Q4 2024 IRADIMED CORP Earnings Call
Operator: Welcome to the IRadimed Corporation fourth quarter of 2024 financial results conference call. Currently, all participants are in a listen-only mode. And at the end of the call, we will conduct a question and answer session.
Welcome to the Errata Magic Corporation fourth quarter of 'twenty 'twenty four financial results Conference call.
Currently all participants are in a listen only mode.
At the end of the call we will conduct a question and answer session.
Operator: This call is being recorded today, February 13th, 2025, and contains time-sensitive, accurate information only today.
This call is being recorded today February 13th 2025 and contains time sensitive accurate information only today.
Operator: Earlier, IRadimed released its financial results for the fourth quarter of 2024. A copy of this press release announcing the company's earnings is available under the heading news on their website at iradimed.com A copy of the press release was also furnished to the Securities and Exchange Commission on form 8k and can be found at sec.gov This call is being broadcast live over the internet on the company's website at iradimed.com and a replay will be available on the website for the next 90 days.
Speaker Change: Earlier <unk> released its financial results for the fourth quarter of 'twenty 'twenty four.
Speaker Change: A copy of this press release announcing the company's earnings is available under the heading news on their website at <unk> Dot com.
Speaker Change: A copy of the press release was also furnished to the Securities and Exchange Commission on form 8-K, and can be found at SEC Gov.
Speaker Change: This call is being broadcast live over the Internet on the company's website at <unk> Dot com.
Speaker Change: And a replay will be available on the website for the next 90 days.
Operator: Some of the information in today's session will constitute four looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. forward-looking statements focus on future performance, results, plans, and events that may include the company's expected future results. IRadimed reminds you that future results may differ materially from these forward-looking statements due to several risk factors. for a description of the relevant risk and uncertainties that may affect the company's business. Please see the risk factors section of the company's most recent reports filed with the Securities and Exchange Commission, which may be obtained free from the SEC's website at sec.gov.
Speaker Change: Some of the information in today's session will constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Speaker Change: Forward looking statements focused on future performance results plans and events that may include the company's expected future results.
Speaker Change: I read a med reminds you that future results may differ materially from these forward looking statements due to several risk factors.
For a description of the relevant risks and uncertainties that may affect the company's business. Please see the risk factors section of the company's most recent reports filed with the Securities and Exchange Commission, which may be obtained free from the Sec's website at SEC Gov.
Roger Susi: I would now like to turn the call over to Roger Susi, President and Chief Executive Officer of IRadimed Corporation.
Speaker Change: I would now like to turn the call over to Roger Susi, President and Chief Executive Officer, Alban Vitamin Corporation.
Roger Susi: Mr. Susi. Thank you. And good morning, and thank you all for joining us on today's call.
Speaker Change: Mr Susi.
Speaker Change: Thank you and good morning, and thank you all for joining us on today's call. Once again I am in a fairly unique position to report yet another record quarter, our 14th consecutive quarter.
Roger Susi: Once again, I am in a fairly unique position to report yet another record quarter, our 14th consecutive driving this record quarter, his revenue at over $19.4 million. gross profit came in at 76.1 with earnings very strong as well. Meaning GAAP diluted earnings per share increasing 11% from Q4 2023.
Speaker Change: Driving this record quarter with revenue at over $19 4 million.
Speaker Change: Gross profit came in at 76.1 with earnings very strong as well.
Speaker Change: GAAP diluted earnings per share increasing 11% from Q4 2023.
Roger Susi: For the year, pump sales continued their extraordinarily strong trend.
For the year pump sales continued their extraordinarily strong trend. However, also proud to say that the team also has brought in monitor bookings domestically for the quarter at a record tying rate.
Roger Susi: However, also proud to say that the team also has brought in monitor bookings domestically for the quarter at a record tying rate. and pump sales continue their extraordinary strong trend as well. This is due to the sales team's focus and continuing customer interest and demand.
Speaker Change: Pump sales continue their extraordinary strong strong credit as well.
Speaker Change: This is due to the sales team's focus and continuing customer interest and demand.
