Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $5.4 million, a 23% increase year-over-year from $4.4 million in Q3 2024 [11] - Gross profit for the quarter was $0.9 million, or 16.5% of revenue, compared to $0.7 million, or 15.5% in the prior year [11] - Net loss was $2.7 million, or $0.24 per share, compared to a net loss of $10.3 million, or $0.98 per share in the prior year [13] - Cash position as of September 30, 2025, was $60 million, up from $44 million at year-end 2024 [15] Business Line Data and Key Metrics Changes - EscharEx's VALUE Phase III trial for venous leg ulcers is progressing with a target of 216 patients across approximately 40 sites [4] - NexoBrid's manufacturing facility expansion has increased production capacity sixfold, with full operational capacity expected by year-end 2025 [8] - NexoBrid reported record quarterly revenue growth of 38% year-over-year and 26% sequentially [8] Market Data and Key Metrics Changes - Medicare's recent reduction in reimbursement rates for skin substitute products is expected to pressure that category, making EscharEx more attractive as it is regulated under the BLA pathway [7] - The updated U.S. market access assessment estimates annual peak sales for EscharEx at about $831 million, reflecting robust clinical data and health economic benefits [7] Company Strategy and Development Direction - The company is focused on three strategic priorities: advancing the EscharEx trial, expanding NexoBrid manufacturing, and securing funding for its strategy [4] - The company aims to leverage market changes to position EscharEx as a leading product in the enzymatic debridement segment [7] - The collaboration with BARDA is expected to resume following the government shutdown, which will support the development of NexoBrid [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for growth in 2026, citing consistent execution and strategic progress [16] - The company is actively monitoring enrollment trends in clinical trials and will update guidance as visibility improves [5] Other Important Information - The company completed a $30 million equity financing, enhancing its financial flexibility to execute long-term growth strategies [10] - The TGA in Australia approved NexoBrid for use in both adult and pediatric patients, expanding its global presence [9] Q&A Session Summary Question: Changes in peak sales assumptions for EscharEx - Management clarified that the increase in peak sales estimate to $831 million is primarily due to updated pricing assumptions based on market access analysis, with no changes in patient volume or adoption rates [25] Question: Breakdown of revenue sources - Management indicated that detailed revenue breakdowns are not provided in quarterly reports, but gross margin improvements reflect a favorable revenue mix [44] Question: Status of BARDA contract - The BARDA contract has not yet been awarded, but the company is awaiting the signing of the proposal submitted for a 10-year contract [46] Question: Impact of CPT code on adoption - Management noted that while a temporary CPT code is in place, a permanent code would enhance legitimacy and drive physician and institutional adoption of NexoBrid [39]

Financial Data and Key Metrics Changes - Fiscal 2025 Adjusted EBITDA reached $352 million, an increase of $28 million or 8% compared to fiscal 2024, with a margin of 13.2%, representing a 260 basis point improvement from fiscal 2023 [14][15] - Adjusted EBITDA margin expanded by 150 basis points year-over-year, marking consecutive years of margin expansion [15][20] - SG&A expense as a percentage of revenue improved by 180 basis points since 2023, reflecting operational efficiencies [12][16] Business Line Data and Key Metrics Changes - Customer retention improved to approximately 83%, a 400 basis point increase since the start of the transformation two years ago [8][4] - The company added about 100 new sellers in fiscal 2025, with plans to continue expanding the sales force by approximately 500 net new hires through 2030 [9][10] - The land maintenance revenue is expected to grow by 1%-2% in fiscal 2026, driven by the growing sales force and improved customer retention [21] Market Data and Key Metrics Changes - The development segment is expected to see revenue growth in the range of flat to +2%, supported by a healthy backlog and benefits from cold starts [22] - Snow revenue is anticipated to be between $190 million and $220 million, reflecting a shift to more fixed fee contracts [22] Company Strategy and Development Direction - The company is focused on delivering sustainable and profitable top-line growth by investing in frontline employees and expanding the sales force [6][11] - A disciplined approach to capital allocation is emphasized, with an increased share repurchase authorization from $100 million to $150 million [4][19] - The fleet management strategy has been a key focus, with over $300 million invested to refresh aging equipment, leading to improved operational efficiency and employee morale [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the return of discretionary spending in ancillary services and the overall growth potential for the business in 2026 [28][29] - The company is confident in its ability to grow, citing improvements in employee and customer retention as critical factors [84][85] - Management acknowledged potential challenges from seasonal