EDAP TMS (EDAP) Q1 2025 Earnings Call May 15, 2025 08:30 AM ET Company Participants John Fraunces - DirectorRyan Rhodes - CEO & DirectorKen Mobeck - Chief Financial OfficerSean Lee - VP - Equity Research Conference Call Participants Michael Sarcone - Analyst Operator Day. I would like to welcome everyone to EDAP TMS First Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer se ...

Financial Data and Key Metrics Changes - HIFU revenues for Q1 2025 were EUR 6.2 million, an increase of 6.8% compared to EUR 5.8 million in Q1 2024 [11][24] - Total worldwide revenue for Q1 2025 was EUR 13.6 million, a decrease of 9.1% from EUR 14.9 million in the same period in 2024 [12][25] - Gross profit for Q1 2025 was EUR 5.7 million, down from EUR 6.4 million in Q1 2024, with a gross profit margin of 42% compared to 42.8% year-over-year [25][26] - Net loss for Q1 2025 was EUR 7.1 million or EUR 0.19 per diluted share, compared to a net loss of EUR 4.5 million or EUR 0.12 per diluted share in the prior year [27] Business Line Data and Key Metrics Changes - The company placed nine Focal One systems in Q1 2025, a record for any first quarter, including six cash sales and three operating leases [4][6] - U.S. procedures grew approximately 4% over Q1 2024, despite longer review and approval times for Medicare Advantage patients [12][13] Market Data and Key Metrics Changes - Four cash sales of Focal One systems were completed outside the U.S. in Q1 2025, indicating growing international demand [11] - The company noted that over half of the National Comprehensive Cancer Network (NCCN) member institutions now have access to the Focal One platform [10] Company Strategy and Development Direction - The company aims to become the global leader in HIFU focal therapy, focusing on growing its core HIFU business and expanding clinical data support [4][6] - The launch of the new Focal One I robotic HIFU system is expected to enhance technological leadership and meet future needs of surgeons [22][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the payer landscape, particularly with Medicare Advantage plans, but noted progress in appeals and approvals [35][38] - The company reiterated its 2025 revenue guidance, expecting HIFU revenue growth between 16% and 25% year-over-year, while non-core segments are projected to decline [30][41] Other Important Information - The company received CE Mark approval for the treatment of deep infiltrating endometriosis, marking a significant regulatory milestone [14][15] - A landmark remote transatlantic Focal One robotic HIFU procedure was successfully conducted, showcasing technological advancements [17][18] Q&A Session Summary Question: Changes in payer landscape and procedure approvals - Management noted that the trends are primarily relevant to Medicare Advantage Plan patients, with ongoing efforts to improve market access and reimbursement [35][36] Question: Continued challenges in Q2 and approval processes - Management confirmed that while there is a risk of denials, notable progress in appeals is being made, with a majority of appeals resulting in approvals [38][39] Question: HIFU sales growth guidance assumptions - The guidance incorporates expected procedure growth and assumes that payer challenges may recede in the second half of the year [40][41] Question: Marketing plans for endometriosis after CE Mark approval - The company is in a controlled market entry phase in CE Mark countries and is preparing for broader launch based on clinical data [44][46]

Core Insights - EDAP TMS SA reported strong growth in the adoption of its Focal One robotic HIFU system, achieving a record nine system placements in Q1 2025, the highest in the company's history [2][5] - The company launched the new Focal One i Robotic HIFU System, which includes enhanced features aimed at improving treatment efficiency and expanding its market leadership in focal therapy [2][6] - Positive clinical data from the FARP randomized controlled trial supports the use of HIFU for early-stage prostate cancer, indicating non-inferiority compared to traditional robotic radical prostatectomy [3][6] Business Update - The company achieved a record number of Focal One system placements and received CE Mark designation for the treatment of deep infiltrating endometriosis [5][7] - The FARP trial results were presented at the AUA 2025 meeting, marking a significant milestone in clinical evidence for ultrasound-based focal ablation therapy [6][5] - The Focal One i system features new capabilities, including compatibility with advanced imaging technologies and improved treatment workflows [6][5] Financial Performance - Total HIFU revenue for Q1 2025 was EUR 6.2 million (USD 6.5 million), a 6.8% increase from EUR 5.8 million (USD 6.3 million) in Q1 2024, driven by increased system sales [10] - Total revenue for the non-core business declined to EUR 7.4 million (USD 7.8 million) from EUR 9.1 million (USD 9.9 million) in the previous year, reflecting the company's strategic focus on high-growth opportunities in focal therapy [11] - The company's total worldwide revenue for Q1 2025 was EUR 13.6 million (USD 14.3 million), down 9.1% from EUR 14.9 million (USD 16.1 million) in Q1 2024 [13] Operating Metrics - Gross profit for Q1 2025 was EUR 5.7 million (USD 6.0 million), with a gross profit margin of 42.0%, slightly down from 42.8% in Q1 2024 [14] - Operating expenses increased to EUR 11.7 million (USD 12.3 million) from EUR 11.2 million (USD 12.1 million) in the same period last year, primarily due to investments in the HIFU business [15] - The net loss for Q1 2025 was EUR 7.1 million (USD 7.5 million), compared to a net loss of EUR 4.5 million (USD 4.9 million) in Q1 2024 [16] Cash Position - As of March 31, 2025, the company held cash and cash equivalents of EUR 22.8 million (USD 24.6 million), down from EUR 29.8 million (USD 30.9 million) at the end of 2024 [16]