Semler Scientific 2025 Q1 Earnings Misses Targets as Net Income Drops 1165.4%

Semler Scientific (SMLR) reported its fiscal 2025 Q1 earnings on May 13th, 2025. The company posted a significant drop in revenue and swung to a substantial net loss compared to the previous year. Analysts were surprised by the results, which missed expectations due to higher-than-anticipated operating expenses, including a contingent liability related to settlement discussions with the DOJ. Despite the financial setback, the company maintained its guidance on growth and cash generation from new cardiovascular products.

Revenue
Semler Scientific experienced a decline in total revenue, which fell to $8.84 million in Q1 2025, representing a 44.4% decrease from $15.90 million in Q1 2024. This decline reflected challenges in segment performance across the board.

Earnings/Net Income
Semler Scientific swung to a loss of $6.74 per share in Q1 2025, marking an 865.9% negative change from a profit of $0.88 per share in Q1 2024. The company reported a net loss of $64.70 million, further illustrating a significant downturn compared to last year’s net income of $6.07 million. EPS performance was notably poor this quarter.

Price Action
The stock price of Semler Scientific edged up 1.94% during the latest trading day, rose 10.91% over the last full trading week, and increased 12.47% month-to-date.

Post-Earnings Price Action Review
Over the past five years, buying Semler Scientific (SMLR) shares after its financial report release and holding for 30 days has shown moderate returns. The strategy faced a maximum drawdown of -44.7% in Q1 2025, largely due to negative earnings per share (EPS) of -$6.74 and total operating expenses that included a contingent liability of $29.8 million related to potential DOJ settlement. Despite this, the Sharpe ratio of 0.43 suggests acceptable risk-adjusted returns, with an annualized return of 6.74% driven by the company’s aggressive bitcoin acquisition strategy and new revenue opportunities in cardiovascular. However, investors should remain cautious about the volatility influenced by Semler Scientific's bitcoin acquisition and legal settlements.

CEO Commentary
“Our healthcare business is seeing green shoots from the cardiovascular product line that we introduced to our large enterprise customer base this year,” said Doug Murphy-Chutorian, MD, Chief Executive Officer of Semler Scientific. He expressed optimism regarding growth and cash generation from the FDA-cleared products and services, which are expected to enhance the company's bitcoin treasury strategy. This commentary reflects a focus on operational performance and a positive outlook on future contributions from new product lines.

Guidance
Semler Scientific projects growth and cash generation from its new cardiovascular products, which will support its bitcoin treasury strategy. The company achieved a BTC Yield of 22.2% year-to-date through May 12, 2025, and anticipates continued accretive growth in its bitcoin holdings through operating cash flow and financing activities. Additionally, the company is in settlement discussions with the DOJ, expecting to finalize a payment of $29.75 million to resolve claims.

Additional News
Recently, Semler Scientific announced updates on its bitcoin holdings, having acquired 165 BTC between April 25-29, 2025, for $15.7 million at an average price of $94,931 per bitcoin, bringing total holdings to 3,467 BTC. The company also launched a $500 million ATM offering program, selling 559,000 shares for net proceeds of $19.5 million. Semler's BTC Yield reached 23.8% YTD through April 29, 2025. Additionally, the company has increased its basic shares outstanding from 9,557,000 to 10,430,000, reflecting its strategic financial maneuvers.