Executive Summary

Q2 2025 delivered 17% YoY revenue growth to $3.32M, with gross margin at 55%; operating loss narrowed YoY as R&D spend stepped down following completion of a pivotal study .
Revenue modestly beat S&P Global consensus by ~2% ($3.32M vs. $3.25M); GAAP diluted EPS of -$2.02 is not comparable to the -$0.11 S&P consensus due to pre-IPO share base and limited coverage, but headline optics appear as a large miss .
Liquidity strengthened post-quarter: $1.07M cash at 6/30/25 and $23.4M net IPO proceeds on 7/3/25; partial over-allotment added ~$0.6M net .
Pipeline catalysts remain the stock narrative: small-bowel AI module 510(k) submission targeted for late Sep/early Oct with launch next year, 510(k) for CapsoCam Colon submitted in June (Gen2 targeted for 2026), and Breakthrough Device Designation application for pancreas by year-end .

What Went Well and What Went Wrong

What Went Well

Adoption: New accounts +75% YoY; CapsoCam Plus used by >143,000 patients as of 6/30/25, supporting the 17% YoY revenue increase .
Margin discipline and expense control: Gross margin 55% (vs. 56% LY), while operating expenses declined YoY (-$0.4M) on lower clinical costs post-pivotal study completion .
Capital and pipeline progress: IPO raised $23.4M net; 510(k) filed for CapsoCam Colon in June; AI module for small bowel planned for FDA submission late Sep/early Oct .

Selected quote:

“Our second quarter performance reflected steady adoption of our CapsoCam Plus… Following the achievement of several development milestones, we successfully completed our IPO in July, providing us with the additional capital to accelerate growth and expand into high-impact new indications.” – CEO Johnny Wang .

What Went Wrong

Losses remain elevated: Net loss of $(4.63)M and operating loss of $(4.65)M, reflecting growth investments; gross margin dipped 100 bps YoY due to mix/scale .
Liquidity tight at quarter-end: Cash of $1.07M pre-IPO; company depended on subsequent financing to fund operations and pipeline .
Cash burn scrutiny: In Q&A, management characterized cash burn as “around $11.5M,” while the cash flow statement shows H1’25 net cash used in operations of $(9.51)M, highlighting potential investor focus on runway and spending cadence .

Financial Results

Income Statement Snapshot (chronological: oldest → newest)

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD)	$2.843M	$2.783M*	$3.315M
Gross Profit ($USD)	$1.592M	$1.494M*	$1.811M
Gross Margin (%)	56.0%	53.7%*	55.0%
Total Operating Expenses ($USD)	$6.863M	$8.165M*	$6.462M
Operating Income (EBIT) ($USD)	$(5.271)M	$(5.382)M*	$(4.651)M
Net Income ($USD)	$(5.266)M	$(5.375)M*	$(4.625)M
Diluted EPS ($)	$(2.58)	$(2.47)*	$(2.02)

*Values retrieved from S&P Global.

Highlights and comparisons:

YoY: Revenue +17%, gross profit +14%; operating loss improved from $(5.27)M to $(4.65)M .
Seq: Revenue up vs. Q1’25 ($3.32M vs. $2.78M); OpEx down sequentially to $6.46M from ~$8.17M.

Actual vs S&P Global Consensus (Q2 2025)

Metric	Actual	Consensus	Surprise
Revenue ($USD)	$3.315M	$3.2465M*	+$0.07M (+2.1%); beat
Primary EPS ($)	$(2.02)	$(0.11)*	Headline miss; note comparability limits

Notes: EPS comparability is limited given the pre-IPO weighted share base and very limited analyst coverage; management does not provide non-GAAP EPS .* Values retrieved from S&P Global.

Liquidity and Cash Flow

Cash and equivalents at 6/30/25: $1.07M .
IPO net proceeds (7/3/25): $23.4M; over-allotment (7/16/25): ~$0.6M net .
Net cash used in operating activities (H1’25): $(9.51)M .

KPIs and Commercial Indicators

New accounts +75% YoY in Q2’25; GI clinics/mega groups +46% YoY; hospital systems customers +35% YoY .
Cumulative patients for CapsoCam Plus >143,000 as of 6/30/25 .
U.S. direct sales: 25 reps, with seven regional directors/trainers; four reps in Germany; distribution partners internationally .
Gross margin: 55% (consistent with scaling expectations) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue cadence	2H 2025 vs. 1H 2025	Not provided	2H 2025 expected > 1H 2025; seasonally strongest Q4 historically	Qualitatively raised cadence
AI module (small bowel) 510(k)	Filing timing	Not provided	Submit late Sep/early Oct 2025; launch next year	New milestone timing
CapsoCam Colon 510(k)	FDA submission	Not applicable previously	Submitted June 2025 (Gen1); plan commercialization following Gen2 introduction (2026)	New regulatory milestone
Pancreas screening	Regulatory pathway	Not provided	Plan Breakthrough Device Designation application by year-end 2025	New pathway target
OpEx, OI&E, tax	2025	Not provided	No quantitative guidance	Maintained N/A
Dividend	Ongoing	None	None	Maintained N/A

