Executive Summary

Q2 2025 delivered strong top-line and profitability: revenue $24.16M (+210% YoY), gross margin 86%, diluted EPS $0.07, and adjusted EBITDA $9.82M; U.S. HEPZATO KIT revenue was $22.5M and Europe CHEMOSAT revenue $1.7M .
Results exceeded Wall Street consensus: revenue beat by ~$1.14M and EPS beat by ~$0.0467; beats were driven by consistent utilization (~2 treatments/month/site) across 20 active centers and expanding referral networks, while NDRA/340B impacts start in Q3 (ASP headwind) . Estimates marked with * are from S&P Global.
Guidance tightened: FY25 revenue nudged down to $93–$96M (from $94–$98M), gross margin maintained at 83–85%, and management expects positive adjusted EBITDA and cash flow in each quarter; YE active sites revised to 25–28 (from 30) due to large-institution onboarding complexity .
Near-term catalysts: NDRA/340B implementation (50% kit mix at discounted pricing from 7/1), Phase II CRC first patient randomized, and CHOPIN randomized Phase II PFS readout at ESMO in October that could inform IO-combination strategies and adoption narrative .

What Went Well and What Went Wrong

What Went Well

Strong growth and profitability: revenue $24.16M (+210% YoY), net income $2.70M vs loss a year ago, adjusted EBITDA $9.82M, operating cash flow $7.3M; cash/investments $81.0M, no debt .
Commercial execution: 3 new U.S. centers activated (now 20 active) with ~2 treatments/month/site; sales force expanded to 6 regions and “hit their stride” per CEO .
Strategic access progress: NDRA/340B participation commenced 7/1, enhancing coverage/access; management expects long-term volume tailwinds despite near-term ASP headwinds; ~50% of kits at 340B prices thus far .

Quote: “This quarter marks the fifth consecutive quarter of site and HEPZATO volume growth… average treatments were approximately two per month per center” .

What Went Wrong

Site activation pace slower than prior expectations: YE active centers revised to 25–28 (vs 30), reflecting complex onboarding at large academic centers (e.g., perfusion services gating) .
Anticipated NDRA/340B ASP headwind: Q3 average revenue per kit expected to be 10–15% lower than Q2; volume may offset over time but quantification uncertain .
Higher OpEx trajectory: R&D up 37% QoQ in Q2, with further 40% QoQ increase in Q3 and 25–30% in Q4; SG&A elevated by commercial expansion and stock-based comp, pressuring near-term margins even as EBITDA stays positive .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$15.10	$19.784	$24.156
Diluted EPS ($)	-$0.11	$0.03	$0.07
Gross Margin (%)	86%	86%	86%
Net Income ($USD Millions)	-$3.398	$1.069	$2.697
Adjusted EBITDA ($USD Millions)	$4.636	$7.552	$9.816

Segment/Product Revenue

Metric	Q4 2024	Q1 2025	Q2 2025
HEPZATO KIT Revenue ($USD Millions)	$13.7	$18.0	$22.5
CHEMOSAT Revenue ($USD Millions)	$1.4	$1.8	$1.7

KPIs

KPI	Q4 2024	Q1 2025	Q2 2025
Active Centers (U.S.)	14	19	20
Centers Accepting Referrals (U.S.)	8	10	10
Avg Treatments per Site per Month	Slightly under 2	~2	~2
Cash & Investments ($USD Millions)	$53.2	$58.9	$81.0
Cash from Operations ($USD Millions)	-$1.0	$2.2	$7.3

Estimates vs Actuals

Metric	Q1 2025 Estimate*	Q1 2025 Actual	Q2 2025 Estimate*	Q2 2025 Actual
Revenue ($USD Millions)	$16.83*	$19.784	$23.02*	$24.156
Primary EPS ($)	$0.015*	$0.03	$0.02333*	$0.07
# of Estimates (EPS)	6*	—	6*	—
# of Estimates (Revenue)	6*	—	6*	—

Bold beats: Q1 revenue/eps beat; Q2 revenue/eps beat.
Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD Millions)	FY 2025	$94–$98	$93–$96	Lowered
Gross Margin (%)	FY 2025	83%–85%	83%–85%	Maintained
Adjusted EBITDA	FY 2025	Positive each quarter	Positive each quarter	Maintained
Cash Flow	FY 2025	Positive each quarter	Positive each quarter	Maintained
Active U.S. Centers	YE 2025	30	25–28	Lowered
HEPZATO Treatment Volume vs 2024	FY 2025	≥200%	>175%	Lowered
ASP per Kit (NDRA/340B impact)	Q3 2025	N/A	-10% to -15% vs Q2 average	New headwind

