iCAD Reports 16.9% Revenue Decline and Increased Net Loss for Fiscal Year 2022

iCAD, Inc. reported a significant decline in its financial performance for the fiscal year ended December 31, 2022, with total revenue of $27.9 million, down 16.9% from $33.6 million in 2021. The decrease was attributed to a 10.1% drop in the Detection segment, which generated $19.8 million, and a 29.9% decline in the Therapy segment, which brought in $8.1 million. The company's net loss for the year was approximately $13.7 million, compared to a loss of $11.2 million in the previous year, reflecting ongoing challenges in the market and the lingering effects of the COVID-19 pandemic.

In terms of operational developments, iCAD has begun transitioning to a subscription-based revenue model, which is expected to impact short-term revenue recognition negatively, as subscription revenues are recognized over time rather than at the point of sale. The company has seen increased customer demand for subscription licenses, although this segment currently represents a small portion of total revenue. Additionally, iCAD's workforce is undergoing a restructuring plan aimed at reducing operating expenses by approximately 28%, which will result in a reduction of about 23 employees, primarily from the Detection business unit.

The company’s gross profit also decreased to $19.8 million, or 70.9% of total revenue, down from $24.2 million, or 72.1% of revenue in 2021. The decline in gross profit was driven by lower revenues across both segments, with the Therapy segment experiencing a notable drop in gross profit margin from 49% to 37%. iCAD's total operating expenses decreased slightly to $33.7 million, but the operating loss widened to $13.9 million from $10.7 million in the previous year.

iCAD's customer base remains concentrated, with a significant portion of revenue derived from a limited number of customers. In 2022, GE Healthcare accounted for approximately 16% of total revenue. The company also reported that its international sales represented about 25% of total revenue, with Europe being a key market. The ongoing geopolitical tensions and economic uncertainties in regions where iCAD operates could further impact its sales and profitability.

Looking ahead, iCAD's management remains cautious about the future, particularly regarding the potential impacts of the COVID-19 pandemic and macroeconomic conditions on revenue and order volume. The company is focused on enhancing its product offerings and expanding its market presence, particularly in the subscription model, while navigating the challenges posed by the current economic environment.