Semler Scientific Q1 2024 Earnings Report $34.26 +0.50 (+1.48%) As of 04/14/2025 04:00 PM Eastern Earnings HistoryForecast Semler Scientific EPS ResultsActual EPS$0.78Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ASemler Scientific Revenue ResultsActual Revenue$15.90 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/ASemler Scientific Announcement DetailsQuarterQ1 2024Date5/7/2024TimeN/AConference Call DateTuesday, May 7, 2024Conference Call Time4:30PM ETUpcoming EarningsSemler Scientific's Q1 2025 earnings is scheduled for Monday, May 5, 2025, with a conference call scheduled on Tuesday, May 6, 2025 at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Quarterly Report (10-Q)Earnings HistorySMLR ProfilePowered by Semler Scientific Q1 2024 Earnings Call TranscriptProvided by QuartrMay 7, 2024 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00Please 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 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, including receipt and time of an additional five zero one clearance for QuantaFlo and investment in emerging growth opportunities. Operator00:00:37Such 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, semlarscientific.com. Now, I would like to introduce Doug Murphy Chutorian, CEO of Semler Scientific. Operator00:01:14Please go ahead. Speaker 100:01:17Good afternoon, everyone. Thank you for joining us on our Q1 2024 results call. We achieved year over year earnings growth and ended the quarter with our highest cash position in the history of the company. Now I'm pleased to introduce our CFO, Rene Comer to provide further details. Renee? Speaker 200:01:47Thank 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 Q1 2024 financial results and discussing recent corporate development. Jennifer Oliva Harrington, our COO, 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. Speaker 200:02:15As mentioned in today's earnings release, we had a very strong quarter of cash generation despite the regulatory driven year over year revenue decline from our PAD product. Even with the decline in year over year quarterly revenues, we achieved year over year earnings growth in the Q1 2024 compared to the Q1 of 2023. This achievement is a testament to the hard work of our team, who adjusted spending accordingly to changes in market conditions. We expect that our revenues will reaccelerate if we successful in our efforts to obtain a new 510 clearance from the FDA that would allow us to market our heart dysfunction product. Now to the details of our Q1 results. Speaker 200:03:05Total revenues in Q1 2024 were $15,900,000 a decrease of 13% compared to the Q1 of 2023. Our revenues are driven by continued sales of QuantaFlo to existing and new customers to test for peripheral arterial disease or PAD. Fixed fee revenues were $7,100,000 a decrease of 24% year over year. Variable fee revenues were $8,000,000 a decrease of 6% year over year. Equipment and other revenues were $800,000 an increase of 140% year over year. Speaker 200:03:45Equipment revenues are primarily sales to variable fee customers and they remain strong versus historical levels. In March 2023, the Centers For Medicare and Medicaid Services, or CMS, announced the 3 year phase in of the removal of the HCC code relating to PAD without complications from the Medicare Advantage Risk Adjustment Model. 2024 marks the 1st year of the 3 year phase in of the decreased economics to our managed care customers. For the remainder of 2024, we anticipate our revenues could follow a similar cadence that we saw in 2023, with H1 more heavily weighted versus H2. We are encouraged by the continued testing for PAD given the importance of early diagnosis and treatment that can lead to improved long term clinical outcomes for patients. Speaker 200:04:44In the Q1 of 2024, our 3 largest customers, including their related affiliates, comprised 45%, 25% and 11% of quarterly revenues. Operating expenses in Q1 2024, which includes cost of revenue, were $8,900,000 a decrease of 25% year over year. As a percentage of revenues, operating expenses decreased to 56% compared to 66% in 2023 due to continued expense control after our strategic corporate streamlining announced in July last year. We have an outstanding group of leaders and employees here at Semler that remain diligent in assuring we're focused on cost discipline without sacrificing the high service our customers have come to expect. We anticipate we could experience a slight uptick in expenses throughout the year as we prepare for the next phase of launching quantiflo with expanded use as an aid in the diagnosis of other cardiovascular diseases that is subject to FDA clearance, which we hope to achieve in the second half of twenty twenty four. Speaker 200:05:59Pretax net income was $7,800,000 compared to $6,600,000 in the prior year. Net income was $6,100,000 or $0.88 per basic share and $0.78 per fully diluted share, compared to $5,000,000 or $0.74 per basic share and $0.63 per fully diluted share in Q1 2023. We had a record high cash balance at March 31, 2024 of $62,900,000 Now, I'd like to turn the call over to Jennifer to provide a more in-depth discussion of our market developments and