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Spectral AI(MDAI) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Research and development revenue for Q1 2025 rose 6% to $6,700,000 from $6,300,000 in Q1 2024, reflecting increased activity under the BARDA Project BioShield contract [12] - Gross margin increased to 47.2% from 46.6% in the same period last year due to a higher concentration of direct labor [12] - General and administrative expenses decreased significantly from $5,100,000 in Q1 2024 to $4,100,000 in Q1 2025, primarily due to a focus on the BARDA contract and cost-cutting measures [12] - Operating loss for Q1 2025 was $896,000 compared to a net loss of $2,100,000 in Q1 2024 [13] - Net income for Q1 2025 was $2,900,000, a significant improvement from a net loss of $3,200,000 in the previous year [13] - Cash and cash equivalents totaled $14,100,000 as of March 31, 2025, up from $5,200,000 on December 31, 2024 [14] Business Line Data and Key Metrics Changes - The company is focused on advancing the DeepView system and preparing for FDA submission, which is expected by the end of Q2 2025 [5][8] - The burn validation study, one of the largest burn trials in the U.S., utilized over 340 billion clinically validated data points and demonstrated superior performance of the DeepView technology [6][7] Market Data and Key Metrics Changes - The company reiterated its revenue guidance for 2025 at approximately $21,500,000, which does not include contributions from sales of the DeepView system in the UK or Australia [14] Company Strategy and Development Direction - The company is transitioning from a research-focused organization to a commercial entity with a well-defined business focus for 2025 and beyond [4] - The company aims to leverage its relationship with BARDA and continue developing the DeepView system while also advancing the DeepView Snapshot M for military applications [9][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the revenue guidance and the progress made towards the FDA submission, highlighting a strong start to the year [18][19] - The company is actively working to de-risk the FDA submission process through extensive pre-submission meetings and collaboration with BARDA [22][23] Other Important Information - The company completed a debt financing agreement of up to $15,000,000, with an initial drawdown of $8,500,000, and raised approximately $2,700,000 in equity financing [8] - The healthcare intellectual property subsidiary, Spectral IP, is in the SEC registration process for its initial public offering [10] Q&A Session Summary Question: Guidance on revenue expectations - Management indicated that the revenue guidance of $21,500,000 seems reasonable, with potential for restating guidance if performance continues to exceed expectations [18][19] Question: Preparation for FDA submission - Management highlighted a strong relationship with BARDA and over 10 pre-submission meetings with the FDA, expressing confidence in the submission process [22][23] Question: General administrative expenses outlook - Management anticipates general and administrative expenses to remain consistent with Q1 results, focusing on operational efficiencies [32] Question: Development of Snapshot M and military applications - Management confirmed ongoing work on the Snapshot M device and emphasized the importance of the FDA submission for the DeepView system [38][41] Question: Future relationships with the Department of Defense - Management acknowledged the long-term nature of developing relationships with the DoD and expressed optimism about future contracts [50][51]