Roger Susi: Jacqueline, our CFO, shall provide more details on revenue and earnings comps in a bit, while I would like to discuss the new pump's progress through FDA clearance. As previously discussed, we received an additional information letter from the FDA shortly after the submission was made in early September. We've engaged with the agency twice via SIR meetings to clarify certain items in this AI additional information letter. With our team pushings, our teams have been pushing very hard gathering data and writing the formal response. With that, we plan to have this response back to the FDA the first week of April.
Speaker Change: Jacqueline our CFO shall provide more details on revenue and earnings comps in a bit well I would like to discuss the new pumps progress through FDA clearance as previously discussed we received an additional information letter from the FDA. Shortly after the submission was made in early September.
Speaker Change: We are engaged with the agency twice B S IR meetings to clarify certain items in that.
Speaker Change: Additional information letter.
Speaker Change: With our team pushing our teams have been pushing very hard gathering data and writing the formal responses.
Speaker Change: That we plan to have this response back to the FDA. The first week of April.
Roger Susi: From there, we would expect a few possible follow-up questions to come in May, with our final responses shortly thereafter.
Speaker Change: From there we would expect a few possible follow up questions to come in May.
Speaker Change: With our final responses shortly thereafter.
Roger Susi: Given the turmoil with various agencies in the current administration, it's anyone's guess if the FDA may be operating more slowly than usual. However, we do not see any strong sign as of yet. And so we will expect clearance, as previously stated, midsummer.
Speaker Change: Given the turmoil with various agencies and the current administration.
Speaker Change: It's anyone's guess, if the FDA may be operating more slowly than usual. However, we do not see any strong signed as of yet and so we will expect clearance as previously stated mid summer.
Roger Susi: To reiterate what I mentioned, this new device, the 3870MR IV pump, will be a 2026 story. Clearance in mid-25 means that we expect only light revenue from the new device in the fourth quarter of 2025, as the sale and shipment cycle is measured in months, not days.
Speaker Change: To reiterate what I mentioned this new device 30, 870, MRI IV pump will be at 2026 storey clearbridge and mid 25 means that we expect only light revenue from that new device in the fourth quarter of 2025.
Speaker Change: Selling shipment cycle is measured in months not days, however, as witnessed by the strong sales.
Roger Susi: However, as witnessed by the strong sales of replacing the older IV pump after we discontinued offering our extended maintenance on pumps seven years and older, the new 3870 pump sales are expected to dwarf sales of this older model as the quarters progress through 2026 and into 2027 and beyond.
Speaker Change: Replacing the older IV pump after we discontinued offering our extended maintenance Sean pumps seven years and older. The new 38, 70 pump sales are expected to dwarf sales of this old model as the quarters progressed through 2026 and is 2020 and beyond.
Roger Susi: Finally, with regard to our new facility that's now under construction, progress has been steady and to plan with only minor material supply disturbances, which the general contractor has managed to mitigate well. Interior walls wrap electrical and plumbing are well past halfway, and with the installation of the glass going in very soon, the building will be totally dried in and ready for the interior final trim. We remain confident in a June final certificate of occupancy and commencements of our move shortly thereafter.
Speaker Change: Finally, with regard to our new facility now under construction progress has been steady and to plan with only minor material supply disturbances, which the general contractor has managed to mitigate well.
Speaker Change: Interior walls wrap electrical and plumbing are well past half way and with the installation of the.
Speaker Change: Glass going in very soon.
Speaker Change: The building will be totally dried in and ready for the interior final trim.
Speaker Change: We remain confident in a June final certificate of occupancy and commencement of our move shortly thereafter.
Roger Susi: I'd now like to provide a bit of what we expect to see in Q1 2025. For this first quarter of 2025 financial guidance, we expect revenue of 19.2 to 19.4 million with a gap diluted earnings per share of 35 to 39 cents. Non-GAAP diluted earnings per share of 39 to 43. We look forward to reporting revenue of $78 to $82 million for the full year. And we would expect GAAP diluted earnings per share of $1.55 to $1.65, with non-GAAP diluted earnings per share of $1.71 to $1.81.
Speaker Change: I'd now like to provide a bit of what we expect to see in Q1 2025.
Speaker Change: For this first quarter of 2025 financial guidance, we expect revenue of 19.2 to 19 point for me.
Speaker Change: GAAP diluted earnings per share of 35% to 39 cents.
Speaker Change: non-GAAP diluted earnings per share 39 to 43 cents.
Speaker Change: We look forward to reporting revenue of $78 million to $82 million for the full year.
