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Sensus Healthcare, Inc. (SRTS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered record shipments (39 systems) and revenue of $13.1M, marking a fifth consecutive profitable quarter with diluted EPS of $0.09; sequential revenue rose from $8.8M in Q3, while gross margin compressed to 54.4% due to a one-time discount and higher service costs .
  • Year-end cash was $22.1M with no debt; management emphasized continued profitability and a strong capital position to fund R&D, partnerships, and sales initiatives .
  • Guidance tone: management expects Q1 2025 sales “considerably lower” than Q1 2024 given seasonality and major conferences, but anticipates full-year 2025 sales growth; Fair Deal Agreement (revenue-sharing) placements are expected to contribute meaningfully starting in H2 2025 .
  • Strategic catalysts: largest customer provided PO for 50 units (25 delivered in Q4, 25 slated for 2025), planned TDI 510(k) resubmission in H1 2025, and a resumed $3.0M share repurchase program, all supporting midterm execution and capital return visibility .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly shipments (39 units) and 115 for the year; Q4 revenue of $13.1M and fifth consecutive profitable quarter underscore growing SRT adoption and sales execution .
  • Strategic progress: strong corporate account interest in Fair Deal Agreements and deepening pipeline; largest customer PO for 50 units supports 2025 deliveries and installed base expansion .
  • Diversification momentum: initial veterinary placement and ongoing international expansion (5 units in Q4, 10 in 2024) broaden addressable markets and validate platform versatility .

What Went Wrong

  • Gross margin declined to 54.4% (vs. 62.3% prior year and 59.3% in Q3) driven by a one-time discount to a large group customer and higher service costs; profitability held, but margin pressure is a watch item .
  • Operating expense step-up: Q4 G&A rose to $2.4M (from $0.9M LY) on compensation and professional fees; CFO later clarified much of the Q4 step-up was one-time, but it impacted quarterly operating leverage .
  • Near-term demand caution: management flagged seasonality and conference timing; expects Q1 2025 sales “considerably lower” than Q1 2024, tempering near-term momentum despite an improving annual trajectory .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$12.566 $8.839 $13.067
Diluted EPS ($USD)$0.26 $0.07 $0.09
Gross Margin (%)62.3% 59.3% 54.4%
Net Income ($USD Millions)$4.210 $1.215 $1.546
Adjusted EBITDA ($USD Millions)$5.689 $1.593 $1.933

KPIs and operating metrics

KPIQ4 2023Q3 2024Q4 2024
Systems shipped (units)N/A27 39
International systems shipped (units)N/A1 5
Cash & equivalents at period-end ($USD Millions)$23.148 $22.558 $22.056
Systems shipped to largest customer (units, quarter)N/A~50% of placements 25 of 39

Notes and cross-references:

  • CEO opening remark referenced “net income of $1.4M” in Q4, but the press release and CFO formal remarks indicate $1.546M and $0.09 diluted EPS; we anchor on the 8-K press release and detailed CFO figures .
  • Adjusted EBITDA reconciliation provided in the press release and 8-K exhibits; non-GAAP defined as excluding interest, taxes, D&A and stock comp .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2025None“Q1 2025 sales could be considerably lower than Q1 2024” Lower (qualitative)
RevenueFY 2025None“Expect full-year sales growth in 2025 vs 2024” Initial qualitative view: Growth
Fair Deal Agreement revenue contributionH2 2025Recurring revenue to begin in 2025 “Meaningful contribution in second half of 2025” Maintained/timing clarified
TDI 510(k) submissionH1 2025Prior approach evolving“Plan to re-submit TDI 510(k) in H1 2025” Timing update

