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Semler Scientific, Inc. (SMLR)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue fell 44% year-over-year to $8.8M, with diluted EPS of -$6.74 driven by a $29.75M DOJ contingent liability and a $41.8M unrealized loss on bitcoin fair value; pre-tax loss was $74.9M and net loss was $64.7M .
  • Non-GAAP income from operations was $0.132M after excluding the DOJ contingent liability and stock-based compensation, highlighting core healthcare profitability despite exceptional items .
  • BTC holdings increased to 3,192 as of quarter-end and 3,808 by May 12 (fair value ~$387.9M), with YTD BTC Yield of 22.2% and a new $500M ATM program and $100M converts bolstering treasury capacity; management emphasized aggressive bitcoin accumulation as a strategic priority .
  • Catalysts: launch of a bitcoin dashboard for real-time disclosures, resumed settlement discussions with DOJ (agreement in principle at $29.75M) and preparation for a collateralized term loan with Coinbase to fund settlement; “green shoots” in cardiovascular product line for large enterprise customers .

What Went Well and What Went Wrong

What Went Well

  • Continued execution of bitcoin treasury strategy: holdings reached 3,192 BTC at 3/31 and 3,808 BTC by 5/12; YTD BTC Yield 22.2% and Q1 BTC $ Gain of $41.6M (illustrative KPI) .
  • Financing capacity expanded: $500M ATM effective (new syndicate) and $100M 4.25% 2030 converts with capped calls; management confident in using financing to accretively acquire more BTC .
  • Healthcare “green shoots”: new cardiovascular product line introduced to large enterprise customers; pursuing 510(k) extension to aid in heart failure diagnosis in 2025 .
    • CEO: “Our healthcare business is seeing green shoots… we are expecting growth and cash generation… which will add to our bitcoin treasury strategy.” .
    • COO: “We are starting to see green shoots… diversifying our customer base and introducing additional FDA‑cleared products…” .

What Went Wrong

  • Core revenue pressure continued: Q1 revenue down 44% YoY to $8.8M; management attributed declines to CMS rate changes impacting customers’ risk-adjustment economics .
  • Significant exceptional charges: $29.75M DOJ contingent liability booked in OpEx and $41.8M unrealized BTC fair value loss flowed through other expense, driving a -$74.9M pre-tax loss .
  • Elevated customer concentration: two largest customers comprised 42% and 32% of Q1 revenue, underscoring reliance on key accounts during a revenue downturn .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD)$13.512M $12.413M $8.835M
Diluted EPS ($)$0.72 $3.41 -$6.74
EBIT ($USD)$5.065M (income from operations) $3.542M (income from operations) -$31.101M (loss from operations)
EBIT Margin (%)37.5% (5.065/13.512) 28.5% (3.542/12.413) -352.2% (-31.101/8.835)
Total Operating Expenses ($USD)$8.447M $8.871M $39.936M (incl. $29.75M DOJ contingency)
Cash & Equivalents ($USD)$6.568M $8.819M $9.737M

KPIs and bitcoin treasury metrics:

KPI12/31/20243/31/20255/12/2025
Total BTC Held (units)2,298 3,192 3,808
BTC Yield % (QTD/YTD)N/A21.9% QTD; 21.9% YTD 0.2% QTD; 22.2% YTD
Assumed Diluted Shares Outstanding (‘000s)10,248 11,671 13,896
Digital Assets Fair Value ($USD)$214.633M $263.504M $387.9M (as of 5/12/25)

Customer concentration:

MetricQ3 2024Q4 2024Q1 2025
Top 2 Customers (% of revenue)44%, 29% 39%, 31% 42%, 32%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q1 2025None providedNone providedMaintained (no formal guidance)
Operating Income/EBITQ1 2025None providedNon-GAAP income from operations $0.132M (excl. DOJ contingency and SBC)New non-GAAP disclosure
OpExQ1 2025None providedIncludes $29.75M DOJ contingency; ~$0.4M legal fees; ~$0.4M sales/use tax accrualNew disclosure
Tax RateQ1 2025None providedEffective tax benefit 14%New disclosure
Financing2025Prior $150M ATMNew $500M ATM; $100M converts (4.25% due 2030)Raised
DOJ Settlement2025Initial settlement talks ceased Feb 11Agreement in principle to pay $29.75M; plan for Coinbase collateralized loan to fundNew disclosure
Dividends2025NoneNoneMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Bitcoin Treasury StrategyAccretive use of operating cash + ATM to buy BTC; exploring more financing Upsized converts ($100M), strong demand; continued BTC accumulation “Bitcoin-first” strategy; highest leverage among BTC treasuries; aggressive use of $500M ATM Escalating focus and capacity
CMS/Reimbursement HeadwindsNoted ongoing demand but acknowledged core declines; maximize OpInc Expect further pressure in 2025 from CMS changes Revenue down; pressure from 2024 CMS rate changes reiterated Persistent headwind
Product/R&D (Cardio)Pursuing 510(k) extension for QuantaFlo (H1’25 target) Seeking expanded indications; marketing other FDA‑cleared CV products “Green shoots” in cardiovascular offerings; pursuing 510(k) for heart failure aid in 2025 Gradual progress
Capital Markets (ATM/Converts)$150M S-3/ATM; ~$2.5M sold in Q3; use proceeds for BTC Sold ~2.2M shares; converts with 75% premium cap calls New $500M ATM; ~1.8M shares sold; converts completed; BTC purchases ongoing Capacity increased
Regulatory/Legal (DOJ)No material new disclosureNo material new disclosureAgreement in principle to settle DOJ at $29.75M; plan to borrow via Coinbase collateralized loan Resolution path progressing

