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Profound Medical Corp. (PROF)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $2.62M, up 82% year-over-year but down sequentially from Q4 2024; gross margin held at 71%. EPS was -$0.36 versus -$0.27 a year ago, reflecting higher OpEx for commercialization and clinical initiatives .
  • Results missed Wall Street consensus: revenue ($3.26M*) and EPS (-$0.28*) estimates, driven by the back-end-loaded nature of the new capital model transition and timing of reimbursement cash flows; management reaffirmed full-year revenue growth guidance of 70–75% vs. 2024 .
  • Strategic catalysts strengthened: Level 1 CAPTAIN perioperative data showed statistically significant superiority in patient experience versus robotic prostatectomy, supporting adoption and payer engagement; CMS APC Level 7 reimbursement across multiple settings is a structural tailwind .
  • Commercial strategy is expanding with TULSA-AI Volume Reduction (limited release in June; full release planned early Q4) and a turnkey TULSA-PLUS interventional MRI solution; near-term deals and conversions indicate growing pipeline into 2H25 .

What Went Well and What Went Wrong

What Went Well

  • CAPTAIN Level 1 perioperative outcomes: TULSA had median blood loss of 0 mL vs. 100 mL for robotic prostatectomy, median length of stay ~0.29 vs. 1.24 days, and significantly lower pain and superior 30-day QoL metrics; a strong adoption catalyst with clinicians and insurers .
  • Reimbursement tailwinds: TULSA APC Level 7 codes effective Jan 1, 2025 with broader applicability across hospitals, ASCs, imaging centers, and large urology practices; management emphasized higher rate vs. peers (APC Level 6) and multi-setting advantage .
  • Product pipeline momentum: TULSA-AI Volume Reduction for BPH launched in limited release in June with full release planned early Q4, enabling faster, more predictable workflows and broader addressable market .

Quotes: “TULSA's precision, flexibility, and resulting total available market in prostate disease is unmatched… Our Urology APC Level 7 codes… provide a significant tailwind…” – Arun Menawat, CEO .
“TULSA completely eliminates blood loss… completely eliminates overnight stay… statistically significantly less pain during the first week…” – Mathieu Burtnyk, President .

What Went Wrong

  • Consensus miss: Revenue of $2.62M vs. $3.26M* and EPS of -$0.36 vs. -$0.28*; EBITDA -$11.0M vs. -$7.1M*, driven by higher OpEx from salesforce build-out, conferences, and accelerated R&D, and timing of capital placements .
  • Sequential revenue decline: From $4.18M in Q4 2024 to $2.62M in Q1 2025 as the business transitions from placements to capital sales, resulting in back-end loaded revenue pacing .
  • Net loss widened: -$10.7M vs. -$6.6M YoY, reflecting SG&A and R&D investments; operating loss expanded to -$11.2M .

Financial Results

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$1.439 $2.832 $4.177 $2.621
Gross Margin %60% N/A71% 71%
Operating Loss ($USD Millions)$(7.877) $(8.988) $(8.344) $(11.166)
Net Loss ($USD Millions)$(6.585) $(9.364) $(4.946) $(10.724)
Diluted EPS ($)$(0.27) $(0.38) $(0.20) $(0.36)
Cash and Equivalents ($USD Millions)$41.180 $27.123 $54.912 $46.433

Revenue breakdown (consumables/leases/warranties vs. capital):

Revenue BreakdownQ1 2024Q3 2024Q4 2024Q1 2025
Recurring – Non-Capital ($USD Millions)$1.439 $2.653 $2.679 $1.801
Capital Equipment ($USD Millions)$0.000 $0.179 $1.498 $0.820

Consensus vs. Actual (Q1 2025):

MetricActualConsensusSurpriseBeat/Miss
Revenue ($USD Millions)$2.621 $3.263*-19.7%Miss
EPS ($)$(0.36) $(0.28)*-$0.08Miss
EBITDA ($USD Millions)$(11.003) $(7.147)*-$3.86MMiss

Values with asterisk retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue Growth vs. FY 2024FY 2025+70% to +75% (management commentary prior to Q1) Reaffirmed; maintains +70% to +75% Maintained
Product Launch Timing2H 2025N/ATULSA-AI Volume Reduction: limited release early June; full release planned early Q4 New timeline clarification

