Rockley Photonics Holdings Ltd (NYSE:RKLY) Q2 2022 Earnings Conference Call August 11, 2022 5:00 PM ET
Company Participants
Gwyn Lauber – VP, IR
Andrew Rickman – Founder, Chairman, President & CEO
Chad Becker – Interim CFO
Conference Call Participants
Nathaniel Bolton – Needham & Company
Paul Silverstein – Cowen and Company
Timothy Savageaux – Northland Capital Markets
Operator
Welcome, and thank you for joining us today for this Rockley Photonics Second Quarter 2022 Conference Call. As a reminder, all phone participants are in a listen-only mode and later you will have the opportunity to ask questions. Please remember, today’s conference is being recorded. And now to get us started with opening remarks and introduction time, I’m pleased to turn the floor over to your host, Gwyn Lauber. Please go ahead.
Gwyn Lauber
Thank you, operator, and welcome, everyone. This is Gwyn Lauber, Vice President of Investor Relations at Rockley Photonics. Today, we released the results for the second quarter ended June 30, 2022. A copy of our earnings press release, along with supplemental financial tables are available on the Investor Relations section of our website at investor.rockleyphotonics.com.
With me on today’s call are Dr. Andrew Rickman, OBE, Chairman and Chief Executive Officer; and Chad Becker, Interim Chief Financial Officer. This call is being webcast and will be archived on the Investor Relations section of Rockley’s website.
Before I turn the call over to Andrew, I’d like to note that today’s discussion will contain forward-looking statements. These forward-looking statements include, but are not limited to, the anticipated features, benefits, scope, focus, status and goals of our platform, technology, products, studies and partnerships with third parties, our ability to bring and the timing of bringing our products to market, our product development schedules, our strategies, our research and development plans, our customers, our commercial and market opportunities and trends, our debt obligations, our cost and expenses, our cash resources, cash burn, revenue guidance, financial projections and financial performance, and outlook and factors affecting the foregoing.
These forward-looking statements are subject to risks and uncertainties that may cause actual results to vary materially from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed in our earnings press release and the Risk Factors section of our annual report on Form 10-K, as well as our other filings with the SEC. Any forward-looking statements that are made on this call are based on assumptions as of today. We undertake no obligation to update these statements as a result of new information or future events.
In addition to U.S. GAAP reporting, Rockley reports certain non-GAAP financial measures that do not conform to generally accepted accounting principles. We believe that these non-GAAP measures enhance the understanding of our performance. Reconciliations of these GAAP and non-GAAP measures are included in the tables found in our earnings press release.
Now I’ll turn the call over to Andrew.
Andrew Rickman
Thank you, Gwyn, and thank you all for joining us for our second quarter 2022 earnings conference call. Today, I’ll start by briefly discussing our results and then talk about our business. In the second quarter, we generated revenues of $1.5 million. Our GAAP net loss for the second quarter was $54.2 million, plus noncash charges related to the CRM of $67.6 million for a total of $121.8 million. This compares to a loss of $41.8 million in the first quarter of 2022, which included an interest payment for our debt and expenses for our datacom business. We ended the quarter with $46.6 million in cash, cash equivalents and investments. In a few moments, Chad will provide more detail on our financials. A full summary of our financial statements is available on the Investor Relations section of our website.
Turning to our business. I’m especially happy to speak with you on the first anniversary of our business combination. One year ago, I could not have imagined how far our business would have come. As I addressed you, we are at an extraordinary point for the company as we move from R&D to starting production of a solution that, I believe, will truly change the way we approach health care and will help improve the health and wellness of people worldwide. As you know, there’s an ongoing convergence of med tech and consumer wearable markets as they buy predominance in the health and wellness marketplace. We believe that Rockley solution fits firmly at the center of this convergence and that our biosensing solution will help to provide competitive differentiation to our partners and customers.
At our core is our commitment to helping to change the health care landscape, from a sick care system to a truly health care system. We believe that not only is technology enabling this change, but also society’s realization that we can and must do better. We need to learn how to improve our baseline health. And by providing a comprehensive biomarker monitoring solution, we believe that we will offer tools to enable consumers, patients and health care providers to improve health outcomes by acting on the data received from our products.
In the U.S., nearly 20% of the U.S. GDP is spent on sick care. We believe that our solution has the potential to reduce the cost of treatment and improve health outcomes by identifying symptoms of illness and chronic disease much earlier. By helping people understand their physiology as they work towards positive outcomes, we believe our devices will help to enable wellness proactively rather than waiting to treat illness reactively.