fluctuations but remains focused on leveraging improvements in service delivery and operational efficiencies [28][29] Other Important Information - The company has a strong balance sheet with net leverage remaining at 2.3x and no long-term maturities until 2029, providing ample liquidity for investments [19][20] - The midpoint of the margin guidance implies a 310 basis point improvement over the last three years, reinforcing the commitment to expanding margins [23] Q&A Session Summary Question: How did performance in discretionary areas of land maintenance trend in Q4? - Management noted optimism in discretionary spending returning, with positive feedback from frontline workers and customers regarding new fleet investments [27][28] Question: What is the expected productivity ramp for new sales hires? - New sellers typically see limited productivity in the first six months, with improved performance expected after a year, targeting $1.5 million in annual sales for seasoned sellers [30][31] Question: How far along is the company in improving employee retention? - Employee retention has improved significantly, with further potential for enhancement, aiming for a more normalized level for the high-turn workforce [41][43] Question: What impact has the new tax bill had on capital investment? - The company benefited from tax savings to accelerate fleet refresh investments, with expectations to normalize capital expenditures in the coming years [45][46] Question: What is the timeline for the rollout of the field service management system? - The rollout is expected to be completed in the first quarter of the new year, aimed at increasing efficiency and capacity rather than cost savings [68][69] Question: How are project delays in the development business being managed? - Management indicated that while there have been delays, they expect to see growth in the development business as new branches open and backlogs are addressed [71][72]

Financial Data and Key Metrics Changes - Net revenue for the first half of fiscal year 2025 reached $38 million, reflecting a 15% year-on-year growth [18] - Income from operations was $471,000, marking a 108.1% increase compared to the same period last year [18][20] - Operating cash flow turned positive at $2.60 million, a significant improvement from a negative figure in the same period last year [22] Business Line Data and Key Metrics Changes - The sports school business generated revenue of $27 million, an 8.5% year-on-year increase, driven by a rise in membership and event participation [20] - The social business achieved sales revenue of $11 million, a 35.4% year-on-year increase, primarily due to an increase of 114 schools contracting for school club support [20] Market Data and Key Metrics Changes - The proportion of social business revenue to total revenue increased from 24% in fiscal year 2023 to 28% in the first half of fiscal year 2025, indicating growth in this segment [18] - The company supported 349 schools nationwide as of the end of June 2025, a 48.5% year-on-year increase [12][19] Company Strategy and Development Direction - The company aims to expand its sports school business internationally, leveraging its recent IPO on NASDAQ to facilitate this growth [10][26] - The focus is on developing a sports and social business that addresses social issues through sports, with a strong emphasis on non-cognitive skill development for children [11][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the school club support business, driven by national policy reforms aimed at transitioning club activities to private sector management [24][25] - The company anticipates net sales for the full year 2025 to be between $80.2 million and $82.6 million, representing a growth of 12%-15% compared to the full year of 2024 [21] Other Important Information - The company has been recognized as the number one provider in Japan for both the number of sports school members and the number of schools supported [10][12] - The company operates 18 facilities nationwide for after-school daycare services, focusing on children with developmental disabilities [13] Q&A Session Summary Question: What do you think about the future of social business, especially school club support business? - The company plans to continue growing the school club support business, targeting public junior high schools in designated cities and leveraging its market leader position [24] Question: Please tell us about your overseas business expansion in the U.S. and other countries. - The company intends to expand its sports schools overseas, considering various sports popular in each region, not limited to soccer [26] Question: Are you considering listing in Japan? - The company is not ruling out the possibility of a future listing in Japan but is currently focused on its recent NASDAQ listing [27] Question: Why is the operating profit margin low? - The company incurs costs related to solving social issues but plans to improve this margin through business expansion and operational efficiency [27]

