Vivos Therapeutics(VVOS) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $3.9 million, a 17$3.3 million in Q3 2023, driven by higher sales of Vivos appliances and lower discounts [14][40] - Gross profit increased to $2.3 million, a 34$2.6 million, primarily due to a change in the fair value of a warrant liability [31] Business Line Data and Key Metrics Changes - Product revenue increased by 34% in Q3 2024, with 1,954 oral appliance arches sold, compared to 1,809 in Q3 2023 [20][40] - VIP enrollment revenue decreased by 6% to $900,000 in Q3 2024, with only five VIPs enrolled compared to 29 in Q3 2023 [16][40] - Billing Intelligence Service revenue remained relatively unchanged, with a noted shift in marketing and distribution strategy impacting future VIP enrollment revenue [15][40] Market Data and Key Metrics Changes - The company is focusing on expanding its market presence through strategic alliances with sleep and breathing disorder treatment providers, which is expected to broaden access to Vivos products [22][40] - The new marketing model is anticipated to increase patient access and revenue, with expectations of nearly$8 million in annual revenue for every 100 OSA patients treated [49][50] Company Strategy and Development Direction - The company is transitioning to a new sales and distribution model that emphasizes collaborations with sleep centers, aiming to enhance revenue per clinical case and overall profitability [47][40] - Recent FDA clearances for treating severe OSA in both adults and children are expected to enhance product credibility and broaden market opportunities [43][55] - The company is actively hiring marketing firms to expand outreach and awareness of its FDA-cleared technology [44][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the new strategic model's potential to drive revenue growth, with expectations for significant improvements in Q1 2025 [42][106] - The transition quarter is expected to show slight growth, with a more substantial increase anticipated in the following quarters as the new model gains traction [80][106] - Management highlighted the importance of educating healthcare professionals about sleep apnea to increase referrals and patient engagement [68][70] Other Important Information - Cash and cash equivalents increased to approximately $6.3 million as of September 30, 2024, compared to$1.6 million at the end of 2023 [37] - The company has reduced operating expenses for nine consecutive quarters, with a 21% decrease in operating expenses year-over-year [30][41] Q&A Session Summary Question: Insights on the new marketing model at the sleep clinic - Management noted high levels of patient interest and provider enthusiasm, indicating confidence in expanding to additional locations [58][60] Question: Integration of pediatric population into marketing - Management explained that there is a natural cross-pollination effect where parents inquire about treatments for their children, and efforts are underway to educate professionals about sleep issues in children [66][68] Question: Path to positive cash flow from operations - Management indicated that revenue growth will be the primary driver for reaching positive cash flow, with the new model expected to generate higher revenue per patient [73][76] Question: Expectations for Q4 sequentially from Q3 - Management described Q4 as a transition quarter, with a blend of revenue sources as the new model is implemented [80][106] Question: Future geographic expansion plans - Management confirmed active engagement in laying groundwork for national rollout leveraging telemedicine opportunities [90] Question: Clarification on the number of active sleep centers - Management confirmed one active location in Colorado with two additional locations opening soon, with ongoing discussions for further expansions [93]