Executive Summary

Q1 delivered 40% revenue growth to $13.47M, in line to slightly ahead of third‑party consensus, with gross margin at 47.1%; GAAP EPS was $(0.12). Management cut FY24 revenue guidance to $52–$55M (from $60–$62M) on slower enterprise purchasing and migration to lower‑ARPU AI offerings, despite strong NRR and clinician growth .
Sequential gross margin compressed from 49.3% to 47.1% due to temporary offshore facility move and optimization costs; CFO guided margins to recover beginning in May, implying near‑term gross margin normalization as one catalyst .
Strategic pivot toward AI solutions (Augmedix Go and Go Assist) is resonating—HCA plans to expand Go in EDs; the new ED version (fully automated, GenAI) entered general availability in April—supporting a longer‑term mix shift to higher‑margin products even as near‑term ARPU headwinds weigh on revenue growth .
Stock narrative hinges on execution of large deployments (HCA and others), pace of Live→Go/Go Assist transitions, and proof of margin recovery; third‑party sources indicate a small Q1 beat on EPS and revenue, but the guidance cut is the likely driver of investor reaction and estimate resets .

What Went Well and What Went Wrong

What Went Well

Strong growth and retention: Revenue +40% y/y to $13.47M with Dollar‑based NRR at 143% and Average Clinicians in Service up to 1,862, demonstrating healthy expansion in existing accounts .
Product momentum and partnerships: Management cited “increasing interest” in Augmedix Go and Go Assist, with HCA planning to expand Go in additional EDs; the ER version (fully automated, GenAI) is resonating with health systems and was launched for GA in April .
Long‑term margin mix: Transition toward AI products (Go/Go Assist) should expand gross margins versus Live over time, positioning the model for structurally higher profitability once deployments scale (“products with inherently higher gross margins than our established Live product”) .

What Went Wrong

Guidance reduction: FY24 revenue cut to $52–$55M from $60–$62M on slower enterprise purchasing and accelerated migration to lower‑ARPU AI offerings—pressuring near‑term growth despite strategic alignment .
Sequential margin dip: Gross margin fell to 47.1% from 49.3% in Q4 on one‑time overseas facility move/optimization costs; while management expects recovery beginning in May, the print introduced near‑term uncertainty .
Higher operating spend: OpEx rose to $12.7M (vs $10.6M in Q4), reflecting stepped‑up S&M and engineering investment; operating cash burn increased to $(8.2)M y/y, adding focus on pacing investments vs. growth visibility .

Financial Results

Metric	Q1 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$9.628	$12.680	$13.471
Gross Profit ($USD Millions)	$4.386	$6.246	$6.341
Gross Margin %	45.6%	49.3%	47.1%
Operating Expenses ($USD Millions)	$9.480	$10.593	$12.743
Loss from Operations ($USD Millions)	$(5.094)	$(4.347)	$(6.402)
Net Loss ($USD Millions)	$(5.239)	$(4.491)	$(6.499)
GAAP EPS ($)	$(0.14)	$(0.09)	$(0.12)
Adjusted EBITDA ($USD Millions)	$(4.282)	$(3.306)	$(5.078)

KPIs

KPI	Q3 2023	Q4 2023	Q1 2024
Average Clinicians in Service	1,650	1,789	1,862
Average Annual Revenue per Clinician	$28,200	$28,200	$28,700
Dollar‑Based Net Revenue Retention	157%	152%	143%

Vs Estimates

S&P Global consensus data was unavailable in our system for AUGX this quarter; therefore, we cannot present SPGI‑sourced consensus values. Third‑party sources indicate Q1 EPS beat by $0.01 and revenue beat by ~$0.10M versus consensus .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	FY 2024	$60–$62M	$52–$55M	Lowered

Rationale (management commentary): health systems progressing methodically in AI purchasing; some Live users transitioning to Go Assist, lowering near‑term ARPU; still selling Live cohorts but below prior expectations; transition welcomed for larger TAM and higher long‑term margins .

