Semler Scientific, Inc.

Good afternoon and welcome to the Semler Scientific 2023 Fourth Quarter Financial Results Conference Call. All participants will be in a 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 a touch-tone phone. To withdraw your question, please press star then 2. Please note this event is being recorded. Before we begin, Semler 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 of marketing and additional products, including receipt and timing of an additional 510 clearance for quanta flow and investment in emerging growth opportunities. 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 have a copy of today's release, you may obtain one by visiting the investor relations page of the website, SemlerScientific.com. I would now like to turn the conference over to Doug Murphy-Katorian, CEO of Semler Scientific. Please go ahead.

Good afternoon, everyone. Thank you for joining us for our fourth quarter and full year 2023 results call. Year over year, we continue to achieve annual revenue and earnings growth. Now, I'm pleased to introduce our CFO, Renee Cormier, who will provide you with further details. Renee?

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 fourth quarter 2023 financial results and discussing recent corporate developments. Jennifer Oliva Harrington, who leads our marketing, sales, and related operations, will be providing information about our market developments and opportunities. Following our remarks, Doug, Jennifer, and I will be available to address any questions you may have. I'm excited to announce continued growth in revenues and earnings in the fourth quarter 2023. 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 details of our fourth quarter results. Total revenues in Q4 2023 were $15.1 million, an increase of 9% compared to the fourth quarter of 2022. Our revenues continue to be driven 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 in 2022 are having an impact. These studies underscore the importance of identifying asymptomatic PAD patients, enabling the implementation of preventative measures. Fixed fee revenues were $8.8 million, a decrease of 2% year over year. We saw end of 2023 cleanup of underutilized units by some customers, resulting in the decline. We see continued interest in our products from existing customers, as well as new customers, such as hospitals, value-based care providers, and major pharmaceutical and retailer markets. Variable fee revenues were $5.8 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 were $0.5 million, an increase of 71% year over year. Equipment revenues remain strong versus historical levels because the majority of equipment sales Our two variable fee customers, we believe it is a sign of future potential growth in the fee per test market. In the fourth quarter 2023, our three largest customers, including their related affiliates, comprised 37%, 32%, and 11% of quarterly revenue. Operating expenses in Q4 2023, which includes cost of revenue, were $12.5 million. an increase of 23% year-over-year. Our Q4 2023 results included $2.5 million write-offs in cost of revenues in the Insulin Insights prepaid licenses and also a $0.6 million impairment of malicious investments in other income. While we've continued to market Insulin Insights because we believe in its clinical benefits for diabetic patients, Our marketing efforts over the past three years have not yielded significant results to date. As a percentage of revenues, operating expenses increased to 83% compared to 74% in 2022 due primarily to the write-off. Retax income was $2.8 million compared to $4 million in the prior year. Net income was $4.2 million, or 62 cents per basic share, and 55 cents per fully diluted share compared to 3.2 million or 48 cents per basic share and 41 cents per fully diluted share in 2022. We had cash, cash equivalents and short-term investments at December 31st, 2023 of $57.3 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.