Release Date: August 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales numbers were up 76% quarter-over-quarter, with the US market showing a 167% increase.
- Senzime AB (SNZZF, Financial) secured 40 new hospital accounts during the quarter, including prestigious US pediatric hospitals.
- The company shipped over 2,600 monitors and just under 50,000 sensors in the quarter, nearly doubling from last year.
- Senzime AB (SNZZF) was awarded a new European patent, enhancing its competitive edge.
- The company has a strong institutional backing, including support from the Crafoord family and Segulah group.
Negative Points
- Gross margin was slightly lower this quarter due to high growth in the US and a high portion of instrument sales.
- The European market remains flat with slow adoption of the technology.
- Increased costs due to scaling up production and launching a new product line of sensors.
- The company extended its short-term guidance, indicating it will take another 12 months to reach SEK300 million in sales.
- There is some price pressure in the US market for monitors due to professional procurement buyers negotiating larger volumes.
Q & A Highlights
Q: Can you discuss your updated financial outlook and sales estimates?
A: We've conducted a rigorous market analysis and broadened our sales estimate range due to uncertainties. We believe we'll land in the middle of this range, with ambitions to overachieve. The US market is crucial, accounting for 50% of our operating expenses and showing the fastest market shift.
Q: How quickly are new US hospital contracts adopting your technology?
A: Adoption has accelerated. Previously, early adopters drove sales, but now hospital management teams are implementing protocols mandating monitoring. The time from start to higher utilization has decreased from nine months to three to four months.
Q: What is the status of your largest deal to date with a Texas healthcare system?
A: We adhered to their schedule and completed the full implementation during the summer. We've shipped half of the volume, and it's already running at full speed, taking about four months from order to scale volume.
Q: How has the competitive landscape evolved over the last year?
A: We are gaining market share, especially with large hospital systems choosing us as their preferred vendor. Competition keeps us on our toes, but we are confident in our market position and the quality of our product.
Q: Can you elaborate on your financial goals and the path to becoming cash flow positive?
A: We aim to be cash flow positive during the year, depending on our sales trajectory. We previously targeted a 40% EBITDA margin long-term, and while we focus on growth, we believe we can achieve high-level margins due to our business model.
Q: What is your confidence level in reaching SEK1 billion in sales?
A: We are confident, supported by a complex model and intelligence. Achieving SEK1 billion would require around 1,500 hospitals as customers, representing about a 10% market share. We are on a strong growth trajectory with our hospital wins.
Q: How satisfied are you with the Q2 numbers?
A: Overall, I am decently satisfied. The US market showed phenomenal growth, while Europe remains flat. We are moving in the right direction, although the speed of conversion in Europe is slower than desired.
Q: How does the demand for sensors look?
A: Demand is strong, with customers buying in bulk or just in time. Tracking true utilization is challenging, but we see continued improvement and aim for daily use of TetraGraph in operating rooms.
Q: What is the status of your collaboration with Masimo?
A: The collaboration is still slow, but we are making progress in other areas. Masimo is reviewing and realigning their priorities, and we are waiting for them to come back to us.
Q: What should we look forward to in the coming months?
A: Expect an exciting fall with continued growth and some exciting news. We are leading the transition for patient safety and building a strong future for the company.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
