Semler Scientific Reports Fourth Quarter and Full Year 2023 Financial Results
- Strong revenue and net income growth in Q4 and full year 2023 compared to 2022.
- Key financial figures include Q4 revenues of $15.1 million, a 9% increase, and full year revenues of $68.2 million, a 20% rise.
- Q4 net income was $4.2 million, up by 31%, and full year net income reached $20.6 million, a 44% increase.
- Cash balance increased to $57.3 million.
- Focus on marketing QuantaFlo® for peripheral arterial disease testing drove sales growth.
- Plans to seek FDA clearance for expanded product use.
- None.
Insights
The reported financial results from Semler Scientific, Inc. showcase a robust year-over-year growth, both in terms of revenue and net income. The 20% increase in annual revenues and a more pronounced 44% surge in net income reflect effective cost management and an expanding market share, especially considering the significant growth in variable fee software license revenues, which jumped by 36%. This indicates a successful adoption and integration of Semler's medical products into healthcare systems, potentially leading to recurring revenue streams.
However, the cost of revenues has also seen a substantial increase of 64%, which is notably higher than the revenue growth rate. This could suggest scaling challenges or increased investment in product development, which should be monitored for future margin pressures. The write-off of prepaid software licenses for Insulin Insights is a one-time expense that investors should note, as it could indicate a strategic pivot or a response to market demands that did not materialize as expected.
Additionally, the reliance on two customers for a significant portion of their revenue poses a concentration risk that could impact future performance if either customer relationship changes. Diversification of the customer base should be a strategic focus to mitigate this risk.
The performance of Semler Scientific is indicative of the growing demand for medical products and services that assist in evaluating and treating chronic diseases. The increased sales of QuantaFlo® for peripheral arterial disease testing signal that the company is effectively addressing a critical need within the healthcare sector. Moreover, the pursuit of a new 510(k) clearance from the FDA with expanded labeling for use as an aid in the diagnosis of other cardiovascular diseases could open additional market opportunities and drive future growth.
It is also worth noting the strategic implications of the increased cash balance, which positions the company well for future investments or acquisitions. The ability to self-finance growth or innovation is a competitive advantage in the healthcare technology market, where rapid advancements are common.
The reported progress in obtaining FDA clearance for expanded labeling of Semler's products is a significant development. FDA clearance is a rigorous process that validates the safety and efficacy of medical devices and expanded labeling can significantly broaden the potential use cases and market for a product. This could enhance the company's value proposition to healthcare providers and patients, potentially leading to increased adoption and revenue growth.
The focus on chronic diseases, such as cardiovascular conditions, aligns with global health trends and the increasing prevalence of these diseases. As such, Semler's product offerings are well-positioned to meet a critical and growing demand in the healthcare market. The financial success and strategic moves of the company should be seen in the context of the broader healthcare landscape, which is increasingly prioritizing early diagnosis and management of chronic conditions.
2023 Q4 and full year highlights compared to the corresponding period of 2022:
- Fourth quarter revenues were
$15.1 million 9% - Fourth quarter net income was
$4.2 million 31% - Full year revenues were
$68.2 million 20% - Full year net income was
$20.6 million 44% - Cash balance increased to
$57.3 million
"We are pleased to report continued growth in year-over-year quarterly and full year revenues and net income, predominately from sales of QuantaFlo® for peripheral arterial disease testing," said Doug Murphy-Chutorian, MD, chief executive officer of Semler Scientific. "We remain focused on continuing to market our product while seeking a new 510(k) clearance from the FDA with expanded labeling for use as an aid in the diagnosis of other cardiovascular diseases."
