Semler Scientific (SMLR 2.83%), the device maker best known for its QuantaFlo vascular testing system and recent pivot to bitcoin investing, reported earnings for the quarter on August 4, 2025. The headline result was a GAAP earnings per share (EPS) of $5.04, which soundly beat analyst expectations for a loss of $0.22 per share. However, this massive swing was primarily due to the value of the company's bitcoin holdings, which drove $83.8 million in unrealized gains. The core healthcare operations continued to decline, with revenue falling to $8.2 million (GAAP)—below the $8.4 million consensus (GAAP)—and down sharply from last year. Overall, the period highlighted the increasingly bitcoin-centric profile of the company, with fundamental healthcare results under significant pressure.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP, diluted) | $5.04 | $(0.22) | $0.00 | — |
| Revenue (GAAP) | $8.2 million | $8.4 million | $14.5 million | (43.3%) |
| Non-GAAP (Loss) Income from Operations | N/A | $5.6 million | N/A | |
| Net Income (GAAP) | $66.9 million | 668,900% | $0.01 million | — |
| Total Operating Expenses | $10.3 million | $9.1 million | 13.2% |
Source: Analyst estimates for the quarter provided by FactSet.
About Semler Scientific and Its Focus
Semler Scientific is a healthcare technology company that originally focused on disease detection through medical devices. Its flagship product, QuantaFlo, is a portable vascular testing device used for diagnosing peripheral artery disease (PAD), which is a circulatory problem common in older adults.
In recent quarters, Semler started building a second identity as a corporate bitcoin holder. It now views bitcoin as its primary treasury asset while using its healthcare business as a means of generating cash to buy more of the cryptocurrency. Both the healthcare and bitcoin strategies present pivotal factors for the company’s future: operational improvements and product expansion are necessary to rebuild healthcare performance, while bitcoin price direction dictates overall financial volatility and potential upside.
Quarter Review: Key Results and Drivers
The period was defined by the impact of Semler's bitcoin holdings on reported profit (GAAP). Gains from a rising bitcoin price added $83.8 million in unrealized income (GAAP), accounting for the entire swing in profits from the previous year. Share dilution and added leverage funded this build-up of digital assets. Without bitcoin, underlying business results would have shown a sharp downturn in operating income and free cash flow.
Healthcare revenue continued its steep decline, falling 43% year-over-year. This decline was attributed to reimbursement changes imposed by the Centers for Medicare & Medicaid Services (CMS). The company’s two largest customers accounted for 76% of its revenue, increasing concentration risk and exposing Semler to decisions by a very small client base. The company said, "two largest customers (including their affiliates) comprised 45% and 31% of revenues,"
Total operating expenses (GAAP) increased 13.2% year over year despite falling sales. General and administrative (G&A) costs, in particular, more than doubled to $5.1 million. Legal costs and elevated stock-based compensation contributed to the higher spend. Non-GAAP measures show the healthcare operation lost $158,000, compared to a positive $5.6 million in Q2 2024.
Product expansion efforts continued but have yet to offset the hit from declining PAD testing volumes. The company launched CardioVanta, focusing on early detection of heart failure and cardiac arrhythmia—two conditions with significant unmet needs—but this initiative did not have a material effect in the quarter. Semler is also attempting to secure a new U.S. Food and Drug Administration (FDA) 510(k) clearance for QuantaFlo to expand its application beyond PAD, but no new approval has been granted as of the reporting date.
On the regulatory front, Semler faced ongoing legal costs and previously recognized a $29.75 million contingent liability related to a civil investigative demand by the Department of Justice (DOJ). Legal spending continues to be a drag. The company also disclosed its efforts to prepare for possible further regulatory changes affecting both healthcare and cryptocurrency activities.
The bitcoin strategy reshaped the balance sheet. Semler acquired 1,444 bitcoins for $149.6 million during the period, with additional purchases after the reporting date. As of July 31, 2025, its holdings had grown to 5,021 bitcoins at a fair value of $586.2 million, compared to an original purchase cost of $475.8 million. The company funds these acquisitions through a mix of cash flow, a $500 million at-the-market (ATM) stock issuance program, and a $100 million convertible notes offering. Share count increased from 9.6 million at the start of the period to 13.788 million at the end as new equity was issued to fund these purchases.
Sustained negative cash flow from the core business was masked by inflows from financing to support digital asset investments. Operating cash flow (GAAP) was negative $1.4 million for the six months ended June 30, 2025, with investment outflows of $237.0 million and financing inflows of $243.0 million. Total liabilities as of June 30, 2025 were $139.2 million, reflecting new debt taken on.
No dividends were declared or adjusted during the period. SMLR does not currently pay a dividend.
Healthcare Devices and Bitcoin: Breaking Down Product Moves
QuantaFlo, Semler's vascular testing device, remains its largest healthcare product and primary driver of medical revenue. QuantaFlo is used by clinicians to detect peripheral artery disease, and the company has attempted to expand its use to include more forms of cardiovascular disease. Two major customers accounted for 76% of second quarter revenues, highlighting concentration risk.
The CardioVanta business, launched as a subsidiary, aims to enter the market for early detection of heart failure and cardiac arrhythmia with new diagnostic devices. The timing or scale of revenue from CardioVanta is unknown, and no impact is evident in current numbers. Management disclosed it is "pursuing a new 510(k) clearance for a product extension to aid in the diagnosis of heart failure" but this process is ongoing. The company continues to invest in product pipeline and regulatory strategy, with the hope of reducing dependence on PAD and regaining growth, but progress remains in early stages.
The bitcoin portfolio, now the largest component of Semler’s balance sheet, has become the key driver of headline results. This transformation accelerated through aggressive use of the ATM equity program and a new $100 million convertible debt issue. The rise in bitcoin price during Q2 2025 caused large swings in net income, with $83.8 million in paper gains recorded (GAAP). Equally, Semler is now exposed to downside risk if bitcoin falls.
Financing activities dominated the quarter's activity. The company borrowed an additional $100.0 million through a 4.25% coupon convertible note due in 2030 in January 2025, and put in place a $500 million ATM equity program. Resulting share dilution means shareholders now own a smaller piece of a company with higher leverage and much greater bitcoin exposure. The core healthcare business is not currently contributing to growth or profitability.
Looking Ahead
Semler management did not provide revenue, income, or other quantitative guidance for future periods. The company reaffirmed its focus on continued bitcoin purchases, ongoing regulatory efforts for new QuantaFlo indications, and early development of new products and services through CardioVanta.
No timeline or projections were given for a rebound in healthcare revenue or the regulatory status of new device indications. Investors are left to watch progress in CardioVanta and FDA processes, customer concentration trends, and, most importantly, bitcoin price and strategy milestones. Given the absence of forward outlook and concentration of business risk, the coming quarters remain highly dependent on external developments in both the health policy and cryptocurrency landscapes.
SMLR does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