opportunities. Speaker 300:06:44Thank you, Renee. Looking ahead, I'm enthusiastic about Semler's potential to support the identification of chronic diseases by our customers, which continues to burden our healthcare system. Cardiovascular disease ranks as a top concern in healthcare expenditures and global mortality, underscoring the imperative need for early identification of cardiac conditions. Our recent announcement in January marked our intent to pursue an additional 510 clearance from the FDA for QuantaFlo, seeking to broaden its utility to encompass a wider array of cardiovascular diseases. We anticipate we may receive clearance with the expanded label in the second half of twenty twenty four. Speaker 300:07:26Upon achieving this regulatory milestone, our strategic focus will expand to effectively showcase this enhanced offering to our existing customer base. In the interim, our commitment remains dedicated to the promotion and selling of QuantaFlo as a valuable aid in the diagnosis of PID. This proactive approach ensures continuity providing our customers with a trusted solution, while positioning us for potential future success in the broader cardiovascular diagnostic market. Through enabling early detection of peripheral archdale disease, we are hopeful that healthcare providers will continue to initiate preventative management programs in chronic cardiovascular disease. We believe that this approach holds the potential to not only save lives, but also lower healthcare expenditures. Speaker 300:08:16We continue to envision a healthcare landscape where our technology assumes a central role in delivering healthier outcomes for patients, while concurrently delivering substantial economic value to our customers. Our sales and marketing goals remain focused on further establishing quantiflo as the standard of care for PAD diagnosis, leveraging the demonstrated clinical benefits of early detection and preventative care, and to continue diversifying our customer base by adding new medical centers, expanding our reach within value based care providers, fortifying our presence in the VA system and growing opportunities within additional markets that will benefit from PAD testing. And now Renee will conclude with remarks. Speaker 200:09:06To achieve this plan, we are reinvesting in emerging growth opportunities a focus on expanding our customer base for PAD. We believe that these opportunities may hold promise and represent an exciting aspect of our company's future. Additionally, our commitment to research and development remains unwavering as we prioritize the enhancement of existing products and data services to stay in the forefront of innovation and consistently deliver cutting edge solutions to our customers. Our long term includes extending our reach to encompass additional cardiovascular applications, reflecting our dedication to continuous expansion. A key strength of our technology lies in its portability and accessibility, allowing us to actively contribute to addressing health inequities prevalent in cardiovascular disease. Speaker 200:09:58By providing tools that can be utilized in diverse settings, we play a role in breaking down barriers, ensuring that more individuals have access to early detection and intervention. As part of our growth strategy, we are exploring inorganic growth initiatives to further diversify our product portfolio. Through strategic partnerships and exploring new opportunities, we aim to broaden our impact on the market and expand our offerings. We extend our appreciation for your interest in our company and for your continued support as we embark on the journey of innovation. Now, operator, if you could please open the line, Doug, Jen and I will be happy to address your questions. Operator00:11:10And our first question comes from Brooks O'Neil of Lake Street Capital Markets. Please go ahead. Speaker 400:11:18Hi, good afternoon guys. This is Aaron on the line for Brooks. Thanks for taking our questions. I'm interested in the timing and sort of the process to receive the 510 ks clearance. Obviously, you guys mentioned the second half of this year, but assuming approval, what are sort of the next steps taken after that process? Speaker 200:11:39Sure. Hi, Aaron. Thanks for the question. So as we had released earlier in the year in January, we did announce our intention to file for the 510 clearance. At this point, it's kind of out of our hands on timing. Speaker 200:11:55So it's up to the FDA and their approval process. As we said, we do anticipate that we will receive approval in the second half of this year. And once we do that, we can start marketing it to our customers. We can't market it before then. And we do anticipate that it will take time for the product to gain traction and that we don't anticipate significant revenues in 2024. Speaker 200:12:30We will start to market this to our existing customers. So they've already are familiar with our product. It's the same unit. It's just a software portion upgrade to the unit. And our customers have worked with us for many years and they're familiar with us. Speaker 400:12:50Okay. That makes sense. And then do you have any additional color regarding what specific