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Sensus Healthcare, Inc. (SRTS)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $7.3M, down 20.8% YoY, with diluted EPS of $(0.06); results missed Wall Street consensus as revenue came in ~21% below estimates and EPS missed by $0.07, driven by a temporary pause in domestic sales tied to a proposed LCD impacting ultrasound reimbursement on IG-SRT *.
  • Management highlighted a significant potential tailwind: Medicare’s proposed Physician Fee Schedule (PFS) would align outpatient SRT payments with higher hospital rates starting January 1, 2026; management characterized the proposed delivery code increase as ~300% on the call, a catalyst for future adoption if finalized .
  • Commercial execution remained solid: 19 SRT systems shipped (4 to China), five new Fair Deal Agreements (FDAs) signed with four sites activated, and FDA treatment volume rose 27% sequentially; cash ended at $22.2M with no debt .
  • Strategic initiatives advanced: receipt of MDSAP certification for the full SRT portfolio to streamline international registrations, and engagement of Radiology Oncology Systems (ROS) as primary U.S. distribution partner for hospital-based oncology, with initial orders expected as early as Q4 2025 .
  • Near-term narrative is dominated by reimbursement clarity: management expects the LCD issue to resolve (favorably or status quo) and noted a large customer paused purchases pending clarity; this dynamic could weigh on Q3 while international and FDA recurring revenue provide partial offsets .

What Went Well and What Went Wrong

What Went Well

  • International traction and regulatory readiness: shipped 4 systems to China in Q2 and obtained MDSAP certification (covering FDA, Health Canada, ANVISA, PMDA, TGA), enabling faster multi-country market entry .
  • Recurring revenue model gaining momentum: signed five new FDAs with four going live; FDA treatment volume increased 27% sequentially, signaling improving utilization efficiency and awareness .
  • New channel into hospital oncology: engaged ROS as primary distribution partner; management expects tangible results later this year and initial orders as early as Q4 2025 .
    Quote: “This agreement builds upon our strong base in dermatology and supports broader adoption of SRT in complementary care settings. We anticipate this relationship will begin to yield tangible results later this year.” — CEO Joe Sardano .

What Went Wrong

  • Reimbursement uncertainty pressured domestic momentum: a proposed LCD (mid-May) to limit ultrasound reimbursement used with SRT-100 Vision stalled U.S. sales in the back half of Q2 .
  • Mix and costs compressed margins: fewer capital system sales to a large customer and higher cost of service drove gross margin down to 39.7% (vs 58.7% YoY) and negative adjusted EBITDA of $(1.8)M .
  • R&D and commercial investments elevated OpEx: R&D up to $1.5M (+$0.6M YoY) on product development and reimbursement lobbying; selling & marketing rose on tradeshows and clinical studies .

Financial Results

P&L Trend vs Prior Quarters

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$13.07 $8.34 $7.32
Gross Profit ($USD Millions)$7.11 $4.35 $2.90
Gross Margin %54.4% 53.0% 39.7%
Operating Income ($USD Millions)$1.73 $(2.65) $(1.94)
Net Income ($USD Millions)$1.55 $(2.57) $(1.04)
Diluted EPS ($USD)$0.09 $(0.16) $(0.06)

Actual vs Wall Street Consensus (S&P Global)

MetricQ4 2024 Consensus*Q4 2024 ActualQ1 2025 Consensus*Q1 2025 ActualQ2 2025 Consensus*Q2 2025 Actual
Revenue ($USD Millions)$10.53*$13.07 $7.23*$8.34 $9.30*$7.32
Primary EPS (USD)$0.12*$0.09 $0.02*$(0.16) $0.01*$(0.06)
# of Estimates (Revenue)4*—5*—5*—
# of Estimates (EPS)4*—4*—4*—
Values retrieved from S&P Global.*

KPIs and Balance Sheet

KPIQ4 2024Q1 2025Q2 2025
SRT Systems Shipped (units)39 21 19
International Systems (units)5 1 4
FDAs Signed (count)——5
FDA Treatment Volume QoQ Change—+65% vs Q4 +27% vs Q1
Cash & Cash Equivalents ($USD Millions)$22.06 $19.07 $22.16
Accounts Receivable ($USD Millions)$19.73 $18.02 $12.62

Segment Breakdown

SegmentQ4 2024Q1 2025Q2 2025
Dermatology & Oncology DevicesRecord 39 systems; one-time discount to a new large group impacted margin 21 systems; emphasis on conference-driven pipeline 19 systems; fewer units to a large customer; FDAs recurring revenue growth partially offset
Recurring (FDAs)Program expanded; pipeline for 2025 +65% treatment volume vs prior quarter +27% treatment volume sequentially; 5 new contracts signed