Financial Data and Key Metrics Changes - Total revenue grew by 13% in Q4, marking the highest year-over-year growth in nearly two years [16] - Adjusted OIBDA rose by 12%, with a slight decline in margins due to a revenue mix shift towards lower-margin artist services [17] - For the full year 2025, total revenue and adjusted OIBDA growth were both 8% on an adjusted basis [17] Business Line Data and Key Metrics Changes - Recorded music subscription streaming increased by 8.4%, driven by global subscriber growth [17] - Artist services revenue grew by 64%, showcasing the company's ability to support artists and expand revenue streams beyond core music [16] - Music publishing revenue grew by 13%, supported by double-digit growth across performance, mechanical, and sync [17] Market Data and Key Metrics Changes - In the U.S., market share increased by 0.6 percentage points year-over-year in Q4 [5] - Globally, the company's share of the Spotify top 200 increased by approximately 6 percentage points compared to fiscal 2024 [5] - The company achieved a 42% share of the Billboard Global 200 for 22 weeks during fiscal 2025 [9] Company Strategy and Development Direction - The company is focused on optimizing its operational structure to navigate a more globalized and digital environment [6] - Investments are being prioritized in markets with the most attractive return profiles, leading to market share growth in every key region [19] - The company is committed to driving efficiency and has a cost savings program targeting $200 million in annualized savings by 2026 [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth strategy, highlighting the importance of adapting to the evolving landscape, including the impact of generative AI [10] - The outlook for 2026 includes expectations for strong top-line growth driven by organic investments and M&A opportunities [22] - Management emphasized the importance of protecting artists' rights while exploring new revenue streams through AI [11] Other Important Information - The company has signed agreements with four of the largest DSPs, which include wholesale price increases that will positively impact future revenues [17] - A significant focus is placed on enhancing the digital supply chain and modernizing infrastructure to support growth [14] - The company is actively pursuing M&A opportunities to accelerate growth and enhance margins [20] Q&A Session Summary Question: Update on rights monetization and WMG's role in capturing incremental value - Management sees this as an incremental opportunity for the music industry and is determined to be proactive in driving change [27] Question: Building blocks behind top-line growth expectations for 2026 - Key drivers include global subscriber growth, wholesale price increases, and a robust pipeline of accretive M&A [35] Question: Market share gains and performance of flagship labels - Market share growth has been broad-based across flagship labels and regions, with a focus on artist development and catalog revitalization [42] Question: M&A plans and distribution as a growth driver - The company has a strong pipeline for M&A and is confident in accelerating growth in distribution under new leadership [50] Question: Investments in technology and their contribution to growth - Investments in technology are focused on strengthening infrastructure to support high-volume business and enhance operational efficiency [56] Question: Variability in licensing terms across DSPs - There is more standardization in deal terms now, but the company strives for a fair marketplace where partners pay similar prices for content [64] Question: Balancing savings initiatives with market share gains - The company is increasing investments in core markets while achieving savings through operational efficiencies [66] Question: AI as a potential threat and opportunity - Management acknowledges the dual nature of AI as both a threat and an opportunity, emphasizing the importance of shaping the industry to benefit artists and songwriters [79]

Financial Data and Key Metrics Changes - In Q3, the company reported net sales of $1.6 billion, a decrease of 1% compared to the prior year, and adjusted earnings per diluted share of 35 cents, both below expectations [21][22] - The gross profit rate was 41.3%, down 220 basis points year-over-year, primarily due to a 260 basis point decrease in merchandise margin impacted by tariffs [23] - Operating income for Q3 was $161 million, down 26% from the previous year [24] Business Line Data and Key Metrics Changes - All core categories experienced low single-digit declines, indicating a need for focused investment in these areas [22] - U.S. and Canadian store net sales totaled $1.2 billion, flat compared to the prior year, while direct net sales decreased by 7% to $299 million [22] - International net sales increased by 6% to $73 million, with system-wide retail sales growing 16% [23] Market Data and Key Metrics Changes - The company anticipates Q4 sales to decline by high single digits compared to last year, influenced by macro consumer sentiment and competitive retail dynamics [25][26] - Consumer confidence has been declining, affecting purchase intent, particularly at the start of the holiday season [25] Company Strategy and Development Direction - The company is focusing on a consumer-first strategy with four pillars: creating innovative products, reigniting the brand, winning in the marketplace, and operating with speed and efficiency [20][10] - Plans include reducing SKU complexity, exiting non-core categories, and enhancing digital and retail experiences to attract younger consumers [12][18] - The company aims to invest in its core categories and improve product offerings to meet evolving consumer