Speaker Change: And we would expect GAAP diluted earnings per share of $1 55 to $1 65.
Speaker Change: non-GAAP diluted earnings per share of $1 71 to $1 81.
Jack Glenn: And with that, I'll turn the call over to Jack Glenn, our CFO, to review the quarter's financial results.
Speaker Change: And with that I will turn the call over to Jack Glenn Our CFO to review the quarter's financial results.
Jack Glenn: Thank you, Roger.
Jack Glenn: And good morning, everyone. As in the past, our results are reported on a gap basis and a non-gap basis. You can find a description of our non-gap operating measures in this morning's earnings release and a reconciliation of these non-gap measures to the gap measure on the last page of today's release. As we reported earlier this morning, revenue in the fourth quarter of 2024 was $19.4 million, an increase of 11% compared to the fourth quarter of 2023. For fiscal year 2024, revenue increased 12% to $73.2 million. The increase for the quarter and the year was due to the sustained strong demand for our IV pump as our end-of-life replacement program continues to drive exceptional growth for our pump.
Jack Glenn: Thank you Roger and good morning, everyone as.
Jack Glenn: As in the past our results are reported on a GAAP basis, and a non-GAAP basis, you can find a description of our non-GAAP operating measures in this morning's earnings release and a reconciliation of these non-GAAP measures to the GAAP measure on the last page of today's release.
Jack Glenn: As we reported earlier this morning revenue in the fourth quarter of 2024 was $19 4 million, an increase of 11% compared to the fourth quarter of 2023.
Jack Glenn: For fiscal year, 2024 revenue increased 12% to $73 2 million.
Jack Glenn: The increase for the quarter and the year was due to the sustained strong demand for our IV pumps as our end of life replacement program continues to drive exceptional growth for our pumps.
Jack Glenn: Domestic sales increased 21% to $16.5 million and international sales decreased 24% to $2.9 million. Overall, domestic revenue accounted for approximately 85% of total revenue for Q4 2024 compared to 78% for Q4 of 2020. Device revenue increased 12% to $14.3 million in the fourth quarter and 13% to $52 million in fiscal 2024, again, driven by a 34% and 36% increase in pump revenue respectively. Revenue from disposables and services increased 9% for both the fourth quarter of 2024 and fiscal 2020. The gross margin was 76.1% for the fourth quarter of 2021-2024, slightly below the 76.9% for the 2023 quarter.
Jack Glenn: Domestic sales increased 21% to $16 5 million and international sales decreased 24% to $2 9 million.
Jack Glenn: Overall domestic revenue accounted for approximately 85% of total revenue for Q4 2024 compared to 78% for Q4 of 2023.
Jack Glenn: Device revenue increased 12% to $14 3 million in the fourth quarter and 13% to $52 million in fiscal 2024, again, driven by a 34% and 36% increase in pump revenue respectively.
Jack Glenn: Revenue from disposables and services increased 9% for both the fourth quarter of 2024 and fiscal 2024.
Jack Glenn: The gross margin was 76, 1% for the fourth quarter of 'twenty, one 2024 slightly below the 76, 9% for the 2023 quarter.
Jack Glenn: The gross margin for fiscal 2024 increased to 76.9% compared to 76.5% for fiscal 2020. The increase in overhead spending year-over-year primarily was driven by the slight decline in the gross margin for the quarter. Operating expenses were $9 million or 46% of revenue, compared to $8.3 million or 47% of revenue for the fourth quarter of 2023. For 2024 operating expenses were $34 million or 47% of revenue compared to $30 million or 46% of revenue for 2023. The dollar increase in operating expenses for the quarter and the year is primarily due to increased sales and marketing expenses due to higher sales commission expenses.
Jack Glenn: The gross margin for fiscal 2024 increased to 76, 9% compared to 76, 5% for fiscal 2023.
Jack Glenn: The increase in overhead spending year over year, primarily was driven by the slight decline in the gross margin for the quarter.
Jack Glenn: Operating expenses were $9 million or <unk>, 46% of revenue compared to $8 3 million or 47% of revenue for the fourth quarter of 2023.
Jack Glenn: For 2024, operating expenses were $34 million or 47% of revenue compared to $30 million or 46% of revenue for 2023.
