Welcome to the IRadimed Corporation Q1 2022 financial results conference call. Currently, all participants are in a listen only mode, and at the end of the call, we will conduct a question and answer session. As a reminder, this call is being recorded today, 29 April , 2022, and contains time-sensitive information that is accurate only as of today. Earlier, IRadimed released its financial results for the Q1 of 2022. A copy of this press release announcing the company's earnings is available under the heading News on their website at iradimed.com. A copy of the press release was also furnished to the Securities and Exchange Commission on Form 8-K and can be found at sec.gov.
This call is being broadcast live over the Internet on the company's website at iradimed.com, and a replay of the call will be available on the website for the next 90 days. Some of the information to be furnished in today's session will constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those focused on the future performance, results, plans, and events and may include the company's expected future results. IRadimed reminds you that future results may differ materially from these forward-looking statements due to several risk factors. For a description of the relevant risks and uncertainties that may affect the company's business, please see the Risk Factors section of the company's most recent reports filed with the Securities and Exchange Commission, which again may be obtained for free from the SEC's website at sec.gov.
I would now like to turn the call over to Roger Susi, President and Chief Executive Officer of IRadimed Corporation. Mr. Susi.
Thanks, operator, and good morning, and thank you all for joining us on the call this morning. IRadimed had another very good quarter of revenue and earnings growth, as was reported in this morning's release. The trend of strong demand for our products remains intact, and thus we feel very good about the coming quarters as well. As reported in this morning's release, Q1 revenue was $12.3 million, nearly a 34% increase over the Q1 last year. Non-GAAP earnings were $0.22 or 69% over Q1 2021. I'm very pleased with these results and the strong start our company has had in 2022. Our sales team continues to perform well, increasingly driving customer demand for our products. Total Q1 bookings remained at record levels, coming in 52% higher than Q1 last year.
Strong demand for our products has given us additional visibility to a growing backlog, which increased from its year-end level of $10.9 million. Our engineering and regulatory teams continue to work closely on obtaining 510(k) clearance for our next generation IV pump, which has been branded the MRidium 3870. We continue working diligently to meet our timelines for the second half of this year, and while there is still much to complete, we are committed to doing everything we can do to achieve our goal. Regarding our new ferromagnetic detection system, we plan to install our first placements this quarter with a growing number of installations from that point on.
As I have said in the past, we are very, we feel very good about where we are with this product and believe that we have a technologically superior system compared to the others already in the field. Regarding our financial guidance, we have considered the booking trends and the added visibility we have through growing backlog. We've also considered the macro risks associated with supply chain and feel confident in increasing our full year expectations. Those supply issues are a near daily consideration at some level, and supply instability is now a familiar norm the world over. As we have the means and tenacity to find workaround solutions as necessary, we have comfort that we can continue to make shipments without material delay.
Considering Q1 with an eye on sales levels and deal count, we now expect full year 2022 revenue of $52.5 million to $53.2 million, with GAAP earnings of $0.89 to $0.95 and non-GAAP earnings of $0.96 to $1.03. Additionally, for the Q2 of this year, we expect revenue of $12.5 to $12.7 million, with GAAP earnings of $0.21 to $0.23 and non-GAAP earnings of $0.23 to $0.25. Now, before turning the call over, I'd like to address the executive transition that we announced yesterday afternoon. As disclosed, Chris Scott has resigned from the company effective 27 May to pursue other opportunities. Over the next 30 days, he'll be focused on a smooth transition of financial responsibilities to Matt Garner, who will serve as interim CFO while we go through a search process.
Chris has been a valued partner to me and the rest of the organization during his 8+ years here. He has supported the company every step of the way and will be missed. Sorry as we are to see him go, he leaves a very capable finance team and the company in good shape, which the finance team will now be led by Matt. This has been the situation for the last several years. I'm confident in Matt's abilities to maintain the quality and integrity of our financial information during this search process. Now I'd like to turn the call over to Matt so he can introduce himself and to review the financial results of the quarter. Matt?
