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01/10 16:25
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects mixed signals: while there is progress in sales force expansion and potential improvements in reimbursement processes, the guidance was narrowed, and gross margin guidance remains unchanged despite a Q2 beat. The Q&A reveals management's cautious optimism but also highlights uncertainties, particularly in reimbursement changes and Tier 3/4 account impacts. Without a clear market cap, the lack of strong positive catalysts and vague management responses suggest a neutral stock price movement in the short term.
Total Revenue $13.6 million in Q2 2025, a 15% increase year-over-year. The increase was driven by growth in the U.S. heart failure business, expansion into new sales territories, new accounts, and increased physician and patient awareness of Barostim.
U.S. Heart Failure Revenue $12.2 million in Q2 2025, a 15% increase year-over-year. This growth was attributed to the expansion into new sales territories, new accounts, and increased awareness of Barostim.
Heart Failure Revenue Units in the U.S. 387 units in Q2 2025, up from 339 units in Q2 2024. The increase was driven by the same factors as revenue growth: expansion into new territories, new accounts, and increased awareness.
Revenue in Europe $1.3 million in Q2 2025, a 19% increase year-over-year. The increase was attributed to growth in the European market despite a slight decrease in total revenue units (61 units in Q2 2025 compared to 63 units in Q2 2024).
Gross Profit $11.5 million in Q2 2025, a 16% increase year-over-year. Gross margin remained consistent at 84%.
R&D Expenses $2.5 million in Q2 2025, an 11% decrease year-over-year. The decrease was driven by a $0.3 million reduction in compensation expenses.
SG&A Expenses $23.4 million in Q2 2025, an 11% increase year-over-year. The increase was primarily due to a $1.4 million rise in compensation expenses, $0.8 million in travel expenses, and $0.4 million in noncash stock-based compensation, partially offset by a $0.5 million decrease in advertising expenses.
Interest Expense Increased by $0.5 million in Q2 2025 compared to Q2 2024. This was driven by higher levels of borrowings under the term loan agreement.
Other Income Net Increased by $0.2 million in Q2 2025 compared to Q2 2024. This was primarily due to more interest income on interest-bearing accounts.
Net Loss $14.7 million or $0.57 per share in Q2 2025, compared to $14 million or $0.65 per share in Q2 2024. The increase in net loss was due to higher SG&A expenses and interest expenses.
Cash and Cash Equivalents $95 million as of June 30, 2025. Net cash used in operating and investing activities was $8 million in Q2 2025, compared to $10.2 million in Q2 2024.
Barostim Therapy: Continued focus on Barostim therapy for heart failure patients, with efforts to make it a standard of care. Clinical evidence generation and awareness-building efforts are ongoing.
U.S. Market Expansion: Increased the number of active implanting centers in the U.S. to 240, up from 227 in Q1 2025 and 189 in Q2 2024. Expanded U.S. sales territories to 47, up from 45 in Q1 2025.
European Market: Revenue in Europe increased by 19% year-over-year, though total revenue units slightly decreased from 63 to 61.
Sales Force Transformation: Completed major transitions in the sales team, with over 35% of territory managers hired since January 2025. Focus is now on optimizing onboarding and training to improve productivity.
Reimbursement Strategy: CMS proposed maintaining the Barostim implant procedure payment at approximately $45,000 for outpatient settings. Transition to Category 1 CPT codes in January 2026 will improve reimbursement predictability and physician payment.
Clinical Strategy: Discussions with FDA on a new randomized controlled trial design are progressing. Additional clinical evidence is being developed through investigator-sponsored research and real-world data.
Leadership Appointment: Brent Binkowski appointed as Chief Operating Officer, bringing over 20 years of leadership experience in medical devices.
Sales Force Transformation: The company is undergoing a sales force transformation, with over 35% of territory managers hired since January 1 and over half of area sales directors joining in the last 12 months. This presents challenges in onboarding, training, and ensuring productivity of new hires, which could impact sales performance in the short term.
