Nano-X Imaging Q3 2024 Earnings Call Transcript

Quartr
Provided by Quartr
November 21, 2024

There are 8 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Nanox Third Quarter 2024 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You.

Operator

Please be advised that today's conference is being recorded. I would like now to turn the conference over to Mike Cavanaugh, Investor Relations. Sir, please go ahead.

Speaker 1

Good morning and thank you for joining us today. Earlier today, Nanox Imaging Limited released financial results for the quarter ended September 30, 2024. The release is currently available on the Investors section of the company's website. With me today are Erez Meltzer, Chief Executive Officer and Acting Chairman and Ron Daniel, Chief Financial Officer. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward looking statements regarding the company's financial results, research and development, manufacturing and commercialization activities, regulatory process operations and other matters.

Speaker 1

These statements are subject to risks, uncertainties and assumptions that are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission. We will also refer to certain non GAAP financial measures to provide additional information to investors. A reconciliation of the non GAAP to GAAP measures is provided with our press release, with the primary differences being non GAAP net loss attributable to ordinary shares, non GAAP cost of revenue, non GAAP gross profit, non GAAP gross profit margin, non GAAP research and development expenses, non GAAP sales and marketing expenses, non GAAP general and administrative expenses and non GAAP gross loss per share.

Speaker 1

With that, I'd now like to turn the call over to Erez Meltzer.

Speaker 2

Thank you for joining us today for our financial results call. I'm happy to share the progress we have made deploying our innovative Nanox Art technology as well as further progress with Nanox AI and the other components of the full Nanox solutions. Since its commercial deployments at the beginning of this year, there are now 47 units, almost 50 that are in various stages of shipments and deployments for both commercial and clinical use. In the U. S, we are deployed across 7 states.

Speaker 2

Our strategic growth plan is well underway and we are committed to accelerating our efforts to expand our footprint and enhance our technology. This is a multi pronged effort, which includes doubling our pipeline, expanding our sales, service and support teams on the ground in the key U. S. Market to drive sales, raise awareness with imaging centers and hospitals, as well as supporting our growing customer base in the installations and ongoing use of Nanox solutions. Hand in hand with these efforts, we are also continuing to advance our regulatory efforts with the U.

Speaker 2

S. FDA for additional clearances and securing the C Mark in European Union, while also continue to generate trial data supporting the use of the Nanox ARC. The positive feedback from healthcare providers and patients alike reinforce our belief in the transformative potential of Nonox R. We are confident that our continued focus on innovation and strategic partnership will drive significant value for our shareholders. We also signed several new deals for Analox AI solutions including Oxford University Hospitals and NHS Foundation Trust in the UK.

Speaker 2

I will share more detail on this and other agreements later in my remarks. But I will say that all of the Nanox Arc are excited to partner with such prestigious institutions. We at Nanox were also humbled and proud to have Nanox AI selected for a special mention in Times Best Inventions of 2024 list. This annual list highlights groundbreaking products that are transforming industries and Nanox AI is certainly beginning to change how we diagnose and manage population health. I'm also pleased to report that our U.

Speaker 2

S. Suraj Telerheology business continued to produce meaningful revenue for our organization generating $2,600,000 in revenue, which is quarterly record and we anticipate its continued growth to complement our business lines. These milestone across all our business segments are a testament to our team's dedication and the growing demand for our cutting edge medical imaging solutions globally. As we look ahead, we remain confident about the opportunities that lie before Our mission to make advanced medical imaging accessible and affordable is more critical than ever and we are poised to lead the industry with our pioneering solutions. Thank you for continued support and confidence in our vision.

Speaker 2

I look forward to discussing our financial performance and future plan in more detail. Now let's dive right into some details around our deployments of the Nanox Arc in the U. S, a highly sophisticated and competitive market. I'm proud of our market penetration and notable job demonstrating the benefits of introducing the Nanox Art to imaging and medical centers in the U. S, which are by nature sophisticated buyers and are exposed to the latest technology the world has to offer.