Jack Glenn: The dollar increase in operating expenses for the quarter and the year is primarily due to increased sales and marketing expenses due to higher sales Commission expenses.
Jack Glenn: We accrue and pay sales commissions on orders booked, so the higher sales and marketing expenses in the fourth quarter reflect the exceptional bookings for the quarter and a resultant record backlog as we enter 2025. Operating income was $5.8 million for the quarter and $22 million for fiscal 2024 as we maintained a solid operating margin of 30% for the quarter and the year. We recognize the tax expense of approximately $5 million for fiscal 2024, resulting in an effective tax rate of 20.8% for the year and 18.9% for the fourth quarter. This rate was in line with the 20.9% effective rate in 2020.
Jack Glenn: We accrue and pay sales commissions on orders booked so the higher sales and marketing expenses in the fourth quarter reflect the exceptional bookings for the quarter and our result in record backlog as we enter 2025.
Jack Glenn: Operating income was $5 8 million for the quarter and $22 million for fiscal 2024, as we maintained a solid operating margin of 30% for the quarter and the year.
Jack Glenn: We recognized tax expense of approximately $5 million for fiscal 2024, resulting in an effective tax rate of 28% for the year and 18, 9% for the fourth quarter.
Jack Glenn: This rate was in line with the 29% effective rate in 2023.
Jack Glenn: On a gap basis, net income for the quarter was $0.40 per diluted share compared to $0.36 per diluted share for the 2023 fourth quarter. On a gap basis, net income for fiscal 2024 was $1.50 per diluted share compared to $1.35 per diluted share for fiscal 2020. On a non-GAAP basis, adjusted net income was $0.44 per diluted share for the fourth quarter of 2024, compared to $0.39 per diluted share for the fourth quarter of 2023. On a non-GAAP basis, adjusted net income was $1.66 per diluted share for fiscal 2024 compared to $1.48 per diluted share in 2023, an increase of 12% year over year.
Jack Glenn: On a GAAP basis net income for the quarter was <unk> 40 per diluted share compared to 36 cents per diluted share for the 2023 fourth quarter on.
Jack Glenn: On a GAAP basis net income for fiscal 2024 was $1 50 per diluted share compared to a $1 35 per diluted share for fiscal 2023.
Jack Glenn: On a non-GAAP basis adjusted net income was 44 per diluted share for the fourth quarter of 2024 compared to 39 per diluted share for the fourth quarter of 2023.
Jack Glenn: On a non-GAAP basis, adjusted net income was $1 66 per diluted share for fiscal 2024 compared to $1 48 per diluted share in 2023, an increase of 12% year over year.
Jack Glenn: Cash from operations with $6 million for the three months ended December 31, 2024, up from $3.9 million for the same period in 2023, as we drove efficiencies in our working capital management, particularly in inventory. For the three months ended December 31, 2024, our free cash flow, a non-gap measure, was $2.9 million, down from $3.3 million for the same period in 2023. This decline is related to our ongoing capital expenditures for construction of our new building, which were $2.7 million for the quarter.
Jack Glenn: Cash from operations was $6 million for the three months ended December 31, 2024 up from $3 9 million for the same period in 2023, as we drove efficiencies in our working capital management, particularly in the inventory.
Jack Glenn: For the three months ended December 31, 2024, our free cash flow a non-GAAP measure was $2 9 million down from $3 3 million for the same period in 2023.
Jack Glenn: This decline is related to our ongoing capital expenditures FERC construction of our new building, which were $2 7 million for the quarter.
Jack Glenn: As Roger noted, we expect to complete the new facility by June and will spend approximately another $5.5 million to complete the project.
Jack Glenn: As Roger noted, we expect to complete the new facility by June.
Jack Glenn: Spend approximately another $5 5 million to complete the project.
Operator: And with that, I will turn the call over to the operator for questions.
Jack Glenn: And with that I will turn the call over to the operator for questions operator.
Operator: Operator. Thank you. We will now begin our Q&A session. As a reminder, to ask a question you will need to press star 11 on your telephone. Please stand by while we compile the Q&A roster.
Speaker Change: Thank you we will now begin our Q&A session. As a reminder to ask a question you will need to press star one on your telephone please standby, while we compile the Q&A roster.
