Executive Summary

Q4 2023 revenue surged to $5.43M, up 121% year over year, driven by $3.60M in system revenue; net loss improved slightly to $17.24M ($0.07) from $17.89M ($0.08) in Q4 2022 .
835+ Senhance procedures in the quarter and five new program initiations (Germany, Romania, CIS x2, Japan), supporting utilization and market development .
2024 guidance targets 8–10 new Senhance programs and 15–20% procedure growth; LUNA design freeze pushed to Q3 2024 with U.S. submission now expected H2 2025 and clearance H1 2026, materially shifting timelines later versus prior guidance .
Liquidity remains tight: $21.1M cash, cash equivalents and short-term investments as of year-end, with runway to early June 2024; management flagged an expected going-concern paragraph in the 2023 audit opinion .

What Went Well and What Went Wrong

What Went Well

Robust Q4 revenue mix led by system placements: $3.6M system, $1.0M instruments & accessories, $0.5M lease, $0.3M services, supporting a step-up in quarterly sales execution .
Strong procedure momentum: “over 835” procedures in Q4 and 3,550+ in FY23 (+13% YoY); CEO emphasized growing acceptance and confidence in Senhance across sites and specialties .
Market development in pediatrics: FDA clearance for pediatric use (U.S.), plus new pediatric programs; management highlighted Senhance’s unique features (3mm instruments, haptics, ISU) as a differentiator .

Quote: “Our main focus right now is on the thorough testing and evaluation phase of the LUNA Surgical System, as we prepare for regulatory submissions…[and] the progress we're making in pediatric applications” — Anthony Fernando, CEO .

What Went Wrong

LUNA timeline pushed materially: design freeze moved to Q3 2024; verification/validation Q4 2024; submission H2 2025; clearance H1 2026; delays tied to conserving capital .
Gross profit remained modest in Q4 ($1.17M) with total operating expenses at $17.16M, underscoring an ongoing scale and cost challenge before breakeven .
Liquidity risk and financing overhang: runway to early June 2024; management indicated multiple financing options but acknowledged need to execute to sustain operations .

Financial Results

Sequential comparison (Q2 2023 → Q3 2023 → Q4 2023)

Metric	Q2 2023	Q3 2023	Q4 2023
Total Revenue ($USD Millions)	$1.081	$1.089	$5.431
Gross Profit (Loss) ($USD Millions)	$(1.993)	$(1.780)	$1.166
Total Operating Expenses ($USD Millions)	$18.870	$18.479	$17.164
Net Loss ($USD Millions)	$(20.662)	$(18.318)	$(17.235)
Net Loss per Share (Basic & Diluted)	$(0.09)	$(0.07)	$(0.07)
Weighted Avg Shares (Millions)	239.570	256.184	264.348

Year-over-year comparison (Q4 2022 → Q4 2023)

Metric	Q4 2022	Q4 2023
Total Revenue ($USD Millions)	$2.464	$5.431
Gross Profit ($USD Millions)	$0.166	$1.166
Total Operating Expenses ($USD Millions)	$18.293	$17.164
Net Loss ($USD Millions)	$(17.890)	$(17.235)
Net Loss per Share (Basic & Diluted)	$(0.08)	$(0.07)

Revenue breakdown (Q4 2023)

Component	Q4 2023 ($USD Millions)
System revenue	$3.6
Instruments & accessories	$1.0
Lease revenue	$0.5
Services	$0.3
Total	$5.4

KPIs

KPI	Q2 2023	Q3 2023	Q4 2023
Senhance procedures	Over 1,000	Over 760	Over 835
Senhance program initiations (quarter)	2 YTD through Q2	2 in quarter; 2 subsequent (total 5 YTD)	5 in quarter
Cash, cash equivalents & ST investments ($M, period-end)	$40.0	$33.1	$21.1

Liquidity and balance sheet (select items, year-end 2023)

Metric	12/31/2023
Cash & cash equivalents ($M)	$17.096
Short-term investments ($M)	$3.971
Total current assets ($M)	$36.386
Total liabilities ($M)	$25.672
Stockholders’ equity ($M)	$33.414
Runway commentary	Early June 2024

