Earnings call transcript: Semler Scientific Q1 2025 reports loss, stock rises

Semler Scientific Inc. (SMLR) reported a challenging first quarter for 2025, with a net loss of $64.7 million, translating to an earnings per share (EPS) of -$6.74. Despite a 44% year-over-year drop in revenue to $8.8 million, the company’s stock rose 5.34% in aftermarket trading, closing at $36.39. With a market capitalization of $394 million and an impressive gross profit margin of 91.55% according to InvestingPro, this stock movement suggests investor optimism, potentially driven by the company’s strategic focus on Bitcoin and future growth initiatives.

Key Takeaways

• Semler Scientific reported a significant net loss of $64.7 million for Q1 2025.
• Revenue fell by 44% year-over-year to $8.8 million.
• Stock price increased by 5.34% in aftermarket trading.
• The company is focusing on Bitcoin treasury and expanding its cardiovascular product line.
• Pressure from CMS payment changes and reduced PAD testing volumes are notable challenges.

Company Performance

Semler Scientific faced a tough first quarter in 2025, with a notable decline in revenue and a substantial net loss. The company is navigating through pressures from CMS payment changes that have impacted its current operations. Despite these challenges, the company remains committed to expanding its presence in the cardiovascular market and leveraging its healthcare technology innovations.

Financial Highlights

• Revenue: $8.8 million, a 44% decrease year-over-year.
• Net Loss: $64.7 million, with an EPS of -$6.74.
• Operating Expenses: $39.9 million, significantly higher than $8.9 million in Q1 2024.
• Cash and Equivalents: $9.9 million.

Market Reaction

Following the earnings announcement, Semler Scientific’s stock price rose by 5.34% in aftermarket trading, closing at $36.39. This increase suggests positive investor sentiment, possibly due to the company’s strategic direction and future prospects, despite the financial losses reported for the quarter. According to InvestingPro analysis, the stock is currently trading below its Fair Value, with analysts setting a target price of $71. The stock trades at an attractive P/E ratio of 6.35, suggesting potential upside opportunity. Get access to 8 more exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.

Outlook & Guidance

Looking ahead, Semler Scientific plans to focus on its Bitcoin treasury strategy, aiming to use cash generated from its healthcare business to purchase Bitcoin. The company has set ambitious goals for Bitcoin acquisition, targeting $500 million through its ATM program. With a strong current ratio of 3.59 and minimal debt, the company appears well-positioned to pursue these initiatives. Additionally, it continues to pursue new opportunities in the cardiovascular space, which could provide new revenue streams. InvestingPro’s comprehensive financial health score of "GREAT" suggests solid fundamentals supporting these strategic moves.

Executive Commentary

• "We are a Bitcoin first company," stated Eric Schindler, Treasury Executive, emphasizing the company’s strategic focus on cryptocurrency.
• COO Jen Oliva Harrington highlighted, "We will be managing the healthcare business to generate cash, which we plan to use for buying more Bitcoin," underscoring the company’s financial strategy.

Risks and Challenges

• Regulatory changes in CMS payments may continue to pressure revenue.
• The significant decline in PAD testing volumes could impact financial performance.
• The company’s heavy investment in Bitcoin poses risks due to cryptocurrency volatility.
• High operating expenses may strain financial resources if revenue does not improve.
• Dependence on expanding into new markets, such as cardiovascular, carries execution risks.

Q&A

During the earnings call, analysts inquired about the company’s ambitious Bitcoin acquisition plans and its strategy to minimize revenue declines. Executives reiterated their commitment to using cash from the healthcare business to support their Bitcoin strategy and acknowledged the challenges posed by current market conditions.

Full transcript - Semler Scientific Inc (SMLR) Q1 2025:

Moderator/Unidentified Operator, Semler Scientific: Good afternoon, and welcome to the Semler Scientific First Quarter twenty twenty five Financial Results Conference Call. All participants will be in a listen only mode. After today’s prepared remarks, as time permits, management will take questions submitted prior to this call via email. Please note this event is being recorded. Before we begin, Seminole Scientific needs to remind you that certain comments made during this call may constitute forward looking statements and are made pursuant to and within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 as amended.

These include express or imply statements regarding the expectations for our Bitcoin treasury strategy, plans to acquire additional Bitcoin, opportunity to upsize and the price of Bitcoin, expansion on the health care business and the development and marketing of additional products, including receipt and timing of an additional five ten clearance for QuantaFlo and for our proposed settlement with the U. S. Department of Justice. Such forward looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and our SEC filings.

The forward looking statements made today are as of the date of this call, and the company does not undertake any obligation to update the forward looking statements. If you do not have a copy of today’s release, you may obtain one by visiting the Investor Relations page of the website semlarscientific.com. I would now like to introduce Doctor. Doug Murphy Tutorian, CEO of Semler Scientific.

