Stereotaxis(US:STXS)2023-11-09 19:42Financial Data and Key Metrics Changes - Revenue for Q3 2023 totaled $7.8 million, up 2% from $7.7 million in the prior year [24] - Operating loss and net loss for Q3 were $5.6 million and $5.4 million, compared to $5.1 million and $4.9 million in the previous year [5] - Gross margin for Q3 2023 was 52% of revenue, with recurring revenue gross margin at 80% and system gross margin at 18% [25] - Negative free cash flow for Q3 was $1 million, with cash and cash equivalents at $23 million and no debt [6] Business Line Data and Key Metrics Changes - System revenue of $3.5 million reflects revenue recognition on the delivery of two Genesis systems [24] - Recurring revenue for the quarter was $4.3 million, predominantly impacted by the absence of J&J royalty and residual pressure on procedures [24] - The company recognized revenue from the adoption of Genesis by both Greenfield new accounts and existing upgrade customers [13] Market Data and Key Metrics Changes - The company has seen strengths in capital activity out of Europe, benefiting from enhanced commercial leadership and greater market appreciation for upcoming innovations [14] - In contrast, several projects in China have been delayed due to a countrywide anti-corruption drive, freezing hospital capital purchasing activity [15] Company Strategy and Development Direction - The company is actively driving a broad-based comprehensive innovation strategy forward, including the development of MAGiC and a smaller self-shielding robot [2][16] - The innovation strategy aims to expand the clinical use of the robotic platform beyond electrophysiology to various endovascular procedures [22] - The company plans to submit a PMA supplement for MAGiC using existing data, aiming to accelerate access for US physicians and patients [18] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the ability to advance the innovation strategy to market and reach profitability without additional financings [8] - The company acknowledges the importance of maintaining financial strength in the current macro environment while delivering commercial results [8] - Management expressed optimism about the impact of the innovation strategy and the potential for growth beyond the current backlog [1][24] Other Important Information - The company has a cash balance expectation of $22 million by year-end with no debt [6] - The company is working on regulatory submissions for MAGiC and expects to receive responses from European health authorities soon [17] Q&A Session Questions and Answers Question: What is being done differently in Europe to drive increased activity? - The new leadership in Europe has implemented a disciplined process and is leveraging product ecosystem aspects, including the anticipation of MAGiC approval [28] Question: Can you clarify the expectations for revenue growth in 2023? - Management indicated that while they are confident in growth in the coming quarters, they are not certain about achieving annualized double-digit revenue growth based on fourth-quarter results [46] Question: What is the timeline for collecting data in Europe for MAGiC? - The trial is structured to capture acute clinical data from 20 patients, with the potential to enroll up to 30 patients at each of the three sites [67] Question: How does the company view the replacement cycle for its systems? - A significant majority of the installed base is over 10 years old, indicating a ripe opportunity for replacement, although the replacement cycle is still tied to X-ray system replacements [65][66]