Earnings Call Themes & Trends

Topic	Q3 2023 (Q‑2)	Q4 2023 (Q‑1)	Q1 2024 (Current)	Trend
AI/Technology (Go, Go Assist)	Early access to Go; building platform and data strategy	Go ambulatory GA in Dec; ER Go on track for GA by end of March	ER Go resonating; HCA planning expansion; Go Assist gaining traction	Increasing adoption focus, expanding use cases
Partnerships (HCA)	Enhanced collaboration with HCA and Google Cloud	HCA making plans for broad roll‑out across network	HCA to expand Go to additional EDs	Scaling deployments
Gross Margin	+390 bps y/y to 49.5%	+300 bps y/y to 49.3%; strong exit rate	47.1% with temporary costs; recovery expected starting May	Near‑term dip, recovery guided
Demand/Macro	Strong adoption, raised FY23 revenue guidance	Confidence in 2024 growth and margin expansion	Health systems proceeding methodically; broader AI evaluation slowing commitments	Slower near‑term closes
Pricing/ARPU Mix	Emphasis on Live/Notes growth	Live and Notes growth; Go modest 1H24 contribution	Live→Go Assist transitions reduce near‑term ARPU but improve long‑term margins	ARPU down near‑term, margin mix up long‑term

Management Commentary

CEO (strategic positioning): “We are seeing an increasing amount of interest with new and existing customers that are evaluating our AI products, Augmedix Go and Augmedix Go Assist… the recently introduced ER version is resonating… HCA… is planning to expand Augmedix Go to additional emergency departments… While the transition from our established Live product to our AI‑based solutions… may result in slower short‑term revenue growth given the lower ARPU… we welcome this transition… [leading to] products with inherently higher gross margins than our established Live product.”
Market adoption and portfolio breadth: “Health systems are proceeding methodically… The market is trying to balance the need for medical note accuracy and completeness against cost‑effective optimization. We believe offering solutions that span this spectrum is the winning approach at this juncture of AI’s evolution.”
CFO (gross margin cadence): Q1 sequential decline driven by temporary Bangladesh facility move and India optimization costs; “We expect gross margins to be closer to fully recovered in May.”

Q&A Highlights

Guidance reduction drivers: ~80% of the cut tied to both lower bookings and migration from Live to Go Assist; remaining ~20% reflects faster migration of Notes to Go Assist (lower ARPU) .
Migration timing: Many contracts allow migration within 90 days; management aims to optimize long‑term ROI for customers .
Product pricing and positioning: Live roughly ~$2,400 per clinician per month vs. Go Assist ~$300–$600, highlighting near‑term ARPU pressure from AI mix shift .
Investment pacing: ~60% of planned hiring completed; management will calibrate remaining hiring to market adoption and demand signals .

Estimates Context

S&P Global consensus estimates were unavailable in our system for AUGX this quarter; as a result, we could not present SPGI‑sourced consensus values. Third‑party sources indicate a small beat: EPS beat by $0.01 and revenue beat by ~$0.10M for Q1 2024 .
Implications: Guidance cut (from $60–$62M to $52–$55M) likely drives estimate downgrades across FY24 revenue and, to a lesser extent, margin trajectory assumptions despite management’s near‑term gross margin recovery commentary .

Key Takeaways for Investors

Near‑term growth reset but long‑term mix upgrade: Migration to Go/Go Assist compresses ARPU short‑term yet supports structurally higher gross margins and broader TAM over time; watch the slope of AI adoption in 2H24–2025 .
Execution catalysts: Confirmed gross margin recovery from May onward, announced GA of ER Go, and HCA’s planned expansion are near‑term proof points; incremental large‑scale deployments are critical stock catalysts .
KPIs remain healthy: NRR at 143% and clinician growth to 1,862 support durable demand from existing enterprise customers; track whether NRR holds amid pricing mix shift to AI offerings .
Investment pacing vs. cash burn: OpEx up with stepped‑up GTM and engineering; operating cash burn of $(8.2)M in Q1 requires disciplined hiring cadence until visibility improves .
Guidance risk skew: FY24 revenue guide now embeds slower purchasing and faster AI migration; upside requires faster enterprise win cycles or earlier AI contribution, downside if evaluation periods lengthen .
Trading lens: Near‑term sentiment tied to proof of margin normalization and evidence of multi‑site/go‑live ramps (especially HCA). Delivery against these milestones can re‑anchor the multiple despite the revenue reset .

Sources

Q1 2024 8‑K/press release, financials, and non‑GAAP reconciliations .
Q4 2023 8‑K/press release (prior quarter comp and prior guidance) .
Q3 2023 8‑K/press release (two quarters back KPI trend) .
Q1 2024 earnings call transcript (third‑party) and highlights .
Product/ED launch PR (contextual, within/around Q1) .

Augmedix, Inc. (AUGX)·Q1 2024 Earnings Summary