FINANCIAL RESULTS
For the year ended December 31, 2023, compared to the corresponding period of 2022, Semler Scientific reported:
- Revenues of
$68.2 million $11.5 million 20% , compared to$56.7 million - Fixed fee software license revenues of
$37.3 million $3.3 million 9% , compared to$34.0 million - Variable fee software license revenues of
$29.0 million $7.7 million 36% , compared to$21.3 million - Sales of other products of
$1.9 million $0.5 million 42% , compared to$1.4 million
- Fixed fee software license revenues of
- Cost of revenues of
$7.0 million $2.7 million 64% compared to$4.3 million 10% , compared to8% in the prior year period. - Total operating expenses of
$45.9 million $6.4 million 16% , compared to$39.5 million 67% compared to70% . - Pre-tax income of
$24.1 million $6.4 million 36% , compared to$17.7 million - Income tax expense of
$3.5 million 15% , compared to$3.4 million 19% . - Net income of
$20.6 million $3.06 $2.63 $6.3 million 44% , compared to$14.3 million $2.13 $1.79
Note: Cost of revenues for the full year ended December 31, 2023 includes a
Semler Scientific's two largest customers (including their affiliates) comprised
For the fourth quarter ended December 31, 2023, compared to the corresponding period of 2022, Semler Scientific reported:
- Revenues of
$15.1 million $1.3 million 9% , compared to$13.8 million - Fixed fee software license revenues of
$8.8 million $0.2 million 2% , compared to$9.0 million - Variable fee software license revenues of
$5.8 million $1.3 million 28% compared to$4.5 million - Sales of other products of
$0.5 million $0.2 million 71% , compared to$0.3 million
- Fixed fee software license revenues of
- Cost of revenues of
$3.4 million $2.2 million 186% , compared to$1.2 million 22% compared to9% . - Total operating expenses of
$12.5 million $2.3 million 23% , compared to$10.2 million 83% , compared to74% . - Pre-tax income of
$2.8 million $1.2 million 29% , compared to$4.0 million - Income tax benefit of
$1.4 million 50% compared to income tax expense of$0.7 million 19% . - Net income of
$4.2 million $0.62 $0.55 $1.0 million 31% , compared to$3.2 million $0.48 $0.41
Note: Cost of revenues for the fourth quarter and full year ended December 31, 2023 includes a
Semler Scientific's three largest customers (including their affiliates) comprised
MAJOR ACCOMPLISHMENTS IN 2023
- Continued year-over-year revenue growth.
- 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 fourth quarter and year ended December 31, 2023, 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/10185342/fb4eeec618. 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. | ||||||||||||
Statements of Income | ||||||||||||
Unaudited | ||||||||||||
(In thousands of | ||||||||||||
For the three months ended December 31, | For the year ended December 31, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Revenues | $ | 15,056 | $ | 13,794 | $ | 68,184 | $ | 56,686 | ||||
Operating expenses: | ||||||||||||
Cost of revenues | 3,384 | 1,182 | 6,984 | 4,252 | ||||||||
Engineering and product development | 1,207 | 1,365 | 5,773 | 4,809 | ||||||||
Sales and marketing | 4,546 | 4,654 | 18,147 | 17,685 | ||||||||
General and administrative | 3,262 | 2,977 | 14,290 | 12,737 | ||||||||
Strategic streamlining | 135 | — | 734 | — | ||||||||
Total operating expenses | 12,534 | 10,178 | 45,928 | 39,483 | ||||||||
Income from operations | 2,522 | 3,616 | 22,256 | 17,203 | ||||||||
Interest and dividend income | 699 | 343 | 2,471 | 494 | ||||||||
Impairment of investments | (337) | — | (337) | — | ||||||||
Change in fair value of notes held for investment | (90) | — | (307) | — | ||||||||
Other income (expenses) | 20 | (3) | 17 | (5) | ||||||||
Other income, net | 292 | 340 | 1,844 | 489 | ||||||||
Pre-tax income | 2,814 | 3,956 | 24,100 | 17,692 | ||||||||
Income tax provision | (1,407) | 740 | 3,517 | 3,367 | ||||||||
Net income | $ | 4,221 | $ | 3,216 | $ | 20,583 | $ | 14,325 | ||||
Net income per share, basic | $ | 0.62 | $ | 0.48 | $ | 3.06 | $ | 2.13 | ||||
Weighted average number of shares used in computing basic net | 6,804,998 | 6,691,406 | 6,732,806 | 6,726,687 | ||||||||
Net income per share, diluted | $ | 0.55 | $ | 0.41 | $ | 2.63 | $ | 1.79 | ||||
