Semler Scientific Reports Third Quarter and Year-to-Date 2023 Financial Results

Semler Scientific Reports Third Quarter and Year-to-Date 2023 Financial Results

PR Newswire

2023 Q3 highlights:

  • Revenue of $16.3 million, an increase of 16% compared to the corresponding period of 2022
  • Net income of $5.5 million, an increase of 50% compared to the corresponding period of 2022
  • Quarter-ending cash, cash equivalents and short-term investments of $56.0 million

SANTA CLARA, Calif., Nov. 9, 2023 /PRNewswire/ -- Semler Scientific, Inc. (Nasdaq: SMLR), a company that develops, manufactures and markets innovative medical products and services that assist in evaluating and treating chronic diseases, today reported financial results for the three and nine months ended September 30, 2023.

"We are pleased to report consistent growth in year-over-year quarterly revenue and pre-tax net income, predominately from sales of QuantaFlo® for peripheral arterial disease testing," said Doug Murphy-Chutorian, MD, chief executive officer of Semler Scientific. "We are encouraged by our results year-to-date and remained focused on expanding our business in support of the diagnosis of heart dysfunction."

FINANCIAL RESULTS

For the quarter ended September 30, 2023, compared to the corresponding period of 2022, Semler Scientific reported:

  • Revenue of $16.3 million, an increase of $2.3 million, or 16%, compared to $14.0 million.
    • Fixed fee software license revenues of $9.5 million, an increase of $0.9 million, or 11%, compared to $8.6 million.
    • Variable fee software license revenues of $6.3 million, an increase of $1.4 million, or 28%, compared to $4.9 million.
    • Sales of other products of $0.5 million, same as the prior year period.
  • Cost of revenues of $1.1 million, same as the prior year period. As a percentage of revenues, cost of revenues decreased to 7%, compared to 8% in the prior year period.
  • Total operating expenses of $10.0 million, which includes cost of revenues, an increase of $0.4 million, or 5%, compared to $9.6 million. As a percentage of revenues, operating expenses decreased to 61% compared to 68%.
  • Pre-tax net income of $7.0 million, an increase of $2.4 million, or 52%, compared to $4.6 million.
  • Income tax expense of $1.5 million, or an effective tax rate of 21%, compared to $0.9 million, or an effective tax rate of 20%.
  • Net income of $5.5 million, or $0.82 per basic share and $0.71 per diluted share, an increase of $1.8 million, or 50%, compared to $3.7 million, or $0.55 per basic share and $0.46 per diluted share.

Semler Scientific's three largest customers (including their affiliates) comprised 36%, 28% and 11% of third quarter revenues in 2023.

For the nine months ended September 30, 2023, compared to the corresponding period of 2022, Semler Scientific reported:

  • Revenues of $53.1 million, an increase of $10.2 million, or 24%, compared to $42.9 million.
    • Fixed fee software license revenues of $28.5 million, an increase of $3.4 million, or 14%, compared to $25.1 million.
    • Variable fee software license revenues of $23.2 million, an increase of $6.5 million, or 39% compared to $16.7 million.
    • Sales of other products of $1.4 million, an increase of $0.3 million, or 35%, compared to $1.1 million.
  • Cost of revenues of $3.6 million, an increase of $0.5 million, or 17%, compared to $3.1 million. As a percentage of revenues, cost of revenues was flat at 7%.
  • Total operating expenses of $33.4 million, which includes cost of revenues, an increase of $4.1 million, or 14%, compared to $29.3 million. As a percentage of revenues, operating expenses decreased to 63%, compared to 68%.
  • Pre-tax net income of $21.3 million, an increase of $7.6 million, or 55%, compared to $13.7 million.
  • Income tax expense of $4.9 million, or an effective tax rate of 23% compared to $2.6 million, or an effective tax rate of 19%.
  • Net income of $16.4 million, or $2.44 per basic share and $2.09 per diluted share, an increase of $5.3 million, or 47%, compared to $11.1 million, or $1.65 per basic share and $1.38 per diluted share.

Semler Scientific's two largest customers (including their affiliates) comprised 36% and 34% of year-to-date revenues in 2023.

THIRD QUARTER 2023 MAJOR ACCOMPLISHMENTS

  1. Continued year-over-year quarterly revenue growth.
  2. Continued year-over-year pre-tax net income growth.
  3. Record balance of cash, cash equivalents and short-term investments balance.

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 third quarter and nine months ended September 30, 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/10182979/fa8e2b792d. 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: (866) 777–2509
International callers: (412) 317–5413

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 U.S. Dollars, except share and per share data)
















For the three months ended September 30, 


For the nine months ended September 30, 



2023


2022


2023



2022














Revenues


$

16,316


$

14,047


$

53,127


$

42,891

Operating expenses:













Cost of revenues



1,111



1,138



3,599



3,070

Engineering and product development



1,174



1,244



4,566



3,444

Sales and marketing



3,423



4,153



13,601



13,031

General and administrative



3,710



3,045



11,028



9,760

Strategic streamlining



599





599



Total operating expenses



10,017



9,580



33,393



29,305

Income from operations



6,299



4,467



19,734



13,586

Interest income



692



137



1,772



151

Change in fair value of notes held for investment







(217)



Other expense



(3)



(3)



(3)



(2)

Other income, net



689



134



1,552



149

Pre-tax net income



6,988



4,601



21,286



13,735

Income tax provision



1,474



926



4,924



2,626

Net income


$

5,514


$

3,675


$

16,362


$

11,109

Net income per share, basic


$

0.82


$

0.55


$

2.44


$

1.65

Weighted average number of shares used in computing
basic net income per share



6,717,301



6,678,175



6,708,675



6,738,717

Net income per share, diluted


$

0.71


$

0.46


$

2.09


$

1.38

Weighted average number of shares used in computing
diluted net income per share



7,818,236



7,939,926



7,847,390



8,027,271

 

Semler Scientific, Inc.

