Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue growth of 4% compared to the third quarter of 2023, indicating positive financial performance.
- FDA clearance for ProFound Detection version 4.0, enhancing cancer detection capabilities and reducing false positives.
- Successful transition to a Software-as-a-Service model with the ProFound Cloud platform, creating a high-margin recurring revenue stream.
- Expansion of global reach with new commercial distribution alliances in multiple countries, increasing market presence.
- Participation in significant clinical trials, such as the RENAISSANCE trial, validating the company's technology and expanding its reach.
Negative Points
- AI adoption in mammography remains low, with only 37% of U.S. sites currently using AI, indicating a challenge in market penetration.
- Shift to a recurring revenue model results in lower GAAP revenue and negative cash flow in the short term.
- Operating expenses increased by 19% year-over-year, driven by investments in R&D and regulatory support.
- GAAP net loss from continuing operations increased to $1.8 million compared to $1 million in the previous year.
- Cash and cash equivalents decreased from $21.7 million at the end of 2023 to $18.8 million as of September 30, 2024, reflecting cash usage.
Q & A Highlights
Q: How would you characterize the third quarter deal count versus your expectations, and is there any seasonality affecting it?
A: Dana Brown, CEO: Seasonality does impact us, especially in the third quarter, with Europe on holiday and some slowdown in the US. Despite this, the deal count was up from last year, with cloud deals exceeding expectations. Eric Lonnqvist, CFO: We reported 85 deals, up from 67 in Q3 2023, with cloud deals exceeding internal plans.
Q: Does offering a subscription or cloud model help you access more customers, especially those using competitor systems?
A: Dana Brown, CEO: Yes, subscription and cloud models improve affordability and accessibility across all customer types, not limited to any specific equipment configuration. This allows more customers to consider and adopt our solutions.
Q: With the new density regulations, is there a change in conversations with customers regarding adopting the full iCAD suite?
A: Dana Brown, CEO: The new regulations reinforce the decision for customers to adopt our solutions, especially the density plus detection bundle. However, it is not a significant driver for additional density licenses as many customers were already aware of the challenges with dense breast tissue.
Q: How soon will version 4.0 of your product be available across different models?
A: Dana Brown, CEO: We are assessing customer preferences for deployment models and expect the first shipment of version 4.0 by mid-December, shortly after RSNA, with subsequent implementations following quickly.
Q: With the increase in subscription and cloud models, how will this affect the product revenue line?
A: Eric Lonnqvist, CFO: The product line includes perpetual, subscription, and cloud revenues. The main drop quarter-over-quarter is in perpetual deals, but subscription and cloud revenues are included in the product line.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
