Semler Scientific (SMLR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $13.5M, down 17% year-over-year, with net income of $5.6M, up 2% from Q3 2023.

• Income from operations was $5.1M, compared to $6.3M in Q3 2023, with operating expenses down 16% to $8.4M.

• Maintained focus on core medical products, especially QuantaFlo, while aggressively accumulating bitcoin as a treasury asset.

• Held 1,058 bitcoins as of November 5, 2024, after purchasing 142 in Q3 for $8.4M and 40 more for $2.6M.

• Nine-month 2024 revenue was $43.9M, down 17% year-over-year; net income was $11.7M, down 29%.

Financial highlights

• Q3 2024 revenues: $13.5M, down from $16.3M in Q3 2023; operating income: $5.1M; net income: $5.6M ($0.80 basic, $0.72 diluted EPS).

• Operating expenses were $8.4M, down 16% year-over-year.

• Other income included a $1.1M unrealized gain from bitcoin revaluation; cumulative reduction in bitcoin fair value was $3.9M as of September 30, 2024.

• Cash, cash equivalents, and restricted cash were $6.7M at September 30, 2024, down from $57.3M at year-end 2023, mainly due to bitcoin purchases.

• Gross margin for Q3 2024 was 91%; operating margin was 37.5%; net margin was 41.5%.

Outlook and guidance

• Q4 2024 revenues expected to follow a similar cadence as 2023, with focus on expense control and maximizing operating income.

• Management believes current funds and bitcoin holdings provide adequate liquidity for the next 12 months and long term.

• Plans to continue purchasing bitcoin using operating cash flow and ATM proceeds, and exploring additional financing.

• Pursuing new FDA 510(k) clearance for QuantaFlo product extension, targeted for the first half of 2025.