Q2 2025 Semler Scientific Inc Earnings Call

Good day and welcome to the Semler Scientific, Inc. Q2 2025 financial results conference call.

All participants will be in a listen-only mode. Should you need assistance? Please signal 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 1 on your touchtone phone and to draw your question. Please press star then 2. Please note this event is being recorded, I will now like to turn the conference over to Mr. Joe Barnard. Please go ahead sir.

Good afternoon and welcome to the Semler Scientific, Inc. Q2 2025 Financial Results Conference Call.

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. Before we begin, we want 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 express or implied statements regarding the expectations for our Bitcoin treasury strategy, plans to acquire additional Bitcoin, opportunity for upside, and the price of Bitcoin.

Extension of the healthcare business and the development and marketing of additional products.

Including the receipt and time timing of an additional 5 10K clearance for heart failure. And for our wholly owned subsidiary, cardiovascular and our proposed settlement with the US Department of Justice. Such forward-looking statements are subject to both known and unknown risk and uncertainties that could cause actual results to differ. Materially from such statements. Those risks and uncertainties are described in the press release of 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 1 by visiting the investor relations page of the website similar scientific.com. Now, I would like to introduce Dr. Doug Murphy tutorin, CEO of similar scientific.

I want to thank you for joining our second conference since 2025, the results call. I also want to take a moment to pause and pay tribute to our late co-founder, Herbert J. Summer.

who passed away in July at the age of

90 - 96 years. Dr. Similar was a pioneering physician.

Visionary leader and a creative genius in medical devices.

His teaching continues to take shape who we are and what we do his passion for Innovation, and commitment to every patient care, he laid the foundation for our mission.

And it remained at the heart of what we do today.

Join us to join us in honoring and remarkable life.

The world to do improving health and and vaccine medicine.

His letter, his legacy.

Of caring, Lisa.

And now, hand this call to Eric S. and our executive chairman.

Thank you, Doug.

We are super excited about the excellent progress. We are making in our Bitcoin operations, and we are confident in the potential of our health care business.

We believe that renewed strength in our health care business will generate meaningful cash flow in the coming years enabling us to acquire Bitcoin in a highly accretive way.

This dual engine strategy. Differentiates us among Bitcoin treasury companies?

During the quarter and through July 31st, we purchased approximately $195 million of Bitcoin and now hold a total of approximately $586 million.

In the addition, during the second quarter, we took bold steps to strengthen our Bitcoin team.

Adding highly acclaimed Bitcoin journalist and educator Natalie Brunell to our board.

Since joining in May, Natalie has made a significant contribution to advancing our Bitcoin Mission, we are thrilled to have her insights and support.

In June, we further strengthened our team.

By hiring Joe Bernett as Director of Bitcoin Strategy.

Joe is a recognized leader in Bitcoin treasury management.

And having his expertise in-house is a game changer for us.

His full-time focus on building and executing sellers' Bitcoin roadmap is already making a measurable impact.

Later on, Joe will discuss our Bitcoin philosophy and strategy in more detail.

In addition, in June, I went from being a chair from being chairman of the company to Executive chairman to deepen, my role in operations at the company.

no, I

we are extremely proud of the progress. We are making as a Bitcoin treasury company and thrilled about the opportunities ahead.

Since becoming the second U.S. public company to adopt Bitcoin, the Bitcoin standard in May 2024, we have made creative Bitcoin purchases every quarter.

The growth in profitability of our Bitcoin operations, as reported today, is truly remarkable.

For the second quarter of 2025, we reported gaap net, income of 66.9 million or 5 dollars and 44 cents per fully diluted share.

On an annualized basis. This would imply a price to earnings multiple of only 1.7 times.

Significantly lower than the S&P 500, average of 25 time forward PE estimates.

Our board of directors as significant shareholders ourselves believes the current valuation of similar. Scientific stock is disconnected from the company's underlying performance and, and its intrinsic value. It is clear to us that our stock is a thirdly undervalued. We are committed to unlocking value for all similar stockholders, and are actively exploring the creative opportunities to do so.

As I noted earlier, I strongly believe that. Similar scientific offers investors a differentiated business model among Bitcoin. Treasury companies our top priority is to provide stockholders with Amplified exposure to bitcoin using intelligent Leverage.

Mature until August of 2030. We believe we have ample room to take on more leverage, to amplify stockholder returns and we are actively exploring a wide range of financing options.