demands [11][68] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the current consumer environment is challenging, and the brand has not fulfilled its potential [5][34] - The company does not expect growth for the full year of 2026 but anticipates improvements as new initiatives take effect in the second half of the year [37][47] - Management expressed confidence in the brand's future and the strategic actions being taken to drive sustainable growth [18][20] Other Important Information - The company plans to deliver $250 million in cost savings over the next two years, with over half identified for 2026 [17] - Capital expenditures for the year are projected at approximately $240 million, down from previous guidance [27] - Free cash flow expectations for the full year are approximately $650 million, reflecting current performance trends [28] Q&A Session Summary Question: What changed between when the CEO first joined and current expectations? - The CEO noted that the brand is not fulfilling its potential and that the focus on adjacencies has led to underinvestment in core categories [34][35] Question: What are the key KPIs for the new strategy? - The CEO highlighted metrics such as total active consumers and growth in core categories, along with improvements in digital traffic and dwell time [45][46] Question: How will the company balance investments and cost cuts? - The CFO explained that the $250 million in savings will help fund necessary investments, with a focus on high-value consumer areas [56] Question: What is the plan for the Amazon partnership? - The CEO stated that the Amazon launch will start with a small assortment of evergreen products, aiming to enhance brand perception and sales [62] Question: How will the company exit non-core categories? - The CEO indicated that SKU rationalization will begin in Q1, focusing on consumer feedback to simplify offerings [80][81]

Financial Data and Key Metrics Changes - In Q3 2025, the company reported net sales of $1.6 billion, a decrease of 1% compared to the prior year, and adjusted earnings per diluted share of 35 cents, both below expectations [19][24]. - The gross profit rate was 41.3%, down 220 basis points year-over-year, primarily due to a 260 basis point decrease in merchandise margin impacted by tariffs [20][21]. - Operating income for Q3 was $161 million, down 26% from the previous year [21]. Business Line Data and Key Metrics Changes - All core categories experienced low single-digit declines, indicating a need for focused investment in these areas [19]. - U.S. and Canadian store net sales were flat at $1.2 billion, while direct net sales decreased by 7% to $299 million [19][20]. - International net sales increased by 6% to $73 million, with system-wide retail sales growing 16% [20]. Market Data and Key Metrics Changes - The company noted that macro consumer sentiment is negatively affecting purchase intent, with sales down high single digits in early Q4 [23][24]. - Consumer confidence has declined due to concerns about job loss and affordability, impacting the start of the holiday season [23]. Company Strategy and Development Direction - The company plans to invest in brand fundamentals to drive sustainable long-term growth, focusing on core categories and innovative product development [5][10]. - A holistic growth plan has been announced, emphasizing consumer insights and a return to best-in-class product leadership in body care, home fragrance, and soaps [10][11]. - The strategy includes reducing complexity in product offerings and enhancing the in-store experience to attract new consumers [11][12]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the current consumer environment is challenging and that the brand is underperforming relative to expectations [4][24]. - The company expects Q4 sales to decline high single digits and has lowered full-year sales guidance to a decline of low single digits [24][25]. - Management remains confident in the brand's future and the potential for growth through strategic investments and operational improvements [17][39]. Other Important Information - The company is targeting $250 million in cost savings over the next two years, with over half expected to be realized in 2026 [16][18]. - Capital expenditures for the year are projected at approximately $240 million, down from previous guidance [25]. Q&A Session Summary Question: What changed between when you first joined the company and now? - Management indicated that the brand is not fulfilling its potential and that a strategic reset is necessary to address underperformance in core categories [28][29]. Question: How should we think about margins in 2026? - The company plans to invest in brand and product while also pursuing cost savings, which may pressure margins until top-line growth is achieved [39]. Question: Can you elaborate on the Amazon partnership? - The company will start with a small assortment of evergreen products on Amazon, aiming to enhance brand perception and sales [44][65]. Question: How should we think about free cash flow for FY2026? - The company remains focused on generating strong free cash flow while increasing investments to support transformation efforts [45]. Question: What is the timing for exiting non-go-forward categories? - The company plans to begin SKU rationalization and exit certain categories in Q1 2026, focusing on consumer outcomes [54].

