KORU Medical Systems(KRMD) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Q4 revenues grew by 23% year-over-year, totaling $8.8 million, while full-year revenues reached$ 33.6 million, representing an 18% increase [13][37] - Gross margins for Q4 were 62.9%, a 260 basis point improvement from the previous year, and full-year gross margins were 63.4%, reflecting a 480 basis point improvement [39][40] - The year-end cash balance was $9.6 million, exceeding expectations, with positive cash flow generated in Q4 [15][41] Business Line Data and Key Metrics Changes - Domestic core revenues increased by 20% in Q4 and 12% for the full year, driven by strong pump and consumable volume growth [35][38] - International core revenues grew by 14% in Q4 and 32% for the full year, supported by market penetration and geographic expansion [36][38] - Novel therapies revenues reached$ 700,000 in Q4, marking a 122% increase, and full-year revenues were $2.4 million, a 62% growth [37][39] Market Data and Key Metrics Changes - The U.S. SCIg market grew approximately 10% in 2024, marking the eighth consecutive quarter of year-over-year growth [17] - The international SCIg market also showed strong growth, with KORU entering new geographies in the Middle East, North Africa, and Eastern Europe [20][21] - The overall large-volume subcutaneous market is rapidly expanding, with over 18 large-volume drugs in development [11] Company Strategy and Development Direction - KORU Medical aims to become a global leader in large-volume subcutaneous drug delivery, focusing on expanding its market share in both domestic and international markets [9][12] - The company is transitioning its Novel Therapies segment to Pharma Services and Clinical Trials to better reflect its business model [24][46] - KORU plans to launch three new products in 2025, enhancing patient comfort and convenience [53][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining mid-teen growth rates in recurring revenue, driven by increased market share and new product launches [27][28] - The company anticipates operational cash flow positivity for the full year of 2025, with revenue guidance set between$ 38 million and $39 million [16][50] - Management noted potential supply disruptions from FDA announcements are expected to be short-term and manageable [25] Other Important Information - The company has approximately 49,000 patients, with 75% of revenues coming from recurring sources, indicating a strong recurring revenue base [26] - KORU holds about 10% share of a$ 60 million o-US SCIg market, indicating significant growth potential [28] Q&A Session Summary Question: Can you break down the 2025 guidance for domestic and international growth? - Management expects domestic revenue growth between 10% and 15% and international growth over 20%, with novel therapies contributing $2 million to$ 3 million [62] Question: What drives the above-market growth in 2025? - Growth will be driven by new geographies, increased market share, and new customer acquisitions, particularly in the international space [64][66] Question: What is the status of the oncology opportunity? - The company is focused on market assessment, reimbursement strategies, and establishing distribution partnerships for the oncology product [70] Question: Can you elaborate on the e-pump opportunity? - The e-pump market is seen as a significant growth driver, with KORU currently holding over 10% market share and plans for further penetration [82] Question: How do you view gross margin expansion with the new product portfolio? - The new consumables launch is expected to drive efficiencies and potentially increase gross margins to over 65% in the long term [85]