When will SMTI reach cashflow breakeven?
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When will SMTI reach cashflow breakeven?

Jun 9, 2022 - 18:16

Company is growing revenues at 50%+ YoY, 12.5% QoQ, with 90% gross margin.

Assuming expenses remain flat at $11m and QoQ growth remains at 12.5%, I get the first Net Income break-even in 22Q4 ($105k).

Given the high growth rate, the network effect that the drug seems to be having, and the backlog of elective surgeries that drogala@ mentioned in MCC, I think 2022 stands a good chance. But it’s Q4, this is a microcap company (more fragile), and expenses are likely to grow as well.

If this forecast were about Net Income cashflow breakeven, my weighs would be:

35% - 2022 60% - 2023 5% - 2024+

Management has mentioned before that they expect to reach cashflow breakeven in 2023. Their last reported FCF was -2.16m, so I will go with “reaching cash flow breakeven will take about 1Q longer than Net Income breakeven, which then makes Q4 unlikely because revenues growth would have to accelerate an it’s already at 50%+.