conditions that Quantipol might identify in 5 ten clearance or is it still a little bit too early to speak on that? Speaker 200:13:05And so it will be surrounding heart dysfunction, specific wording will come out once we get the actual clearance. Speaker 400:13:18Okay. Got you. Understood. And then, Renee, how would you classify the current demand environment? And I guess as just sort of a follow-up to that, have you lost customers or I mean expect to lose a significant amount of customers in relation to the PAD product? Speaker 200:13:36I would say that we still do have demand for our product. So the reaction from our customers has been somewhat mixed. So with 2023 being the 1st year of the phase in or sorry, with 2024 being the of the new CMS rate announcement, the economics have changed to some of our managed care customers. So the extra reimbursement is being reduced, not only for the asymptomatic PAD, but this reimbursement was cut in 20 24 by about 33%. And while our revenues are not directly linked to the CMS payments to our customers, some of the largest customers were offered additional volume pricing tiers. Speaker 200:14:22So we are seeing continued testing, but we also did see some cleanup of underutilized units. We are still getting new customers and the clinical value of testing remains the same. And we think it's unfortunate that CMS did not recognize this, that the clinical benefit of early detection by putting preventative measures really supports better outcomes. Speaker 400:14:53And then obviously you guys have developed and maintained a healthy balance sheet with a record cash balance this quarter. And you might have mentioned this a little bit in your prepared remarks, but have you had any conversations on any inorganic opportunities? I'd just love to get some more thoughts on potential uses of cash as we move forward throughout the year here. Thanks for taking Speaker 100:15:15the questions. Speaker 200:15:16Sure. So really when we're looking at our cash, there's kind of 3 areas that we're looking at. 1st and foremost is reinvesting back into our product. And so an example of this is the heart dysfunction 510 clearance that we're going after. The second, as you mentioned, is inorganic growth activities. Speaker 200:15:39We do have a robust pipeline. But as you know, these things take time. So we are going to be very diligent in what we're doing and what we're looking at. Our Board has a lot of experience in capital allocation and they are closely aligned with management and shareholders in trying to make sure that we carefully approach any acquisition that we may have. And then the 3rd piece with our cash could potentially be share buybacks. Speaker 200:16:16So we do have a $20,000,000 share buyback that's authorized by the Board. We have bought back $5,000,000 already, so we do have $15,000,000 authorized in share repurchases. So that's something else that the Board will obsess will assess, looking at with capital allocation and depending on the market circumstances. Speaker 400:16:44Okay, understood. Super helpful. And then Speaker 100:16:46just a quick one for modeling purposes. Speaker 400:16:46I think that I Yes. We Operator00:16:58Yes. We think it will follow a Speaker 200:16:59similar cadence where H1 will be more heavily weighted than H2. Operator00:17:14This concludes our question and answer session. I'd like to turn the call back over to Renee Cormier for any closing remarks. Speaker 200:17:22Thank you. As we wrap up this conference call, we want to emphasize our ongoing commitment to delivering clinical benefits through earlier diagnosis of chronic cardiovascular conditions. The continued recognition of the value of this approach by our customers underscores the crucial role our technology plays for patients, physicians, facilities and payers in an evolving healthcare landscape. Moving forward, our primary objective remains to preserve and strengthen our current revenue opportunities and profitability within the chronic disease space with a focus on cardiovascular diseases. We appreciate your participation in today's discussion and thank you for your ongoing support.Read moreRemove AdsPowered by Conference Call Audio Live Call not available Earnings Conference CallSemler Scientific Q1 202400:00 / 00:00Speed:1x1.25x1.5x2xRemove Ads Earnings DocumentsPress Release(8-K)Quarterly report(10-Q) Semler Scientific Earnings HeadlinesCorcept Therapeutics Incorporated (NASDAQ:CORT) Receives $143.25 Consensus Price Target from AnalystsApril 14 at 1:46 AM | americanbankingnews.comCorcept Therapeutics (NasdaqCM:CORT) Rises 36% in Last QuarterApril 9, 2025 | finance.yahoo.comCrypto’s crashing…but we’re still profitingMost traders are panicking right now. Bitcoin’s dropping. Altcoins are bleeding. The stock market’s a mess. The news is screaming fear. But while most traders watch their portfolios tank…April 15, 2025 | Crypto Swap Profits (Ad)Corcept Therapeutics initiates trial of Phase 2 trial BELLAApril 8, 2025 | markets.businessinsider.comZacks Research Issues Positive Forecast for CORT EarningsApril 8, 2025 | americanbankingnews.comCorcept Initiates Trial of Relacorilant Plus Nab-Paclitaxel and Bevacizumab in Patients With Platinum-Resistant Ovarian CancerApril 7, 2025 | finance.yahoo.comSee More Corcept Therapeutics Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Semler Scientific? