Zomedica (ZOM) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $7 million, reflecting a 10.2% increase year-over-year, marking the 14th consecutive quarter of record revenue [6][31] - Gross margin improved to 72.3%, exceeding the previously stated target range of 65% to 70% and higher than last year's 69% [35] - Net loss for the quarter was$ 6.7 million, compared to a net loss of $491,000 in the prior year, which included a one-time gain of approximately$ 2.2 million [38] Business Line Data and Key Metrics Changes - Therapeutic device revenue increased by 8.5% year-over-year, driven by a 24% increase in PulseVet sales [7][33] - Diagnostics segment revenue grew by 38%, primarily due to an 80% increase from the TRUFORMA platform [10][34] - Consumable revenue was $4.8 million, a 6% increase, with a 27% growth excluding Assisi products [32] Market Data and Key Metrics Changes - International sales accounted for approximately 18% of total revenue in Q3, with year-to-date sales outside North America up nearly 21.5% [74] - The company noted that macroeconomic factors, particularly interest rates, had a minimal impact on capital sales in Q3 [71] Company Strategy and Development Direction - The company is focusing on international market expansion, having secured CE Marking for all products, allowing sales in the EU and other countries [11][13] - Plans to increase sales presence in 2025 include creating new positions focused on corporate accounts and capital sales [50] - The company aims to achieve cash flow breakeven at an annualized revenue of$ 50 million, with a target of reaching this level by 2026 [59][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth across all product segments, with expectations for accelerated growth in international markets [52][74] - The company is optimistic about maintaining high gross margins and reducing operating expenses as a percentage of revenue [56][68] Other Important Information - The company ended Q3 with $77.8 million in cash and cash equivalents, indicating strong liquidity to support growth initiatives [40] - A new automated robotic manufacturing line has been installed to improve production efficiency [27] Q&A Session Summary Question: Outlook for growth in 2025 - Management expects growth to accelerate in 2025, with plans to increase sales presence and fill open positions [50][52] Question: Trends in operating expenses - Management anticipates that operating expenses as a percentage of revenue will continue to decline, despite some one-time items in the current quarter [55][56] Question: Risk of delisting due to stock price - There is a risk of delisting if the stock price remains below$ 0.20, but management believes they can maintain their listing [64] Question: Potential funding sources if cash runs low - Management does not foresee a need for additional funding, given their current liquidity and declining cash burn [66][68]