Doug Murphy Tutorian, CEO, Semler Scientific: Good afternoon, everyone. Thank you for joining us on our first quarter twenty twenty five results call. We believe our health care business is well positioned this year as we pursue a new revenue opportunity in the cardiovascular space with our existing large enterprise client customer base While we pursue a new revenue opportunity, we will manage the health care business to generate cash, which we plan to primarily use for additional Bitcoin purchases. Now I will hand a call over to Eric Schindler, and who will provide you with an update on our our treasury strategy. Eric?

Eric Schindler, Treasury/Financial Executive, Semler Scientific: Thanks, Doug, and thank you to all our stakeholders for listening in today and for your support of our company. We were thrilled to participate in Strategy’s Bitcoin for Corporations conference last week in Orlando, where we had a chance to meet many of our passionate stockholders and fellow Bitcoiners in person. A special thank you to Michael Saylor, Fong Lee, and the strategy organization for all their wonderful support for hosting such a fantastic, well attended event. The corporate Bitcoin treasury movement is gaining powerful momentum and scale. We are we are a Bitcoin first company.

Nearly one year ago, we became the second US public company to adopt the Bitcoin standard. Since then, we have intelligently and accretively acquired 3,808 Bitcoins that are now worth almost $400,000,000, which we which we believe makes us the fourth largest Bitcoin treasury company in The US and the ninth largest corporate holder of Bitcoin in The US. So far in 2025, we acquired 1,510 Bitcoins and had a BTC yield of 22.2%. This resulted in BTC gain of 510 Bitcoins and BTC dollar gain of $52,000,000. Since the quarter that we adopted Bitcoin as our primary treasury reserve asset on 05/28/2024, we have achieved a 52.8% positive Bitcoin yield.

This has resulted in a BTC gain of 1,447 Bitcoin and a BTC dollar gain of a hundred and $39,000,000. Over that same period, our stock has depreciated 64% in less than twelve months versus only 9% for the S and P five hundred. We were able to generate these strong returns despite headwinds in our health care business. We have an we have ambitious goals for growing our Bitcoin arsenal in 2025, and we have tremendous firepower backed by a new $500,000,000 ATM program that became effective on April 22. During the first quarter of twenty twenty five, we completed a $100,000,000 convertible note financing round using most of the net proceeds to buy Bitcoin.

As a result, we believe we now have the highest leverage ratio among publicly traded Bitcoin treasury companies positioning us for outsized positioning us for outsized upside should Bitcoin prices rise. Semler Scientific is a pioneer in developing and marketing Sorry. We believe this is a defining moment for Bitcoin. It cannot be tariffed. It doesn’t issue earnings or guidance.

It doesn’t have counterparty risk, and it continues to trade at a huge discount to gold. Most importantly, statements by the current administration suggest that Bitcoin may soon be considered for strategic reserve purchases by the US government. Our corporate strategy is underpinned by three core principles. Our Bitcoin treasury strategy is our highest priority. Our health care business must generate cash and complement our Bitcoin treasury strategy, and we must intelligently and exponentially increase our Bitcoin holdings and hold them.

We look forward to continuing to get out on the road to tell our story. We will be participating at the BTC Conference in Las Vegas at the end of this month and at BTC Clog in June. We hope to have the chance to meet many of you at these events. Now I’m pleased to introduce our COO, Jen Oliva Harrington, to go over our health care business.

Moderator/Unidentified Operator, Semler Scientific: Thank you, Eric. While our health care business has seen the impact from payment changes made by CMS for our customers that became effective last year, we believe our business is in a good place to capitalize on current initiatives to drive future growth. We are starting to see green shoots in areas we targeted for future growth, including diversifying our customer base and introducing additional FDA cleared products and other services in the cardiovascular space to our strong and well established customer base. Additionally, as we continue to innovate, we are pursuing a new five ten clearance for a product extension to aid in the diagnosis of heart failure with hopes of obtaining this clearance sometime in 2025. Semler is a pioneer in developing and marketing technology products and services to health care providers to combat chronic diseases.

Our unwavering focus on our core medical products and services business alongside our Bitcoin treasury strategy ensures that we maintain our position at the forefront of medical and financial freedom. Now I’m pleased to introduce our CFO, Renee Cormier, to go over our financial results. Thank you, Jen. I’ll cover our first quarter financial results and then speak more about our Bitcoin holdings. Following our remarks and as time permits, we’ll answer questions that have been submitted via email.

Total revenues in q one twenty twenty five were $8,800,000, which was down about 44% compared to the first quarter of twenty twenty four. We saw further pressure on revenues following the additional phase in of the 2024 CMS rate announcement. Operating expenses in q one twenty twenty five, which includes the cost of revenues, were 39,900,000.0 versus 8,900,000.0 in q one twenty twenty four. I wanted to highlight a few unusual items that were included in operating expenses in q one twenty twenty five, including a 29,800,000.0 contingency reserve related to our agreement in principle to settle the DOJ CID. It also includes 1,500,000.0 in non cash stock compensation, 400,000 in state and sales, use tax accruals, and another 400,000 in legal fees related to the DOJ DOJ CID.