Speaker 2

Our accelerating commercial traction demonstrates not only the skill and the tenacity of our sales team, but also the value that Nanonox R brings to healthcare providers. As our customer base increases along with rising awareness of the NanoxR within the medical community, we will add to our team accordingly. As a result, during the quarter, we strengthened our sales team with representative as well as expanded our clinical team along with enhancements to our operational team. As we accelerate our Uro's commercialization, we doubled our sales and service personnel in the U. S.

Speaker 2

To support our expanding client base along with various channel partners. Our team on the ground will be critical to our accelerating rollout and we will steadily by carefully continue to add to this team. We have an internal target of 30 to 40 sales, service, marketing and support personnel in place by the end of 2025 in alignment with our commercial progress. Additionally, we are focusing on expanding our network of strategic collaborations and distributors. I mentioned on our last call that we have engaged with 3 prominent imaging groups in the U.

Speaker 2

S. And during Q3, we continue to gain traction with additional imaging groups. Our sales team continues to actively engage imaging groups across the U. S. In consultative discussions demonstrating the added clinical utility to be gained by adding the Nanox ARC to their practices.

Speaker 2

Itar is our aim as more standalone imaging groups adapt our technology that the Nanox Arc will eventually be viewed as a standard equipment alongside traditional x-ray and CT technologies. We are also working with multiple distributors in Europe charged with expanding our footprint in the EU. This is an important as we anticipate receiving the CE Mark designation for the Nanox Arc in the coming months. To further assist our commercial core technology OEM rollout, we have created the demo kits to more effectively educate potential buyers on the NAC's value proposition. We have now shipped several demo kits to the prospective clients to more easily allow them to experience our unique technology.

Speaker 2

Clearly, we have been ramping up our activity in the U. S. And we know we must continue with this momentum and drive even greater adoption going forward. While we view the key U. S.

Speaker 2

Market as a strategic priority, we continue to advance commercialization efforts in the rest of the world. In Mexico, where we have already made commercial inroads, we are waiting for the import license needed to deploy the Nanox Arc. The system allocated for the Mexican market has been manufactured and tested and is today ready for shipment and our partner has already designated the first two sites for the Nanox Arcs in Mexico. In Chile, the Nanox Arcs is in registration process after a successful site visit in our demo center in the U. S.

Speaker 2

Also in Europe, we were excited to showcase the Nanox Arc technology at Medica 2024 in Dusseldorf, Germany recently in November. Medica is one of the largest medical B2B trade fairs in the world. Our team was well prepared and did an excellent job raising awareness to the 3 d digital tomography as a key tool in the future of medical imaging. Turning to the regulatory front, we have maintained ongoing communication with both the U. S.

Speaker 2

FDA and the European regulatory bodies. As you are aware, we have a pending 510 applications to the FDA for the general use of NanoxR, which could cover general use including chest. We continue to work closely with the FDA and provide any supporting information as needed in a timely matter including in recent weeks. In the EU, we continue to work with our notified body in the process aimed to securing the CE Mark designation for the Nanox ARC. Both new designations when secured would be in our view a considerable expansion for the Nanook's ARC technology and help to make its standard part of medical imaging equipment worldwide and results in a significant increase in our total addressable market.

Speaker 2

We are not able to comment specifically on timing, but we're doing everything we can to assist in both review processes and hope to receive the clearances in the coming months. Turning to our clinical update. In Bellingston Hospital, more than 40 patients were already recruited for both the CHEST trial and the multi site trial. Together with the staff of Belizan, we have reviewed more than 25 of the patients' data sets and the results are impressive. Continue the trend we have published in a recent white paper from the first twelve patients.

Speaker 2

In Ghana, the multicenter trial site is actively recruiting and the Nautilus Rx system is actively scanning patients, both for the clinical trial as well as part of the clinical practice. Furthermore, Nanox is in active discussions with a prominent site in Europe for incorporation into the multi site clinical trial. I'd like now to discuss the Nanox AI Business segment, which is generating revenues and is also gaining commercial tractions worldwide. As previously announced, during the quarter, we secured a new 510 clearances from the U. S.

