ICAD - Earnings call transcript Q1 2024

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Operator

Good day, ladies and gentlemen, and welcome to the iCAD, Inc.

First Quarter 2024 Earnings Call. [Operator Instructions] Please note, this call is being recorded.

It is now my pleasure to turn the floor over to your host, Mr. Jeremy Bennett. yours. is floor the Sir,

Unknown Executive

Thank you, joining Year thank for everyone, Earnings Good today for morning, us Fiscal and iCAD's Call. you operator. First XXXX Quarter

Chief Dana On Financial Chief our we call and have the President Lonnqvist, today, Officer. and Executive our Officer; Eric Brown,

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

For could and events revise any statements differ, our the to circumstances of conference undertakes and a release the or please update call. after with iCAD list to Securities U.S. factors cause actual or date obligation reflect filings press to of Exchange that see this today's Commission. results no

please Also, that to non-GAAP the performance of reflect believes financial management Management and the investors operating the measures. provide for refer note company. that information view they way measures certain these will meaningful

You of to the at measures earnings our of can the reconciliation non-GAAP end release. GAAP a find

With Dana. that, call turn I'll to the over

Dana Brown

and morning, you, good Thank Jeremy, everyone.

X our our burn, made, we Phases which cash [indiscernible] business. I last On and update. the progress phases, were our base We've our recap realigning were focused team stabilizing strengthening foundation. we've with our these I our divesting begin executing Let's In transformation. business X-phase II, on a call, completed leadership and the strengthening and

agreements, new focused revenue large annual to reengaging lapsed accounts. our on solutions. began upgrading quarter versions, across the accounts deployments on in into XXXX, with cloud and first with III, existing and installed focus customers base Phase expanding is including national including in on maintenance growth from the to our key This transition customers phase maximizing sizable initiatives accelerating new investing who've markets service

a reliable targeted we and exist. did We've segment new of our not and and management and pricing for provides leads Previously, We've gen account we messaging, consistent documented have how and process and model. lead up our programs. us set management developed structure, target a inflow team revamped success, launched strategies. To pipeline measured market our reorganized commercial

prior noted as fiscal U.S. to part believe a reduction on sales in XXXX. declined call, in sales we And due had the year significant force in

we ] sales would result had As XX large reps we X in and our XXXX, reps thorough retention the additional XXXX. revenue. the and opportunity, orchestrated past a U.S., X on After breast on adding of versus new more focused QX and performance in years QX believe increased analysis of sales account expansion business over market addressable [ effort in a

as In the new added Graham team. December to we North quarter, of XXXX, reps Peter Head first X announced he In Sales. American guiding sales

as we QX few so The turn gantries portion subscription Let's X-year using to Dignity highlights. a go gantries. deal deal signed a of Hologic be Health, our to expand a deal. room of are will on now their a Spirit technology for there their part brief was initial forward. Common They

to Raleigh deal smaller a serves Navajo, Hologic. it's head-to-head a a XX,XXX to Radiology, over deal, against competitive important in Northern while Raleigh perpetual nations. was our win license market. the the Raleigh patients strategy first Radiology serve

to education a We roll perpetual expand native also and women. support out continued deal. will be was together working reach This to American to the

room subscription is to We're a VM supporting a virtual mammography platform future support deal to to Medical This platform. us with them ability to is and software total an move McKennan Center to Hospital in a plans new of expand with with added cloud. today University years. expand Chicago their chose use iCAD upgraded Avera to the because continue XD volumes exam of their over our for and closer via XD coming XXXX. expansion

use solutions XD Hospital, Detection and the Hancock are Detection Hologic continuing in iCAD's purchased solutions. XD XD with well. gantry There's system and ProFound and University a both perpetual a to Hologic. health account that's this additional XD ProFound for AI in both are expand They deal, Regional systems. Indiana their deal of purchased room Arnett, within Indiana perpetual largest for expansion predominantly also environment mixed use a as Health

upgrade X earlier, with upgrade detection for their industry across suite Texas reducing the and improve leader Solis of overall, deal. accuracy Tyler, workflow improve by efficiency. add improving value state-of-the-art both into an and positives this expanded we an patients false adding with detection existing defined lastly, provides sites. Standardization of AI new existing University patient enable and solar perpetual cancers remain that was to all The for outcomes to technology additional solar best-in-class experience. a And iCAD's ProFound sites XD

