Silk Road Medical Reports Fourth Quarter and Full Year 2023 Financial Results and Provides 2024 Financial Outlook
- Silk Road Medical reported revenue growth in Q4 2023 and full year 2023 driven by increased TCAR adoption.
- The company completed over 25,000 TCAR procedures in 2023 and received expanded coverage for TCAR.
- Silk Road initiated market releases for new tapered configurations for its ENROUTE Transcarotid Stent System.
- Despite revenue growth, operating expenses increased, leading to a net loss for both Q4 2023 and full year 2023.
- The company projects revenue of $194-198 million for the full year 2024.
- Gross margin for the full year 2023 decreased to 72% compared to 73% in 2022 due to unfavorable production variances.
- Operating expenses increased by 22% in full year 2023 compared to 2022, driven by increased headcount.
- Net loss was $55.7 million in the full year 2023, or a loss of $1.44 per share, compared to $55.0 million in 2022.
- Adjusted EBITDA was a loss of $17.7 million for the full year 2023, compared to a loss of $25.1 million for 2022.
Insights
The reported revenue growth of 28% year-over-year for Silk Road Medical is a robust indicator of the company's increasing market penetration, particularly in the adoption of its TCAR (TransCarotid Artery Revascularization) procedure. This growth, coupled with the expanded coverage decision by CMS (Centers for Medicare & Medicaid Services), suggests a solidifying payer acceptance which is critical for the sustainability and predictability of future revenues. However, the decrease in gross margin from 73% to 72% signals potential cost pressures or scaling challenges that could impact profitability.
On the expense side, an 18% increase in operating expenses, primarily due to increased headcount, indicates strategic investments in the company's growth potential. However, investors should monitor whether these investments translate into sufficient revenue growth to achieve profitability, as evidenced by the net loss figures. The adjusted EBITDA improvement is a positive sign, showing some operational efficiency gains despite the net losses. The provided 2024 financial guidance projects further revenue growth, which will be a critical metric for investor confidence.
The completion of over 25,000 TCAR procedures in 2023 and the cumulative total exceeding 85,000 is a testament to the increasing clinical acceptance and utilization of Silk Road Medical's technology. The market release of new stent configurations and distribution agreements in Japan and China represent strategic moves to capture international market share and diversify revenue sources. These steps are crucial given the competitive nature of the medical device industry and the need for continuous innovation and market expansion.
However, the company must navigate various regulatory environments and tailor its marketing strategies to different healthcare systems. The gross margin dip, despite increased production volumes, indicates there may be cost inefficiencies or pricing pressures that could affect the company's international competitiveness. Long-term success will depend on Silk Road Medical's ability to leverage its expanded CMS coverage to increase domestic market penetration while scaling operations internationally without compromising profit margins.
The revised national coverage decision by CMS is a pivotal development for Silk Road Medical, as it not only broadens patient access to TCAR but also simplifies the reimbursement process for providers. This regulatory tailwind can lead to an increased procedural volume, thereby enhancing the company's market position. However, the financial health of the company must be scrutinized in this context. Despite revenue growth, the persisting net losses and the slight decline in gross margin raise concerns about the company's cost structure and pricing strategy.
From an economic standpoint, the balance between investment in growth (e.g., headcount, international expansion) and the necessity of achieving a sustainable financial model is delicate. The company's cash reserves of $190.9 million provide a buffer for strategic initiatives but must be managed judiciously to ensure long-term viability. The financial guidance for 2024 indicates optimism, but stakeholders should seek clarity on the path to profitability and how increased adoption will translate into improved financial metrics.
SUNNYVALE, Calif., Feb. 28, 2024 (GLOBE NEWSWIRE) -- Silk Road Medical, Inc. (Nasdaq: SILK), a company focused on reducing the risk of stroke and its devastating impact, today reported financial results for the three months and full year ended December 31, 2023.
“With the right team in place, broad reimbursement, and extensive evidence in support of TCAR, we are laser focused on deepening adoption in physicians who perform TCAR,” said Chas McKhann, CEO of Silk Road Medical. “My experience thus far at Silk Road has only served to further validate the vast opportunity that we see for TCAR to benefit many more patients with carotid artery disease, and I’m excited by the underlying progress we are already making towards that end.”
Recent Business Highlights
- Completed more than 25,000 TCAR procedures in 2023, bringing the cumulative total to over 85,000
- Received expanded coverage for TCAR under a revised national coverage decision issued by CMS, further expanding access to TCAR and reducing administrative barriers
- Initiated the limited market release of new tapered configurations for the Company’s ENROUTE Transcarotid Stent System
- Executed distribution agreements with Medico’s Hirata in Japan and Genesis MedTech Group in China following clearance for the Company’s ENROUTE Stent and ENROUTE Neuroprotection System in both countries
Fourth Quarter 2023 Financial Results
Revenue for the fourth quarter of 2023 was
Gross profit for the fourth quarter of 2023 was
Operating expenses were
Net loss was
Adjusted EBITDA was a loss of
For additional information regarding non-GAAP financial measures, see “Use of Non-GAAP Financial Measures” and “Reconciliation of GAAP Net Loss to Adjusted EBITDA” below.
