iCAD Reports $5.8 Million Revenue in Q1 2023, Down 23.2% Year-Over-Year

iCAD, Inc. reported a total revenue of $5.8 million for the first quarter of 2023, a decrease of approximately 23.2% from $7.5 million in the same period of 2022. The decline was primarily attributed to a strategic shift towards a subscription model, which has resulted in lower immediate revenue recognition compared to traditional sales. Product revenue from the Detection segment fell by 36.3% to $2.5 million, while Therapy product revenue decreased by 59.2% to $0.3 million. Despite these declines, service and supplies revenue in the Detection segment increased by 13.1% to $1.9 million, indicating some resilience in service offerings.

The company's gross profit for the quarter was approximately $4.1 million, representing a gross margin of 71.4%, slightly up from 70.1% in the prior year. The gross profit from the Detection segment improved to 85.0%, while the Therapy segment saw a decline to 33.5%. Operating expenses decreased by 8.8% to $8.1 million, driven by reduced marketing and sales costs, which fell by nearly 20% due to lower headcount and commission expenses. iCAD reported a net loss of $3.8 million, or $(0.15) per share, compared to a net loss of $3.5 million, or $(0.14) per share, in the first quarter of 2022.

In terms of operational developments, iCAD underwent a significant restructuring in March 2023, reducing its workforce by approximately 28%, which included furloughing half of the employees at its subsidiary, Xoft, Inc. This move is part of a broader strategy to align costs with long-term goals amid ongoing economic challenges. The company incurred pre-tax charges of $0.08 million related to this restructuring and anticipates additional charges of $0.1 million for the remainder of the year.

As of March 31, 2023, iCAD had cash and cash equivalents of $19.7 million, down from $21.3 million at the end of 2022. The company reported a net working capital of $21.3 million and a current ratio of 2.66, indicating a stable liquidity position. Approximately 15% of the company's revenue was derived from international customers, highlighting its geographic diversification. Looking ahead, iCAD expects to continue focusing on its subscription model, which may impact short-term revenue but is anticipated to enhance long-term growth potential.

The company remains cautious about the ongoing impacts of the COVID-19 pandemic and geopolitical tensions, particularly the conflict in Ukraine, which could affect its operations and market conditions. iCAD's management believes that its current liquidity and capital resources are sufficient to sustain operations for at least the next 12 months, although they will continue to monitor the situation closely.