Now I’d like to provide some insights into our markets. Today, we have 19 customers across the consumer wearables med tech market, representing 6 of the top 10 largest wearable companies and two of the five largest med tech companies. We continue to increase our engagement with these and other customers. It’s worth noting that in med tech we have customer interest across multiple segments, including patient monitoring, clinical trials, health and wellness monitoring, lifestyle management, pharmaceuticals and fitness. We believe that this expanded customer base should provide us with multiple opportunities in the market and will allow us to not be overly reliant on any one customer.
Turning to consumer wearables. In June, we announced that one of our Tier 1 consumer wearable customers have begun an evaluation program using Rockley’s photonic-based sensing technology. Under the program, Rockley’s VitalSpex Pro Pro comprehensive noninvasive biomarker measurement solution has been evaluated for potential integration into the customers’ future wearable products. The Tier 1 customer adds to Rockley’s growing list of global consumer electronics manufacturers to receive shipments of our VitalSpex Pro technology, which is expected to enable the noninvasive measurement of alcohol, glucose and lactate from a wrist-worn device. This evaluation is a big milestone as it will further the development of our Pro solution.
In med tech, during the quarter, we signed a supply agreement and received our first purchase order for our Bioptx baseline band from a global health technology provider. This was a very exciting accomplishment for us. We plan to begin shipping units to the customer in the fourth quarter. The customer also provided their forecast for 2023 purchases, which includes a significant ramp throughout the year as we achieve ISO and other regulatory qualifications. This first order is truly exciting as it means that we could have some devices on the wrist of end users by year-end. To that end, we received production of Bioptx baseline band devices from our manufacturing partner. I’m delighted to have this near final version in my hand and look forward to showing the device to you throughout the quarter.
Another important announcement for us was our agreement to partner with a top 10 clinical research organization. This new customer will work with us to develop and evaluate our Bioptx wristband, our cloud services and other elements of our biosensing platform. We believe this partnership will provide the first opportunity to integrate our health monitoring solution into a CRO’s clinical research studies. By offering an expanded range of biomarkers, including core body temperature, hydration, blood pressure, alcohol, glucose and lactate, this partnership not only will expand our reach in med tech, but it also has the potential to significantly aid CROs by creating opportunities for clinicians and researchers to conduct decentralized trials and gain crucial insight into the health and well-being of patients throughout the trials regardless of their location.
We recently made several announcements that I believe will help to enhance our understanding of our markets and regulatory landscape as well as sharpening our overall strategic vision. First, I am delighted to welcome Richard Kuntz to our Board of Directors. Rick brings an incredibly broad background in multiple areas of health care. Most recently, he served as Chief Medical and Scientific Officer at Medtronic. He was also the Founder and Chief Scientific Officer of the Harvard Clinical Research Institute, a university-based contract research organization which coordinates National Institute of Health and industrial clinical trials with the FDA. Additionally, he directed numerous multi-center clinical trials, authored more than 250 original peer-reviewed publications and served as an Associate Professor of Medicine at the Harvard Medical School. I am very excited to have Rick on board.
We also announced the formation of our Scientific Advisory Board, or SAB. This group of experts brings experience in therapies for diseases associated with diabetes and cardiology, as well as human hydration and fundamental spectroscopy and is tasked with helping to further the company’s ongoing efforts to revolutionize wearable biosensing technology. The newly formed SAB will support Rockley’s mission to empower people to make better informed decisions about their health and well-being.
Now I’ll update you on our human trials. In the second quarter we expanded on our preliminary human studies into core body temperature, hydration and blood pressure with larger follow-on studies of these biomarkers ahead of the launch of Bioptx baseline band. Our focus was on a broad range of study participants and use cases, and additional validation data was collected. Our Bioptx baseline band is expected to launch in the fourth quarter. The data that we’ve collected continues to support the results of our previous studies and helps us fine-tune the performance of the Rockley sensing platform with the goal of providing accuracy that is closer to the gold standard than any of the commercially available devices.
As a reminder, core body temperature, blood pressure and hydration biomarkers, along with heart rate, heart rate variability, respiration and blood oxygen levels will be measured in our baseline solution. We are also conducting early-stage studies of our Pro solution, which includes the measurement of alcohol, glucose and lactate, in addition to the biomarkers available in our baseline technology. We are very pleased with the early results. We plan to update you on the results of our human studies for each biomarker as we complete various programs throughout the year.