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Semler Scientific and other key companies, straight to your email. Email Address About Semler ScientificSemler Scientific (NASDAQ:SMLR) provides technology solutions to enhance the clinical effectiveness and efficiency of healthcare providers in the United States. The company's products include QuantaFlo, a four-minute in-office blood flow test that enables healthcare providers to use blood flow measurements as part of their examinations of a patient's vascular condition. It also offers Insulin Insights, a software program that is used by a healthcare provider to optimize outpatient insulin dosing. The company's products serve cardiologists, internists, nephrologists, endocrinologists, podiatrists, family practitioners, healthcare insurance plans, integrated delivery networks, independent physician groups, and companies contracting with the healthcare industry, such as risk assessment groups and retailers. It offers its products through sales representatives and distributors. The company was incorporated in 2007 and is headquartered in Santa Clara, California.View Semler Scientific ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Why Analysts Boosted United Airlines Stock Ahead of EarningsLamb Weston Stock Rises, Earnings Provide Calm Amidst ChaosIntuitive Machines Gains After Earnings Beat, NASA Missions AheadCintas Delivers Earnings Beat, Signals More Growth AheadNike Stock Dips on Earnings: Analysts Weigh in on What’s NextAfter Massive Post Earnings Fall, Does Hope Remain for MongoDB?Semtech Rallies on Earnings Beat—Is There More Upside? 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There are 5 speakers on the call. Operator00:00:00Please 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 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, including receipt and time of an additional five zero one clearance for QuantaFlo and investment in emerging growth opportunities. Operator00:00:37Such 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, semlarscientific.com. Now, I would like to introduce Doug Murphy Chutorian, CEO of Semler Scientific. Operator00:01:14Please go ahead. Speaker 100:01:17Good afternoon, everyone. Thank you for joining us on our Q1 2024 results call. We achieved year over year earnings growth and ended the quarter with our highest cash position in the history of the company. Now I'm pleased to introduce our CFO, Rene Comer to provide further details. Renee? Speaker 200:01:47Thank 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 Q1 2024 financial results and discussing recent corporate development. Jennifer Oliva Harrington, our COO, 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. Speaker 200:02:15As mentioned in today's earnings release, we had a very strong quarter of cash generation despite the regulatory driven year over year revenue decline from our PAD product. Even with the decline in year over year quarterly revenues, we achieved year over year earnings growth in the Q1 2024 compared to the Q1 of 2023. This achievement is a testament to the hard work of our team, who adjusted spending accordingly to changes in market conditions. We expect that our revenues will reaccelerate if we successful in our efforts to obtain a new 510 clearance from the FDA that would allow us to market our heart dysfunction product. Now to the details of our Q1 results. Speaker 200:03:05Total revenues in Q1 2024 were $15,900,000 a decrease of 13% compared to the Q1 of 2023. Our revenues are driven by continued sales of QuantaFlo to existing and new customers to test for peripheral arterial disease or PAD. Fixed fee revenues were $7,100,000 a decrease of 24% year over year. Variable fee revenues were $8,000,000 a decrease of 6% year over year. Equipment and other revenues were $800,000 an increase of 140% year over year. Speaker 200:03:45Equipment revenues are primarily sales to variable fee customers and they remain strong versus historical levels. In March 2023, the Centers For Medicare and Medicaid Services, or CMS, announced the 3 year phase in of the removal of the HCC code relating to PAD without complications from the Medicare Advantage Risk Adjustment Model. 2024 marks the 1st year of the 3 year phase in of the decreased economics to our managed care customers. For the remainder of 2024, we anticipate our revenues could follow a similar cadence that we saw in 2023, with H1 more heavily weighted versus H2. We are encouraged by the continued testing for PAD given the importance of early diagnosis and treatment that can lead to improved long term clinical outcomes for patients. Speaker 200:04:44In the Q1 of 2024, our 3 largest customers, including their related affiliates, comprised 45%, 25% and 11% of quarterly revenues. Operating expenses in Q1 2024, which includes cost of revenue, were $8,900,000 a decrease of 25% year over year. As a percentage of revenues, operating expenses decreased to 56% compared to 66% in 2023 due to continued expense control after our strategic corporate