Not only are we the sixth largest Bitcoin treasury company in the us but we also operate a health care business with 80 plus employees, that has the potential to generate free cash flow that will enable us to purchase Bitcoin in a very accretive way.

In 2024 we we achieved record cash generation of 24 million in our Healthcare business. While our business has faced headwinds this year, we believe we are on the cusp of launching several new products in markets that are much larger than our current pad Market.

These new businesses will be housed in a subsidiary called Cardiovascular. We may seek capital in Cardio for Cardiovascular from outside investors to validate its long-term value and fund its relatively modest capital needs.

We strongly believe that our health care business has substantial optionality and that its potential upside is not reflected in our market valuation.

We are extremely pleased with the value. We have created by our consistent, accretive accumulation of Bitcoin.

Since adopting the Bitcoin standard just over a year ago, we've strategically and assertively acquired 5,021 Bitcoin. Now valued at approximately $586 million, with a cost basis of $476 million, resulting in an unrealized gain of $110 million.

So far in 2025, we have acquired 2,723 Bitcoin and generated a BTC yield of 31%. This resulted in BTC gain of 719 Bitcoin and a BTC dollar gain of 84 million as of July 31st.

Since adopting the Bitcoin standard in May 2024 we have achieved a 300% positive Bitcoin yield this has resulted in BTC gain of 1,747 Bitcoin and a BTC dollar gain of 195 million through July 31st 2025.

We remain confident in our long-term goals for accumulating Bitcoin. We are targeting 10,000, Bitcoin by year, end 2025 42,000, by year, end, 2026, and 105,000. By year, end 2027

We are exploring a wide range of options to meet our Bitcoin targets. Historically to buy Bitcoin we've used operating cash flow from our Healthcare business monetized. A portion of of 1 of our health care Investments and issued convertible bonds and Incredibly issued Common Stocks to our ATM.

In our recent proxy filing, we included two proposals—Proposals 3 and 4—on the agenda for our upcoming annual meeting on September 5th.

These proposals are vital to our strategic direction.

As they provide the financial flexibility to raise capital efficiently and to pursue our long-term Bitcoin acquisition strategy.

This includes enabling access to a broader range of capital instruments, such as preferred equity. We strongly encourage stockholders to vote for all proposals outlined in the proxy statement.

Our Bitcoin strategy has significantly expanded our investor base. We now have more than 32,000 stockholders up from approximately 11,000.

In 2023, we're honored by your support and enjoyed meeting many of you at BTC 2025 in Vegas and BTC Prague in June.

In closing, thank you for joining us today. You'll continue to support means a great deal for us.

Now, I'll turn the call over to Joe, our Director of Bitcoin Strategy.

Thank you, Eric. I'm going to discuss Bitcoin or Bitcoin strategy and how similar scientific is positioned to amplify bitcoin's future returns.

But first, it's important to understand the fundamentals of Bitcoin and why it is historically delivered such a remarkable compound annual growth rate and outperformed traditional asset classes.

Bitcoin is the first form of money with these monetary properties. Absolute scarcity, portability durability divisibility. And fungibility

The supply of U.S. dollars, measured by the M2 money supply, has grown at an average annual rate of roughly 8%.

My thesis has always been that money is being debased as a result. Nearly all smart investors are relentlessly buying a diversified portfolio of financial assets, often regardless of valuation, because they know that holding cash over any meaningful period of time is a losing proposition. This creates a perpetual bid under asset classes like real estate, stocks, bonds, and gold—not necessarily because they're undervalued, but because people feel uncomfortable holding dollars in this way. A monetary premium has been embedded into these asset classes; they're bid up beyond what their fundamentals might otherwise justify simply because investors are looking for somewhere to store wealth.

The Bitcoin thesis flips that Dynamic of the US dollar growing at 8% per year. Bitcoin Supply is growing at less than 1% annually today and over time. That number will Trend towards zero. So to summarize my thesis in 5 simple points 1, the money is broken to people saved in real estate. So stocks and fixed income, 3 Bitcoin is good. Money for the monetary premium from other assets is getting siphoned into Bitcoin and 5 we believe there's a possibility that Bitcoin could ultimately become a hundred trillion dollar asset.

Now, on top of the bullish case for Bitcoin, here's the key: institutional reality. Many institutions can't buy Bitcoin directly; approximately 97% of institutional capital—a $95 trillion market—is restricted by mandate to owning only equities and credit. In other words, they can't own Bitcoin. The commodity or Bitcoin ETFs, in essence, force them to own Bitcoin proxies like Bitcoin treasury stocks should they want exposure to Bitcoin as an asset class.