Jason Wittes: Our first question comes from the line of Jason Wittes of Roth Capital Partners. Your question, please, Jason. Hi, thanks for taking the questions and solid quarter here. So in terms of next year, should we assume that the sales force is going to focus more on the monitor business and we see an uptick there? Or how do you see this 2025, at least on the top line, sort of forming?
Speaker Change: Our first question comes from the line of Jason Wittes.
Speaker Change: Roth Capital Partners. Your question, please Jason Hi, Thanks for taking the questions and solid quarter here.
Speaker Change: So in terms of next year should we assume that the sales force is going to focus more on the monitor business and we see an uptick there or how do you see this 2025 at least on the topline.
Speaker Change: Sure.
Speaker Change: Performing.
Roger Susi: Hey, Jason. Yeah, this is Roger. Good question.
Speaker Change: Okay.
Speaker Change: Hey, Jason this is Roger.
Roger Susi: I've spoken to it, I guess, the last maybe two quarters here since probably mid year last year that 2025, we would indeed be highlighting, you know, sales of the monitor as far as how we are going to incentivize the sales team. And so we, we would expect the, you know, that the monitor business in 2025 will will be significantly impacted. As I mentioned, it started to show already. We had some very strong bookings for the monitor in this fourth quarter. So yeah, 2025, as you put it, is going to have more to come on the monitor.
Speaker Change: Good question.
Speaker Change: Spoken to it I guess.
Speaker Change: Last maybe two quarters here since probably mid year last year that 2025, we would indeed be highlighting.
Speaker Change: Sales of the monitor as far as how we.
Speaker Change: Going to incentivize the sales team and so we would expect.
Speaker Change: The monitor business in 2025.
Speaker Change: <unk>.
Speaker Change: <unk> will.
Speaker Change: It will be significantly impacted as I mentioned it started to show already.
Speaker Change: We had the we had some very strong bookings for the monitor in this fourth quarter.
Speaker Change: So yes, 2025 as you put it is.
Speaker Change: It's going to have more to come on the monitor.
Jason Wittes: So related to the uptick, has there already been sort of a shift in focus at the sales force or is it as part of the reason we saw this sort of uptick in monitor business or is it just sort of?
Speaker Change: So related to the uptick was there or it has already been sort of a shift in focus the sales force.
Speaker Change: As part of the reason we saw this sort of uptick in monitor business or is it just sort of.
Roger Susi: Yes, yes.
Roger Susi: Yeah, I'd say mid year, slightly past last mid year, we we did some, you know, minor tweaks to the to the goals surrounding the the monitor versus the pump. And, and that's, you know, started to show, you know, it's been bared some fruit already in Q4. And it didn't, it didn't impact the pump business. So very, you know, pretty happy with that. Yeah.
Speaker Change: Yes, yes, yes.
Speaker Change: I'd say mid year slightly past last mid year, we did some minor tweaks to the to.
Speaker Change: So the goals.
Speaker Change: Rounding the.
Speaker Change: Monitor versus the pump.
Speaker Change: And Thats.
Speaker Change: Starting to show.
Speaker Change: There is bare to improved already in Q4.
Speaker Change: Got it and it didn't it didn't impact the pump business.
Speaker Change: That will get you pretty happy with that.
Jason Wittes: So then if I think about then looking at your bottom line assumptions, does R&D come down because of you now have submitted for the pump? And also, what do I think about gross margins for 2025?
Speaker Change: Yes.
Speaker Change: So then if I think about that I'm.
Speaker Change: Looking at your bottom line assumptions.
Speaker Change:
Speaker Change: This R&D come down because you now have submitted for the pump.
Speaker Change: And also what do I think about gross margins for 2025.
Jack Glenn: Jack. Yeah, Jason, this is Jack. So from the R&D spend, I would say it's going to be pretty consistent, maybe a little uptick from where we're at right now, because as we might add some headcount in that area into 2025, but fairly consistent, as far as margin, I think, yeah, in R&D, yeah. And then as far as the gross margin, I would say that we right now feel it's pretty much going to be in line with where we're at, you know, in that 76, 77% range going into 2025. Always a little dependent upon the mix as far as geographical is, as you know, we, but roughly 20% of the business is international and we sell it at a fairly sizable discount through distribution.
