Good day, and welcome to the Semler Scientific First Quarter 2022 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 touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. 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 and more recently, the Russian invasion of Ukraine, risks associated with Semler Scientific's extension of QuantaFlo to additional cardiovascular diseases, and its distribution of Insulin Insights, as well as other risks associated with Semler Scientific's business. Please note that these forward-looking statements reflect Semler Scientific's opinions only as of the date of this presentation, and it 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. Now, I would like to introduce Doug Murphy-Chutorian, CEO of Semler Scientific. Good afternoon, everybody, and thank you for joining us on our first quarter 2022 results call. I'd like to introduce you to Dennis Rosenberg, our Chief Marketing Officer, who will be giving the call for us today. Dennis? Thanks, Doug. We are pleased to report that during the first quarter of 2022, the company's financial performance rebounded in the home testing market with higher volume of sequential revenues, which grew 67% compared to the fourth quarter of 2021. This was consistent with our expectations regarding the pattern of seasonality in this market and our thoughts about timing of orders by large insurance plans to our health risk assessment customers. Comparing results for the quarter ended March 31st, 2022, to the corresponding period of 2021, the highlights are as follows. Revenues were higher by 6%, increasing to $14 million. Net income was lower by 31%, decreasing to $3.4 million. Cash at the end of the quarter was $38.4 million, increasing by $11.9 million. We believe that the relatively slower growth in the period-to-period quarterly comparison was due, at least in part, to the COVID-19 pandemic and more specifically, the highly contagious Omicron variant, which peaked in most parts of the United States in 2022 to date. Our staff and many of our customers and prospects experienced a higher than normal rate of employee absence due to illness, which can have a slowing effect on our sales cycle. That being said, there were two significant milestones that we achieved so far this year that I would like to outline for you. Previously, we've described to you how some customers took years to study QuantaFlo before deciding to use it. We have noted that we funnel all the testing data through our servers and provide it back to our customers in a confidential manner, who in turn kept the data privately within their own organizations. Therefore, few knew how powerful and clinically important the data actually were. Now, a large customer has published the data underscoring why they use QuantaFlo. We refer to this as the Nevada paper. The big picture, the Nevada paper quantifies risk of peripheral arterial disease or PAD on death and other adverse outcomes. The Nevada paper justifies screening asymptomatic patients in a Medicare Advantage population using QuantaFlo, thus supporting why CMS pays extra so that these patients can be properly cared for. When the message permeates the medical community, we believe new customers might be attracted to use QuantaFlo. The second accomplishment, through our internal development efforts, QuantaFlo can now be used as an aid to identify patients who would benefit from further evaluation for another underlying cardiovascular disease. While we are not disclosing this specific disease yet, we believe this extension of QuantaFlo may make it even more valuable to assist the medical community in the future, including Medicare Advantage providers. We intend to sell this extension to our existing customer base and others as an upgrade to our software-as-a-service business model. Other key points regarding this extension are. The unserved clinical problem may be as important as PAD. A peer-reviewed publication of clinical data has been submitted and is under review. A medical aid performs the test in a primary care setting, similar to how one uses QuantaFlo for PAD, and the technology is protected by trade secrets. Now, Andy Weinstein, our Senior Vice President of Finance & 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 ended March 31st, 2022 compared to the corresponding period of 2021, revenue was $14 million, an increase of $800,000 or 6% from $13.2 million. Operating expenses, which includes cost of revenue, was $10.1 million, an increase of $2.1 million or 41% from $7.2 million. Net income was $3.4 million, a decrease of $1.5 million or 31% from $4.9 million. Net income per share was $0.50 per basic share and $0.41 per diluted share, which compares to $0.73 per basic share and $0.60 per diluted share during the same period last year. For the quarter ended March 31st, 2022, basic share count was 6,777,950, and the diluted share count was 8,116,456. Analyzing the expense categories and earnings for the first quarter of 2022 as a percentage of quarterly revenue, our cost of revenue was 7% of quarterly revenue. Engineering and product development expense was 8% of quarterly revenue. Sales and marketing expense was 33%. General and administrative expenses was 24% of quarterly revenue. Net income was 24% of quarterly revenue. As of March 31st, 2022, Semler had cash of $38.4 million, which represents an increase of $11.9 million compared to $26.5 million at March 31st, 2021. Our stockholders' equity is $49.4 million as of March 31st, 2022. On March 14th of this year, we announced a stock repurchase program of up to $20 million. We established this program because we are positive about the future for Semler. We expect to file our quarterly report on Form 10-Q on or around May 6, 2022, and this will include our cash flow statement and more discussion of our cash liquidity as well as the purchases pursuant to our stock repurchase program. In the first quarter of 2022, our two largest customers comprised 35.4% and 31.7% of revenues, respectively. In the first quarter of 2022 compared to the corresponding period of 2021, our fixed-fee software license revenues were approximately $7.9 million, an increase of $700,000 or 10%. Variable fee software license revenues were approximately $5.8 million, an increase of $200,000 or 3%. Equipment and other sales were $300,000 in both periods. We believe a new pattern emerged during 2021 in the home testing market, with higher volume of testing seen earlier in the year with the fee per test revenue. We believe this 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. However, this newly observed pattern