As a seasoned researcher with a knack for deciphering market trends and financial statements, I find Semler Scientific’s Bitcoin strategy intriguing. The company’s decision to follow MicroStrategy’s footsteps in accumulating Bitcoin, while maintaining its focus on innovative medical products, is a bold move that seems to be gaining traction in the corporate world.
It seems that Semler Scientific Inc., a company specializing in healthcare technology products (Nasdaq: SMLR), is mirroring MicroStrategy’s approach to Bitcoin investment by reporting ongoing Bitcoin acquisitions along with its Q3 2024 results. As stated in their press release, they have purchased an additional 47 Bitcoins since late August, increasing their total holdings to 1,058 BTC, which were bought for approximately $71 million.
Semler Scientific, known for cutting-edge medical technology and services, is mainly known for its product QuantaFlo®. This rapid point-of-care test has been approved by the FDA. QuantaFlo® is used to gauge arterial blood flow in the limbs, which can aid in diagnosing cardiovascular diseases, particularly Peripheral Arterial Disease (PAD). The company aims to secure a new 510(k) clearance to expand QuantaFlo®’s uses, empowering healthcare professionals to assess patients’ risks of death and major cardiovascular incidents (MACE).
Similar to MicroStrategy, Semler is employing various strategies for procuring Bitcoins, such as utilizing operational cash flow and an At-the-Market (ATM) stock offering program. Launched in August 2024, the company’s ATM program has already garnered around $2.5 million by selling about 86,734 shares. This program, managed by Cantor Fitzgerald & Co., enables Semler to sell up to $50.0 million of its common stock if needed.
Eric Semler, the chair of the company, hinted at their interest in seeking further financial avenues, particularly to buy more bitcoin. This approach seems similar to how MicroStrategy frequently raised both debt and equity to purchase bitcoins.
In the third quarter, the medical device company located in Santa Clara experienced a 17% reduction in revenue compared to the same time last year, dropping from $16.3 million to $13.5 million. However, the business managed to remain profitable, reporting an operating income of $5.1 million, even though this figure represented a 20% decrease from the previous year’s $6.3 million.
In the third quarter of 2023, net income experienced a modest uptick, amounting to approximately $5.6 million or $0.80 per share – a 2% increase from $5.5 million or $0.82 per share in the same period last year. This growth was facilitated by an unrealized gain of $1.1 million from the company’s Bitcoin holdings and a reduced tax rate of 12%, contrasting with 21% in the preceding year.
In Q3 2024, two major clients contributed to a significant portion of the company’s earnings, accounting for about 73% of the total revenue. This is slightly higher than in Q3 2023 when the top three customers combined for 75% of the revenue (36%, 28%, and 11% respectively). In other words, the reliance on a few key clients has grown over this period.
By the 30th of September, the company owned 1,018 bitcoins, which were worth approximately $64.5 million in total. This represents a decrease in value of around $3.9 million since their initial acquisition. During Q3, the company bought 141 bitcoins at a cost of $8.4 million. Between the end of the quarter and November 4, they purchased an additional 40 bitcoins, spending about $2.6 million on them.
As a researcher, I’d note that the total operational expenditures, which encompass cost of revenues, dipped by approximately 16%, landing at roughly $8.4 million – a significant drop from the $10.0 million recorded in the same period last year. It’s worth mentioning that cost of revenues showed a minor uptick of about 4% to hit $1.2 million. The pre-tax income stood at $6.4 million, marking a decrease of 9% compared to the previous year’s $7.0 million. However, this figure incorporates an unrealized gain related to bitcoin, which hasn’t been realized yet.
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2024-11-05 12:27