EDAP TMS (EDAP) Q2 2025 Earnings Call August 28, 2025 08:30 AM ET Company ParticipantsJohn Fraunces - Director - Corporate CommunicationsRyan Rhodes - CEO & DirectorKen Mobeck - CFOConference Call ParticipantsMichael Sarcone - AnalystSwayampakula Ramakanth - Managing Director & Senior Equity AnalystJason Bednar - MD & Senior Research AnalystOperatorGood day, everyone, and welcome to today's EDAP Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only m ...

Financial Data and Key Metrics Changes - Global HIFU revenues reached $9.7 million, an increase of 89% year over year, driven by the placement of 12 Focal One systems, representing a 140% growth compared to Q2 2024 [3][4] - Total revenue for Q2 2025 was €16 million, a 1.6% increase from €15.8 million in Q2 2024, with HIFU revenue growing 76.8% year over year to €8.5 million [21][22] - Gross profit for Q2 2025 was €6.8 million, with a gross margin of 42.5%, up from 37.5% in the same period last year [23] Business Line Data and Key Metrics Changes - The HIFU business saw a 76.8% increase in revenue, driven by nine capital sales compared to three in the prior year, and a 16.1% increase in treatment-driven revenue [21][22] - Non-core distribution and ESWL businesses declined by 31.2% in Q2 2025 compared to Q2 2024 [21] Market Data and Key Metrics Changes - U.S. procedures grew approximately 4.8% year over year, despite challenges with Medicare Advantage plans impacting growth in certain markets [9][10] - The proposed hospital payment for the Focal One HIFU procedure in 2026 is set at $9,765, a 5.6% increase from 2025 [11] Company Strategy and Development Direction - The company is expanding its Focal One Endometriosis application, having received CE marking for HIFU in treating rectal endometriosis, which is expected to drive incremental sales growth [13][15] - A strategic financing facility with the European Investment Bank for €36 million is expected to enhance the balance sheet and support the expansion of Focal One robotic HIFU [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the accelerating growth of Focal One, driven by strong clinical data and increasing awareness among patients and physicians [5][29] - The company updated its 2025 financial guidance, expecting core HIFU business revenue to grow between 26% to 34% year over year [28] Other Important Information - The company will transition to a U.S. domestic filer starting January 1, 2026, which is expected to enhance transparency and attract new institutional investors [18][20] - Inventory decreased to $15.5 million in Q2 2025, reflecting efficient inventory management and higher turnover due to increased demand for Focal One [25][26] Q&A Session Summary Question: Can you provide details on the payer issues and improvements? - Management noted solid growth in the HIFU business despite challenges with Medicare Advantage plans, with early signs of improvement in procedure approvals [32][34] Question: What factors does CMS consider for reimbursement rate increases? - CMS considers service value, clinical value ratios, procedure volume, and costs associated with services when determining reimbursement rates [43][45] Question: How much effort is placed on multi-unit purchases? - Significant effort is placed on every sale, with recent sales indicating strong validation of the technology's value [48][50] Question: Update on the endometriosis trial? - The phase three study is ongoing, with over 80% of sham arm patients opting for Focal One treatment post-unblinding, and a limited European launch is underway [55][56] Question: Status of the €36 million financing? - No funds have been received yet, as the company is finalizing terms with the European Investment Bank [58][59]