Mammography AI maker iCad lays off another 28% of workers as losses grow, revenues shrink

Only a few months after it quietly conducted a reduction in force, iCad is once again laying off another chunk of its workers.

New Hampshire-based iCad is developing imaging and radiotherapy technologies to improve detection and treatment of breast, prostate and colorectal cancers, led by its artificial intelligence-powered 3D mammography software.

In a filing with the U.S. Securities and Exchange Commission on Friday, the company announced that it had implemented a restructuring plan earlier in the week that includes layoffs of “approximately 23 employees,” affecting about 28% of its workforce. The majority of the laid-off employees will come from iCad’s detection business unit; the company houses two main divisions: detection and therapy.

The layoffs are expected to cost iCad about $300,000 in one-time severance and benefits payments, as well as employee transition costs. That charge is expected to hit the company’s bottom line throughout the first half of this year, though it noted in the filing that it “may incur additional costs during the remainder of 2023.”

Meanwhile, iCad subsidiary Xoft, which makes a miniaturized radiotherapy device, is planning to furlough 12 of its own employees, comprising half of its roster, according to the filing.

iCad didn’t respond to a request for additional comment.

Though iCad has yet to publish its financial results for the final quarter of and full-year 2022—the release is currently scheduled for Tuesday afternoon—it issued a preview earlier this month estimating fourth-quarter revenues of $6.5 million, which would mark a decrease of more than 16% compared to the final quarter of 2021 when it earned $7.8 million in revenues (PDF).

The company calculated similar declines throughout 2022. Through the first nine months of the year, iCad reported (PDF) total revenues of just under $21.5 million, almost 17% below the $25.8 million it earned in the first three quarters of 2021. Throughout that period, iCad’s net loss climbed to more than $10.5 million, compared to a net loss of just over $7 million for the first nine months the prior year.

Those results have come as iCad spent 2022 switching up its business model, transitioning from offering perpetual licenses of its software to selling subscriptions to the technology instead. That change is expected to save the company more than $3 million in expenses per year, CEO Stacey Stevens said in the third-quarter release.

The company also touted the success of the new recurring-revenue model, noting in the release that subscription sales in the third quarter alone had topped those of the entire first half of the year.

Despite that optimism, however, iCad has recently made several potentially money-saving moves. In an early November conference call discussing the third-quarter results, Stevens said the company had reduced its headcount by about 17% compared to the start of the year. That reduction was split between the company’s decision not to fill open positions and a round of layoffs that had been implemented in the week before the call, the CEO said.

Additionally, in the preview of its fourth-quarter results earlier this month, iCad disclosed that it has tapped investment bankers to help “explore strategic options” for its therapy division.