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KM

KORU Medical Systems, Inc. (KRMD)·Q1 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue $9.64M (+17.5% YoY) and gross margin 62.8%; adjusted EBITDA improved to $(0.19)M and adjusted diluted EPS $0.00 .
  • Revenue beat Wall Street consensus by ~$0.77M, while GAAP EPS modestly missed by ~$0.00 (−$0.03 vs −$0.028); company raised FY25 revenue guidance to $38.5–$39.5M and reiterated 61–63% GM and positive operating cash flow . Revenue consensus: $8.86M*; EPS consensus: −$0.0275*.
  • Core business strength (Domestic +16% YoY; International +36% YoY) driven by new patient starts, share gains, geographic expansion, and a prefilled syringe tender; international included ~$0.4M distributor stocking .
  • Near-term catalysts: increased FY25 revenue range, OUS tender momentum and Japan IG clearance, oncology infusion clinic pilots, and plans to submit two additional commercialized drugs (iron chelation, antibiotic) for 510(k) by year-end .

What Went Well and What Went Wrong

What Went Well

  • Core growth: Total core net revenues $9.36M (+20.8% YoY), with Domestic core $6.93M (+16.4%) and International core $2.43M (+35.6%) on new patient starts, share gains, geographic expansion, and prefilled syringe tender win .
  • Margin discipline: Gross margin 62.8%, up 50 bps YoY, aided by favorable product mix; reiterated FY25 GM guidance 61–63% inclusive of tariff impacts .
  • Strategic pipeline: Plans to submit two commercialized drugs for 510(k) in 2025 (iron chelation, antibiotic); total of 17 opportunities and 15 active collaborations, with Japan clearance for Freedom60 across IG drugs .
    • “We plan to submit 2 additional commercialized drugs for 510(k) clearance... by the end of 2025” — Linda Tharby .

What Went Wrong

  • PST softness: Pharma Services & Clinical Trials (PST) revenue $0.28M (−38.6% YoY) due to clinical trial orders pushed from Q1 to Q2; non-recurring nature creates cadence variability .
  • International quarterly volatility: ~$0.4M distributor stocking in Q1 likely to weigh on Q2 sequential international revenue before resuming growth toward ~30% for FY25 .
  • GAAP loss persists: Net loss $(1.17)M; GAAP diluted EPS −$0.03, slightly below consensus EPS (−$0.0275*), despite adjusted diluted EPS at $0.00 .

Financial Results

Quarterly Financials vs Prior Periods

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD)$8,179,977 $8,838,600 $9,635,075
Gross Margin (%)63.4% 62.9% 62.8%
Gross Profit ($USD)$5,185,991 ~$5,600,000 $6,046,335
GAAP Diluted EPS ($USD)$(0.03) $(0.03) $(0.03)
Adjusted EBITDA ($USD)$(434,495) $(727,465) $(191,059)
Cash & Equivalents ($USD)$8,806,310 $9,580,947 $8,735,834

Q1 2025 Actual vs Consensus (S&P Global)

MetricConsensus Estimate (Q1 2025)Actual (Q1 2025)Surprise
Revenue ($USD)$8,863,200*$9,635,075 +$771,875
EPS ($USD)−$0.0275*−$0.03 −$0.0025

Values marked with * retrieved from S&P Global.

Segment Revenue (Oldest → Newest)

SegmentQ3 2024 ($USD)Q4 2024 ($USD)Q1 2025 ($USD)
Domestic Core$6,447,469 $6,657,182 $6,927,964
International Core$1,121,196 $1,504,108 $2,428,662
PST/Novel Therapies$611,312 $677,309 $278,449
Total$8,179,977 $8,838,600 $9,635,075

KPIs

KPIQ1 2025
Recurring revenue share~75% of revenues from chronic SCIg base
Chronic patients supported~45,000 per year
Annual infusions on platform>2 million
Prefilled syringe penetration (U.S.)Just over 65%
International distributor stocking (Q1)~$400,000
PST revenue$278,449