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Reimbursement (APC Level 7)CMS OPPS Final Rule raises TULSA to APC Level 7 effective Jan 1, 2025 Transition to capital model underway Higher Level 7 rates across more settings; tailwind for adoption Strengthening
CAPTAIN trialOn track to complete enrollment by YE 2024; interim data 1H25 Enrollment completed; perioperative data at AUA expected Statistically significant perioperative superiority vs. RP; clinician/insurer interest Accelerating
Commercial model shiftTransition from placement to capital + consumables Continued setup for capital model Back-end loaded revenue pacing; 2 new sites + 1 conversion in Q1 In execution
TULSA-AI for BPHN/AUA Alignment Assistant unveiled Volume Reduction module: limited release June; full release planned early Q4 Launching
TULSA-PLUS turnkey MRICollaboration with Siemens announced N/AEconomics/workflows detailed; compatibility targeted by end Q3; deals expected within ~4 months Building pipeline
Marketing & patient awarenessPRO-Talk Live! with 70 physicians N/ADigital/social campaigns; ex-NFL ambassadors; Medicare awareness driving inquiries Increasing

Management Commentary

  • “Revenue growth trajectory… was in-line with our internal expectations, gross margin continued to be strong, and AUA 2025 was a very successful meeting… TULSA's economic proposition is now clear… Level 7 codes… applicable in an unrivaled range of treatment settings… tailwind behind… TULSA-AI for BPH and TULSA+” – Arun Menawat, CEO .
  • “Q1 revenue $2.6M (recurring $1.8M; capital $0.82M), gross margin 71%, OpEx $13M, net loss $10.7M ($0.36/sh), cash $46.4M” – Rashed Dewan, CFO .
  • “TULSA eliminates blood loss and overnight stay; significantly less pain and superior 30-day QoL vs. RP; Level 1 head-to-head hard data” – Mathieu Burtnyk, President .
  • “TULSA-PLUS provides turnkey interventional MRI; APC Level 7 reimbursement unlocks commercial expansion; economics achievable with 2 TULSAs/week” – Thomas Tamberrino, CCO .

Q&A Highlights

  • CAPTAIN reception and adoption: Teaching hospitals and physicians view Level 1 data as enabling mainstream adoption and guidelines workstreams; insurer engagement underway .
  • FY25 revenue guidance: Management remains “steadfast” in +70–75% growth versus 2024; pipeline back-end loaded due to capital model shift .
  • Commercial build-out: U.S. sales, nurse education, HEOR/market access, and market development teams in place; OUS expansion progressing .
  • Marketing ramp: Patient testimonials, digital/social media, podcasts, celebrity ambassadors (ex-NFL) planned; Medicare coverage messaging amplifying demand .
  • TULSA-PLUS timing/economics: Compatibility targeted by end Q3; customizable “program” model (equipment, coils, software, staff education, PR) with deals expected within ~4 months .

Estimates Context

  • Q1 2025 missed consensus on revenue ($2.62M vs. $3.26M*) and EPS (-$0.36 vs. -$0.28*), with EBITDA also below expectations (-$11.0M vs. -$7.1M*), reflecting timing effects from the shift to capital and upfront commercialization investments .
  • Given management’s reaffirmed FY growth outlook and multi-setting reimbursement tailwinds, estimates may shift toward a back-end weighted trajectory, incorporating TULSA-AI and TULSA-PLUS contributions in 2H25 .
    Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Q1 printed strong YoY growth but a consensus miss; the quarter underscores commercialization investment and the transition to capital placements, setting up a back-half weighted year .
  • Level 1 CAPTAIN perioperative superiority and APC Level 7 reimbursement across hospitals/ASCs/imaging centers provide durable adoption and payer catalysts into FY25–26 .
  • Product cadence should expand TAM and utilization: TULSA-AI Volume Reduction (limited release June; full release early Q4) and TULSA-PLUS turnkey MRI can accelerate case throughput and program launches .
  • Watch near-term KPIs: capital placements/conversions, site activations, reimbursement approvals, and patient pipeline trends; Q1 included 2 new sites and 1 conversion .
  • Liquidity remains solid ($46.4M cash), supported by an amended CIBC revolver (option to expand) and prior equity raise; enables scaling without near-term financing pressure .
  • Trading lens: near-term volatility likely around pacing of capital deals and updated estimate revisions; medium-term thesis rides on clinical differentiation, reimbursement scope, and scalable MRI-enabled workflows.