Semler Scientific Reports Q2 2024 Results; Big Bitcoin Moves
Semler Scientific recently shared its financial performance for the second quarter of 2024, showcasing a mixed bag of results. While income from operations was strong, the company saw a dip in total revenues compared to last year. A major highlight? Semler has a big investment in Bitcoin.
Key Takeaways
- Total revenues for Q2 2024 were $14.5 million, down 22% from last year.
- Income from operations stood at $5.4 million.
- The company has 929 bitcoins as of August 5th, 2024.
- Bitcoin: A type of digital money that can be used as an investment or to buy things.
- Example: Imagine Bitcoin like digital gold that you can trade online.
- Semler’s Board sees Bitcoin as both a smart investment and a protection against inflation.
- Inflation Hedge: Something you invest in to keep your money's value from dropping.
- Example: If your savings lose value due to rising prices, your investment in Bitcoin might still hold value.
Company Outlook
- Semler expects the revenue pattern in 2024 to be like 2023, with more earnings in the first half.
- They plan to manage costs strictly and continue growing their Bitcoin holdings.
- They will use cash flow and raise equity capital to buy more Bitcoin.
- Cash Flow: The money a company makes and spends.
- Example: Like how a family would budget their monthly income and expenses.
Bearish Highlights (Not So Good)
- Revenues dropped 22% compared to last year’s same quarter.
- Change in the value of Bitcoin led to a $5.1 million negative impact on net income.
- Net Income: Profit after all costs and expenses.
- Example: If you sell homemade crafts, net income would be your sales minus all costs of materials and marketing.
Bullish Highlights (Good News)
- Strong income from operations despite lower revenues.
- High-profit business that continuously generates cash.
- Positive market response to the company’s Bitcoin strategy.
Misses
- Net income was zero, a steep drop from $5.9 million reported in Q2 2023.
Q&A Highlights
- The Bitcoin strategy was shaped by the success seen by companies like MicroStrategy.
- The company’s primary aim remains on controlling costs and maximizing operating income.
- Semler is waiting for SEC approval which will allow up to $150 million in security offerings for general corporate purposes, including buying more Bitcoin.
- SEC Approval: Permission from the government to raise money from investors.
- Example: Like getting a license to open a new shop and sell products.
Operational Performance
Even with a revenue drop, Semler showcased strong operational performance. The company’s move to invest heavily in Bitcoin highlights its belief in the cryptocurrency as a secure store of value and shield against inflation. With a robust balance sheet and high-profit margins, Semler is gearing up to leverage the increasing acceptance of Bitcoin by large institutions. At the same time, they continue to focus on their core medical products, eyeing innovations to help combat chronic diseases like PAD (Peripheral Arterial Disease).
Investing Insights
Semler’s shift towards Bitcoin is catching industry attention. This aligns with a broader trend where more companies are adopting cryptocurrencies. Good gross profit margins and positive stock performance show commitment to delivering shareholder value and maintaining operational efficiency.
- Gross Profit Margin: The difference between sales and the cost of goods sold.
- Example: If you make $10 from selling a product that cost $6 to make, your margin is $4.
Financial Metrics:
- Market Cap: $185.97M USD
- P/E Ratio: 12.98, adjusting to 11.14 for the last twelve months
- Revenue Growth: Declined 4.5% for the last twelve months
Investor Opportunity
With high gross profit margins and a rising stock price, investors might consider Semler a potential opportunity. The company's liquid assets exceeding short-term obligations and expected profitability this year add confidence to its financial health.
Full Earnings Call Highlights:
Doug Murphy-Chutorian emphasized the use of cash for Bitcoin investments, while Eric Semler highlighted the strategic decision to hold Bitcoin as a primary treasury reserve asset. Jennifer Oliva Herrington reiterated the company’s ongoing commitment to healthcare innovations, while Renae Cormier detailed the financial outcomes and Bitcoin purchases.
Conclusion
Semler Scientific’s second quarter of 2024 showed strong operations despite revenue decline. The company’s heavy bet on Bitcoin signals confidence in the digital asset as an inflation hedge. The mix of progressive Bitcoin strategy and firm focus on medical product innovation is setting the stage for Semler’s future growth.
