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Profound Medical Corp. (PROF)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record revenue of $4.177M, up 108% YoY, with gross margin at 71% and net loss improving to $4.946M ($0.20/share); the mix shifted toward capital equipment ($1.498M) alongside recurring consumables/services ($2.679M) .
  • Reimbursement is a clear catalyst: CMS finalized TULSA Category 1 CPT codes at Urology APC Level 7, reimbursed across HOPD/ASC/office settings, materially improving economics vs peers and enabling broader adoption .
  • Commercial execution inflected: the company transitioned to a capital-plus-consumables model, rebuilt the U.S. sales organization, and highlighted confidence in high double-digit growth for 2025 and triple-digit growth in 2026, contingent on reimbursement access and sales capacity ramp .
  • Audit update: the Audit Committee identified an error that overstated Q1 2024 revenue by $472K; 2024 interim statements will be restated and prior quarterly communications “should no longer be relied upon,” now reporting under U.S. GAAP .
  • Near-term stock drivers: April AUA CAPTAIN trial perioperative data readout, mid-year BPH AI module launch, and 2H 2025 TULSA+ (co-sales with Siemens Free.Max) commercialization, each expanding addressable market and improving procedural economics .

What Went Well and What Went Wrong

What Went Well

  • Record topline and margins: “record revenue of $4.2 million, record gross margin of 71% and lowest net loss since the first quarter of 2020” (CFO) .
  • Reimbursement tailwind: CMS finalized TULSA at Urology APC Level 7 with coverage in HOPD, ASC, and office settings—higher payments than radical prostatectomy and BPH modalities, broadening access and improving provider economics .
  • Commercial rebuild and model shift: new Chief Commercial Officer and team accelerated move from a placement/recurring model to capital-plus-consumables with service and future software revenue streams (Tom Tamberrino) .
  • Strategic partnerships & product roadmap: non-exclusive collaboration with Siemens Healthineers (TULSA+) and unveiling of the ‘UA Alignment Assistant’ module to simplify procedures; CAPTAIN trial enrollment completed, perioperative data targeted for AUA .
  • Patient demand indicators: Q4 mix shows broad clinical utility across grades and ablation types (53% whole gland; 25% subtotal; 22% hemi/focal), supporting claims of precision and flexibility (President Burtnyk) .

What Went Wrong

  • OpEx stepped up: Operating expenses rose to $11.307M in Q4 (+15% YoY), reflecting headcount, variable comp, travel, and accelerated R&D; full-year OpEx was $40.099M (+22% YoY) .
  • Installed base targets deferred: prior goal to reach 75 systems by year-end 2024 was not met; management withheld updated install targets pending a couple quarters under the new capital model (CEO) .
  • Reporting restatement: Q1 2024 revenue overstated by $472K; 2024 interim IFRS financials will be restated and prior quarters’ releases/guidance “should no longer be relied upon,” introducing process risk and investor uncertainty .
  • Payer adoption still ramping: early private insurer payments are sporadic; Medicare payment cycles are slow, limiting near-term visibility despite strong inquiries and pipeline (CEO) .
  • Bottom line remains negative: despite improvement, Q4 net loss was $4.946M (Q3: $9.364M), highlighting the need for sustained revenue scale and operating leverage to reach breakeven .

Financial Results

Quarterly Financials (USD Millions unless noted)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($)$2.233 $2.832 $4.177
Recurring - non-capital ($)$1.460 $2.653 $2.679
Capital equipment ($)$0.773 $0.179 $1.498
Cost of Sales ($)$0.795 $1.026 $1.214
Gross Profit ($)$1.438 $1.806 $2.963
Operating Expenses ($)$9.271 $10.794 $11.307
Net Loss ($)$6.919 $9.364 $4.946
Diluted EPS ($)$0.28 $0.38 $0.20
Gross Margin %N/AN/A71%

Year-over-Year (Q4 2024 vs Q4 2023)

MetricQ4 2023Q4 2024
Revenue ($)$2.009 $4.177
Gross Profit ($)$1.041 $2.963
Gross Margin %52% 71%
Operating Expenses ($)$9.832 $11.307
Net Loss ($)$8.907 $4.946
Diluted EPS ($)$0.42 $0.20

Segment Breakdown

SegmentQ2 2024Q3 2024Q4 2024
Recurring - non-capital ($)$1.460 $2.653 $2.679
Capital equipment ($)$0.773 $0.179 $1.498