may or may not continue in 2022 or in future years. Semler is giving financial guidance for the first time in its history. Because this is the initial guidance, we have not decided yet how often or when to update or what this entail in the future. That being said, we believe the second quarter revenue will range from $14.2 million-$15.2 million, and operating expenses, which includes cost of revenue, will range from $10 million-$10.5 million. We believe the annual revenue in 2022 will range from $58 million-$60 million, and operating expenses, which includes cost of revenue, will range from $44 million-$46 million. Now, I will ask Dennis to continue the discussion and provide concluding remarks. Dennis? Our R&D and business development 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. Also, we plan to share the Nevada paper results with our established and prospective customers, details of which are as follows. In February 2022, an independently conducted peer-reviewed study was reported that used QuantaFlo for prospectively 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 benefits 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. Also, we have signed up several smaller customers for Insulin Insights, the new product that we are distributing. Insulin Insights is a software program that a healthcare provider can use to optimize outpatient insulin dosing of diabetic patients. If all goes well with the beta launch, we plan to market it to our established base of customers. We began invoicing for initial sales of product licensing to some of our customers in Q1 2022. Our goals continue to be to make new additions to our customer base, expand orders from existing customers, introduce additional products to our customers, and 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. At the end of first quarter 2022, headcount was 122 employees, compared to 124 employees at the end of fourth quarter 2021. Operating expenses are expected to increase from current levels due to wage inflation pressure in the employment 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 goals of providing innovative products that enhance value to our customers now and in the future. The beginning of 2022 portends a record year for our company in terms of revenues and cash position. There were two significant milestones we achieved so far this year that I outlined for you earlier on this call. Number one, the Nevada paper, which may further drive adoption of QuantaFlo by existing and new customers. Two, the enhanced value proposition of QuantaFlo for our current customers for another cardiovascular disease. Accordingly, we are optimistic for our future. Thank you for your interest in the company and your continuing support. Now, operator, please open the lines. Doug, Andrew, and I will be happy to address your questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touchtone phone. 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 will pause momentarily to assemble our roster. Our first question comes from Brooks O'Neil with Lake Street Capital Markets. Please go ahead. Hi, guys. Thanks a lot for taking my questions. I have to confess upfront that I was distracted a little bit during some of the prepared remarks. If I ask something that you've already spoken about, Doug and Dennis, I apologize. I'm curious, obviously, the big thing that happened, or one of the big things that happened last year seemed to be the accelerated order pattern, relative to your fee for per test business. I see that growth did occur in Q1 this year, but the growth rate is more modest. I'm curious how you would characterize what you see in your markets and from your customers as it relates to the possibility that accelerated order patterns were maintained this year or are going back towards more normal patterns now that COVID seems to be in retreat. I think the seasonality that we saw last year is so far expected or is what we've seen in the first quarter. Whether it continues for the year, we have to see about that. As far as the general HRA market, you know, there's movement in market share between companies, so it's sometimes hard to keep track of, you know, exactly which way the market is going. We're seeing growth with all of our customers, and we are seeing new customers come on board. That is a continuing trend on both the HRA variable fee side and the fixed license side. We're seeing growth in both arenas. I think that's what we're expecting to see for the year. I think the rates, I mean, you heard our guidance. That's what we're looking for. Okay, Dennis, that's very helpful. Would you characterize obviously the very significant percentage of revenue from your two largest customers, then I assume your fee-for-test customers also are quite significant for you. Would you help us to get a sense for your estimate of the penetration you've achieved in the core PAD testing market and whether you still see significant long-term upside for Semler in your core business? We do indeed see additional penetration opportunities. We think the publication of the Nevada paper will be impactful in the market in terms of bringing even more people along. We think that the penetration level in terms of the number of people who should be tested according to guidelines, clinical guidelines that have been published by the American Heart and others, is still low. Our penetration has a lot of opportunity for the future. The question is the timing of the adoption of our large customers, and that's something we'll just have to wait and see. Sure, that makes total sense to me, Dennis. Let me just ask one other question. Obviously, expense levels, not so much the margin on your business, but maybe the operating expense spending to prepare for growth in the business, appears to me to be elevated this year. Would you guess that the underlying economics of the business will require you to continue elevated spending to grow the business? Or do you think at some point you can leverage your fixed infrastructure and return to some of the kind of basic margin metrics that you achieved historically? I'll take that. This is Andy. Andy. I do think there will be some more spending, but, you know, our headcount has gone up and we are, you know, preparing for a very bright future and that's why we're keeping the headcount up. You're right, I do think there's a point it may flatten out, but, you know, we're looking to be prepared for all the good things that are happening in the company, and we wanna make sure that we have the infrastructure in place. That those increased expenses you see are