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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 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.
HIFU Revenue €6.2 million, up 6.8% from €5.8 million in Q1 2024; 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% from €14.9 million in Q1 2024; decline attributed to a 23.8% decrease in non-core ESWL and a 17.5% decrease in distribution divisions.
Gross Profit €5.7 million, down from €6.4 million in Q1 2024; 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 in Q1 2024; increase 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, 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 ongoing 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.
New Product Launch: Launched the new Focal One Eye Robotic HIFU system at the 2025 AUA Meeting.
Regulatory Approval: Focal One received CE Mark approval for the treatment of posterior deep infiltrating endometriosis.
Clinical Milestone: Presented positive results from the FARP Randomized Controlled Trial at the 2025 AUA Meeting.
Market Expansion: Placed nine Focal One systems in Q1 2025, a record for any first quarter, including placements in major U.S. healthcare systems.
International Sales: Completed four cash sales of Focal One outside the U.S. in Europe, the Middle East, and Asia.
Operational Efficiency: Implemented just-in-time inventory management, reducing inventory to €18 million.
Revenue Growth: HIFU revenues increased by 6.8% year-over-year to €6.2 million.
Strategic Shift: Focused exclusively on high growth opportunities in therapeutic HIFU, leading to expected declines in non-core revenue.
Collaborative Innovation: Achieved the world’s first remote transatlantic Focal One Robotic HIFU procedure.
Regulatory Issues: The company is facing longer and more challenging review and procedure approvals, especially for patients enrolled in Medicare Advantage plans, which appears to be an industry-wide issue.
Competitive Pressures: The healthcare systems where Focal One is being placed operate in a very competitive environment, particularly in large metropolitan areas, which presents both opportunities and challenges for market penetration.
Economic Factors: The company is forecasting a 10% tariff impact for goods transferred from France to the U.S. in the second quarter, which could affect costs as 80% to 90% of Focal One components come from France.
Financial Performance: The company reported a net loss of €7.1 million for Q1 2025, an increase from a net loss of €4.5 million in Q1 2024, indicating ongoing financial challenges.
Supply Chain Challenges: The company is actively managing its supply chain and inventory levels to balance demand, which is critical given the reliance on components sourced from France.
Strategic Focus: EDAP TMS is focused on becoming 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 Milestone: Focal One received CE Mark approval for treating posterior deep infiltrating endometriosis.
Technological Advancement: Launched the new Focal One i Robotic HIFU system, incorporating advanced technology and features.
Clinical Evidence: Positive results from the FARP Randomized Controlled Trial presented at the AUA meeting, supporting the efficacy of Focal One.
Remote Procedure Capability: Successful execution of the first remote transatlantic Focal One Robotic HIFU procedure.
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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