Speaker 2

FDA for Nanox AI Health CCNG Version 2.0, the upgraded version of Nanox Hyacardi solution, which has already shown clinical utility in several healthcare systems by identifying patients at high risk of coronary artery disease and enabling earlier intervention. The solution is also easy to use, being seamlessly integrated with existing picture archiving and communication systems and electronic medical record systems. As we know, AI has been the forefront of the news worldwide for some time, highlighting its groundbreaking benefits to many industries and myriad use case, much of which is largely hypothetical at this point. Conversely, the Nanox AI application has been fully developed into a practical tool with significant clinical utilities in many imaging and diagnostic uses. Its advanced algorithm and robust data processing capabilities have been trained on thousands of images and enable healthcare providers to identify health problems in much earlier stage than was previously possible.

Speaker 2

With that, let's look at some recent Nanox AI being used in the real world. CoreWell, formerly Spectrum Health, one of the early U. S. Based adopters of the Nanox AI solution. After 2 years of successful collaboration and having seen the clinical utility of the Nanox AI Health CCNG Cardiac Solution, the system will implement the HealthOS Deep Bone solution into its clinical system.

Speaker 2

The HealthOS algorithm automatically detects vertebral compression fractures and low bone mineral density to help identify patient at risk of MSK disease with a focus on osteoporosis without a need for discrete imaging. We are looking forward to another exciting and productive collaboration with CorVel and it is very gratifying to see sophisticated health system validate the use of Nanox AI solution. As previously reported, the UK National Health Services initiated the DAPT trial to evaluate the use of Nanox AI Bone solution. Through this study, the NHS discovered that it was able to identify 6 times as many patients with osteoporosis in routine SCP scans as they were without Nanox AI. Following on those powerful results, one of the National Health Services sites, Oxford University Hospitals, NHS Foundation Trust decided to secure a 3 year contract for the HealthHost bone solution.

Speaker 2

Adapt will continue into Q1 2025, but it's already decided to secure the solution plus the new Real Plus bone management tool for 3 years. This is the first time the RealPlus bone management tool has been mentioned and I'd like to take a few moments to describe this exciting new offering. We have developed this application for use either as a standalone applications or alongside the HealthHouse solution and it is specifically designed to support Fracture Liaison Service Clinics in managing the entire patient lifecycle more effectively from initial detection whether through AI or other diagnostic mean RealPlus Bone Management tool will facilitate the comprehensive management of treatment and ongoing disease management, including follow-up exams, update laters and medication management. These are the latest examples of prominent health systems validating the utility of our Nanox AI solution and that is not just a concept, but a real value add solution. We expect many more to come.

Speaker 2

In other AI business news, Dandelion Health extended its cooperation with Anox AI solution available on its clinical AI marketplace. Dandelion Health

Speaker 3

is

Speaker 2

a healthcare data platform that focuses on AI analytics. It offer life science companies the ability to leverage Nanox AI products to extract clinical insights from their multi model longitudinal patient data sets of over 10,000,000 patients. During the quarter, we also signed a new reseller agreement with Spinex Medical Inc, a distributor of medical equipment based in Florida. Spinex will distribute the Nanox AI solution in the large Florida market and we look forward to a productive partnership. Looking to the future of Nanook's AI, the strong validation of these solutions by multiple health systems around the world drives us to develop additional algorithms that can identify more health problems.

Speaker 2

We are now working on a pulmonary solution, which is expected to be the 1st AI application designed specifically for the Nanox Arc. The algorithm aims to automatically identify patients with pulmonary modules with a goal of identifying chest diseases, especially lung cancer through routine chest sense. The Nanox team will provide timely updates on the development of this exciting new AI solutions as we advance its development. Turning to our OEM efforts, which will help to ensure we have the manufacturing capacity for our expected clients base of the future. As mentioned in the past, we finalized the establishment of our technology development centers based in our headquarters.

