Release Date: March 19, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ICAD Inc (ICAD, Financial) reported strong revenue growth, with Q4 2024 revenue reaching $5.4 million, a 14% increase over the previous year.
- The company successfully transitioned to a SaaS-based model, with annual recurring revenue (ARR) growing by 11% year over year.
- ProFound Detection version 4.0 received FDA clearance, offering significant improvements in cancer detection and workflow efficiency.
- ICAD Inc (ICAD) expanded its global reach with new partnerships and distribution agreements in regions like South Africa, Portugal, and Jordan.
- The company closed a total of 106 deals in Q4, including 19 cloud deals, indicating strong market adoption of its cloud solutions.
Negative Points
- The transition to a SaaS model may cause short-term flattening in reported GAAP revenue due to the shift from upfront revenue recognition to recurring revenue.
- Operating expenses increased by 10% year over year, driven by investments in R&D and regulatory support.
- Gross profit margin declined from 91% in Q4 2023 to 86% in Q4 2024, partly due to amortization of the cloud product.
- The company reported a GAAP net loss from continuing operations of $0.9 million for Q4 2024, compared to a $0.5 million loss in the previous year.
- Cash and cash equivalents decreased from $21.7 million at the end of 2023 to $17.2 million at the end of 2024, reflecting cash used in operating activities.
Q & A Highlights
Q: Can you provide an outlook on the CapEx environment and budget for hospitals and centers this year, and any expectations for cloud deal momentum?
A: Eric Lonnqvist, CFO: We are experiencing some revenue lumpiness, with Q3 being slower and Q4 stronger. Cloud momentum is strong, with growth in deals over the past three quarters. We expect this to continue in 2025. Some deals from Q3 slipped into Q4, and some Q1 2025 deals were pulled into Q4. The SaaS transition aims to eliminate this lumpiness.
Q: What feedback have you received from customers on ProFound Detection version 4.0?
A: Dana Brown, CEO: Version 4.0 is performing better in clinical practice than in our FDA clearance data set. It improves accuracy and reduces false positives. Our marketing and sales teams are now promoting it to prospects and customers, and we expect to have more evidence of its impact by the next quarter.
Q: Did the clearance of Version 4.0 and RSNA catalyze quicker decision-making from customers?
A: Dana Brown, CEO: The strong Q4 performance was more due to sales team execution and effective marketing rather than Version 4.0, which was cleared late in the quarter. Budget timing also contributed to the lift in Q4.
Q: How does the ARR dynamic look as we exit Q4, and are there meaningful deals that will hit ARR in Q1 or Q2?
A: Eric Lonnqvist, CFO: Cloud implementations involve more security checks, causing about a quarter lag before deals hit ARR. We sold more cloud deals in Q4, so we expect a bigger bump in Q1 2025. We are considering reporting more backlog metrics to show future revenue and ARR.
Q: How do recent partnerships, like with Koios Medical and RamSoft, contribute to ICAD's strategy?
A: Dana Brown, CEO: Partnerships are driven by customer requests for follow-on diagnostics. They help us understand market dynamics and inform our corporate roadmap. These partnerships allow us to meet customer needs and explore potential future developments, whether through continued partnerships, building, or acquisitions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