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radiologists from different international in featuring of first iCAD countries. Lastly, several ProFound on Detection aired Interviews television. Israeli received Belgium quarter, and the interviews French, using television exposure

participated and first care activity. In attracting East, Turning Middle publication in a January, professionals quick marketing Health exhibition to the health conference over of now countries. Dubai, clinical from iCAD in largest and in XX,XXX review Arab the research, XXX quarter our

partnership Healthcare our event, During distributor Solutions, announced this with in our new IMATEC we the UAE.

medical or IMATEK, attended important the is we under hosted we Healthcare, XX,XXX their Brazil European Health. prominent from Vienna. including With countries. over with In XXX XX the European imaging with Prime engaged This attendees countries, Ministry meetings late largest Society with hospital and just of event XX X our and and the drew of coming ECR groups, conference from in over conference EHS professionals. XX,XXX We customers distributors February, and Radiology, in most Europe. an ECR, the year, different radiology UAE

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that breast [ clinical in routines Medical artificial Department, Karin X breast France, of of addition, Imaging and GE-sponsored events. detection AI educational adoption focused in Head the showcased the by for of ], in Valliere [indiscernible] Dr. on of of In Institute Radeboldt [ ] intelligence by imaging impact Germany. we mammograms second, the One on Dr. the on Axel cancer

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Let's to turn our on updates technology. now

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of Now ongoing early ensuring Service enhancement the remains in release X a forefront detection another Pack commitment a that to and solutions. at marks of cancer Detection representing detection Version XXXX, the ProFound milestone,

announced We on recently availability at also Platform. ProFound Google commercial Cloud Cloud the built

platform solutions. to and access innovative deploy with Software-as-a-Service the suite a or AI provide Our providers Breast cost-effective, ProFound scalable medical Health and of secure means latest SaaS

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members. the Eric, new earlier Board in quarter, missed in X note turning the call first announcement addition Before also the to over case I want to the of you

pleased years radiologist Board with Directors. welcome renowned and our in researcher of Dr. are field. to the of over Hricak is Dr. to XX a We Hedvig experience Hricak

XX Memorial she position Center more Kettering of the from years, For York which Department of Sloan City, she at stepped in was a Cancer Chair down in January New XXXX. than Radiology

advisory care. In Dr. promoting over addition access cancer to education and in engaged articles, published prestigious She Directors initiatives, XXX and collaboration Hricak is international and roles, Board of oncological XX peer-reviewed to imaging many boards global multiple medical President she actively Trustees. to of has member XXX original improve her health a than review multiple chapters more Board societies, articles, prominent of and research as editorials, of served books. book and

including improve around extensive III, the the numerous University Germany, imaging expertise Hricak's Ludwig received Sabatier, research of of her be solutions applications scientific as deploy experience outreach, continue Maximilian AI-powered France. and and patient Toulouse honorary Dr. and global Munich, to Toulouse that we invaluable In in tireless clinical of outcomes in radiology, awards, world. novel and innovative accomplishments and the University development the doctorates from she will develop recognition has and Paul

companies. Doyle is a Spire, patient announced along Directors. care cardiorespiratory Doyle all board health outcomes and He leading Mike and focused and company Doyle iCAD the technology CEO and achieved our recent the of numerous improvement private, wealth monitoring. and of over years power in Board of the for technology not-for-profit CEO with care Spire care experience. health health strategy to outcomes He care improving been is health also has X seasoned business machine a of company on and measurable also by executive to health the learning. Directors. through and Doyle's currently We public experience with of appointed been the health Mr. patient harnessing patients Mr. Health, continuous XX appointment Board has of brings AI Mr. technology a of of virtual Director companies, to

call I'll now XXXX review detailed a of the over turn our to financials. for QX Eric

Eric Lonnqvist

everyone, over expanded attributable call of The Dana I'll for XX, XXXX. traction to some quarter or from force. morning, million, thank increase the and key was increase deals the as first ended as now of the results an quarter you, for Revenue sales noted Good early $X.X quarter is summarize our XXXX. March the earlier in financial XX% some first Dana. well million our the $X of that

XX% First line year. in quarter product over Service with revenue the $X.X XXXX revenue prior prior up $X.X the was million was million, year.

