Semler Scientific (SMLR) Q2 2025 Earnings Call August 04, 2025 04:30 PM ET Speaker0Good afternoon, and welcome to the Similar Scientific second quarter twenty twenty five financial results conference call. After today's prepared remarks, as time permits, management will take questions submitted prior to this call via email. Please note this event is being recorded. Before we begin, we want to remind you that certain comments made during this call may constitute forward looking statements and are made pursua ...

The Semler Vision: Monetary and Medical Freedom Bitcoin Backed by Early Detection of Chronic Diseases August 4, 2025 Forward-Looking Statements . This presentation includes strbements that are, or may be deemed, "forward-looking statements." In some cases, hese forward-looling statements can be identified by the us looking terminabogy, including the terms "believe," "estimate," "anticipate," "expect," "plan," "intend," "may," "could," "might" "will," "should," or, in ecch case, their variations thereon or c ...

Part I—Financial Information [Item 1. Condensed Consolidated Financial Statements](index=9&type=section&id=Item%201.%20Financial%20Statements.) The company's H1 2025 financial statements show revenue decline, an operating loss from litigation, and net income driven by Bitcoin gains, with digital assets significantly increasing on the balance sheet Condensed Consolidated Statements of Operations Highlights (Unaudited, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $8,217 | $14,465 | $17,052 | $30,368 | | **(Loss) income from operations** | $(2,053) | $5,350 | $(33,156) | $12,326 | | **Change in fair value of intangible digital assets** | $83,761 | $(5,055) | $41,932 | $(5,055) | | **Net income** | $66,933 | $11 | $2,230 | $6,084 | | **Net income per share, diluted** | $5.04 | $0.00 | $0.25 | $0.78 | Condensed Consolidated Balance Sheets Highlights (Unaudited, in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $13,482 | $8,819 | | **Intangible digital assets (Bitcoin)** | **$496,865** | **$214,633** | | Total assets | $522,597 | $239,828 | | Accrued contingent liability | $29,750 | $— | | Long-term notes payable, net | $96,255 | $— | | Total liabilities | $139,188 | $9,078 | | Total stockholders' equity | $383,409 | $230,750 | - For the six months ended June 30, 2025, net cash used in operating activities was **$1.4 million**, a significant shift from **$10.6 million** provided by operations in the prior year. Investing activities used **$237.0 million**, primarily for the purchase of digital assets. Financing activities provided **$243.0 million**, largely from the issuance of debt and common stock[30](index=30&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate and accounting changes, including Bitcoin adoption as a treasury asset, issuance of $100 million convertible notes, ATM equity offerings, and a $29.75 million DOJ litigation contingency accrual - The company adopted Bitcoin as its primary treasury reserve asset, accounting for it as an indefinite-lived intangible asset remeasured to fair value each reporting period, with changes recognized in other income (expense)[33](index=33&type=chunk)[66](index=66&type=chunk) Bitcoin Holdings as of June 30, 2025 | Metric | Value | | :--- | :--- | | Bitcoin Held | ~4,636 | | Cost Basis | $430.0 million | | Fair Value | $496.9 million | - In January 2025, the company issued **$100 million** of 4.25% Convertible Senior Notes due 2030. The net proceeds were approximately **$96 million** after issuance costs, with a portion used for capped call transactions and the remainder for Bitcoin purchases and general corporate purposes[83](index=83&type=chunk)[92](index=92&type=chunk) - The company has an agreement in principle with the DOJ to pay **$29.75 million** to settle all claims related to a civil investigative demand. A litigation contingency liability of this amount was recorded as of June 30, 2025[99](index=99&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses its dual strategy of Bitcoin adoption and healthcare operations, noting a **44% revenue decline** in healthcare due to CMS changes, while Bitcoin acquisitions of **4,636 units for $430 million** were funded by debt and equity, leading to positive net income despite operating losses [Overview](index=45&type=section&id=Overview) The company maintains a dual strategy, adopting Bitcoin as its primary treasury reserve asset while continuing its healthcare business, which includes the QuantaFlo product and the new CardioVanta subsidiary for future healthcare initiatives - The company's strategy is twofold: adopting Bitcoin as its primary treasury reserve asset and operating a healthcare business focused on chronic diseases with