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01/11 03:23
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals declining financial metrics, including reduced units sold, gross profit, and increased net loss, indicating weakening financial health. Despite some positive elements, like international expansion and potential breakeven in Q4, the negative trends, including a significant drop in gross margin and increased operating expenses, dominate. The Q&A section did not alleviate concerns, as management's responses lacked clarity on critical timelines. Given these factors, the stock is likely to experience a negative reaction in the near term.
Revenues for Q3 2025 $6.9 million, compared with $8.8 million for Q3 2024, a decrease primarily driven by a lower number of units sold to a larger customer, slightly offset by revenue recognized from the new placement program under the Fair Deal Agreement in 2025.
Number of units sold in Q3 2025 16 units, compared to 27 units in Q3 2024, reflecting a decrease in sales.
Gross profit for Q3 2025 $2.7 million, compared with $5.2 million in Q3 2024, a decrease due to lower sales, higher costs of servicing systems, and costs associated with the Fair Deal Agreement program.
Gross margin for Q3 2025 39.1%, compared to 59.1% in Q3 2024, reflecting lower sales and higher costs.
Total operating expenses for Q3 2025 $5.3 million, compared with $3.7 million in Q3 2024, an increase due to higher IT and professional service fees, compensation, headcount, payroll costs, and lobbying costs related to billing code reimbursement.
Net loss for Q3 2025 $0.9 million, or $0.06 per share, compared with net income of $1.2 million, or $0.07 per diluted share, in Q3 2024, reflecting lower revenues and higher operating expenses.
Adjusted EBITDA for Q3 2025 Negative $2.4 million, compared with $1.6 million in Q3 2024, reflecting lower revenues and higher costs.
Revenues for the first 9 months of 2025 $22.5 million, compared with $28.7 million for the first 9 months of 2024, a decrease due to fewer units sold to a large customer, slightly offset by revenue from the Fair Deal Agreement program.
Number of units sold in the first 9 months of 2025 56 units, compared to 76 units in the first 9 months of 2024, reflecting a decrease in sales.
Gross profit for the first 9 months of 2025 $10 million, or 44.4% of revenues, compared with $17.3 million, or 60.3% of revenues, for the first 9 months of 2024, reflecting lower sales and higher costs.
Net loss for the first 9 months of 2025 $4.6 million, or $0.28 per share, compared with net income of $5.1 million, or $0.31 per diluted share, for the first 9 months of 2024, reflecting lower revenues and higher operating expenses.
Adjusted EBITDA for the first 9 months of 2025 Negative $6.7 million, compared with $6.7 million in the first 9 months of 2024, reflecting lower revenues and higher costs.
Cash position at the end of Q3 2025 $24.5 million, up from approximately $22 million at the end of 2024, driven by improved working capital management and ongoing collections.
New CPT Codes for SRT: CMS published first-ever dedicated CPT codes for superficial radiotherapy (SRT) in nonmelanoma skin cancer and keloids, increasing reimbursement per fraction by over 300%.
Sentinel Software Platform: Ongoing development of Sentinel platform to enhance data storage, diagnostics, and analytics. Sentinel 2.0 initiative underway with expected results in 2026.
Transdermal Infusion (TDI) System: Awaiting FDA feedback; refining training pathways and support models for future rollout.
International Expansion: Shipped 3 SRT systems to China; MDSAP certification enables access to markets like Canada, Brazil, Japan, and Australia. Initial sales under certification expected soon.
Trade Show in Japan: Sensus will exhibit at JASTRO, Japan's largest radiation oncology conference, marking its first trade show in Japan.
Fair Deal Agreement Program: FDA treatment volumes increased 20% from Q2 and 52% from Q1. Quarterly treatment volumes have risen 157% since program launch.
Inventory and Cash Position: Ended Q3 with $24.5 million in cash and close to 100 SRT systems in inventory, ensuring readiness for anticipated demand.
Focus on Dermatology Practices: New CPT codes narrow reimbursement gap between office-based and hospital outpatient rates, potentially expanding SRT adoption in dermatology offices.
