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ICAD INC (ICAD)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered stable revenue ($4.87M, -1.6% YoY; -9.9% QoQ) with expanding ARR ($10.7M, +18% YoY) and best-in-class gross margin (86%), reflecting a deliberate shift to SaaS/Cloud that defers GAAP revenue while building recurring backlog .
  • Profitability metrics improved: GAAP net loss narrowed to ($0.8M) or ($0.03) per share; non-GAAP adjusted net loss improved to ($0.5M) or ($0.02) per share; adjusted EBITDA essentially breakeven at $3K, aided by 4% lower OpEx and higher-margin cloud mix .
  • Strategic catalysts: 92 total deals (19 cloud) and Total ARR rose to $10.7M; plus announced agreement to be acquired by RadNet, expected to accelerate distribution/innovation upon close (subject to customary conditions) .
  • Trend context: Q4 2024 was unusually strong on execution and timing pull-ins; Q1 sequential revenue moderation is consistent with management’s SaaS transition framing and typical seasonality/pull-forward dynamics .
  • Estimate comparison: S&P Global consensus for ICAD was unavailable in our system this quarter; we cannot classify beat/miss versus Street numbers (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

  • Elevated margin/quality of revenue: Gross margin expanded to 86% (vs. 83% prior year) on higher-margin cloud, despite flat headline revenue .
  • Operating discipline and profitability mix: OpEx fell 4% YoY to $5.3M; adjusted EBITDA turned positive ($3K) vs. ($1.1M) last year; adjusted net loss improved to ($0.5M) .
  • Strategic momentum: 92 deals closed (19 cloud), Total ARR reached $10.7M (+18% YoY); CEO cited “increasing adoption of our cloud-based solutions” and “steady demand” for ProFound Breast Health Suite .

Quote: “We saw meaningful progress this quarter with increasing adoption of our cloud-based solutions... we achieved improved gross margin of 86%... and reduced operating expenses by 4%.” — Dana Brown, President & CEO .

What Went Wrong

  • Headline revenue modestly down YoY and down QoQ: Q1 revenue of $4.87M (-1.6% YoY; -9.9% QoQ) as SaaS transition deferred GAAP revenue recognition and services declined 12% YoY .
  • Services revenue pressure: Services fell to $1.63M (-12% YoY), consistent with customers migrating off maintenance to subscription/cloud .
  • Non-recurring costs tied to M&A: $360K acquisition-related expense in Q1 (non-GAAP add-back), reflecting RadNet transaction costs; while adjusted metrics improved, GAAP loss remains until scale builds .

Financial Results

Core P&L and Operating Metrics (USD Millions, except per-share and %)

MetricQ3 2024Q4 2024Q1 2025
Total Revenue$4.217 $5.408 $4.874
Product Revenue$2.508 $3.668 $3.244
Services Revenue$1.709 $1.740 $1.630
Gross Profit ($)$3.634 $4.670 $4.189
Gross Margin %86% 86% 86%
Operating Expenses$5.649 $5.534 $5.318
GAAP Net Loss($1.801) ($0.854) ($0.833)
GAAP Diluted EPS($0.07) ($0.03) ($0.03)
Non-GAAP Adj. Net Loss($1.632) ($0.854) ($0.473)
Non-GAAP Adj. EPS($0.07) ($0.03) ($0.02)
Non-GAAP Adj. EBITDA($1.463) ($0.525) $0.003
Cash & Equivalents$18.793 $17.206 $20.032

Q1 2025 Revenue Mix YoY

MetricQ1 2024Q1 2025YoY Change
Product Revenue ($M)$3.102 $3.244 +4.6%
Services Revenue ($M)$1.852 $1.630 -12.0%
Total Revenue ($M)$4.954 $4.874 -1.6%

KPIs and Commercial Activity

KPIQ3 2024Q4 2024Q1 2025
Total ARR (TARR, $M)$9.261 $9.778 $10.731
Total Deals Closed85 106 92
Cloud Deals13 19 19

Notes: Q1 non-GAAP add-back includes $360K acquisition-related costs tied to the RadNet transaction; adjusted EBITDA excludes interest income/other, stock comp, D&A, acquisition-related items, and taxes per definitions .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue / EPS / Margin (formal numeric guidance)FY/Q1 2025Not providedNot providedMaintained: No formal guidance issued
Strategic OutlookOngoingSaaS transition to recurringContinued SaaS/Cloud adoption; merger with RadNet pending customary approvalsNarrative reaffirmed

Management did not issue quantitative guidance; commentary emphasized recurring revenue transition and pending RadNet merger which, if completed, is intended to accelerate innovation and market access .

