Sensus Healthcare, Inc. (SRTS) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals mixed signals. While the company faces financial strain with a negative EBITDA and net loss, it shows potential for growth with expanding international sales and recurring revenue streams. The absence of sales to the largest customer is a setback, but there's optimism for future returns. The Q&A highlights interest in new CPT codes, indicating potential for future revenue growth. However, the lack of clear timelines for revenue inflection and the ongoing financial strain balance out the positives, resulting in a neutral sentiment for the stock price movement.
Key Financial Performance
Revenue $3.4 million for Q1 2026, a decrease from $8.3 million in Q1 2025. The decline was primarily due to the absence of sales to the historically largest customer and a lower number of total units shipped. However, excluding sales to that customer in the prior year, revenue increased from $2.7 million, driven by a broader mix of customers.
Cost of Sales $2.4 million for Q1 2026, down from $4 million in Q1 2025. The decrease was due to lower unit volumes and a shift towards Fair Deal Agreement (FDA) and rental placements.
Gross Profit $1 million for Q1 2026, down from $4.4 million in Q1 2025. Gross margin was 29.2%, compared to 52.2% in Q1 2025. The decline in gross margin was due to product mix, including a higher proportion of international shipments with lower average selling prices and costs associated with new system placements under the FDA program.
General and Administrative Expense $2 million for Q1 2026, down from $2.2 million in Q1 2025. The decrease was primarily due to lower professional fees.
Selling and Marketing Expenses $1.7 million for Q1 2026, down from $2.2 million in Q1 2025. The decrease was due to a focus on events with the highest potential for sales generation.
Research and Development Expense $1.6 million for Q1 2026, down from $2.6 million in Q1 2025. The decrease reflects lower lobbying costs related to reimbursement efforts and reductions in headcount and product development spending for next-generation systems.
Adjusted EBITDA Negative $4.2 million for Q1 2026, compared to negative $2.5 million in Q1 2025. This reflects earnings before interest, taxes, depreciation, amortization, and stock compensation expense.
Net Loss $2.6 million for Q1 2026, or $0.16 per share, consistent with Q1 2025.
Cash Balance $18.3 million as of the end of Q1 2026, with no debt. This represents a strong balance sheet position.
Inventory $16.5 million as of Q1 2026, up from $14.6 million as of December 31, 2025. This increase positions the company to meet demand in upcoming quarters.
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Operating Highlights
Introduction of Sensus Link: A new software enabling enhanced workflow, treatment documentation, and operating intelligence across the installed base, creating a scalable recurring revenue opportunity tied to treatment activity.
Increased customer adoption: The implementation of new CPT codes has led to a 300% increase in per fraction delivery code reimbursement, driving higher inquiry levels and stronger pipeline development.
International market expansion: Continued demand in key markets such as China, with plans for further diversification into new regions.
Recurring revenue growth: Recurring revenue streams expanded through FDA placements, software, and services. Treatment volumes increased by 8% compared to Q1 2025.
Cost management: Reduced general and administrative, selling, and R&D expenses compared to the prior year, reflecting disciplined expense management.
Diversification of customer base: Shift away from reliance on a historically largest customer, with broader customer adoption across dermatology practices, hospital systems, and private equity-backed platforms.
Flexible financing options: Launch of Sensus Healthcare Financial Services to provide customers with flexible financing options, improving conversion rates on late-stage opportunities.
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Risk or Challenges
Customer Concentration: The company has historically relied heavily on a single large customer, which has now ceased purchasing. This transition to a more diversified customer base poses challenges in maintaining revenue stability.
Revenue Decline: Revenue for the quarter dropped significantly from $8.3 million in the prior year to $3.4 million, primarily due to the absence of sales to the largest historical customer and a shift towards rental and agreement-based placements.
Gross Margin Decline: Gross margin decreased from 52.2% to 29.2%, driven by a higher proportion of international shipments with lower average selling prices and costs associated with new system placements under the Fair Deal Agreement program.
Profitability Challenges: The company reported a net loss of $2.6 million for the quarter, consistent with the prior year, and adjusted EBITDA was negative $4.2 million, reflecting ongoing financial strain.
Product Mix and International Sales: A higher proportion of international shipments, which carry lower margins, and the costs associated with Fair Deal Agreement placements are impacting profitability.
Market Education and Adoption: The company faces the challenge of educating the market and driving adoption of new CPT codes for reimbursement, which is critical for broader customer adoption and revenue growth.
Recurring Revenue Growth: Expanding recurring revenue streams through software and services is a priority, but the company is still in the early stages of this transition, which may delay financial benefits.
