- Earnings call transcript Q3 2022

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Operator

Good afternoon ladies and gentlemen and welcome to the iCAD Incorporated Third Quarter 2022 Earnings Call. At this time all participants have been placed on a Listen Only mode and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host is Linnell Faber Executive Assistant to the Chief Executive Officer, and I know the floor is yours.

Linnell Faber

Thank you, operator. Good afternoon, everyone. Executive us on iCAD have Officer. the our and joining earnings quarter Stacey for Sarno, President call Steve conference call Chief you today Chief third for XXXX Stevens, our Thank Interim and Financial Officer today we

turning the Stacy, would to call based forward statements remind over today. like making forward on to will in circumstances. differ changes may these are expectation and subject that These uncertainty we be call and iCAD looking the to Before results I everyone statements are from current on looking Actual materially expectations.

list no meaningful press I after also cause these non financial the actual release obligation the update any measures. to a Commission. reflect would Management US to results operating today's filings factors company. reflect our Exchange performance see view the revise note or with or please of For the that provide that for to circumstances conference of that in certain this Securities statements of will refer undertake the way to events GAAP information can date believes could and they investors and call. management differ, I measures

GAAP You turn release. of GAAP can measures to the call our find Stacy. of at over With to a end the non the I'll reconciliation earnings that,

Stacey Stevens

Thank you, Eleanor and good afternoon, everyone.

with I As quarter prospects look of be portfolio to continue XXXX. about leading we optimistic another company first towards out its a close ahead unchain market the and and technologies.

are right to needs and for That the is steps am that create growth said, taking confident shareholder many addressing the the transformational right significant for I team value. unmet we that ways. additional we time We us global in a continued company And in health. are this ensure and are building

even significant to have our last meet future to ensure towards heights. and make exceed that positioned business are to endpoints. sustainable models we strides company continued the quarter, to more business we propel our driven desired of our new shift As In we

had competitive standard breast world to the strong as breast Looking at underlying patient when benefits. demand ultimate risk this detection only the remains And cancer side value a differentiation comes see AI technology lives. market assessment value for evaluation efficiency, driver solution of importantly, and the suite complete AI remained to more continue over density have with leading believe we performance and detection, technology will, the for impact the business, positive strong. superior our I the it a become available care. on on today. of solution they workflow solutions And proposition, time continue But for our to and particularly we company

different needs we several customer clear assess necessitated business. forward look for future It changes opportunities meaningful As to going and things our continue has will evolving our existing is that how this and and operations. business, does iCAD

go is opportunities of manner. to focused first to optimize our major our market to that most operational To model to which end, are address changes, The a more efficient and in implementing we one shifting the involves effective approach. better partnership largest

that partnership the developing example hundreds the as on patients as is very of receive discuss allows to will initial to the of order afternoon. excited radiology by of rationale with new this XXXXs the an call. States benefits As technology we But United month our the largest relationship and partners, this we new I access we of later our of the this announced more which are potential practice this radiology relationship. this detail well in in

significantly for more easily revenue and a subscription an the model. it we only for one-time model. model revenue our lower amount generate years, The term add a software a for per deploy accelerated significant model costly one believe also technologies to to new perpetual offers work ability compared than sale. license number least the drives to benefits company, is in opportunities upfront one to change license transition capital customers functionalities long major This costs that offers the the customer customers of of way with customers our over This outlays. current sale twice and compared time adopt, ongoing can offers Another and subscription at model company time not without five to the a model scale as our

we half no than seen first increase We in flexible customer also model the XXXX. ever in ever tangible in this our booked of our a with model for more proof of in marked And to demand move underlying subscription strength this sold to decision has demand the technology. QX offers have of validates entire have subscriptions been the This more AI canceled. and

Therefore, mentioned, or revenue unique recognized However, it to based in order feedback, a recurring a our is is your its poses the as term transition, to investment better follow reporting revenue subscription as community the near of recurring amount help the previously time. measure generates the is measuring s given new introducing revenue subscription on a subscription our in the success and of expected and over challenge most s that we basic annual At revenue AR. metric subscription are generate. annual AR for

s specific AR financial the explain further shortly. will We metric

structure new of go on models. have revenue this we are the in maintaining growth in this we not ultimately raise out to plan, that cost want importantly, our focused for aligning will any To more time. a that debt better model, annualized based efficient lower and a effort, to dollars that structure forward expenses, cost I at plans and over anticipated key proactively revenue subscriptions approach, reduction to these our a we additional on basis. initiatives cost company. equity the these this partner Very recurring proactively to taken As do We enable the have stress including end, to as evolve or transition strategic million part while match $X other of trajectory investments we believe

