• Total Revenue (Q4 2024): $12.4 million, down 18% compared to Q4 2023.
• Operating Expenses (Q4 2024): $8.9 million, a decrease of 29% year-over-year.
• Income from Operations (Q4 2024): $3.5 million, an increase of 40% compared to $2.5 million in the prior year.
• Net Income (Q4 2024): $29.2 million or $3.64 per basic share and $3.41 per fully diluted share.
• Cash, Cash Equivalents, and Restricted Cash (Dec 31, 2024): $8.9 million.
• Bitcoin Holdings: 3,192 bitcoins valued at over $300 million, with an average cost basis of $87,854 per Bitcoin.
• Convertible Senior Notes Offering: $100 million of notes issued with a 4.25% interest rate, maturing in August 2030.
• Bitcoin Purchases (Q4 2024): 1,280 bitcoins for $121.3 million.
• Additional Bitcoin Purchases (Post Q4 2024): 894 bitcoins for $90.7 million.

• Warning! GuruFocus has detected 4 Warning Signs with SMLR.

Release Date: February 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Semler Scientific Inc (NASDAQ:SMLR) achieved record cash generation of over $24 million in 2024 from healthcare operations.
• The company adopted Bitcoin as its primary treasury reserve asset, becoming the second US public company to do so, and has seen a 152% positive yield since adoption.
• Semler Scientific Inc (NASDAQ:SMLR) has accumulated 3,192 bitcoins, valued at over $300 million, making it the tenth largest corporate holder of Bitcoin.
• The company's market capitalization has grown by more than 200% since adopting Bitcoin as a treasury strategy.
• Semler Scientific Inc (NASDAQ:SMLR) is pursuing a new 510(k) clearance for an extension of its QuantaFlo technology, aiming to expand its product offerings in the cardiovascular space.

Negative Points

• Total revenues in Q4 2024 were $12.4 million, down about 18% compared to the fourth quarter of 2023.
• The company expects further pressure on revenues in 2025 due to the phasing of the 2024 CMS rate announcement.
• Two largest customers, including their affiliates, comprised 70% of quarterly revenues, indicating high customer concentration risk.
• The adoption of a new accounting standard for Bitcoin assets may introduce volatility into reported net income.
• Semler Scientific Inc (NASDAQ:SMLR) faces challenges in maintaining QuantaFlo revenue due to government decisions affecting payment for risk adjustment for PAD.

Q & A Highlights

Q: Why did Semler Scientific decide to do the convertible note offering? A: Eric Semler, Independent Chairman of the Board, explained that the company chose the convertible note offering as it is a cheaper source of funding and less dilutive to stockholders. The offering allowed them to raise a large amount of capital quickly, initially targeting $75 million but increasing to $100 million due to high demand. The cap call created a conversion premium 75% higher than the stock's trading price at the time of the announcement.

Q: What's driving the underlying trends in the business, and what are the expectations for 2025? A: Jennifer Oliva Herrington, Chief Operating Officer, stated that despite government decisions affecting payment for risk adjustment for PAD, the company continues to add new clients for QuantaFlo software licenses. They are expanding their customer base beyond managed care to clinics and value-based care providers. The priority for 2025 is to minimize declines in QuantaFlo revenue while supporting and growing operations related to other cardiovascular diseases.

Q: What are Semler Scientific's expectations from the new government in Washington, D.C. regarding crypto? A: Eric Semler expressed excitement about the strong government support for Bitcoin, particularly the repeal of SB 21, which allows major banks to custody Bitcoin. This expansion may increase the likelihood of large public companies adding Bitcoin to their balance sheets. Semler believes the benefits of the repeal are not yet fully reflected in Bitcoin's current price.

Q: How did Semler Scientific perform financially in Q4 2024? A: Renae Cormier, Chief Financial Officer, reported that total revenues for Q4 2024 were $12.4 million, down 18% from Q4 2023. Operating expenses decreased by 29% year-over-year, and income from operations increased by 40% to $3.5 million. The company also recorded a $28.8 million gain from the change in fair value of Bitcoin holdings, contributing to a net income of $29.2 million for the quarter.

Q: What is the status of Semler Scientific's Bitcoin holdings and strategy? A: Eric Semler highlighted that the company owns 3,192 bitcoins valued at over $300 million, making it the tenth largest corporate holder of Bitcoin. They have invested $280 million in Bitcoin, viewing it as digital gold with long-term investment potential. The company remains committed to growing its Bitcoin holdings and will evaluate financing options to maximize stakeholder value.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.