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HELIUS MEDICAL TECHNOLOGIES, INC. (HSDT)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue was $0.135M (+21.6% YoY), with net loss of $2.516M and diluted EPS of $(3.08); operating loss improved vs Q1 2023 driven by lower SG&A and R&D .
  • Reimbursement momentum: CMS assigned HCPCS codes (effective Apr 1) and issued preliminary Medicare payment determinations; management expects final rates effective Oct 1, 2024, positioning reimbursement as the key near-term catalyst .
  • Strategic access: Partnership with Lovell Government Services to make PoNS available to VA/DoD; training and contracting expected to enable initial VA prescriptions beginning around early June following internal team training .
  • Funding runway extended: Closed a $6.4M public offering (~$5.6M net), extending cash runway into 2025 and supporting the stroke registrational program targeting early 2025 FDA submission .
  • Estimates context: S&P Global consensus for Q1 2024 EPS/revenue was unavailable; comparisons to Street estimates cannot be provided (limited micro-cap coverage likely) [GetEstimates unavailable].

What Went Well and What Went Wrong

What Went Well

  • CMS progress: “We marched one step closer to an important milestone when CMS released its preliminary Medicare payment determinations... Once finalized, the payment rates are expected to be effective October 1” (CEO) .
  • Access channels: Partnered with Lovell Government Services to supply PoNS to VA/DoD; management highlighted training and rollout plans to begin processing prescriptions following internal training completion (corrected to early June) .
  • Stroke program advancement: Added six more sites in U.S./Canada and aligned with FDA to streamline registrational program; management remains on track for early 2025 FDA submission using breakthrough designation .

What Went Wrong

  • Revenue base remains muted due to cash-pay economics; cost of revenue largely flat given fixed overhead, constraining gross profit to $12K in Q1 .
  • Continued net losses: Q1 net loss of $2.516M and operating loss of $3.416M; cash used in operations was $3.0M, reflecting early-stage commercialization ahead of reimbursement coverage .
  • Lack of explicit financial guidance (revenue/margins) and no non-GAAP metrics to frame near-term profitability, limiting visibility until CMS final rates and broader third-party coverage arrive .

Financial Results

Core P&L and Liquidity (Quarterly trend)

MetricQ3 2023Q4 2023Q1 2024
Revenue ($USD thousands)$143 $134 $135
Gross Profit ($USD thousands)$(44) $44 $12
Operating Loss ($USD thousands)$(3,153) $(2,246) $(3,416)
Net Loss ($USD thousands)$(3,663) $(1,045) $(2,516)
Diluted EPS ($USD)$(5.49) $(1.47) $(3.08)
Cash And Equivalents ($USD thousands)$6,596 $5,182 $3,638
Cash used in Operating Activities ($USD millions)$2.5 $2.0 $3.0

Q1 year-over-year comparison

MetricQ1 2023Q1 2024YoY Change
Revenue ($USD thousands)$111 $135 +21.6% (computed from $135/$111; source: )
Cost of Revenue ($USD thousands)$122 $123 +0.8% (computed; source: )
Gross Profit ($USD thousands)$(11) $12 N/M (computed; source: )
Operating Expenses ($USD thousands)$3,799 $3,428 −9.8% (computed; source: )
Operating Loss ($USD thousands)$(3,810) $(3,416) +$394 improvement (computed; source: )
Net Loss ($USD thousands)$(2,494) $(2,516) −$22 (computed; source: )
Diluted EPS ($USD)$(4.42) $(3.08) +$1.34 (computed; source: )
Cash used in Operating Activities ($USD millions)$3.2 $3.0 +$0.2 improvement (computed; source: )

Revenue breakdown (Q1 2024 vs Q1 2023)

Revenue Detail ($USD thousands)Q1 2023Q1 2024
Product Sales, net$106 $124
Other Revenue$5 $11
Total Revenue$111 $135

Margins (derived from reported figures)

MetricQ3 2023Q4 2023Q1 2024
Gross Margin %(−30.8%) (computed from −44/143; source: )32.8% (computed from 44/134; source: )8.9% (computed from 12/135; source: )
EBIT Margin %(−2,206.3%) (computed from −3,153/143; source: )(−1,675.4%) (computed from −2,246/134; source: )(−2,529.6%) (computed from −3,416/135; source: )