Now I’d like to update you on our move to production. To ready ourselves for our production ramp in 2023, we’ve assembled a network of suppliers to support our manufacturing. We built a dual source strategy to ensure a diversified supply chain that we hope will help mitigate potential issues with any one supplier. We’ve made significant progress in our wristband manufacturing capability. As we move to the next phase of production, I’m very optimistic as the team we’ve assembled is world-class and has the know-how to steer us through this stage.
Now I’d like to update you on our datacom asset. In the second quarter, we received what we thought was a very good offer for this business. As we moved through the negotiations, it became apparent that the buyer was trying to have a step in terms of the original agreement. We realized that it was crucial to protect our IP and our business. With our focus on the production of our baseline band, it became clear that actively trying to monetize our datacom asset have become a distraction. Since stopping the transaction, we repurposed most of the datacom staff and resources. We are not proactively pursuing a similar type of transaction for the datacom business.
We have eliminated its expenses, making the transaction cash flow neutral, thereby achieving our financial objectives. We still believe there is an opportunity to monetize our datacom asset. But as we move to production, all our energies must be focused on our baseline band. I strongly believe that Rockley is pursuing the right path for our future. We continue to develop highly sophisticated solutions that will provide individuals and health care professionals with a powerful holistic view of human health through insights provided by multiple biomarkers. Our solution will allow these audiences to monitor and track trends on individual’s health and wellness. I believe this will profoundly change today’s system as we move from providing sick care to true health care.
The insights that our products will enable have the potential to change one’s daily life by providing a deeper understanding of the impact of lifestyle choices on one’s health, helping physicians identify serious health conditions and possible disease states earlier, allowing for more affordable prevention measures and providing a real opportunity for remote patient monitoring. I believe our solution, which utilizes our very powerful technology, will help to profoundly change health care for the better. We’ve reached a very exciting time at Rockley. As I sit in our office in Pasadena, I’m amazed at how far we’ve come. I truly feel the excitement around the office as we move towards the production stage. We believe what we are doing is truly exceptional as we’re building a technology that will truly change the current health care system and will help improve the health and wellness of people worldwide.
With that, I will turn the call over to Chad for a review of our financial performance in the quarter. Thank you.
Chad Becker
Thank you, Andrew, and good afternoon, everyone. On today’s call, I will discuss some key topics and will provide you with a deeper understanding of our business. I will end by providing an update on our outlook for the remainder of 2022. We recorded revenue of approximately $1.5 million in the second quarter. Revenue for the quarter was solely related to nonrecurring engineering services from our customers and revenue is recognized based on mutually agreed performance, obligation and acceptance.
Cost of revenue was $2.3 million, resulting in a gross profit of negative $800,000. It is important to note that expenses are recorded as incurred even if revenue has not been recognized. In Q2, R&D expenditures were $26.3 million, which includes a slight increase in product design services and third-party engineering, as well as other expenses as we build our infrastructure to support our product efforts ahead of our second half 2022 production ramp. This compares to R&D expenditures of $24.8 million in Q1.
SG&A expenses increased from $10.9 million in Q1 to $21 million in the second quarter due to noncapitalized fees related to the recent issuance of our convertible notes. For the second quarter, our cash burn was impacted by several expenses, which resulted in higher cash outlays. These expenses included $10 million in noncapitalized deal fees and other onetime expenses, including expenses for our datacom business of roughly $1.6 million related mainly to salaries and [indiscernible] partner spend. As Andrew noted, our efforts to repurpose our datacom employees and eliminate those expenses is expected to be cash flow neutral compared to our previous divestment plan.
Excluding these expenses, cash used in operating activities during the quarter totaled approximately $29.6 million, an improvement from the first quarter as we implemented programs to preserve capital and reduce cash burn. We believe that our cash burn will be lower in the second half of 2022 as we work towards reducing expenses. We ended the quarter with $46.6 million in cash, cash equivalents and investments. We did not utilize any funds from our e-lock. And as a reminder, we believe that we will receive additional funds from a U.K. R&D tax credit.
Looking ahead to 2022, our core product revenue guidance is $5 million to $10 million. While we believe that there may be future opportunities to monetize our datacom assets, we have not included any revenue from it in our guidance. For 2023, we plan to issue revenue guidance on our third quarter earnings call.
In wrapping up my prepared remarks, I’ll just add that we believe the opportunity in front of us is large and that with discipline, we will execute on our road map ahead. I will now turn the call back to the operator to open up the call for questions.
