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01/10 19:57
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several concerns: declining revenue and gross margin, increased net loss, and dependency on FDA approval for U.S. market growth. The Q&A highlighted uncertainties around the post-market study budget and lack of specific sales projections for Europe and Japan. While there is interest in ProSense and potential reimbursement, the financial metrics and market adoption risks overshadow these positives, suggesting a negative sentiment.
Revenue $1.25 million for the 6 months ended June 30, 2025, compared to $1.75 million for the same period in 2024, a decrease due to over $200,000 in product shipments delayed because of the Israel-Iran conflict in June.
Gross Profit $349,000 for the first half of 2025 compared to $799,000 in the prior year period, with gross margin decreasing to 28% from 46% in the first half of 2024. The decline is attributed to the company's focus on building commercial scale sales.
Operating Expenses $7.39 million for the 6 months period ended June 30, 2025, compared to $7.68 million a year ago, reflecting efforts to optimize spending without sacrificing commercial or regulatory execution.
Net Loss $6.95 million or $0.12 per share for the first half of 2025 compared to $6.69 million or $0.14 per share in the same period last year, showing a slight increase in net loss.
Cash, Cash Equivalents, and Short-term Deposits $5.38 million as of June 30, 2025, which included a $2 million loan from the major shareholder, excluding the $10 million in gross proceeds raised from the rights offering closed on August 1, 2025.
ProSense for early-stage low-risk breast cancer: Optimistic about FDA approval before year-end 2025. FDA requested a post-market study, which has been submitted. Positive adoption trends in Europe, driven by ICE3 results and independent clinical evidence.
ProSense technology: Featured prominently in major medical forums, including the American Breast Surgeons Annual Conference and the European Conference on Interventional Oncology. Data shows 91% of patients prefer ablation over surgery. Japanese data shows a 99% recurrence-free rate over 17 years for 600 patients.
European market: Increased adoption of ProSense for breast cancer cryoablation, driven by clinical evidence and ICE3 results.
Financial performance: Revenue for the first half of 2025 was $1.25 million, down from $1.75 million in 2024. Gross profit decreased to $349,000 from $799,000. Operating expenses reduced to $7.39 million from $7.68 million. Net loss was $6.95 million compared to $6.69 million in 2024.
Cash position: $5.38 million in cash and equivalents as of June 30, 2025, excluding $10 million raised from a rights offering in August 2025.
Rights offering: Raised $10 million, significantly oversubscribed, indicating shareholder confidence. Funds expected to support FDA decision and operational activities.
Regulatory Approval Challenges: The FDA has requested additional information and a post-market study for the ProSense device, which could delay the anticipated marketing authorization decision.
Revenue and Profit Variability: Revenue and gross profit have shown significant quarter-to-quarter variability, with a decline in revenue from $1.75 million in 2024 to $1.25 million in 2025 for the same period. Gross margin also dropped from 46% to 28%.
Geopolitical Disruptions: The Israel-Iran conflict in June caused delays in product shipments worth over $200,000, impacting revenue recognition for Q2.
Financial Sustainability: The company reported a net loss of $6.95 million for the first half of 2025, with cash reserves of $5.38 million as of June 30, 2025, excluding recent rights offering proceeds. This raises concerns about financial sustainability if FDA approval or revenue growth is delayed.
Market Adoption Risks: While there is growing adoption in Europe and Japan, the company is heavily reliant on FDA approval to accelerate its growth trajectory in the U.S., which remains uncertain.
Regulatory Approval for ProSense: The company is optimistic that regulatory approval for ProSense will be granted before year-end 2025, pending satisfactory supplemental data submission to the FDA.
Post-Market Study: The FDA has requested a post-market study to be conducted after marketing authorization is granted. The plan for this study has been fully submitted to the FDA.
European Market Adoption: The company is experiencing a positive shift in adoption in Europe, particularly for breast cancer cryoablation, driven by ICE3 results and independent clinical evidence.
Clinical Data: The company expects more clinical data to be forthcoming from independent researchers, which will be leveraged to drive further adoption and utilization of ProSense.
Revenue and Gross Profit Variability: Revenue and gross profits may continue to vary quarter-to-quarter as the company focuses on building commercial scale sales.
Financial Position: The company believes its financial position, bolstered by a $10 million rights offering, is sufficient to support the anticipated FDA marketing authorization decision.
Growth Trajectory: The company believes its growth trajectory could meaningfully accelerate upon receiving the FDA's decision.
The selected topic was not discussed during the call.
The company's financial performance shows declining revenue, gross profit, and margins, indicating challenges in maintaining profitability. Despite the optimism around FDA approval and market potential, the lack of a concrete timeline for regulatory approvals and the unclear management responses in the Q&A create uncertainty. The ongoing net losses and limited cash position add to financial strain. These factors, combined with supply chain and sales variability, suggest a negative market reaction, likely in the -2% to -8% range, especially given the lack of market cap information for a more precise prediction.
The earnings call reveals several concerns: declining revenue and gross margin, increased net loss, and dependency on FDA approval for U.S. market growth. The Q&A highlighted uncertainties around the post-market study budget and lack of specific sales projections for Europe and Japan. While there is interest in ProSense and potential reimbursement, the financial metrics and market adoption risks overshadow these positives, suggesting a negative sentiment.
The earnings call presents several challenges: ongoing financial losses, dependency on FDA approval for revenue growth, and competitive pressures. Despite some positive developments like increased sales in North America and Europe, the decline in Asia and supply chain issues are concerning. The Q&A revealed uncertainties in regulatory timelines and management's unclear responses. The unsecured loan and share sales indicate financial strain. These factors, coupled with the lack of immediate revenue change expectation, suggest a negative sentiment, likely leading to a stock price decline in the next two weeks.
The earnings call reflects a mixed to negative sentiment. Despite some positive developments like sales growth in North America and Europe, the overall financial performance is weak with declining revenue, gross profit, and margins. The uncertainty around FDA approval and the need for a post-market study pose significant risks. Additionally, the issuance of new shares and reliance on loans indicate financial strain. The Q&A session highlights management's inability to provide clear guidance, further contributing to negative sentiment. These factors suggest a likely negative stock price movement in the short term.
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