MDxHealth SA

Good afternoon, ladies and gentlemen, and welcome to the MDX Health Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, March 6, 2024. Before we begin, I would like to remind everyone that the company will make forward-looking statements during today's call. Whether in prepared remarks or during the Q&A session, these forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the risk factors section of the company's filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20F. I would now like to turn the conference over to Michael McGarrity, Chief Executive Officer. Please go ahead.

Thanks, Ludi. And thank you all for joining us for our fourth quarter and year-end 2023 earnings conference call for MDX Health. With me today is Ron Kalfas, Chief Financial Officer. Commercial Execution and Operating Discipline are the two foundational drivers of our business and performance. And our fourth quarter and full year results for 2023 demonstrate the continued success of this strategy. It is also becoming clear that our strategy is creating multiple sources of growth for our company, including test manual augmentation, cross-selling of complementary diagnostic solutions, and expanding payer coverage. With these growth drivers in place, we believe MDX Health remains well positioned to continue to deliver sustainable growth that will lead to adjusted EBITDA profitability in the first half of 2025. I would now like to review a few of the financial and operating highlights from our fourth quarter and full year 2023 results that clearly demonstrate this execution. Fourth quarter revenue, was 19.4 million, an increase of 50% over the prior year period. For the full year, revenue increased to 70.2 million, an increase of 89% year-over-year. Excluding the impact from GPS, total revenues in 2023 grew 42% year-over-year. In the fourth quarter, gross margin improved to 65.3%, versus 56% in the prior year period, which represents a year-over-year improvement of 9.3 percentage points. And for the full year, gross margins were 62.6% compared to 51.9% for the prior year, an improvement of 10.7 percentage points, which reflects continued focus on operating discipline, cost management, and expanded payer coverage for our full menu of precision diagnostics. So what these financial metrics speak to is that we are delivering on our mission to become a premier growth company in precision diagnostics focused in the urology. In fact, when we step back and look at the progress from only a few years ago, our growth trajectory has been, I believe, quite compelling. In 2019, MDX Health reported annual revenue of $11 million. Today, we are now projecting 2024 revenues of $79 to $81 million, which represents a five-year CAGR or compound annual growth rate of over 50%. Importantly, we have also maintained our operating discipline over this period of extraordinary top-line growth. Gross margins have dramatically improved from essentially no gross profit generated by the business in 2019 to over 62% for the full year of 2023. And our focus on Salesforce productivity is allowing us to manage and maintain our operating expenses as we go forward. This dynamic is providing clear leverage in our P&L and reinforces our confidence reaching adjusted EBITDA profitability. Of course, our world-class technology, outstanding clinical lab operations, and improved reimbursement for our tests are all major factors in our success. But without question, one of the ultimate drivers for sustained execution is the strong, and we believe enduring, relationships we have built in our urology customer base. and key opinion leader community. In my experience, these initiatives and resulting effect on our business underpin the strength of our business model. To that end, we remain relentlessly focused on the customer experience in order to maintain and advance our best-in-class reputation. Before my closing comments, I will turn the call over to Ron for a review of our financial and operating results. Ron?

Thank you, Mike. As Mike mentioned, we are pleased to report our positive results for the fourth quarter and year end 2023 with strong reported growth in revenues and solid improvements in gross margins. Revenues for the fourth quarter ended December 31st, 2023, increased by 50% to $19.4 million versus $12.9 million for the fourth quarter of 2022. Fourth quarter revenues of $19.4 million were comprised of $8.8 million from GPS, $5.9 million from Confirm, $3.2 million from Resolve, and $1.3 million from Select. For the year 2023, our revenues were $70.2 million, representing an increase of 89% over the same period last year. Excluding GPS, full year 2023 revenue increased 42% over the same period last year. Moving below the revenue line, our gross profit for the fourth quarter was $12.7 million, an increase of 75% as compared to $7.2 million for the third quarter of 2022. Gross margins were 65.3% for Q423 as compared to 56% for Q422, an improvement of 9.3 percentage points. For the full year 2023, gross profit was $43.9 million, an increase of 129% as compared to 19.2 million for the full year 2022. Growth margins were 62.6% for the full year 2023 as compared to 51.9% in the prior year, an improvement of 10.7 percentage points. Operating loss for the fourth quarter was $6.3 million compared to $8.9 million for the fourth quarter of 2022, representing a reduction of 30% driven by top-line growth and improved gross margin. Full year 2023, operating loss was $27.3 million, compared to $37.9 million for the same period last year, a reduction of 28%. Cash-in-cash equivalents as of December 31, 2023, were $22.4 million, Our total use of cash for the fourth quarter was $10.3 million. The increase in cash use in the fourth quarter was driven by non-operating, non-recurring cash payments of $2.3 million, primarily attributed to the transition to a sole listing on NASDAQ. This concludes my brief overview of the results, and I will now turn the call back to Mike.