Question-and-Answer Session
Operator
[Operator Instructions]. We’ll hear first from Quinn Bolton at Needham.
Nathaniel Bolton
Congratulations on the first volume purchase order for the Bioptx platform. I guess I was hoping you might be able to provide a little bit more detail on that initial contract, and Andrew, you mentioned the possibility or a forecast for a pretty significant ramp in 2023. Can you just quantify how much this initial purchase order might generate in revenue and then give us a sense as you look into 2023, could this customer generate tens of millions of dollars, single-digit millions of dollars, just any kind of ballpark we could think about as we’re trying to model 2023?
Andrew Rickman
Yes. This is a very, very, very big opportunity. This alone could make the company extremely substantial. So this customer has provided us with initial purchase order, but has given us also the forecast for the year ahead, and we have a good grasp of the overall market opportunity associated with this particular channel over the next couple of years. And so it’s a very, very large opportunity.
Nathaniel Bolton
Just maybe — would that be hundreds of thousands potentially of wristbands? Or I mean, is it substantial? And it sounds like it’s pretty large order or potential.
Andrew Rickman
Yes. The addressable market through this channel is in the millions of units in due course.
Nathaniel Bolton
Second question for me, just I was wondering if you might be able to update us on your efforts in the consumer electronics segment. I believe you were going to be providing samples to a Tier 1 customer in the fourth quarter with a potential launch of a customer device sometime in 2023. Is that still the right time frame to be thinking about for the consumer electronics opportunity?
Andrew Rickman
We are working very closely with all of the consumer customers that we’ve got on their design and processes. At this point in time, we can’t say anything about the specific launch plans. But those design-in activities are going very, very well. It is worth noting that since we took the company public a year ago, there really has been a shift around in terms of the timing that our own respond and the Bioptx respond that you now see has really accelerated ahead of everything else and is our focus in terms of revenue for next year.
The design-in activities associated with the consumer device companies are very exciting. They represent tens of thousands of units just in their own sort of qualification and ramp-up phase and then building inventory. But what we can see at this time is with great firmness is around our own wristband, which gives us a lot of confidence as we look forward for the business in 2023.
Nathaniel Bolton
And then just maybe one for Chad. How should we think about OpEx? I know you’ve said that on the one hand you’ve taken actions to reduce OpEx in the second half, but it sounds like much of the staff that was deployed on datacom has been redeployed to focus on the health care and the medical device opportunity. And so I’m just trying to sort of think about those two comments and what it implies for OpEx on a quarterly basis into the second half of this year?
Chad Becker
Yes. I would just like to say that the entire company is committed to the efficiency of cash and I’m just pleased how the entire organization is committed to that cause. So whether it’s hiring employees or investing in the CapEx, we just continue to be very diligent with the cash usage. And as we’ve mentioned in the past, our target for the cash burn, we are focusing on doing our best to be on the lower range of that band.
Operator
Thank you for your question, sir. Next, we’ll move to Paul Silverstein at Cowen.
Paul Silverstein
Andrew, before I ask my real question, I want to make sure I understood you correctly on this call and from your press release. I think what you’re telling us is that the consumer wearable opportunity, which, correct me if I’m wrong, you previously projected $300 million to $320 million of revenue for ’23, you’ve now removed that guidance. So I heard you just say the initial opportunities tens of thousands of units, but I think you’re telling us that you no longer expect any of the consumer wearable companies to go forward in a meaningful way in ’23. I just want to make sure that I understand that correctly before I ask you some other questions.
Andrew Rickman
No, it’s not quite what we’ve said, but we said that the — our own respond going into the medical applications and it’s designed specifically for that area is dominating us for 2023 in terms of our expectations for the year. From the consumer device customer point of view, there’s still a huge amount of activity and design-in activity going on in that area. But it is predicated on those customers launching their products for us to be able to forecast those customers beyond the tens of thousands of units that are relevant to the buildup, if you like, of their own qualification of their own devices. So as we look forward, we’re seeing a greater level of certainty in terms of our revenues for 2023, driven by our own device, which is exceeding our previous expectations in terms of its potential.
Paul Silverstein
But Andrew, I’m not trying to be argumentative, but I’m confused. You had a $300 million to $320 million guidance out there based on consumer wearables. You now have your med tech that stepped up. The way you’re presenting it, it sounds like it’s a choice, which it shouldn’t be. I would think that the med tech opportunity, which has manifested itself faster than you all had previously conveyed that, that should increase your confidence as to $300 million to $320 million and frankly, even more than increase the confidence, should augment, it should be something north of that.
