Yahoo Finance Zynex Inc (ZYXI) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges and Seizing ...
Revenue: Q1 2024 revenue was $46.5 million, up 10% year-over-year.
Net Income: Q1 2024 net income was $10,000, significantly lower compared to $1.6 million in Q1 2023.
Earnings Per Share (EPS): Q1 2024 EPS was $0.00, down from $0.04 in Q1 2023.
Gross Margin: Increased to 80% in Q1 2024 from 78% in Q1 2023.
Free Cash Flow: Cash from operations was $2.1 million in Q1 2024, up from the previous year.
2024 Revenue Guidance: Expected to be at least $227 million.
2024 EPS Guidance: Projected to be approximately $0.50.
Release Date: April 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Zynex Inc (NASDAQ:ZYXI) reported an ongoing revenue momentum, marking the eighth consecutive quarter of record-high order numbers with a 10% year-over-year increase.
The company reaffirmed its 2024 revenue guidance of at least $227 million despite a temporary delay in revenue recognition due to a cyber event.
Zynex Inc (NASDAQ:ZYXI) saw a positive cash flow from operations amounting to $2.1 million in the first quarter, an improvement from the previous year.
FDA clearance was received for the new M-Wave neuromuscular electrical stimulation device, which is now in production and shipping to patients.
The company is making significant progress in its hospital monitoring division, including advancements in its blood and fluid monitor and laser-based pulse oximeter, which are expected to drive future growth.
Negative Points
Revenue for the first quarter was slightly lower than expected due to a cyber event at Change Healthcare, which disrupted claims processing across the healthcare sector.
The cyberattack led to delayed payments from a large group of payers, impacting the company's ability to submit claims and causing a suspension in claim payments.
Net income for the first quarter was minimal at $10,000, significantly lower compared to $1.6 million in the first quarter of 2023.
General and Administrative expenses increased significantly to $13.3 million in Q1 2024 from $7.4 million in the same period last year, indicating higher operational costs.
The company is still in the process of ramping up its hospital monitoring division, which represents a large market opportunity but is currently pre-revenue and requires further development and clinical trials.
Q & A Highlights
Q: Can you provide an update on the impact of the cyberattack and its effect on revenue? A: Daniel Moorhead, Chief Financial Officer - The cyberattack resulted in a $1 million revenue impact, primarily affecting the ability to submit claims and causing suspension in claim payments from several commercial payers. The impact was roughly split between devices and supplies, similar to our normal revenue breakout. Recovery from this shortfall is expected throughout 2024, starting from Q2.
Q: What are the expectations for the M-Wave device, and how is it being received in the market? A: Thomas Sandgaard, CEO - The M-Wave device, which replaces the older E-Wave model, is being shipped to new prescriptions. It's designed to be user-friendly and powerful, maintaining its position as a leading neuromuscular electrical stimulator. However, it's expected to represent only a small percentage of our orders, similar to the E-Wave, as the NexWave continues to be the preferred choice for less complex needs.
Q: Could you discuss the strategic review process and any considerations regarding going private? A: Thomas Sandgaard, CEO - Discussions about going private are advanced, with positive progress towards a potential conclusion. This move could provide a valuable partner and contribute significantly to the company's future.
Q: What are the commercialization plans for the blood volume monitor and the potential for licensing the technology? A: Thomas Sandgaard, CEO - The CM-1600 blood volume monitor has FDA clearance but is not planned for commercialization as it serves as a milestone in R&D. The focus is on developing the CM-1700 for commercial use, with no current plans to license the CM-1600 technology.
Q: What is the status of the NiCO and HemeOx products in the pipeline? A: Thomas Sandgaard, CEO - NiCO is progressing well, with a verification study planned for the latter half of the year. It's expected to be the first commercial product from our monitoring solutions, potentially in 2025. HemeOx, which builds on the NiCO technology, will follow and is aimed at expanding into different care areas.
Q: How much is left in the current share buyback plan, and what are the future plans regarding share repurchases? A: Daniel Moorhead, CFO - About $15 million remains from the current $20 million share buyback plan initiated after Q4 results. The company continues to evaluate the balance between investing in the business and returning cash to shareholders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
