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Sensus Healthcare, Inc. (SRTS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered a clean top/bottom-line beat vs S&P Global consensus: revenue $6.88M vs $6.31M* and EPS ($0.06) vs ($0.11)*, aided by steady FDA program utilization and shipments, despite YoY declines and margin compression .
  • CMS published first-ever dedicated CPT codes for SRT, raising per-fraction delivery reimbursement by “300%+,” which management views as a major long-term demand catalyst; management expects break-even or profitability in Q4 as pent-up demand converts and new codes take effect January 1 (per management) .
  • Mix and cost headwinds persisted: units sold fell to 16 (vs 27 LY), gross margin compressed to 39.1% (from 59.1% LY), and R&D/OpEx elevated due to coding/reimbursement lobbying and product development .
  • Balance sheet remained strong (cash $24.5M, no debt) with ~100 systems in inventory, positioning Sensus to respond to demand as reimbursement normalizes and international expansion (MDSAP-enabled) ramps .

What Went Well and What Went Wrong

  • What Went Well

    • CMS finalization of SRT CPT codes: “increase in SRT delivery code reimbursement per fraction of more than 300%,” expected to stabilize ROI for dermatology offices and strengthen adoption over time .
    • FDA program momentum: Q3 FDA treatment volume increased 20% QoQ and 52% vs Q1; 21 FDA sites active and 11 pending to go live .
    • Liquidity/fulfillment capacity: exited Q3 with $24.5M cash, no debt, and “nearly 100 systems in inventory,” improving readiness for demand acceleration .

  • What Went Wrong

    • Revenue and units sold down YoY on lower shipments to a large U.S. customer; Q3 revenue $6.9M (–21.6% YoY) and 16 units vs 27 LY .
    • Margin compression from mix/service and placement program costs: gross margin 39.1% vs 59.1% LY; gross profit $2.7M vs $5.2M LY .
    • Elevated operating expenses: R&D $1.8M (vs $0.9M LY) reflecting reimbursement lobbying and next-gen development; S&M and G&A also higher YoY; led to net loss ($0.9M) vs LY profit $1.2M .

Financial Results

Quarterly progression and YoY context

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD)$8.344M $7.315M $6.884M
Gross Margin %53.0% 39.7% 39.1%
Net Income ($USD)($2.572M) ($1.037M) ($0.943M)
Diluted EPS ($)($0.16) ($0.06) ($0.06)
Adjusted EBITDA ($USD)($2.481M) ($1.777M) ($2.398M)

Q3 year-over-year comparison

MetricQ3 2024Q3 2025
Revenue ($USD)$8.839M $6.884M
Units Shipped27 16
Gross Margin %59.1% 39.1%
Net Income ($USD)$1.215M ($0.943M)
Diluted EPS ($)$0.07 ($0.06)

Estimate comparison (S&P Global)

MetricQ3 2025 ConsensusQ3 2025 ActualSurprise
Revenue ($USD)$6.31M*$6.88M +$0.57M (+9.1%)
EPS ($)($0.11)*($0.06) +$0.05

KPIs and operating metrics

KPIQ1 2025Q2 2025Q3 2025
Systems Shipped (units)21 19 16
FDA Treatment Volume QoQ+65% vs Q4’24 baseline (narrative) +27% QoQ +20% QoQ; +52% vs Q1
FDA Sites (Active / Pending)——21 / 11
Cash & Equivalents ($USD)$19.1M $22.2M $24.5M
Inventories ($USD)$9.9M $12.4M $13.0M

Notes: Asterisks denote S&P Global consensus values. Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance (Q3 call/PR)Change
Profitability (GAAP)2025“Profitable in each of the next three quarters and for the full year” (Q1 PR) “Pretty good to either hit break-even or be profitable for Q4” (Q3 Q&A) Updated focus to Q4 break-even/profitability
Reimbursement/Coding2026 (Physician Fee Schedule)Proposed physician fee schedule expected to favor adoption beginning 2026 (Q2 PR) CMS issued SRT CPT codes; >300% per-fraction delivery reimbursement increase; codes “begin January 1” per management (Q3) Transition from proposal to finalized codes; positive reimbursement inflection
International Mix12–24 monthsNot specifiedmgmt target ~20% of revenue international over 12–24 months (Q&A) New directional target
Quantitative items (Revenue, GM%, OpEx, Tax)2025Not providedNot provided—