Thank you, Roger, and good morning, everyone. Before summarizing the financial results, I'd like to spend a moment and introduce myself. I began with IRadimed in February 2014 as the assistant controller, and in 2020 was elevated to the controller role. Over these last eight years with IRadimed, I've developed a deep understanding of the company and its culture. Overall, I have 15 years of experience within the medical equipment industry, including seven years at Roger's former company. I also hold a bachelor's degree in accounting from Southern New Hampshire University. I am thankful for the opportunity to serve as the company's interim CFO and look forward to interfacing with you while the search proceeds. Now on to the financial summary. As in the past, I will be discussing these results on a GAAP basis as well as on a non-GAAP basis.
You can find a description of our non-GAAP operating measures in this morning's earnings release. You can also find a reconciliation of these non-GAAP measures to the nearest GAAP measure on the last page of today's release. As reported earlier this morning, Q1 2022 revenue was $12.3 million, an increase of 33.5% compared to the Q1 of 2021. Revenue from domestic sales increased 37.2% to $10 million, and revenue from international sales increased 19.5% to $2.3 million. Overall, domestic revenue accounted for 81.1% of total revenue for Q1 2022, compared to 78.8% for Q1 of 2021. Device revenue increased 38.8% to $8.5 million. This was driven by a 99.5% increase in monitor revenue resulting from continued customer acceptance and win rates.
The average selling price of our MRI compatible IV infusion pump system during the Q1 2022 was approximately $33,800, compared to approximately $32,700 for the Q1 of 2021. This increase relates to higher domestic unit sales, partially offset by an unfavorable product sales mix. The average selling price of our MRI compatible patient vital signs monitoring system during the Q1 2022 was approximately $46,800, compared to approximately $38,300 for the same period in 2021. This increase relates to higher domestic unit sales and price increases that we began implementing during the second half of 2021.
Revenue from disposables and service increased 25.9% to $3.3 million for the Q1 of 2022, and revenue from our maintenance contracts was consistent at $ half a million for both periods. Gross margin was 76.2% for the 2022 quarter, compared to 76.6% for the 2021 quarter. The decrease in gross margin percent is primarily due to unfavorable labor and overhead expenses, partially offset by higher domestic sales. While the supply chain remains challenging, we continue to believe that any negative impact from higher costs will likely be limited and partially offset by higher levels of unit production, resulting in gross margins that are consistent with our historical ranges.
Operating expenses were $6.3 million or 51.2% of revenue, compared to $5.3 million or approximately 57.3% of revenue for the Q1 of 2021. On a dollar basis, this increase is primarily due to higher sales commissions, payroll and benefit costs, sales activity expenses, and engineering costs for prototyping and design. As a result, income from operations grew 73% to $3.1 million for the 2022 quarter. We recognized a tax expense during the Q1 2022 of approximately $573 000, resulting in an effective tax rate of 18.7% compared to a tax expense of approximately $384000 in the 2021 quarter. This increase is due to higher taxable income, partially offset by benefits associated with stock compensation and research and development credits.
On a GAAP basis, net income was $0.20 per share, compared to $0.11 for the 2021 quarter. On a non-GAAP basis, adjusted income was $0.22 per diluted share for the 2022 quarter, compared to $0.13 for the Q1 2021. Cash from operations grew to $1.4 million for the three months ended 31 March , 2022, from $0.9 million for the same period in 2021. For the three months ended 31 March , 2022 and 2021, our free cash flow, a non-GAAP measure, was $1.2 million and $0.8 million respectively. With that, I will turn the call over for questions. Operator?
Thank you. As a reminder, to ask a question, you will need to press star one on your touchtone telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Again, that's star one on your touchtone telephone to ask a question. Our first question comes from the line of Scott Henry with Roth Capital. Your line is open.
Thank you, and good morning. First, Chris, best of luck to you. It's been a pleasure working with you. Second, Roger, you told us the name of the next generation pump. What was that again?