But by virtue of taking away that guidance, again, I’m not trying to be argumentative here. I’m just trying to understand, by taking away, it sounds like you don’t have the confidence on the wearable side anymore. Otherwise, you want to remove the guidance you’ve been telling us, now with the strength of med tech having materialized, you’re looking at something even greater than $300 million to $320 million. What am I not understanding?
Andrew Rickman
I think it’s a good point, Paul. There’s definitely — as we look at our projections going out into future years and when you think about it earlier in this year, then the certainty associated with any of the revenues had a particular risk associated with it. Now we find ourselves in a situation where we are much, much more certain about the prospects of our own wristband and where that is much more in our control. So there’s always going to be risks associated with our customers in terms of — particularly in the consumer device area in terms of their launch and their particular ramp. So our confidence in the mix has definitely moved towards the med tech area.
And you are right to point out that in the consumer device area, there is an element of less certainty in terms of the ramp-up. But the fundamental point is that our overall business prospects in our view are actually stronger than they have been before because when you look at the wearable device ourselves, you look at the average selling price, you look at the margin associated with it, you look at the diversity of customers that we’ve got in that particular area, this is a very exciting prospect for the business. And it leads the way now in a way where initially we thought the consumer device customers were going to lead the way. Now we’re in a position where that order book, if you like, and visibility is firming up earlier on the med tech side, which is a more profitable and in the sense exciting business.
And then when you look at the overall size of the individual markets, if you look at those two markets in terms of their dollar representation for us, they’re about equal in terms of size. They’re both still strongly there, but the med tech, you’re right to observe, the med tech has definitely accelerated ahead.
Paul Silverstein
But Andrew, if they’re equal in size, why are you all backing away from the original guidance? And the real question is on the consumer wearables side, given that time has marched on and one would think objectively that at this point in time you would have greater visibility, and I’m trying to understand what’s happened. It’s not just one customer, it’s not just Apple. It sounds like as a general proposition, the consumer wearable companies are taking more time. Not that it won’t materialize.
The real question is, what — if we dialed back the clock in time, you all had stated that there were no meaningful hurdles from a technology standpoint that remaining to be overcome for adoption and deployment. And I’m trying to understand what’s changed. It sounds like something has changed with consumer wearable companies where they’re not moving forward consistent with what your original expectations were. And again, the question is, what’s changed? Is it a technology hurdle issue? Is it a commercial issue? What’s changed?
Andrew Rickman
I don’t think anything has changed. But from our point of view, in terms of our emphasis and our effort in terms of getting product out there, clearly, we’re seeing a stronger pull with more profitability from the med tech area. So if you look at the utilization of our own cash and capital in terms of our own efforts to meet the numbers for 2023, it’s just so much clearer for us in the med tech area than it is in the consumer device area.
And in the consumer device area, we continue the design-in processes, but our hands are in a sense in — our position is in the hands of those consumer device companies in terms of their launch program. So I think we’re making the message pretty clear that the emphasis has moved towards the medical device companies. The opportunity, as you rightly point out in the consumer device area, is still there, but we are in the hands of those companies in terms of their own launch programs.
Paul Silverstein
My last question, again, I just want to make sure I understand this. If Xiaomi or another consumer wearable technology company placed a significant order with you for inclusion in their devices shipping in ’23, you’re not telling us that you don’t have the production capability to satisfy both your med tech customers and your consumer wearable customers, and this is all about a choice you’re making to focus on med tech as opposed to consumer wearables. That — I would think that would be crazy, but I’ll let you respond.
Andrew Rickman
Yes. I’m not sure I fully understood the question. But the — in terms of the production capacity, obviously, the utilization of production capacity to sell products that sell for — how will I put it, 10 times as much as the components that go in a consumer wearable is within — very much within the interest of the company to be able to do that. So there is a clear prioritization that we’re communicating here that we have a much, much higher selling price for our own medical-orientated wearable and we have a much higher margin potential in that area.
Operator
And our next question is going to come from the line of Tim Savageaux with Northland Capital Markets.
Timothy Savageaux
I just want to follow up on the size of the potential volume opportunities. I think last call, and I don’t know whether this is in reference to a combination of consumer and med tech or what have you. But I think you thought you could ship something under 1 million units in calendar ’22, in the hundreds of thousands and multimillion in ’23. And again, that could be a range of ASPs there. But even then I think we were talking more about the wristband than anything else. I mean, can you provide some sort of update on those expectations? It sounds like maybe ’22 might be a little lighter, but ’23 might be pretty similar in terms of those metrics that you set out last quarter? And I’ll follow up from there.
