Semler Scientific, Inc.

Good afternoon and welcome to the similar scientific 2023 third quarter financial results conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note that this event is being recorded. Before we begin, similar scientific needs to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended. These include statements regarding the expectations for expansion of the business and the development and marketing of additional products, as well as expected savings from the strategic corporate streamlining. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and our SEC filings. The forward-looking statements made today are as of the date of this call, and the company does not undertake any obligation to update the forward-looking statements. If you do not have a copy of today's release, you may obtain one by visiting the investor relations page of the website, similar scientific.com. Now I would like to introduce Doug Murphy-Tutorian, CEO of Summler Scientific.

Good afternoon, everyone. Thank you for joining us for our third quarter 2023 results kill. We are again achieved excellent year over year earnings and revenue growth. Now, I am pleased to introduce our CFO, Renee Cormier.

Thank you, Doug. Good afternoon, everyone, and thank you for being part of today's conference call. Today, I'll be presenting an overview of our third quarter 2023 financial results and discussing recent corporate events. We have with us today our Chief Operating Officer, Jennifer Oliva Harrington, who will be providing market developments and opportunities. Jennifer has been with Semler since 2010. She oversees our operations, sales, and customer-related departments, driving new strategies, and launching and delivering new products and programs. Following our remarks, Doug, Jennifer, and I will be available to address any questions you may have. I'm excited to announce continued revenue growth and strong margins in the third quarter. This achievement is a testament to the hard work of our team. as well as the ongoing support of our customers who continue to recognize the clinical benefits and value of our technology. Now for the specifics of our third quarter results. Total revenue in Q3 2023 was $16.3 million, an increase of 16% compared to the third quarter of 2022. We anticipate that revenues in the fourth quarter of 2023 will exceed fourth quarter of 2022. Our revenues continue to be driven primarily by continued sales of Quantiflow to existing and new customers to test for peripheral arterial disease, or PAD. We believe the promising results that were published in two large, independently conducted, peer-reviewed studies by Quantiflow customers last year are having an impact. These studies underscore the importance of identifying asymptomatic PAD patients. enabling the implementation of preventative measures. We are also marketing Quantiflow as an aid to diagnose heart dysfunction, or HD. While HD revenue is currently not significant, we anticipate that HD will assume an important role in our business over the coming years. Jennifer will provide you with more detail. Fixed fee revenues were $9.5 million, an increase of 11% year-over-year. we saw continued interest in our products from existing customers as well as new customers such as hospitals, value-based care providers, major pharmaceutical and retailer markets. Variable fee revenues were $6.3 million, an increase of 28% year over year. We continue to see strong demand from our home risk assessment customers using Quantiflow for PAD during in-home examination. Equipment and other revenues or half a million dollars, flat year over year. Equipment revenues remain strong versus historical levels. Because the majority of our equipment sales are to variable fee customers, we believe it's a sign of future potential annual growth in the fee protest market. In the third quarter of 2023, our three largest customers, including their related affiliates, comprised 36%, 28%, and 11% of quarterly revenue. Operating expenses in Q3 2023, which includes the cost of revenues, were $10 million, an increase of 5% year-over-year. As a percent of revenues, operating expenses improved to 61% compared to 68% in 2022. Last quarter, we announced a strategic plan to streamline operations and reduce employee headcount by approximately 30%. This plan is meant to be proactive and seeks to drive operational efficiency while maintaining high-quality service to our customers. As of the end of the third quarter, this streamlining has been completed. Headcount as of September 30, 2023, was 91 compared to 137 at the end of the second quarter, 2023. Included in operating expenses were streamlining and related costs of $600,000 offset by accrued compensation reversals of $700,000. We anticipate total operating expenses, which includes cost of revenues, in the fourth quarter will be similar to total operating expenses in the third quarter of 2023. Pre-tax net income was $7 million, an increase of $2.4 million, or 52% year-over-year. Net income was $5.5 million, or 82 cents per basic share, and 71 cents per fully diluted share, an increase of 50% year-over-year. We had cash, cash equivalents, and short-term investments at September 30, 2023, of $56 million. Now, I'd like to turn the call over to Jennifer to provide a more in-depth discussion of our market developments and opportunities.