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ClearPoint Neuro, Inc. (CLPT)·Q3 2024 Earnings Summary

Executive Summary

  • ClearPoint Neuro posted record Q3 revenue of $8.12M (+41% YoY) with product revenue more than doubling YoY, gross margin of 60% (up 300 bps YoY), and maintained FY24 revenue guidance at $30–$33M; operational cash burn fell to $1.2M and the company ended Q3 debt-free with $21.6M cash .
  • Growth was broad-based: Biologics & Drug Delivery (BDD) $4.4M (+27% YoY), Neurosurgery Navigation & Therapy $2.9M (+49% YoY), and Capital & software $0.8M (+133% YoY), aided by SmartFrame OR and PRISM laser traction and accelerated site activations (+5 in Q3; 19 YTD, ~3x historical pace) .
  • Management reiterated a potential path to cash flow breakeven by end of 2025 and highlighted catalysts including more FDA/CE submissions, expanding OR presence (SmartFrame OR) and PRISM adoption, and multiple cell/gene therapy partners in expedited FDA programs (7 partnered programs) .
  • Consensus estimates (S&P Global) were unavailable at time of analysis due to data access limits; therefore, beat/miss vs Street is not assessed. Values from S&P Global were not retrieved.*

What Went Well and What Went Wrong

  • What Went Well
    • Record quarter with 41% revenue growth; product revenue more than doubled YoY; GM improved to 60% (+300 bps YoY); operational cash burn reduced to $1.2M; debt fully repaid ($10M note) .
    • Broad-based strength: Neurosurgery Navigation & Therapy +49% YoY on new accounts and SmartFrame OR/PRISM introductions; BDD +27% YoY with significant shift toward product revenue as pharma partners advance .
    • Strategic momentum: 5 new center activations in Q3 (19 YTD), >90 active global customers; multiple partners in expedited FDA pathways (Fast Track/Priority/RMAT) .
  • What Went Wrong
    • Sequential gross margin contracted to 60% from 63% in Q2, with mix sensitivity (capital sales carry lower margin vs disposables) discussed as a headwind when capital is strong .
    • Operating expenses rose YoY to $10.0M (vs $8.2M in Q3’23) on higher personnel and product development costs, keeping the company at a net loss of $(5.0)M and EPS of $(0.18) .
    • BDD services declined YoY by ~$0.7M as preclinical studies fluctuated; management noted milestone/royalty structures can add near-term revenue lumpiness .

Financial Results

Revenue and profitability progression (quarterly)

MetricQ1 2024Q2 2024Q3 2024
Revenue ($USD Millions)$7.6 $7.858 $8.122
Gross Margin (%)59% 63% 60%
Net Loss ($USD Millions)N/A$(4.408) $(4.974)
Diluted EPS ($)N/A$(0.16) $(0.18)

Year-over-year snapshot (Q3)

MetricQ3 2023Q3 2024
Revenue ($USD Millions)$5.762 $8.122
Gross Margin (%)57% 60%
Diluted EPS ($)$(0.20) $(0.18)

Segment revenue (quarterly)

Segment ($USD Millions)Q1 2024Q2 2024Q3 2024
Biologics & Drug Delivery$4.3 $4.3 $4.4
Neurosurgery Navigation & Therapy$1.9 $2.6 $2.9
Capital Equipment & Software$1.4 $0.9 $0.8
Total Revenue$7.6 $7.858 $8.122

Key KPIs and balance sheet items

KPIQ1 2024Q2 2024Q3 2024
New Centers Activated (Quarter)8 6 5
YTD New Centers8 14 19
Active Global CustomersN/AN/A>90
Operational Cash Burn ($USD Millions)$3.8 $2.7 $1.2
Gross Margin (%)59% 63% 60%
Cash & Cash Equivalents ($USD Millions, period-end)$35.4 $32.845 $21.573
Debt OutstandingConvertible note due 2025 outstanding $9.979M current portion No debt post repayment

Drivers and context:

  • Sequential revenue growth was supported by continued device adoption (SmartFrame OR, PRISM) and advancing BDD product pull-through as partners progress into later-stage studies .
  • Sequential GM decline reflects mix normalization and the inherent lower margins on capital relative to disposables; management reiterated a long-run target of ~70% GM on disposables at scale .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2024$30.0–$33.0 (raised on Aug 7, 2024) $30.0–$33.0 (reaffirmed Nov 7, 2024) Maintained
Cash Flow BreakevenTargetEnd of 2025 possible (Q2’24 call) End of 2025 possible (Q3’24 call) Maintained (qualitative)