to was quarter Moving from $X.X which profit. the million dollar the XXXX, pure the a revenue quarter profit year. On a quarter up to as was was first of for XXXX. On $X.X basis, for of gross of XX% compared percentage gross gross profit on million basis, first last in XX%

or announced. diluted reflects measures GAAP million, share $X.XX and implemented improved deals earlier year-over-year. quarter the for first million the share XXXX per the first sales in is cost-cutting previously of for the year-over-year by XXXX primarily call. run net loss of expense $X.X quarter decrease of compared net a operating loss GAAP per diluted due This This was were combination in the noted expenses XXXX. XX% growth or reductions to share $X.XX with of a decrease operating a million million for of some $X.X GAAP the quarter loss first $X.X of $X.X per Total driven or rate

in XXXX, March period from loss the EBITDA to adjusted in quarter Non-GAAP $X.X $X.X decreased same million XX, the million ended XXXX.

Moving on to balance sheet. the

cash As compared to to of and million the in XXXX, was XXXX. of of had million sufficient company improvement due activities of of to XXXX. to of million first savings cash $X.X quarter operations We compared quarter cash This million resources equivalents XX, the cash equivalents for cash $XX.X the March XX, raise additional implemented $X.X during first $XX.X XX, XXXX. operating December for year-over-year of XXXX, cash quarter March ended as used funding. and no cost planned to our need we initiatives is XX% current believe fund with primarily have Net the

our 'XX. transition, has ARR risks, began revenue, earnings noted years. next or efficient the more lower better flow It we the benefits the negative X this revenue model for predict to help metrics calls, QX cash business steady model recurring illustrate management visibility, a a GAAP including recurring and impact prior expense including shift also As ability flow. in future short-term to from revenue cash perpetual annual numerous reporting has progress an in following in To improved and

reporting of subscription reporting or value and end a or end annualized the license, represents maintenance, the ARR, contracts term SARR active service ARR, active period. CARR ARR, maintenance perpetual a represents period. contracts of end contracts annualized a the or of active of Subscription Maintenance at ARR the cloud Services services of reporting represents Cloud value represents at MARR or license at value annualized reporting of period. the period. subscription at cloud of value of annualized licenses the the the ARR, services Total the active end

with $X ARR XX, will million $X Subscription $X XX, ARR in December With as of million at ARR, quarter. end MARR, in our released, prior tracking was line March now $X.X $X.X TAR Maintenance million, cloud from of as million, begin or of quarters. or Services up $X.X from was SARR end ARR the XXXX, the fiscal or Total of XXXX. million up platform at the we prior fiscal quarter. the commercial million upcoming cloud was

metrics we is of relating number pure cloud perpetual to began product, sales noted of of to this GAAP the total addition the also deals. and above, In The metric revenue of the the recurring orders multiple subscription intent without streams. revenue illustrate volume complexity disclosing to

we pleased XX orders. the of perpetual and to first that in We quarter report closed XX XXXX, subscription are

the to concludes Q&A. now of financial call This lead the the highlights turn the would presentation. over to back to our I operator like

Operator

Thank questions. question floor coming for is you. Ladies now Craig-Hallum. Ostlund Per and first from Instructions] is gentlemen, with the open [Operator Our

Per Ostlund

a to and I by quarter. Dana revisiting because, certainly ahead the pleasantly Congratulations I the quarter growth little results. say -- a little to the obviously, the on with was, was in the have model. I bit surprised start initiatives of bit want think, Eric. stellar I growth and key

-- cited, XX in know as down missed team. was as writing things, of year. it of having prepared U.S. you I it last remarks, Start to I of X Dana, XQ a talked it quick handful being you [indiscernible]. fairly sales gone So with and about some I the from the of in well. some in your

do point? in here kind additions think have Graham Or Peter end then extent for to you this of is and the come year at that in be more You you the Are of to first at the there? where bring the refilling sufficient to the team X want there quarter. you

Dana Brown

Yes. the quarter. on Thanks for thanks the

we I begin better land, winning we're terms might some players see what versus in accounts. we traction think sales kind from right existing to expanding business new call as in perspective, the of gaining of stable. who's We switch team around

from of some going I think forward. may this there the be So calendar rest But perspective, good quantity shifting for roles a year. we're

Per Ostlund

good. Very Okay.

release that and in initiatives. remarks the the then your growth you the couple other things about cited in the of So

wasn't a of -- of what circle one that generation in the release And at effort, just implementation? but like an kind targeted talk couple really I around color and you think that entails? before. there comments lead or Where you're generation there you felt kind discuss any revamped your place there So the if there? that then things of you wondering is in when to about commercial a lead can know back that a alluded well, you press little model, there in to doing as bit what Is

Dana Brown

Yes.