to as interest rising environment the manufacturers, the concerns to now rates, impact issues, the capital macro these supply by about continued chain factors inflation, gantry third to overshadowed continuing issues. high and be quarter, for budgets, brought associated some and delay Turning by such

there seen fairly addition, with customer ongoing regard far staffing. this year. was so we've challenges what with consistent environment to are This In

economic licenses contributed In plans. number strong the fact, purchase at reported to least total our two health along major sharp is have desire capital solutions, acquire full X.X to rise this our causing revenue. expressed to in delays freezes systems that of capital versus in with but are a their million AI subscriptions overall the climate, It budget

these deals, to sales heightened focus on recurring reductions, a long as subscription revenue, strategic term expansion to expense diligently working the impacts partnerships are mitigate with enterprise such and via of and drive We companywide was expect in Total year additional partners, quarter partnerships the near third in detection the at over million, we to down radiology detection key business. closer XX% revenue term. year. Taking announce a the $X.X look

only our to of from a but inventory this had compare, enterprise is OEM not QX as significant multiple quarter also deals, partners. one Although challenging purchase XXXX of particularly large bulk

growth subscriptions. solutions breast for evidenced As remained the by previously as mentioned, success the and strong, AI of our demand

customers. favorable several macro to further while enabling sales customer accelerating to the economics also further in and capital for us subscription fact, challenges us budget key the assisting In overcoming is enterprise due penetrate

developing position making the more partners AI partners, than year services across mammography. solidify expected including to per health industry, of radiology also in an agreement them largest strategic This partnerships XX order scale to improve today's progress the to example our their to top and screening radiology go Radiology AI XXXX breast network market the unleashing Millions for partners potential strategic of our partners partner. type across significantly as women our and across women a country, and millions iCAD physicians targeted with nationally access patients. to practices collaboration ability via technology approach. This of XXXXs the largest clinical and will radiology Ikats from the efficient deployed mammography of across can in to We of made expand increasing to breast position relationship great nationwide expertise is leadership can of solutions of potentially exceptional practice have US mammography provider the provides the network announcement for including and expanding first their prime facilities, country. more RP radiology suite adoption recognized the be of clinical millions radiology to cloud, leverage partners and leadership the of is I systems in and

result being market. to mammogram solution further potential to partnership the with a AI strategic address calcifications penetrate access the the broaden solace care, of to among in an announced to number breast US. AI largest commercial quarter, suite. but is of disease. we sizable offers breast breast collaboration presence exciting research services heart women screening multi-year a only not iCAD arterial a explore to and assess also risk in in This the similar that and expect unmet collaboration powerful disease significant of the one independent the patient provider diagnostic to cardiovascular killer need US. quantify future will mammography, in the We also expected with the a to new in This partnerships Last in

in one the is of disease of XXX efficient Given greatest to we screen than In the working US to detection simple of expansion with the is on order year each be The risk overall better screening Solis breast through cancer cancer suite locations. shared part women of an and Phyllis the look of mission worked our years that more the for annually. the approximately breast take time and at arterial breast business. on in fight team and application have exceptional together of the strategy. calcifications their screened the preventative heart two to to are AI health. closely XX could threats forward expand support against at iCAD to million across last women expected over women's breast evaluation our millions of a care way And

in States. commercial We are bolder the taking particularly optimize to United our steps team,

in to new year skill been our in achieving to we future. we are throughout As previous sets, reported organization have quarters, our the working goals crucial have believe the we strengthen with

AI a opportunities leader suite. who are execution and We of this on a will exclusively our will United and growing we now business, new States for detection have of are final forward. as breast decision step bringing the focus move our driving focus further enable on greater believe commercial We the the in pipeline gone in on sales stages

slower financing third own a round, decision Similar our as expected as we and are taking quarter be conducted total they the additional turning to of on least strong aging was Now stop partner to million. from customer $X with business, the segment by expect results partners bring than ramp therapy from results orders at to our second working to our new as QX, therapy we impacted were revenue one partners this well of QX. continues which There to underlying in dermatologists to one improve receivable. in demand accounts