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Profitability (GAAP)Q2–Q4 2025; FY 2025“Profitability forecast for the next three quarters and for the full year” Not reiterated on Q2 call; management emphasized LCD-related uncertainty and proposed PFS tailwind Not reiterated
ROS Distribution OrdersQ4 2025—Initial orders expected as early as Q4 2025 New
Outpatient SRT Reimbursement (PFS)Effective 1/1/2026—Proposed alignment with hospital rates; management referenced ~300% delivery code increase on call New (external)
TDI 510(k)2025Re-submit in H1 2025 Under FDA review; feedback anticipated later this year Maintained
FDA Revenue ContributionH2 2025“Meaningful” contribution in H2 2025 5 contracts signed; +27% volume sequentially, trajectory intact Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Reimbursement (LCD vs PFS)Lobbying and reimbursement focus ramping in Q1 LCD proposed to limit ultrasound utilization paused U.S. sales; PFS proposes aligning outpatient SRT payments with hospital rates; ~300% delivery code increase discussed Near-term headwind with potential 2026 tailwind
FDA Program (Recurring)Pipeline building; expected H2 revenue contribution 5 FDAs signed; 4 activated; +27% QoQ treatment volume Strengthening utilization and adoption
International Expansion10 systems shipped in FY 2024; growing footprint MDSAP certification enabling faster access (Brazil, Canada, Japan, Australia); 4 units shipped to China Accelerating regulatory and commercial access
Distribution StrategyFocused on dermatology; conferences driving leads ROS engaged as primary hospital oncology partner; initial orders targeted for Q4 2025 New channel build-out
R&D / Pipeline (TDI)Plan to re-submit 510(k) in H1 2025 510(k) resubmission under FDA review; feedback expected later this year Progressing toward clearance
Customer ConcentrationLarge customer drove FY 2024 growth Large customer paused purchases pending LCD clarity Temporary headwind
Macro / Tax—Section 179 expensing limit noted as increased to $1M (management comment) Potential capital spending support

Management Commentary

  • “Our financial performance was tracking ahead of expectations … yet domestic sales momentum was impacted by a proposed Local Coverage Determination (LCD) to limit the reimbursement for ultrasound when used with our SRT-100 Vision™ … In July Medicare proposed a Physician Fee Schedule to align outpatient SRT payments with the higher hospital rates … if finalized, will be effective as of January 1, 2026.” — CEO Joe Sardano .
  • “We shipped 19 SRT systems during the quarter, including four to China … FDA treatment volume increased 27% sequentially vs Q1.” — CEO Joe Sardano .
  • “The LCD and the proposed physician fee schedule are actually two separate items … we’re very, very thrilled to see that the proposal would actually make it … about a 300+% increase in the delivery code for SRT.” — President & GC Michael Sardano .
  • “Our balance sheet remains strong as we ended the quarter with $22.2M in cash and no debt.” — CFO Javier Rampolla .
  • “This agreement [ROS] … supports broader adoption of SRT in complementary care settings. We anticipate this relationship will begin to yield tangible results later this year.” — CEO Joe Sardano .

Q&A Highlights

  • Reimbursement clarity: Management views the LCD (ultrasound utilization) and PFS (delivery code increase) as separate; they expect LCD not to take effect given lobbying and evidence (including NIH study), while the proposed PFS could materially improve outpatient reimbursement .
  • Large customer pause: A key customer paused purchases due to uncertainty; management expects resumption once clarity is achieved, potentially driving end-of-year deliveries .
  • International and ROS offsets: China shipments and MDSAP-enabled markets (Japan/Taiwan/Brazil/Australia) plus ROS channel ramp could mitigate near-term softness; initial ROS orders could emerge by Q4 2025 .
  • Capital spending environment: Management cited Section 179 expensing limit increase to $1M as supportive of equipment purchases .
  • Timeline expectations: CMS decision could come by Q4; if earlier, Q3 impact may be reduced; otherwise Q3 is at risk of softness .

Estimates Context

  • Q2 2025: Revenue $7.32M vs $9.30M consensus (miss ~21%); EPS $(0.06) vs $0.01 consensus (miss $0.07). 5 revenue and 4 EPS estimates contributed to consensus *.
  • Q1 2025: Revenue $8.34M vs $7.23M consensus (beat ~15%); EPS $(0.16) vs $0.02 consensus (miss $0.18) *.
  • Q4 2024: Revenue $13.07M vs $10.53M consensus (beat ~24%); EPS $0.09 vs $0.12 consensus (miss $0.03) .
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term setup: Expect muted U.S. capital sales until LCD clarity; watch for CMS updates in Q4 and potential Q3 softness per management commentary .
  • Strategic offsets: International expansion (MDSAP) and ROS channel development can diversify away from domestic dermatology concentration and large-customer dependence .
  • Recurring revenue traction: FDA program is scaling, with sequential treatment volume growth and new contracts signed; this supports utilization-led revenue beyond capital sales .
  • 2026 reimbursement catalyst: If PFS is finalized, outpatient SRT reimbursement alignment with hospital rates could expand adoption and improve unit economics; position ahead of that inflection .
  • Margin recovery hinges on mix: Rebound in capital system sales to key accounts and scaling of service efficiency are essential to lift gross margin back toward historical levels .
  • Pipeline optionality: TDI clearance could broaden product portfolio and open new revenue streams; monitor FDA feedback timing in 2025 .
  • Trading lens: In the short term, stock likely reacts to reimbursement headlines (LCD/PFS) and hospital channel news (ROS orders); in the medium term, the thesis rests on reimbursement normalization plus diversified growth vectors (international, recurring, hospital oncology) .