Management did not provide explicit numerical revenue/margin/tax guidance for Q4/FY. Narrative suggests demand acceleration as CPT codes become effective and pent-up pipeline converts .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Reimbursement/CodingQ1: increased lobbying to ensure value of IG-SRT; profitability outlook . Q2: proposed physician fee schedule aligning outpatient rates to hospital in 2026 .CMS issued first-ever SRT CPT codes; >300% per-fraction delivery reimbursement increase; ultrasound now has a code (lower initial value) .Strong positive inflection; clarity and improved economics.
FDA (Fair Deal Agreement) utilizationQ1: treatments +65% QoQ; model gaining traction . Q2: +27% QoQ; five new FDAs signed, four activated .+20% QoQ; +52% vs Q1; 21 active sites, 11 pending .Consistent growth, expanding site base.
Product mix and demandQ1: 21 units shipped; 15 to large customer . Q2: 19 units, 10 to large customer; ROS distribution partnership .16 units; 10 to large customer; mix may tilt toward SRT-100 given code changes; Vision sustained via Sentinel 2.0 .Near-term lower units; mix re-optimization.
Software/Analytics (Sentinel)Q1: TDI with Sentinel capabilities in development .Expanded R&D for Sentinel 2.0; enterprise analytics focus; 2026 initial results .Investment phase; long-term recurring value.
International expansionQ2: MDSAP certification; shipments to China (4) .3 units to China; MDSAP enabling entry to JP/BR/CA/AU; 20% revenue mix target in 12–24 months .Gradual build; multi-market pipeline.
Regulatory/LCD (ultrasound)Q2: LCD proposal impacted momentum .LCD effectively superseded per mgmt; ultrasound gets separate code; company will work on valuation .Issue largely neutralized; working to improve ultrasound economics.

Management Commentary

  • “CMS published first-ever dedicated CPT codes for superficial radiotherapy… increase in SRT delivery code reimbursement per fraction of more than 300%… very well received as we provide pro formas” — Joe Sardano, CEO .
  • “We shipped 16 SRT systems, including three to China… FDA treatment volumes increased 20% from the second quarter… exited the quarter with $24.5 million in cash and no debt… nearly 100 systems in inventory” — CEO .
  • “These new codes narrow the gap between office-based reimbursement and hospital outpatient rates… enable strengthening adoption for SRT” — CEO .
  • “We have initiated an expanded R&D program… Sentinel 2.0… expect initial results in 2026” — President/GC .
  • On ultrasound: “CMS… gave the ultrasound for the first time its own code… value a little lower than we want… we’ll continue to work on that valuation” — President/GC and CEO .
  • “We’re pretty good to be on line to either hit break-even or be profitable for the fourth quarter… pent-up demand” — CEO (Q&A) .

Q&A Highlights

  • Reimbursement impact: Management expects the 300%+ per-fraction increase to offset ultrasound changes and improve physician ROI; both SRT-100 and Vision benefit; ultrasound has a new code but with lower initial value the company aims to improve .
  • Demand conversion and pipeline: Pent-up orders should begin converting; 11 pending sites expected to go live in Q4; expectation for Q4 break-even/profitability .
  • Product mix: Possible uplift in SRT-100 demand post-coding; Vision sustained through Sentinel 2.0 capabilities .
  • International: With MDSAP and early traction (China shipments, JASTRO in Japan), management targets ~20% revenue mix from international in 12–24 months .
  • LCD effect: Management views prior LCD concerns as largely moot given CMS’ new structure; ultrasound imaging receives explicit recognition via its own code .

Estimates Context

  • Q3 2025 beat: Revenue $6.88M vs $6.31M consensus*; EPS ($0.06) vs ($0.11) consensus* — a top- and bottom-line beat that should support near-term estimate stability or upward revisions for Q4 on management’s break-even/profitability commentary .
  • FY 2025 consensus stands at revenue $31.19M* and EPS ($0.325); FY 2026 at revenue $45.15M and EPS $0.01* — new CPT codes and targeted demand acceleration could bias outer-year revenue/EPS upward if execution and site activations ramp as expected .

Notes: Asterisks denote S&P Global consensus values. Values retrieved from S&P Global.

Key Takeaways for Investors

  • The structural reimbursement upgrade (first-ever SRT CPT codes; 300%+ per-fraction increase) is a significant multi-year catalyst likely to improve adoption and ROI across both SRT-100 and Vision systems .
  • Q3 beat vs consensus with continued FDA utilization growth and a solid cash position sets the stage for Q4 break-even/profitability if pending sites go live and pent-up demand converts as planned .
  • Near-term headwinds persist: lower unit volume to a large customer, margin pressure from service/placement costs, and elevated OpEx for lobbying and development; watch for mix normalization and service cost efficiencies into 2026 .
  • Inventory (~100 systems) and MDSAP-enabled global access provide capacity and optionality to capture demand; international mix could trend toward ~20% over 12–24 months if distributor pipelines mature .
  • Street models may lift Q4 and 2026 assumptions for revenue/EPS given reimbursement clarity and FDA program momentum, while FY25 full-year profitability appears unlikely after Q1–Q3 losses; monitor conversion pace, margins, and ultrasound code valuation progress .
  • Stock reaction catalyst: reimbursement inflection plus Q4 profitability potential; execution on site activations and order conversion over the next 1–2 quarters will be key to sustaining a re-rating .