Q1 2025 Semler Scientific Inc Earnings Call
Happy Holidays and Merry Christmas
Speaker Change: Good afternoon and welcome to the Semler Scientific First Quarter 2025 Financial Results Conference call.
Eric Semler, Jennifer Herrington, Eric Semler, Jennifer Herrington, Jennifer Herrington,
All participants will be in a listen only mode.
Speaker Change: After today's prepared remarks, as time permits, management will take questions submitted prior to this call via email. Please note this event is being recorded.
Speaker Change: 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 Security's litigation reform act of 1995 as amended.
Speaker Change: These include express or imply statements regarding the expectations for our Bitcoin Treasury strategy, plans to acquire additional Bitcoin, opportunity to upsize, and the price of Bitcoin.
Speaker Change: Expansion on the health care business and the development and marketing of additional products including receipt and timing of an additional 510k clearance for quanta flow.
Speaker Change: and for our proposed settlement with the U.S. Department of Justice.
Speaker Change: Such four-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements.
Speaker Change: Those risks and uncertainties are described in the press release in our SEC filing.
Speaker Change: The four-looking statements made today are as of the date of this call, and the company does not undertake any obligation to update the four-looking statements.
Speaker Change: If you do not have a copy of today's release, you may obtain one by visiting the Investor Relations page of the website, SemlerScientific.com.
Speaker Change: I would now like to introduce Dr. Doug Murphy, Catorian, CEO of Semler Scientific.
With that finoon everyone.
Speaker Change: Thank you for joining us on our first quarter, 2025 Results.
We're...
Believe our healthcare business is well positioned to secure.
Speaker Change: and the customer base. While we pursue a new regular new opportunities, we will manage the healthcare business to generate cash, which we plan to primarily use for additional big-point processes.
Speaker Change: Now I will hand a call over to Eric Semler, who will provide you with an update on our
Prefer to restart it. Eric?
Eric Semler: Thanks Doug, and thank you to all our stakeholders for listening in today and for your support of our company.
Speaker Change: We were thrilled to participate in strategies Bitcoin for Corporations Conference last week in Orlando.
Speaker Change: where we had a chance to meet many of our passionate stockholders and fellow Bitcoiners in person.
Speaker Change: A special thank you to Michael Saylor, Fonley, and the Strategy Organization for all their wonderful support and for hosting such a fantastic, well-attended event. The corporate Bitcoin Treasury movement is gaining powerful momentum and scale.
We are a Bitcoin first company.
Speaker Change: Nearly one year ago, we became the second US public company to adopt the Bitcoin standard.
Speaker Change: Since then, we have intelligently and accretably acquired 3,808 bitcoins that are now worth almost $400 million, which we believe makes us the fourth largest bitcoin treasury company in the US, and the ninth largest corporate holder of bitcoin in the US.
Dr. Smith, Dr. Smith.
Speaker Change: So far in 2025, we acquired 1,510 bitcoins and had a BTC yield of 22.2%. This resulted in BTC gain of 510 bitcoins and BTC dollar gain of $52 million.
Speaker Change: Since the quarter that we adopted Bitcoin as our primary treasury reserve asset on May 28th,
2024.
Speaker Change: We have achieved 152.8% positive Bitcoin yield. This has resulted in a BTC gain of 1,1447 Bitcoin and a BTC dollar gain of $139 million.
Speaker Change: Over that same period, our stock has appreciated 64% in less than 12 months versus only 9% for the S&P 500.
Speaker Change: We were able to generate these strong returns despite headwinds in our health care business.
Speaker Change: We have ambitious goals for growing our Bitcoin arsenal in 2025 and we have tremendous firepower backed by a new $500 million ATM program that became effective on April 22nd.
Speaker Change: During the first quarter of 2025, we completed a $100 million convertible note financing round using most of the net proceeds to buy Bitcoin.