Weighted average number of shares used in computing diluted | 7,734,263 | 7,917,991 | 7,819,159 | 7,999,750 | ||||||||
Semler Scientific, Inc. | ||||||
Balance Sheets | ||||||
Unaudited | ||||||
(In thousands of | ||||||
December 31, | December 31, | |||||
2023 | 2022 | |||||
Assets | ||||||
Current Assets: | ||||||
Cash and cash equivalents | $ | 57,200 | $ | 23,014 | ||
Restricted cash | 132 | — | ||||
Short-term investments | — | 20,073 | ||||
Trade accounts receivable, net of allowance for credit losses of | 6,125 | 3,884 | ||||
Inventory, net | 445 | 469 | ||||
Prepaid expenses and other current assets | 2,042 | 1,468 | ||||
Total current assets | 65,944 | 48,908 | ||||
Assets for lease, net | 2,285 | 2,478 | ||||
Property and equipment, net | 720 | 667 | ||||
Long-term investments | 512 | 821 | ||||
Notes held for investment (includes measured at fair value of | 5,372 | 4,679 | ||||
Other non-current assets | 270 | 2,842 | ||||
Deferred tax assets | 2,962 | 2,298 | ||||
Total assets | $ | 78,065 | $ | 62,693 | ||
Liabilities and Stockholders' Equity | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 402 | $ | 835 | ||
Accrued expenses | 4,502 | 4,748 | ||||
Deferred revenue | 1,120 | 1,160 | ||||
Other short-term liabilities | 176 | 114 | ||||
Total current liabilities | 6,200 | 6,857 | ||||
Long-term liabilities: | ||||||
Other long-term liabilities | 70 | 160 | ||||
Total long-term liabilities | 70 | 160 | ||||
Commitments and contingencies (Note 13) | ||||||
Stockholders' equity: | ||||||
Common stock, | 7 | 7 | ||||
Additional paid-in capital | 11,985 | 16,449 | ||||
Retained earnings | 59,803 | 39,220 | ||||
Total stockholders' equity | 71,795 | 55,676 | ||||
Total liabilities and stockholders' equity | $ | 78,065 | $ | 62,693 | ||
Semler Scientific, Inc. | ||||||
Statements of Cash Flows | ||||||
Unaudited | ||||||
(In thousands of | ||||||
Year ended December 31, | ||||||
2023 | 2022 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
Net income | $ | 20,583 | $ | 14,325 | ||
Reconciliation of Net Income to Net Cash Provided by Operating Activities: | ||||||
Depreciation | 599 | 589 | ||||
Deferred tax expense | (664) | (351) | ||||
Loss on disposal of assets for lease | 369 | 463 | ||||
Write off of prepaid software licenses | 2,476 | — | ||||
Gain on short-term investments | (151) | (77) | ||||
Allowance for credit losses | 268 | 103 | ||||
Change in fair value of notes held for investment | 307 | — | ||||
Stock-based compensation | 944 | 741 | ||||
Impairment of long term investments | 337 | — | ||||
Changes in Operating Assets and Liabilities: | ||||||
Trade accounts receivable | (2,508) | (367) | ||||
Inventory | 24 | 81 | ||||
Prepaid expenses and other current assets | (603) | 2,576 | ||||
Other non-current assets | 96 | (2,510) | ||||
Accounts payable | (433) | 392 | ||||
Accrued expenses | (246) | 1,310 | ||||
Other current and non-current liabilities | (68) | 188 | ||||
Net Cash Provided by Operating Activities | 21,330 | 17,463 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
Additions to property and equipment | (345) | (476) | ||||
Purchase of notes held for investment | (1,000) | — | ||||
Proceeds from maturities of short-term investments | 78,093 | (4,679) | ||||
Purchase of short-term investments | (57,869) | (19,996) | ||||
Purchase of assets for lease | (483) | (1,684) | ||||
Net Cash Provided by (Used in) Investing Activities | 18,396 | (26,835) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
Taxes paid related to net settlement of equity awards | (3,510) | (114) | ||||
Common stock warrants acquired | (1,949) | — | ||||
Treasury stock acquired | — | (4,991) | ||||
Proceeds from exercise of stock options | 51 | 168 | ||||
Net Cash Used in Financing Activities | (5,408) | (4,937) | ||||
INCREASE (DECREASE) IN CASH | 34,318 | (14,309) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 23,014 | 37,323 | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD | $ | 57,332 | $ | 23,014 | ||
Supplemental Disclosure of Cash Flow Information: | ||||||
Cash paid for taxes | $ | 4,060 | $ | 2,400 | ||
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; 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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