Speaker Change: Yes, Jason this is Jack so from the R&D spend I would say, it's going to be pretty consistent maybe at a little uptick from where we're at right. Now is we may add some head count in that area into 2025, but fairly consistent as far as the margin.
Speaker Change: Margin I think.
Speaker Change: Yes in R&D, yes.
Speaker Change: And then as far as the gross margin I would say that we right now feel that it's pretty much going to be in line with where we're at in that 70, 677% range going into 2025, alright global dependent upon the mix as far as geographically as you know.
Speaker Change: But roughly 20% of the business is international and we sell it at a fairly sizable discounted III.
Jack Glenn: But overall, I should say pretty, you know, in that range for 2025.
Speaker Change: Distribution, but overall, it's a pretty in.
Speaker Change: In that range for 2025.
Jason Wittes: Sorry, just to clarify, on a dollar basis or a percentage basis, when you say in percentage basis. Yeah. Okay. So like I said. Okay, got it. And then so I guess that means that you're going to see, you know, if I look at the map here in terms of getting to, you know, plugging in the numbers you provided for guidance, sounds like there's gonna be some leverage in G&A and S&M. I don't know if you can elaborate any on that and how that might play out this year. Yeah, I think that we will hopefully that's our plan is get some leverage in the model and the GNA.
Speaker Change: Sorry, just to clarify on a dollar basis or a percentage basis. When you say percentage of is consistent yes, yes, okay. So and then like I said.
Speaker Change: Okay got it and then so I guess that means that youre going to see is if I look at the math there in terms of getting to.
Plugging in the numbers you provided for guidance sounds like there's going to be some leverage in G&A and <unk> I don't know if you can elaborate on that and how that might.
Speaker Change: Play out this year.
Speaker Change: Yes, I think that we will hopefully thats our plan is to get some leverage in the model and the G&A sales and marketing as I spoke to is the big piece. There is the variable expense rate the sales commissions.
Jack Glenn: Sales and marketing is right, you know, I spoke to is the big piece there is the variable expense, right, the sales commissions. And that was reflected in our Q4 is, you know, we do accrue for commissions on bookings. And we had, again, very strong bookings quarters, that was, and you can see the increase in the sales and marketing in Q4. Going forward, I would say that, yeah, we expect it kind of to be in that same range, though. But certainly, it may be a little more leverage as we go through the year, always dependent upon, you know, how the performance is to plan, which is, if it exceeds that, certainly a good problem to have, right, right.
Speaker Change: And that was reflected in our Q4 as we do accrue for commissions.
Speaker Change: Bookings and we had again very strong bookings quarters that you can see the increase in the sales and marketing in Q4 going forward I would say that yes, we expect it to be in that same range, though but certainly it may be a little more leverage as we go through the year always dependent upon how the performance is to plan, which is if it exceeds that.
Speaker Change: Certainly a good problem to have right right, we're trying to.
Jack Glenn: We're trying to, you know, this year in getting prepared. for having the new pump next year, though, we will be also, you know, extending, I guess, overextending for lack of a better word, it would look like overextension in 2025 to get ready for the 2026 launch of the new pump in that we'll be adding some of the support people, you know, the clinical specialists. We'll probably put in some, we'll be starting to put in some territories, additional territory plug-ins. So yeah, there'll be some, there'll be some cost increases that aren't directly. you know, commissions paid for actual sales made in 2025 as well.
Speaker Change: This year in getting prepared.
Speaker Change: For having the new pop next year, though we will be it will be also.
Speaker Change: Extending I guess over extending.
Speaker Change: For lack of a better word it would look like over extension in 2025 to get ready for the 2026 launch of our new new pump.
Speaker Change: And that will be adding some of the support people in the clinical specialist would probably put in some.
Speaker Change: We'll be starting to put in some territories additional territory plug in so.
Speaker Change: Yes, there'll be some.
Speaker Change: There'll be some cost increases there arent directly.
Speaker Change: Yeah.
Speaker Change: Commissions paid for actual sales made in 2025 as well.
Jason Wittes: Got it. I will jump back in queue. Thank you very much. Thank you. Good to talk.
Speaker Change: Got it I'll jump back in queue. Thank you very much.
Speaker Change: Thank you good to talk.
Operator: Our next question.
Speaker Change: Our next question.
Speaker Change: Okay.
Thomas Wittekamp: Thomas Wittekamp. We are joined live by .