streamlining announced in July last year. We have an outstanding group of leaders and employees here at Semler that remain diligent in assuring we're focused on cost discipline without sacrificing the high service our customers have come to expect. We anticipate we could experience a slight uptick in expenses throughout the year as we prepare for the next phase of launching quantiflo with expanded use as an aid in the diagnosis of other cardiovascular diseases that is subject to FDA clearance, which we hope to achieve in the second half of twenty twenty four. Speaker 200:05:59Pretax net income was $7,800,000 compared to $6,600,000 in the prior year. Net income was $6,100,000 or $0.88 per basic share and $0.78 per fully diluted share, compared to $5,000,000 or $0.74 per basic share and $0.63 per fully diluted share in Q1 2023. We had a record high cash balance at March 31, 2024 of $62,900,000 Now, I'd like to turn the call over to Jennifer to provide a more in-depth discussion of our market developments and opportunities. Speaker 300:06:44Thank you, Renee. Looking ahead, I'm enthusiastic about Semler's potential to support the identification of chronic diseases by our customers, which continues to burden our healthcare system. Cardiovascular disease ranks as a top concern in healthcare expenditures and global mortality, underscoring the imperative need for early identification of cardiac conditions. Our recent announcement in January marked our intent to pursue an additional 510 clearance from the FDA for QuantaFlo, seeking to broaden its utility to encompass a wider array of cardiovascular diseases. We anticipate we may receive clearance with the expanded label in the second half of twenty twenty four. Speaker 300:07:26Upon achieving this regulatory milestone, our strategic focus will expand to effectively showcase this enhanced offering to our existing customer base. In the interim, our commitment remains dedicated to the promotion and selling of QuantaFlo as a valuable aid in the diagnosis of PID. This proactive approach ensures continuity providing our customers with a trusted solution, while positioning us for potential future success in the broader cardiovascular diagnostic market. Through enabling early detection of peripheral archdale disease, we are hopeful that healthcare providers will continue to initiate preventative management programs in chronic cardiovascular disease. We believe that this approach holds the potential to not only save lives, but also lower healthcare expenditures. Speaker 300:08:16We continue to envision a healthcare landscape where our technology assumes a central role in delivering healthier outcomes for patients, while concurrently delivering substantial economic value to our customers. Our sales and marketing goals remain focused on further establishing quantiflo as the standard of care for PAD diagnosis, leveraging the demonstrated clinical benefits of early detection and preventative care, and to continue diversifying our customer base by adding new medical centers, expanding our reach within value based care providers, fortifying our presence in the VA system and growing opportunities within additional markets that will benefit from PAD testing. And now Renee will conclude with remarks. Speaker 200:09:06To achieve this plan, we are reinvesting in emerging growth opportunities a focus on expanding our customer base for PAD. We believe that these opportunities may hold promise and represent an exciting aspect of our company's future. Additionally, our commitment to research and development remains unwavering as we prioritize the enhancement of existing products and data services to stay in the forefront of innovation and consistently deliver cutting edge solutions to our customers. Our long term includes extending our reach to encompass additional cardiovascular applications, reflecting our dedication to continuous expansion. A key strength of our technology lies in its portability and accessibility, allowing us to actively contribute to addressing health inequities prevalent in cardiovascular disease. Speaker 200:09:58By providing tools that can be utilized in diverse settings, we play a role in breaking down barriers, ensuring that more individuals have access to early detection and intervention. As part of our growth strategy, we are exploring inorganic growth initiatives to further diversify our product portfolio. Through strategic partnerships and exploring new opportunities, we aim to broaden our impact on the market and expand our offerings. We extend our appreciation for your interest in our company and for your continued support as we embark on the journey of innovation. Now, operator, if you could please open the line, Doug, Jen and I will be happy to address your questions. Operator00:11:10And our first question comes from Brooks O'Neil of Lake Street Capital Markets. Please go ahead. Speaker 400:11:18Hi, good afternoon guys. This is Aaron on the line for Brooks. Thanks for taking our questions. I'm interested in the timing and sort of the process to receive the 510 ks clearance. Obviously, you guys mentioned the second half of this year, but assuming approval, what are sort of the next steps