KORU Medical Systems, Inc. (KRMD)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered record revenue and positive adjusted EBITDA; revenue of $10.195M grew 20.9% YoY, with gross margin 63.5% and GAAP diluted EPS $0.00; adjusted diluted EPS was $0.01 .
• Wall Street consensus (S&P Global) was $9.459M revenue and -$0.02 EPS; KRMD beat both on revenue and EPS with $10.195M and $0.01 respectively; 5 revenue and 4 EPS estimates contributed to the consensus values (Values retrieved from S&P Global)*.
• Guidance raised: 2025 revenue now $39.5–$40.5M (from $38.5–$39.5M), gross margin reiterated at 61–63%, and positive operating cash flow reiterated; management also expects ending cash balance >$8.1M .
• Key catalysts: accelerating international prefilled syringe conversions, near-term drug label expansions (e.g., Empaveli expanded indications), and product pipeline milestones; near-term US distributor inventory reduction creates a Q3 cadence shift but expected to normalize in Q4 .

What Went Well and What Went Wrong

What Went Well

• Record quarterly revenue, sixth consecutive quarter of double-digit growth, and positive adjusted EBITDA: “We achieved a milestone this quarter, surpassing $10 million in revenue for the first time… Operationally, we delivered positive adjusted EBITDA” — Linda Tharby ; Revenue $10.195M (+20.9% YoY); adjusted EBITDA $339,413 .
• International acceleration via prefilled syringe conversions; KRMD is the preferred device as markets convert, driving share gains: “More than a 40% reduction [in steps] and +75% patient preference for pre-fills… we are the preferred device” — Linda Tharby .
• Pipeline and regulatory progress: Empaveli label expansion opens new infusions; submitted 510(k) for a rare disease biologic; oncology pilot underway in US clinics (six centers, four subcutaneous oncology drugs) .

What Went Wrong

• Gross margin declined 150 bps YoY to 63.5%, driven by tariff impacts (≈90 bps) and lack of prior-year favorable inventory revaluation; partially offset by volume and PST margin improvements .
• Domestic core growth slower than international (+15.3% YoY domestic vs +33.9% international); management flagged a Q3 US distributor inventory reduction that will temporarily impact cadence (expected rebound in Q4) .
• PST strength in Q2 (clinical trial orders for a non-IG drug) is not expected to be the ongoing run-rate; management guided to stable PST front/back half rather than sustained Q2 level .

Financial Results

Revenue, Gross Margin, EBITDA, Cash

Note: Values retrieved from S&P Global* (consensus column).

EPS vs Prior Periods and Consensus

Note: Values retrieved from S&P Global* (consensus rows).

Segment Breakdown

KPIs

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We achieved a milestone this quarter, surpassing $10 million in revenue for the first time… delivering positive adjusted EBITDA… we continued to outperform the strong SCIg market through global share gains” — Linda Tharby .
• “Our second quarter margins were 63.5%… decline was primarily driven by… tariff impacts of 90 bps and a prior year favorable inventory revaluation” — Tom Adams .
• “You can expect… strong growth outpacing what you’d seen in the first two quarters… most of the raise we will see in international markets… [US] large distributor… inventory reduction program here in Q3… bounce back in Q4” — Tom Adams .
• “Our new pump will work with any prefill available on the marketplace… we expect to submit for US 510(k)… and EU would follow one quarter beyond that” — Linda Tharby .
• “We now expect to file a 510(k) for our new consumable sets in 2026… prioritizing the pump development” — Linda Tharby .

Q&A Highlights

• Guidance composition: Raise driven by international prefilled conversions; domestic impacted by a Q3 distributor inventory action, with Q4 recovery; PST stable into H2 .
• International share gains: Europe aggregate share moving to low-20% with first market conversion; multiple additional markets targeted into 2026 .
• Tariffs: ~90 bps full-year impact (~2% per order); mitigation via operational efficiencies and vendor rebates .
• Japan entry: Registrations complete; initial sales included in H2; larger impact expected in 2026 .
• Cash generation and capital allocation: Expect positive operating cash in H2; investments skew to SG&A with ~1-year paybacks; pipeline optionality (e.g., oncology) could warrant incremental spend .

Estimates Context

• Q2 2025 results versus S&P Global consensus: Revenue $10.195M vs $9.459M*; EPS $0.01 vs -$0.02*; 5 revenue and 4 EPS estimates contributed (Values retrieved from S&P Global)*.
• Implications: Consensus models likely need to reflect stronger international trajectory and prefilled conversions, tempered by Q3 US distributor inventory reduction and H2 margin mix/tariff pressures .

Key Takeaways for Investors

• Beat-and-raise quarter: Revenue and EPS exceeded S&P consensus; FY revenue guide raised to $39.5–$40.5M with margins and cash flow targets intact (Values retrieved from S&P Global)*.
• International is the engine: Prefilled conversions are expanding KRMD’s share and accelerating growth; expect continued strength in H2 weighted to OUS .
• Margin management: H2 gross margin within 61–63% range despite mix and tariff pressures; near-term headwinds well-quantified (~90 bps tariff impact) .
• Near-term cadence: Anticipate a Q3 domestic dip from distributor inventory normalization with Q4 rebound; PST not a new base level but offers upside variability .
• Pipeline milestones: Empaveli label expansion, rare disease biologic 510(k) submitted, oncology pilot under way, next-gen pump 510(k) targeted by late 2025/early 2026; EU filing ~1 quarter later .
• Cash discipline: Positive adjusted EBITDA in Q2, H2 operating cash flow expected; targeted SG&A investments with rapid paybacks support >20% growth aspiration .
• Trading setup: Stock narrative anchored on international conversions and guide raise; watch Q3 US inventory dynamic, H2 margin cadence, and regulatory filings as potential catalysts .

Additional Q2 2025 Press Releases

• Appointment of Adam Kalbermatten as Chief Commercial Officer (July 28 start) .
• Inducement grant under Nasdaq Listing Rule 5635(c)(4) for CCO .
• Earnings date announcement and conference participation updates .