In of safety and meeting later expect the our early this date terms of continue brain month. at annual neuro to areas, progress application other treatment upcoming positive to Society clinical see the oncology study on and report presented we feasibility the to of

most site up We peer major follow became to Biko and of both cancer gynecological presentation the to Africa. for Due South am patient report benefits that cancers offer I also have events. each XX% first high treatments upcoming to is and are pleased well GYN submitted these applications, and in cancers is health challenges. suited off Hospital low particularly recently soft also of Africa reviewed new academic publication in world's among mobility women to Africa both cervical the skin worldwide. breast represents This have at the its footprint, Africa common some year, Pretoria energy small cancer But updated cervical our common which Steve system and new South the data industry most dose of longer treatment. been in with with cancers journals address for and for the

that demand and years AI made will strong strong to strides for benefits significant We in in last the continues know the offering. subscription our conclusion, in especially be the interest to there as ahead. we months yield that quarter technology, over indicated So by continue

to subscription and We the are in growth ARR backlogs. including ARR in the transition by demonstrating evidenced as booked success

market radiology the business. efficient as our are providing flow better demonstrating importantly, are to their leaders us capabilities while more future to And our match in cost soloists with such business aligning and proactively We market their of partners technology. on also and an as ikat expand they path of structure belief

forward. indicators are will I that moving positioning for ideal. Steve financials. over QX itself data While the not are that call right that points I the near these detailed turn and is encouraging we our are a success results changes to that term the review believe With reported ikat of for correctly making

Steve Sarno

XX% all US GAAP XXXX. Revenue million from revenues Stacey for million, from from $X.X Product for financial the Thank now quarter of supplies in of our from million third results was of of XX year $X.X you and good down ended On $X in last third was XX% afternoon year. ago. a quarter million all September million to the up services was basis, X.X quarter million, you the X% XXXX. total X.X $X.X our a QX summarize decline of and Revenue

our capital on budgets regarding business. fears concerns all higher As rising believe rates, an tighter along interest had and inflation Stacey earlier, impact with have mentioned recessionary we that

was such comparison year impacted of our over results. the In year some factors as subscriptions that specific of also growth there addition, business the

our XX% million year $X.X in ago, macro-economic was up in ago. a $X segment, from down detection million $X.X billion million service a XX% detection Within dollars $X.X believe We revenue QX down to year headwinds the well year to from detection XX% product QX and the subscription million, Moving portion budgets, sales, that revenue million, $X.X current segment revenue, our was revenue detection, $X.X as ago. factors revenues. a our of of shortages in all from QX subscription QX inventory gantry decrease as year contributing our sales customer purchase bulk in revenue. in a moving XXXX. one large regards year our detection on greater continued a pressure partners of We're and In over impacting OEM supply our move towards to our was

from to annual new as a versions its Subscription subscription without revenue, ARR management providing recurring of growth ARR customers, recurring measure used detection metric. help or of by metric progress. transactions the are we this subscription a revenue We is measure to two business metric have our

subscriptions first The month's this multiplied from calculate an earned the To as The from is by installed with from to us XX of month revenue of revenue months subscription installed that estimate are earned period. revenue calendar our earning the last that ARR subscription will recent provide customers. of reporting is metric. most be

by of of agreements are subscription to to from agreements the subscription customers were not eight typically been represents subscription the end locations, of QX of six the XX ARR from end agreements, at that note next XX that yet monthly will the once these be the of from installed between was ARR $XXX,XXX. booked they the ARR calculated that second our months. was our is of installed subscription booked weeks subscription is Over agreements by I of QX each difference $XXX,XXX installed. and QX take ARR The revenue metric subscription committed installed end which customers $XXX,XXX months. multiplying be that two times subscription all month version as Please agreements by book subscription earned at booked bought metrics as subscription are

booked none deals in or in recognized fact, installed have the of been In revenue QX QX. as subscription

of estimate not XX% million rates. as the allow dates, moving operating future and very dollars subscriptions. segment. installed with viewed in installed to be to can We $X churn that GAAP XX contracts any customers AR of each note independently To booked, low indicator start these by not US end under rapidly not of we was an the million revenue down as cancellation this be of notice. cancellations, a next should revenue, an $X.X demonstrates from our subscription be AR subscription XXXX. annualized replacement renewal months XX in and XXXX. expect our that revenue of by the but have revenue all model. for these represents is does on dates, metrics an and days’ QX yet by cancellations impacted date, contract of revenue on QX that forecast intended early of our it and very This revenue therapy QX ARR arrangements Please over expect experienced basis, for accumulative represent towards success these is not we repeat can offering is metrics the in of grow of good be

therapy down XXXX. revenues, dollars of the QX in was from XX% X.X Revenue Product Within million $XXX,XXX A