Economic Uncertainty: Economic conditions and customer preferences for financing options or shared service programs could impact the pace of adoption and revenue growth.
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Guidance & Outlook
Revenue Expectations: Second quarter revenue is expected to be higher than the first quarter, with revenue in the second half of the year anticipated to surpass the first half due to pipeline momentum and increased customer engagement.
Margin Projections: Gross profit and margin are expected to improve over the course of the year as utilization under the Fair Deal Agreement program increases and revenues are recognized over time.
Recurring Revenue Growth: Recurring revenue streams, including FDA, service, and software, are expected to represent an increasing percentage of total revenue over time. The rollout of Sensus Link is anticipated to enhance recurring revenue tied to treatment activity.
Customer Adoption and Market Trends: Customer adoption is expected to grow due to improved reimbursement clarity and diversified adoption pathways, including outright purchase, leasing, and Fair Deal Agreement programs. Increased interest is anticipated from dermatology practices, hospital systems, and international markets.
Profitability: The company aims to achieve full-year profitability in 2026 through stronger demand, a growing recurring revenue base, and disciplined expense management.
International Market Expansion: Continued demand is expected in key international markets such as China, with additional diversification anticipated as the company expands into new regions.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Your largest customer had 15 units sold in Q1 '25 but 0 in Q1 '26. Should we consider their return as upside, and are you assuming they won't return?
A:If the largest customer returns, it would be upside. They are not included in the model for this year, but it doesn't mean they can't figure out a new model to remain strong in the market.
Q:With the new CPT code effective January 1, which increased per fraction delivery code by 300%, are you seeing shorter sales cycles or a pipeline of new business?
A:There is tremendous interest due to the guaranteed coding system for SRT in dermatology. Many offices are considering SRT as a long-term decision due to the new codes. However, decisions on FDA approval, outright purchase, or fair market value lease are still being made.
Q:When will the pipeline of recurring revenue and fair lease agreements reach an inflection point for easier revenue growth?
A:As education about the new codes continues, more people are adopting SRT. The exclusive CMS codes for SRT are a significant regulatory milestone. The sales team is expanding, and the company is optimistic about steady growth as more people adopt SRT.
Q:What is the significance of the radiation physics code and Sensus Link in your business model?
A:The radiation physics code can be charged $93.85 per week per patient, and Sensus Link enables customers to access this reimbursement. The company shares this revenue with customers, and Sensus Link is already live and performing in several accounts.
Q:Review of Unclear Management Responses
A:Management avoided providing a specific timeline for when the pipeline of recurring revenue and fair lease agreements would reach an inflection point. They emphasized education and adoption but did not offer concrete details or a clear timeline.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Agreement program
CPT code
Deal Agreement
Fair Deal
Link
absence sale
adoption CPT
arrangement
coding
combination reimbursement
conversion
customer adoption
customer base
customer concentration
decision
dermatology conference
driver
economics
engagement
evaluation
expense
mix
opportunity
pathway
period decrease
perspective
physician
placement Fair
priority
profitability
reimbursement clarity
reimbursement environment
sale customer
shipment
software
stream
transition
SRTS Transcript
Sensus Healthcare, Inc. (SRTS) Q1 2026 Earnings Call Transcript
Unknown5-8
The earnings call reveals mixed signals. While the company faces financial strain with a negative EBITDA and net loss, it shows potential for growth with expanding international sales and recurring revenue streams. The absence of sales to the largest customer is a setback, but there's optimism for future returns. The Q&A highlights interest in new CPT codes, indicating potential for future revenue growth. However, the lack of clear timelines for revenue inflection and the ongoing financial strain balance out the positives, resulting in a neutral sentiment for the stock price movement.
Sensus Healthcare, Inc. (SRTS) Q4 2025 Earnings Call Transcript
Unknown2-12
The company reported disappointing financial results with significant revenue and profit declines, resulting in a net loss. Despite optimistic guidance and international expansion plans, uncertainties like the largest customer's exclusion from projections, unclear FDA approval timelines, and vague management responses during the Q&A raise concerns. Increased expenses and negative EBITDA further contribute to a negative sentiment. Although there is potential in international markets and reimbursement changes, the overall outlook remains negative due to financial underperformance and uncertainties.
Sensus Healthcare, Inc. (SRTS) Q3 2025 Earnings Call Transcript
Unknown11-6
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.
Sensus Healthcare, Inc. (SRTS) Q2 2025 Earnings Call Transcript
Unknown8-8
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.
SRTS Report
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