iCAD Reports $4.1 Million Revenue in Q3 2023, Down 6.6% Year-Over-Year

iCAD, Inc. reported a total revenue of $4.1 million for the third quarter of 2023, a decrease of 6.6% from $4.4 million in the same period last year. The decline was primarily attributed to reduced demand and a strategic shift towards a subscription model, which has resulted in lower immediate revenue recognition. Product revenue fell by 13.3% to $2.2 million, while service and supplies revenue remained relatively stable at approximately $1.9 million. For the nine months ended September 30, 2023, total revenue decreased by 17.1% to $12.6 million, with product revenue down 29.4% and service revenue up 6.0%.

The company's financial performance also reflected a net loss of $1.4 million for the third quarter, compared to a loss of $3.9 million in the prior year. This improvement was driven by a significant reduction in operating expenses, which decreased by 31.0% to $4.7 million, largely due to cost-saving measures and a reduction in workforce. The company reported a gross profit margin of 86.4% for the quarter, slightly up from 85.0% in the previous year, despite a decrease in total gross profit to $3.5 million.

In terms of strategic developments, iCAD completed the sale of its Xoft business line on October 23, 2023, for approximately $5.76 million. This transaction has allowed the company to focus solely on its Detection segment, which specializes in advanced image analysis and workflow solutions for cancer detection. The assets and liabilities related to the Xoft business have been classified as held for sale in the financial statements, and its operations are now reported as discontinued.

Operationally, iCAD's cash and cash equivalents stood at $19.0 million as of September 30, 2023, down from $21.3 million at the end of 2022. The company has seen a decrease in its employee headcount, with a reduction of approximately 28% in workforce as part of its restructuring efforts. The company’s net cash used in operating activities improved to $3.5 million for the nine months ended September 30, 2023, compared to $9.7 million in the same period last year, reflecting better cash management and collections.

Looking ahead, iCAD anticipates that the transition to a subscription model may continue to impact short-term revenue recognition, but it expects increased customer demand for subscription licenses. The company believes its current liquidity is sufficient to sustain operations for at least the next 12 months, although it remains cautious about potential economic uncertainties and the ongoing impacts of global conflicts on its business.