Spectral AI (MDAI) Q2 2024 earnings summary

Executive summary

• Q2 2024 research and development revenue reached $7.5 million, up 76% year-over-year, driven by BARDA contract activity and progress toward DeepView AI commercialization.

• First commercial sales of DeepView for burn indication expected in the UK in the second half of 2024, with US commercialization targeted for early 2026 following FDA submission in 2025.

• Expanded clinical presence with five DeepView AI burn devices deployed in the UK and 16 US clinical sites participating in pivotal studies; US pivotal burn study enrollment exceeded 85% with 100% pediatric enrollment.

• Ongoing development of DeepView Snapshot M, a handheld device for military and first responder use, supported by over $6 million in contracts.

• Collaboration with PolyNovo Ltd. to enter the Australian market and addition to the Russell Microcap Index in July 2024.

Financial highlights

• Q2 2024 R&D revenue rose 76% year-over-year to $7.5 million, with gross margin improving to 44.3% from 42.1% due to higher BARDA contract reimbursement rates.

• Net loss narrowed to $2.9 million (16 cents/share) for Q2 2024, improved from $3.1 million (23 cents/share) year-over-year.

• General and administrative expenses increased to $5.8 million, but as a percentage of revenue, decreased to 77% from 112% year-over-year.

• Cash and cash equivalents totaled $6.9 million as of June 30, 2024, up from $4.8 million at year-end 2023.

• Adjusted EBITDA was $(2.0) million for Q2 2024, showing improvement year-over-year.

Outlook and guidance

• FY 2024 revenue guidance reiterated at approximately $28 million, a 55% increase over 2023, driven by BARDA and government funding, excluding potential UK commercial sales.

• US commercialization of DeepView anticipated in early 2026, with FDA submission planned for first half of 2025.

• Management believes current cash, government contract proceeds, and equity facilities are sufficient to fund operations for at least one year beyond the financial statement release date.

• Second half of 2024 expected to see increased BARDA revenue as clinical trials progress.

• Ongoing pivotal clinical study for burn indication in the US with planned enrollment of 240 patients.