Financial Data and Key Metrics Changes - Fourth quarter revenue increased by 12% to $269 million, while full year revenue rose by 14% to $912 million, primarily driven by growth at existing centers and new center additions [16] - Fourth quarter net income per diluted share increased by $3.51 to $4.66, and full year net income per diluted share increased by $3.09 to $4.89 [16] - Fourth quarter adjusted net income per diluted share increased by $0.51 to $1.65, and full year adjusted net income per diluted share increased by $0.80 to $2.42 [17] - Operating cash flow for the fourth quarter was $52 million, totaling $117 million for the full year [17] - The company ended the quarter with $405 million in cash and investments, allowing for continued investments to drive profitable growth [17] Business Line Data and Key Metrics Changes - The Inspire 5 system demonstrated superiority over Inspire 4, with a significant reduction in surgical time and improved inspiratory overlap, leading to a 79.5% responder rate in the Singapore study [9][10] - Approximately 10,000 Inspire 5 procedures were performed in 2025, providing a basis for professional reimbursement [7] - The professional fee for CPT code 64568 is approximately 10% less than the reimbursement for CPT code 64582 used for Inspire 4 procedures [7] Market Data and Key Metrics Changes - The company is actively engaging with key government agencies and physician societies regarding the coding of the Inspire 5 procedure, with expectations of transitioning to CPT code 64582 with a -52 modifier [4][5] - The WISeR program, requiring prior authorization of Medicare cases in six pilot states, has begun affecting Medicare patient procedures in the first quarter [12] Company Strategy and Development Direction - The company is focused on developing a new CPT code for the Inspire 5 procedure, with clarity on coding and reimbursement expected to enhance patient care [8][13] - The strategy includes training advanced practice providers, certifying additional surgeons, and driving the adoption of Sleep Sync and digital tools to enhance patient access to Inspire therapy [14] - The company plans to transition the existing Inspire 4 IPG line to Inspire 5 later in 2026, ensuring stable product inventory throughout 2026 [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the coding of the Inspire 5 procedure and the potential impact on physician willingness to perform the procedure due to reduced professional fees [6] - The company revised its full year revenue guidance for 2026 to a range of $950 million to $1 billion, reflecting the expected impact from coding uncertainty [18] - Management expressed confidence in the long-term growth potential and the strategies in place to drive stakeholder value [15] Other Important Information - The company completed $50 million in share repurchases during the fourth quarter, totaling $175 million for the full year [17] - The company received FDA approval for 3 Tesla MRI compatibility, enhancing the product's appeal [12] Q&A Session Summary Question: What is the expected clarity on the physician fee with Gen 5 using the 82 code and the -52 modifier? - Management indicated that clarity will come as they work with MACs and commercial payers to minimize the reduction in professional fees [25] Question: What is the pathway forward for Gen 5 and the pursuit of a dedicated code? - Management confirmed the pursuit of a new CPT code, emphasizing that the -52 modifier is not a long-term solution [27] Question: How does the WISeR program impact revenue guidance? - Management clarified that the primary reason for revenue reduction is the coding uncertainty, with the WISeR program causing some disruption but not the main issue [29] Question: What percentage of physicians are salary-based versus RVUs? - Management noted that a majority of physicians are in private practice, with academic centers being salary-based, which mitigates the impact of professional fee reductions [32] Question: How does the company plan to manage the impact of the WISeR program? - Management expressed confidence in their ability to navigate the challenges posed by the WISeR program due to their history of working with Medicare [54]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $6.9 million, down 20% compared to Q3 2024, primarily due to a challenging international environment [10] - Recurring revenue remained solid, with gross code sales up 4.1% and net U.S. recurring XTRAC revenue up 2.8% [10] - Global recurring revenue of $5.5 million increased 3% year over year, while equipment revenue decreased 60% [10] - Gross profit for Q3 2025 was $4.2 million, representing a gross margin of approximately 60%, which was flat compared to the prior year [11] - Net loss for Q3 2025 was $1.6 million, or EPS of negative $0.36, compared to a net loss of $2.1 million, or EPS of negative $0.51 in Q3 2024 [11] - Adjusted EBITDA was slightly positive in the quarter compared to negative $240,000 in the comparable quarter of the prior year [11] Business Line Data and Key Metrics Changes - Average gross billings per device for U.S. partner clinics was $5,981 for Q3 2025, an increase of 8.5% versus Q3 2024, marking the highest since Q4 2022 [7] - 99 out of approximately 838 clinics have entered the Elevate 360 program, resulting in an average growth of 7% year over year for those businesses [6] Market Data and Key Metrics Changes - The expansion of CPT codes for STRATA's XTRAC laser is expected to increase the addressable market to over 30 million patients, tripling the total available market [6] - The company is experiencing challenges in its international