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2025)	Trend
AI/technology initiatives	Pre-IPO; limited public disclosures	In-house AI competency across labeling, model training/validation; small-bowel AI module targeting 510(k) late Sep/early Oct, launch next year	Building; nearer-term commercialization
Product performance	Pre-IPO	CapsoCam Plus adoption fueling +17% YoY revenue; 55% GM; expanding in GI groups/hospitals	Positive trajectory
Regulatory	Pre-IPO	Colon 510(k) filed (June); Gen2 colon filing targeted 2026; pancreas Breakthrough Designation plan; pediatric and remote ingestion clearances	Multiple shots on goal
Commercial execution	Pre-IPO	U.S. sales force of 25 reps; intl presence; new accounts +75% YoY	Scaling footprint
Supply chain/macro	Pre-IPO	Not a focus this quarter	Neutral
R&D and components	Pre-IPO	Canon CMOS development agreement (~$4.1M) to advance future capsules (not Plus/Colon Gen1)	Platform enhancement
Cash/burn	Pre-IPO	Cash burn discussed in Q&A; IPO proceeds bolster runway	Scrutinized; runway extended

Management Commentary

Strategic positioning: “I am confident that we have the right technology, the right strategy, and the right team to lead the next generation of innovation in GI screening and disease detection.” – CEO Johnny Wang .
AI focus: “We are the only company we know in this space with in-house AI… from labeling to the model… training [and] validation.” – CEO Kang-Huai (Johnny) Wang .
Commercial leverage: “The same call point for CapsoCam Plus will serve as the entry for CapsoCam Colon… creating a built-in cross sell opportunity without requiring significant increases in headcount.” – CFO Kevin Lundquist .
2025 cadence: “We expect second half revenue to be higher than first half and are already experiencing stronger sales in Q3… Q4 sales have historically been seasonally our highest.” – CFO Kevin Lundquist .

Q&A Highlights

Colon strategy and timing: Management clarified commercial plans favor the second-generation colon capsule after first approval; Gen2 submission planned for 2026 .
Canon development agreement: ~$4.1M total; $1.0M upfront; remainder amortized through future unit pricing under a master purchase; intended for future capsules (not current Plus/Colon Gen1) .
Cash burn/runway: Management characterized cash burn “around $11.5M” with ~$2M/month currently; note H1’25 cash used in operations was $(9.51)M and quarter-end cash was $1.07M before $23.4M IPO proceeds .
AI adoption: Minimal physician education needed; AI intended to improve efficiency and accuracy; confidence reinforced by in-house capabilities and data asset .

Estimates Context

Coverage is limited post-IPO. S&P Global consensus revenue for Q2 2025 was ~$3.25M vs actual $3.32M (beat). EPS consensus was -$0.11 vs GAAP diluted EPS of -$2.02; interpret with caution given pre-IPO share base and methodology differences*.
Implications: modest upward adjustments to near-term revenue models are plausible; EPS forecasts may require normalization choices (GAAP vs. non-GAAP; share base alignment).
*Values retrieved from S&P Global.

Key Takeaways for Investors

Growth with improving efficiency: Solid +17% YoY revenue with lower OpEx YoY and stable 55% GM indicates early operating leverage, albeit still at negative EBIT .
Liquidity risk mitigated: Post-quarter IPO and over-allotment meaningfully extended runway to support regulatory and commercial milestones .
Near-term catalysts: Small-bowel AI module 510(k) submission late Sep/early Oct; any positive FDA interactions and an early-2026 launch underpin sentiment .
Medium-term optionality: CapsoCam Colon (Gen1 filed; Gen2 targeted 2026) and pancreas Breakthrough Designation application could materially broaden TAM if cleared .
Execution watch items: Sales force productivity into 2H seasonality (Q4 peak), conversion of large GI groups/hospitals, and international distributor ramp .
Risk factors: Regulatory timelines (AI/Colon/Breakthrough), sustained cash burn vs. commercialization timing, and the need to harmonize reported EPS with consensus conventions for post-IPO share base .
Trading lens: Stock likely reacts to FDA milestones (AI/Colon), 2H revenue cadence, and any updates on Gen2 colon and pancreas pathway; modest revenue beat this quarter helps credibility on the growth narrative .

Notes:

Financial figures and operating metrics are from the Q2 2025 8-K and press release unless marked as S&P Global estimates or data .
Additional context from the earnings call transcript (prepared remarks and Q&A) and subsequent 8-Ks re: IPO proceeds and Canon development agreement - -.
Values marked with an asterisk (*) are retrieved from S&P Global.

CapsoVision, Inc (CV)·Q2 2025 Earnings Summary