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenuesFY 2025$38.0–$39.0M $38.5–$39.5M Raised
Gross MarginFY 202561%–63% 61%–63% Maintained
Cash Flow from OperationsFY 2025Positive Positive Maintained
Operating Expenses (ex-SBC)FY 2025N/A$26–$27M Provided (new detail)
Capital ExpendituresFY 2025N/A< $2M Provided (new detail)
PST (Pharma Services & Clinical Trials)FY 2025N/A~$2.5–$3.0M Provided (new detail)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
International expansion & distributor stockingEU penetration and geographic expansion; some stocking shifted into Q2 due to BSI appeal Strong core and International growth; OUS expansion highlighted +36% International; ~$0.4M stocking; expect Q2 dip then sequential growth to ~30% FY Accelerating OUS with quarterly cadence volatility
Prefilled syringe adoptionData and adoption momentum; oncology admin preference for FreedomEdge vs manual push Continued collaborations and readiness for SCIg advancements Prefilled penetration in U.S. >65%; EU tender win; new pump to support full prefilled range Rising adoption; platform upgrades pending
Oncology infusion clinic entry97% nursing preference (PODD) Building collaborations; 2025 milestones 5 pilot sites; economic reimbursement advantages (pump vs manual) Moving from validation to pilots; potential revenue channel
Gross margin and tariffsRaised FY24 GM guidance to 62–63% FY24 GM 63.4%; FY25 GM guide 61–63% 62.8% in Q1; tariffs <100 bps impact; GM guide unchanged Stable margins; mitigating tariff impacts
New drugs on label (510(k))Novel therapies growth; raised FY24 revenue/GM guidance 4 collaborations in 2024; 2 new in early 2025 Plan to submit 2 commercialized drugs (iron chelation, antibiotic) plus earlier rare disease biologic; 17 total opportunities, 9 with commercial potential by 2026 Pipeline broadening; nearer-term label additions
Japan IG clearanceN/AN/AFreedom60 cleared with all IG drugs in Japan; distribution in place; ramp expected New market entry poised to contribute

Management Commentary

  • “We had a great start to the year... Revenue for the quarter reached $9.6 million... This performance reflects the ongoing strength of our core business… We are raising our 2025 guidance to a range of $38.5 million to $39.5 million” — Linda Tharby .
  • “First quarter margins were 62.8%, a 50-basis point improvement... reiterating our margin guidance of 61% to 63%... we have low exposures to tariffs... calculated just under 100 basis points” — Tom Adams .
  • “We currently have 9 active collaborations with new drug therapies... 17 total opportunities... 9 have commercial potential by 2026” — Linda Tharby .
  • “We finished the quarter with an $8.7 million cash balance… cash usage of $800,000 during the first quarter” — Tom Adams .

Q&A Highlights

  • Strategy to submit drugs without pharma partners: focus on iron chelation and antibiotic used by nurses at home; sub-1-year paybacks; actively exploring more candidates transitioning from hospital to home .
  • Revenue cadence: international distributor stocking in Q1 implies Q2 sequential dip, then gradual sequential growth to ~30% for the year; domestic expected to outpace ~10% market growth; PST $2.5–$3.0M for FY25 .
  • Prefilled syringe adoption and EU tender: U.S. penetration >65%; EU tender win supports OUS expansion; new pump expected to cover full prefilled range .
  • Tariffs impact: under 100 bps embedded in GM guidance; absent tariffs, margin uplift could be ~150 bps annualized; majority of raw materials U.S.-origin .
  • Oncology clinic economics: potential for improved workflow throughput and higher reimbursement using pump vs manual push; pilots underway with distributor and pharma support .
  • Japan ramp: full system cleared; distribution agreement in place; sales expected to begin upticking in Q2; potential upside later in year .

Estimates Context

  • Q1 2025 revenue beat: $9.64M actual vs $8.86M consensus, +$0.77M absolute beat; EPS modest miss: −$0.03 actual vs −$0.0275 consensus (−$0.0025). Guidance raised to $38.5–$39.5M revenue; GM 61–63%; positive operating cash flow reiterated .
  • Implications: Expect sell-side to lift FY25 revenue models modestly and consider higher OUS contributions; EPS revisions likely minimal near term given tariff headwinds offset by mix and efficiency.
    Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Strong topline momentum with core engine expanding: domestic share gains and OUS tender-driven growth; Q1 set a record revenue base .
  • Raised FY25 revenue guidance and reiterated margin/cash flow targets suggest confidence in pipeline execution and OUS scaling; watch Q2 international cadence normalization .
  • Prefilled syringe adoption and next-gen pump program are structural tailwinds; expect incremental OUS share capture where e-pumps are standard but lack direct prefilled compatibility .
  • Pipeline de-risking via on-label expansion: two commercialized drugs targeting 510(k) by year-end with sub-1-year paybacks; potential 2026 contribution (~$0.5M preliminary) .
  • Margins resilient despite tariffs (<100 bps headwind included); operational initiatives and product mix support maintaining 61–63% GM .
  • Cash discipline continues: $8.74M ending cash, $(0.24)M net cash used in operations, capex < $2M planned; operating cash flow positive reiterated for FY25 .
  • Near-term trading lens: revenue beat + guidance raise are positive catalysts; monitor Q2 international step-down from stocking and updates on Japan ramp and oncology pilots .

Other Relevant Press Releases (Q1 2025)

  • Agreement for next-generation SCIg infusion system with global pharma and SCHOTT Pharma collaboration to integrate vial and prefilled syringe formats .
  • Phase III clinical trial collaboration for nephrology expanded indication (approx. 30k patients; projected 300k annual infusions) .
  • Post-quarter: Russell 3000/2000 inclusion set for June 30, 2025 (visibility and investor base expansion) .