Full Year 2023 Financial Results
Revenue for the full year 2023 was
Gross profit for the full year 2023 was
Operating expenses were
Net loss was
Adjusted EBITDA was a loss of
Cash, cash equivalents and investments were
2024 Financial Guidance
Silk Road Medical projects revenue for the full year 2024 to range from
Conference Call
Silk Road Medical will host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Wednesday, February 28, 2024, to discuss its fourth quarter and full year 2023 financial results. Those interested in listening to the conference call should register online using this link. Participants are encouraged to register more than 15 minutes before the start of the call. A live and replay version of the webcast will be available at https://investors.silkroadmed.com and will remain available for at least 12 months.
About Silk Road Medical
Silk Road Medical, Inc. (NASDAQ: SILK), is a medical device company located in Sunnyvale, California and Plymouth, Minnesota, that is focused on reducing the risk of stroke and its devastating impact. The Company has pioneered a new approach for the treatment of carotid artery disease called TransCarotid Artery Revascularization (TCAR). TCAR is a clinically proven procedure combining surgical principles of neuroprotection with minimally invasive endovascular techniques to treat blockages in the carotid artery at risk of causing a stroke. For more information on how Silk Road Medical is delivering brighter patient outcomes through brighter clinical thinking, visit www.silkroadmed.com and connect on X, LinkedIn and Facebook.
Forward-Looking Statements
Statements contained in this press release that relate to future, not past, events are forward-looking statements under the Private Securities Litigation Reform Act of 1995, including Silk Road Medical’s financial guidance and statements related to the future opportunity of its business. Forward-looking statements are based on current expectations of future events and often can be identified by words such as “expect,” “should,” “project,” “anticipate,” “intend,” “will,” “can,” “may,” “believe,” “could,” “continue,” “outlook,” “guidance,” “future,” other words of similar meaning or the use of future dates. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Risks and uncertainties may cause Silk Road Medical’s actual results to be materially different than those expressed in or implied by Silk Road Medical’s forward-looking statements. For Silk Road Medical, such risks and uncertainties include, among others, future operating results and financial performance; the Company’s success in retaining and recruiting key personnel; the ability to continue to grow the business and expand the use of TCAR; the ability to obtain an adequate supply of materials and components from its third-party suppliers; product development plans and the ability to commercialize new products in a timely manner; the success of current clinical trials; plans to conduct further clinical trials; the ability to obtain additional indications or new regulatory approvals or clearances for its products; market acceptance and use of its products by physicians; the ability to grow and leverage its commercialization infrastructure; the effect of increased competition; the effect of economic conditions and COVID-19 or similar pandemics on its business; government and third-party payer coverage and reimbursement and the ability to obtain and maintain intellectual property protection for its products. More detailed information on these and other factors that could affect Silk Road Medical’s actual results are described in its filings with the U.S. Securities and Exchange Commission, including its most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission today, February 28, 2024. Silk Road Medical undertakes no obligation to update its forward-looking statements.
Use of Non-GAAP Financial Measures
To supplement its financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses adjusted EBITDA, which is a non-GAAP financial measure, in this press release. A reconciliation of non-GAAP adjusted EBITDA to GAAP net loss, which is the most directly comparable GAAP financial measure, is provided in the financial statement tables included in this press release, and investors are encouraged to review the reconciliation. Non-GAAP adjusted EBITDA is calculated by adding back to net loss or excluding, as appropriate, interest income and expense, provision for income taxes, and charges for depreciation and amortization and is further adjusted by adding back in or excluding, as appropriate, other income and expense and stock-based compensation. The Company believes the presentation of adjusted EBITDA provides useful information to investors as it provides visibility to the Company’s underlying continuing operating performance from period to period by excluding the impact of certain items that are non-cash or non-recurring in nature or not related to the Company’s core business operations. Adjusted EBITDA is also frequently used by analysts, investors and other interested parties to evaluate companies in the same industry. Management uses adjusted EBITDA internally for evaluation of the performance of the Company’s business, including the allocation of resources.
The Company’s definition of adjusted EBITDA may differ from similarly titled measures used by others. Adjusted EBITDA should be considered only as a supplement to, and not as a substitute for, or superior to, net income or loss prepared in accordance with GAAP. Because adjusted EBITDA excludes the effect of items that increase or decrease the Company’s reported results of operations, management strongly encourages investors to review, when they become available, the Company’s financial statements and publicly filed SEC reports in their entirety.