While earned revenue from million and were million, service $X.X from in supplies XXXX. down QX $X.X of XX%

profit QX million primarily XX% Moving of year to was $X.X XXXX was margin last from to in increase as a of discussion and of gross by profits our QX year. profit down margin profit the our previously this overall gross That quarter consolidated in The quarter was a $X.X reduction third therapy Gross in discussed. percentage. in versus gross decrease The a by ago. lower our due the gross business. margin in gross the slight margins, revenue driven million, in detection offset XX% the for partially primarily XX% margins was reduction was in business gross

to million, operating ago. down QX our in a in headcount, operating QX year reduction expenses over was $X.X some X% loss decrease a expenses, chose that The were operating in backfill primarily in was QX Moving due compared our expenses $X.X X.X operating million from million as of million, loss $X QX we an million, increased to not $X.X turned to of loss positions representing XXXX. our to

a Our of by increased loss our result offset reduction the lower expenses. operating revenues in was partially primarily

and and loss a of quarter basis, $X.X share. diluted $X.X was XX of loss million, a XXXX net Our per GAAP GAAP million, cents basic was XX or our net loss basic QX On diluted cents third for non loss for or the per of share.

this of ago. a million Our quarter in $X.X a year $X.X versus million EBIT QX loss QX dot non was GAAP adjusted

to balance Moving the sheet.

versus on instances, which not of to to dollars million were in the some past as resulted lower half focus of million, our In outstanding in had distributors we September due XX. they $X.X has is of in are XX therapy XX sales, of business, financially to of million, attributable lower COVID As XXXX, million prior reduction June $X.X as collecting receivables balances has in receivables collections. the our our quality $XX.X as healthy that still the $X.X outstanding of our receivables XXXX, revenues in million particularly some stronger

$X.X higher million QX and Due that as year XXXX. XX the to sales $X million, inventory, was and point X.X were June purchases of lower Moving supply purchases received XXXX. net XXXX, reaction inventory to of XX delivery to million and XX last made of September have existed, as throughout a in of inventory our September XXXX shortages in those that been from

As our move year, to to reduce towards closer next levels inventory levels. we historical we expect their

third million or equivalents employee Moving to $X.X during point was of provided usage had as primarily XX $XX.X million September and options. equivalents and XX X in used XXXX XXXX. million from XX to result equivalents the cash the of of point compared related capex million, as XXXX, of inflows used XX was June the financing X partially as of point million, by million September cash offset cash cash $X.X to stock quarter used million $X of million cash of XX of $X.X and exercise cash operations of and for $X point we cash decrease cash and $X.X of million a

into QX. QX During

reduced week. to have and headcount beginning come XX% reduce that the basis our our reaction last open to excess both we reduction by from on of The and in in working from business through a been reduced that of this in spending earlier, of expenses our reducing these evolving million. not majority annual go positions Stacy headcount have year. forward discussed spending our in reduction $X our has Through actions We the approximately have force took we backfilling model

taking also a XXXX. are the in $XXX,XXX of about We charge quarter fourth of

expect Because now full the in slight see actions QX we force. in reduction the and of beginning only like our a to in operator the Q&A. financial highlights these call concludes to portion lead taking QX, the reduction receive during back Cash And through to three QX I turn of with then Associated over the us to benefit were burn, would would majority This the presentation. XXXX. of

Operator

from Your Capital. Instructions] Ostlund first Craig Hallum Per of question coming [Operator is

is life. line Your

Per Ostlund

Thank you. and Good afternoon, Stacey Steve.

something long start a win partners. they before competitive there. guess start win bit want the a the these let's signature as how solace with as Let's had have critical to you notable Was not that and there takeaway? well a not any maybe a you had vendors. that to a with backstory little piecemeal have to like pair fact it for a two? those I obviously agreement radiology of across partners with competitive go the out like of I from that know, extent or products you with That's ago been I a that sizable, And And too that see you. this looks customer Is just expansion, that guess have partners you to have was that can suite

