Executive Summary

Q2 delivered 27% revenue growth to $13.7M with gross margin at 47.2% (+20 bps YoY), but operating intensity and merger-related costs widened net loss to $(8.5)M and drove a larger adjusted EBITDA loss of $(6.0)M .
Management emphasized the pending acquisition by Commure (cash consideration $2.35/share), targeting close in late Q3/early Q4; the tie-up aims to scale ambient documentation via deeper integrations and AI capabilities .
Demand mix is shifting toward AI products (Go, Go Assist) that are lower-price but structurally higher-margin; the company noted slower purchasing decisions by providers evaluating AI offerings, which constrains growth near term while supporting gross margin expansion over time .
Country risk emerged in Q2: civil unrest in Bangladesh (where ~75% of employees are based) and intermittent internet shutdowns temporarily disrupted operations; the future impact remains uncertain and is a key risk to monitor .
Street estimate context: S&P Global consensus was unavailable in our tool for this quarter; comparisons to estimates are omitted (see Estimates Context).

What Went Well and What Went Wrong

What Went Well
- Revenue and margin: Revenue rose 27% YoY to $13.7M; gross margin expanded 20 bps to 47.2% (operational efficiencies in MDS operations and support) .
- Unit economics & base growth: Average clinicians in service up 23% YoY to 1,887; APRU up ~3% to $28.7k; NRR remained robust at 129% (down YoY but still >100%) .
- Strategic direction: CEO highlighted entering the Commure combination “from a position of strength” to create a “health AI operating system,” with closing expected late Q3/early Q4, a potential catalyst for scale and integrations .
What Went Wrong
- Profitability: Net loss widened to $(8.5)M vs $(5.0)M YoY; adjusted EBITDA loss also widened to $(6.0)M (higher opex, merger costs) .
- Operating leverage: Total opex increased to $15.2M from $10.0M (+52% YoY), including ~$1.2M of acquisition-related expenses in Q2 .
- Demand cadence and risk: Company flagged a slowdown in provider purchasing commitments amid broader AI evaluations; growth rates expected lower in 2024 vs 2023, though mix shift should aid margins longer term . Bangladesh civil unrest disrupted operations and remains an ongoing risk .

Financial Results

Performance vs prior year and prior quarter, with estimates column intentionally blank due to unavailable S&P Global data.

Metric	Q2 2023	Q1 2024	Q2 2024	Vs. Estimates
Revenue ($M)	$10.780	$13.471	$13.664	N/A (S&P Global unavailable)
Gross Profit ($M)	$5.065	$6.341	$6.455	N/A
Gross Margin (%)	47.0%	47.1%	47.2%	N/A
Net Loss ($M)	$(5.033)	$(6.499)	$(8.450)	N/A
Diluted EPS ($)	$(0.12)	$(0.12)	$(0.16)	N/A
Adjusted EBITDA ($M)	$(4.107)	$(5.078)	$(5.960)	N/A
Operating Cash Burn ($M)	$(6.0)	$(8.2)	$(3.8)	N/A

KPIs and operating metrics:

KPI	Q2 2023	Q1 2024	Q2 2024
Average Clinicians in Service	1,534	1,862	1,887
Average Annual Revenue per Clinician ($)	27,900	28,700	28,700
Dollar-Based Net Revenue Retention (%)	148%	143%	129%
Cash & Cash Equivalents ($M)	—	$37.301 (3/31/24)	$28.220 (6/30/24)
Total Debt ($M)	—	$20.452 (3/31/24)	$20.540 (6/30/24)

Non-GAAP note: Q2 adjusted EBITDA excludes $1.197M acquisition-related expenses and other items per reconciliation .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance (Q2)	Change
Revenue ($M)	FY 2024	$60–$62 (as of Mar 18, 2024)	$52–$55 (revised May 13, 2024; no new Q2 update)	Lowered in Q1; no Q2 update

Notes: Q4 2023 press release initially guided $60–$62M; this was reduced to $52–$55M in Q1 2024. The Q2 earnings materials did not provide an updated outlook .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2023 and Q1 2024)	Current Period (Q2 2024)	Trend
AI/Technology initiatives	Go generally available in ambulatory; ED version targeted by end of March; high confidence in AI roadmap . Q1 reiterated AI product introductions and broad customer evaluations .	Continued emphasis on AI scale-up; integration and platform vision highlighted via proposed Commure merger .	Steady progress; gearing to scale via combination.
Product mix (Live vs Go/Go Assist)	Q1: shift toward AI products; slower Live bookings; mix change lowers near-term revenue but expands margins longer-term .	Q2 MD&A reiterates slower provider commitments during AI evaluations; Go/Go Assist priced lower but with structurally higher margins; 2024 growth rates lower vs 2023 .	Mix shift underway; near-term growth constrained; margin tailwind later.
Customer demand/macro	Q1: “methodical” health system approach to AI purchasing; active pilots .	Q2: explicit statement of slower purchasing commitments amid AI evaluations; NRR down to 129% .	Demand still engaged but elongated cycles.
Operations/geo risk	—	Bangladesh unrest (75% of employees there) disrupted operations due to internet shutdowns; future impact uncertain .	New risk factor; operational resilience in focus.
M&A/Strategic	—	—	Commure merger at $2.35/share cash; expected close late Q3/early Q4, subject to stockholder approval and customary conditions .
Financial discipline	Q4: margin expansion and lower cash burn QoQ .	Q2: gross margin +20 bps YoY; operating cash burn improved YoY; opex up on growth and merger costs .	Margin progression intact; opex elevated in transition.

