IRADIMED CORPORATION (IRMD) Q4 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary and Q&A reveal strong financial performance with increased EPS and revenue, stable gross margins, and positive cash flow. The market feedback on the new 3870 MRI IV pump system is very positive, with additional orders already placed. The company also raised its financial guidance for the year, indicating confidence in future growth. These factors suggest a positive sentiment that will likely lead to a stock price increase of 2% to 8% over the next two weeks.

Key Financial Performance

Revenue (Q4 2025) $22.7 million, a 17% increase year-over-year. Growth driven by strong performance across all product lines, including MRI-compatible IV infusion pump systems (+20%), patient vital signs monitoring systems (+7.5%), and disposable revenue (+18%).

Revenue (Full Year 2025) $83.8 million, up 14% year-over-year. Growth attributed to consistent strong U.S. performance, especially in the domestic pump business.

GAAP Diluted EPS (Q4 2025) $0.50, up 25% year-over-year. Reflects strong revenue growth and operational efficiency.

Non-GAAP Diluted EPS (Q4 2025) $0.54, up 23% year-over-year. Reflects adjustments for non-recurring items and operational performance.

GAAP Diluted EPS (Full Year 2025) $1.75, up 17% year-over-year. Driven by revenue growth and cost management.

Non-GAAP Diluted EPS (Full Year 2025) $1.93, up 16% year-over-year. Reflects adjustments for non-recurring items and operational performance.

Gross Margin (Q4 2025) 75%, consistent with prior year. Indicates stable cost management and pricing strategy.

Gross Margin (Full Year 2025) 77%, consistent with prior year. Reflects strong cost control and pricing strategy.

Operating Expenses (Q4 2025) $9.9 million. Increase due to higher general and administrative expenses to support growth, along with modest increases in sales, marketing, and R&D.

Operating Expenses (Full Year 2025) $38.2 million. Increase due to higher general and administrative expenses to support growth, along with modest increases in sales, marketing, and R&D.

Income from Operations (Q4 2025) $7.1 million. Reflects strong revenue growth and operational efficiency.

Income from Operations (Full Year 2025) $26.1 million. Reflects strong revenue growth and operational efficiency.

Effective Tax Rate (Q4 2025) 17.3%, decreased due to a true-up based on year-end tax provision.

Effective Tax Rate (Full Year 2025) 20.7%, lower than previously estimated 22%. Reflects tax planning and adjustments.

Net Income (Q4 2025) $6.4 million, up 25% year-over-year. Reflects strong revenue growth and operational efficiency.

Non-GAAP Net Income (Q4 2025) $7 million, up 23% year-over-year. Reflects adjustments for non-recurring items and operational performance.

Net Income (Full Year 2025) $22.5 million, up 17% year-over-year. Reflects strong revenue growth and operational efficiency.

Non-GAAP Net Income (Full Year 2025) $24.8 million, up 16% year-over-year. Reflects adjustments for non-recurring items and operational performance.

Cash and Cash Equivalents (End of 2025) $51.2 million. Reflects strong cash generation and financial position.

Cash Flow from Operations (Q4 2025) $5.9 million. Reflects strong operational performance.

Cash Flow from Operations (Full Year 2025) $24.9 million. Reflects strong operational performance.

Non-GAAP Free Cash Flow (Q4 2025) $5.5 million. Reflects adjustments for capital expenditures.

Non-GAAP Free Cash Flow (Full Year 2025) $16.5 million. Reflects adjustments for capital expenditures.

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Operating Highlights

3870 MR IV pump: Positioned to increase ASP by 10%-14%, targeting greenfield opportunities and replacement of older pumps. Initial order of 23 systems delivered in December, with general sales release starting in April 2026. Expected to drive significant revenue growth, targeting $50 million annual revenue run rate for pumps.

MRI-compatible infusion pump systems: Legacy 3860 system grew strongly, contributing $9.1 million in Q4 2025, up 20% year-over-year. Replacement of older pumps expected to continue driving growth.

Patient vital signs monitoring systems: Contributed $7.1 million in Q4 2025, up 7.5% year-over-year.

Ferromagnetic detection system: Saw meaningful contribution to revenue.

Domestic market: Accounts for 81% of Q4 2025 revenue and 84% of full-year 2025 revenue. Strong performance in the domestic pump business.

International market: Included in overall revenue growth but specific details not highlighted.

Revenue growth: Achieved 18th consecutive quarter of record revenue. Q4 2025 revenue was $22.7 million, up 17% year-over-year. Full-year 2025 revenue reached $83.8 million, up 14% year-over-year.

Gross margins: Remained strong at 77% for the year and 75% for Q4 2025.

Cash flow: Ended 2025 with $51.2 million in cash and cash equivalents. Generated $24.9 million in cash flow from operations for the year.

Product replacement strategy: Targeting replacement of older 3860 pumps, with a focus on 6,400 units over 5 years old in the U.S. market. Plan to add 1,000 replacement channels annually starting Q2 2026.

Revenue run rate goal: Aiming for $100 million-plus annual revenue run rate during 2026, driven by new product sales, disposables, maintenance, and international sales.

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Risk or Challenges

Regulatory Compliance: The company is providing an extraordinary level of clinical support and monitoring for the new 3870 systems to ensure stability and quality before general sales release. This indicates potential regulatory or quality assurance challenges that could impact the timeline for broader product rollout.