mostly related to headcount, not only in wages and bonus, payroll tax, and employee benefits. There was also one of the reasons of elevated expenses was in the first quarter of last year, there were payroll tax credits due to the CARES Act that we were able to take advantage of, which we obviously weren't able to take advantage of in Q1 of 2022. Okay, that's helpful. Let me just ask you, I guess one other question. You know, historically, I think one of the things that has always appealed to me about Semler and one of the things that I think appealed to investors beyond me about Semler has been the unique dynamic of largely going direct to payers and leveraging, making a simpler, if you will. I know it's not simple to deal with some of these large payers, but a more direct sale, I guess I would call it, that doesn't require you to try to convince individual doctors or doctor groups to use your product. As you evaluate both the newest product you were talking about ramping today and other products you're making an effort to develop, do you still see that direct channel as viable and attractive and available to you as you grow the company over the next year or two or three? We do. We see that market as being very viable. It's one of the match points that we wanted to make sure any products we bring in are part of as well. We also see an expansion in that kind of leveraged approach to the market as we expand from not only the large payers, but also to delegated medical groups and on to other types of organizations that are making a mark and will be making a future mark in primary care up to including the large retail players and others. We think it's viable, this leveraged approach to the market, and we think it has the opportunity to continue to grow. Great. Perfect. Thank you very much. I'll drop back in the queue. Thank you, Brooks. Thank you. Our next question comes from Marc Wiesenberger with B. Riley FBR. Please go ahead. Thanks. Good afternoon. Appreciate you taking my questions. If you could talk about the data from the Nevada paper and specifically how that has maybe helped evolve some of your conversations with existing or new customers and kind of any specifics there would be helpful. Sure. Well, the publication of the data is still fairly new, just a month or two, so it'll take time for this to disseminate out into the marketplace. That's gonna be a focus of our sales and marketing activities through this year and on into future years. This is a large and important study independently conducted that really underscores quite dramatically the benefits of PAD testing with QuantaFlo. We think it's gonna have an impact in the market. It's still early. As I say, it's only a month or two old, but it certainly will be part of all the conversations we are having with customers and prospects going forward. Okay, fair enough. Based on the guide, it actually looks like the second half of the year is gonna be stronger than the first half, which seems a little different than obviously the recent commentary we've heard previously about seasonality. Wondering if you could unpack that a little bit. Then you talked about some billing for Insulin Insights. I'm wondering how much of that is baked into the full year guide? Maybe Andy, you can cover the guidance question specifically, but in terms of Insulin Insights, we would anticipate not a material amount of revenue from this year, although that could pick up. We just have to see the progress of the beta launch and the adoption by customers and these things. You know, we're just gonna have to see as the year progresses. It's why we have a range in there in terms of the guidance. Andy, you may wanna cover what Marc was asking as far as the specifics of the year. Yeah. We do see it. We do see increases. We think that both fee per test, our license fee revenue will continue to increase during the year. It is baked in that there will continue to be increases and we don't see anything slowing down. We could see quarters in the future quarters being better than the first quarter or as good as the first quarter. I think on both sides of the business, things are gonna increase. Also, I do agree with Dennis that there's not a lot baked in for the new products. Hopefully we will, but that is again, why we have the range. Got it. Okay. It looks like this might be the best or pretty close to the best gross margin for the company. If you could talk about those dynamics and how sustainable is this level moving throughout the year. We don't anticipate pressure in terms of that for the year. You know, we'll have to see how things develop, but we feel as though that's a pretty solid number. When we're thinking about the new application for QuantaFlo, how should we think about the target patient population relative to that for QuantaFlo being used for PAD? Well, as we said in the text, this may be as important or more important a market ultimately. Obviously this will be a lot easier to discuss in detail once we're talking more specifically about the application for this, which should be in upcoming quarters. We do believe this is a significant market and can definitely play a role in expanding the value proposition for QuantaFlo. We're enthusiastic about what the future holds for this. It should be a major market as long as things pan out as we expect. Okay. Looking at the share count from the Form 10-K that was filed at the end of February, and then the count that was in the release today, it actually doesn't look like you bought back any shares since the buyback was announced. Just wanna confirm that and then maybe understand how you view deploying the capital for that purpose. Andy, you wanna take that, or Doug? Yeah, you are correct that there was not significant repurchases that will be addressed in Form 10-Q when we file that a little bit later this week. Your assumption is accurate. Okay. Just maybe just talk about the thought process though, on how you're gonna look to deploy that, considering you said that you kind of thought shares were depressed and it's a pretty bright outlook. It would seem like maybe it's an opportune time to deploy that. We haven't made any decisions about that yet, but we'll try to make decisions in the shareholders' interests. Understood. Okay. Thank you very much. Appreciate it. This concludes our question and answer session. I would like to turn the conference back over to Dennis Rosenberg for any closing remarks. Thank you for joining us today, and we look forward to updating you soon on our continued progress. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.