Stacey Stevens

Right. thanks pair. Yeah, that for

services the radiology So of give a the about the bit of million of all background images received And exams. for about modalities. patients controls on imaging we've for across you you me perspective. potential of for from And of prospects today and or a imaging to it we're just kind mammogram. X Radiology obviously total little the know, the And States. reading mammography kind excited US scale the XX United initial the total incredibly this of perspective of in order and in size that's let XX relationship, in future, for partners put relationship. mammography they million million kind control of partners the around a Today,

XX in they of And have with services serving They their XXXX in in US practices XX largest States. XX% to locations of they have health currently coverage states, which or XX imaging are market. have XX close XXX. own practice sites there in systems the the They United radiologists. about the it's all So And serve onsite of mammography states. XXXX they're

see, that kind started. are you that scope thing to has other and from wins. sites this but else, wins bigger this on that this mammography or I in primarily radiology order very you dwarfs It's the relationship degree, the of build think That's The know, company. recurring is order no great their wins other internal we infrastructure. some I products know of initial that this scale got How exam a to see see you came that be implementation it than legitimate recognized some think announced meaningful today. important has understand XXXX expected and much model to competitive the about XXXX over been I any we're of ever going that the locations, sort revenue think clearly yet. have forward in a was model, then is be it's not for It's And anything us. do it looking you the not about, company, pricing how of and a that model, hard impact some XXXX per obviously, time. win will Yeah, cloud is of kind not to So subscription revenue partner when structure to rather it's agreement.

our as that from that in ARR exciting overtime will subscription super So well metric. unleashed it contribute standpoint newly to

Per Ostlund

entire AI point? risk Is fair and radiology or profound this suite is taking partners to Absolutely. focused predominantly they are that say it on your perhaps at

Steve Sarno

Fantastic. this part is The entire suite deal. of

faster. there that positioning sold a we the script months. twice to six period some, of that QX, you in six it's choice. in understand little shift it the great frankly, is generate aspect turned do this it winning way months better right, model, more the more positioning given choppiness our understand. are as bit it a to challenging and continue better market, a that you dare for know, all. accelerating You the your six as we'll might in having of this amount say, of of business thought of increasing environmental, customer in And part first in your time, then months And were you first greater that you a know, to said a it XXX a into revenue accelerate, if And we starting be I believe model look time. more that mentioned you a to this know, the what than say, mentioned, demand And that, the the right. of at year, to So the this of you prepared think expect for I And that machinations model. term QX is But a we use year can of sold still we of new came that. QX, as release the the is we revenue, subscriptions where, to absolutely, recurring overall, brand, in that all you of generates, part you know, it remarks you know, positioning fair long at ago? first is the be? are Yeah, And than least we over five see period, is of But that kind subscription know, and something, I if for maybe the profound recognition revenue in numbers then you And

growth a we when So obviously, future challenging the it company, the to that model is this the company comes can and in optics, of for for build really great is short the the the going reporting model really and term, this believe forward. revenue, model in but this

Per Ostlund

dovetail Understood, of off maybe. one, just that, Stacy. Last to

prepared you too. you And to that this is did at for really introducing So see Or that your none as unfold backlog well, if the in backlog is know, you us metric as and the remarks, with at pipeline, metric, the something overload also will? more focus opposed quantifiable on we'll point? somewhat probably that's to, that time, generic you best know, that it's of mention of SAR over something risk introduction that is of

Stacey Stevens

Hey, Pierre, Steve.

metric know, So a no, The, this. is as a, of we that can measure can no, is, that said, we flavors you two we've there's

The on what's been installed. based first is

amount know, in And generating multiply and that, contracted recent most and month. XX. and installed that the you that we of think revenue by So as it take

yet metric is but eight to there's installed, six in having not delay other it a because week The in installed. contracted,

you amount know, you once over fourth jump in is it So know, that very And everything that up good. QX metric you installed, you an over over of would XXX,XXX the, reasonably the XXX,XXX. ARR. know, helped that's know, the to is, That believe that we, flow that then from that would so would about that first quarter,

Per Ostlund

as Absolutely. absolutely. the questions the Sure. for Yes, the well. and for Thanks to answers caller other

Operator

Thank you much. very

from coming Your next is [indiscernible]. question

Your line is live.