We call it the 3870. It's a model. We use the same, you know, MRidium name that was carried to these pumps for all these years. You know, we had a 3850. We have current pumps at 3860. This one we're calling a 3870.
Perfect. Is there any update as far as correspondence with FDA and, you know, how we should think about the timeline for approval of that product?
Yeah. We've had a couple of calls, actually, Scott, in the last six weeks. Yeah, in the last six weeks. Yeah, the communications have been, I'd say good, you know. Those communications are in the form of what we call information requests, clarifications to the questions that we've been trying to answer formally. You can, you know, submit and have such calls. They've engaged with us, and that's been positive. On this end, as I said, you know, we're working. It's all hands on deck there in our regulatory and engineering side, answering this host of questions, and we plan to get them to the FDA in August.
Then we hope that they can, you know, pull their support in and take care of business on their end and get this thing done.
Okay. Thanks for the update there. I think I heard on the FMD product no revenues in Q1, but should we expect to see revenues in Q2?
Well, yeah. Yeah, we're gonna start install a couple of these ones that we've had these orders booked on.
You book the revenues post-installation, is that correct?
Yeah. Mm-hmm.
Okay. Just a couple final questions. How is the pricing environment? I mean, given kind of the inflationary backdrop, do you feel that you have some pricing power to, you know, maybe not immediately, but certainly raise price over time?
Answer is yes, but I gotta point out, I was a little proactive on that. As I said, you know, we had some pretty good increases that we started on about this time last year, and you're seeing the fruit of that, particularly in the monitor. As you saw the average price that Matt quoted you, that has been pretty significant.
Okay. Great. Final question maybe for Matt, just get him involved. The tax rate, should we still be thinking about kind of a 24%, 25% tax rate for the full year? It was certainly a little lower than that in the Q1 .
Thereabouts. I mean, for what we're looking at, we've got roughly a 23% for the full year.
Okay. Perfect. Thank you for that color. Thanks for taking the questions, guys.
All right, Scott. Appreciate it.
Thank you. Once again, to ask a question, please press star one on your touchtone telephone. Again, that's star one on your touchtone telephone to ask a question. Our next question comes from the line of Lisa Springer of Singular Research. Your line is open.
Thank you. Good morning. Roger, I was wondering if you can comment on, in terms of the surge in monitor sales in terms of, customer segments. Was there any particular group of customers that was driving that, or was it kinda spread across your whole customer base?
The monitor?
Yeah.
Lisa? Yeah.
Yes.
Yeah. It's across the whole customer base. We find ourselves as these quarters have rolled along since we launched the monitor, we're participating in larger and larger deals as well. That's very encouraging, meaning you know we're moving from selling maybe one or two monitors at a pop to you know eight, 10, 12. It's pretty exciting.
Mm-hmm. For sure. Okay. Have you seen any impact on your European sales from the Ukraine war?
Maybe too soon to tell if it's because of the Ukraine issues, but you know, the European business is. You know, I'd have to say international has been a little sluggish. As you noticed, you know, we're
Mm-hmm.
We said we're, you know, kind of favorable from the mix being domestic, a little bit stout. I don't think that's. I can't tell you if that's anything to do with hesitations in Europe from the Ukraine thing or not, but, you know, I guess it's probably a good question and a logical thing to think if. But at this point, I don't have any reason to tell you yes or no.
Okay. Thank you, Roger.
Mm-hmm.
Thank you. At this time, I'd like to turn the call back over to Roger Susi for any closing remarks. Sir?
Well, I'll wrap up the call by saying again how pleased I am with our Q1 results and with how well the business is operating. I continue to believe strongly that customers are realizing the value of that our products bring, which shows in the high level of bookings that we achieve, quarter after quarter here, these last few quarters. I guess I, you know, I'd like to say that Chris will be here working through the rest of the month to help Matt and everyone through this transition, and he's gonna be missed. You know, man's gotta do what he's gotta do and as he sees fit, and we wish him well.
We're off to a great start in 2022, and I look forward to speaking with you all again next quarter. Thank you very much.
Thank you. This concludes the call. You may now disconnect.