Release Date: May 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Q1 revenues increased by 51% year-over-year to $19.7 million, surpassing the high end of the preannounced revenue range.
- Strong customer engagement driven by integrated precision offerings, enhancing scalability and interoperability across multiple points of care.
- Successful integration of Medix Health acquisition, contributing to revenue growth and expanding the customer base with minimal overlap.
- Signed nine DAS deals in Q1 2024, building on the 24 deals from the previous year, indicating strong sales momentum.
- Improved gross margin to 62% in Q1 2024 from 57.2% in Q1 2023, reflecting higher data-related revenue and favorable channel partner mix.
Negative Points
- Reported a net loss of $6.9 million in Q1 2024, slightly higher than the $6.4 million net loss in Q1 2023.
- Despite revenue growth, the company still faces challenges in achieving profitability, with a non-GAAP net loss of $2 million in Q1 2024.
- Operating expenses, although decreased by $2.7 million year-over-year, included costs related to acquisitions and severance.
- The company is carrying a significant debt balance of $37.8 million, which could impact financial flexibility.
- Adjusted EBITDA was at a loss of $0.3 million for Q1 2024, although an improvement from a $2.2 million loss in Q1 2023, indicating ongoing challenges in operational efficiency.
Q & A Highlights
Q: What type of improvements and ROI metrics have you seen as you scale the GAAP platform?
A: (William Febbo - CEO & Director) The platform's success is evident from the increasing client base, which is more discerning. The team of data scientists, with 2.5 years of experience, continuously enhances the platform. The value proposition of providing more successful marketing returns with one partner is resonating well. Investments in data infrastructure have streamlined reporting and analysis, making engagements stickier and more holistic.
Q: Can you discuss the tone of your conversations with pharma manufacturers and whether it reflects broader market improvements or enhancements in your offerings?
A: (Steve Silvestro - President) It's both. The pharma market is rebounding, with increased spending and drug approvals. Additionally, our offerings, especially the combined HCP and DTC product, are becoming more appealing. Pharma companies are now more selective, investing in proven platforms like ours.
Q: What drives the gross margin improvement seen in the quarter?
A: (Ed Stelmakh - CFO) The improvement in gross margin is primarily driven by the success of the Adap platform. Higher margins from increased sales through this platform could potentially sustain a gross margin above 60% throughout the year.
Q: Regarding the seasonality from Q1 to Q2, should we expect the usual pattern to continue this year?
A: (Ed Stelmakh - CFO) There is no reason to expect a deviation from the typical seasonality pattern observed in previous years. As usual, the first half of the year will likely account for about 35-40% of annual revenue, with the second half making up the remainder.
Q: How does the integration of Medix health impact the guidance for this year? Are late-stage negotiations included in the guidance?
A: (William Febbo - CEO & Director) The guidance for 2024 was conservative and did not assume rapid success in cross-selling due to the Medix acquisition. Any faster-than-anticipated progress in these areas would positively impact the guidance.
Q: Can you elaborate on the net revenue retention improvements and how the combination of GTC and HCP businesses might affect revenue stability?
A: (William Febbo - CEO & Director) The Medix acquisition has enhanced visibility and upsell potential, improving net revenue retention. The integration allows for more comprehensive data utilization and marketing execution, which is expected to drive better retention rates.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