Condensed Balance Sheets

(In thousands of U.S. Dollars, except share and per share data)










September 30, 


December 31, 



2023


2022




Unaudited




Assets







Current Assets:







Cash and cash equivalents


$

37,497


$

23,014

Short-term investments



18,530



20,073

Trade accounts receivable, net of reserves of $254 and $109, respectively



5,966



3,884

Inventory, net



439



469

Prepaid expenses and other current assets



1,946



1,468

Total current assets



64,378



48,908

Assets for lease, net



2,498



2,478

Property and equipment, net



765



667

Long-term investments



821



821

Notes held for investment (includes measured at fair value of $4,462 and $3,679, respectively)



5,462



4,679

Other non-current assets



2,744



2,842

Deferred tax assets



2,775



2,298

Total assets


$

79,443


$

62,693








Liabilities and Stockholders' Equity







 Current liabilities:







Accounts payable


$

300


$

835

Accrued expenses



6,998



4,748

Deferred revenue



1,120



1,160

Other short-term liabilities



159



114

Total current liabilities



8,577



6,857








Long-term liabilities:







Other long-term liabilities



93



160

Total long-term liabilities



93



160

Commitments and contingencies (Note 14)







Stockholders' equity:







Common stock, $0.001 par value; 50,000,000 shares authorized; 6,941,554, and 6,906,544
shares issued, and 6,727,132 and 6,692,122 shares outstanding (treasury shares of 214,422 and
214,422), respectively



7



7

Additional paid-in capital



15,184



16,449

Retained earnings



55,582



39,220








Total stockholders' equity



70,773



55,676








Total liabilities and stockholders' equity


$

79,443


$

62,693

 

Semler Scientific, Inc.

Condensed Statements of Cash Flows

Unaudited

(In thousands of U.S. Dollars)










Nine months ended September 30,



2023


2022

CASH FLOWS FROM OPERATING ACTIVITIES:







Net income


$

16,362


$

11,109








Reconciliation of Net Income to Net Cash Provided by Operating Activities:







Depreciation



439



462

Deferred tax expense



(478)



(405)

Loss on disposal of assets for lease



355



303

Loss on disposal of inventory



171



Allowance for credit losses



203



53

Change in fair value of notes held for investment



217



Gain on short-term investments



(307)



Stock-based compensation



907



708

Changes in Operating Assets and Liabilities:







Trade accounts receivable



(2,284)



(107)

Inventory



30



39

Prepaid expenses and other current assets



(478)



2,083

Other non-current assets



98



(1,934)

Accounts payable



(535)



40

Accrued expenses



2,250



3,217

Other current and non-current liabilities



(22)



(52)

Deferred revenue



(40)



237

Net Cash Provided by Operating Activities



16,888



15,753








CASH FLOWS FROM INVESTING ACTIVITIES:







Additions to property and equipment



(310)



(388)

Purchase of notes held for investment



(1,000)



(1,179)

Proceeds from maturities of short-term investments



59,719



Purchase of short-term investments



(57,869)



Purchase of assets for lease



(773)



(961)

Net Cash Used in Investing Activities



(233)



(2,528)








CASH FLOWS FROM FINANCING ACTIVITIES:







Taxes paid related to net settlement of equity awards



(247)



(114)

Common stock warrants acquired



(1,949)



Treasury stock acquired





(4,991)

Proceeds from exercise of stock options



24



93

Net Cash Used in Financing Activities



(2,172)



(5,012)

INCREASE IN CASH



14,483



8,213

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD



23,014



37,323

CASH AND CASH EQUIVALENTS, END OF PERIOD


$

37,497


$

45,536

 

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 U.S. Food and Drug Administration (FDA), is a rapid point-of-care test that measures arterial blood flow in the extremities. The QuantaFlo® test aids in the diagnosis of cardiovascular diseases, such as peripheral arterial disease (PAD) and heart dysfunction (HD). QuantaFlo® is used by healthcare providers to evaluate their patient's risk of mortality and major adverse cardiovascular events (MACE). In addition, Semler Scientific has an agreement with Mellitus Health, Inc. (Mellitus) to exclusively market and distribute Insulin Insights™, an FDA cleared software product that recommends optimal insulin dosing for diabetic patients in the United States, including Puerto Rico. Semler Scientific has a minority investment in Mellitus, as well as Monarch Medical Technologies LLC, a privately held company whose product EndoTool® offers a technological solution for inpatient glycemic management. Additional information about Semler Scientific can be found at www.semlerscientific.com.

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 development of its business in HD and diabetes; QuantaFlo®'s ability to aid in the diagnosis of cardiovascular diseases; 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 it will be able to successfully expand its product offering, including into HD and diabetes; whether or not QuantaFlo® can successfully aid in the diagnosis of PAD and HD; 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
[email protected] 

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