R&D Investment: Increased R&D spending on lobbying for billing code reimbursement and next-generation system development.
Revenue Decline: Revenues for the third quarter of 2025 decreased to $6.9 million from $8.8 million in the same quarter of 2024, primarily due to a lower number of units sold to a large customer.
Gross Margin Decline: Gross margin dropped to 39.1% in Q3 2025 from 59.1% in Q3 2024, driven by lower sales, higher servicing costs, and costs associated with the Fair Deal Agreement program.
Increased Operating Expenses: Total operating expenses rose to $5.3 million in Q3 2025 from $3.7 million in Q3 2024, with increases in general and administrative, selling and marketing, and research and development expenses.
Net Loss: The company reported a net loss of $0.9 million in Q3 2025 compared to a net income of $1.2 million in Q3 2024, reflecting financial challenges.
Inventory Risks: The company holds approximately $13 million in finished goods inventory, which could pose risks if anticipated demand does not materialize.
International Expansion Challenges: While international expansion is underway, the process is expected to take up to 12 months in certain regions, potentially delaying revenue contributions.
Regulatory Uncertainty: Awaiting feedback from the FDA on the Transdermal Infusion (TDI) system, which could delay its commercial rollout and impact future revenue streams.
Competitive Pressures: The company faces competitive pressures as it works to expand adoption of its SRT technology in dermatology offices and international markets.
Economic Pressures: Higher costs of servicing systems and increased lobbying and product development expenses are straining financial resources.
Future demand expectations: CMS published first-ever dedicated CPT codes for superficial radiotherapy in nonmelanoma skin cancer and keloids, increasing reimbursement per fraction by over 300%. This is expected to drive strong interest and rising demand for SRT systems.
SRT system sales projection: The company expects to reach 1,000 systems sold globally by 2026, up from over 900 systems currently sold.
Fair Deal Agreement program growth: FDA treatment volumes increased 20% from the second quarter, marking the third consecutive quarter of double-digit growth. This growth is expected to continue through the end of the year.
Sentinel software platform development: The company has initiated an expanded R&D program for the next generation of the Sentinel platform, called Sentinel 2.0, with initial results expected in 2026. This platform aims to enhance analytics, reporting capabilities, and customer-facing tools.
International expansion: The company is building a foundation for global expansion, with initial sales under MDSAP certification expected soon. International sales are anticipated to ramp gradually over the next 12 months, with meaningful contributions over time.
The selected topic was not discussed during the call.
The earnings call reveals declining financial metrics, including reduced units sold, gross profit, and increased net loss, indicating weakening financial health. Despite some positive elements, like international expansion and potential breakeven in Q4, the negative trends, including a significant drop in gross margin and increased operating expenses, dominate. The Q&A section did not alleviate concerns, as management's responses lacked clarity on critical timelines. Given these factors, the stock is likely to experience a negative reaction in the near term.
The earnings call revealed significant declines in gross profit, gross margin, and a shift from net income to net loss, indicating financial challenges. The Q&A highlighted uncertainties around CMS reimbursement, impacting sales and causing a large customer to pause purchases. Despite some international sales optimism, the lack of clear guidance on reimbursement and increased operating expenses suggest a negative short-term outlook. The overall sentiment leans negative due to financial performance issues and unresolved reimbursement concerns.
The earnings call summary reflects several concerns: declining revenue, increased operating expenses, and a net loss compared to the previous year. While management expects future profitability, lack of formal guidance and reliance on a few key customers pose risks. No shareholder return initiatives were announced, and competitive pressures remain. Despite some positive aspects like cash position and international expansion, the overall sentiment is negative, as financial metrics are weak, and uncertainties in market demand persist.
The earnings call reveals several concerns: a revenue decline, increased operating expenses, and a net loss, all of which are negative indicators. Additionally, the lack of a share repurchase program and competitive pressures in the market further dampen sentiment. Despite some positive aspects like the Fair Deal Agreement and potential international expansion, these are overshadowed by the financial and competitive challenges. The Q&A session did not alleviate these concerns, with management avoiding specific guidance. These factors suggest a negative stock price reaction in the short term.
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