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Zomedica (ZOM) - 2025 Q1 - Earnings Call Transcript
2025-05-15 21:32
Financial Data and Key Metrics Changes - Zometica reported total revenue of $6.5 million for Q1 2025, reflecting a 4% increase year-over-year, marking the seventeenth consecutive quarter of record revenue growth [5][14] - Gross margin improved to 68%, up from 66% in Q1 2024 [15] - The net loss for the quarter was $63.8 million, significantly higher than the net loss of $9.2 million in the prior year, primarily due to a $55.8 million non-cash impairment expense [16][17] Business Line Data and Key Metrics Changes - Revenue from the Therapeutic Devices segment was $5.9 million, while the Diagnostics segment generated approximately $600,000, a decrease of 25% [15] - Consumables revenue reached $4.5 million, a 13% increase year-over-year, representing about 70% of total revenue [14][15] - The TruForma platform saw a 41% year-over-year growth, driven by the launch of new assays [8] Market Data and Key Metrics Changes - International revenue grew approximately 32% year-over-year, indicating strong performance in new international markets [8] - The equine market expansion is a key focus, with new product launches aimed at increasing adoption and utilization [6][19] Company Strategy and Development Direction - The company aims to achieve cash flow breakeven and GAAP profitability through operational efficiencies and cost reductions [11][20] - Key growth strategies include expanding into the equine market, international market growth, and enhancing the TruForma platform with new assays [19][20] - Zometica is also focusing on optimizing its infrastructure to support growth and reduce costs [11][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in 2025, particularly in the equine market and international expansion [18][19] - The company is committed to reducing cash operating expenses and improving overall cost structure [12][21] - Management highlighted the importance of achieving cash flow profitability to support stock price appreciation [50][51] Other Important Information - The company relocated its headquarters to a smaller facility, which is expected to reduce overhead costs by over $200,000 annually [11] - Zometica has no debt and ended the quarter with $64.6 million in cash and cash equivalents [17][24] Q&A Session All Questions and Answers Question: Why have management options not been repriced or new options issued, instead of salary? - Management believes it is inappropriate to change the strike price of options and continues to issue option grants to employees [27] Question: Why are marketing costs much higher than the industry averages? - Marketing costs are high due to the nature of introducing new products to the market, which requires significant investment [28][30] Question: Are you looking to expand into retail vet stores? - Currently, the company sells one product line through online channels and has limited presence in brick-and-mortar stores [31] Question: Is there a strategy for getting institutional coverage, investment banking relations, and so on? - Institutional coverage is challenging due to the stock price being below a dollar, and the company is not prioritizing this at the moment [35] Question: Are you using or planning on using AI to expand the number and rate of discovery of new assays for TruForma? - The company is not currently using AI for this purpose but has a good cadence of assays under consideration for development [39] Question: How profitable has the new Vetigel product been? - The Vetigel product has favorable margins, and the company is focused on acquiring consumable product lines that can leverage the existing client base [41][42] Question: Why are you focusing so heavily on equine when it's only 5% the size of the domestic animal market? - The equine market has high penetration and demand for the company's products, justifying the focus [43] Question: What is the status of TruView? - The TruView platform is nearing completion for AI reporting and is expected to launch soon [45] Question: Do you plan on hiring a new CFO to replace Scott? - The current Vice President of Finance is doing a good job, and hiring a new CFO is not a priority at this time [46] Question: Are there any plans in place to try and increase the stock share price? - The company is focusing on internal growth and operational improvements to drive stock price appreciation [48][50] Question: What is the status of the cancer assay? - The cancer assay concept has been abandoned as it was determined not to be viable [58] Question: Have the tariffs affected the international expansion at all? - Tariffs have had a minor impact, but the company expects to continue expanding its international market presence [60][62]