• Revenue: $7 million, an increase of 10.2% year-over-year.
• Therapeutic Device Revenue: $6.5 million, up 8.5% driven by PulseVet's 24.5% growth.
• Diagnostics Segment Revenue: Approximately $500,000, an increase of 38%.
• Gross Margin: 72.3%, higher than last year's 69%.
• Operating Expenses: $12.5 million, an increase of 21% year-over-year.
• Net Loss: $6.7 million, or 0.007 cents per share.
• Non-GAAP EBITDA Loss: $4.8 million.
• Cash and Equivalents: $77.8 million at the end of the quarter.
• Cash Used in Quarter: Approximately $5.1 million.

• Warning! GuruFocus has detected 1 Warning Sign with ZOM.

Release Date: November 07, 2024

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

Positive Points

• Zomedica Corp (ZOM) reported a strong third quarter with double-digit top-line growth and solid gross margins.
• The company achieved a new revenue record for the third quarter at $7 million, reflecting over 10% growth year-over-year.
• Zomedica Corp (ZOM) has expanded its global reach through strategic partnerships with distributors in new international markets, enhancing growth opportunities.
• The diagnostics segment saw a 38% year-over-year revenue increase, driven by strong performance from the True Forma platform.
• The company has made significant progress in operational efficiency, reducing operating expenses by over $900,000 compared to the previous quarter.

Negative Points

• Zomedica Corp (ZOM) experienced disruptions in the sales force due to unexpected medical leaves, impacting capital sales in the second quarter.
• The company reported a net loss of $6.7 million for the quarter, compared to a net loss of $491,000 in the prior year.
• There is a risk of potential delisting due to the stock price falling below $0.20 on a 30-day moving average.
• Operating expenses increased by 21% over the prior year, driven by non-recurring professional fees.
• The company has not yet achieved cash flow breakeven, with a target of reaching this milestone at $50 million in annualized revenue.

Q & A Highlights

Q: How did the sales force recovery impact the quarter, and what is the outlook for growth in 2025? A: The sales force recovery positively impacted capital sales, with a 24% increase in PulseVet sales. We expect this trend to continue into the fourth quarter and beyond. For 2025, we plan to expand our sales presence and expect growth to accelerate. Once a new CFO is onboard, we will provide guidance in the new year. - Mike Zuehlke, Vice President of Finance, Corporate Controller

Q: Can you provide any ballpark figures for revenue growth expectations pending the arrival of the new CFO? A: We are confident in increasing revenues across all product segments. This is the 14th consecutive quarter of record revenue levels, and we expect this trend to continue into 2025. We will provide credible guidance in the new year. - Mike Zuehlke, Vice President of Finance, Corporate Controller

Q: Are the trends in cost of goods sold and operating expenses sustainable? A: We expect gross margins to remain around 70%, continuing the trend. Operating expenses as a percentage of revenue will continue to decline as we grow revenue and improve efficiencies. - Mike Zuehlke, Vice President of Finance, Corporate Controller

Q: What is the timeline for reaching cash flow break-even and profitability? A: We expect to be cash flow positive at $50 million in annualized revenue, which is about 2% of our addressable market penetration. We previously aimed for 2026, which remains an aggressive but achievable goal. - Mike Zuehlke, Vice President of Finance, Corporate Controller

Q: Is there any consideration for a stock buyback given the current share price? A: We believe a stock buyback is not in the best interest of all shareholders. We prefer to use our capital to fuel organic growth and potential acquisitions that are accretive to earnings. - Mike Zuehlke, Vice President of Finance, Corporate Controller

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