Good afternoon, and welcome to the Semler Scientific 2023 Q2 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please send to a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note, this event is being recorded. Before we begin, Semler Scientific needs to remind you that certain comments made during this call may constitute forward-looking statements and are made pursuant to and within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 as amended. These include statements regarding the expectations for expansion of the business and the development and marketing of additional products, as well as expected savings from the strategic corporate streamlining. Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from such statements. Those risks and uncertainties are described in the press release and our SEC filings. The forward-looking statements made today are as of the date of this call, and the company does not undertake any obligation to update the forward-looking statements. If you do not have a copy of today's release, you may obtain one by visiting the investor relations page of the website, semlerscientific.com. Now I would like to introduce Douglas Murphy-Chutorian, CEO of Semler Scientific. Please go ahead. Good afternoon, everyone. Thank you for joining us on our Q2 2023 results call. Q2 2023 performance represent the highest quarterly revenue and pretax net income that Semler has ever achieved. Now I'd like to introduce Renae Tee-Comer, our newly appointed CFO. She plays a fundamental role in shaping our financial strategy, all along with me and our board. Renee? Thank you, Doug. Good afternoon, everyone, and thank you for being part of today's conference call. I'm excited for my new role in the future of Semler. I look forward to working closely with our senior leadership team and our board to unlock stakeholder value. We are pleased that both Eric Semler and Will Chang have joined our board in the Q2 of 2023. They bring deep expertise in capital allocation, corporate governance, strategic planning, and investment management. Furthermore, the board has decided to ask Doug to stay on as permanent CEO in order to bring continuity and direction to Semler, and he has agreed. After 13 years with Semler, Dennis Rosenberg has retired as Chief Marketing Officer. However, he will continue to assist me with our investor relations efforts. We thank Dennis for his valuable contributions and wish him a happy and fulfilling retirement. Today, I'll be presenting an overview of our Q2 2023 financial results, providing market updates, and discussing recent corporate developments. Following my remarks, Doug and I will be available to address any questions you may have. I'm excited to announce record results for the Q2. This achievement is a testament to the hard work of our team, as well as to the ongoing support of our customers, who continue to recognize the clinical benefits and value of our technology. By enabling early diagnosis of both PAD and heart dysfunction, we are empowering healthcare providers to initiate preventative interventions and treatments at an early stage. We believe that this proactive approach not only saves lives, but also lowers healthcare expenditure. As we look to the future, we envision a healthcare landscape where our technology plays a pivotal role in shaping healthier outcomes for patients while delivering substantial economic benefits. For now, the specifics of our Q2 results. Total revenue in Q2 2023 was $18.6 million, an increase of 25% compared to the Q2 of 2022, driven by continued sales of QuantaFlo to existing and new customers to test for PAD. We believe the promising results that were published in 2 large, independently conducted, peer-reviewed studies by QuantaFlo customers last year are having an impact. These studies underscore the importance of identifying asymptomatic PAD patients, enabling the implementation of preventative measures. Fixed fee revenues were $9.6 million, an increase of 13% year-over-year. We saw continued interest in our products from existing customers as well as new customers, such as hospitals, major pharmaceutical and other retail chains, and delegated medical groups. Variable fee revenues were $8.4 million, an increase of 39% year-over-year. We continued to see strong demand from our home risk assessment customers using QuantaFlo for PAD during in-home examinations. Equipment and other revenues were $600,000, an increase of 128% year-over-year. Because the majority of equipment sales are to variable fee customers, we believe it is a sign of strength in the fee for test market. In the Q2 of 2023, our two largest customers, including their related affiliates, comprised 37% and 34% of quarterly revenues. Operating expenses in Q2 2023, which includes cost of revenues, were $11.4 million, an increase of 18% year-over-year. As a% of revenues, operating expenses decreased to 61% compared to 65% in 2022. Operating expenses increased primarily due to increased headcount, wage inflation, and increased professional fees. Pre-tax net income was $7.7 million, an increase of $2.5 million, or 48% year-over-year. Net income was $5.9 million, or $0.88 per basic share, and $0.75 per diluted share, an increase of 44% year-over-year. During the quarter, we purchased outstanding warrants to acquire 76,000 shares of common stock from our CEO at a cost of $1.9 million. We have $15 million remaining under the board-authorized stock repurchase program. We had cash, cash equivalents, and short-term investments at June 30, 2023, of $51.8 million. As of June 30, 2023, headcount was 137 employees, compared to 134 at the end of the Q1, 2023. We recently announced a strategic plan to streamline operations and reduce employee headcount by approximately 30% by September 15, 2023. This plan is meant to be proactive and seeks to drive operational efficiency while still providing high-quality service to our customers. We currently estimate that we will incur severance costs in the range of $700,000-$900,000, consisting of one-time termination benefits, which are expected to be paid by December 31, 2023. We anticipate this will result in a reduction in quarterly operating expenses of approximately $1.5 million-$2 million, which are expected to be realized during the Q4, ended December 31, 2023. Our primary objective remains set fast to maintain and enhance our current revenue opportunities and profitability. To achieve this, we are reinvesting in emerging growth opportunities, particularly focusing on new customers for QuantaFlo, both for PAD and HD. This broadening of our customer base may prove to show the tremendous promise and the exciting potential that we believe is in our company's future. Furthermore, we're committed to maintaining our investments in research and development. Upgrading existing products and data services is a priority for us as we strive to stay at the forefront of innovation and continuing to deliver cutting-edge solutions to our customers. Last year, we unveiled QuantaFlo HD to aid in the diagnosis of heart dysfunction, which