Semler Scientific® Reports First Quarter 2024 Financial Results
Semler Scientific, Inc. reported $15.9 million in revenue for the first quarter of 2024, a 13% decrease from the same period in 2023. Net income increased by 22% to $6.1 million. The company's cash balance rose to $62.9 million. Despite revenue decline from the PAD product, the CEO remains optimistic about future revenue growth pending FDA clearance for a new product. Semler Scientific also achieved year-over-year net income growth and a record cash balance.
Net income increased by 22% compared to the same period in 2023, reaching $6.1 million.
Cash, cash equivalents, and restricted cash balance increased to $62.9 million.
Continued year-over-year net income growth was achieved by the company.
First quarter revenues declined by 13% to $15.9 million compared to the corresponding period of 2023.
The cost of revenues increased to 8% of total revenues compared to 7% in the prior year period.
Insights
Analyzing Semler Scientific's financial results, we observe a mixed performance with a decrease in revenue yet an uptick in net income. The revenue decline of
Investors should weigh these results carefully. The customer concentration is notably high, with three customers accounting for a large portion of revenue, which implies potential risk from customer dependency. The pursuit of a new 510(k) clearance from the FDA could be pivotal for future growth; if successful, it might open avenues for revenue re-acceleration. However, it's essential to monitor the FDA's response as regulatory hurdles can significantly impact market dynamics and investor sentiment.
The medical products and services market, especially in the Chronic Disease Management domain where Semler operates, is highly competitive and subject to rapid technological advances. Semler's strategy to offset revenue declines through a new FDA clearance for a heart dysfunction product could be a smart move. Being granted this clearance would allow the company to diversify offerings and tap into new market segments—potentially a significant growth catalyst.
For retail investors, it's essential to look beyond the numbers and understand the broader market context. While Semler's financial efficiency is impressive, its future growth potential hinges on regulatory approvals and its ability to mitigate customer concentration risk. Observing industry trends and competitor performance is crucial, as this will give a better perspective on Semler's positioning in the market.
2024 Q1 highlights compared to the corresponding period of 2023:
- First quarter revenues were
$15.9 million 13% - First quarter net income was
$6.1 million 22% - Cash, cash equivalents and restricted cash balance increased to
$62.9 million
"We had a very strong quarter of cash generation despite the regulatory-driven, year-over-year revenue decline from our PAD product," said Doug Murphy-Chutorian, MD, chief executive officer of Semler Scientific. "We expect that our revenues will re-accelerate if we are successful in our effort to obtain a new 510(k) clearance from the FDA that would allow us to market our heart dysfunction product."
FINANCIAL RESULTS
For the first quarter ended March 31, 2024, compared to the corresponding period of 2023, Semler Scientific reported:
- Revenues of
$15.9 million $2.3 million 13% , compared to$18.2 million - Fixed fee software license revenues of
$7.1 million $2.2 million 24% , compared to$9.3 million - Variable fee software license revenues of
$8.0 million $0.6 million 6% , compared to$8.6 million - Sales of other products of
$0.8 million $0.5 million 140% , compared to$0.3 million
- Fixed fee software license revenues of
- Cost of revenues of
$1.2 million $0.1 million 2% compared to$1.3 million 8% , compared to7% in the prior year period. - Total operating expenses of
$8.9 million $3.1 million 25% , compared to$12.0 million 56% compared to66% . - Pre-tax income of
$7.8 million $1.2 million 18% , compared to$6.6 million - Income tax expense of
$1.7 million 22% , compared to$1.7 million 25% . - Net income of
$6.1 million $0.88 $0.78 $1.1 million 22% , compared to$5.0 million $0.74 $0.63
Semler Scientific's three largest customers (including their affiliates) comprised
MAJOR ACCOMPLISHMENTS IN FIRST QUARTER OF 2024
- Continued year-over-year net income growth.
- Record balance of cash and cash equivalents.
Notice of Conference Call
Semler Scientific will host a conference call today at 4:30 p.m. ET. The call will address results of the first quarter ended March 31, 2024, as well as provide a business update on Semler Scientific's strategies for the near-term future.
Participants are encouraged to pre-register for the conference call using the following link: https://dpregister.com/sreg/10187645/fc081c8059. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. Those without internet access or who are unable to pre-register may dial in by calling:
Domestic callers: (833) 816–1161
International callers: (412) 317–0717
Please specify to the operator that you would like to join the "Semler Scientific Call." The conference call will be archived on Semler Scientific's website at www.semlerscientific.com.
