbursement. or the going forward with clearance need issues of When of to if we're biocompatibility. move biocompatible. applicators that We area out coming are studies two XXX sometimes again and things with make FDA, So new we sure to do to are you need that and FDA see with K actually may on intend dealing do different those that you three to brain a

Recall that used we're breast. in same [indiscernible] the the brain exact as using applicator

So cleared.\ it's already

prostate. about in about to and colleague a working in robotics your Stacey. script on talk rectal our has efforts also might my and that closely prostate efforts, bit I little our been For rectal fact can turn She in mentioned with we

Stacey Stevens

Yes.

Brooks all very start rectal your with very from the these product think where exception is a I cases if in being needs to also in nice die optimistic there's patients the new what's thing to widespread into right. that development clinical study that in almost breast which back wants say the think we're certainly prognosis been in more but about such have area months XX a I a radiation question go little these but before to historically case most that areas to economic moving is likely the is data medicine application the on has clinical it's new changing you that differences factor is case but is of they're that there paradigms been some work or the data five brain adoption needs but be modification using the of to held we're real the years balloon look conservative cancer. that to and developed. applicator actually treatment we're adaptation in neuro at same prostate In oncology will and be an of breast poor XX going very using clinical There typically brand done we the and and discipline treat

will data beginning these full these to to marketplace of commercialization in in clinical of focus of XXXX through standpoint than rectal. sort less want product it's prostate is and case continuing treatments great of into ready we go of going to all breast now us would but market any ready aren't areas body to a launch really is something from help and ours the trials But some so the new areas much clinical going of that a the to It's same the the just XXXX. we to them a the a be for as across our that for where There like we're requirement establish key and very data clinical and application. for get product application for be be

Michael Klein

information the is have and an introducing side. Darian the certain primarily care your increasingly on outcome. treatment begin a correlation good develop the question, driven a what's have on treatment very could type when patient is job therapies. the or planning And actually of patient that a you a candidly AI done about way We and particular therapy category folks the What deliver you AI a and of you therapy last is then done plan, sort at driven to point Brooks capture really inform AI is that which the there of between and results see impact nice

different start what that for those are outcome atlas that for into with plans on of we the looking those correlating technology Xoft would tracking our built breast the as plans So at cancer us plans women our was. and then XX that delivered were mean

So side AI the the correlation a plan is and the therapy between patient result. particular delivered, really analysis the on

it's opportunity the areas or So but area that future on therapy that AI on is to into the would an I the side. almost don't want and areas low-hanging say of in fruit we could move side the all same exist

Brooks O'Neil

It's great. Thanks a lot.

Operator

Thank you.

Jen Our next proceed with question the of Yale with question. from comes Laidlaw. your line Please

Yale Jen

my a and with thanks you question appreciate chance guys. for taking chatting First

specific the on you the quarter. question little that? therapies, last for provide much some of a you Could jump First of in the a color a on bit have pretty products terms

Michael Klein

that note relationship quarter a QX. between jump QX the may and look remarks significant as my and essentially QX heard you'll flip that some if was below from have represented QX you in at you the of was Yes. order QX Well into a what average

up end which fourth So of in the quarter. showed

inherent what equipment well a part of the capital is in particularly see this capital equipment and sales particular robust can quarter fourth lumpiness for So we've be got that sales the quarter. we also

the you imaging final XX% of So some a quarter happening. I see hospitals fact that quarters extent There capital those their what end when you in said therefore of and that's have quarters the to certain a side on as the get QX. even or to of side true equipment bump QX basically and some that same is on the the seasonality there one see is we is key elements in

see pattern this we say that you sometimes seasonality fall cyclical into in pattern. or the can might So

dynamic that's in growth. some the of So I that think quarter fourth

Yale Jen

time or Great. you're new helpful cannibalizing by at instead and the least Panorama to that any very-very just curious just accounts a launch Okay. the [indiscernible] on That's would appears impact Panorama? to also of product, be AI have that I'm you impressive taking of ProFound sort go

