Profound Medical Corp. (PROF)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 revenue was $2.21M, below Wall Street consensus of $3.47M; diluted EPS was -$0.52 vs consensus -$0.41. Management attributed the miss to timing-related delays in several capital sales; absent those delays, revenue “would have been over $3 million.” Bold miss on both revenue and EPS versus estimates.* *
• Gross margin expanded to 73% (from 64% YoY), reflecting manufacturing efficiency improvements, but operating expenses rose sharply to $15.4M on headcount, CAPTAIN trial activity, salesforce commissions, travel and infrastructure, widening the net loss to -$15.7M (vs -$6.9M YoY).
• Strategic progress: same-store TULSA procedure volumes rose 10% sequentially; qualified pipeline stands at 80 systems; first commercial BPH case using the TULSA-AI Volume Reduction module completed; Siemens “combined total prostate solution” remains on track to initiate sales before year-end.
• FY 2025 revenue growth guidance maintained at ~70%–75%; near-term stock catalysts include the full launch of TULSA-AI Volume Reduction in Q4-2025 and initial sales of the Siemens-integrated prostate solution before year-end, alongside continued reimbursement traction and CAPTAIN data dissemination.

What Went Well and What Went Wrong

What Went Well

• Same-store utilization growth and pipeline build: “same store” procedure volumes up 10% sequentially; qualified pipeline at 80 systems across verify/negotiate/contracting stages.
• Clinical and product milestones: first commercial BPH treatment using the new TULSA-AI Volume Reduction module completed (expected to enable 60–90 minute BPH procedures). “TULSA-AI® Volume Reduction…levelling the playing field on the time it takes…Profound expects to initiate the full launch…in Q4-2025.”
• Management commitment to growth despite timing headwinds: “Had [capital sales] occurred in the quarter, total revenues would have been over $3 million…we continue to work towards achieving total year-over-year revenue growth at an approximate range of 70% to 75% in 2025.”

What Went Wrong

• Timing-driven revenue shortfall and EPS miss vs estimates: revenue $2.21M vs $3.47M consensus; EPS -$0.52 vs -$0.41 consensus; capital sales delays cited. Bold miss on both lines.* *
• Expense and FX headwinds: operating expenses rose to $15.4M (vs $9.3M YoY), and net foreign exchange loss was $2.17M, contributing to a larger net loss.
• Year-over-year top-line stagnation and sequential decline: revenue “essentially unchanged” YoY and down from Q1’s $2.62M and Q4’s $4.2M record, underscoring back-end loading and execution timing risks as the sales model transitions to capital.

Financial Results

Quarterly Financials

Revenue Breakdown

YoY Comparison (Q2 2024 vs Q2 2025)

KPIs and Operating Indicators

Additional P&L and Cash Flow Details (Q2 2025)

• Cost of sales: $0.59M; Gross profit: $1.62M; Net foreign exchange loss: $2.17M; Net finance income: $0.34M.
• H1 2025 operating cash flow: -$22.03M; cash end of period: $35.20M.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO on Q2 timing and FY outlook: “The second quarter was characterized by some unfortunate timing…Had [capital sales] occurred in the quarter, total revenues would have been over $3 million…we continue to work towards achieving total year-over-year revenue growth at an approximate range of 70% to 75% in 2025.” — Arun Menawat
• Economic proposition and reimbursement breadth: “TULSA is a better procedure, addressing a larger patient population, reimbursed at a higher rate and also in more settings than any other prostate disease treatment modality.” — Arun Menawat (Q1 call)
• BPH module positioning: “TULSA-AI® Volume Reduction is designed to maintain…advantages of treating BPH with TULSA while leveling the playing field on the time it takes…Profound expects to initiate the full launch of the module in Q4-2025.” — Company release
• Clinical advantages vs RP: “TULSA completely eliminates blood loss…completely eliminates overnight stay…statistically and clinically significant less pain during the first week post treatment…” — Mathieu Burtnyk (Q1 call)

Q&A Highlights

• Adoption drivers and private payer engagement: Management is prioritizing private insurers with early signs of approvals/pre-authorizations; CAPTAIN data expected to further support payer policies.
• Pipeline pacing and back-end weighting: Transition to capital model implies back-end loaded revenue cadence; hospitals’ waiting lists increasing with growing patient awareness and reimbursement progress.
• Salesforce and commercialization build-out: U.S. sales force, nurse education, and market development teams in place; expansion outside the U.S. ongoing.
• Marketing ramp and ambassadors: Digital/social media campaigns underway; notable former NFL players and patient advocates engaged to drive awareness.

Estimates Context

• Q2 2025 comparison versus S&P Global consensus:

Values retrieved from S&P Global.*

Interpretation: The quarter missed both revenue and EPS consensus, driven by timing delays in capital sales. Management reiterated FY growth guidance and indicated those delayed deals would have pushed revenue “over $3 million,” suggesting potential catch-up in H2 if execution normalizes.

Key Takeaways for Investors

• Execution timing, not demand, drove the Q2 miss; same-store procedures grew and the pipeline expanded to 80 systems, supporting the back-end loaded FY outlook.
• Margin structure is improving (73% GM) with manufacturing efficiencies; however, scaling SG&A and R&D (CAPTAIN, commercial build-out) are elevating OpEx and cash burn—watch for operating leverage as capital sales ramp.
• Near-term catalysts: Q4 launch of TULSA-AI Volume Reduction for BPH and initial Siemens-integrated solution sales before YE 2025; both can accelerate capital placements and procedure volume.
• Reimbursement breadth (APC Level 7 across multiple sites of care) remains a core differentiator and should underpin broader adoption and payer traction throughout 2025–2026.
• Clinical narrative is strengthening: CAPTAIN perioperative outcomes (Level 1 data) highlight tangible patient-experience benefits vs RP, likely to drive clinician adoption and bolster private payer policy momentum.
• Liquidity of $35.2M at quarter-end provides runway, but H1 operating cash outflow was ~$22.0M; monitor capital closing cadence and cash burn trajectory into H2.
• Tactical positioning: Expect estimate revisions to converge with back-half weighting; upside if delayed capital deals convert and product launches deliver as guided; risk if conversion timelines slip or FX/OpEx headwinds persist.

Sources: Q2 2025 8-K press release and exhibits ; Q1 2025 8-K and earnings call ; Q4 2024 earnings call ; BPH module press release .

S&P Global consensus data used for estimates (revenue, EPS, # of estimates).*