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CMS Final Medicare Reimbursement Determination (Controller/Mouthpiece)Effective dateTargeted Oct 1, 2024 (stated in Q4 update) Expected Oct 1, 2024; presented arguments for higher rates at May 29 CMS meeting Maintained timing; pursuing higher rates
VA/DoD Channel Activation2024 rolloutPursuing VA supplier relationship Partnered with Lovell; FSS/GSA contracting; training to enable initial prescriptions after early June New/Accelerated access channel
Stroke FDA Submission (U.S.)Early 2025Early 2025 submission using breakthrough designation On track; registrational program expanded; streamlined plan with FDA Maintained timeline; program scope streamlined
Cash RunwayThrough 2024Into Q3 2024 via ATM Into 2025 post $6.4M offering (~$5.6M net) Raised runway

Note: No explicit revenue, margin, OpEx quantitative guidance ranges were provided for Q1 or FY; management commentary focused on reimbursement milestones and regulatory timelines .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
Reimbursement (HCPCS/CMS)UPC codes established; dual reimbursement paths (pharmacy/device) HCPCS codes assigned; aiming for Oct 1, 2024 Medicare effective date Preliminary CMS payment determinations; advocacy for higher rates; final expected Oct 1, 2024 Advancing toward finalization
VA/DoD AccessEarly plans; VA MS Centers of Excellence targeted Pursuit of VA supplier; broad access emphasized Lovell partnership finalized; FSS/GSA contracting; initial prescriptions expected after early June Execution beginning
Stroke ProgramCanadian adoption; Quebec LOI; registrational planning FDA alignment; streamlined registrational program; open-label + MUSC RCT; early 2025 submission Added six sites; enrollment progressing; Canadian study expansion Building evidence; on track
PT Training & CoverageUpScript telehealth; goal to expand PoNSTEP sites PoNSTEP full enrollment; more KOL engagement Modular training (<3 hours), nationwide therapist footprint growing Scaling footprint
Canada Health EconomicsPBC/HTC TBI white paper with strong RTW outcomes Emphasis on cost-effectiveness and fall-risk reduction Using Canadian real-world evidence to bolster US stroke and reimbursement Reinforcing narrative

Management Commentary

  • “We believe the establishment of Medicare payment rates will make it easier to expand reimbursement across third-party payers, creating a pathway to positive cash flow as we continue pursuing stroke authorization in the U.S.” – CEO Dane Andreeff .
  • “We are targeting regulatory submission by early 2025... utilizing PoNS breakthrough designation in stroke later in the year.” – CEO Dane Andreeff .
  • “Total revenue for the first quarter of 2024 was $135,000... operating loss... $3.4 million... net loss... $2.5 million or $3.08 per share.” – CFO Jeff Mathiesen .
  • “Last Thursday, we closed on a $6.4 million public offering and received net proceeds of approximately $5.6 million, which will extend our cash runway into 2025.” – CFO Jeff Mathiesen .

Q&A Highlights

  • VA rollout timing: Management corrected target start to early June with contracting/training underway; PTs must be trained before orders, but modular training enables rapid readiness .
  • PT training demand: Growing interest across Canada and U.S.; focus on filling geographic coverage so patients can reach in-clinic therapy within reasonable travel .
  • Reimbursement pathway post-CMS: Plan to partner with regional/super-regional PT chains to accelerate nationwide coverage once final Medicare rates become effective .

Estimates Context

  • S&P Global consensus for Q1 2024 EPS and revenue was unavailable via our data access (tool limit exceeded), and coverage appears limited for this micro-cap. As a result, comparisons to Wall Street estimates cannot be provided for this quarter [GetEstimates unavailable].
  • Implication: Near-term revisions likely hinge on CMS final pricing (Oct 1 effective date), VA/DoD uptake, and stroke program milestones, rather than Street estimate beats/misses .

Key Takeaways for Investors

  • CMS final reimbursement determination expected to be effective Oct 1, 2024 is the primary catalyst; management is advocating for higher rates using market pricing and supply categorization for the mouthpiece .
  • VA/DoD channel activation via Lovell Government Services should begin contributing following early-June readiness; early wins here can validate demand and support broader payer negotiations .
  • Stroke registrational program is progressing with added sites and FDA-aligned, streamlined plan; early 2025 submission using breakthrough designation supports medium-term market expansion .
  • Despite muted revenues under cash-pay dynamics, Q1 showed operating expense discipline; sufficient capital runway into 2025 reduces financing overhang during pivotal reimbursement and regulatory events .
  • Watch for Canadian evidence and PBC/HTC outcomes to strengthen U.S. reimbursement arguments; fall-risk and RTW economics are compelling narratives for payers .
  • Trading setup: Near-term sensitivity to CMS rate decision and VA uptake; medium-term thesis turns on stroke approval and rapid PT network scaling .