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 & Q1’25)	Current Period (Q2’25)	Trend
NDRA/340B access	Announced intent to enter NDRA; expectation to expand access	NDRA in effect 7/1; ~50% kits at 340B; -10–15% Q3 ASP; long-term volume tailwind expected	Mixed near-term ASP; improving access
Site activation & capacity	Target 30 sites YE; complex onboarding; expansion to 6 regions	YE sites 25–28; perfusion services gating; referral networks building; training second teams to expand capacity	Slower activations; capacity workarounds
R&D execution	INDs cleared; trials expected 2H25 start; broader platform vision	CRC Phase II first patient randomized; breast to follow; R&D up +37% QoQ; further ramp Q3/Q4	Accelerating
Pricing & margins	Price increased to $187.5K/unit; GM 86%; potential to reach ~90%	Q2 GM 86%; NDRA/340B introduces ASP headwind in Q3	Stable GM; ASP down near term
Europe strategy	Modest growth; reimbursement constraints; critical for data	CHEMOSAT concentrated in few centers; clinical sites for CRC/BC to aid future expansion	Strategically improving; revenue modest
IO combinations (CHOPIN/SCANDIUM)	CHOPIN PFS analysis expected 2H25; SCANDIUM screening	CHOPIN results planned for ESMO Oct; MSLs to discuss; reps to share publication; unlabeled sequences noted	Data catalyst approaching
Referral networks	Building oncology referrals; 30–40% organic vs referred	Continued referral development; balancing capacity constraints	Improving breadth

Management Commentary

“Based on the current pace, 25 to 28 operational centers are expected by the end of the fourth quarter… we have set a goal of 40 sites by the end of next year.”
“Volume distribution under the 340B program is expected to remain at roughly 50%… in the third quarter, the estimated net effect will be a 10% to 15% reduction from the second quarter average revenue per HEPZATO kit.”
“We anticipate patient dosing for the metastatic colorectal trial to begin within weeks, with the first patient having been randomized just yesterday.”
“During the second quarter, average treatments were approximately two per month per center, with expectations for similar averages for the remainder of the year.”
CFO: “Non-GAAP positive adjusted EBITDA for the second quarter was $9.8 million… we ended the quarter with approximately $81,000,000 in cash and investments… and no outstanding debt obligations.”

Q&A Highlights

NDRA/340B impact: Management expects long-term volume benefits as portfolio economics improve for participating hospitals, but near-term ASP headwind of 10–15% in Q3; too early to quantify volume lift .
Site activation drivers and hurdles: Perfusion services credentialing and contracting is a key gating item; company is proactively securing external perfusion providers and earlier onboarding steps to accelerate timelines .
Utilization and capacity: Average ~2 treatments/month/site expected through year-end; management pursuing training of second teams and room-time increases to grow capacity beyond two treatments/site/month over time .
R&D spend cadence: Q2 R&D up ~37% vs Q1; expected +40% in Q3 and +25–30% in Q4; stock-based comp is a notable portion; CRC/Breast trials advancing .
Guidance clarifications: FY revenue tightened modestly; change driven ~two-thirds by HEPZATO and ~one-third by CHEMOSAT; CHEMOSAT’s small number of contributing sites can create volatility .

Estimates Context

Q2 2025 revenue and EPS beat consensus: Revenue $24.16M vs $23.02M*; EPS $0.07 vs $0.02333* .
Q1 2025 also beat: Revenue $19.784M vs $16.83M*; EPS $0.03 vs $0.015* .
With NDRA/340B now active, estimates may need to reflect lower ASPs in Q3, offset by volume growth as access improves; management reiterated positive adjusted EBITDA and cash flow each quarter .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Q2 was a clean beat on both revenue and EPS with robust profitability; strength stemmed from consistent utilization across expanding centers and disciplined commercial execution .
Expect Q3 ASP headwinds from NDRA/340B (-10–15% per kit) while access broadens; volume growth should partially offset, but ASP mix warrants near-term model adjustments .
FY25 revenue nudged down to $93–$96M and YE sites to 25–28; operational complexity at major centers is the key gating factor—capacity initiatives (perfusion, second teams) are critical to upside .
Pipeline execution is accelerating: CRC Phase II dosing begun; breast to follow; ESMO CHOPIN readout is a near-term sentiment catalyst for IO combinations and broader use narrative .
Gross margin remains strong at 86%; despite R&D ramp, management expects positive adjusted EBITDA and cash flow each quarter—cash/investments $81M and no debt enhance flexibility .
For trading: watch ESMO in October and Q3 print for ASP/mix clarity; continued site activations and capacity expansion updates are key to sustaining revenue trajectory amid NDRA pricing dynamics .
Medium-term thesis: expanding indications (CRC/breast) and combination strategies (IO) can leverage current footprint and clinical momentum; Europe remains strategically important for data while revenue contribution stays modest near term .

DELCATH SYSTEMS, INC. (DCTH)·Q2 2025 Earnings Summary