Unidentified Analyst

Murray. questions my A can good can afternoon. team here. for any civics, is partnership first here. up callers new live. the how the question the on on taking for We're And Maybe new on ask commercial Thanks for set strategy. you This is give I more Sam

You others. you're evaluating mentioned,

details to So behind different how give can someone's any on you and there maybe you scenes work is the going leverage expected know approach, the more growth forward.

Stacey Stevens

Sure. Sam. Sure,

to we one commercial regarding off to sort into organizational the first So bit a moving are has our been prior commercial combined this, of structure organization. setup, an team of

detection led the leader. greater it's also felt focus needed detection at kind are execution we that global to the States on both been business in United one particularly often level, of in So really And the under business. specific we bring and to

the bringing execution should to that a So And was a impact you in and that closer success. have to national think much the have day of that. stages of the the the our geography. Think with we're be we very leader on detection that for we be And that second the able opportunities, to structure to will positive What business, are a a final new force day moving on sales second question? person question. sales doing customers

Unidentified Analyst

evaluating new some Just team of and the you how partnerships more is ones forward? potential on coming maybe new the

Stacey Stevens

Yeah.

where know, you said, investing the are, to moving where this, So, of market collaborators we're script, model, I we a relationships than of in and in what would in a as the it's partners right. I in just transaction, deeper key more really sort call with levels

sales some complement opportunities, clinical product that could Kol like development we're team. of study trial and sharing, sales include solace, even own product can it and So clinical with of data the what work, input, elements distribution and our joint doing

and us for number of the future way also us every a kind model partnership with way structure clinic. relative there, quicker, oriented is traditional enable model, to well. have on bit to think it's investment little to ultimately of scale this more a better a that some help cost of the and And company in So the as level of hospital to the to for deeper partners, lower of going radiology door market we different and knocking of a a

Unidentified Analyst

you quarter. know, can get I maybe in is good. just up, very on as subscription for thanks shift know, And detail maybe going to there, know, some added to Okay, expecting you're mix maybe and we're perpetual, anything, versus we a That potential follow still we're ballpark expecting QX, you shift forward, of can this of the how you get know, it potentially, acceleration we something a this know, expecting I XXXX know, subscription any But, degree know, you in here. faster a ranges or, there. perpetual, you

Stacey Stevens

Sure.

little on perpetual XXX% with the in So know, piece, recognize carve a sale, a, on week you revenue, know, first, it before or it for a begins subscription get make perpetual then you installed. recognizing, a mixed recognize And a on once a six when you talk can on the except taking you to of license, know, business, even monthly know, about, sale maintenance that it's it's revenue, daily basically you is basis. out know, you you're a basically, upfront, sale, there's you that lag, when you to eight a and a you that, maybe complicated

book you amount we're you bit the the, bit, you look particular you perpetual would percentage have know, a look so more on you way know, Where know, Great, when you recognized you know quite thanks a, you the you that, know, of see it's what taking selling begun know, range you in XX% and what your questions. a any, we've it's be, into, know, where's you revenue quite know, on it's, or quarter revenue growing higher fraction small. things, basis, you, you very know, at that is, GAAP when there plus these you at as you'd it, MCs, you is, to for actually on are you know, So to those, a of the month is, you you a booking. know, the of get though, in And time, take know, going that XX just

Unidentified Analyst

Sure, thanks. Sam,

Operator

much. very you Thank

[ph] Your coming Frank from next is question Lake Street Capital.

Unidentified Analyst

Hey, opportunity call thanks was low we'll this frame the it, other Maybe like of hanging my [indiscernible] it's the network that maybe just And along lines the start for can if to share hoping many have they you opportunity as overarching questions. taking with us of for what on is, kind installed or fruit partner. wide help one partner. you how to fingers the that helpful partners, things radiology many gauge within how could

Stacey Stevens

Thanks Frank. for yeah. Sure, that,

know if know, will they that exam type that per as and total is they XXXXs you they earlier, what mammograms. of XXX provide sites in States, now gantries XXXXs hybrid of million it's you us, to, their if a between forward, total kind then across a of order large to number, technology both And, opportunity them in Just it's use own model partners, mentioned serviced of given put and the services mammography have enable that the the of hundreds perspective. reading our know, owns again, United for which and, that know, are for model, you about imaging and kind X what country. they going right, approximately actually Radiology total it centers you to a own about mammograms. how I of think many don't obviously, accounts very read that service, the of between represents, I but sort owned you initial there

