Semler Scientific(SMLR) - 2018 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Annual revenue grew 73% to $21.5 million from $12.5 million, and net income increased to $5 million from a net loss of $1.5 million [6][8] - Earnings per share were $0.82 basic and $0.66 diluted, compared to a net loss of $0.28 both basic and diluted [6][8] - Total liabilities decreased by $3.3 million, and cash at year-end was $3.3 million, up from $1.5 million a year ago [6][10] Business Line Data and Key Metrics Changes - Operating expenses increased to $16.1 million, up from $13.3 million, representing a 21% increase [8][10] - In Q4 2018, revenue was $6 million, a 42% increase from $4.2 million, while operating expenses were $4.5 million, an 18% increase from $3.8 million [11][12] Market Data and Key Metrics Changes - The company noted that customer and market interest in its products is growing, with expectations for continued sequential growth in license revenue [7][13] - The market for vascular disease testing is large relative to current market penetration, indicating room for continued growth [17] Company Strategy and Development Direction - The company aims to further establish its QuantaFlo product as the standard of care in the industry and expects to grow revenue at a faster rate than expenses while remaining profitable [16][17] - Management plans to increase operating expenses to support anticipated growth, with no current plans to raise additional capital [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued revenue growth due to increased installations and usage of products, as well as recurring revenue from licensing [13][15] - The company believes that the QuantaFlo product provides substantial clinical and economic value, contributing to increased customer demand [35] Other Important Information - The company intends to re-list its stock on NASDAQ, which requires a minimum stockholders' equity of $5 million [10] - The historical pattern of quarterly revenue shows that the first quarter is typically the lowest, with increases in subsequent quarters [15] Q&A Session Summary Question: How does the fourth quarter compare to the third quarter? - Management characterized the fourth quarter as a terrific quarter, with significant customer interest and new orders coming in [21] Question: What are the main drivers of increased customer demand? - The QuantaFlo product is recognized for its clinical and economic value, leading to increased demand [35] Question: What is the expected capital expenditure for 2019 compared to 2018? - Capital expenditures are expected to be similar or slightly less than in 2018 due to decreased costs associated with hardware [39] Question: Can you provide updates on the adoption of QuantaFlo within UnitedHealth? - The penetration within UnitedHealth remains low, with estimates suggesting less than 10% [46] Question: What is the status of the iOS version and the congestive heart failure device? - The focus remains on upgrading current products rather than developing new ones, with all platforms now operational [51]