taken after that process? Speaker 200:11:39Sure. Hi, Aaron. Thanks for the question. So as we had released earlier in the year in January, we did announce our intention to file for the 510 clearance. At this point, it's kind of out of our hands on timing. Speaker 200:11:55So it's up to the FDA and their approval process. As we said, we do anticipate that we will receive approval in the second half of this year. And once we do that, we can start marketing it to our customers. We can't market it before then. And we do anticipate that it will take time for the product to gain traction and that we don't anticipate significant revenues in 2024. Speaker 200:12:30We will start to market this to our existing customers. So they've already are familiar with our product. It's the same unit. It's just a software portion upgrade to the unit. And our customers have worked with us for many years and they're familiar with us. Speaker 400:12:50Okay. That makes sense. And then do you have any additional color regarding what specific conditions that Quantipol might identify in 5 ten clearance or is it still a little bit too early to speak on that? Speaker 200:13:05And so it will be surrounding heart dysfunction, specific wording will come out once we get the actual clearance. Speaker 400:13:18Okay. Got you. Understood. And then, Renee, how would you classify the current demand environment? And I guess as just sort of a follow-up to that, have you lost customers or I mean expect to lose a significant amount of customers in relation to the PAD product? Speaker 200:13:36I would say that we still do have demand for our product. So the reaction from our customers has been somewhat mixed. So with 2023 being the 1st year of the phase in or sorry, with 2024 being the of the new CMS rate announcement, the economics have changed to some of our managed care customers. So the extra reimbursement is being reduced, not only for the asymptomatic PAD, but this reimbursement was cut in 20 24 by about 33%. And while our revenues are not directly linked to the CMS payments to our customers, some of the largest customers were offered additional volume pricing tiers. Speaker 200:14:22So we are seeing continued testing, but we also did see some cleanup of underutilized units. We are still getting new customers and the clinical value of testing remains the same. And we think it's unfortunate that CMS did not recognize this, that the clinical benefit of early detection by putting preventative measures really supports better outcomes. Speaker 400:14:53And then obviously you guys have developed and maintained a healthy balance sheet with a record cash balance this quarter. And you might have mentioned this a little bit in your prepared remarks, but have you had any conversations on any inorganic opportunities? I'd just love to get some more thoughts on potential uses of cash as we move forward throughout the year here. Thanks for taking Speaker 100:15:15the questions. Speaker 200:15:16Sure. So really when we're looking at our cash, there's kind of 3 areas that we're looking at. 1st and foremost is reinvesting back into our product. And so an example of this is the heart dysfunction 510 clearance that we're going after. The second, as you mentioned, is inorganic growth activities. Speaker 200:15:39We do have a robust pipeline. But as you know, these things take time. So we are going to be very diligent in what we're doing and what we're looking at. Our Board has a lot of experience in capital allocation and they are closely aligned with management and shareholders in trying to make sure that we carefully approach any acquisition that we may have. And then the 3rd piece with our cash could potentially be share buybacks. Speaker 200:16:16So we do have a $20,000,000 share buyback that's authorized by the Board. We have bought back $5,000,000 already, so we do have $15,000,000 authorized in share repurchases. So that's something else that the Board will obsess will assess, looking at with capital allocation and depending on the market circumstances. Speaker 400:16:44Okay, understood. Super helpful. And then Speaker 100:16:46just a quick one for modeling purposes. Speaker 400:16:46I think that I Yes. We Operator00:16:58Yes. We think it will follow a Speaker 200:16:59similar cadence where H1 will be more heavily weighted than H2. Operator00:17:14This concludes our question and answer session. I'd like to turn the call back over to Renee Cormier for any closing remarks. Speaker 200:17:22Thank you. As we wrap up this conference call, we want to emphasize our ongoing commitment to delivering clinical benefits through earlier diagnosis of chronic cardiovascular conditions. The continued recognition of the value of this approach by our customers underscores the crucial role our technology plays for patients, physicians, facilities and payers in an evolving healthcare landscape. Moving forward, our primary objective remains to preserve and strengthen our current revenue opportunities and profitability within the chronic disease space with a focus on cardiovascular diseases. We appreciate your participation in today's discussion and thank you for your ongoing support.Read moreRemove AdsPowered by