business, primarily due to current U.S. trade policies, which have pressured total revenue [8] Company Strategy and Development Direction - The company is focused on expanding reimbursement eligibility for excimer laser treatments to include multiple inflammatory and autoimmune skin conditions, which is pivotal for future growth [4] - STRATA is strengthening practice partnerships through the Elevate 360 consulting model and innovative direct-to-consumer (DTC) campaigns [6] - The company aims to increase utilization of existing devices while removing non-productive devices from the market [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a seasonally stronger Q4 2025, driven by expanded indications for the excimer laser and favorable reimbursement trends [12] - The lingering impact of tariffs on international business was acknowledged, with hopes for improvement in the future [13] Other Important Information - The company raised $2.2 million net in a common registered direct offering during the quarter [11] - The litigation against LaserOptic is progressing positively, with potential for significant damages and an injunction limiting further damage to the domestic recurring business [9] Q&A Session Summary Question: Can you talk about average revenue per device in Q3 and trends for Q4? - The average revenue per device was $5,981, the highest since 2022, with expectations for continued growth due to increased utilization and removal of non-productive devices [15] Question: Any increase in show-up rates from DTC campaigns? - DTC campaigns have shown improved cost per acquisition and better conversion rates, contributing to increased recurring revenue [20] Question: What is the installed base for TheraClearX by the end of 2025? - The U.S. install base for TheraClearX is about 161 devices, with expectations to approach 200 devices by the end of 2025 [26] Question: Any updates on the litigation and potential device recoveries? - The company is actively pursuing the return of approximately 75-100 accounts affected by false claims, with a significant number of devices expected to come back [38] Question: Will there be temporary codes for 2026? - CMS has indicated that they do not plan to create temporary codes for 2026, focusing instead on the expanded codes effective January 1, 2027 [44]

Financial Data and Key Metrics Changes - Revenues for Q2 2025 were $7.3 million, down from $9.2 million in Q2 2024, primarily due to fewer capital system sales [18] - Gross profit decreased to $2.9 million in Q2 2025 from $5.4 million in Q2 2024, with gross margin dropping to 39.7% from 58.7% [19] - Net loss for Q2 2025 was $1 million, or $0.06 per share, compared to net income of $1.6 million, or $0.10 per diluted share, in Q2 2024 [20] - Adjusted EBITDA for Q2 2025 was negative $1.8 million, down from positive $2.1 million in the prior year [20] Business Line Data and Key Metrics Changes - The company delivered 19 SRT systems in Q2 2025, with four sold to China, indicating growing international demand [9] - FDA treatment volume increased by 27% over Q1 2025, suggesting improved efficiency and patient awareness of SRT [9] Market Data and Key Metrics Changes - The proposed local coverage determination (LCD) by Medicare has temporarily stalled domestic sales momentum, impacting market activity [5][6] - The proposed physician fee schedule by Medicare could significantly increase reimbursement for SRT delivery, potentially transforming the U.S. commercial strategy [16] Company Strategy and Development Direction - The company is focused on increasing patient awareness for SRT, growing internationally, and advancing its product pipeline [14] - A new partnership with Radiation Oncology Systems (ROS) aims to enhance distribution in hospital-based oncology segments [10] - The company is preparing for commercial deployment of its next-generation TBI platform, with FDA feedback anticipated later this year [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for increased reimbursement rates and the positive impact on SRT adoption [23] - The company is actively lobbying against the proposed LCD, believing it will not be implemented due to their efforts and supporting evidence [30][36] - Management indicated that the pause in purchasing from a large customer is temporary and that interest in SRT remains strong [42][43] Other Important Information - The company ended the quarter with $22.2 million in cash and no debt, maintaining a strong balance sheet [23] - The MD SAP certification allows the company to access markets in Brazil, Canada, Japan, and Australia, enhancing its international growth prospects [15] Q&A Session Summary Question: Impact of proposed CMS reimbursement changes - Management clarified that the LCD and proposed physician fee schedule are separate, with the LCD focusing on ultrasound utilization [28][30] Question: Effects of LCD on FDA treatment volumes - Management noted a pause in market activity due to uncertainty from the LCD, but they believe ultrasound's role in SRT will be validated [34][35] Question: Status of large customer purchases - Management confirmed that the largest customer has paused purchases due to reimbursement uncertainties but remains committed to SRT [42][43] Question: Potential for increased sales in China - Management expressed optimism about continued orders from China and potential new orders from other international markets due to MD SAP [46][70] Question: Macro-level softness in capital equipment spending - Management indicated that the current pause is specific to SRT and not indicative of broader market trends, with expectations for growth in Q3 [72][73]