Product Transition Risks: The transition from the older 3860 model to the new 3870 MR IV pump involves significant operational and market risks. The company is relying heavily on replacement sales from older models, which may not materialize as expected.

Market Penetration Challenges: The company anticipates challenges in penetrating greenfield opportunities and increasing utilization among existing customers who currently use older pumps sporadically.

Supply Chain and Production Risks: The company plans to ramp up production and sales of the 3870 systems starting in Q2 2026. Any delays in production or supply chain disruptions could impact revenue targets.

Revenue Concentration: A significant portion of revenue is derived from domestic sales, particularly from the pump business. This concentration poses a risk if there are market or economic downturns in the U.S.

Operational Costs: Higher general and administrative expenses to support growth, along with increases in sales, marketing, and R&D, could pressure margins if revenue growth does not meet expectations.

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Guidance & Outlook

Revenue Growth: IRadimed expects to achieve a $100 million-plus revenue run rate during 2026, driven by the new 3870 MR IV pump, disposables, maintenance, international sales, and MRI monitoring business.

Product Launch and Sales: The general sales release of the 3870 MR IV pump is scheduled for April 2026. Initial shipments of approximately 100 to 130 pump channels are expected in Q2 2026, with significant ramp-up in the second half of the year.

Market Penetration and Replacement Opportunity: The company plans to target replacing 1,000 channels annually from the existing 6,400 units of 5-plus-year-old pumps in the U.S. market, starting in Q2 2026. This replacement strategy is expected to drive significant revenue growth over the coming years.

Revenue from 3870 Pump Channels: For the domestic market, selling over 2,000 3870 pump channels annually at a higher anticipated ASP is expected to approach a $50 million annual revenue run rate for pumps.

Short-term Revenue Expectations: Quarterly revenue in the first half of 2026 is expected to be maintained by growth in MRI monitoring and the 3860 pump backlog, with additional booking strength from the 3870 systems.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What has been the initial market feedback from the pilot of the 3870 launch?

A:The feedback has been very positive. Orders for an additional 15-20 pumps are already on the books. The product has been shown to select customers, and the response has been tremendous. Users familiar with the older 3860 pump are excited about the changes in the new pump, which is modernized and user-friendly. The company conducted a prelaunch with a single large user to refine the product before a full-scale launch.

Q:How should we think about gross margin scaling throughout the year?

A:Gross margins are expected to remain in line with previous levels in the first half of the year. However, higher volumes and higher ASPs in the second half of the year are anticipated to improve gross margins, potentially exceeding the previous quarters' 78% range.

Q:What is next for the R&D team now that the 3870 is launched?

A:The R&D team has already started working on the next-generation MRI monitor, which is planned for launch in 2028. This project has been in progress for about six months.

Q:What drove the growth in disposables and services in the quarter?

A:Growth in disposables and services is commensurate with the capital side of the business. The company expects utilization to increase with the 3870 due to its improved user interface.

Q:How do inventory levels for the 3860 look, and how is the transition to the 3870 being managed?

A:The company is carefully managing 3860 inventory to ensure it can fulfill backlog orders while transitioning to the 3870. The increase in Q4 inventory reflects the buildup of 3870 units in anticipation of shipments. The transition is expected to be a focus in Q2.

Q:Has there been any early feedback or changes required for the 3870?

A:The company has been making tweaks based on early user feedback during the prelaunch phase to optimize the product for target users.

Q:What is the regulatory timeline for the 3870 in Europe and Japan?

A:The CE mark for Europe is expected by the end of the year, while regulatory clearance in Japan is anticipated by the summer of 2025.

Q:Review of Unclear Management Responses

A:None of the questions appeared to be avoided or lacked clarity. All responses were direct and provided sufficient detail.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

IRMD Transcript

IRADIMED CORPORATION (IRMD) Q4 2025 Earnings Call Transcript

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IRADIMED CORPORATION (IRMD) Q3 2025 Earnings Call Transcript

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The company reported strong financial performance with a 16% revenue increase and improved gross margins. Despite higher operational costs, the raised revenue and earnings guidance for 2025 and 2026, along with strategic growth plans, indicate optimism. The Q&A highlighted stable pricing and sufficient inventory, with plans for international expansion. The dividend declaration also supports a positive sentiment. However, concerns about operational costs and tax rate increases temper the outlook slightly. Overall, the sentiment is positive due to strong earnings, raised guidance, and strategic initiatives.

IRADIMED CORPORATION (IRMD) Q2 2025 Earnings Call Transcript

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The earnings call presents strong financial performance with revenue and EPS growth, a consistent gross margin, and increased domestic sales. The Q&A section reveals a solid backlog, positive sentiment towards the new product launch, and potential market expansion. However, international sales declined, and management was vague about the quantitative impact of the new pump. Despite these concerns, the overall sentiment is positive due to strong earnings, optimistic guidance, and a dividend announcement, suggesting a likely stock price increase in the next two weeks.

IRadimed Corporation (NASDAQ:IRMD) Q1 2025 Earnings Call Transcript

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The earnings call presents a mixed picture. Financial performance is solid with revenue and EPS growth, and strong domestic market presence. However, uncertainties around FDA clearance and tariff impacts pose risks. The Q&A reveals confidence in monitor sales recovery but lacks clarity on FDA timelines. No share repurchase program is a negative, while consistent gross margins and operational efficiency are positives. Overall, the positive financial metrics are offset by regulatory and economic uncertainties, leading to a neutral stock price prediction.

IRMD Report

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