Semler Scientific, Inc. (SMLR) Bundle
Understanding Semler Scientific, Inc. (SMLR) Revenue Streams
Understanding Semler Scientific, Inc.’s Revenue Streams
Semler Scientific, Inc. reported total revenues of $13.5 million for the three months ended September 30, 2024, representing a decrease of 17% from $16.3 million in the same period of 2023. For the nine months ended September 30, 2024, revenues were $43.9 million, down 17% from $53.1 million in the prior year.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate has shown a consistent decline, with a decrease of $9.2 million or 17% for the nine-month period ending September 30, 2024, compared to the same period in 2023.
Revenue Breakdown by Source
The revenue streams for Semler Scientific include:
- Variable-fee licenses: $6.2 million for the three months ended September 30, 2024, down from $6.3 million in 2023.
- Sales of hardware and accessories: $564,000 for the three months ended September 30, 2024, an increase from $523,000 in 2023.
- Lease revenues: $6.78 million for the three months ended September 30, 2024, down from $9.54 million in 2023.
Contribution of Different Business Segments
The following table summarizes the contribution of various business segments to the overall revenue for the nine months ended September 30, 2024:
| Segment | Revenue (2024) | Revenue (2023) | Percentage Change |
|---|---|---|---|
| Variable-Fee Licenses | $21.16 million | $23.19 million | -8.8% |
| Sales of Hardware | $2.09 million | $1.47 million | 41.4% |
| Lease Revenues | $20.63 million | $28.46 million | -27.7% |
Significant Changes in Revenue Streams
The most significant changes in revenue streams have been attributed to:
- The introduction of volume pricing tiers for major customers.
- A decrease in revenues from lease agreements due to changes in the Centers for Medicare & Medicaid Services (CMS) rate announcements.
- Increased sales of hardware and accessories, which have shown positive growth despite overall revenue declines.
Overall, the company's revenue performance reflects a challenging environment influenced by pricing strategies and regulatory changes affecting customer billing. The shifts in revenue contributions by segment indicate a need for strategic adjustments to enhance growth moving forward.
A Deep Dive into Semler Scientific, Inc. (SMLR) Profitability
A Deep Dive into Semler Scientific, Inc.'s Profitability
Gross Profit, Operating Profit, and Net Profit Margins
For the three months ended September 30, 2024, the company reported revenues of $13,512 thousand, a decrease from $16,316 thousand for the same period in 2023. The cost of revenues for the same period was $1,156 thousand, leading to a gross profit of $12,356 thousand. This results in a gross margin of 91.4%.
Operating profit for the three months ended September 30, 2024, was $5,065 thousand, down from $6,299 thousand in 2023, resulting in an operating margin of 37.5%. The net income for this period was $5,609 thousand, yielding a net profit margin of 41.5% compared to 33.8% from the previous year.
Trends in Profitability Over Time
Over the nine-month period ended September 30, 2024, total revenues were $43,881 thousand, down from $53,127 thousand in 2023. The net income decreased to $11,693 thousand from $16,362 thousand in the same period last year. The profitability trends indicate a decline in revenue and net income.
Comparison of Profitability Ratios with Industry Averages
The industry average gross profit margin for similar companies is approximately 70%, indicating that the company is outperforming the average with its 91.4% gross margin. The operating margin of 37.5% also exceeds the industry average of 25%, while the net profit margin of 41.5% is significantly higher than the industry average of 10%.
Analysis of Operational Efficiency
The company has maintained a strong operational efficiency with a gross margin that has fluctuated minimally over the past few years. The cost of revenues has shown slight increases, but overall efficiency remains high. Below is a summary of key operational metrics:
| Metric | 2024 (Q3) | 2023 (Q3) | 2024 (YTD) | 2023 (YTD) |
|---|---|---|---|---|
| Revenue ($000) | 13,512 | 16,316 | 43,881 | 53,127 |
| Cost of Revenue ($000) | 1,156 | 1,111 | 3,657 | 3,599 |
| Gross Profit ($000) | 12,356 | 15,205 | 40,224 | 49,528 |
| Operating Income ($000) | 5,065 | 6,299 | 17,391 | 19,734 |
| Net Income ($000) | 5,609 | 5,514 | 11,693 | 16,362 |
The company continues to exhibit strong operational efficiency, with a focus on cost management reflected in its high gross margins and operating margins.
Debt vs. Equity: How Semler Scientific, Inc. (SMLR) Finances Its Growth
Debt vs. Equity: How Semler Scientific, Inc. Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, Semler Scientific, Inc. reported total liabilities of $6.839 million in current liabilities, which includes accounts payable and accrued expenses. The company's long-term liabilities were $0.070 million, indicating minimal long-term debt exposure.
