Q1 2024 Earnings Summary
- The company anticipates continued strong performance, expecting the second quarter to be as good as the first, following a significant increase in revenue in Q1 2024.
- The Fair Deal Agreement is generating substantial interest, with expectations of increased placements over time and significant revenues starting in the second half of next year, indicating strong future growth potential.
- The largest customer accounted for more than half of the 26 systems shipped, and this customer has a nationwide presence, reflecting a robust and expanding relationship with a key partner.
- Revenue concentration risk: Over half of the 26 systems sold in Q1 were purchased by a single large customer, who has historically accounted for over 50% of Sensus Healthcare's revenues. This heavy reliance on one customer poses a significant risk if the customer reduces orders or shifts to a competitor.
- Delayed revenue impact from Fair Deal Agreement: The new Fair Deal Agreement has only secured several deals so far and takes longer to implement. Significant revenue impact from this model is not expected until the second half of next year, with major significance in 2026. This delay indicates that the benefits from this model may not contribute to near-term growth.
- Regulatory delays for TransDermal Infusion System: The company's TransDermal Infusion System is facing delays in FDA approval. Management expressed frustration with the slow process and is in a "wait-and-hold" position. This uncertainty may affect future growth prospects and delay potential revenues from this product line.
-
2024 Revenue Outlook
Q: How will 2024 quarters compare after strong Q1?
A: The first quarter set a strong pace with $10.7 million in revenue, up from $3.6 million last year. We expect the second quarter to be just as good. The third quarter is typically slower due to seasonality. We're cautious about the fourth quarter because of the upcoming election year, but it's usually our best quarter. -
Impact of Fair Deal Agreement
Q: Is Fair Deal driving first quarter performance?
A: The Fair Deal Agreement isn't the primary driver yet, but it's an indicator of future growth. We're seeing increased interest and expect significant revenues from it in the second half of next year, with major impact in 2026. -
Large Customer's Contribution
Q: Did largest customer account for half of 26 systems?
A: Yes, our largest customer is responsible for more than half of the 26 systems sold this quarter. They're a strong partner with representation across the country. -
Economics of Fair Deal Agreement
Q: How do Fair Deal economics work for customers?
A: The Fair Deal Agreement has no upfront fees or revenue commitments. It's a unique concept that benefits physicians and strengthens our balance sheet once patient treatments begin. As we say, "The more patients they do, the more they keep". -
TransDermal Infusion System Update
Q: Any update on TransDermal Infusion FDA approval?
A: We're still waiting on FDA approval for the TransDermal Infusion System. We've addressed all their questions but face delays due to their backlog. We expect approval but are disappointed with the wait.
Research analysts covering Sensus Healthcare.