its flagship product, QuantaFlo[130](index=130&type=chunk)[131](index=131&type=chunk) - A wholly-owned subsidiary, CardioVanta, was formed to house future healthcare business activities, focusing on early detection of heart failure and cardiac arrhythmia monitoring, with a planned SAAS business model[132](index=132&type=chunk) [Bitcoin Treasury Strategy](index=45&type=section&id=Bitcoin%20Treasury%20Strategy) The company actively pursues its Bitcoin treasury strategy, acquiring more Bitcoin using financing proceeds and cash, holding **5,021 Bitcoins** for **$475.8 million** by July 31, 2025 Bitcoin Holdings Summary | Date | Bitcoins Held | Aggregate Purchase Price | Average Price per Bitcoin | | :--- | :--- | :--- | :--- | | June 30, 2025 | 4,636 | $430.0 million | $92,753 | | July 31, 2025 | 5,021 | $475.8 million | $94,772 | [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Revenues for Q2 2025 decreased **43% to $8.2 million** due to lower testing volume, while six-month revenues fell **44% to $17.1 million**, with operating expenses surging **178% to $50.2 million** due to a litigation contingency, yet net income was positive from Bitcoin gains Revenue Comparison (in millions) | Period | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Three Months Ended June 30** | $8.2 | $14.5 | $(6.3) | -43% | | **Six Months Ended June 30** | $17.1 | $30.4 | $(13.3) | -44% | - The primary reason for the decrease in revenues was lower testing volume, which management believes is a result of the 2024 CMS rate announcement[137](index=137&type=chunk)[146](index=146&type=chunk) - For the six months ended June 30, 2025, total operating expenses included a **$29.8 million** contingent liability related to a potential DOJ settlement[147](index=147&type=chunk)[153](index=153&type=chunk) - Other income for Q2 2025 was **$82.6 million**, driven by an **$83.8 million** increase in the fair value of Bitcoin holdings. For the six-month period, other income was **$38.9 million**, driven by a **$47.0 million** increase in Bitcoin's fair value[143](index=143&type=chunk)[153](index=153&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$13.6 million** in cash and **$496.9 million** in Bitcoin, with negative working capital of **$14.9 million** due to a DOJ liability, yet management deems liquidity adequate, supported by **$100 million** convertible notes and a **$500 million** ATM program - As of June 30, 2025, the company had negative working capital of approximately **$14.9 million**, primarily due to the one-time **$29.8 million** contingent liability for the potential DOJ settlement[156](index=156&type=chunk) - Financing activities in the first six months of 2025 provided **$243.0 million**, primarily from **$100 million** in convertible notes and **$156.9 million** from ATM stock offerings[164](index=164&type=chunk) - In April 2025, the company entered into a Master Loan Agreement with Coinbase, allowing it to borrow cash or digital assets collateralized by its Bitcoin holdings, though no amounts have been borrowed to date[174](index=174&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) The company's primary market risk is the extreme price volatility of its **$496.9 million** Bitcoin investment, where fluctuations significantly impact financial results as changes in fair value are recognized in net income - The main market risk is the significant price volatility of Bitcoin. As of June 30, 2025, the fair value of the company's Bitcoin investment was **$496.9 million**[178](index=178&type=chunk) - For the six months ended June 30, 2025, the company recognized a **$41.9 million** increase in fair value from the remeasurement of its Bitcoin investment, which is recorded in 'other income (expense), net'[178](index=178&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during Q2 - Based on their evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[180](index=180&type=chunk) - No changes in internal control over financial reporting occurred during the second quarter of 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[181](index=181&type=chunk) Part II—Other Information [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings.) The company reached an agreement in principle with the DOJ to pay **$29.8 million** to settle civil claims, but a final agreement is not guaranteed, risking a potential False Claims Act lawsuit for higher damages - The company reached an agreement in principle to pay the DOJ **$29.8 million** to settle all claims from a civil investigative demand. This amount excludes potential relators' counsel fees[183](index=183&type=chunk) - A final agreement is not guaranteed. If a settlement is not reached, there is a risk the DOJ will file a