Speaker Change: Gotcha Kennan.
Speaker Change: <unk> Lynch.
Speaker Change: Okay.
Nelson Cox: Hey, hey, Roger and Jack, this is Nelson Cox. I'm for Frank. Thanks for taking the questions.
Speaker Change: Hey.
Operator: . Thank you.
Nelson: Jack This is Nelson on for <unk>, Thanks for taking the questions.
Nelson Cox: Kind of just following up on that, correct me if I'm wrong, I think the last We had talked, you talked about 35 territories kind of being an optimal number post the new pump approval. And I think that's versus 30 today. Is there any change to the thinking there on how you are thinking about an optimal sales organization kind of post approval of the new pump? No, that's, that's, that's where we, that is, that is still the plan. And of course, it means, you know, we'll seed that ground starting a little early. We won't put in 35 in calendar year 2025 on the one hand, but we will be putting in a few extra above our current 20, where we at 28 right now, actually.
Speaker Change: Kind of just following up on that correct me, if I'm wrong I think the last.
Speaker Change: You had talked you talked about 35 territories kind of being an optimal number post the new pump approval and I think that's versus 30 today is there any change to the thinking there on how you are thinking about an optimal sales organization kind of post approval of new pump.
Speaker Change: Now that's S. Why are we that is that is still the plan and of course. It means you know.
Speaker Change: We will see that ground on starting a little early we won't put in 35% in calendar year 2025 on the one hand, but we will be putting in a few extra above our current 'twenty, where we at 28 right now actually so.
Roger Susi: So that's why, you know, we'll have some expense there in preparation for, you know, right size in the sales team to, to, you know, do the, do the business we anticipate we'll have with the.
Speaker Change: Why.
Speaker Change: We will have some expense there and preparation for.
Speaker Change: Yes, right sizing the sales team.
Two tariff.
Speaker Change: Does the do the business we anticipate.
Speaker Change: We will have with the pump.
Nelson Cox: Perfect. And then sounds like the backlog is providing good visibility and good to see the strength there. Can you maybe just walk us through how you're thinking about backlog as you move through the year? Any commentary on how you're thinking about the overall composition of the backlog possibly changing throughout the year would be helpful. Sounds like monitors maybe take a bigger portion with the focus there on the sales team, but any additional color there would be helpful.
Speaker Change: Perfect and then.
Speaker Change: It sounds like the backlog is providing good visibility and good to see the strength. There can you maybe just walk us through how youre thinking about backlog as you move through the year any commentary on how you're thinking about.
Speaker Change: The overall composition of the backlog, possibly changing throughout the year would be helpful. It sounds like monitors maybe take a bigger portion with.
Speaker Change: The focus there on the sales team, but any additional color there would be helpful.
Jack Glenn: Yeah, Nelson's Jack. Yeah, it is, as we mentioned, is a very strong backlog beginning the year. So that gives us very good visibility, especially into the first half of the year, I would say that the backlog right now is certainly based, you know, on the pump bookings is very strong on pump, but not in also at the same time, though, as Roger mentioned that we had a very strong bookings as number of units here domestically on the monitoring side. So it's, I think, you know, right now, it may be a little more biased towards the pumps.
Speaker Change: Yes.
Speaker Change: Jack.
Speaker Change: Yes. It is as we mentioned David a very strong backlog beginning of the year. So that gives us very good visibility, especially into the first half of the year I would say that the backlog right. Now is certainly based on the pump bookings is very strong and pump but also.
Speaker Change: Also at the same time, though as Roger mentioned that we had a very strong bookings as number of units here domestically on the monitoring side. So I think right now maybe a little more biased towards the pumps, but certainly our plan as we've talked about would be to have the monitors pickup as we go along but it again it gives us very good visibility.
Jack Glenn: But certainly, our plan, as we've talked about, would be to have the monitors pick up as we go along. But it again, is give this very good visibility, especially for the first half of the year.
Speaker Change: For the first half of the year.
Roger Susi: Perfect. And then maybe just one last quick one of the current pump install base out there. Can you just walk us through, starting in 2026, how many pumps you think you can renew a year with the 387? Oh, you mean this replacement business? Yeah, yep. Yeah. Well, as we've talked in the past, right, we'll have over 4,000, mid-4,000 pups that are older than five years of our current 3860 model. and we feel it will be, you know, We feel that we want to kind of hold the demand to where it's going to be about 800 to 1,000 replacements of those systems, which ultimately is about 1,600 to 2,000 pumps, because most of the systems we'd be replacing are twin channel systems in the U.S.