Speaker Change: As a result, we believe we now have the highest leverage ratio among publicly traded Bitcoin Treasury companies, positioning us for outsides, positioning us for outsides upside should Bitcoin prices rise.
Semler Scientific is a pioneer in developing and marketing.
Thank you very much.
Hi.
Thank you.
We believe this is a defining moment for Bitcoin.
Speaker Change: It cannot be tariffed, it doesn't issue earnings or guidance, it doesn't have counter-party risk and it continues to trade at a huge discount to gold.
Speaker Change: Most importantly, statements by the current administration suggest that Bitcoin may soon be considered for strategic reserve purchases by the U.S. government.
Speaker Change: Our corporate strategy is underpinned by three core principles. Our Bitcoin Treasury strategy is our highest priority. Our healthcare business must generate cash and complement our Bitcoin Treasury strategy. And we must intelligently and exponentially increase our Bitcoin holdings and hold them.
Speaker Change: We look forward to continuing to get out on the road to tell our story. We'll be participating at the BTC conference.
Speaker Change: In Las Vegas at the end of this month and at BTC Prague in June .
Speaker Change: We hope to have the chance to meet many of you at these events. Now I'm pleased to introduce our COO, Jen Oliva Herrington, to go over our healthcare business.
Thank you, Eric.
Speaker Change: While our healthcare business has seen the impact from payment changes made by CMS for our customers that became effective last year, we believe our business is in a good place to capitalize on current initiatives to drive future growth.
Speaker Change: We are starting to see green shoots in areas we have targeted for future growth, including diversifying our customer base and introducing additional FDA-cleared products and other services in the cardiovascular space to our strong and well-established customer base.
Speaker Change: Additionally, as we continue to innovate, we are pursuing a new 510K clearance for a product extension to aid in the diagnosis of heart failure, with hopes of obtaining this clearance sometime in 2025.
Speaker Change: Semler is a pioneer in developing and marketing technology products and services to healthcare providers to combat chronic diseases.
Speaker Change: Our unwavering focus on our core medical products and services business alongside our Bitcoin Treasury strategy ensures that we maintain our position at the forefront of medical and financial freedom.
Speaker Change: Now I'm pleased to introduce our CFO , Renae Cormier, to go over our financial results.
Renae Cormier: Thank you, Jen. I'll cover our first quarter financial results and then speak more about our Bitcoin holdings. Following our remarks and as time permits, we'll answer questions that have been submitted via email.
Renae Cormier: Total revenues in Q1 2025 were $8.8 million, which was down about 44% compared to the first quarter of 2024. We saw further pressure on revenues following the additional season of the 2024 CMS rate announcement.
Renae Cormier: Operating expenses in Q1 2025, which includes the cost of revenues, were 39.9 million versus 8.9 million in Q1 2024.
Renae Cormier: I wanted to highlight a few unusual items that were included in operating expenses in Q1 2025 including a 29.8 million contingency reserve related to our agreement in principle to settle the DOJCID.
Renae Cormier: It also includes 1.5 million in non-cash.compensation, 400,000 in state and sales, youth tax accruals and another 400,000 in legal fees related to the DOJCID.
Further details are laid out in our press release.
Renae Cormier: The loss from operations was $31.1 million given these items, a decrease compared to income from operations of $70 million in the prior year.
Renae Cormier: Other expenses met were 43.8 million and included a net unrealized loss of 41.8 million from the change in fair value of our Bitcoin holdings.
Renae Cormier: Accounting Standards require Bitcoin assets to be measured at fair value with gains and losses from changes in the fair value to be recognized in net income in each reporting period.
Renae Cormier: While this may introduce volatility into our reported net income, it does not impact our cash flow from operations.
Thank you for tuning in.
Renae Cormier: For some perspective on how dramatic the change in fair value measurements can be, as of March 31, 2025, the net unrealized loss on our Bitcoin holdings was $17 million.
Renae Cormier: As a reference, had Bitcoin been priced around its current level of 104,000 per Bitcoin, we would have had a net unrealized gain of over $51 million.