So what lead and is a sales when great to you correctly, Rolodex, repeatable the and mean of working want thinking I not business, winning calling, of trackable was at heard supplement at there But especially call part about like a even good before. the they structured team, or process you're a I sales and to network, generation new team qualified with need their equation. part cold their you right, big leads. be that's always those

the in, strategy. lead a we're in BXB So gen that's business

the at LinkedIn, around attend that making shows, concerted audience. like more trade working effort leveraging platforms been that conference a really we've So seminars we

I it think they with this attend the about outcomes scheduled organized with meetings desired sales show, have been those knocking trade a attending team park like shows. in trade we and out think of with regard agendas just when to they particular,

either deal. away on actually qualified right, very making And so walking with a are progress, leads

into even move hovering the to call phase just funnel So it I above and gen beginning of activity. type of truly, more lead the

who's really actually digital COO, the was gen and BXC. and a year last in Michelle brought we BXB additions both strong lead Strong, then background has VP leadership marketing-type Marketing; new in the of our BXB, of part So

just those of right combination the more helping So of expertise as organization well is areas as there.

lead having a So winning when results the and terms conversations. of bulk the tracking then campaigns off it right, leads is kick we see to and exciting gen new in

In model, terms did. restructure of the for the commercial like overall, like what we

OUS say We've these first of pretty bit all, on much have of upgrading focused market. all U.S. a done So distributors, but is of the changes the of and in little this come most U.S. I would expanding

what be to programs building because then add. So optimal type and pipeline of could model see reps generation sales use first lead how to these to we we develop would that wanted many was

When also we we reps, added sales structured the focus.

then segmented everyone or them having into areas most comfortable, naturally everything things gravitating consequently and role. doing people do of structure we towards not instead well So that more maybe did are

focused pricing expansion business, new more way of there's focused retention there's us models. and new structure existing business. solution. whole did to a for our One, deliver cost more We cloud on So on the and revamp introduced

drove across then board perpetual. kind way of that changes all So the the back into

You've now, reporting that's subscription seen upon us a so based ARR our pricing model.

I pricing getting sales tighter our would right, So those say communicated documented well and among teams. models and

And then we're done how that There's just the the and we job a win they deal today mean our better I really with So book customers. We have iCAD existing because some and a but accounts, last to deal, least price right? expand. large know -- it. talked is some use of more color doesn't fortunate marketing room just not doing about then is solution. even that within trying to to we give internally

account involved to the make and it's need in even internal their difference, we be in that oftentimes, the and going to right, practice. to understand others to more So enable within why radiologists a solution marketing

Per Ostlund

That's color, Dana. great

because a with the a little let's a -- fourth think, think And quarter. QX. for as go of in far first I As to step a quarter I the numbers from normally, couple hot deals out the ran quarter, specifically is the back sliding second then sequentially fourth

QX. clearly We step foundation count and have little in XX, a we And a back, So see we it forward. I had in in we think a already XX pretty the was and was didn't. deal a would thought over around aggregate saw step would I QX. right from quarter good first

first sales that from shift just for some commercial anything did lead of So all pull was new talking Or you're here forward about? probably folks, really initial the the model quarter? this those in efforts gen the

Eric Lonnqvist

that. can I answer Yes,

a had of we quarter. big couple drivers So this

also there one that radiology particular, that then revenue was in working deal been $XXX,XXX over itself. in whole was this Dana over rally So expansion. has of mentioned year for on in Dana a came team mentioned that the And

that another there's X expanded. there came we sites So that in X or

to that those between quarter. kind was of of revenue So $XXX,XXX close X this drivers,

caused that So the bump, really.

right. from sliding was that QX, QX, into So last we you're had X.X quarter. There causing QX some

I So is nature lumpy quarter, of think because bit this it's of the our part of a model it. perpetual little

I'm sure going change on -- lumpiness that forward. come it's -- yet. we not be structural There it's could a still So

Per Ostlund

anybody No, I know of to fair. that's was curious just couple those expects a entirely think don't I pieces. differently.