This represents a huge opportunity for similar scientific. Our Shares are already owned by several of the most highly regarded institutional investors and funds. In addition, brokerage houses and sell side. Research. Firms are launching coverage of our company in July caner, Fitzgerald Benchmark, equity, research, and maximum group all initiated research on similar scientific with buy ratings.

Now of course Bitcoin holders can buy and sell custody Bitcoin themselves. That's a great strategy. Every Bitcoin holder, should own some spot Bitcoin directly, but BTC Equity public companies like similar scientific are uncommon through our status as a public Bitcoin treasury company, we can amplify Bitcoin exposure through intelligent leverage. That public companies can access

Specifically. We can issue, low interest, long duration debt, like our outstanding convertible note to acquire additional Bitcoin and importantly, we're supported by valuable Healthcare business. That is enabled us to allocate operating profits into more Bitcoin.

So the logic is straightforward. If you expect Bitcoin, to outperform fixed income over the long run. And we do, it's rational to borrow in dollars at low. Interest in long duration to accumulate more Bitcoin.

And the results are already showing up on the Bitcoin, treasuries leaderboard. Some are scientific is currently ranked 15th globally among public companies holding Bitcoin on their balance sheet. But if you narrow the list to only companies truly operating on a Bitcoin standard, that is companies that actively measure progress with the BTC yield kpi. We Believe similar rates, 6th, in the US.

In short, we are already one of the largest public Bitcoin treasuries in the world, and we plan to continue climbing. Our long-term target is to reach 105,000 Bitcoin by the end of 2027.

Lastly, I'd like to share that we are launching the similar scientific merch store where you'll be able to purchase hats shirts, jackets and more. As of today, the store is officially live at similar scientific.com store.

Now I will turn the call over to Renae Cormier, our Chief Financial Officer.

Thank you, Joe, and thank you, everyone, for joining us today.

Quarter, Financial results, Bitcoin and capital markets activity, as well as more details on our plans for our Healthcare business.

Operating expenses for Q2 2025, which includes cost of revenues, where 10.3 million and loss from operations was 1.2 million.

Operating expenses in Q2, 2025 included, 1.9 million in non-cash stock based compensation expense, and 0.5 million of legal expenses, related to the doj settlement agreement in principle pertaining to a civil investigative demand. The doj settlement process is progressing smoothly and on track

Further details are laid out in our press release and the appendix to our second-quarter presentation.

We recorded a net unrealized gain of $83.8 million from the change in fair value of our Bitcoin holdings during the second quarter, calculated using a price of $170,176 per Bitcoin.

Accounting Standards require Bitcoin assets to be measured at fair, value with gains and losses from the changes. In Fair Value to be recognized in net income in each reporting period.

While this may introduce volatility into our reported net income, it does not impact our cash flow from operations.

For the second quarter, 2025 our net income was 66.9 million or 5.71 cents per basic share and 5.4 cents per fully diluted share.

Cash, cash equivalents, and restricted cash at June 30, 2025, was $13.6 million.

We acquired 1,444 Bitcoin and Q2 at a total cost of 149.6 million or 103581 per Bitcoin.

At June 30th 2025. We held 4,636 Bitcoin valued at 496.9 million subsequent to quarter end. We acquired 385 Bitcoin at a total cost of 45.8 million or 119,000 090 per Bitcoin.

As of July 31, 2025, we held 5,021 Bitcoin with a total market value of $586.2 million based on the 4 p.m. Eastern Time price per Bitcoin, as reported on Coinbase, of $116,758.

Capital markets activity in Q2, 2025, revolved around Equity issuances under our ATM offering in Q2, we issued approximately 4.1 million shares for net proceeds of 156.6 million, subsequent to quarter end and through July, 31st 2025, we should approximately 1.1 million shares for net proceeds of 47.8 million as of July 31st 2025, we have a little over 300 million remaining in our 500 million ATM.

Year to date through July 31st 2025. We generated a 31.3% Bitcoin yield

This translated into a Bitcoin dollar gain of 84 million.

As you know we maintain a bit Bitcoin dashboard at IRS, similar scientific.com where investors are able to go to find our Bitcoin related statistics and 1 location. We encourage investors to check back often as it will track additional Bitcoin purchases, as we announce them and provide a real-time snapshot of our market and Bitcoin metrics.