Speaker 2

The primary purpose of the center is to consolidate our core assets and knowledge and to advance the development of the chips and the tubes and to lead our future roadmap. This center has 8 R and D labs and is manned by a highly credentialed team of engineers and researchers who are also advancing nanochip and tube technology from the robust technology patent library. The library includes dozens, patents and families for Nanox and Nanox AI. The team at the center is tasked with the ongoing work on Nanox future technology innovations as well as the development of our next products in our roadmap and I know our future development is in a very capable hands. I'd now like to provide an update on our OEM partners who will play an important role in ensuring that we have the supply of systems to meet our accelerating growth trajectory over the coming years.

Speaker 2

There are many manufacturing agreements in place as well as multiple development projects in motion at various stages and sites globally, an increased pipeline of potential leads and I'd like to provide a high level overview of some of these activities. Varex has completed assembly of the first ARC tubes with Nanox proprietary emitter and we have taken delivery of them at our manufacturing facility. We are now performing systems integration and pre FDA submission testings on the tubes, which will be used in the Nanox Arc. Varex is also engaged in development of the multi source modules utilizing the aforementioned Nanox emitters testing of this unit should commence in Q1 2025. As part of our efforts to raise awareness of Nanook's value in security applications such as screening, Nanook's team attended the international security export in September in London, where over 300 international exhibitors showcased products and solutions from across the entire security spectrum.

Speaker 2

As a result of this event, we are following up on multiple opportunities to expand our penetration in the security vertical. A leading global medical and diagnostic solution provider is assembly the 1st prototype tubes utilizing the Nanox Ammeter. We are working closely with them and have delivered a Nanox Art demo kit to serve as test bench for prototype under development. We have been partnering with the U. S.

Speaker 2

Government security application projects to develop non invasive screening applications. The team has successfully completed component build, assembly and testing. We have since received a follow on purchase order to finalize 2 unique tube designs for advancing prototyping, which are to be delivered in the first half of twenty twenty five. We also delivered in Q3, a Nanox demo kit to ViewWorks, a global x-ray imaging solution provider for assessment of our technologies. Viewworks recently completed their assessment, issued their findings and have since requested to acquire NanoxTubes towards specific application testing and development.

Speaker 2

We are pleased that our demo kit inclusive of our amateur tube high voltage power supply and software has already enabled multiple global solution providers to more easily experience our technology. Additionally, the 1st cube utilizing CSEM chips have been successfully built and the initial fab of production quality chips is scheduled to commence in Q1 2025. This is another example of the Nanox team's dedication to securing manufacturing agreements to ensure the supply of NanoxRx system can meet our expected demand. That concludes my business update, and I would like now to turn the call over to Rand Daniel for a review of our financials. Rand?

Speaker 3

Thank you, Erez. We reported a GAAP net loss for the Q3 of 2024 of $13,600,000 which I will refer as to the reported period compared with a net loss of $21,400,000 in the Q3 of 2023, which I'll refer as to the comparable period. The decrease was largely due to a decrease of $7,400,000 in expenses related to impairment of goodwill, which were recorded in the comparable period and not in the reported period. Revenue for the reported period was $3,000,000 and gross loss was $2,800,000 on a GAAP basis compared to a revenue of $2,500,000 and a gross loss of $1,700,000 on a GAAP basis for the comparable period. Non GAAP gross loss for the reported period was $200,000 as compared to a non GAAP gross profit of $900,000 in the comparable period, which represents a gross loss margin of approximately 6% on a non GAAP basis for the reported period as compared to a gross profit margin of 37% on a non GAAP basis in the comparable period.

Speaker 3

Revenue from the teleradiology services for the reported period was $2,600,000 with a gross profit of $300,000 on a GAAP basis in the reported period, which represents a gross profit margins of approximately 13% on a GAAP basis for the reported period. Non GAAP gross profit of the company's tele radiology service for the reported period was $900,000 which represents a gross profit margin of approximately 35% on a non GAAP basis. Revenue from the telepharidology services for the comparable period was $2,200,000 with a gross profit of $200,000 on a GAAP basis, which represent a gross profit margins of approximately 11% on a GAAP basis. Non GAAP gross profit of the company's teleradiology services for the comparable period was $800,000 which represents a gross profit margin of approximately 36% on a non GAAP basis. The increase in the company's revenue from the teleradiology services was mainly attributable to customer retention and increased volume of the company's reading services during the weekdays shifts.

Speaker 3

During the reported period, the company generated revenues through the sales of its AI solutions in the amount of $400,000 as compared to a revenue of $100,000 in the comparable period. The increase was mainly due to a completion of the project of the installations of our AI solution. During the reported period, the company generated revenues through the sales and deployment of its imaging systems, which amounted to $29,000 with a gross loss of $1,500,000 on a GAAP and non GAAP basis. Those revenues stems from the sales and deployment of the Nanoxarc systems in the U. S.

Speaker 3

And the sales of our 2 d systems in the rest of the world. Research and development expenses net for the reported period were $4,700,000 compared to $6,000,000 in the comparable period. The decrease of $1,300,000 was largely due to a decrease of $300,000 in salaries and wages, decrease of $400,000 in share based compensation and a decrease of $600,000 in expenses that are related to other research and development activities. Sales and marketing expenses for the reported period were $900,000 compared to $1,100,000 in the comparable period. General and administrative expenses for the reported period were $5,700,000 as compared to $5,000,000 in the comparable period.

Speaker 3

The increase of $700,000 was mainly due to an increase of $500,000 in share based compensation, increase in our legal expenses in the amount of $500,000 which was offset by decreasing the cost of our D and O liability insurance premium in the amount of $300,000 Our non GAAP net loss attributable to our ordinary shares for the reported period was $8,700,000 as compared to a non GAAP net loss of $9,400,000 in the comparable period. The decrease of $700,000 was mainly due to a decrease in our non GAAP operating expenses of $1,800,000 which was offset by a decrease of $1,100,000 in our non GAAP gross profit. Turning to our balance sheet. As of September 30, 2024, we had cash, cash equivalents with restricted deposits and marketable securities of approximately $57,100,000 and we had $3,400,000 loan from a bank. We ended the Q3 of 2024 with a property and equipment net of $44,700,000 As of September 30, 2024, we had approximately 58,500,000 shares outstanding.

Speaker 3

With that, I will hand the call back over to Erez.

Speaker 2

As we conclude our discussion today, I'm filled with confidence about the future of Nanox. Our initial deployment of the Nanox ART technology across multiple states in the U. S. Along with our expanding footprint in international markets has been a testament to our unwavering commitment to making advanced medical imaging accessible and affordable worldwide. The positive feedback from healthcare providers and patients reaffirm their transformative potential of our solution.

Speaker 2

Coupled with a robust infrastructure we have established this past year, we are well positioned to accelerate our progress in 2025. On the regulatory front, we are diligently working with the FDA and European Union bodies to secure the necessary approvals, which will further solidify our position in the market. Our ongoing trials and collaboration with leading health system demonstrate the clinical utility and the value of our AI solutions paving the way for broader adoption of groundbreaking advancement in medical imaging. We take pride in our robust clinical performance by prioritizing clinical needs and development efforts in close collaboration with the medical community, we ensure that our innovations are not only advanced, but also deeply relevant to those we serve. Our commitment to providing advanced diagnosis imaging capabilities continues to elevate market needs and utilization, setting new standards in the industry.

Speaker 2

Moreover, we're constantly working to improve and innovate with solutions designed to meet and exceed market expectations. Thank you for continued support and confidence in our vision. Together, we will drive significant value for our stakeholders and make a lasting positive impact on global healthcare. As always, we welcome your feedback and are happy to meet with the interested investors. Please contact our Investor Relations partner at ICR and they will assist.

Speaker 2

With that operator, let's now open the call for questions.

Operator

Thank you. And our first question will come from Ross Osborne with Cantor Fitzgerald. Your line is open.

Speaker 4

Hi, guys. Thanks for taking our questions and congrats on the progress. So starting off, how many systems did you deploy in the U. S. During the quarter?

Speaker 4

And how many were operating? And as a follow-up, what types of imaging centers are adopting ARC?