KPIs

KPIQ3 2024Q4 2024
Installed base (systems)59 N/A (management deferred targets)
Cash (period-end, $)$27.123M (9/30/24) $54.912M (12/31/24)
Shares outstanding24,661,771 (11/7/24) 30,039,809 (3/6/25)
Patient ablation mix (Q4)Whole gland 53%; subtotal > half 25%; hemi/focal 22% —
Cancer grade mix (Q4)GG1 12%; GG2 54%; GG3 23%; GG4/5 11% —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue GrowthFY 2025None explicit“High-double digit growth” (CEO) Introduced
Revenue GrowthFY 2026None“Triple-digit revenue growth” (CEO/Tom) Introduced
Installed BaseFY 202475 systems target (Q2 PR) Not met; new target deferred until H2’25 (CEO) Lowered/deferred
CAPTAIN perioperative data1H 20251H 2025 (Q3 PR) AUA April 26–29, 2025 (CEO) Maintained/specified timing
BPH AI moduleMid-2025“Later this year” (Q2 PR) Demo at AUA; mid-year launch plan (President) Clarified timing
TULSA+ (Siemens)2H 2025N/ASales initiation targeted in 2025, post compatibility Introduced
Reimbursement level2025Proposed APC Level 6 (July) Finalized APC Level 7; broader sites of service (CMS) Raised/expanded
Financial reporting basis2025IFRS (2024 interims) Transition to U.S. GAAP; restatement of 2024 interims Basis changed/restated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2, Q-1)Current Period (Q4 2024)Trend
Reimbursement (CMS)Proposed rule (July); inflection anticipated Final Rule Level 7; HOPD/ASC/office coverage; higher payments vs peers Strong positive tailwind
Commercial modelRecurring-heavy; installations to 57 Shift to capital + consumables + service/software; rebuilt sales org Strategy pivot executed
CAPTAIN trialOn-track to complete enrollment by YE’24 Enrollment completed; perioperative readout at AUA Clinical validation nearing
AI modules/productFDA clearance of Contouring Assistant; BPH module in development UA Alignment Assistant unveiled; BPH demo/launch timing Product cadence improving
PartnershipsN/ASiemens co-sales/co-marketing (TULSA+) Ecosystem expansion
Installed base53→57; target 75 YE’24 Target not met; metrics to be reintroduced later Near-term tempered
Payer mix/adoptionPreparing for 2025 CPT codes Early private pay signals; Medicare payment cycles slow Building momentum
Financial reportingIFRS interim reporting U.S. GAAP transition; restatement; prior quarters unreliable Governance/process reset

Management Commentary

  • CEO tone on 2025 growth: “we believe that we are entering into a stage of anticipated escalating growth” .
  • CFO on operational performance: “record revenue of $4.2 million, record gross margin of 71% and lowest net loss since the first quarter of 2020” .
  • CEO on reimbursement economics: Level 7 APC and multi-setting applicability make TULSA “a better procedure addressing a larger patient population reimbursed at a higher rate and also in more settings” .
  • President on clinical differentiation: “TULSA wins every time... due to the precision of the technology and due to the flexibility of the ablation” with whole-gland and focal capabilities .
  • CCO on commercial rebuild: “complete turnaround of the commercial organization… transitioning from placement model to a capital model” and targeting top 50 cancer centers .

Q&A Highlights

  • Growth outlook drivers: Confidence stems from improved hospital economics under Level 7 APC, energized pipeline, and early capital sales in Q4 and Q1 (CEO/CCO) .
  • Installed base and model mix: Company shifted to capital-plus-recurring; will reintroduce install targets after several quarters to improve predictability (CEO/CCO) .
  • Payer adoption: Medicare payment cycles are slow; early private insurer payments observed in select centers, with a dedicated team prioritizing targeted payers (CEO) .
  • BPH module timing/regulatory: Demo at AUA; mid-year launch plan; regulatory aspects are part of the project plan (President) .

Estimates Context

  • Attempts to retrieve S&P Global consensus for Q4 2024 EPS, revenue, and EBITDA failed due to request limit; therefore, Wall Street consensus comparisons are unavailable for this recap [GetEstimates error].
  • Implication: Without consensus benchmarks, the focus is on absolute performance and trajectory (YoY and sequential), reimbursement-driven economics, and pipeline visibility from CAPTAIN/BPH/TULSA+.

Financial Results vs Estimates

MetricQ4 2024 ActualWall St. ConsensusSurprise
Revenue ($)$4.177M N/A (SPGI data unavailable)N/A
Diluted EPS ($)$0.20 loss N/A (SPGI data unavailable)N/A
Gross Margin %71% N/A (SPGI data unavailable)N/A

Key Takeaways for Investors

  • Reimbursement is the inflection: Level 7 APC across HOPD/ASC/office settings materially strengthens provider ROI and expands access—expect adoption to accelerate as capital model and sales capacity ramp .
  • Execution pivot underway: Q4 capital sales plus recurring revenues mark a model transition, with a rebuilt U.S. sales org targeting leading cancer centers and B2B ASC networks .
  • Clinical validation nearing: CAPTAIN perioperative data at AUA should support private payer coverage and guideline inclusion, potentially unlocking another step-up in demand .
  • Product cadence boosts TAM: Mid-year BPH module and 2H 2025 TULSA+ with Siemens could triple the addressable market (to ~600k prostate patients annually) and improve workflows/economics .
  • Financial trendlines improving: Record revenue/margins and smaller net loss vs prior periods highlight operating leverage potential as scale grows .
  • Watch governance/process: U.S. GAAP transition and restatement of 2024 interims introduce near-term reporting complexity; treat prior 2024 quarterly figures with caution per company guidance .
  • Near-term catalysts: AUA April readout, private payer wins, BPH launch timing, early TULSA+ progress—each event can drive estimate revisions and sentiment.

Appendix: Additional Relevant Press Releases (Q4 2024 context)

  • Siemens Healthineers collaboration for TULSA+ (co-sales/co-marketing of TULSA-PRO with Magnetom Free.Max), targeting initiation in 2025 .
  • CMS Final Rule raising TULSA reimbursement to Urology APC Level 7, with coverage across HOPD/ASC/office, and physician RVUs delineated for one- vs two-physician procedures .
  • Q3 2024 results and strategic updates (installed base 59; transition to capital+consumables; PRO-Talk Live; CAPTAIN enrollment timing; reimbursement raised) .