Release Date: August 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Healwell AI Inc (HWAIF, Financial) successfully completed a $20 million equity financing, strengthening its financial position.
- The company achieved significant revenue growth, with Q2 2024 revenues reaching $5.44 million, up from $1.79 million in the same quarter last year.
- Healwell AI Inc (HWAIF) launched four advanced AI copilots targeting specific clinical domains, enhancing early disease detection capabilities.
- The acquisition of VeroSource and BioPharma is expected to be financially accretive, enhancing Healwell's financial profile and core capabilities.
- The company has a strong acquisition pipeline, positioning it for substantial expansion and aiming for a $100 million revenue run rate by year-end.
Negative Points
- Healwell AI Inc (HWAIF) reported an adjusted EBITDA loss of $3.68 million in Q2 2024, although this was an improvement from the previous year.
- The company faces challenges in technology adoption among physicians, which can be difficult due to their busy schedules.
- There is seasonality in the clinical research segment, with slower activity expected in Q3, potentially impacting revenue.
- The integration of newly acquired companies like VeroSource and BioPharma requires careful planning and execution.
- Despite the positive outlook, the company acknowledges that the AI and healthcare technology market is still in its early stages of gaining commercial traction.
Q & A Highlights
Q: Can you provide context on the uptake of the clinical decision support platform in Canada and abroad, including onboarding and feedback from doctors?
A: The uptake is progressing well, particularly through our partnership with WELL Health. We have a dedicated team working with physicians to facilitate adoption. Feedback has been positive, especially from the Chief Medical Officer of WELL Health, although adoption takes time due to the busy nature of physicians.
Q: You mentioned signing six MSAs this quarter. Can you explain what a typical MSA entails and its impact on revenue?
A: Signing six MSAs is a significant achievement, indicating strong credibility. An MSA sets the stage for future work and revenue, as it involves rigorous compliance and legal processes. Historically, MSAs have led to 100% conversion into active projects, and we expect to build on these relationships for future revenue opportunities.
Q: Could you clarify the four areas targeted by your AI copilots?
A: The four AI copilots focus on rare diseases, chronic kidney disease, oncology, and cardiovascular diseases. Each copilot supports early disease detection and has been integrated into our systems to enhance patient care. We plan to expand these copilots into additional clinical domains in the future.
Q: What factors influenced the change in sequential revenue, and how do you foresee adjusted EBITDA evolving throughout 2024?
A: Revenue growth was driven by strong performance from existing businesses like Pentavere and Khure, and a full quarter of Intrahealth. The addition of Verosource and Biopharma will impact future results, though Q3 is typically slower for clinical research. We expect marked changes in EBITDA in Q4, with Q3 resembling Q2.
Q: Regarding the M&A pipeline, should we expect transactions similar in size to Verosource and Biopharma, or are there larger opportunities?
A: We are exploring a range of opportunities, from smaller companies with validated AI technology to potentially transformational acquisitions. The pipeline includes targets across the size spectrum, allowing us to leverage AI capabilities and unlock additional commercial value.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