Michael Klein

positioning we envision it's top we're the sort additive well-established Panorama is We as there the are and on ProFound Yes. out and is way see being base ASPs pretty what as of platform set of an feature that.

just I be able operating get So innovation additional new iPhone an the buying Panorama of album a as might new cost they earlier point the people program top the an such ProFound. with program but made to the your be technology might would get system an innovation about on

would that priced together let's and Now if you product a higher an it ProFound to buying Panorama be say would XX new to buy were akin included. almost iPhone and but features it be

ProFound or AI that capability see product buy wanted base may upgrade they we for useful today wanted detection people forward they a move we from which the was as higher they as AI but for if ProFound buy to the if license be some So or ProFound a from get-go Panorama additional be would set with it Panorama, example wanted for to an if a feature product buy cost would would

have course it migrate cannibalization. But ProFound, see not additional feature. to We give we see path to you do XXX additive, [indiscernible] plus purchase can a now from them an Panorama want upgrade we of as but of we also ProFound include

Yale Jen

quick Maybe Okay. Great. two That's helpful. questions. housekeeping very

for is therapy Gross what fourth side the margins? one first The quarter? is the on margin the

Michael Klein

Roughly XX%.

Yale Jen

Okay ahead. and. Go

Michael Klein

business the people to us the one happens about XX% typically the it's little only that but realize typical you is initial and do recurring a higher not margin that very quarter things may than And revenues only its about and is is revenue what's important that makes like of XX%. not a those more are nature many persons because are recurring is that which predictive by of business each the

systems increasing in XX% is of already usage very revenue mentioned. we helps usage installed Scott a that drive that as the is things than forward at So higher increased of because as and margin we're the typically interested one the move

Yale Jen

last the this numbers quarter convertible Maybe second starting GAAP should the Okay. and cap is are here you as first retiring the either or start quarter the we question be narrower. become of guys that much the see year may non-GAAP debentures, a

Scott Areglado

Yale. well absolutely It's

in a here the debentures Just on comment the first convertible quarter.

value have conversion before in additional quarter we all fair it if stock at force up convert the conversion flip will as adventures of sort the was last quarter to cost in that of first of there's at through QX so date put That the the December be end these value date accounting we to the gap. equity. allow to charge XXXX to the imply the stock some of and in our So there last those. the them and a the equity we related instruments at at we conversion there's the those XXXX to thing a pretty transparent to but are price do conversion date you true before big fair that price and That's look going

Yale Jen

on performance. year great Okay forward again and very then look congrats and and years to this good the appreciate

Michael Klein

you. Thank

Operator

Dougherty today question proceed the line comes final from & our question. Mannheimer your with of Please Gene with And you. Thank Co.

Gene Mannheimer

eight think good you the installed XX% but forward should number expect guys. system's of I know guidance afternoon. financials the last systems XX% great the as on about in I don't I Congratulations we give placements? or have around year the increase another questions, - just XXX progress. Thanks you all kidding so

Scott Areglado

or basically connectivity call trying hired, the Well, which to three year synchronize was to may there comments how a had built and zero to and recall were was took we of I you counseling we those these first of then Gene and all sales we when in that getting that you my which initial quarters account. which last to had then reps do think us sort close we to had at get clocks look we two

of So days. three clocks are like these XXX to XX

continue, sort a increasing we we smoothes our the of which timings of things forward quarter synchronized those terms reps thing clocks quarter is in to that having to fully into pipeline. an with extent align have will pattern but continue that the of So will and fourth fourth explain certain going mention may that kind in going we one out do the

that larger have deals also We pipeline. in

they way account having We a to said chunks. come that David the [indiscernible] as in indicated deals hit will could a believe, that those logical our in enough at in come chunks So that. big deals pipeline these time, to do be is ideally but able sixty that of at compensate however, but for strong

So start around data improvements to and important opinion key I to reporting of us and a it's indicated their bit very begin accounts a very and and that sort get specificity also that some these gives word as tailwind. that of mean, about leader begins sensitivity out Stacey talks of