In June, we announced the formation of a wholly owned subsidiary, Cardio, to unlock the value of our future healthcare business opportunities focused on early detection of heart failure and cardiac arrhythmia.

It will be structured as a high-margin Software as a Service (SaaS) business model. It will seek capital from outside investors to validate its long-term value and fund its relatively modest initial capital needs.

The markets for early detection of heart failure and cardiac arrhythmia monitoring are estimated to be in the multi-billion dollar range and are projected to grow substantially due to rising cardiovascular disease technology advancements, such as artificial intelligence, the aging population, and increasing adoption of wearable and remote monitoring solutions. According to the Centers for Disease Control and Prevention, heart failure affects more than 6 million Americans and costs the U.S. healthcare system more than $30 billion annually.

Adult artery disease.

Now, I'll turn it back over to Joe to begin the Q&A.

Great. Thank you, Renee.

uh, our first question is, are you concerned about a potential Supply glut of public companies pursuing similar, Bitcoin treasury strategies,

No, we're not concerned. As I mentioned earlier, on the call, we believe Bitcoin is on track to become a multi hundred trillion dollar market. By absorbing monetary premium from traditional asset classes, like real estate equities, and fixed income given that Outlook companies operating as Bitcoin treasuries with intelligent leverage, effectively long, Bitcoin and short. The dollar are simply positioned positioning themselves to outperform if this thesis proves correct rather than viewing them as competition. We see them as peers accelerating Bitcoin adoption and helping monetize the asset globally. In fact, we believe this trend will benefit all early movers. The more credible companies that adopt Bitcoin as a treasury. Reserve asset, the faster, the monetization process accelerates

and the more valuable our own Bitcoin becomes.

Our second question, do you plan to make more regular Bitcoin, acquisition announcements?

We do not currently plan to make weekly announcements like some other Bitcoin treasury companies. However, we do expect that our Bitcoin acquisition announcements may increase in both regularity and size over time. That said, we may also strategically choose to announce acquisitions with a less frequent cadence. Just because we have not announced an acquisition does not mean we are actively accumulating Bitcoin during the quarter, as we explore additional ways to issue securities and acquire more Bitcoin. The pace of our announcements could naturally accelerate. Our focus remains on executing our strategy in a disciplined, accretive, and stockholder-aligned way.

Last. Our final third question, how does management think about the Mavs multiple at which similar trades at relative to its peers?

I think there's been confusion about Bitcoin treasury companies because there are actually 2 different games to play. The first is the fast money game. This occurs when a Bitcoin treasury company trades at a substantial premium to its Bitcoin, net asset value, or Mavs

At this level, the comp company can tap its common Equity ATM issue additional shares and immediately use the capital to acquire more Bitcoin. This instantly generates a positive BTC yield increasing Bitcoin Holdings per share that process can repeat, rapidly compounding returns provided the premium to Mavs doesn't collapse. The inherent risk, of course, is the potential compression of this premium.

The second strategy is the more sustainable Slow Money game. This strategy is available to all Bitcoin treasury companies of a certain size, and it even works at 1X Mavs. In this scenario, the company intelligently leverages its balance sheet using fixed income liabilities to enhance its exposure to Bitcoin if Bitcoin appreciates significantly and the Mavs ratio stays stable at 1X. The leverage amplifies returns essentially as long as Bitcoin's appreciation outpaces the interest costs of the liabilities. The Bitcoin treasury company should logically outperform Bitcoin itself. In my opinion, the presence of this lower, slower, sustainable strategy actually underpins and fuels the faster, premium-driven game. The attractiveness of the intelligently leveraged position sets the foundation whenever market sentiment for leveraged Bitcoin exposure strengthens even slightly above 1X.

Has the premium-driven fast money strategy become viable again, allowing for rapid value creation?

In short, the Slow Money game is likely. Where pre, why premiums develop in the first place offering? The best way to amplify the future returns of Bitcoin similar as balance sheet. Currently uses intelligent leverage. This enables the potential for similar to amplify the future returns of Bitcoin and it enables the potential for future Mavs expansion.

The only thing better than Bitcoin is more Bitcoin and the premiums on bitcoin treasury companies may exist because the market loves more Bitcoin.

Thank you, everyone, for your questions. As we wrap up this conference call, we want to emphasize our ongoing commitment to the continued 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, you can conclude the call.

Thank you. The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect