Good afternoon, and welcome to the Semler Scientific Fourth Quarter 2021 Financial Results Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Before we begin, Semler Scientific would like to remind you that this conference call may contain forward-looking statements. Such statements can be identified by words such as may, will, expect, anticipate, intend, estimate, or words with similar meaning. Such statements involve a number of risks and uncertainties that could cause Semler Scientific's actual results to differ materially from those discussed here. These risks include continued uncertainty due to the ongoing COVID-19 pandemic, risks associated with Semler Scientific's new distribution arrangement, along with other risks associated with Semler Scientific business. Please note that these forward-looking statements reflect Semler Scientific's opinions only as of the date of this presentation, and undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Please refer to Semler Scientific's SEC filings for a more detailed description of the risk factors that may affect Semler Scientific's results and these forward-looking statements. During the call, Semler Scientific will also discuss certain non-GAAP financial measures, which illustrate the effects of inventory write-down in the fourth quarter on its cost of revenues, earnings per share, basic and diluted, and adjusted income as a percentage of revenues. These non-GAAP financial measures were not prepared in accordance with GAAP and should be considered in addition to and not in lieu of GAAP financial measures. Semler Scientific's press release, which is also available on the Investor Relations section of its website, includes reconciled adjustments. Now I'd like to introduce Doug Murphy-Chutorian, CEO of Semler Scientific. Good afternoon, everyone. Thank you for joining us for the Fourth Quarter and Year-End Results Call. I'd like to introduce you to Dennis Rosenberg, who is our Chief Marketing Officer, who'll be speaking for us today. Dennis. Thanks, Doug. We always like to begin our calls with a reminder about Semler's strategy. Semler is a company that provides technology solutions to improve the critical effectiveness and efficiency of healthcare providers. Our mission is to develop, manufacture, and market innovative products that assist our customers in evaluating and treating chronic diseases. We believe that our technology and software solutions enable our customers to identify when preventive care options are appropriate and to intervene before events like heart attacks and strokes occur. We're pleased to report that the company's financial performance during 2021, based on revenue and net income, was the best in our company's history. Comparing results for the year ended December 31st, 2021, to the corresponding period of 2020, the highlights of today's report are as follows. Revenues were higher by 37%, increasing to $53 million. Net income was higher by 23%, increasing to $17.2 million. Cash at the end of the year was $37.3 million, increasing by $15.2 million. Now, Andy Weinstein, our Senior Vice President of Finance and Accounting, will describe our financial performance in more detail. Andy. Thanks, Dennis. Please refer to the financial results described in the press release that was distributed at market close today. For the quarter ending December 31st, 2021, compared to the corresponding period of 2020, revenue was $11.5 million, a decrease of $500,000 or 4% from $12.1 million. Operating expenses, which includes cost of revenue, was $9.8 million, an increase of $3.7 million or 62% from $6.1 million. It should be noted that the fourth quarter of 2021 reflects a write-down of $1.2 million of inventory due to our termination of a distribution agreement. Excluding this write-down as a percentage of revenues, adjusted cost of revenues is unchanged at 8%. Net income was $1.5 million, a decrease of $3.5 million or 72% from $5.4 million. Net income per share was $0.22 per basic share and $0.18 per diluted share, which compares to $0.81 per basic share and $0.66 per diluted share during the same period last year. Please note that excluding the inventory write-down of $1.2 million, which accounted for $0.18 per basic share before taxes and $0.15 per diluted share before taxes, net income was $0.40 per basic share and $0.33 per diluted share. As a percentage of revenues, adjusted net income was 23%. For the quarter ended December 31st, 2021, basic share count was 6,757,821 shares, and the diluted share count was 8,148,048 shares. Analyzing the expense categories and earnings in the fourth quarter of 2021 as a percentage of quarterly revenue. Cost of revenue was 19% of quarterly revenue, excluding the write-down of the $1.2 million in inventory as a percentage of revenues, adjusted cost of revenues was unchanged at 8%. Engineering and product development expense was 10% of quarterly revenue. Sales and marketing expense was 35%. General and administrative expenses was 22%, and net income was 13% of quarterly revenue. For the year of 2021 compared to 2020 annual revenue was $53 million, which is an increase of $14.4 million or 37% compared to $38.6 million. Operating expenses, which includes cost of revenue, was $33.6 million, an increase of $11 million or 48% compared to $22.6 million. The primary reasons for this change were due to increased expenses associated with our steadily expanding business, such as increased personnel costs as headcount increased to 124 from 86 in inventory and inventory charges such as the $1.2 million write-down in the fourth quarter of 2021 due to our termination of the distribution agreement. Pre-tax net income was $19.5 million, an increase of $3 million or 18% compared to $16.5 million. Net income of $17.2 million was an increase of $3.2 million or 23% compared to $14 million. Net income was $2.56 per basic share and $2.12 per diluted share, compared to $2.13 per basic share and $1.74 per diluted share. Excluding the inventory write-down of the $1.2 million, which accounted for $0.18 per basic share before taxes and $0.15 per diluted share before taxes, adjusted net income was $2.74 per basic share and $2.27 per diluted share. As a percentage of revenues, adjusted net income was 35%. In 2021, earnings per share was calculated using a basic share count of 6,731,693 shares, and a diluted share count was 8,138,608 shares. Analyzing the expense categories and earnings in 2021 as a percentage of annual revenue. Cost of revenue was 12% of annual revenue. Excluding the write-down of the $1.2 million in inventory due to our termination of the previously discussed distribution agreement as a percentage of revenues, adjusted cost of revenues was unchanged at 9%. Engineering and product development expense was 7% of annual revenue. Sales and marketing expense was 27%. General and administrative expense was 17% of annual revenue, and net income was 32% of annual revenue. As of December 31st, 2021, Semler had cash of $37.3 million, which represents an increase of $15.2 million compared to $22.1 million as of December 31st, 2020. Our stockholders' equity is $45.6 million as of December 31st, 2021. We expect to file our annual report on Form 10-K or around March 4th, 2022, which will include our cash flow statement and more discussion of our cash and liquidity. In 2021 our largest customers comprised 40.8% and 28.6% respectively of annual revenues and 48.6% and 21.7% of fourth quarter revenues. In 2021 compared to 2020, revenue from fixed price software license fee arrangements were approximately $30.5 million, an increase of $4.8 million or 19%. Variable fee software license revenue were approximately $21.5 million, an increase of $9.9 million or 85%. Equipment and other sales were $1 million, a decrease of $300,000 or 24%. In the fourth quarter of 2021 compared to the corresponding period of 2020, fixed fee software license revenue were approximately $7.9 million, an increase of $0.9 million or 13%. Variable fee software license revenue were approximately $3.5 million, a decrease of $1 million or 23%. Equipment and other sales were $100,000, which is a decrease of $400,000 or 74%. In 2020, due to the effects of the COVID-19 pandemic, variable fee license revenues had decreased sharply in the first half of 2020 and rebounded strongly in the second half of 2020. The inverse happened in 2021 as the first half saw increased testing volume by our variable fee license customers compared to the second half of 2021. This fact makes quarterly comparisons in 2021 to the corresponding period of 2020 less meaningful in our opinion. We believe that the new pattern in the home testing market, as evidenced by the higher volume of testing seen earlier in the year with fee per test revenue, is due to a COVID-19 related timing change in the behavior of insurance plans when ordering QuantaFlo testing from our health risk assessment customers. Notably, in January 2022 compared to December of 2021, fixed fee monthly license revenues increased by approximately 1%, while variable fee license software revenue increased by approximately 87%. Comparing January 2022 to 2021, fixed fee monthly license revenues increased by approximately 13%, while variable fee software license revenues increased by approximately 6%. All numbers for January 2022 are preliminary and unaudited. Although we do not provide formal guidance, we are intent on continuing annual revenue growth, continued profitability, and generating cash during 2022. Now I will ask Dennis to continue the discussion and provide concluding remarks. Dennis? At the end of 2021, headcount was 124 employees, compared to 119 at the end of third quarter 2021. We continue to operate as close as to normal as possible, notwithstanding the ongoing COVID-19 pandemic and ever-changing rules and regulations. We've been a virtual company for more than 11 years, and we're comfortable with communicating and working out of our homes. Also, we have web-based training in place for our customers and are experienced in using it. As Andy mentioned, in previous years, our variable fee per test revenue was always greater in the second half of the year. We believe the new pattern for variable fee license revenues in 2021 was due to effects of a COVID-19 related timing change in the behavior of insurance plans when ordering QuantaFlo testing from our health risk assessment customers. However, we do not know if this newly observed pattern will continue in 2022 or in future years. Our R&D goals are to continue to upgrade the existing product and data services, to commercialize other internally developed services and products, and to in-license or distribute new services and products which we believe can provide enhanced value to our customers. In the fourth quarter, as Andy mentioned, we terminated one of our distribution agreements with a private company. As previously announced, we began adding customers to a new product that we are distributing, Insulin Insights. Insulin Insights is a software program that a healthcare provider can use to optimize outpatient insulin dosing. We previously made an investment in Mellitus Health in October 2020, and in April 2021, we entered into a distribution agreement pursuant to which we prepaid for $2 million of Insulin Insights product licenses. By the end of the fourth quarter, we signed up several customers for this software product, and the service to these customers may begin in the first quarter of 2022. We also made investments in fall 2020 in another private company, now known as SYNAPS Dx, whose product, DISCERN, is a test for early Alzheimer's disease. Our new initiatives are early and not yet material to our business. However, we believe our current products and services, and any future products or services that we may offer, position us to provide valuable information to our current and growing customer base, which in turn permits them to better guide patient care. We also believe that PAD testing has potential to become standard of care. In February 2022, an independently conducted peer-reviewed clinical study was reported that used QuantaFlo for the prospective screening for undetected and asymptomatic PAD in a Medicare Advantage population with three-year follow-up. In this study, 13,971 patients were tested, and 31.6% were found to have PAD. In positive PAD patients versus negative patients, there was an increased risk of 60%-70% for all-cause mortality or morbidity at one year, and a 40%-50% increased risk of all-cause mortality or morbidity at three years. The authors concluded that a positive screening result of previously undetected lower extremity PAD was independently associated with short-term and long-term increased risks for mortality and major adverse cardiovascular events, MACE, in individuals aged 65 years and older living in a large metropolitan area. Furthermore, they added, a positive PAD screen with QuantaFlo has the potential for PAD risk management at the population level. Semler Scientific believes that this study supports the use of QuantaFlo and highlights the benefit that the product brings to our customers and the patients they care for. Thus, it may drive further adoption of QuantaFlo by existing and new customers. Overall, we believe annual revenue will continue to grow in 2022 because of increased numbers of installations of our product, more usage of our product, and recurring revenue from the licensing businesses. Our goals continue to be to make new additions to our customer base, to expand orders from existing customers, introduce additional products to our customers, and to further establish our QuantaFlo product as a standard of care in the industry. In 2022, Semler Scientific expects continued profitability and generation of cash from operating activities. Operating expenses are expected to increase from current levels due to wage inflation pressure in the job market and our continuing desire to build infrastructure to support new business opportunities. We believe that the market for vascular disease testing is larger than our current market penetration, so there is room for continued growth. We continue to invest in R&D with the goal of providing new products that enhance value to our customers now and in the future. 2021 was a record year for our company in terms of revenues, net income and cash generation. We are optimistic for the future. Thank you for your interest in the company and your continuing support. Now, operator, please open the lines. Doug, Andy and I will be happy to address your questions. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. Okay. Our first question comes from Brooks O'Neil with Lake Street Capital Markets. You may now go ahead. Good afternoon, guys. I have a couple questions. I guess I'll start off by just asking if you can provide any color on why you terminated the distribution arrangement that you highlighted. Hey, Brooks. How are you? We felt that our attention was better served to the products that we've highlighted today. That's where we're directing our attention. Okay. Makes sense. Then maybe you highlighted some of the dynamics in January, in terms of the business. I'm just curious if you see anything about the fixed fee business that causes you to think that the order pattern may have changed in that business as a result of COVID or other factors. We have not seen anything to indicate that as far as the fixed fee license end of the business. Okay, great. Then, obviously gonna be a lot of interest in some of these new products and services. I'll just take a stab at one. As it relates to the diabetes product, software product, can you tell us anything about sort of the underlying financial dynamics of that product? Would you expect it to have similar financial characteristics to QuantaFlo, or will it be somewhat different? I'd say there are some similarities and differences. The similarities being it's also a software product, so ultimately the margins should be in line with software products. The financial benefit to the customer may be slightly different, but we believe there's gonna be benefit in terms of cost savings as well as improvements potentially in HEDIS measurements or quality measures which impact revenue as well. Sure. I know you don't wanna talk much about your existing customers, but would it be fair to guess that some of your existing customers have shown interest in the new diabetes software product? Yes, they have. Okay, cool. Let me just ask one more. Obviously the long-term study on QuantaFlo testing and the patient population and the article you highlighted, have you had any chance to get any feedback or reaction from customers? Do you think that's gonna be a driver of more testing, more new customers, that type of thing? Is it too early to say? I think it's too early to say, but ultimately this type of support can only be helpful in terms of supporting adoption. Great. Okay, that's all I've got. Thanks a lot for taking my questions. Thank you. Our next question comes from Kyle Bauser with Colliers Securities. You may now go ahead. Great. Thanks. Thanks, Doug Murphy, Dennis Rosenberg and Andy Weinstein for the updates. Maybe, I'll follow up on, Brooks' question on some of the new products. For Insulin Insights, sounds like, you know, the most reasonable launching point would be to your fixed fee business, in the office or outpatient setting. Can you talk a little bit about the economics and how they work for the payers? I mean, is there a way to go after another HCC code here? I guess I'm just kinda curious, what do the economics look like from the payer perspective on that? Well, the economics are, as Dennis said, the HEDIS measurements, as you know, are the things that we think they'll be interested in for finding business. The thing is also the cost savings of treating diabetes and dosing the insulin properly is most important. There's also cost savings as well as that. These are whoever has a diabetes program for managing their patients should be very interested in what we do because we make it easier for the primary care guy to take care of these people. Fully 90% of the diabetics on insulin are managed by primary care, not endocrinologists. It's a very important product. Okay. Got it. I guess just following up on that, do you have an idea of, like, the cohort of patients you're gonna go after in terms of, like, age group? Is this type one, type two? Are you gonna go after Medicare Advantage patients first or just kind of all the above? All the above, because it's maybe 7.5 million diabetics that are on insulin in the United States, and they're type two. There are quite a lot of people. It will probably likely in the first quarters of 2024 it PMPM per member per month. It's a very exciting opportunity. The margins are like software margins, so it's keeping with our business model. We're very pleased with the early showing. Okay. Got it. I just looked briefly at the DISCERN product. Looks like you're kinda going after the other channel with that, the home testing market. Is that a diagnostic that the in-home evaluators can bring with them? Or is this more an opportunity for you to send the test directly to the patients that have already done in-home wellness exams? Just kinda curious, how you plan to roll that out. I think that we're not distributing that product yet, so we have no plan to roll it out soon. The thing is, it's also a product that will appeal to the primary care practitioners because 90% of the patients with Alzheimer's go to see primary care and get managed by primary care as opposed to a neurologist. It's a very important product. It's very accurate. We'll put a landing page on to get to their site on our site so you can see for yourself what they're doing. I think we will not talk more about it than that. Okay, got it. Just lastly, and I'll jump back in queue. I appreciate the color on January volumes and kind of what you're seeing. Now that you've kind of relisted on Nasdaq, I'm just kinda curious if you've thought about eventually putting out formal kind of full-year guidance. Any thoughts there would be appreciated. Thank you. Yeah. We've thought about it. I think we sort of decided on this approach because in terms of giving you an idea what January was compared to last January or compared to last month, because we wanted to say that seasonality is real and this year, and it looks like we had a huge increase from December to January in our businesses, too, for fee per test. It's probably following the same pattern, but we can't be sure. Okay, understood. Thanks so much. Jump back in queue. Thank you. Kyle. Our next question comes from Marc Wiesenberger with B. Riley Securities. You may now go ahead. Thank you. Good afternoon. Just going back to the seasonal dynamics you talked about, is that across all of your variable fee customers or is that primarily just with your largest variable fee customer? Dennis? It is primarily with our largest variable fee. You know it's of course early data of just one month. It's a broad indicator, but I don't think we can make too many assumptions about other customers or what the rest of the year, let alone first quarter, is gonna bring. Got it. Okay. For some context, I know you're comparing January to December, but is it appropriate to think that maybe that's a difficult or kind of an apples to oranges comparison because December has the holidays and things? I'm just wondering how much does December actually represent in terms of kind of variable fee revenue in the quarter? Andy? Yeah, I think that is a good question. That's also why we compare January to January. Look, you know, there's people that travel in December, there's less business days. You know, each year, although we haven't seen it drastically dip, but the fact of the matter is there are less days that people would probably be getting tested in December. Right. How much does that represent in terms of the quarterly variable fee revenue? It's hard to say. Like I said, it's not December, you know, usually falls off, but that's large. You know, you can make this assumption that there are a lot of days in December doing testing. It's hard to say exactly what percentage it is. In previous years, we didn't see a falloff in the fourth quarter compared to the first quarter. This is the first year we saw it. It is new to us. We don't have any trends to report because it didn't happen before. Got it. Your largest variable fee customer publicly announced a contract extension with what's believed to be your largest fixed fee customer. Can you shed some light on that dynamic? Does that potentially push or could that push the variable fee growth rate in excess of what was seen in 2020, which was about 30% year-over-year? I think that we have to reserve comments about our confidential customers. I think we are encouraged by that, but we don't speak for them. You have to listen to their earnings calls and make your judgment accordingly. Got it. Okay. Moving on. Can you provide insight into the percentage of patients that had QuantaFlo tests in 2021 relative to the prior year? How does that compare to kind of previous years? Meaning, if someone was tested in 2020, did 80% of those people get retested in 2021? Kind of how did that compare to prior years? We don't give out numbers for testing numbers, but we try to keep them. It's growing every year. I could say that last year was a fantastic year in terms of quantitative tests done, but we don't quantify it more than that. Has the entrance of new or the development of newer Medicare Advantage payors directly resulted in new customer wins? What's your expectation for kind of the Medicare Advantage member churn impacting your business in 2022? Dennis, can you comment? We have continued to see growth within the current customers as well as with new customers. As you know, Medicare Advantage overall is generally picking up steam. There's movement from one company to another. Different companies are focusing in different ways. We're feeling that between our ability to test in office with fixed fee, test at home through the HRA partners, we're gonna be able to get to a continually larger number of Medicare Advantage patients no matter which program they're under. To us, the growth of Medicare Advantage in general is a good thing, and we're able to get to an increasing number of them annually. Okay. Could you talk about net revenue retention at all and maybe stratify that kind of across your, let's say, top five customers and then maybe how that looks beyond that? Dennis, can you comment about the churn we're seeing or not seeing? Maybe Andy can make a comment as well. You know, as we talked about in the past, we do not see churn in any significant numbers. If we see programs where a small percentage of the machines are not being used, it usually has to do with consolidation on the customer's part or you know, individual practices shutting. We are not seeing where people are starting PAD testing programs and then saying, "No, this is not making sense for us. We're gonna end it." I think highlighting as we have in this call, this new publication that's coming out, that's out, large study of 13,000 + patients is only gonna continue to reinforce the importance of doing PAD testing early, as we are with QuantaFlo. Okay. Helpful. Just a final one from me. In the release, you noted that operating expenses are gonna increase. In terms of the growth rate, ex cost of product sales, OpEx averaged a new kind of growth rate of 34% from 2017 through 2019 versus 42% in 2021. Where should we think about the growth rate for OpEx, ex cost of product sales landing in 2022? I think it's a matter of what the revenue goals is. For example, you heard Dennis talk about this new article that is maybe going to point to a adoption of new customers. As I said in the quarterly, we spent a lot of money increasing in preparation for this papers. I think we have a good feeling that's gonna increase. We hope it's gonna increase because we're only gonna increase it if we need the people to get the work done. Okay. Andy? That's it. Okay. If you could, Andy would expand upon that'd be great. That's it from me. Thank you. Yeah. Andy? Yeah. I mean, what we mentioned in the call is there is a little bit of pressure with salaries going up. I agree with Doug that if we hire more people, that's a good thing because that means we're having the revenue and new customers to support it. That concludes our question and answer session. I will turn the call back over to Dennis Rosenberg for any closing remarks. Thank you for joining us today. We look forward to updating you soon on our continued progress. That ends the call. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.