Speaker 2

So I think it was mentioned altogether the number was 47. The I would say majority of the medical centers are imaging centers, small and medium. Another part are imaging medical imaging chains that we mentioned and we added a few right now. And we have a few in hospitals or I would say multifunctional functionality medical centers and some chiropractors clinics or in orthopedic clinics. They're all together in terms of the locations and the place.

Speaker 2

By far, our pipeline and deal flow is far bigger than what we have indicated and we continue to work.

Speaker 4

Okay. And then looking at placements to date, how has average utilization trended in terms of scans per day or month for ARC?

Speaker 2

I think it's similar to what we reported last time that in the operating in the places which are operating, this is around the number that we've indicated in the past in working days, 7 scans per day.

Speaker 4

Okay. And then lastly for us, I'll jump back in queue. You mentioned ongoing conversations with the FDA, but could you parse out how those conversations are going and any updates on ARC X and then the label extension for full body?

Speaker 2

So as you know, Ross, we don't give any indication on something that is not in our hands. We from our point of view and the best we can judge all the information all the questions were answered. From our point of view, the indication is positive. And from the FDA point of view, I don't see a reason why it will not be in the short future. In terms of the Arkex, this is something that we are going to submit in a few months, next early next year.

Speaker 2

And the RKEX is anyhow scheduled to be deployed sometimes during the next year. I would say probably second half if everything goes well. But from the FDA point of view, right now, the process seems to be in line.

Speaker 4

Great. Thanks for taking our questions.

Operator

And our next question comes from Jeffrey Cohen with Ladenburg. Your line is now open.

Speaker 5

Good morning, Erez and Ran. How are you? Good. So a few questions from our end and congrats on the progress. I know you called out Medica that you were asking.

Speaker 5

Could you talk about Europe generally speaking how that may play out throughout the 1st year or 2 of commercialization after CE Mark? Are you anticipating that that will also become 30 or 40 or 50 commercial folks on the ground across Europe? Or do you imagine that will be more clinical and related to agreements by country as far as distribution?

Speaker 2

So if you remember from what we presented as a strategy for the company for sales and distribution, Europe may maybe with the exception of the UK, Europe will be based on distributors. We have already few agreements with the distributors that were signed. The Medica actually indicated a very high interest from other countries, new distributors. And based on the right now the current indication, I think that I don't want to give a number, but it will be hopefully similar to the one that we currently have and we're going to deploy. We have already a few purchase orders, which are concrete.

Speaker 2

And once we get the CE, I think we have already a plan or the action plan for the go to market is already in place and we're going to start. One other thing which is important with respect to the Europe, we have indicated that we are planning to do another clinical trial in a prominent institution in Europe, which will help us to get clinical samples and have a lot of clinical data to help us to work in Europe. But in terms of the sales people, our channel management directors.

Speaker 6

The

Speaker 2

agreement with distributors and the contract and the promotion and the marketing, we already in place and we are running fast forward. Bear in mind that another country that this relates to the EU is the Australia, which we have already an agreement over there.

Speaker 5

Got it. And Erez, carry that over for a moment to APAC and LatAm as far as those territories and walk us through plans there and also talk about the regulatory and who's carrying that burden and where that's being pursued currently besides Mexico and Chile.

Speaker 2

Okay. So LATAM is also going to be based on distributors. The process is already in place in these countries in Mexico and Chile. So the request for the regulation approvals was already submitted by the distributors. They carry actually the process.

Speaker 2

We are in touch with them actually with Mexico just now I finished another call and it's going to be similar in terms of the efforts that we do there. We have a channel manager that is responsible for this area. The beauty of what we can do is we bring people from Latin America to see the demos that we have in the U. S. In order to take them all the way to Israel.

Speaker 2

So it's good for them to make a short trip and see the system operating, see the clinical value that we had, discuss the economic value that we can contribute, etcetera.

Speaker 5

Okay. That's helpful. And then lastly for us, a quick one. I didn't hear any mention about the Nanox Connect. Was there any update there or any anticipation for that platform for 2025?