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $5.4 million, a 23% increase year-over-year from $4.4 million in Q3 2024, primarily driven by higher development services revenue [11] - Gross profit for the quarter was $0.9 million, or 16.5% of revenue, compared to $0.7 million, or 15.5% in the prior year [11] - Net loss for Q3 2025 was $2.7 million, or $0.24 per share, an improvement from a net loss of $10.3 million, or $0.98 per share in Q3 2024 [12] - Adjusted EBITDA loss was $5.4 million, compared to a loss of $3.7 million in Q3 2024 [12] - As of September 30, 2025, cash and cash equivalents were $60 million, up from $44 million at year-end 2024 [15] Business Line Data and Key Metrics Changes - The EscharEx VALUE phase III trial for venous leg ulcers (VLU) is progressing with a target enrollment of 216 patients across approximately 40 sites [4] - NexoBrid manufacturing capacity has expanded sixfold, with full operational capacity expected by year-end 2025 [8] - NexoBrid reported record quarterly revenue growth of 38% year-over-year and 26% sequentially in the U.S. [8] Market Data and Key Metrics Changes - Medicare's recent reduction in reimbursement rates for skin substitute products is expected to pressure that category, while EscharEx aims to enter a market with a single legacy product generating approximately $370 million annually [6] - Updated U.S. market access and pricing assessment estimates annual peak sales for EscharEx at about $831 million, reflecting robust clinical data and health economic benefits [7] Company Strategy and Development Direction - The company is focused on three strategic priorities: advancing the EscharEx trial, expanding NexoBrid manufacturing, and securing funding for its strategy [4] - The company aims to leverage market changes to position EscharEx as an attractive option for strategic partners [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress of clinical trials and the potential for EscharEx to drive growth [4] - The company is actively monitoring enrollment trends in the VALUE trial and will update guidance as visibility improves [5] - The recent $30 million equity financing strengthens the balance sheet and provides resources for long-term growth [10] Other Important Information - The company has received positive FDA feedback for its diabetic foot ulcer program and plans to initiate the study in the second half of 2026 [5] - The collaboration with BARDA on stockpiling and development activities is expected to resume following the end of the government shutdown [10] Q&A Session Summary Question: Can you provide details on the new peak sales assumption for SCAR-EX? - The updated U.S. peak sales estimate of $831 million reflects a focus on pricing rather than changes in patient volume or adoption rates [22][24] Question: What is the breakdown between DFU and VLU opportunities in the sales projection? - There are more diabetic foot ulcers than venous leg ulcers, but the company is prioritizing VLU due to pain issues associated with surgical debridement [30][32] Question: What is the status of the BARDA contract? - The BARDA RFP for a 10-year contract is pending, and the company is awaiting the contract to be signed [44] Question: How does the lack of a permanent CPT code impact adoption? - A permanent CPT code would enhance legitimacy and drive physician and institutional acceptance, facilitating wider adoption of NexoBrid [36][39]

Financial Data and Key Metrics Changes - Total revenue grew by 13% in Q4 2025, marking the highest year-over-year growth in nearly two years [16] - Adjusted OIBDA rose by 12%, with a slight decline in margins due to a significant growth in lower-margin Artist Services revenue [17][18] - For the full year 2025, total revenue and adjusted OIBDA growth were both 8% on an adjusted basis [18] Business Line Data and Key Metrics Changes - Recorded music subscription streaming increased by 8.4%, driven by global subscriber growth and strong market performance [17] - Artist services revenue grew by 64%, showcasing the company's capabilities to support artists and capitalize on new revenue streams [16] - Music publishing revenue grew by 13%, supported by double-digit growth across performance, mechanical, and sync [17] Market Data and Key Metrics Changes - In the U.S., market share increased by 0.6 percentage points year-over-year in Q4 2025 [4] - Globally, the share of the Spotify top 200 increased by approximately 6 percentage points compared to fiscal 2024 [5] - The company achieved a 42% share of the number one spot on the Billboard Global 200 for 22 weeks during fiscal 2025 [10] Company Strategy and Development Direction - The company is focused on optimizing its operational structure to navigate a more globalized and digital environment, leading to market share gains and improved financial performance [6][13] - Investments are being prioritized in high-return areas of the core music business, with a balanced approach to driving performance across different markets and genres [19][22] - The