Semler Scientific(SMLR) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues in Q4 2024 were $12.4 million, down approximately 18$8.9 million, a decrease of 29% year-over-year [23] - Net income for Q4 was $29.2 million or$3.64 per basic share, compared to net income of $4.2 million or$0.62 per basic share in Q4 2023 [25] Business Line Data and Key Metrics Changes - The company achieved record cash generation of over $24 million in 2024 from healthcare operations [9] - The two largest customers comprised 39$300 million [8] - The market capitalization has grown by more than 200% since adopting Bitcoin as a treasury strategy [8] Company Strategy and Development Direction - The company adopted Bitcoin as its primary treasury reserve asset in May 2024, becoming the second U.S. public company to do so [6] - The long-term vision includes expanding product offerings to incorporate additional cardiovascular applications [17] - The company aims to minimize declines in QuantaFlo revenue while supporting growth in operations related to other cardiovascular diseases [34] Management's Comments on Operating Environment and Future Outlook - Management expects further pressure on revenues in 2025 due to the phasing of the 2024 CMS rate announcement [22] - There is excitement about strong government support for Bitcoin, particularly the repeal of SAB 121, which may encourage large public companies to add Bitcoin to their balance sheets [36] Other Important Information - The company has invested $280 million in Bitcoin, viewing it as a highly accretive move [12] - The convertible senior notes offering was upsized from$75 million to $100 million due to strong investor demand [11] Q&A Session Summary Question: Why did you decide to do the convertible note offering? - The company decided to raise capital in the convertible market as it is a cheaper source of funding and less dilutive to stockholders, allowing for a large amount of capital to be raised quickly [29] Question: What's driving the underlying trends in the business and what do you expect for 2025? - Despite government decisions affecting PAD payment, the company continues to add new clients for QuantaFlo software licenses and aims to minimize revenue declines while supporting growth in cardiovascular disease operations [32][34] Question: What are your expectations from the new government in Washington, D.C. regarding crypto? - Management is encouraged by the strong government support for Bitcoin and believes that the repeal of SAB 121 may lead to increased custody of Bitcoin by major banks, potentially increasing the likelihood of large public companies adding Bitcoin to their balance sheets [36]