is a product of our internal R&D efforts. The results of a clinical paper published in the Journal of Preventive Medicine demonstrated a statistically significant correlation with a p-value of less than 0.01, using transthoracic echocardiography, or echo, as a gold standard to diagnose heart failure. A link to the paper is available on our website in our press release, dated March 1, 2023. Heart dysfunction encompasses a broad spectrum, including heart failure, which affects around 6.5 million adults in the US, with a lifetime risk of 1 in 5 at 40 years of age. The impact of heart failure on healthcare is significant, with over 1 million hospitalizations per year in the United States and an annual cost of care exceeding $30 billion. Unlike symptomatic heart disease, a considerable number of patients have asymptomatic heart disease. However, they are not routinely tested for in the current standard of care because echo, while reliable, is not a screening test. It involves a specialized lab, a trained ultrasonographer, and takes about an hour, making it impractical for primary care offices or home settings. Our goal is to equip healthcare providers with a cost-effective means of identifying asymptomatic heart dysfunction early, enabling them to encourage patients to adopt healthier lifestyles and optimize proven guideline-directed medical therapy. Ultimately, this approach could improve long-term health outcomes. There are CPT reimbursement codes for echocardiography and HCC diagnosis codes for heart dysfunction that were not affected by this year's CMS updates. We are in discussions with customers of all sizes and have made initial installations of QuantaFlo HD in the Q2 of 2023. While HD is showing positive early signs, we expect the market uptake process will take time. Finally, as part of our growth strategy, we will explore inorganic growth initiatives to further diversify our product portfolio, guided by our board that has deep experience in capital allocation. By seeking new opportunities and partnerships, we aim to expand our offerings and broaden our impact on the market. Thank you for your interest in the company and your continuing support. Now, Rocco, if you could please open the line. Doug and I will be happy to address your questions. Absolutely, ma'am. If you would like to ask a question, please press star then 1 on your telephone keypad. If you are using a speakerphone, we ask that you please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. Today's first question comes from Aaron Wolfson with Lake Street Capital Markets. Please go. Hey, good afternoon, everyone. This is Aaron on the line for Brooks here. just wanted to start by saying congrats on the strong, strong quarter. Thank you. Thank you. Can you just give us sort of a general sense of, of the reaction of your health plan and your fee, your fee per test customers to sort of the pending changes to the risk model for, for PAD from CMS? Sure. you know, a-as you mentioned, we, we did have very good first half results, and we're very pleased with that. it's- w- it represents a really great start to the year. It's difficult to make any predictions right now, given the numbers, factors at play in our market. Now there really is no consistent pattern emerging among our customer base at this time, and it's really too early to speculate on any potential impacts to our customers. For now, there -- we are seeing testing at an increased rate, obviously, as you can see from, from our results. Okay, that's fair. Can you sort of just give us some insight into the customer reaction and interest in your heart dysfunction product? You know, when might, when might, when might we see some sort of revenue related to that opportunity for you guys? Sure. As I had mentioned in my prepared re-remarks, we are in discussions with customers of all sizes, and we do have initial installations of QuantaFlo HD, right now. We are seeing positive feedback from that. We're not gonna go into specifics of exactly, you know, what's out there and the customers. We do think that the market uptake process will take time. We know that our customers want to get the product in and test it for themselves first, before they roll it out. While we already have these relationships with our customers, they will need to, to look at it themselves. Because of this, we aren't really providing guidance right now on the uptake of it. We have re-revenue generating accounts now, but it's not as meaningful revenue as we hoped to have. Sure. Okay, that's helpful. Sort of my final inquiry here, you know, you mentioned some downsizing and streamlining initiatives. You know, can you just tell us what your priorities there are? You know, just a little bit more color there would be nice. Thanks for taking the questions. Yeah, sure. No problem. On the, the streamlining here, as, as we look back over the past few years, we've really put increased efforts towards automation and improvement of technology, both internally and, and with integrating with our customers. We do have a reduced need for certain staff areas because there are fewer touch points. We're really viewing this as doing more for less. The realigning of the workforce to stream the operations, it's really to become a more nimble organization, and again, utilize the technology that we've been putting into place. The resources that we do have, we are going to focus on capitalizing on the potential emerging market opportunities, diversifying our customer base for QuantaFlo PAD, the customer adoption for QuantaFlo HD, and within the market. Our strategic initiatives and priorities within that, besides focusing on, on our existing products, are to maintain our R&D investments, to upgrade the product data services. PAD now is a lot less R&D intensive at this point than it has been in the past, and HD really is moving from core R&D to more of a refinement stage. We can also focus our R&D on potential other ex-extensions there. Okay, awesome. Very helpful. Congrats again on the quarter. We're excited to keep following you guys. Great. Thank you. Thank you. Thank you. Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to Renee Comer for any closing remarks. Thank you. As we conclude this conference, we want to reiterate our ongoing commitment to delivering clinical benefits through earlier diagnosis of chronic cardiovascular conditions. Our customers continue to recognize the value of this approach, and as the healthcare landscape evolves, our technology continues to play a vital role for patients, physicians, facilities, and payers alike. One of the unique strengths of our technology is its portability and accessibility, enabling us to be part of the solution in reducing health inequities that persist in cardiovascular disease. By providing tools that can be utilized in various settings, we contribute to breaking down barriers and ensuring that more individuals have access to early detection and intervention. Thank you for joining us today. Thank you, ma'am. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.