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01/11 11:26
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
HIFU Revenue €6.2 million (up 6.8% year-over-year from €5.8 million); increase driven by six Focal One systems sold in Q1 2025 versus five in Q1 2024 and increases in service-related revenue.
Total Worldwide Revenue €13.6 million (down 9.1% year-over-year from €14.9 million); decrease attributed to declines of 23.8% in non-core ESWL and 17.5% in distribution divisions as part of a strategic focus on HIFU.
Gross Profit €5.7 million (down from €6.4 million year-over-year); gross profit margin decreased to 42% from 42.8% due to mix changes within the product portfolio.
Operating Expenses €11.7 million (up from €11.2 million year-over-year); increase primarily due to focused investments in the HIFU business segment.
Operating Loss €6 million (compared to an operating loss of €4.8 million in Q1 2024); including non-cash share-based compensation, the operating loss would have been €5.7 million compared to €4.1 million in Q1 2024.
Net Loss €7.1 million or €0.19 per diluted share (compared to a net loss of €4.5 million or €0.12 per diluted share in Q1 2024).
Inventory €18 million at the end of Q1 2025 (down from €18.5 million at the end of Q4 2024); decrease due to efforts to balance demand and supply along with more efficient inventory management.
Cash and Cash Equivalents €22.8 million at the end of Q1 2025 (down from €29.8 million at the end of Q4 2024); decrease driven primarily by cash used in operating activities.
Focal One i Robotic HIFU System Launch: Launched the new Focal One i Robotic HIFU system at the 2025 AUA Meeting, featuring advanced technology and capabilities.
Focal One CE Mark Approval: Focal One received CE Mark approval for the treatment of posterior deep infiltrating endometriosis.
Focal One System Placements: Placed nine Focal One systems in Q1 2025, a record for any first quarter, including placements in major healthcare systems like Baylor Scott & White Health and Methodist Charlton Medical Center.
International Market Expansion: Completed four cash sales of Focal One systems outside the U.S. in Q1 2025, expanding presence in Europe, the Middle East, and Asia.
Revenue Growth: HIFU revenues increased to €6.2 million in Q1 2025, up 6.8% year-over-year.
Operational Efficiency: Decreased inventory levels to €18 million, reflecting improved demand-supply balance and just-in-time inventory management.
Strategic Focus: Continued focus on becoming a global leader in HIFU therapy, with a strategic decision to concentrate on high-growth opportunities.
Remote Procedure Capability: Achieved the world's first remote transatlantic Focal One Robotic HIFU procedure, enhancing training and patient access.
Regulatory Issues: Focal One received CE Mark approval for the treatment of posterior deep infiltrating endometriosis, which is a significant regulatory milestone but also indicates the complexities involved in navigating regulatory approvals.
Competitive Pressures: The company operates in a highly competitive environment, particularly in the U.S. healthcare market, which poses challenges in gaining market share and recognition for Focal One.
Supply Chain Challenges: Approximately 80% to 90% of Focal One components come from France, and the company is forecasting a 10% tariff impact for goods transferred from France to the U.S., which could affect costs and pricing.
Economic Factors: The company is experiencing longer and more challenging review and procedure approvals, especially for patients enrolled in Medicare Advantage plans, which is an industry-wide issue that could impact revenue growth.
Financial Performance: Total worldwide revenue decreased by 9.1% year-over-year, indicating potential financial instability as the company shifts focus to its high-growth HIFU business.
Operational Losses: The operating loss for Q1 2025 was €6 million, an increase from €4.8 million in Q1 2024, highlighting ongoing financial challenges.
Strategic Focus: EDAP aims to become the global leader in HIFU focal therapy, with significant achievements in system placements and regulatory approvals.
System Placements: Nine Focal One systems were placed in Q1 2025, a record for any first quarter, including placements in major healthcare systems.
Regulatory Milestones: Focal One received CE Mark approval for treating posterior deep infiltrating endometriosis.
Clinical Advancements: Positive results from the FARP Randomized Controlled Trial were presented, supporting the efficacy of Robotic Focal therapy for prostate cancer.
Remote Procedure Capability: Successful execution of the world's first remote transatlantic Focal One Robotic HIFU procedure, enhancing training and patient access.
New Product Launch: Launch of the Focal One i Robotic HIFU System at the AUA meeting, featuring advanced technology and capabilities.
Revenue Guidance: 2025 HIFU revenue is expected to grow between 16% and 25% year-over-year.
Non-Core Revenue Decline: Non-core ESWL and distribution businesses are expected to decline between 20% and 25% year-over-year.
Tariff Impact: Forecasting a 10% tariff impact for goods transferred from France to the U.S. in Q2 2025.
Share Buyback Program: None
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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