Further details are laid out in our press release. The loss from operations was 31,100,000.0 given these items, a decrease compared to income from operations of 17,000,000 in the prior year. Other expenses net were 43,800,000.0 and included a net unrealized loss of 41,800,000.0 from the change in fair value of our Bitcoin holdings. Accounting standards require Bitcoin assets to be measured at fair value with gains and losses from changes in the fair value to be recognized in net income in each reporting period. While this may introduce volatility into our reported net income, it does not impact our cash flow from operations.

For some perspective on how dramatic the change in fair value measurements can be, as of 03/31/2025, the net unrealized loss on our Bitcoin holdings was 17,000,000. As a reference, had Bitcoin been priced around its current level of a hundred and 4,000 per Bitcoin, we would have had a net unrealized gain of over $51,000,000. That’s a large swing in just over a month. For the first quarter of twenty twenty five, our net loss was 64,700,000.0 or $6.74 per basic and fully diluted share compared to net income of 6,100,000.0 or 88¢ per basic share and 78¢ per fully diluted share in q one twenty twenty four. Cash, cash equivalents, and restricted cash at 03/31/2025 was 9,900,000.0.

As we discussed in our last earnings call and as Eric mentioned, in late January, we completed a convertible senior notes offering with a hundred million dollar aggregate principal amount of five and a half year, four point two five percent notes due in August 2030. Together with apt call transactions, the conversion premium is 75%, leading to an initial effective conversion price of similar stock of approximately $170 per share, which significantly re reduces potential conversion dilution. We use net proceeds to purchase additional Bitcoins. Last year, we had filed excuse me. My script just disappeared here.

So last year, we had filed for a hundred and $50,000,000 ATM. We had utilized that ATM until our new ATM of 500,000,000 became effective, and that was on 04/22/2025. For our initial ATM, we sold approximately 2,400,000.0 shares for net proceeds of approximately a hundred and $26,000,000. In our new program, our $500,000,000 shelf, we have issued through May 12 approximately 1,800,000.0 shares for net proceeds of approximately $61,000,000. We used net proceeds from the ATM issuance for general corporate purposes, including the purchase of additional Bitcoin.

Since 03/31/2025, we purchased 616 Bitcoins for an aggregate cost of $59,600,000. We now hold a total of $3,008.00 8 Bitcoin valued at approximately $400,000,000, representing an unrealized fair value gain of 59,000,000. We also launched a Bitcoin dashboard today at ir.semil semilarscientific.com, where investors will be able to find our Bitcoin related statistics in one location. We encourage investors to check back often as it will track additional Bitcoin purchases as we announce them and provide a real time snapshot of our market and Bitcoin metrics. Now we’ll begin our q and a.

We received some questions ahead of the release that we tried to address in the pre prepared remarks, and we do have some additional questions. So the first one is, what are your plans this year for accumulating more Bitcoin? Eric, I’ll let you take that one.

Eric Schindler, Treasury/Financial Executive, Semler Scientific: Thanks, Renee. We have extremely ambitious plans to accretively acquire more Bitcoin. We want to aggressively increase our $388,000,000 or close to $400,000,000 now, Bitcoin stockpile, and are well on our way with our recently authorized $500,000,000 ATM. We are confident that we can use our $500,000,000 ATM this year and access additional sources of financing to buy more Bitcoin. We believe that Michael Saylor and strategy’s success tapping into the preferred market with Strike and Strike creates a playbook for yet another great opportunity opportunity for us down the road.

Moderator/Unidentified Operator, Semler Scientific: Great. Jen can, take our next question. So what’s driving the underlying trends in the business, and what do you expect for 2025? Thanks, Renee. Despite the government’s decision about payment for risk adjustment for PAD, we continue to see ongoing testing and additions to our customer base, albeit at decreased volumes for PAD.

Our priority for 2025 is to minimize declines to QuantiFlo revenue while maintaining sufficient infrastructure to support, innovate, and grow our operations related to other cardiovascular disease states. This includes the marketing of other FDA cleared products that we are licensing to our valuable customer base. We seek to diversify and expand our customers and target new markets that will benefit from using these potentially life saving products. We will be managing the health care business to generate cash, which we plan to use for general corporate purposes, including buying more Bitcoin. Thanks, Dan, and thank you everyone for your questions.

As we wrap up this conference call, we want to emphasize our ongoing commitment to continued execution of our Bitcoin treasury strategy and our health care business. We appreciate your participation in today’s discussion, and thank you for your ongoing support. Operator? Thank you, everyone, for joining. This now concludes the conference call.

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