Earnings Call Themes & Trends

TopicQ1 2024 (Prior-2)Q2 2024 (Prior-1)Q3 2024 (Current)Trend
SmartFrame OR expansion (OR navigation)FDA clearance; moving to full market release in Q3; early cases and reorder interest Full market release; multiple VAC reviews underway OR-enabled activations just starting; 6–7 accounts live; ~10 in advanced VAC review Accelerating adoption
PRISM laser therapyLimited market users; first capital sale; accessory enabling OR placement cleared Full market release; expect acceleration in H2 New packaging/compatibility to speed adoption; 1.5T approvals anticipated in 2025 Building momentum
BDD partner progressionStrong +61% BDD growth; partners filing/first-in-human; strategic agreements incl. royalties/milestones 7 programs with expedited FDA pathways; GLP-ready services in 2025 Continued product mix shift; 7 expedited programs reiterated; GLP capability targeted in 2025 Positive, de-risking pipeline
Site activations/global scaleRecord 8 new customers; capital sales $1.4M +6 in Q2 (14 YTD); path to 100 sites by 2025 +5 in Q3 (19 YTD); >90 active customers; goal to reach 100 by H1’25 Ahead of pace
Margins & cash burnGM 59%; op cash burn $3.8M; operating leverage emphasized GM 63%; op cash burn down 47% YoY GM 60%; op cash burn $1.2M; net debt eliminated Improving efficiency; mix-sensitive
Regulatory/AI softwareMaestro Brain Model rollout; AI planning/prediction Continued software/AI expansion AI and predictive modeling to support OR drug delivery workflows Expanding capabilities

Management Commentary

  • “Record revenue quarter of $8.1 million... strongest financial and strategic performance in our history. We made significant progress across all 4 of our growth pillars…” — CEO Joe Burnett .
  • “As of September 30, 2024, we have no outstanding debt… operational cash burn in Q3 was down to $1.2 million, a 33% reduction from the prior year's third quarter.” — CFO Danilo D’Alessandro .
  • “We continue to believe that a cash flow breakeven quarter by the end of 2025 is possible… strong cash position today with over $21.6 million in cash and cash equivalents and no debt.” — CEO .
  • “Our growth continues to be fueled by… SmartFrame OR… PRISM laser therapy… and expansion of pre-clinical capabilities… We expect all three… to continue into 2025… complemented by additional FDA and CE Mark submissions.” — CEO (press release) .

Q&A Highlights

  • 2025 setup: Tailwinds from sleep-DBS labeling (Medtronic) and broader DBS indications; laser therapy efficiency (shorter length-of-stay) supports hospital demand; potential Russell 2000 inclusion could be a stock tailwind if size criteria met .
  • Activations outlook: Double-digit “new normal” for site activations; 50+ advanced discussions, >100 in pipeline; OR expansion solving historical MRI-access bottlenecks .
  • SmartFrame OR penetration: ~6–7 accounts live; ~10 additional in advanced VAC review; existing MRI customers adding OR does not count as new activation but deepens wallet share .
  • Gross margins: Disposables can reach ~70% at scale; capital sales carry ~35–45% margin and can drag consolidated GM when strong; mix is key driver .

Estimates Context

  • S&P Global consensus estimates for Q3 2024 (revenue, EPS) were unavailable at time of analysis due to data access limits; we could not determine a beat/miss vs Street. We default to company-reported results in this recap.
  • Investors should revisit consensus after S&P Global access is restored to calibrate model adjustments and assess the magnitude of any potential estimate revisions.

Key Takeaways for Investors

  • ClearPoint is executing a multi-pillar growth model: OR navigation (SmartFrame OR) and PRISM laser broaden TAM beyond MRI, while BDD partners advance, shifting mix toward higher-margin product revenue .
  • Operating discipline is gaining traction: op cash burn fell to $1.2M; GM up 300 bps YoY; debt fully repaid, leaving $21.6M cash and increased flexibility for 2025 initiatives .
  • Near-term catalysts: incremental VAC approvals for SmartFrame OR, additional PRISM placements, and possible first U.S. neuro gene therapy approvals among partnered programs (7 expedited FDA designations) .
  • Watch margin mix: sequential GM softness underscores sensitivity to capital vs disposables; sustained disposable growth and scale are critical to the CEO’s ~70% disposables-GM aspiration .
  • Guidance steady at $30–$33M for FY24; Q4 seasonality and pharma service timing could add quarterly lumpiness, but trend remains favorable across revenue pillars .
  • Strategic quote to anchor the thesis: “We have gone beyond being just an MRI navigation focused company… added operating room navigation… added our own laser therapy… added significant preclinical services… We believe we have entered an exciting next phase” .

Appendix: Additional Document Notes

  • Other Q3 2024 press release: earnings date and call logistics (Oct 17, 2024) .
  • Q2 2024 press release: record revenue $7.9M; GM 63%; guidance raised to $30–$33M .
  • Q1 2024 call: revenue $7.6M; GM 59%; 8 new customers; PRISM and SmartFrame OR cleared with early traction .

Footnote:
*Consensus estimates from S&P Global were unavailable due to access limits at the time of analysis; no S&P Global values are included in this report.