Mazor Robotics Q4 Loss Narrows, Revenues Improve Y/Y

Mazor Robotics Ltd. MZOR reported adjusted loss of 5 cents in the fourth quarter of 2015, which was narrower than the year-ago loss of 7 cents owing to higher revenues.

Revenues in the reported quarter surged 53.5% to $8.8 million, primarily due to stellar performance in the U.S. market, where sales improved an impressive 97.1% to $6.7 million. However, international revenues declined 8.7% on a year-over-year basis to $2.1 million.

Recurring revenues from system kit sales, services and other increased 40% on a year-over-year basis to $3.5 million in the reported quarter owing to increased utilization of the company’s Renaissance system.

During the fourth quarter, Mazor Robotics received orders for 12 Renaissance systems, out of which 8 were from the domestic market. The company ended 2015 with orders for 25 Renaissance systems, as compared with 20 in 2014.

Gross margin contracted 60 basis points (bps) to 78.4%.

Adjusted operating expenses increased 23.2% to nearly $9 million, largely because of Mazor Robotics’ continued investments in sales, marketing and research & development. Adjusted operating loss amounted to $2.1 million, as compared with $2.8 million in the year-ago quarter.

Our Take

Innovation continues to be the major area of focus for the company and we feel this will propel considerable growth over the long haul.

The top-line growth reflects that the company has managed to gain considerable penetration in new metropolitan markets. Mazor Robotics has also managed to boost its presence in academic centers, which is a key positive in our view.

The Renaissance system is an important growth driver for Mazor Robotics and we believe that the company will continue to win contracts for the same, which will propel significant top-line growth.

However, it is to be noted that innovation means considerable investment in research and development. Hence, higher operating expenses remain a potent headwind.

Zacks Rank and Other Key Picks

Currently, Mazor Robotics has a Zacks Rank #2 (Buy). Other well-placed stocks in the medical sector are Abiomed ABMD, CryoLife CRY and Luminex LMNX. All the stocks sport a Zacks Rank #1 (Strong Buy).

Josh Sandberg

Josh Sandberg is the President and CEO of Ortho Spine Partners and sits on several company and industry related Boards. He also is the Creator and Editor of OrthoSpineNews.

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