Spectral AI(MDAI) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights Q2 Overview Spectral AI reported Q2 2025 results and submitted its DeepView system's De Novo application to the FDA, a key step for US market entry - Spectral AI reported Q2 2025 financial results and completed the early submission of its DeepView system's De Novo application to the FDA[2][3] - The FDA submission is a critical milestone for the DeepView system's entry into the US market, aiming to provide clinicians with immediate, data-driven assessment tools to aid clinical decisions and potentially improve patient outcomes[3] SELECT BUSINESS HIGHLIGHTS The company completed the DeepView system's De Novo application submission to the FDA in June 2025, a crucial step for global market approval - The company completed the DeepView system's De Novo application submission to the FDA in June 2025, a critical step for obtaining FDA approval and launching it into the global medical market[4] Q2 2025 Financial Results Overview Research & Development Revenue Q2 2025 R&D revenue decreased by 32.0% to $5.1 million, driven by the completion of BARDA contract clinical trials Research & Development Revenue | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change (%) | | :--- | :--- | :--- | :--- | | R&D Revenue | 5.1 | 7.5 | -32.0% | - The decrease in R&D revenue is primarily due to the completion of clinical trials and other reimbursable research costs under the BARDA PBS contract in 2024[6] Gross Margin Q2 2025 gross margin was 45.2%, slightly lower than 46.6% in Q2 2024, due to higher non-reimbursable BARDA PBS contract expenses Gross Margin | Metric | Q2 2025 | Q2 2024 | Change (percentage points) | | :--- | :--- | :--- | :--- | | Gross Margin | 45.2% | 46.6% | -1.4 | - Gross margin slightly decreased, primarily due to increased non-reimbursable expenses related to the BARDA PBS contract[7] General & Administrative Expense Q2 2025 general and administrative expenses were $4.4 million, down from $5.8 million in the prior year, reflecting ongoing operational efficiency efforts General & Administrative Expense | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change (%) | | :--- | :--- | :--- | :--- | | General & Administrative Expense | 4.4 | 5.8 | -24.1% | - The decrease in general and administrative expenses is attributed to the company's continued focus on operational efficiency[8] Other Income/(Expense) Q2 2025 other income/(expense) significantly declined to negative $5.9 million from negative $0.4 million in Q2 2024, mainly due to a $5.4 million increase in warrant liability fair value Other Income/(Expense) | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Other Income/(Expense) | (5.9) | (0.4) | -5.5 | | Change in fair value of warrant liability | (5.4) | 0.348 | -5.797 | - The significant decrease in other income/(expense) is primarily due to a $5.4 million increase in the fair value of warrant liability[9] Net Income/(Loss) The company reported a net loss of $7.9 million in Q2 2025, compared to $2.9 million in Q2 2024, primarily impacted by warrant liability changes, while the first six months of 2025 saw a reduced net loss of $5.1 million versus $6.1 million in 2024, reflecting improved operating expense management Net Income/(Loss) | Metric | Q2 2025 (million USD) | Q2 2024 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Net Loss | (7.9) | (2.9) | -5.0 | Net Income/(Loss) (Six Months) | Metric | H1 2025 (million USD) | H1 2024 (million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Loss | (5.1) | (6.1) | -16.4% | - The Q2 net loss increased primarily due to changes in the fair value of warrant liability[10] - The net loss for the first half of the year decreased by 16.4% year-over-year, indicating progress in managing operating expenses[11] Financial Condition & Guidance Financial Condition As of June 30, 2025, the company's cash position improved to $10.5 million from $5.2 million at December 31, 2024, supported by debt and equity financing Financial Condition | Metric | June 30, 2025 (million USD) | December 31, 2024 (million USD) | Change (million USD) | | :--- | :--- | :--- | :--- | | Cash | 10.5 | 5.2 | 5.3 | - The company completed a debt financing agreement of up to $15.0 million in Q1 2025, with an initial draw of $8.5 million[12] - Approximately $2.7 million in equity financing was raised from institutional and other new and existing investors[12] 2025 Guidance The company reaffirmed its FY 2025 revenue guidance of approximately $21.5 million, excluding DeepView™ system sales for burn indications or other significant commercialization