Unidentified Analyst

or with assuming then And heard it AI I that's speak partner, And maybe radiology whether with to on that it's an Okay, comment not partners. other a maybe was helpful. your then I'm just staying competitive but any exclusive they're win. working technology.

competitors. primary the ikat to reasons. Radiology chose over speak other other maybe wood So

Stacey Stevens

both to Sure. ways not competitive that, we're right. this talk of about the ways, details there's mean, about time, relative to exclusivity And at I lots able the win. to disclose

that a it even increasingly, factors. factors workflow right, along an versus and right of of we're with more not I dissimilar and is of product, and streamline so we that not mammograms sort being reasons combination why that proposition amplified efficiency from marketplace think AI, reading now too in our and of is the competitors, productivity but had efficient, piece performance is connectivity finding from only the the the win make really profound can scale, of and the was given the important ability their the be gains factor, the you and scope interoperability know, again, to value

come you collaboration. believe we were this the out So primary those know, able with we're reasons why to,

Unidentified Analyst

to great. expect Okay, side? the savings one saving maybe And last on the Where most XXXX? looking we at predominant you're when cost one those on should then be

Stacey Stevens

Really, the that's area of the coming throughout operating of, it's board. across spread out primary expenses, that's that the, kind know, you evenly

Unidentified Analyst

I'll congrats Okay, there. on progress. that's the stop And thanks, helpful. and all

Stacey Stevens

Frank. so much, Thanks

Operator

[Operator Francois Instructions] Our next is life. line Francoise, question Brisebois is coming Oppenheimer. from from your

Francois Brisebois

for thanks taking questions. the Alright,

you more bit office, count, was maybe cut, Just of about little came back these people disclosed couple a that little talk from? a just just here, know, of who of you Was kind more kind it where you more and it sales headcount a that can were? XX%. the about,

Stacey Stevens

definitely better. of back efficiencies, it part office, know, of business, more was, you ways the know, know, consolidate, to, you the, was do know, you the the of, you it things Yeah, in for in looking

have three that to coming you internal also helping the make new, that know, next We online, probably know, some, are months, possible over one systems that as you to well. are, know, some you

Francois Brisebois

gauge do Okay, to same were clients clients that in under base the faster to that contract way, capital just just terms a want model Do or thank have you of have this to were with time? or anticipated? maybe certain a then moving the you. maybe versus of subscription, At And not you and do model, be used it large happy to than seems this, move? institution are the capital trying

Stacey Stevens

Yeah, we do.

don't company a manufacturers, hardware, preferring right, have a imaging still future. right, that doing all changing, and rapidly immediate we with model. business, still on a see that our You although market perpetual Right. is predominant is here, today capital prefers to number customers, it's but prem obviously OEM that existing in of capital evolving of license are the you the know, the know, and for those still right. still changing And of have the the are there still example, they're for in purchases, segment to model agreements, are right, we're And there actually we way buy

we market in want to you really going fair might portion that to I it's be customers, Yeah, a buy that is will But would, will our time. I to a gone still longer think business otherwise, to, I that's period it's don't know, not to know, competitor. what in just perpetual, get allow have to to that What doing to you really model today, cannibalizing. you it's for think add, no, of a continue change that that a have know, opportunity I know, model. us would over expanding who, we're see you know, degree our you

a not from may only, changed otherwise mostly this subscription. is So won. know, handful you have you have customers This that small it's that new maybe, to expanding, perpetual of we know, we've customers had is

Francois Brisebois

like do are years, I ultimately, to understand be Look would then it subscription that know, on obviously, penetration question to completely is peak, weeks fact kind I the when and based mentioned with subscription? the licenses performance, based of goal of else's a on XXth are capital interesting. about obviously of to the point. recognition, within XX to guess, that that someone or XX% be know, to want peak that you comparing, at terms the can this that to year you'd on with less there I And you at the upfront assume XX eight in five the revenue opportunity that to subscription an move Okay, that's accounts you XX% double you that just issue six, but

Steve Sarno

the of we OEM Yeah, would others have partners not a do and not Stacey you least term. to at move number short know, probably anytime, mentioned, subscription, that, in

where you know, but, be being XX ultimately see you say, you kind we end that, remains XX% range. we've know, as, know, At would over XX% seen, you point, to of to that you know, some modelled but So, kind this know, of I up,

Francois Brisebois

Okay.

