Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Myomo Inc (MYO, Financial) reported a 77% increase in product revenues over the second quarter of 2023, driven by higher unit sales and increased average selling prices.
- The company achieved a record number of 550 additions to its patient pipeline, with a total of 1,179 patients in the pipeline, marking a 22% year-over-year increase.
- Gross margin for the second quarter of 2024 was 70.8%, indicating strong profitability from product sales.
- Myomo Inc (MYO) successfully expanded its manufacturing capacity, producing 80 MyoPros in July, ahead of its target for the year.
- The company has secured a $4 million line of credit with Silicon Valley Bank, providing additional financial flexibility.
Negative Points
- Reimbursement from Medicare Advantage plans has been challenging, with a higher proportion of initial claims being denied compared to previous quarters.
- Operating expenses increased by 20% year-over-year, driven by higher headcount and increased investment in clinical and reimbursement capacity.
- Net loss for the second quarter of 2024 was $1.1 million, slightly higher than the $1 million loss in the same quarter of 2023.
- The company faces potential challenges in advertising due to increased competition from political and holiday advertising in the latter part of the year.
- Despite strong revenue growth, Myomo Inc (MYO) reported a negative adjusted EBITDA of $1.2 million for the second quarter of 2024.
Q & A Highlights
Q: Can you speak to the confidence around increasing manufacturing capacity and when you expect to need a larger footprint to support growth?
A: Paul Gudonis, CEO: We've rapidly expanded our monthly manufacturing capacity and are finalizing plans to move to a larger facility in the Boston area by Q4. This will allow us to hire more people and expand capacity beyond 80 units per month, with potential for further expansion next year, possibly adding a second shift.
Q: What are your goals for the O&P channel team, and when do you expect it to be a material source of revenue?
A: Paul Gudonis, CEO: This year is about building channel relationships and infrastructure. We aim to train 80 to 100 O&P clinicians by year-end. Material revenue from this channel is expected in 2025 as we build the order flow after training and initial patient evaluations.
Q: Should we consider 70% as a baseline for gross margins, and are there opportunities for expansion?
A: David Henry, CFO: 70% is a good baseline. There are opportunities for expansion as more Medicare Advantage plans reimburse at Medicare rates, potentially increasing ASP. Our asset-light manufacturing model supports this margin without significant CapEx.
Q: How do you plan to balance increased marketing spend without negatively impacting the bottom line?
A: David Henry, CFO: We aim to grow revenues in 2025 by investing in marketing now to fill the patient funnel. While this may impact achieving operating cash flow breakeven in Q4, it's crucial for maintaining momentum and minimizing seasonal impacts.
Q: Is there any seasonality in your business that we should expect in 2025?
A: David Henry, CFO: Historically, the second half of the year is stronger due to patients having met their deductibles, making decisions like the MyoPro easier. The first quarter is typically the softest, with growth through the rest of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