Investor Contact:
Marissa Bych
Gilmartin Group
investors@silkroadmed.com
Media:
Michael Fanucchi
Silk Road Medical
mfanucchi@silkroadmed.com
| SILK ROAD MEDICAL, INC. | |||||||||||||||
| Statements of Operations Data | |||||||||||||||
| (unaudited, in thousands, except share and per share data) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | $ | 47,270 | $ | 40,070 | $ | 177,134 | $ | 138,638 | |||||||
| Cost of goods sold | 12,468 | 10,979 | 50,048 | 37,876 | |||||||||||
| Gross profit | 34,802 | 29,091 | 127,086 | 100,762 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 10,064 | 9,200 | 41,324 | 36,449 | |||||||||||
| Selling, general and administrative | 39,110 | 32,521 | 145,033 | 116,317 | |||||||||||
| Total operating expenses | 49,174 | 41,721 | 186,357 | 152,766 | |||||||||||
| Loss from operations | (14,372 | ) | (12,630 | ) | (59,271 | ) | (52,004 | ) | |||||||
| Interest income | 2,618 | 1,776 | 9,957 | 2,527 | |||||||||||
| Interest expense | (1,734 | ) | (1,732 | ) | (6,871 | ) | (5,098 | ) | |||||||
| Loss on debt extinguishment | — | — | — | (245 | ) | ||||||||||
| Other income (expense), net | 477 | (28 | ) | 442 | (190 | ) | |||||||||
| Net loss | (13,011 | ) | (12,614 | ) | (55,743 | ) | (55,010 | ) | |||||||
| Other comprehensive income (loss): | |||||||||||||||
| Unrealized gain (loss) on investments, net | 356 | 25 | 238 | (166 | ) | ||||||||||
| Other comprehensive income (loss) | 356 | 25 | 238 | (166 | ) | ||||||||||
| Comprehensive loss | $ | (12,655 | ) | $ | (12,589 | ) | $ | (55,505 | ) | $ | (55,176 | ) | |||
| Net loss per share, basic and diluted | $ | (0.33 | ) | $ | (0.34 | ) | $ | (1.44 | ) | $ | (1.54 | ) | |||
| Weighted average common shares used to compute net loss per share, basic and diluted | 39,048,656 | 37,609,019 | 38,804,343 | 35,775,672 | |||||||||||
| SILK ROAD MEDICAL, INC. | |||||||
| Balance Sheets Data | |||||||
| (unaudited, in thousands) | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 20,210 | $ | 55,358 | |||
| Short-term investments | 161,264 | 158,316 | |||||
| Accounts receivable, net | 23,573 | 18,007 | |||||
| Inventories | 29,876 | 19,293 | |||||
| Prepaid expenses and other current assets | 5,912 | 3,924 | |||||
| Total current assets | 240,835 | 254,898 | |||||
| Long-term investments | 9,456 | — | |||||
| Property and equipment, net | 8,114 | 9,372 | |||||
| Restricted cash | — | 155 | |||||
| Other non-current assets | 6,904 | 5,260 | |||||
| Total assets | $ | 265,309 | $ | 269,685 | |||
| Liabilities and stockholders' equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 5,676 | $ | 2,523 | |||
| Accrued liabilities | 24,607 | 21,965 | |||||
| Total current liabilities | 30,283 | 24,488 | |||||
| Long-term debt | 75,626 | 74,596 | |||||
| Other liabilities | 8,249 | 6,726 | |||||
| Total liabilities | 114,158 | 105,810 | |||||
| Stockholders' equity | |||||||
| Preferred stock, | — | — | |||||
| Common stock, | 39 | 38 | |||||
| Additional paid-in capital | 550,495 | 507,715 | |||||
| Accumulated other comprehensive income (loss) | 72 | (166 | ) | ||||
| Accumulated deficit | (399,455 | ) | (343,712 | ) | |||
| Total stockholders' equity | 151,151 | 163,875 | |||||
| Total liabilities and stockholders' equity | $ | 265,309 | $ | 269,685 | |||
| SILK ROAD MEDICAL, INC. | |||||||||||||||
| Reconciliation of GAAP Net Loss to Adjusted EBITDA | |||||||||||||||
| (unaudited, in thousands) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| GAAP Net Loss | $ | (13,011 | ) | $ | (12,614 | ) | $ | (55,743 | ) | $ | (55,010 | ) | |||
| Non-GAAP Adjustments: | |||||||||||||||
| Interest (income) expense, net | (884 | ) | (44 | ) | (3,086 | ) | 2,571 | ||||||||
| Depreciation and amortization | 656 | 661 | 2,696 | 2,127 | |||||||||||
| Other (income) expense, net | (477 | ) | 28 | (442 | ) | 190 | |||||||||
| Stock-based compensation expense | 9,609 | 7,546 | 38,893 | 25,023 | |||||||||||
| Adjusted EBITDA | $ | (4,107 | ) | $ | (4,423 | ) | $ | (17,682 | ) | $ | (25,099 | ) | |||
FAQ
What was Silk Road Medical's revenue for the full year 2023?
How many TCAR procedures did Silk Road Medical complete in 2023?
What was the net loss for Silk Road Medical in the full year 2023?
What is Silk Road Medical's financial guidance for the full year 2024?
When will Silk Road Medical host a conference call to discuss its financial results?
