Credit: Image source: Mazor Robotics.Mazor Robotics (NASDAQ: MZOR) , a robotic surgery company focused on the spine and brain, reported its fourth-quarter and full-year results on Wednesday, Feb 14. Revenue grew nicely thanks to a strong uptick in system sales and product utilization. When combined with the recent offloading of its salesforce to Medtronic (NYSE: MDT) , the company managed to eke out a small profit for the first time ever.
Image source: Mazor Robotics.
Mazor Robotics Q4 results: The raw numbers
Data source: Mazor Robotics.
What happened with Mazor Robotics this quarter?
- Revenue in the U.S. grew 38% to $17.4 million. This result was driven by the sale of 21 Mazor X systems.
- International revenue grew 21% to $1.7 million .
- Recurring revenue -- which is derived from the sales of consumables and services -- grew 107% to $9.3 million.
- Gross margin significantly declined from 70.5% in the year-ago period to 59.3%. The huge drop was expected and was largely attributable to higher manufacturing costs related to the Mazor X and the pricing terms of its deal with Medtronic.
- Total operating expenses fell 20% to $11.4 million as a result of Mazor's commercial team becoming Medtronic employees.
- Net income -- yes, income -- for the fourth quarter of 2017 was $0.4 million, or $0.01 per share.
- Backlog at the quarter's end consisted of 14 Mazor X systems and two Renaissance systems.
- Mazor ended the quarter with $108 million in cash.
Zooming out to full-year 2017 results, here's an overview of the headline numbers:
- Revenue grew 78% to $64.9 million.
- The company received orders for 64 Mazor X systems and nine Renaissance systems.
- Operating expenses increased 22% to $55.1 million.
- GAAP net loss was $12.4 million , or $0.25 per share. That's down from a net loss of $18.7 million , or $0.42 per share in 2016 .
- Non-GAAP net loss was $5 .7 million, or $0.12 per share. That's down from $16.1 million , or $0.36 per share in 2 016 .
- The install base at year-end was 180 systems worldwide.
What management had to say
CEO Ori Hadomi was thrilled with how the company executed throughout the year, stating, "Our effective execution during 2017 continued to strengthen our global leadership position in spine robotics and led to record systems sales and recurring revenue."
Hadomi also reminded investors on the call that the company is still responsible for marketing the Renaissance system moving forward. He stated that the company is going to remain focused on the selling the product primarily to ambulatory surgery centers given their focus on value. He said that there are roughly 1,000 ambulatory surgery centers in the U.S. alone that they believe could benefit from the Renaissance. What's more, the company does not believe that this focus will result in any cannibalization of Mazor X sales.
Hadomi also offered investors some comments on the recent FDA approval of Globus Medical 's (NYSE: GMED) Excelsius GPS robotic guidance system:
Looking forward
Mazor's management team doesn't share guidance with investors, but CFO Sharon Levita did state that the company expects to realize $13 million in cost savings during the year thanks to its offloading of the Mazor X commercial team. However, Levita also stated that the deal will have an impact on top-line growth as well:
Finally, Hadomi shared what's in store for the year ahead: "2018 will be a transition year with an emphasis on synergy with Medtronic as well as utilization and procedure growth. We are encouraged by the overall optimism and enthusiasm of the consensus and with a touch of realism for 2018."
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Brian Feroldi owns shares of Mazor Robotics. The Motley Fool owns shares of Medtronic. The Motley Fool recommends Globus Medical and Mazor Robotics. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