civil False Claims Act lawsuit seeking damages that could exceed the proposed settlement amount[183](index=183&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) The company faces extensive risks, primarily from Bitcoin's extreme price volatility, regulatory uncertainty, and custody issues, alongside healthcare business challenges like CMS reimbursement changes, customer concentration, and potential litigation, compounded by convertible debt risks [Risks Related to Our Bitcoin Treasury Strategy and Holdings](index=58&type=section&id=Risks%20Related%20to%20Our%20Bitcoin%20Treasury%20Strategy%20and%20Holdings) This section details substantial risks of the Bitcoin treasury strategy, including extreme price volatility, regulatory uncertainty, potential security classification, counterparty and custody risks, and competition for investor capital from spot Bitcoin ETPs - Bitcoin is a highly volatile asset, and its price fluctuations are likely to significantly influence the company's financial results and common stock price[186](index=186&type=chunk)[197](index=197&type=chunk) - The availability of spot Bitcoin ETPs may adversely affect the market price of the company's common stock, as investors may prefer ETPs for direct Bitcoin exposure[213](index=213&type=chunk)[214](index=214&type=chunk) - The company faces risks related to the custody of its Bitcoin, including the loss or destruction of private keys and the risk that custodially-held Bitcoin could become part of a custodian's insolvency estate in a bankruptcy[237](index=237&type=chunk)[251](index=251&type=chunk) [Risks Related to Our Healthcare Business](index=80&type=section&id=Risks%20Related%20to%20Our%20Healthcare%20Business) The healthcare business faces significant headwinds from the 2024 CMS rate announcement, negatively impacting QuantaFlo's profitability and revenue, alongside risks from limited products, high customer concentration, and reliance on a small number of suppliers - The 2024 CMS rate announcement, which phases out risk-adjusted payments for PAD without complications, has negatively impacted the perceived profitability of using QuantaFlo and is causing decreased usage and revenue[259](index=259&type=chunk)[261](index=261&type=chunk) - The company has a high concentration of revenue and accounts receivable, with two customers accounting for **44.9%** and **31.0%** of revenues, respectively, for the three months ended June 30, 2025[283](index=283&type=chunk) - The business relies on a small number of independent suppliers for the manufacturing of QuantaFlo, and any disruption could negatively impact operations[284](index=284&type=chunk) [Risks Related to Our Legal and Regulatory Environment](index=92&type=section&id=Risks%20Related%20to%20Our%20Legal%20and%20Regulatory%20Environment) The company is subject to extensive FDA regulation and healthcare fraud laws, with uncertainty regarding reimbursement policies and the ongoing DOJ investigation potentially leading to a civil False Claims Act lawsuit if a final settlement is not reached - The company is subject to extensive FDA regulation and cannot assure that new devices, or new uses for QuantaFlo, will be cleared in a timely or cost-effective manner, if at all[294](index=294&type=chunk) - There is a risk that the DOJ will file a civil False Claims Act lawsuit seeking damages for tests performed using the company's device if a final settlement is not reached, which would adversely affect the business[308](index=308&type=chunk)[309](index=309&type=chunk) [Risks Related to Our Indebtedness](index=100&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) The company's **$100 million** senior convertible notes and future debt could limit cash flow and increase vulnerability, with a risk of default if funds are insufficient to settle conversions or repurchase notes upon a fundamental change - The company's indebtedness from its **$100 million** convertible notes could limit cash flow for operations and expose it to risks that could adversely affect its financial condition[320](index=320&type=chunk) - The company may not have the ability to raise the funds necessary to settle conversions of the notes in cash or to repurchase the notes upon a fundamental change, which could lead to a default[322](index=322&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=113&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - There were no unregistered sales of equity securities in the reporting period[367](index=367&type=chunk) [Item 6. Exhibits](index=114&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, the sales agreement for the At-the-Market offering, and certifications from the Principal Executive Officer and Principal Financial Officer