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Senhance program initiations	FY 2023	10–12 (Q2)	8–10 (Q3 revised)	Lowered
Senhance program initiations	FY 2024	—	8–10	New baseline
Procedure volume growth	FY 2024	—	15–20% vs 2023	New baseline
LUNA design freeze	2024	Q1 2024 (prior)	Q3 2024 (current)	Pushed out
LUNA V&V testing	2024	By 2024 (prior trajectory)	Q4 2024	Pushed out
LUNA FDA submission (U.S.)	First submission	By end 2024 (prior)	H2 2025	Pushed out
LUNA FDA clearance (U.S.)	Clearance	Mid-2025 (prior)	H1 2026	Pushed out
Regulatory pathway	U.S.	Traditional 510(k) expected	Traditional 510(k) reaffirmed	Maintained
Cash runway	Corporate	Late Q2 2024 (prior)	Early June 2024	Slightly compressed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2023)	Previous Mentions (Q3 2023)	Current Period (Q4 2023)	Trend
AI/ISU and digital platform	ISU real-time support; collaboration momentum; plan to finalize graphics partner and ISU pilot manufacturing	NVIDIA collaboration; Google Cloud data architecture; ISU roadmap	New features by Q2 2024 (analytics, telestration, safety), ISU hardware ramp; LUNA ISU and Standalone ISU configurations	Advancing features and hardware; commercialization pathways under exploration
LUNA development & regulatory	Preclinical eval planned Q4 2023; freeze Q1 2024; submission by end 2024; clearance mid-2025	Preclinical eval by end Q4 2023 reaffirmed; Traditional 510(k)	Timeline extended: freeze Q3 2024; submission H2 2025; clearance H1 2026; still Traditional 510(k)	Delayed due to capital conservation; path reaffirmed
Pediatrics adoption	First U.S. pediatric-exclusive program; validation of small instruments/haptics	Expanded interest post-Mayo; more pediatric sites and events	Pediatric programs added (Romania); momentum in Japan/EU/U.S.; CEO highlights unique features	Positive momentum; strategic focus
Regional trends	Strong sequential procedure growth; Japan agreements	Slower Q/Q growth tied to Europe summer/holidays; Japan record year	Initiations across Germany, Romania, CIS, Japan; 835+ procedures	Mixed: Europe seasonality; broadening footprint
Financing & runway	Post-July offering (+$10M); runway to late Q2 2024	Runway to late Q2 2024; cash $33.1M	Runway to early June 2024; exploring equity, non-dilutive, licensing	Heightened urgency; strategic options under consideration
Supply chain/manufacturing	ISU pilot manufacturing targeted	Flex partnership for LUNA manufacturing	Ramp future ISU manufacturing with partners; Flex collaboration reaffirmed	Building manufacturing infrastructure

Management Commentary

Strategic focus: “Our main focus right now is on the thorough testing and evaluation phase of the LUNA Surgical System, as we prepare for regulatory submissions… [and] advancing surgical technology for all patients through the unique features of the Senhance System” — Anthony Fernando, CEO .
Timeline reset rationale: “In order to conserve capital, we are adjusting our development timeline… freeze the system’s design in Q3 2024… submission now expected in the second half of 2025, with clearance anticipated in the first half of 2026” — Anthony Fernando .
Regulatory path: “We anticipate using a traditional 510(k) submission pathway in the U.S., rather than the more complex de novo pathway” — Company statement .
Liquidity plan: “We are exploring several options, including equity, non-dilutive transactions, licensing agreements” — Anthony Fernando (Q&A) .

Q&A Highlights

Financing and runway: Management reiterated limited runway (early June 2024) and is evaluating equity and non-dilutive licensing to bridge operations; cost cuts implemented across R&D and functions contributed to reduced burn .
LUNA capital needs: CEO pointed to historical burn trajectory; emphasized execution readiness, suggesting capital sizing can be inferred from trends rather than explicit guidance .
Senhance adoption drivers: Mature sites show efficiency gains; pediatric interest is accelerating adoption in Japan, Europe, and U.S.; management has refined site onboarding to drive utilization .
ISU commercialization: Two configurations (LUNA ISU, Standalone ISU) in development; commercialization options (direct vs partnerships) are being explored given observed interest .

Estimates Context

Wall Street consensus (S&P Global) for ASXC Q4 2023 revenue and EPS was unavailable in our system; therefore, estimate comparisons could not be made. We attempted to retrieve S&P Global consensus, but data was unavailable for this ticker in our mapping.

Key Takeaways for Investors

Q4 revenue inflection supported by system sales; monitor sustainability of placements and instrument/lease mix to gauge durability of quarterly revenue step-up .
LUNA timeline reset is a material delay; near-term stock narrative likely driven by financing path, execution on ISU feature rollouts, and incremental Senhance wins — expect headline sensitivity to capital raises and regulatory milestones .
Pediatrics is a credible wedge: regulatory clearance plus real-world adoption at marquee sites can drive awareness and procedures, supporting utilization and consumables revenue .
Liquidity risk elevated: runway to early June 2024 and going-concern language increase financing urgency; structure (equity vs non-dilutive) and dilution risk are key to sentiment .
Regional breadth expanding (Germany, Romania, CIS, Japan), but seasonality and macro constraints can pressure sequential procedure trends; watch Japan momentum as a relative bright spot .
ISU roadmap provides nearer-term catalysts (Q2 2024 features; hardware finalization) even as LUNA shifts right; partnerships (NVIDIA, Google Cloud, Flex) underpin credibility of platform build-out .
Absent Street estimates, frame performance vs internal milestones: program initiations, procedure growth, cost discipline, and cash extensions; any positive surprises on additional initiations or non-dilutive funding could be stock-supportive .

ASENSUS SURGICAL, INC. (ASXC)·Q4 2023 Earnings Summary