Chad Becker
Tim, I think at this point, from my perspective, we have not — and we won’t be providing guidance for the number of units that we expect to sell next year. But what I — we do believe that the majority of the sales next year will come from our med tech customers. And these are the units that have the higher ASP and higher gross margin potential.
Timothy Savageaux
And I think you may have done that. Maybe you didn’t — the company may have at least talked in broad strokes about those numbers. So I don’t think I made this up, but I suppose it’s possible. From a customer count standpoint, it looks like you mentioned being at 19 currently. I think that’s up two from the last count. Anything notable to discuss in terms of new customer additions, either on consumer or med tech?
Andrew Rickman
With the — I mean, we’ve gotten in the sense more than enough customers. Yes, we did added a further two in the med tech area. And I mean, the engagement with these customers, we’ve made some announcements associated with shipment of our components to these companies. The engagement is very deep and at a corporate level with many of them, and we’re very excited with the progress. In a sense, we don’t need any more customers. We’ve got the pipeline full.
Timothy Savageaux
And then finally for me on ASPs. Andrew, I think you made an interesting comment about — and I don’t know whether this is an end product ASP or kind of a wholesale, but you mentioned 10 times the components. We variably talked about optical engines at $10 or $20 and modules at $20 or $30. If I were to go halfway in between there and say, $20 is your kind of component ASP, if you will, is that a reasonable expectation for either Rockley’s or kind of an end retail ASP? Or can you kind of talk us through that a little bit?
Andrew Rickman
Yes, that you’ve got the right kind of idea in terms of the ASP there. And we haven’t been explicit about that, but we were explicit about the chipsets and modules into the consumer market. So you’re absolutely on the money there, but basically the work that the team has done in order to produce our own Bioptx wearable, which by the way, is an extremely good reference for the consumer market. But it’s specifically designed for a whole range of different sectors in the medical field and in the health and wellness field, and in kind of the professional deployment.
And as a complete device, you’ve got various different price points. You’ve got the price point of what we would call an unregulated device. You then got a price point that goes up that relates to when that device receives FDA approval for the biomarkers. And then we’re talking here about the baseline band. And then, of course, what follows that is the Pro band, which again, is a more powerful device and would have a higher selling price and again go up in terms of selling price in terms of regulated. So we’re trying to get the message across here that through incredible efforts to build the Bioptx band ourselves and the customer reception associated with the device, we’ve been able to elevate the average selling price very, very dramatically with a road map that just continues to take it up with further enhancements in performance through going from unregulated to regulated and creating an extremely exciting opportunity for us in that product line — that product area alone.
The other element of it, which we don’t have a full handle on in terms of our own kind of internal view at this point in time, is on the recurring revenues associated with the use of the platform with what we call connect software, discover software and the inferred applications that sit on the platform. Now those areas could turn out to be extremely profitable as well. And if you look at the metrics in terms of what people in wearable devices charge for functions on a monthly basis, those numbers are typically in the kind of $10 to $30 range, they are significant upside for the model.
And the way that we’ve architected things here is that we’ve created a platform that’s very open, and that platform means that, for example, when you look at the use of this technology in clinical research trials, for example, it’s very, very data intensive. There’s a particular software kind of architecture that one’s got to sit into. We’ve already done with one partner, the integration into that software architecture.
So we’ve created a platform that can adapt to whether it’s in-hospital patient monitoring, remote patient monitoring, clinical trials monitoring, we’ve created a platform that can easily adapt into each one of these environments plug-in, very efficiently and where as the data flows through our connect and cloud elements through into our customers’ environments, that is a continued ongoing repeatable revenue opportunity for us, which we see as upside in terms of where we’ve been looking so far.
Operator
And thank you to everyone that posed a question during today’s conference. At this time, we have no further signals from our queue. So I’d like to turn it back to you, Mr. Rickman for any additional or closing remarks you may have.
Andrew Rickman
Thank you for participating in our call today. We are very excited about the opportunities ahead of us and are looking forward to providing you with updates as we move through 2022 and beyond. Thank you, everybody.
Operator
Ladies and gentlemen, this does conclude today’s teleconference and we do thank you all for your participation. You may now disconnect your lines, and we hope that you enjoy the rest of your day.
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