Financial Data and Key Metrics Changes - Research and development revenue decreased to $3.8 million in Q3 2025 from $8.2 million in Q3 2024, reflecting reduced reimbursements under the BARDA Project Bioshield contract [9] - Gross margin decreased to 42.7% from 44.8% year-over-year due to a lower percentage of direct labor as a part of total reimbursed costs [10] - Net loss for Q3 2025 was $3.6 million, compared to a net loss of $1.5 million in Q3 2024, attributed to reduced revenue and higher administrative expenses [10] - Cash and cash equivalents totaled $10.5 million as of September 30, 2025, up from $5.2 million at the end of 2024, with a consistent cash balance since June 30, 2025 [11][12] - Revenue guidance for 2025 was reduced from $21.5 million to $18.5 million due to anticipated reduced work on the BARDA contract and timing effects from the U.S. government shutdown [12] Business Line Data and Key Metrics Changes - The company continues to focus on the DeepView System, with plans for a U.S. launch next year, supported by a recent registered direct offering that added $7.6 million to cash reserves [5][12] - The company is working on a commercialization strategy for the DeepView System, which includes broad applications beyond burns [8] Market Data and Key Metrics Changes - The company has received positive feedback from international markets where units have been placed, indicating ease of use and effectiveness in treating burn patients [22] - Discussions are ongoing to expand into the U.K. and parts of Europe, with plans to upgrade the current device based on U.S. market learnings [42][43] Company Strategy and Development Direction - The company is focused on three principles: finance, focus, and finish, as it prepares for the commercialization of the DeepView System [4] - The company aims to leverage its existing relationships within the burn community to facilitate initial sales post-FDA clearance [40] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the FDA submission process, indicating no anticipated delays despite the government shutdown [17] - The company expects 2026 to be a transitional year with relatively flat revenue compared to 2025, with significant growth anticipated in 2027 and 2028 [20] Other Important Information - The company is actively communicating with the FDA regarding its submission, with positive interactions noted, particularly concerning the statistical analysis plan [27] - The handheld module for military use is under development, with positive feedback received on its preliminary design [30] Q&A Session Summary Question: Impact of government shutdown on FDA submission - Management confirmed that the FDA submission is on track for approval in the first half of 2026, with delays primarily affecting discussions with BARDA [17][18] Question: Revenue expectations for 2026 - Management indicated that 2026 may see a slight reduction in revenue compared to 2025, but overall expectations remain stable [20] Question: Feedback from international units - Positive feedback has been received from international sites, informing preparations for the U.S. launch [22] Question: Progress with FDA communications - Management reported good communication with the FDA, with ongoing discussions about additional testing and adjustments [27] Question: Status of the handheld module development - Development is progressing well, with military testing ongoing and plans for civilian applications [30] Question: Commercialization preparations - The company is hiring additional personnel for commercialization efforts and leveraging existing relationships in the burn community [40]
Spectral AI(MDAI) - 2025 Q3 - Earnings Call Transcript