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Fair Deal Agreement (FDA) revenue-sharing15 agreements signed by Q2; target up to ~50 by YE; recurring rev to begin 2025 Corporate interest strong; FDAs excluded from Q4 shipment count; focus shifts to patients treated; H2 2025 contribution Building pipeline; execution pivot to utilization
Corporate/PE-backed dermatology groupsPlatinum Dermatology (130 clinics) signed in Q3; broad PE interest 12–15 PE roll-ups targeted; data-driven rollout to high-volume sites Expanding strategic focus
Largest customer concentrationHigher unit sales to a large customer (Q2/Q3) 25 of 39 Q4 units to largest customer; additional 25 slated for 2025 Continues to anchor volume
InternationalFirst Vision system in Asia; shipments to Taiwan/China (Q2); ASTRO interest (Q3) 5 international units in Q4; ongoing distributor-led expansion Steady expansion
Veterinary marketPrior pilots at CSU; growing interest (Q3) First sale to veterinary clinic in Q4 FL; exploring new verticals Early traction
TDI productResubmission planned after feature enhancements (Q2) Resubmit 510(k) in H1 2025; pipeline diversification Advancing regulatory path
Seasonality/macroSummer seasonality noted (Q3) Q1 softness flagged due to conferences; FY growth expected Near-term caution; annual optimism
Sentinel IT & dataEnabler for FDA model (Q3) Data-driven rollout, utilization focus under FDA Deepening operational leverage

Management Commentary

  • “Our fourth quarter performance capped an outstanding year… record-high quarterly unit shipments, along with continued profitability… Fair Deal Agreement program serves new customers… expect it to begin contributing to revenues in the second half of 2025.” – Joe Sardano, CEO .
  • “We expect these [Fair Deal Agreements] to begin contributing meaningfully to our top line in the second half of 2025… Under these programs, it’s less about selling a unit and more about forming a lasting partnership.” – Michael Sardano .
  • “Gross profit… down from… prior year quarter. Most of that decline was due to a one-time discount to a new large group customer and higher service costs… Net income for Q4 2024 was $1.5 million or $0.09 per diluted share.” – Javier Rampolla, CFO .
  • “Our largest customer… provided us with the PO for 50 units, of which 25 were delivered in Q4 with the next 25 slated for delivery in 2025.” – Joe Sardano .

Q&A Highlights

  • Shipments and FDA accounting: 39 units shipped in Q4; FDAs not included in shipment count; emphasis shifting to utilization metrics rather than agreements signed .
  • Largest customer contribution: 25 of 39 units in Q4; ongoing purchases expected in 2025 .
  • FDA rollout cadence and cash conversion: ~8 weeks from signing to install/training; 45–60 days from first treatment to reimbursement; revenue visibility builds into H2 2025 .
  • Competitive framing: main alternative is Mohs surgery; SRT remains unique and here to stay; no new entrants highlighted .
  • Operating expenses: professional fees and compensation step-up largely one-time in Q4; G&A expected to increase “a little” in 2025 but not to Q4 spike levels .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2024 EPS and revenue; data was unavailable due to request limits at the time of query. As a result, we cannot provide a definitive comparison to Wall Street estimates for this quarter [SPGI error].
  • Given the absence of consensus data in this analysis window, we anchor performance evaluation to reported actuals and management’s qualitative guidance trajectory .

Key Takeaways for Investors

  • Operational strength: record Q4 shipments (39), with 25 units to the largest customer and additional 25 slated for 2025, underpinning near-term delivery volumes and installed base growth .
  • Margin watch: gross margin compression to 54.4% driven by a one-time discount and higher service cost; monitor whether normalization occurs as mix and pricing stabilize in 2025 .
  • Near-term caution, medium-term upside: Q1 2025 likely softer due to seasonality and conferences, but management expects full-year 2025 sales growth and FDA contributions beginning H2 2025; orient models to back-half acceleration .
  • Strategic breadth: international shipments, first veterinary placement, and corporate account pipeline broaden vectors for growth; TDI resubmission in H1 2025 adds optionality .
  • Cash and capital return: $22.1M year-end cash, no debt, plus resumed $3.0M buyback signal balance sheet capacity to invest and return capital; track buyback execution and inventory alignment with FDA rollout .
  • Monitoring items: utilization metrics under FDA (patients treated), cadence of corporate deployments, receivables dynamics with large customers, and OPEX run-rate post-Q4 one-time items .
  • Trading implications: expect potential volatility around Q1 softness messaging; catalysts include corporate rollout updates, FDA utilization disclosures, TDI filing progress, and additional international wins .