Nano-X Imaging Ltd. (NASDAQ:NNOX) Q3 2023 Earnings Call Transcript

So, it’s kind of a friendly environment for us to ensure that we’re going to take all the benefits of the proof of concept, both for demonstration purposes and for operational. We mentioned also that as we speak, we are making the next installations before the end of the year. So, basically the go-to market strategy and the go-to market action plan in the US is up and running. We’re building the team. We signed the agreement, and we are aiming to scan the first US patients in the coming days. So, we have all the necessary approvals, but this is something that we’re planning to do. We have managed to get all the certification, finding the physicists that came to be there, enable us to commence the scanning of patients, et cetera. So, it’s good.

We are happy with it.

Ross Osborn: Sounds great. And then turning to Morocco, can you discuss the level of utilization in terms of scans per day or your metric of choice there, and then the amount of systems you have delivered to date?

Erez Meltzer: I think that this something that we will share – we’ll shed some light in the Investors’ Day next week.

Ross Osborn: Okay, fair enough. Looking forward to that. And then maybe …

Erez Meltzer: But basically, right now, it’s in line of – I would say that it’s in line of what we anticipated.

Ross Osborn: Okay. Got it. And then starting to think about next year, given some of your recent manufacturing agreements, when should we expect an inflection in system deployments and expansion into new geographies outside of Morocco, Ghana, and Nigeria? Just trying to get an understanding of system placement cadence for 2024, given you’re now commercial and have contracts with these geographies for hundreds of systems.

Erez Meltzer: So, you asked about next – I think that we indicated already starting the planning to work to fulfill the orders that we had originally mentioned. The agreements that we have, in each one of them we’re making progress in terms of the regulation approvals. So, part of them will be other countries in Africa. Part of them will be in Latin America, and part of them will be in Asia and European countries, which are not dependent on EU. So, that’s the plan so far. But it’s all depend on the process and the progress that we made with the regulation approvals, but this also something that we will give some more color on next week.

Ross Osborn: Sounds good. Thanks for taking our questions.

Operator: Thank you. Again, one moment please for our next question. Our next question will come from Ben Haynor of the Alliance Capital Partners. Your line is open.

Ben Haynor: Good day, gentlemen. Can you hear me okay?

Erez Meltzer: Yes, Ben. Good morning.

Ben Haynor: Great. So, just looking to understand the Nanox.ARC revenue a little bit better for the quarter. It sounds like some of that came from sales. So, if you could give me a sense of – or give us a sense of how much capital revenue was included in there, and then would you expect the revenue that you’re generating out of Africa from these systems to grow from the Q3 level going forward?

Erez Meltzer: Yes, so you referred to the $99,000 that we are recorded in the quarter. Correct?

Ben Haynor: Correct, yes.

Erez Meltzer: Okay. So, those are actually stems from the sales revenue from our 2D imaging systems. The split is between three countries. The first one is Cameroon. The second one is Morocco, and the other one is Ghana. We’re talking of a few systems in each region. And some of the revenue comes from the sales of those units and the other one from the usage of those units.

Ben Haynor: Okay. I guess what I’m getting at – that’s helpful, but what I’m getting at is, would you expect the revenue from those systems to pick up from the $99,000 level, the ones that are currently in those geographies?

Erez Meltzer: Generally saying yes, because some of those (indiscernible) are provided for demo and training purposes, and we expected those units will become commercially used. Of course, we’ll add more units on those ones. And of course, we expect to start generating revenue from the ARC systems itself in those re regions and in the US itself. In these units, by the way, I would say that the numbers of scans per day where they’re operational is actually – or the numbers are exceeding our original expectations.

Ben Haynor: Okay. That’s good to hear and helpful. And then just on the Varex agreement, was curious about the minimal annual amount on that. Is that something that’s relatively easy to achieve or is it kind of a small fraction of the anticipated utilization, or what’s the right way to think about that?