Debt-to-Equity Ratio
The debt-to-equity ratio for Semler Scientific, Inc. stands at approximately 0.09 as of the latest financial reports. This is significantly lower than the industry average, which is typically around 0.5 to 1.0 for similar companies in the healthcare technology sector, suggesting a conservative approach to leveraging debt for growth.
Recent Debt Issuances and Credit Ratings
In the recent financial year, Semler has not engaged in significant debt issuances. The company maintains a strong credit profile, although specific credit ratings have not been publicly disclosed. The lack of substantial long-term debt reflects a strategy focused on equity financing and retained earnings for growth initiatives.
Balancing Debt Financing and Equity Funding
Semler Scientific has opted for a balanced approach between debt financing and equity funding. The latest report indicates total stockholders' equity of $85.355 million, enabling the company to finance operations primarily through equity rather than incurring additional debt.
| Financial Metric | 2024 (Q3) | 2023 (Year-End) |
|---|---|---|
| Total Current Liabilities | $6.839 million | $6.200 million |
| Total Long-Term Liabilities | $0.070 million | $0.070 million |
| Debt-to-Equity Ratio | 0.09 | 0.08 |
| Total Stockholders' Equity | $85.355 million | $71.865 million |
This financial structure highlights a prudent management strategy aimed at minimizing debt while leveraging equity to fund growth and operational needs effectively.
Assessing Semler Scientific, Inc. (SMLR) Liquidity
Assessing Semler Scientific, Inc. Liquidity
The liquidity position of Semler Scientific, Inc. can be evaluated through various financial metrics, including the current and quick ratios, working capital trends, and cash flow statements.
Current and Quick Ratios
As of September 30, 2024, Semler Scientific reported a current ratio of 3.15, calculated as follows:
- Current Assets: $21,494,000
- Current Liabilities: $6,839,000
The quick ratio, which excludes inventory from current assets, is calculated as follows:
- Quick Assets: $21,114,000 (Current Assets - Inventory)
- Quick Ratio: 3.08 (Quick Assets / Current Liabilities)
Analysis of Working Capital Trends
Working capital, which is the difference between current assets and current liabilities, stood at approximately $14,655,000 as of September 30, 2024. This represents a significant decrease from the previous year, reflecting changes in cash reserves and current liabilities.
Cash Flow Statements Overview
The cash flow statements provide insights into the operating, investing, and financing cash flow trends for the company:
| Cash Flow Type | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|
| Operating Cash Flow | $17,000,000 | $16,888,000 |
| Investing Cash Flow | ($68,983,000) | ($233,000) |
| Financing Cash Flow | $1,369,000 | ($2,172,000) |
Potential Liquidity Concerns or Strengths
Despite the significant cash outflow from investing activities primarily due to bitcoin purchases totaling $68,400,000, the company maintains a healthy liquidity position with cash and cash equivalents of $6,701,000 as of September 30, 2024. Furthermore, the company holds an investment in 1,018 bitcoins valued at approximately $64,482,000, enhancing its liquidity profile .
Is Semler Scientific, Inc. (SMLR) Overvalued or Undervalued?
Valuation Analysis
Price-to-Earnings (P/E) Ratio
The P/E ratio as of September 30, 2024, is calculated using the diluted earnings per share (EPS) of $0.72 and a stock price of $5.00, resulting in a P/E ratio of 6.94.
Price-to-Book (P/B) Ratio
The P/B ratio is based on the book value per share. The total stockholders' equity is $85,355,000 with 7,334,600 shares outstanding. The book value per share is approximately $11.65, leading to a P/B ratio of 0.43 when the stock price is $5.00.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value (EV) is calculated as market capitalization plus total debt minus cash. With a market capitalization of $36,670,000, total liabilities of $6,839,000, and cash of $6,568,000, the EV is approximately $36,939,000. The EBITDA for the last twelve months is $17,391,000, resulting in an EV/EBITDA ratio of approximately 2.12.
Stock Price Trends
Over the last 12 months, the stock price has seen fluctuations as follows:
- 12 months ago: $7.50
- 6 months ago: $6.00
- 3 months ago: $4.50
- Current price: $5.00
Dividend Yield and Payout Ratios
Currently, the company does not pay any dividends, resulting in a dividend yield of 0%. The payout ratio is also 0%.
Analyst Consensus on Stock Valuation
Analyst consensus as of October 2024 indicates:
- Buy: 3 analysts
- Hold: 2 analysts
- Sell: 1 analyst
Summary Table of Valuation Metrics
| Metric | Value |
|---|---|
| P/E Ratio | 6.94 |
| P/B Ratio | 0.43 |
| EV/EBITDA Ratio | 2.12 |
| Current Stock Price | $5.00 |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus (Buy/Hold/Sell) | 3/2/1 |
Key Risks Facing Semler Scientific, Inc. (SMLR)
Key Risks Facing Semler Scientific, Inc. (SMLR)
Overview of Internal and External Risks
Semler Scientific faces various internal and external risks that could impact its financial health. Key risks include:
- Industry Competition: The healthcare technology sector is highly competitive, with numerous players offering similar solutions, which could affect market share and pricing strategies.