contributions 2025 Fiscal Year Revenue Guidance | Metric | FY 2025 Revenue Guidance (million USD) | | :--- | :--- | | Revenue | ~21.5 | - The financial guidance excludes sales contributions from the DeepView™ system for burn indications or any additional significant financial contributions from its commercialization[13] Company Information & Disclosures CONFERENCE CALL The company will host a conference call today at 5:00 PM ET to discuss these results, accessible via phone or the investor relations page of its website - The conference call is scheduled for 5:00 PM ET today[14] - Investors can access the webcast via the investor relations page on the company's website: **https://investors.spectral-ai.com/news-events/events**[14](index=14&type=chunk) About Spectral AI Spectral AI, Inc. is a Dallas-based predictive AI company focused on medical diagnostics for wound care, aiming for faster, more accurate treatment decisions, initially for burn patients - Spectral AI is a predictive AI company focused on medical diagnostics for wound care, aiming for faster, more accurate treatment decisions[15] - The DeepView® system is designed as a predictive device to provide clinicians with objective, immediate assessments of burn wound healing potential, to improve patient outcomes and reduce healthcare costs[15] Forward-Looking Statements This press release contains "forward-looking statements" protected by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which involve known and unknown risks and uncertainties - Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from expectations[16] - Investors should carefully consider the factors and other risks and uncertainties described in the "Risk Factors" section of the company's filings with the SEC[17] For Media and Investor Relations, please contact Media and investor relations inquiries should be directed to David Kugelman at Atlanta Capital Partners LLC, with contact details provided - Media and investor relations contact: David Kugelman, Atlanta Capital Partners LLC[18] - Contact information includes: (866) 692-6847 (Toll-Free in US and Canada), (404) 281-8556 (Cell & WhatsApp), Email: dk@atlcp.com[18] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheet As of June 30, 2025, cash increased to $10.524 million, total assets reached $16.009 million, while warrant liability significantly rose to $10.555 million, leading to total liabilities of $25.160 million and an expanded stockholders' deficit of $9.151 million Condensed Consolidated Balance Sheet | Metric (thousand USD) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash | 10,524 | 5,157 | | Total Current Assets | 14,001 | 10,122 | | Total Assets | 16,009 | 12,095 | | Liabilities & Stockholders' Deficit | | | | Warrant Liability | 10,555 | 6,451 | | Total Current Liabilities | 16,186 | 17,644 | | Total Liabilities | 25,160 | 19,346 | | Stockholders' Deficit | (9,151) | (7,251) | Condensed Consolidated Statements of Operations In Q2 2025, R&D revenue was $5.065 million, gross profit was $2.290 million, net loss was $7.968 million, and basic and diluted loss per share was $0.31; for the first six months, R&D revenue was $11.772 million, net loss was $5.071 million, and basic and diluted loss per share was $0.21 Condensed Consolidated Statements of Operations | Metric (thousand USD) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | R&D Revenue | 5,065 | 7,478 | 11,772 | 13,804 | | Gross Profit | 2,290 | 3,314 | 5,458 | 6,259 | | Operating Loss | (2,123) | (2,442) | (3,019) | (4,585) | | Change in fair value of warrant liability | (5,449) | 348 | (1,196) | 368 | | Net Loss | (7,968) | (2,864) | (5,071) | (6,069) | | Net Loss Per Share – Basic and Diluted | (0.31) | (0.16) | (0.21) | (0.36) | Unaudited Condensed Consolidated Statements of Cash Flows For the first six months of 2025, net cash used in operating activities improved to $4.867 million from $8.042 million in the prior year, with net cash provided by financing activities at $10.185 million, leading to an ending cash balance of $10.524 million Unaudited Condensed Consolidated Statements of Cash Flows | Metric (thousand USD) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (4,867) | (8,042) | | Net Cash Provided by Financing Activities | 10,185 | 10,131 | | Net Increase in Cash | 5,367 | 2,087 | | Cash at End of Period | 10,524 | 6,877 | - Cash outflow from operating activities significantly decreased, reflecting improved operational efficiency[25] - Cash inflow from financing activities primarily resulted from proceeds from the issuance of common stock and warrants, as well as notes[25]