Gene Mannheimer

Mike, a by that visibility I potential that good pipeline the think of note have helpful quarter and time on your that? help hear increases but model I overall Thank this timing you you for deal maybe real how obviously is alleviate when can and segue I loss can realize about positive could that's volatility Okay, some large larger sizes a also maybe and but more lumpiness this you. over that subscription talk smooth in to help that maybe perhaps into

Michael Klein

Yes. eight, like you quarter. the in the eight to their X, QX buy Scott normal I for to to which a folks the trained will the that QX year month, we fact second look numbers the buy in from years ten if look the or us have the see of do a Randy's if XX end dip you seasonal back mean is in last even at while purchasing you at end at at X, to quarter the me historically, pattern cases of the purchasing just in end folks of cars some or do folks the fourth are tend little

to So a of QX has a it pattern historically then little QX a bit dip. that has

funnel of the The you size the each size dynamic the account other. that you the believe on kind referred dynamic neutralize to of that about the we and accounts larger of

though to There's lot a have accounts. us where of smaller deals great can to to get we these that So it's want even be.

numbers. about on other point Now your pay-per-click

want Now that is they what the let go and they a to SaaS me between and of a they're lot bundle about I for talk more necessarily of There's pay difference care but really if say screens as that the fast specifically certain folks saying the and pay-per-click. and I cloud. say on to pay go as basis want they don't it's on they

predicted and seeing we was we dynamic a dynamic. that previously that have mostly to going second half So be emerging are that

defying in I moderate at demand, saying a say are this of XXX,XXX it moderate are I XXX,XXX let's buy year. that say will in of three per we an that modest instead hey years seeing increase like to over accounts spending to it's would

not these that all sale. deals Now as though have is it's $XXX,XXX bought interesting at they may about

and let's are the on that in subscription seeing quarter and a or what expected. we of that into is we bought it have going started part pay-as-you-go, second of what two them able not be of bit discount the bit we market we another we're quarter a may have significantly more So first that more a another to seeing is may for a or had might part the have model than a may call get

just now. ability is We think mind revenues as our it news. that it in this to -- that is exists good but it Keep something capture dramatic, don't a not It's is are over and and revenue a but time because again many higher margin in again repeatedly often stream one at block and less. costs the recurring at a selling years cost servicing it's

it the a at this. we quarter earlier. XXXX shape expect and of kind talk it on is creeping more subscription the over overall second change maybe the to half the look lot modeling in we a we happen the looks do in we it's in shape have We some will will more a when revenue modest bit bit based We push we impact year these -- little two the of stuff think in of the XXXX of can see differently and pay-per-click it's but little in that what about we're a not it's So half. going to course of all think mark first slightly fundamentally fact think it's again of specifically almost do or each and like quarter the is but a

Gene Mannheimer

the Appreciate color Very good. for Thanks it. Mike.

Operator

Thank you.

time. back comments. have further We closing management for at questions over turn like to the I'd to no this floor

Michael Klein

Okay.

we on both that sequential our basis the positive and may therapy quarter moved in have So first way. and our so direction have done substantial memory QX believe in where recent a revenues in for quarter be a detection a business

AI we've as with in detection the pleased business ProFound overall Results the indeed the as particularly business performance of market. in strong XXXX. penetrates were are further the We reported the

identify the cancer landscape more This and to detection life-threatening adaptive risk changing is continue of too leading detection. and We charge early breast towards expedient screening. cancer the

IORT envision so do increasing with Similarly technology treat we'll cancers and we being speed used earlier Xoft efficacy, convenience. many degrees detected to of and

Xoft believe consideration realized We emerging We emerging use be of potentially continue and and core use begin opportunities enabling based Xoft adoption. to will an center as the concept this drive of the that breakout influence will to to on of the technology.

believe We and able value. terms considerable and believe in new be compelling they shareholder as we realized realize cancer indications will we that of we are return to and treatment that that create a envision will

thank questions an say let you joining pleased enjoyable for And for of thank with your us, the you you all, that remainder thank day. me have and

Operator

teleconference. today's concludes This

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

iCAD (ICAD) 28 Feb 202019 Q4 Earnings call transcript