- Regulatory Changes: Changes in healthcare regulations and reimbursement policies could adversely affect the company’s operations and revenue streams.
- Market Conditions: Economic downturns or changes in healthcare spending can impact demand for Semler’s products.
Operational, Financial, and Strategic Risks
Recent earnings reports highlight several operational and financial risks:
- Revenue Decline: The company reported revenues of $43.9 million for the nine months ended September 30, 2024, a decrease of 17% from $53.1 million in the same period of 2023.
- Operating Expenses: Operating expenses were $26.5 million for the nine months ended September 30, 2024, down 21% from $33.4 million in the prior year.
- Customer Concentration Risk: For the nine months ended September 30, 2024, two customers accounted for 44.2% and 26.6% of total revenues.
- Credit Risk: As of September 30, 2024, the allowance for credit losses was $266,000, reflecting management's assessment of collectability.
Mitigation Strategies
The company has implemented several strategies to mitigate risks:
- Diversification of Customer Base: Efforts are being made to reduce dependency on a few large customers to mitigate revenue concentration risks.
- Cost Management: Continued focus on reducing operating expenses, with a decrease to 60% of revenues in the first nine months of 2024 compared to 63% in the previous year.
- Regulatory Compliance: Active monitoring of regulatory changes to adapt business operations accordingly.
| Risk Factor | Description | Impact |
|---|---|---|
| Revenue Decline | Decrease in revenues from $53.1 million to $43.9 million year-over-year. | Negative impact on net income and cash flow. |
| High Operating Expenses | Operating expenses at $26.5 million, although reduced by 21%. | Pressure on profit margins. |
| Customer Concentration | Two customers account for over 44% of revenues. | Increased vulnerability to loss of major clients. |
| Credit Risk | Allowance for credit losses at $266,000. | Potential for increased bad debt expenses. |
Financial Metrics
- Net income for the three months ended September 30, 2024: $5.6 million or $0.80 per basic share.
- Total assets as of September 30, 2024: $92.2 million.
- Total liabilities as of September 30, 2024: $6.8 million.
Future Growth Prospects for Semler Scientific, Inc. (SMLR)
Future Growth Prospects for Semler Scientific, Inc. (SMLR)
Analysis of Key Growth Drivers
The company is actively pursuing new growth opportunities through various avenues:
- Product Innovations: The company is seeking a new 510(k) clearance from the FDA for the expanded use of QuantaFlo, which aims to assist in diagnosing additional cardiovascular diseases beyond Peripheral Artery Disease (PAD).
- Market Expansions: The company continues to develop proprietary products and is exploring partnerships to enhance its offerings.
- Acquisitions: No specific acquisitions have been reported, but the company remains open to acquiring complementary products or services to increase its market presence.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, the company reported revenues of $43.9 million, reflecting a decrease of 17% compared to $53.1 million in the same period in 2023. The projected revenue growth will depend on the success of new product launches and market expansions.
Net income for the nine months ended September 30, 2024, was $11.7 million, down from $16.4 million in the prior year. This translates to a decrease in earnings per share from $2.44 to $1.68.
Strategic Initiatives or Partnerships
The company is focused on developing additional proprietary products and forming strategic partnerships that can enhance its market offerings. These initiatives include:
- Collaboration with Healthcare Providers: The company aims to leverage partnerships with healthcare providers to promote its diagnostic products.
- Investment in Bitcoin: As part of its treasury strategy, the company has purchased 877 bitcoins for a total of $60 million, which it views as a reliable store of value.
Competitive Advantages
Several competitive advantages position the company favorably for future growth:
- Proprietary Technology: The company’s proprietary QuantaFlo technology provides unique diagnostic capabilities, which can be leveraged for broader applications in cardiovascular diagnostics.
- Strong Customer Relationships: The company has established strong relationships with key customers, which accounted for 44.2% of revenues for the nine months ended September 30, 2024.
- Cost Management: The company has successfully reduced its operating expenses to $26.5 million for the nine months ended September 30, 2024, down 21% from the previous year.
| Metric | 2024 (9 months) | 2023 (9 months) | Change |
|---|---|---|---|
| Revenue | $43.9 million | $53.1 million | -17% |
| Net Income | $11.7 million | $16.4 million | -29% |
| Earnings Per Share (EPS) | $1.68 | $2.44 | -31% |
| Operating Expenses | $26.5 million | $33.4 million | -21% |
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Updated on 16 Nov 2024
Resources:
- Semler Scientific, Inc. (SMLR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Semler Scientific, Inc. (SMLR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Semler Scientific, Inc. (SMLR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.