Semler Scientific(US:SMLR)2023-08-11 03:36Financial Data and Key Metrics Changes - Total revenue in Q2 2023 was $18.6 million, an increase of 25% compared to Q2 2022, driven by continued sales of QuantaFlo for PAD testing [40] - Pre-tax net income was $7.7 million, an increase of $2.5 million or 48% year-over-year, while net income was $5.9 million, or $0.88 per basic share and $0.75 per diluted share, an increase of 44% year-over-year [43] Business Line Data and Key Metrics Changes - Fixed fee revenues were $9.6 million, an increase of 13% year-over-year, while variable fee revenues were $8.4 million, an increase of 39% year-over-year [41] - Equipment and other revenues were $600,000, an increase of 128% year-over-year, indicating strength in the fee per test market [42] Market Data and Key Metrics Changes - The two largest customers comprised 37% and 34% of quarterly revenues, highlighting reliance on major clients [43] - There is strong demand from home risk assessment customers using QuantaFlo for PAD during in-home examinations [41] Company Strategy and Development Direction - The company aims to maintain and enhance current revenue opportunities and profitability by reinvesting in emerging growth opportunities, particularly focusing on new customers for QuantaFlo [4] - A strategic plan to streamline operations and reduce employee headcount by approximately 30% by September 15, 2023, is in place to drive operational efficiency [2] Management's Comments on Operating Environment and Future Outlook - Management noted that it is difficult to predict customer reactions to pending changes in the risk model for PAD from CMS due to various factors at play in the market [17] - The company is committed to maintaining investments in research and development to stay at the forefront of innovation [5] Other Important Information - The company anticipates incurring severance costs in the range of $700,000 to $900,000, which are expected to result in a reduction in quarterly operating expenses of approximately $1.5 million to $2 million [3] - The company is exploring inorganic growth initiatives to diversify its product portfolio [11] Q&A Session Summary Question: Reaction of health plans and fee per test customers to CMS changes - Management indicated that it is too early to speculate on potential impacts to customers, but testing is currently at an increased rate [18] Question: Customer interest in heart dysfunction product and revenue expectations - Management confirmed positive feedback from initial installations of QuantaFlo HD, but noted that market uptake will take time and they are not providing specific guidance on revenue [19][20] Question: Priorities regarding downsizing and streamlining initiatives - Management explained that the focus is on automation and technology improvements, leading to a reduced need for certain staff areas, and emphasized the importance of capitalizing on emerging market opportunities [22]