Semler Scientific, Inc. Condensed Statements of Income Unaudited (In thousands of | ||||||
For the three months ended March 31, | ||||||
2024 | 2023 | |||||
Revenues | $ | 15,903 | $ | 18,206 | ||
Operating expenses: | ||||||
Cost of revenues | 1,247 | 1,269 | ||||
Engineering and product development | 1,138 | 1,630 | ||||
Sales and marketing | 3,675 | 5,192 | ||||
General and administrative | 2,867 | 3,859 | ||||
Total operating expenses | 8,927 | 11,950 | ||||
Income from operations | 6,976 | 6,256 | ||||
Interest and dividend income | 819 | 484 | ||||
Change in fair value of notes held for investment | — | (107) | ||||
Other income | 2 | — | ||||
Other income, net | 821 | 377 | ||||
Pre-tax income | 7,797 | 6,633 | ||||
Income tax provision | 1,724 | 1,664 | ||||
Net income | $ | 6,073 | $ | 4,969 | ||
Net income per share, basic | $ | 0.88 | $ | 0.74 | ||
Weighted average number of shares used in computing basic net income per share | 6,892,742 | 6,701,199 | ||||
Net income per share, diluted | $ | 0.78 | $ | 0.63 | ||
Weighted average number of shares used in computing diluted net income per share | 7,782,393 | 7,896,043 | ||||
Semler Scientific, Inc. Condensed Balance Sheets (In thousands of | ||||||
March 31, | December 31, | |||||
2024 | 2023 | |||||
Unaudited | ||||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 62,754 | $ | 57,200 | ||
Restricted cash | 132 | 132 | ||||
Trade accounts receivable, net of allowance for credit losses of | 6,132 | 6,125 | ||||
Inventory, net | 408 | 445 | ||||
Prepaid expenses and other current assets | 2,479 | 2,042 | ||||
Total current assets | 71,905 | 65,944 | ||||
Assets for lease, net | 2,071 | 2,285 | ||||
Property and equipment, net | 649 | 720 | ||||
Long-term investments | 512 | 512 | ||||
Notes held for investment (includes measured at fair value of | 5,372 | 5,372 | ||||
Other non-current assets | 249 | 270 | ||||
Deferred tax assets | 3,098 | 2,962 | ||||
Total assets | $ | 83,856 | $ | 78,065 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 410 | $ | 402 | ||
Accrued expenses | 4,305 | 4,502 | ||||
Deferred revenue | 996 | 1,120 | ||||
Other short-term liabilities | 192 | 176 | ||||
Total current liabilities | 5,903 | 6,200 | ||||
Long-term liabilities: | ||||||
Other long-term liabilities | 47 | 70 | ||||
Total long-term liabilities | 47 | 70 | ||||
Commitments and contingencies (Note 14) | ||||||
Stockholders' equity: | ||||||
Common stock, issued, and 6,919,771 and 6,885,019 shares outstanding (treasury shares of 214,422 and 214,422), respectively | 7 | 7 | ||||
Additional paid-in capital | 12,023 | 11,985 | ||||
Retained earnings | 65,876 | 59,803 | ||||
Total stockholders' equity | 77,906 | 71,795 | ||||
Total liabilities and stockholders' equity | $ | 83,856 | $ | 78,065 | ||
Semler Scientific, Inc. Condensed Statements of Cash Flows Unaudited (In thousands of | ||||||
Three months ended March 31, | ||||||
2024 | 2023 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income | $ | 6,073 | $ | 4,969 | ||
Reconciliation of Net Income to Net Cash Provided by Operating Activities: | ||||||
Depreciation | 176 | 129 | ||||
Deferred tax expense | (136) | (80) | ||||
Loss on disposal of assets for lease | 189 | 78 | ||||
Gain on short-term investments | — | (305) | ||||
Allowance for credit losses | (55) | 48 | ||||
Change in fair value of notes held for investment | — | 107 | ||||
Stock-based compensation | 27 | 702 | ||||
Changes in Operating Assets and Liabilities: | ||||||
Trade accounts receivable | 66 | (5,507) | ||||
Inventory | 37 | (43) | ||||
Prepaid expenses and other current assets | (455) | (1,301) | ||||
Other non-current assets | 21 | 25 | ||||
Accounts payable | 8 | (537) | ||||
Accrued expenses | (196) | 2,458 | ||||
Other current and non-current liabilities | (131) | 118 | ||||
Net Cash Provided by Operating Activities | 5,624 | 861 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Additions to property and equipment | (4) | (95) | ||||
Purchase of notes held for investment | — | (500) | ||||
Proceeds from maturities of short-term investments | — | 20,211 | ||||
Purchase of short-term investments | — | (37,496) | ||||
Purchase of assets for lease | (77) | (544) | ||||
Net Cash Used in Investing Activities | (81) | (18,424) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Taxes paid related to net settlement of equity awards | (45) | (146) | ||||
Proceeds from exercise of stock options | 56 | — | ||||
Net Cash Provided by (Used in) Financing Activities | 11 | (146) | ||||
INCREASE (DECREASE) IN CASH | 5,554 | (17,709) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD | 57,332 | 23,014 | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 62,886 | $ | 5,305 | ||
About Semler Scientific, Inc.:
Semler Scientific, Inc. develops, manufactures and markets innovative products and services that assist in evaluating and treating chronic diseases. Its flagship product, QuantaFlo®, which is patented and cleared by the
Forward-Looking Statements
This press release contains "forward-looking" statements. Such statements can be identified by, among other things, the use of forward-looking language such as the words "believe," "goal," "may," "will," "intend," "expect," "anticipate," "estimate," "project," "would," "could" or words with similar meaning or the negatives of these terms or by the discussion of strategy or intentions. The forward-looking statements in this release include express or implied statements regarding seeking a new 510(k) clearance for QuantaFlo with expanded indications for use; and the revenue impact of marketing QuantaFlo for heart dysfunction; among others. Such forward-looking statements are subject to a number of risks and uncertainties that could cause Semler Scientific's actual results to differ materially from those discussed here, such as whether or not insurance plans and other customers will continue to license its cardiovascular testing products, including the risk of changes in the reimbursement landscape for its customers including related to the recent CMS rate announcement; whether or not QuantaFlo can successfully aid in the diagnosis of PAD or obtain a new 510(k) clearance for expanded indications; along with those risk factors detailed in Semler Scientific's filings with the Securities and Exchange Commission. These forward-looking statements involve assumptions, estimates, and uncertainties that reflect current internal projections, expectations or beliefs. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. All forward-looking statements contained in this press release are qualified in their entirety by these cautionary statements and the risk factors described above. Furthermore, all such statements are made as of the date of this release and Semler Scientific assumes no obligation to update or revise these statements unless otherwise required by law.
INVESTOR CONTACT:
Renae Cormier
Chief Financial Officer
ir@semlerscientific.com
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SOURCE Semler Scientific, Inc.
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