Release Date: February 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenue increased by 41% year-over-year.
- Core business revenue, excluding COVID-related sales, doubled from just under $1 million to $2 million.
- Normalized gross margins improved from 39% to 45%, indicating better profitability.
- Operating expenses have decreased, contributing to a leaner business model.
- EBITDA loss reduced by half, showing significant improvement in financial performance.
Negative Points
- Revenue growth in core business has been relatively flat when excluding COVID-related sales.
- Despite improvements, the company is still operating at a loss.
- The company remains reliant on securing new contracts and partnerships to drive future growth.
- There is uncertainty around the timing of regulatory approvals for new products, such as the blood-based pregnancy test.
- The company faces challenges in expanding into new markets, such as the U.S., which requires significant investment and regulatory hurdles.
Q & A Highlights
Q: Can you provide more details on the revenue growth and the factors driving it?
A: Suzy Elhlou, Financial Manager: Total revenue increased by 41%, with core business revenue doubling from just under $1 million to $2 million. This growth is driven by strategic efforts to build business partnerships in developed markets, reducing reliance on lower-margin global health business.
Q: What are the key drivers behind the improved gross margins?
A: Suzy Elhlou, Financial Manager: Improved gross margins, excluding COVID, increased from 39% to 45%. This is due to strategic efforts to build partnerships in developed markets, which yield higher margins compared to global health sectors.
Q: How is Atomo managing its operating expenditures?
A: Suzy Elhlou, Financial Manager: We continue to run a lean business with an overall decrease across all OpEx categories. Investments in core business infrastructure have allowed us to absorb increased sales demand without significantly increasing cost overheads, improving our operating leverage.
Q: What is the status of Atomo's cash flow and cash burn?
A: Suzy Elhlou, Financial Manager: Cash burn reduced from about $470,000 per month to $330,000 per month, a 30% improvement. This is due to increased sales revenue, improved gross margins, and running a leaner business.
Q: Can you elaborate on the performance and user preference of Atomo's products?
A: John Kelly, CEO: Our products have a 90% user preference due to significant error reduction benefits. Errors are reduced by more than 90%, making our platform the best for self-test approvals in strict regulatory markets.
Q: What are the future growth opportunities for Atomo's technology?
A: John Kelly, CEO: We see multiple customers coming onto the platform over the next couple of years across both blood and swab sample types. We are also exploring custom cassette solutions for other diagnostic products outside of lateral flow.
Q: How is Atomo expanding its market presence, particularly in the HIV self-testing segment?
A: John Kelly, CEO: We have restructured commercial arrangements and secured a partnership with Newfoundland Diagnostics, leading to significant sales increases in Europe. We are also expanding in Australia with innovative access methods like vending machines and home delivery programs.
Q: What are the plans for the blood-based pregnancy test?
A: John Kelly, CEO: We are confident in securing regulatory approvals in Australia and New Zealand this year. Market research indicates a significant interest in blood-based tests due to earlier detection and reliability compared to urine-based tests.
Q: Are Atomo's relationships with Australian pharmacies exclusive?
A: John Kelly, CEO: No, we have chosen not to pursue exclusive relationships in Australia to maximize sales across multiple channels. However, in markets where we lack ground infrastructure, we are open to exclusive arrangements in exchange for partner commitments.
Q: Is entering the U.S. market for the pregnancy test a priority for 2024?
A: John Kelly, CEO: Yes, but the immediate priority is launching in Australia to generate positive cash flow. Success in Australia will support further engagement with U.S. channel partners.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