company is actively engaging with generative AI, establishing principles to ensure artists and songwriters benefit from new revenue streams while protecting their rights [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on a healthy industry environment, with expectations for strong top-line growth in 2026 driven by organic investments and M&A [23] - The outlook includes robust global subscriber growth, rising wholesale prices, and the potential of AI as an incremental opportunity for revenue growth [22][23] - Management emphasized the importance of maintaining a fair marketplace and ensuring that the company remains a driver of value in the evolving music landscape [30][31] Other Important Information - The company has a cash balance of $532 million and total debt of $4.4 billion, with a weighted average cost of debt at 4.1% [18] - A strategic reorganization is expected to deliver $200 million in annualized savings in 2026, increasing to $300 million in 2027 [21] Q&A Session Summary Question: Update on rights monetization and WMG's role in capturing incremental value - Management sees this as an incremental opportunity for the music industry and is determined to be the drivers of this change, focusing on licensed models and fair economic terms [28][29] Question: Building blocks behind expectations for top-line growth in 2026 - Growth will be supported by wholesale price increases from new DSP deals, investments in high ROI markets, and a robust pipeline of accretive M&A [35][36] Question: Successful market share gains and performance of flagship labels - Market share has improved across all regions and flagship labels, driven by a focus on artist development and revitalizing catalog [44][46] Question: M&A plans and distribution as a growth driver - A strong pipeline for M&A is in place, with a focus on catalog businesses that deliver high returns, and confidence in accelerating growth in distribution starting in 2026 [50][52] Question: Investments in technology and their contribution to growth - Investments in infrastructure and technology are aimed at enhancing scalability and efficiency, which will support future growth [58][60] Question: Variability in licensing terms across DSP partners - There is more standardization in deal terms now, but the company strives for a fair marketplace where all partners pay similar prices for licensed content [67] Question: Balancing savings initiatives with reinvestment for market share gains - The company is increasing investments in core markets while achieving savings through operational efficiencies in back-office functions [70]

Financial Data and Key Metrics Changes - Oddity reported a 24% year-over-year revenue growth, reaching $148 million in Q3 2025, exceeding guidance of 21% to 23% [13][14] - Adjusted diluted earnings per share increased to $0.40, surpassing guidance of $0.33 to $0.36 [16] - Gross margins expanded to 71.6%, up 170 basis points from the prior year, exceeding guidance of 68% [15] - Adjusted EBITDA for the quarter was $29 million, above the guidance of $26 million to $28 million [16] - The company ended the quarter with $793 million in cash and cash equivalents, plus an additional $200 million available on undrawn credit facilities [17] Business Line Data and Key Metrics Changes - Il Makiage experienced double-digit online revenue growth, on track to achieve $1 billion in revenue by 2028 [9] - SpoiledChild is expected to generate $225 million in revenue for 2025, indicating strong performance [10] - International revenue increased approximately 40% year-over-year in the first nine months of 2025, with significant growth in existing markets like the U.K. and Australia [9][10] Market Data and Key Metrics Changes - The company noted that 83% of revenue still comes from the U.S., with international markets contributing 17% [20] - New geographic expansions include Italy, Spain, Netherlands, Ireland, Sweden, and Denmark, with testing in Japan, Mexico, and Korea [21][22] Company Strategy and Development Direction - The launch of Methodic, a telehealth platform, aims to transform the medical care system, starting with dermatology [5][6] - Methodic is expected to feature 28 products addressing various skin conditions, with a focus on high-efficacy treatments [6][7] - The company plans to continue investing in its long-term growth engines, including Methodic and ODDITY Labs [16][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging industry backdrop, citing strong repeat customer rates as a buffer against acquisition cost increases [36] - The outlook for 2025 has been raised, with expected net revenue between $806 million and $809 million, representing 24% to 25% year-over-year growth [17] - Management remains bullish on Methodic's potential, emphasizing the unique market opportunity it presents [30][31] Other Important Information - The company is leveraging artificial intelligence and proprietary datasets to enhance its direct-to-consumer model [11] - Methodic's launch includes a significant media