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Precipio(PRPO) - 2023 Q3 - Earnings Call Transcript
PRPOPrecipio(PRPO)2023-11-20 23:38
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Financial Data and Key Metrics - Revenue grew by almost 30% quarter-over-quarter and doubled year-over-year, reaching 4.5millioninQ32023,puttingthecompanyonanannualizedrunrateof4.5 million in Q3 2023, putting the company on an annualized run rate of 18 million [8] - Cash burn dropped to around 1millioninQ32023,downapproximately401 million in Q3 2023, down approximately 40% from 2.5 million in the same quarter of the previous year [9] - The Pathology division reached a cash-neutral status, achieving a breakeven run rate of 14million,whiletheProductdivisionisontracktoreachareducedbreakeventhresholdof14 million, while the Product division is on track to reach a reduced breakeven threshold of 6 million annually (1.5millionperquarter)[13][15]BusinessLinePerformance−BoththePathologyandProductbusinessescontributedtotherevenuegrowth,withthePathologydivisionnowoperatingasacash−neutralentity[8][13]−TheProductdivisionhasnotyetreachedits1.5 million per quarter) [13][15] Business Line Performance - Both the Pathology and Product businesses contributed to the revenue growth, with the Pathology division now operating as a cash-neutral entity [8][13] - The Product division has not yet reached its 8 million target but is expected to achieve a revised breakeven threshold of 6 million annually due to operational efficiencies [15] Market and Strategic Direction - The company's strategy focuses on developing and selling diagnostic products for laboratories, leveraging its cash-neutral Pathology division as a cost-free R&D center [18][19] - The release of the BCR-ABL assay in August 2023, developed at a cost of less than 100,000, exemplifies the company's low-cost product development model [20] - The total available market potential for products like HemeScreen is estimated at 400millionannually,withsignificantgrowthpotential[23]ManagementCommentaryonOperatingEnvironmentandFutureOutlook−Managementemphasizedtheimportanceofmaintainingafrugalmindsetevenafterachievingbreakeven,highlightingoperationalefficienciessuchasbringingbillingfunctionsin−house,whichsaves400 million annually, with significant growth potential [23] Management Commentary on Operating Environment and Future Outlook - Management emphasized the importance of maintaining a frugal mindset even after achieving breakeven, highlighting operational efficiencies such as bringing billing functions in-house, which saves 50,000 to $75,000 monthly [14][17] - The company plans to focus on financial stability, product growth, and R&D development in 2024, including expanding the HemeScreen product line and developing new products [24][26] - Management intends to increase investor outreach through conferences, social media, and digital marketing campaigns to raise awareness of the company's financial success and growth potential [27] Other Key Information - The company believes it has sufficient cash reserves to achieve financial independence, even if it takes one or two more quarters to reach the target [16] - Investments in sales and marketing, as well as product production lines, are expected to yield positive ROI within 12 months, further improving business economics [21][22] Q&A Session - No specific questions or answers were provided in the transcript [30]