So you'd already? be almost halfway there

Steve Sarno

it we be you we know, you a of know, last you can the spoke, kind Well, it's choppy, is yeah, of and right. beginning, from time except, it know, you a spoke can is And the know, it find a know, you measure. tough a customer and be, looking to kind at perspective. it that, better definitely of counts, ARR or And about license we way way matter

we So you when it's say Right. this quarter. know, you we're won business, it's there, the of

a know, it's that's, this quarter, it. the about overall, of thinking of So had we are of two different where ways bit not little we you business

Francois Brisebois

Well, great. thank you very Thanks. much. Okay,

Operator

Thank you.

from coming Per Ostlund your from is line Per, Capital. question next live. Your is Craig Hallum

Per Ostlund

Thank you.

find since discussion of form correctly, as can One the What type kind as of didn't much Right? Society to know, almost the But next did mean, talk ad Neuro that know, the we its this know it's, the at about where let the the conference? circle week. the to at is here that just preliminary? that's, And sort trial, as stuff? if this on kind some at stands we really believe conference? Or to soon is I If, airtime know, back for going is as ready Are is kind point you it I of us in poster a of I you hoc of you where remarks. anything take? remember then, of this enrollment since And oncology. trial? measure into GLIAC really discussions, mention, the it's way you going the it you lot could to get

Stacey Stevens

it is for poster formal thanks presentation the Yeah, event. at a actually

type presentation, to have is presentation, have early sort a It too enough follow safety, recurrence bit who enough rate really presentation. patients it's still rate feasibility type a not have a to of is it a up recurrence However, right.

an are but So along you those at, does presentation meeting. it work? looking feasible formal So of study that initial a So aspects? it? really of sort Or it's at is what is how more lines? this well technical this How treatment some know, is the

Per Ostlund

not? that into Okay, and you can side, on get the or enrollment

Stacey Stevens

a I say Yeah, I we're know, right, necessarily slower you bit would ones that enrolled mean, patients, being what end little than going, a degree up the the or enrollment, in have is but expected, Glion are fair not will pant that the criteria brain of still you study. know, treating meet we

So we this I during did think patient quarter. previous another treat

on study some so bringing specific we sites trial. the in patients but expected the to not QX, Glocks have are many to that would in We new more we expect treating brain add to as as

Per Ostlund

Sure. that. for you Thank excellent. Okay,

Operator

very you is much. line of your David, [ph] Securities. question Thank live. And your coming next is David from JMP

Unidentified Analyst

on Dave, taking Yeah, for questions. thanks that's Danny actually for the

some far both Just the on trends one would and licenses density in the Thank just commentary quick you the area one be us between as one you. AI give great. from could that me. I any mix color was emerging profound just And risk for then subscriptions. as hoping as as time well

Stacey Stevens

that in of which licenses. is what to QX our about and can there information really we a rate those when sort bundles perpetual rate, out to attachment different meaningful detail some are in our risk And what perpetual we a both has about customer products little subscription. license have historically attachment different It's tag. a attachment model from the about to comes Sure. been of had or it in of Oh, price that a product, XX% think saw come and I bit rate five particularly talk hard there's of low. because because four a a But to that that Danny risk each we could carry break fairly was buy, all

So more our in having our of attachment of success of products, a we're actually whole the innovation. models. And XX% portfolio saw risk with that's leading bundles that evidence subscription we

price too, with benefit the selling is So on than monthly the model. actually we're finding positioning subscriptions, or expected anticipated. very higher the and the And good getting price a subscription initially we in that, subscription bundles luck we're of that average

Unidentified Analyst

helpful. you. very that's Great, Thank

Operator

in queue. appears I'm for to remarks. Stacy closing There very to hand to much. any back the be And questions further going no over you Thank

Stacey Stevens

Thank you, operator.

our long scale recurring will towards to in several that and I'm doing as have business shareholder enhance So really we're of to to based Thank in greater our QX to saving strong the revenue also AI updating enthusiastic we a in value. we look of made changes summary, I about technology life that model you the transformation progress accelerate generate many next more realignment our the all a we continue towards business many, great you growth to resulting increase I way iCAD, potential. believe we business, substantial access quarter progress the in towards team of have term night. partner and drive a strategic made forward implementation more in patients. expect all significant have

Operator

you, conference call. conclude gentlemen, and today's Thank does this ladies

day. You Thank for may this participation. disconnect time your a your wonderful phone you and at lines have

iCAD (ICAD) 11 Nov 222022 Q3 Earnings call transcript