Speaker 2

We'll probably have more clarity on 2025. But right now, I think the next one on the agenda will be Mexico and that we're going to get orders once we get the approval. And we have submitted already a request for regulation approvals in a few other countries for the Connect as well.

Speaker 5

Perfect. There is, Ryan, thanks for the color.

Speaker 2

Thank you.

Operator

The next question comes from Scott Henry with Alliance Global. Your line is now open.

Speaker 7

Thank you and good afternoon. For starters, when we think about Europe and the rest of the world, how should we think of that opportunity relative to the U. S? I know you used to think of all of that comparable to the U. S.

Speaker 7

As far as potential revenues, but I just wanted to get your thoughts on that.

Speaker 2

I cannot say that we don't have any internal thoughts about it and indication what's the split between the U. S. And the rest of the world and especially Europe. But I would say that I will be smarter to indicate or to give an answer to your question once we get the CE approval. And we know that we can move fast forward.

Speaker 2

In terms of strategy and the go to market, we've definitely, as we have mentioned a few times last year in 2023 and in 2024, in the beginning when we started the deployment in the U. S, We have put the U. S. As a priority, mainly because of the FDA approval and the fact that we can get easier access to customer and customer base and to generate the big deal flow and the pipeline. And so right now, U.

Speaker 2

S. Would be a priority and Europe will follow after.

Speaker 6

But Scott, in terms of modeling, you should think about it like the way that we did with the U. S. It's just we have learned more lessons from the past. So you can think about more efficient process.

Speaker 7

Okay, great. And then I noticed revenues for AI solutions were higher than the trend line. Is that a signal that AI solutions revenue should continue to

Speaker 6

be

Speaker 7

higher? And is there a little bit of seasonality? Because I know they were strong in Q3 of last year as well. Just trying to get a sense of that line.

Speaker 2

Okay. So as So the first question I will start, then Ron will continue. The first question is yes, you can anticipate that the number will continue to grow. In terms of seasonality, it usually relates to the budget related decisions, especially in the U. S.

Speaker 2

In the public health market. But since part of it is in the UK and it's not necessarily related to the U. S. Budget processes, then I wouldn't say that it's a seasonality there is seasonality impact on this. Ron, would you like to add anything else?

Speaker 3

Yes. Thank you. So as

Speaker 6

we explained in the PR, this decrease in the revenue of the AI division was due to a completion of projects of where we installed our solution. As for what the second part of your question, we do continue to build up our customer base and backlog, whether it's existing or expand the scope with existing customers. So So it's not related to seasonality and there's no linear expansion over here, but you do with this we do see some expansion in the scope of the AI division does.

Speaker 7

Okay. Thank you for that feedback. Final question, which is very much a big picture question. When we think about the revenue trajectory, when do you think we would start to see an inflection point? Would that be the expanded indication?

Speaker 7

And then obviously, we get Europe coming in. I mean, are we thinking kind of middle of 2025, we should start to see kind of that hockey stick upward turn? Just trying to get your sense of when we should look for the inflection point? Thank you.

Speaker 2

Ron?

Speaker 3

Yes.

Speaker 6

So without specifying any specific point of time, it's connected for various factors. Of course, first of all, and drilling the clinical value of our devices, the commercialization, it's the of course, it's also related to expanding the decelerances for the general use in the U. S. And the CE Mark. So it's really a combination of many things, which we hope that will come to fruition in the near future.

Speaker 7

Okay. Thank you, David.

Speaker 2

I would actually look at it more not as inflection point of point, but more of a kind of a milestones that each one of them can make it be a game changer. So one will be the chest and the full body, another one will be the CE Later on, sometimes 2025, the FDA approval of the ArQX, the ArQX launch. So we have a lot of milestones along the way that each one of them will be a game changer. That's the way at least we see it internally.

Speaker 7

Okay. Thank you. That is helpful. Thank you for taking the questions.

Speaker 2

Thank you.

Operator

I am showing no further questions at this time. And I do want to thank you for participating today's call. And you may now disconnect.

Remove Ads
Powered by Quartr
Earnings Conference Call
Nano-X Imaging Q3 2024
00:00 / 00:00
Remove Ads