EDAP — Edap Tms S.a.

EDAP TMS Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenue: $17.8 million, a 25% increase from $14.3 million in Q1 2025.
• HIFU Revenue: $11.6 million, up 78% year-over-year from $6.5 million.
• Gross Profit: $8.1 million with a gross margin of 45.7%, compared to 42% in Q1 2025.
• Operating Expenses: Increased to $15.5 million from $12.3 million, driven by higher sales expenses and costs related to becoming a U.S. domestic filer.
• Net Loss: $9.1 million ($0.24 per share), compared to a net loss of $7.4 million ($0.20 per share) in Q1 2025.
• Cash Position: $15 million at the end of Q1, down from $20.5 million at the end of Q4 2025, primarily due to cash used in operating activities.

2. Strategic Updates and Business Highlights

• HIFU Business Growth: Achieved 7 consecutive quarters of year-over-year growth, with significant increases in system placements and procedure volumes.
• New Placements: 11 capital sales and 10 net placements in Q1, including notable installations at prestigious cancer centers like UPMC and Moffitt Cancer Center.
• International Expansion: Strong performance in Europe, with record sales in France and Hungary, and new placements in Mexico.
• Clinical Studies: Positive results from the HIFI-2 study, which supports the use of Focal One for patients with recurrence after failed radiation therapy.
• Endometriosis Program: Gaining momentum with multiple hospitals adopting Focal One for treatment, and plans for clinical studies in benign prostatic hyperplasia (BPH).

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Core HIFU revenue expected between $50 million to $54 million (34%-45% growth), with noncore revenue projected between $22 million to $26 million.
• Upcoming Events: Participation in the Annual Meeting of the American Urological Association and an Investor Day scheduled for June 1, 2026, to provide further updates on growth strategies and clinical advancements.

4. Bad News, Challenges, or Points of Concern

• Operating Loss: Increased operating loss of $7.4 million, reflecting higher expenses and a non-cash charge related to warrants.
• Declining Noncore Revenue: Noncore distribution and ESWL businesses declined by 20% year-over-year.
• Cash Burn: Decrease in cash reserves raises concerns about liquidity, although a recent tranche from the European Investment Bank is expected to bolster the balance sheet.

5. Notable Q&A Insights

• Utilization Growth: CEO Ryan Rhodes noted a 53% increase in U.S. procedure volumes, driven by increased physician adoption and training.
• Surgeon Engagement: The average number of trained surgeons per account has increased from 1.5 to nearly 2, with some sites having up to 6 trained surgeons.
• Endometriosis Financial Contribution: While growth is anticipated, specific financial projections for the endometriosis application remain uncertain until further data is published.
• U.S. Market Potential: Rhodes emphasized that while international markets are growing, the U.S. still holds significant potential for HIFU sales, with a strong pipeline and increasing recognition of focal therapy as a necessary treatment option.

Overall, EDAP TMS reported strong growth in its HIFU business, supported by strategic placements and clinical advancements, while facing challenges related to operating losses and cash management. The outlook for 2026 remains positive, with significant events on the horizon to further engage stakeholders and drive growth.