That's a large swing in just over a month.
for the first quarter of 2025, our net loss was 6.
Renae Cormier: 64.7 million, or $6.74 per basic and fully diluted chair, compared to net income of $6.1 million, or $0.88 per basic share, and $0.78 per fully diluted chair in Q1 2024.
Renae Cormier: Cash Equivalence and Restricted Cash at March 31, 2025, with $9.9 million.
Renae Cormier: As we discussed in our last earnings call, as Eric mentioned, in late January , we completed a convertible senior notes offering with a $100 million aggregate principal amount of five-and-a-half year.
4.25% notes due in August 2030.
Renae Cormier: Together with Capt Paul Transactions, the conversion premium is 75% leading to an initial effective conversion price of similar stock of approximately $107 per share.
Renae Cormier: Wood significantly reduces potential conversion delusion. We use net proceeds to purchase additional bitcoins.
Last year, we had filed, excuse me.
My script just disappeared here.
[inaudible]
Renae Cormier: until our new ATM of 500 million became effective, and that was on April 22nd, 2025. For our initial ATM, we sold approximately 2.4 million shares for net proceeds of approximately 126 million dollars.
and our new program, our $500 million shelf.
Renae Cormier: We have issued through May 12th approximately 1.8 million shares for net proceeds of approximately $61 million. We have got proceeds from the ATM issuance for general corporate purposes, including the purchase of additional decoints.
Renae Cormier: Since March 31, 2025, we purchased 616 Bitcoins for an aggregate cost of $59.6 million.
Renae Cormier: We now hold a total of 3,808 Bitcoin, valued at approximately $400 million, representing an unrealized fair value gain of $59 million.
Renae Cormier: We also launched a Bitcoin dashboard today at IR.SemlerSimlerScientific.com, where investors will be able to find our Bitcoin related statistics in one location.
Renae Cormier: We encourage investors to check back often as it will track additional bit-going purchases as we announce them and provide a real-time snapshot of our market and Bitcoin metrics.
Renae Cormier: Now we'll begin our Q&A. We received some questions ahead of the release that we tried to address in the prepared remarks and we do have some additional questions.
Speaker Change: and so the first one is, what are your plans this year for accumulating more Bitcoin? Eric, I'll let you take that one.
Thank you very much.
We have extremely ambitious plans to...
Speaker Change: Incredibly acquired a more good coin. We want to aggressively increase our $388 million, close to $400 million, now Bitcoin stockpile, and are well on our way with our recently authorized $500 million ATM. We are confident that we can use our $500 million ATM this year and access additional sources of financing to buy more Bitcoin.
Speaker Change: We believe that Michael Saylor in strategy success tapping into the preferred markets with strike and strife creates a playbook for yet another great opportunity for us down the road.
Speaker Change: Great. Jen can take our next question. So what's driving the underlying trends in the business and what do you expect for 2025?
Thanks for next.
Speaker Change: Despite the government's decision about payment for risk adjustments for PAD, we continue to see ongoing testing and additions to our customer base.
Speaker Change: Albeit at decreased volumes for PAD. Our priority for 2025 is to minimize declines to quantiflow revenue while maintaining sufficient infrastructure to support, innovate, and grow our operations related to other cardiovascular disease states.
Speaker Change: This includes the marketing of other FDA-cleared products that we are licensing to our valuable customer base. We seek to diversify and expand our customers and target new markets that will benefit from using these potentially life-fading products.
Speaker Change: We will be managing the healthcare business to generate cash which we plan to use for general corporate purposes, including buying more Bitcoin.
Speaker Change: Thanks, Dan, and thank you everyone for your questions. As we wrap up this conference call, we want to emphasize our ongoing commitment to continue execution of our Bitcoin Treasury strategy and our healthcare business. We appreciate your participation in today's discussion and thank you for your ongoing support. Operator?
Speaker Change: Thank you everyone for joining. This now concludes the conference call.