Semler Scientific Q1 2020 Earnings Report
Key Takeaways
Semler Scientific reported their Q1 2020 financial results, noting the impact of COVID-19 late in the quarter. The company is managing expenses to preserve cash during the pandemic, with expectations of decreased operating expenses in Q2 2020 due to cost-cutting measures.
The company's two largest customers comprised 46.1% and 21.4% of quarterly revenues.
Revenues from fixed fee software license arrangements were approximately $6,457,000, variable fee software license revenues were approximately $2,703,000 and equipment/other sales were $270,000.
In the first quarter of 2020, new installations produced an overall net gain in fixed-fee license contracts.
Requests for changes in billing arrangements in the quarter due to COVID-19 amounted to less than 1% of fixed-fee license contracts for QuantaFlo®.
Semler Scientific
Semler Scientific
Forward Guidance
Semler Scientific intends to manage its expenses and other costs in line with changes in revenues to conservatively preserve cash during these uncertain times. Operating expenses are expected to decrease during the second quarter of 2020 as a result of cost-cutting measures that have included vendor fee reductions and decreased spending on consultants.
Positive Outlook
- Customer interest in our QuantaFlo® product and related services will return to, or exceed, pre-COVID-19 activity at such time as “shelter-in place” or similar restrictions are lifted and non-emergency medical services resume.
- Operating expenses are expected to decrease during the second quarter of 2020 as a result of cost-cutting measures that have included vendor fee reductions and decreased spending on consultants.
- To date, staffing, salaries and inventory have been maintained at usual levels, and travel expenses have decreased.
- Cash at April 30, 2020 increased compared to cash at March 31, 2020 primarily due to these cost-cutting measures, which have decreased our monthly operating expenses.
- Until the effects of the COVID-19 pandemic on our business are more quantifiable, we do not plan to undertake any material changes to our business plan or operations.
Challenges Ahead
- In these uncertain and turbulent times driven by the COVID-19 pandemic, acute care for patients is of paramount importance.
- Because we started to experience the effects of COVID-19 late in the first quarter, results in the first quarter are not indicative of any future quarter or the full fiscal year results.
- Test volumes have decreased due to “social distancing” and other executive orders mandating “shelter in place” or similar restrictions.
- This affects revenues from our variable-monthly fee arrangements, which are based on usage largely occurring during home visits.
- In April 2020 compared to March 2020, fixed-fee monthly license revenues decreased by approximately 4%, and variable fee software license revenues decreased by approximately 97%.