Territory Expansion: The company plans to resume territory expansion as new hires become productive. However, the reliance on new and relatively inexperienced sales staff could delay the realization of expected growth.
Reimbursement Challenges: While there have been positive developments in reimbursement, the transition to Category 1 CPT codes and the finalization of Medicare Outpatient Payment System rules are still pending. Any delays or unfavorable outcomes could hinder adoption and financial performance.
Clinical Trial and FDA Approval: The company is in discussions with the FDA for a new randomized controlled trial. Progress is contingent on FDA agreement and CMS coverage for Medicare patients, which introduces regulatory and operational risks.
Net Loss and Operating Expenses: The company reported a net loss of $14.7 million for Q2 2025, with operating expenses increasing by 11% compared to the prior year. This financial strain could impact future investments and operational flexibility.
Interest Expense: Interest expense increased due to higher levels of borrowings, which could add financial pressure if borrowing costs continue to rise.
European Market Performance: Revenue units in Europe decreased slightly, and the number of sales territories remained stagnant. This indicates potential challenges in scaling operations and achieving growth in the European market.
Revenue Guidance for 2025: The company expects total revenue between $55 million and $57 million for the full year of 2025.
Gross Margin Guidance for 2025: The company continues to expect full year gross margin between 83% and 84%.
Operating Expenses Guidance for 2025: The company expects operating expenses between $96 million and $98 million for the full year of 2025.
Revenue Guidance for Q3 2025: The company expects to report total revenue between $13.7 million and $14.7 million for the third quarter of 2025.
Reimbursement Updates: CMS has proposed maintaining the assignment of the Barostim implant procedure to new technology APC 1580 with its associated payment of approximately $45,000 for outpatient procedures. CMS is also soliciting comments about the need for a Level 6 neurostimulator APC, with the final rule expected in November 2025 to take effect in January 2026. Additionally, the transition to Category 1 CPT codes in January 2026 will eliminate experimental and investigational denials, improve prior authorization predictability, and ensure consistent physician payment.
Clinical Trial Plans: Discussions with the FDA on a category B IDE randomized controlled trial design are progressing. The trial would include patients with an ejection fraction of up to 50% and an NT-proBNP up to 5,000. CMS coverage for procedures performed in the trial on Medicare patients is a prerequisite for moving forward.
The selected topic was not discussed during the call.
The earnings call summary presents mixed signals. The financial performance shows a slight improvement in net loss per share, and cash reserves are healthy. However, guidance was cut on the higher end, and sales force productivity is not fully realized. The Q&A reveals cautious optimism, with potential growth in 2026 but conservative Q4 guidance. There are positive developments in gross margin and reimbursement, but uncertainties in productivity improvements and market expansion remain. Without a market cap, the overall sentiment is neutral, expecting minimal stock movement.
The earnings call reflects mixed signals: while there is progress in sales force expansion and potential improvements in reimbursement processes, the guidance was narrowed, and gross margin guidance remains unchanged despite a Q2 beat. The Q&A reveals management's cautious optimism but also highlights uncertainties, particularly in reimbursement changes and Tier 3/4 account impacts. Without a clear market cap, the lack of strong positive catalysts and vague management responses suggest a neutral stock price movement in the short term.
The earnings call presents a mixed picture: strong revenue growth and positive reimbursement changes are offset by ongoing financial losses and operational risks. The Q&A reveals management's focus on expanding market penetration and addressing awareness issues, but also highlights uncertainties in cash burn and target account strategies. The issuance of new shares and stable gross margins suggest financial stability, but the lack of clear guidance on certain metrics tempers enthusiasm. Given these factors, a neutral stock price movement is expected over the next two weeks.
The earnings call presents a mixed picture. Financial performance shows strong revenue growth, but increased expenses and a widened net loss raise concerns. Positive elements include optimistic guidance and strategic initiatives. However, the equity offering and increased loan could dilute value. The Q&A reveals confidence in reimbursement efforts but lacks clarity on some financial impacts. The neutral rating reflects these balanced factors, with potential for volatility due to unclear guidance and financial adjustments.
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