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01/11 11:29
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with a 76.8% increase in HIFU revenue and improved gross margins. Despite operating and net losses, strategic investments in HIFU and efficient inventory management are promising. Positive Q&A insights include efforts to improve reimbursement, growing demand, and multiunit purchases, indicating confidence in future growth. However, some concerns remain about reimbursement and unclear management responses. Overall, the company's strategic focus and optimistic guidance point to a positive stock price movement.
Global HIFU Revenues USD 9.7 million, up 89% year-over-year. This increase was driven by the net placement of 12 Focal One systems, representing a year-over-year growth of 140%.
Total Revenue EUR 16 million, an increase of 1.6% year-over-year. The increase was driven by significant strength in the core HIFU business, which grew 76.8% over the second quarter of 2024, offset by a decline in noncore distribution and ESWL businesses by 31.2%.
Total HIFU Revenue EUR 8.5 million, up 76.8% year-over-year. This was driven by 9 Focal One capital sales in Q2 2025 versus 3 in the prior year and a 16.1% year-over-year increase in Focal One treatment-driven revenue.
Gross Profit EUR 6.8 million, up from EUR 5.9 million year-over-year. Gross margin increased to 42.5% from 37.5%, primarily due to the strategic focus on the high-margin HIFU business segment.
Operating Expenses EUR 12.6 million, up from EUR 12.1 million year-over-year. The increase was primarily due to focused investments in the HIFU business.
Operating Loss EUR 5.8 million, compared to EUR 6.1 million year-over-year. Excluding noncash share-based compensation, the operating loss would have been EUR 5.3 million.
Net Loss EUR 5.6 million or EUR 0.15 per share, compared to EUR 6.1 million or EUR 0.16 per share year-over-year.
Inventory EUR 15.5 million, down from EUR 18 million at the end of Q1 2025. The decrease was due to efficient just-in-time inventory management and higher inventory turnover due to increased demand for Focal One.
Cash and Cash Equivalents EUR 16.3 million, down from EUR 22.8 million at the end of Q1 2025. The decrease was driven by cash used in operating activities to support strategic investment in HIFU.
Focal One HIFU: Global HIFU revenues reached USD 9.7 million, up 89% YoY. 12 Focal One systems were placed, including 9 capital sales and 4 operating leases. The new Focal One i system was introduced, featuring advanced imaging and robotic capabilities. The first Focal One i system was delivered in the U.S. and has successfully performed procedures.
Endometriosis Application: Received CE marking for HIFU use in rectal endometriosis. Initial commercialization in Europe has begun. Clinical studies show HIFU provides similar pain relief as surgery but with fewer complications and shorter recovery times.
Market Expansion: Focal One systems were adopted by major hospital networks, including Cleveland Clinic facilities worldwide. Expansion into endometriosis treatment opens a new patient population.
Operational Efficiencies: Inventory decreased to EUR 15.5 million due to just-in-time inventory management and higher turnover. Gross margin improved to 42.5% in Q2 2025 from 37.5% in Q2 2024.
Strategic Financing: Entered into a letter of intent for a EUR 36 million (USD 42 million) financing facility with the European Investment Bank to support HIFU expansion and new clinical developments.
Transition to U.S. Domestic Filer: Announced transition to U.S. domestic filer status starting January 1, 2026, to align with SEC and NASDAQ requirements, aiming to attract institutional investors.
Medicare Advantage Plan Challenges: Intermittent challenges with certain healthcare plan providers, particularly Medicare Advantage plans, have impacted growth in certain markets and the adoption of HIFU. This has necessitated efforts to accelerate pre-authorizations for procedures.
Tariff Impact: A 15% tariff impact on goods transferred between France and the U.S. is forecasted, which could affect cost structures and profitability.
Decline in Noncore Businesses: The noncore ESWL and distribution businesses are expected to decline by 25% to 30% year-over-year, which could offset growth in the core HIFU business.
Inventory and Cash Flow Management: Decreased inventory levels and cash reserves due to strategic investments in HIFU, which may strain liquidity and operational flexibility.
Regulatory and Reimbursement Risks: While there is positive news on reimbursement rates, the reliance on CMS and other regulatory bodies for favorable reimbursement policies poses a risk if these policies change.
Strategic Execution Risks: The company is undergoing significant strategic transitions, including becoming a U.S. domestic filer and expanding into new applications like endometriosis, which could strain resources and execution capabilities.
Core HIFU business revenue growth: Expected to grow within the range of 26% to 34% year-over-year in 2025.
Noncore ESWL and distribution business revenue decline: Expected to decline within the range of 25% to 30% year-over-year in 2025.
CMS proposed hospital payment for Focal One HIFU procedure in 2026: Set at $9,765, representing an increase of $518 or 5.6% compared to 2025.
CMS proposed physician reimbursement for Focal One HIFU procedure in 2026: Proposed at 26.43 total RVUs, translating to a Medicare payment of $888.
New CPT code for BPH treatment with HIFU: Effective July 1, 2025, enabling facilities to be reimbursed for investigational studies in BPH.
Strategic financing facility with European Investment Bank: EUR 36 million (approximately USD 42 million) to support Focal One expansion and new clinical indications.
Transition to U.S. domestic filer: Effective January 1, 2026, aligning with U.S. SEC reporting rules and NASDAQ requirements.
The selected topic was not discussed during the call.
The earnings call reflects strong growth in the core HIFU business, with record revenue and significant increases in HIFU revenue and placements. The strategic financing with EIB and the new CPT code for BPH treatment are positive developments. Although there are concerns about the declining noncore business and operating losses, the optimistic guidance and strategic investments in HIFU suggest a positive outlook. The Q&A session confirmed positive trends in U.S. procedures and payer coverage. Overall, these factors indicate a likely positive stock price movement.
The earnings call reveals strong financial performance with a 76.8% increase in HIFU revenue and improved gross margins. Despite operating and net losses, strategic investments in HIFU and efficient inventory management are promising. Positive Q&A insights include efforts to improve reimbursement, growing demand, and multiunit purchases, indicating confidence in future growth. However, some concerns remain about reimbursement and unclear management responses. Overall, the company's strategic focus and optimistic guidance point to a positive stock price movement.
The earnings call reveals a challenging financial performance with increased net losses and declining non-core revenues. Despite positive HIFU growth, the lack of shareholder returns and competitive pressures weigh heavily. Regulatory issues and economic factors like tariffs add to the uncertainty. While there is optimism in HIFU revenue guidance, the Q&A highlighted unclear management responses on payer challenges. The absence of a share buyback or dividend increase further dampens sentiment. Overall, the factors suggest a negative market reaction over the next two weeks.
The earnings call reveals several negative factors: a decline in total revenue, increased operational losses, and financial instability due to the strategic shift to HIFU. Despite a moderate growth forecast for HIFU, the challenges in payer landscape, increased tariffs, and a lack of clear management responses contribute to uncertainty. The absence of a share buyback program and declining cash reserves further weigh negatively. Although optimistic guidance for HIFU exists, the overall sentiment is negative, especially with the negative trend in non-core businesses and operational losses.
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