campaign, marking the largest TikTok activation in the company's history [8][9] Q&A Session Summary Question: Can you unpack the 40% year-to-date growth in international markets? - Management noted that while international growth is strong, 83% of revenue still comes from the U.S., and they plan to responsibly grow in international markets [20][21] Question: How is Methodic expected to drive new customer acquisition? - Management indicated that Methodic will attract both existing and new customers, with a mix of user acquisition strategies [25] Question: What are the expectations for SG&A in the context of the new brand launch? - Management stated that they are not ready to provide specific guidance for 2026 but expect Methodic to scale faster than SpoiledChild [29][32] Question: How does the company view the health of the U.S. consumer? - Management acknowledged softness in the consumer market but highlighted strong revenue and margin performance, driven by repeat customers [36] Question: What is the financial profile of Methodic? - Management expects Methodic to support long-term revenue growth and healthy unit economics, with lower gross margins initially due to prescription costs [44][45] Question: How will the company approach international expansion for Methodic? - Management confirmed that Methodic will initially focus on the U.S. market before considering international expansion [55]

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $13.7 million for Q3 2025, compared to a net loss of $13.6 million in Q3 2024 [31] - Revenue for Q3 2025 was $3.4 million, an increase from $3.0 million in the comparable period [31] - Non-GAAP gross loss for the reported period was $0.3 million, compared to a gross loss of $0.2 million in the comparable period, representing a gross loss margin of approximately 8% [32] Business Line Data and Key Metrics Changes - Revenue from teleradiology services for Q3 2025 was $3.1 million, with a gross profit of $0.1 million, compared to revenue of $2.6 million and a gross profit of $0.3 million in the comparable period [32] - Revenue from the sale and deployment of imaging systems and OEM services amounted to $175,000 for the reported period, with a gross loss of $1.7 million [34] - Revenue from AI solutions for Q3 2025 was $0.1 million, with a gross loss of $1.9 million, compared to revenue of $0.4 million and a gross loss of $1.6 million in the comparable period [34] Market Data and Key Metrics Changes - The company is expanding its presence in Europe with new agreements in the Czech Republic and France, indicating rising demand for its imaging ecosystem [7][16] - The company aims to deploy 100 systems worldwide by the end of 2025, with several systems pending regulatory approval [8] Company Strategy and Development Direction - The company is focused on building a comprehensive medical imaging portfolio, increasing revenues, and accelerating its path to profitability [5] - The strategy includes reinforcing its position in the medical AI sector and deepening its foothold in the U.S. healthcare system [5] - The acquisition of VasoHealthcare IT is intended to enhance the company's AI infrastructure and customer service capabilities [10][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving over $35 million in revenues for 2026, driven by strategic partnerships and the acquisition of VasoHealthcare IT [6][38] - The company anticipates reaching EBITDA break-even on a quarterly basis in 2026 for the AI business segment and in 2027 for the overall company [30][44] Other Important Information - The company is preparing to launch its next-generation Nano-X ARC X system at the RSNA annual meeting, which is expected to enhance market penetration [9] - The company is actively engaged in clinical trials to validate the effectiveness of its imaging solutions, particularly in lung cancer detection [20] Q&A Session Summary Question: How many systems were in the field and performing scans that resulted in your revenue of $175,000? - The revenue was generated from a combination of scans and OEM services, with several systems being installed and awaiting regulatory approvals [40] Question: What types of agreements should we be thinking about in terms of those being lease versus capital sales? - The majority of agreements are expected to be MSES, with some CapEx sales anticipated [40] Question: Could you talk about how OpEx could look over the next four to six quarters? - Investment in deployment efforts, particularly sales and marketing expenses, is expected to increase, while R&D expenses may be tamed [42] Question: Could you talk about Vaso and the types of customers they currently have? - Vaso's customers are primarily medical-related, serving hospitals and imaging centers, presenting cross-selling opportunities for Nano-X [42] Question: Could you reiterate the break-even expectations for 2026 and 2027? - The AI business is expected to achieve quarterly break-even in 2026, while the ARC hardware business aims for break-even in 2027 [44][46]