Exhibit 99.1 Semler Scientific® Reports Second Quarter 2025 Financial Results, BTC Holdings of 5,021 and BTC Yield of 31.3% YTD through July 31, 2025 Campbell, CA – August 4, 2025 – Semler Scientific, Inc. (Nasdaq: SMLR), a publicly traded company that has adopted Bitcoin as its primary treasury reserve asset and is one of the leading corporate holders of Bitcoin, today reported financial results for the second quarter ended June 30, 2025 and provided an update on its Bitcoin holdings and other key performa ...

Core Insights - Semler Scientific, Inc. has reported significant progress in its Bitcoin treasury strategy, purchasing approximately $195.4 million of Bitcoin, bringing total holdings to nearly $586.2 million as of July 31, 2025, with unrealized gains exceeding $110.4 million and a BTC yield of 31.3% year-to-date [2][9][10] - The company launched CardioVanta™, a subsidiary focused on healthcare initiatives for early detection of heart failure and cardiac arrhythmia, positioning itself as a dual-engine platform for growth [2][26] - Financial results for Q2 2025 show revenues of $8.2 million, a 43% decrease year-over-year, and a net income of $66.9 million, significantly up from $11 thousand in Q2 2024 [10][11] Bitcoin Treasury Highlights - As of June 30, 2025, Semler Scientific held 4,636 Bitcoins valued at $496.9 million, reflecting a cumulative increase in fair value of $66.9 million [9][10] - The company purchased 1,444 Bitcoins for $149.6 million during Q2 2025 and an additional 385 Bitcoins for $45.8 million through July 31, 2025 [9][10] - Total Bitcoin holdings as of July 31, 2025, reached 5,021 Bitcoins with a fair value of $586.2 million [9][10] Financial Performance - Total operating expenses for Q2 2025 were $10.3 million, compared to $9.1 million in Q2 2024, with a loss from operations of $2.1 million [10][11] - Pre-tax income for Q2 2025 was $80.6 million, influenced by an unrealized gain of $83.8 million from Bitcoin holdings [10][11] - The effective tax rate for Q2 2025 was 17%, compared to 99% in Q2 2024 [10][11] Customer Concentration - The two largest customers accounted for 45% and 31% of Q2 2025 revenues, while the three largest customers in Q2 2024 accounted for 44%, 27%, and 11% of revenues [5][10] Cash Flow and Financing Activities - The company reported a net cash increase of $4.7 million for the period, with significant cash flows from financing activities, including $156.9 million from the issuance of common stock [13][10] - Semler Scientific has entered into a new Controlled Equity OfferingSM Sales Agreement allowing it to issue up to $500 million in common stock [9][10]

BITCOIN TREASURIES ARE THE FUTUREI talk to Eric Semler, Chairman of Semler Scientific, about getting orange-pilled by Michael Saylor, and the Bitcoin-led turnaround at his company.Eric was a fascinating guest.Follow him👉 @SemlerEricTIME STAMPS1:40 - Investing in Eastern Europe4:30 - Eric's Journalistic Approach to Investing6:13 - Semler Scientific Origins9:20 - Adopting a Bitcoin Treasury Company13:15 - Implementing Bitcoin at Semler Scientific16:21 - Raising Capital20:26 - mNAV and Liquidity Challenges24:2 ...

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Semler Scientific Inc. for possible violations of federal securities laws and unlawful business practices [1][3]. Company Investigation - Semler Scientific Inc. disclosed in its Form 10-K filed on February 28, 2025, that it received a civil investigative demand from the U.S. Department of Justice (DOJ) in July 2017 regarding reimbursement claims related to its QuantaFlo device [3]. - The company has faced multiple requests for information from the DOJ over the years, with the most recent being in April 2023 [3]. - Settlement discussions with the DOJ in February 2025 were unsuccessful, and there is a risk of a civil False Claims Act lawsuit being filed against Semler [3]. Stock Performance - Following the news of the DOJ investigation and potential lawsuit, Semler's stock price fell by $4.03, from $42.92 on February 28, 2025, to $38.89 on March 3, 2025 [3].

Company Overview - Semler Scientific, Inc. is the second U.S. public company to adopt Bitcoin as its primary treasury reserve asset [3] - The company is a leader in medical devices and software aimed at combating chronic diseases [3] - Semler Scientific's flagship product, QuantaFlo, is FDA-cleared and provides rapid point-of-care testing for measuring arterial blood flow [3] Financial Reporting - Semler Scientific will report its financial results for the second quarter ended June 30, 2025, on August 4, 2025, after U.S. market close [1] - A live video webinar will be hosted by CEO Doug Murphy-Chutorian at 4:30 pm ET on the same day [1] Strategic Initiatives - The company plans to strategically accumulate Bitcoin using proceeds from equity and debt financings, as well as cash flows from operations [3] - Semler Scientific, along with its subsidiary CardioVanta, develops and markets products for early detection and monitoring of chronic diseases [3]

Benchmark says Semler Scientific could close valuation gap with Bitcoin treasury peers, sees 150% upside in SMLR https://t.co/azSaMtzSx7 ...

Broker Benchmark initiated coverage of $BTC treasury firm Semler Scientific with a buy rating and a $101 price target. @willcanny99 reports.https://t.co/SDe335herW ...