MDxHealth SA (OTC:MXDHF) Q3 2023 Earnings Conference Call November 8, 2023 4:30 PM ET

Company Participants

Michael McGarrity - Chief Executive Officer

Ron Kalfus - Chief Financial Officer

Conference Call Participants

Daniel Sammarco - TD Cowen

Andrew Brackmann - William Blair

Thomas Vranken - KBC Securities

Operator

Good afternoon, ladies and gentlemen, and welcome to the MDxHealth Third Quarter 2023 Earnings Call. Before we begin, I would like to remind everyone that we will make forward-looking statements during today's call, whether in prepared remarks or during the Q&A session. These forward-looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission, specifically in the company's annual report on Form 20-F.

At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. [Operator Instructions] Also note that this call is being recorded on Wednesday, November 8, 2023.

And I would like to turn the conference over to Michael McGarrity, Chief Executive Officer. Please go ahead, sir.

Michael McGarrity

Thanks Sylvie, and thank you all for joining us for our third quarter 2023 earnings call for MDxHealth. With me today is Ron Kalfus, Chief Financial Officer. Today's comments will be brief and serve as a supplement to our Q3 pre-release.

Third quarter results demonstrate our continued execution and commitment to deliver strong and sustainable growth for all of our stakeholders by focusing on commercial execution and operating discipline.

Based upon the significant improvements made across our business, including our industry-leading diagnostic product menu, focused commercial organization and overall operating efficiency, we believe MDxHealth is now on a path to deliver strong and sustainable growth that will lead to operating profitability in the first half of 2025.

As the third quarter results demonstrate, this execution is translating into improvements across our entire P&L. Revenue has increased from $11 million in 2019 to the high-end of our $65 million to $70 million guidance for this year, 2023. And revenue for the first nine months of 2023 has more than doubled versus the prior year period.

Gross margin has expanded more than 20 percentage points from midyear last year to 65%. Operating expenses have been managed and actually declined in Q3 year-over-year. Operating loss has been more than cut in half, with a 62% reduction for Q3 year-over-year. And cash burn has declined by almost 50% from Q4, 2022. These across the board improvements to our P&L give us visibility to operating profitability in the first half of 2025 and demonstrate why MDxHealth is a unique outlier compared to many other small-cap growth companies in the life sciences diagnostics sector. Over time, we expect investors will appreciate this distinction and increasingly view MDxHealth as a premier high growth leader in precision diagnostics with operating profitability targeted in the coming quarters, not years.