Management Commentary

  • Chairman: “We are a bitcoin‑first company… we have intelligently and accretively acquired 3,808 bitcoins… we believe [we are] the fourth largest bitcoin treasury company in the U.S.” .
  • CEO: “Our healthcare business is seeing green shoots… expecting growth and cash generation from these FDA‑cleared products and services, which will add to our bitcoin treasury strategy.” .
  • CFO: “Operating expenses… included a $29.8M contingency reserve… and a net unrealized loss of $41.8M from the change in fair value of our bitcoin holdings… it does not impact our cash flow from operations.” .
  • CFO: “We completed a convertible senior notes offering with $100M… the conversion premium is 75%… we used net proceeds to purchase additional bitcoins.” .

Note: Management referenced an “effective conversion price of approximately $170 per share” on the Q1 call, while filings state an initial conversion price of ~$76.44 and capped call cap price of ~$107.01; we anchor on filed terms .

Q&A Highlights

  • How aggressively will BTC accumulation continue? Management plans to use the $500M ATM and additional financing sources to “aggressively increase” BTC holdings .
  • Healthcare trajectory in 2025: priority is to minimize declines in QuantaFlo while expanding cardiovascular offerings and customer diversification; manage healthcare to generate cash for corporate uses including BTC .
  • Volatility in BTC accounting: CFO emphasized fair value accounting’s impact on reported net income vs. cash flow, citing large swings tied to BTC price .

Estimates Context

  • Q1 2025: Consensus EPS and revenue estimates were not available/limited; actuals were revenue $8.835M and diluted EPS -$6.74, precluding a standard beat/miss assessment against Wall Street .
  • Forward consensus (illustrative for context):
    • Q2 2025: Revenue $8.40M*, EPS -$0.27*; Q3 2025: Revenue $7.87M*, EPS -$0.15*. Actuals to date show Q2 revenue $8.22M and EPS -$0.227, and Q3 revenue $7.49M and EPS -$0.299*, suggesting negative EPS and mid‑single‑digit million revenue profile continuing into 2H’25*. Values retrieved from S&P Global.
MetricQ2 2025Q3 2025
Revenue Consensus Mean ($USD)$8,400,670*$7,865,330*
Primary EPS Consensus Mean ($)-$0.27*-$0.145*

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Core healthcare revenue declined materially due to CMS headwinds, but non-GAAP operations remained near breakeven, indicating underlying cost control excluding exceptional items .
  • The investment narrative is dominated by BTC accumulation: expanded ATM to $500M and completed $100M converts to scale holdings, with BTC KPIs (Yield/Gain) now formally highlighted and a public dashboard launched .
  • Near-term stock drivers: DOJ settlement finalization and funding (Coinbase collateralized loan), pace of BTC purchases, and BTC price—these can swing reported earnings via fair value marks .
  • Watch customer concentration risk amid revenue pressure; execution on cardiovascular product expansion and 510(k) heart failure extension is critical to stabilizing and re‑growing healthcare cash generation .
  • Disclosures indicate aggressive capital markets activity; be mindful of dilution vs. BTC-per-share accretion and monitor ATM usage cadence and pricing .
  • For modeling, anchor healthcare trends on mid‑single‑digit to high‑single‑digit quarterly revenue with negative EPS near term per consensus, and treat BTC fair value volatility as a non-operating swing factor [GetEstimates summary above].
  • Note the conversion terms in filings ($76.44 initial conversion price; $107.01 capped call cap) vs. the higher “effective” price mentioned on the call; rely on filed terms for dilution scenarios .

View source documents: Q1 press release and financials , Q1 8‑K (Item 2.02 and Exhibit 99.1) , Q1 call transcript , prior quarter Q4 press release/call , and Q3 press release/call .