Speaker Change: Perfect and then maybe just one last quick one of the current pump installed base out there can you just walk us through starting in 2026, how many pumps you think you can renew a year.
Speaker Change: With the $3 70.
Speaker Change: You mean do you mean this replacement business.
Speaker Change: Yeah Yeah.
Speaker Change: Yes.
Well.
Speaker Change: As we've talked in the past.
We all have.
Speaker Change: We will have over 4000.
Speaker Change: Mid four thousands of pumps that are older than five years.
Speaker Change: Our current 38 60 model.
Speaker Change: And we feel a b.
Speaker Change: We feel that we want to kind of hold the demand to where it's going to be about 802, <unk> thousand replacement of those systems, which ultimately is about 1600 2000 pumps because most of the systems will be replacing our twin.
Speaker Change: <unk> channel systems.
Roger Susi: market. So that represents, you know, given that currently today, twin channels, what we're selling now is about 1,200. uh You know, we're looking at more than doubling the number of pumps that we sell. in 2026.
Speaker Change: In the U S market so that represents.
Speaker Change: Given that currently today twin putting channels.
Speaker Change: We're selling now is about 1200.
Speaker Change: We're looking at more than doubling.
Speaker Change: The number of pumps that we sell.
In 2026 six years.
Roger Susi: Perfect. 2026, yeah.
Speaker Change: Yes.
Nelson Cox: All right, thank you.
Speaker Change: Alright, thank you.
Alright good.
Operator: Thank you.
Roger Susi: I would now like to turn the conference back to Roger Susi for closing remarks, sir. Good. Well, thanks. One last thought I had here is regarding concerns that folks may have over this various tariffs that are being implemented. And I'd like to say that, you know, you know, this this will mix into probably most every manufacturer in the US has some exposure to that. In our case, We source only three or four rather expensive components from countries that are going to be hit with the tariffs and or increased tariffs over what we've already been paying.
Speaker Change: Thank you I would now like to turn the conference back to Roger Susi for closing remarks, Sir.
Roger Susi: Okay well thanks.
Speaker Change: Let's see.
Speaker Change: One last thought I had here is regarding concerns that.
Speaker Change: Folks may have over this various tariffs that are being implemented.
Speaker Change: And I'd like to say that.
Speaker Change: Yes.
Speaker Change: Well.
Speaker Change: Make sense, probably most every manufacturer in the U S has some exposure to that in our case.
Speaker Change: We source only three or four rather expensive components from countries that are going to be hit with tariffs.
Speaker Change: Increasing and our increased tariffs over what we've already been paying.
Roger Susi: And of course, there's a larger number of inexpensive components, which we feel the impact from those is very negligible. But still, these larger parts make up less than 3% of our bomb costs, the bill of material costs. So with tariffs as a fraction of that, you know, therefore. do the math, and we wouldn't expect tariffs to affect gross margin material. And I just thought I'd speak to that briefly.
Speaker Change: Yeah.
Speaker Change: Of course, there is a larger number of inexpensive components, which we feel in the.
Speaker Change: Impact from those is very negligible, but still these larger parts make up less than 3% of our.
Speaker Change: Sure.
Speaker Change: Bom cost the bill of material cost, so with tariffs as a fraction of that.
Speaker Change: Therefore, do the math and we wouldn't expect tariffs to affect gross margin materially.
Speaker Change: And I, just thought I'd speak to that.
Roger Susi: So and with that, as always, it has been a great pleasure that we take this opportunity to review IRadimed's progress for y'all. And we also proudly state that we expect strong performance as 2025 progresses. With that, thank you. Thank you.
Speaker Change: Briefly so and with that as always it has been a great pleasure that we take this opportunity we view or Adam as progress for you all and we also probably state that we expect strong performance as 2025 progresses.
Speaker Change: With that thank you.
Operator: This concludes the call. You may now disconnect.
Speaker Change: Thank you. This concludes the call you may now disconnect.
Okay.
Speaker Change: [music].
Speaker Change: Okay.
Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].