Management Commentary

“We believe we are approaching the proposed combination with Commure, Inc. from a position of strength, with consistent double-digit revenue growth and improving gross margins…The ultimate goal is to create the health AI operating system of the future, a single, powerful, integrated platform that drives unprecedented efficiency.” — Emmanuel (Manny) Krakaris, CEO .
Narrative from MD&A: The company expects near-term revenue growth rates to be lower in 2024 given the product mix shift and AI evaluation cycles, but sees eventual robust growth from AI products that carry higher gross margins than Live .
Risk disclosure: Civil unrest in Bangladesh disrupted operations in July; the ongoing situation poses operational and reputational risks with uncertain future impact .

Q&A Highlights

The full Q2 2024 earnings call transcript was not available in our document set and public transcript sources were not accessible; as a result, Q&A detail could not be reviewed or cited. We relied on the company’s Q2 8‑K press release and 10‑Q MD&A for qualitative context .

Estimates Context

S&P Global/Capital IQ consensus estimates were unavailable for AUGX in our tool this quarter; therefore, we are not presenting vs-consensus comparisons and cannot characterize beats/misses relative to SPGI. If you would like, we can source third-party estimate snapshots separately, but per policy we anchor on S&P Global when available (unavailable this period).

Key Takeaways for Investors

Commure acquisition is the near-term stock catalyst: $2.35/share cash consideration with expected close late Q3/early Q4, pending stockholder approval and conditions; monitor process, timing, and any legal challenges -.
Mix shift to AI products (Go, Go Assist) should structurally lift margins but tempers revenue growth near term as providers evaluate options; watch gross margin trajectory as a leading indicator of the AI transition’s economic benefits .
Operational risk in Bangladesh is real: disruptions have occurred; assess contingency planning and service delivery continuity given employee concentration and prior internet shutdowns .
Opex step-up and merger-related costs pressured losses; after close, integration milestones and opex control will be critical to reestablishing operating leverage .
KPIs remain healthy: clinicians served grew 23% YoY; APRU edged up; NRR >100% (though down YoY); sustainment of NRR during the transition bears close monitoring .
Liquidity runway looks adequate for 12+ months from filing date; debt maturity extended (term loan to Dec 1, 2026); watch covenant thresholds and cash collateral requirements with SVB .
Absent SPGI consensus, traders should focus on execution signals: margin expansion, pace of AI deployments (especially at large customers), and any updates to FY outlook post-merger close .

Supporting detail follows.

Additional Detail

Non-GAAP adjustments and impact:

Q2 adjusted operating expenses were $12.877M, excluding $1.106M share-based comp and $1.197M acquisition-related expenses; adjusted EBITDA loss was $(5.960)M .
Q1 adjusted operating expenses were $11.899M; adjusted EBITDA loss was $(5.078)M .

Balance sheet/liquidity:

Cash and cash equivalents were $28.220M at 6/30/24; restricted cash (non-current) $5.207M (cash collateral tied to SVB facility) .
Debt: loan payable $20.540M (net of discount); term loan maturity extended to Dec 1, 2026; interest-only extended to Jan 1, 2025, with potential extension .
Management believes cash provides resources for >12 months from the 10‑Q filing date; longer-term financing may be required if revenues lag .

Customer concentration and demand:

Customer A accounted for 30% of Q2 revenue; B and C ~11% and 10%; NRR 129% (Health Enterprises), signaling continued expansion within the base despite slower decisions at some providers .

Civil unrest in Bangladesh:

Approximately 75% of employees are based in Bangladesh; July 2024 unrest and internet shutdowns affected service delivery; risk remains ongoing as of filing .

Merger details:

Agreement and Plan of Merger with Commure: each share to be converted into right to receive $2.35 cash; subject to stockholder approval and customary conditions; restrictions during pendency may limit certain business actions; termination fee provisions apply -.

Citations:

Q2 2024 press release and financials:
Q2 2024 10-Q (MD&A, risk, liquidity, debt): -, , -, -
Q1 2024 press release and financials:
Q4 2023 press release (context, guidance history): -

Augmedix, Inc. (AUGX)·Q2 2024 Earnings Summary