Earnings Call Themes & Trends

TopicQ3 2024 (prior)Q4 2024 (prior)Q1 2025 (current)Trend
SaaS/Cloud transition & ARRExplained deferred GAAP revenue vs Cloud; example showed revenue recognition drag near term; ARR/go-live lag of ~a quarter Continued cloud momentum; Q4 had timing pull-ins; expect near-term lumpiness but long-term visibility from SaaS ARR +18% YoY to $10.7M; 19 cloud deals; GM improvement attributed to cloud mix Positive adoption; predictable model building
ProFound Detection v4.0FDA clearance announced; benefits: +22% detection for aggressive subtypes, -18% false positives Reinforced clinical gains; early field accuracy feedback strong; launch catalyzing interest Continued positioning as differentiator (no new Q1 claims beyond GM/mix) Product strength aiding adoption
Partnerships/ChannelsNew OUS distributors (Dominican Rep., etc.) and Blackford platform Koios ultrasound, Sectra, Olea; expanding pipelines; RamSoft referenced by analyst RamSoft distributor integration (750+ sites) announced; Koios reseller partnership live Channel breadth expanding
Regulatory/Market driversU.S. density reporting mandate; supports bundle attach (Density+Detection) Reinforced early adoption of v4.0 and SaaS No new regulatory items; merger process disclosures Stable tailwinds
Backlog/TimingCloud go-live drives ARR timing; expect lag; considering backlog disclosure Reiterated pull-ins and continued Cloud growth; ARR should accelerate with mix shift ARR uplift; deal counts strong; backlog implied in ARR growth Improving visibility over time
M&A——Announced agreement to be acquired by RadNet; subject to approvals Potential step-change in scale

Management Commentary

  • “We saw meaningful progress this quarter with increasing adoption of our cloud-based solutions... we achieved improved gross margin of 86%... and reduced operating expenses by 4%.” — Dana Brown, CEO .
  • “We announced a transformational agreement in which iCAD is expected to be acquired by RadNet... we expect to accelerate innovation and broaden access... Completion... remains subject to customary closing conditions, including approval by iCAD’s stockholders.” — Dana Brown .
  • Prior quarter context (Q4 call): “In '25, we do expect this momentum to continue for cloud... there will be some timing variances as we go through this transition... biggest benefit of getting to a SaaS-based business will be to eliminate... lumpiness.” — CFO Eric Lonnqvist .

Q&A Highlights

  • Transition dynamics and timing: Management reiterated near-term revenue lumpiness from SaaS (perpetual pull-ins and cloud deferrals) but emphasized momentum and improved visibility as Cloud mix rises .
  • Version 4.0 reception: Early field accuracy performing even better than regulatory data set; expected to catalyze upgrades/new wins as commercialization scales .
  • ARR mechanics and backlog: ARR increases upon go-live; ~one-quarter lag typical; considering additional backlog disclosures to enhance transparency .
  • OpEx/Spending: 2025 OpEx not guided; recent years’ OpEx levels not to be assumed run-rate; investments support product/regional expansion .
  • Channel expansion: RamSoft partnership introduced as a general reseller/integration channel; more details to come as it scales .

Note: A Q1 2025 earnings call transcript was not available in our search window; Q&A highlights reflect Q4 2024 for context -.

Estimates Context

  • Wall Street consensus via S&P Global (EPS and revenue) for Q1 2025 was unavailable in our system for ICAD; therefore, we cannot quantify beat/miss versus consensus this quarter. We attempted to retrieve quarterly and annual estimates, but the S&P Capital IQ mapping for ICAD was not present in our database (tool returned a missing mapping error).

Guidance Changes

As above, no formal numeric guidance was issued; qualitative focus remains on accelerating SaaS/Cloud adoption and closing the RadNet transaction (subject to approvals) .

Key Takeaways for Investors

  • Mix upgrade more than offsets revenue timing: Despite flat revenue, gross margin held at 86% and ARR grew +18% YoY—consistent with a healthy SaaS transition building future earnings power .
  • Profitability inflection groundwork: Adjusted EBITDA breakeven and lower OpEx suggest operating leverage as ARR scales and Cloud penetration rises .
  • Cloud adoption is real and broadening: 19 cloud deals in Q1 (matching Q4’s record) with expanding channel partners (RamSoft, Koios) should support sustained ARR growth and upgrade cycles (e.g., to v4.0) .
  • Near-term revenue variability likely: Sequential moderation from a strong Q4 aligns with management’s caution on timing/pull-ins and SaaS deferral; focus on ARR, gross margin, and deal flow to track intrinsic progress .
  • Corporate catalyst: Pending RadNet acquisition could accelerate commercialization and innovation, expanding installed base and distribution; monitor shareholder/regulatory milestones for timing .
  • Liquidity adequate through transition: Cash of $20.0M supports continued execution without near-term financing needs, per management .
  • What to watch next: ARR growth pace, cloud deal mix, v4.0 upgrade adoption, OpEx discipline, and merger closing timeline.

Additional Context: Other Relevant Press Releases (Q1/Q2 2025 window)

  • RamSoft partnership to integrate ProFound AI in a 750+ site RIS/PACS footprint across U.S./Canada, expanding channel reach .
  • Koios reseller partnership to add AI ultrasound decision support, extending iCAD’s pathway from screening to diagnosis .
  • New CCO appointment (Mark Koeniguer) to lead next phase of global commercialization, bringing deep breast AI market experience .

All citations: Q1 2025 8-K earnings release ; Q4 2024 press release ; Q3 2024 press release ; Q3 2024 earnings call transcript ; Q4 2024 earnings call transcript -; RamSoft partnership PR ; Koios partnership PR ; CCO appointment PR .