updated in FDA will only of the didn't me, that. look appreciate I it data. a It's now. last for late since really whole health you get X.X, opportunities at still this their type this or you lot. We be do at where Last So couple been tracking for question kick is heart they months toward in talk front But approvals? that look promise you they are you for things on a I do of where us about 'XX

Dana Brown

going mean, Yes. skew with know but say to never I the I longer FDA, always you it's would faster. than

I yes, calendar into So think year. be scenario, best case this would

going And time, a smoothly, many very whole me -- I host right, detection with [ is we're of versions. those. review mean, algorithm, smoothly, but out, days the heard itself And they first there's if example, those usually XX rolling the prior new very mention cybersecurity going requirements. For this you is ] of went algorithm through

what we right that's as taking and right, to back longer, bit So us, a and then their understand asking questions respond. structure we they're little think they

we iterations. need come then And like have for up they that to just health, working that same has Luckily, thing market. right? on predicate device, right, a firming to few that's more data on the heart taking So So the see.

understand. their is that's still plan. the help they year questions of helping to about of But you being some they yes, can scenario that is refer end So that the message best-case because and heard something to have our clear

Operator

Our next & with coming question Company. Yale from is Jen Laidlaw

Yale Jen

And my congrats to X the good quarters. X here. questions or Maybe

you The first the the the subscription this trend Do to have, you perpetual versus deals quarters. And quarter, deal, in this see one anticipate X last going would is increased you for how continue the first have forward? subscription compared to quarter-over-quarter dynamic? you the particularly

Eric Lonnqvist

for -- still was forth. to recurring more for were ebbs for There's Sure. subscription quarter more trying a or organizationally. have or prefer Yale, a to XX one and we'll perpetual some good model and reason revenue another It But are flows. we with It's we customers security up so get that subscription. deals.

subscription So not the a way bit, maximize team comped annual to and -- they're pushing only our recurring revenue. on is be the that will side

incented So the another well is team cloud cloud subscription to as model. there'll push on be recurring in release opportunity through the with QX, revenue for our as new

is team. to So split and push what would it pushed by deals. It's will the forward. say team cloud on hard recurring But both revenue these the the subscription going be incented be exactly to

Yale Jen

in Okay. Great. that the next And the X-part terms of question is [indiscernible], question. the

closed? And in this First you actually you're what and of improving? still or system can this hurdles it that as deals get all, on see now go sign is have the based then might is you first second, first what on space to -- ready follow-up guys is evasion that to you deal be right part to the

Stacey Stevens

Cloud ProFound our available. yes, is So, commercially

I selling it. quarter We right cloud. why the about more is actively next deal here, it's you'll chat earnings lot our actually it, the So first call. on in didn't our already second but sales It hear have so a occurred team on

Yale Jen

some different irrelevant may to -- nowadays? some that question in lower about maybe from days, taking apply helpful. in the is the higher, the thanks fourth Does Or for I question. in that's the quarter and last that very on And be of revenue you Congrats perspective. totally now? the remember That's guys quarters, are that that. Great. seasonality older here X talking terms

Dana Brown

would I'll have in, especially a maybe chime different view view. if Eric point for So of you point you to of give then love my

of I the think cycle. budget is driver Seasonality just And primary the that applies. still

are of year customers budget. our many calendar a on So

tend the they wait a to towards bit of budget see until end So the year, remaining.

I capture especially in much the bit also business in better as going trying as training, think because the later right, where there's they happened, deal to if a possible. the you know software wait industry, year, customers will, the everybody the they're get, to is of that's

So you can kind you better discount wait. maybe but of land, the into get longer

just together factors kind X those drive mindset. this think I So of

if bit So decision-making impacting little their it's a I it a process. can now, afford to bit is they have my wait business, in less right, about directly don't it

Operator

question-and-answer our session. concludes This

turn the back call now for any like So comments. closing I'd over to Dana to Brown

Dana Brown

would I esteemed most strong. to it conclusion, continues the reiterate In with to The grow, like for supporting team some and operator. secure opportunities you, prestigious continues and evidence just worldwide. demand Thank be to our of continues our technology to facilities care health

hope remain generate Thank about value. have you, of firmly optimistic the future in and each day. believe I the future, of a significant company and the shareholder you to bright company ability great and I its our and

Operator

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iCAD (ICAD) 15 May 242024 Q1 Earnings call transcript