Q4 2024 Hyperfine Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by my name is staggering and I will be your conference operator today.
This time I would like to welcome everyone to the hyper find fourth quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If.
If you would like to ask a question. During this time seems a press star followed by the number one on your telephone keypad.
If you would like to draw your question again press the star one.
Maurice: I would now like to turn the conference over to Maurice about Sri you may begin.
Speaker Change: Thank you for joining today's call.
Speaker Change: Earlier today Hyperfine, Inc, released financial results for the quarter ended December 31 2024.
Speaker Change: A copy of the press release is available on the company's website as well as the SEC Doc of.
Speaker Change: Before we begin I would like to remind you that management will make statements during this call.
Speaker Change: Forward looking statements within the meaning of the federal Securities laws, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.
Speaker Change: Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.
Speaker Change: All forward looking statements, including without limitation, those relating to our operating trends and future financial performance.
Speaker Change: <unk> management expectations for hiring training and adoption.
Speaker Change: And our organization.
Speaker Change: Opportunity commercial and international expansion.
Speaker Change: <unk> approvals and product development are based upon our current estimates and various assumptions.
Speaker Change: These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.
Speaker Change: Lee you should not place undue reliance on these statements.
Speaker Change: For Western description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our latest periodic filings with the Securities and Exchange Commission.
Speaker Change: This conference call contains time sensitive information and is accurate only as of the live broadcast today March 17 2025.
Speaker Change: Hyperfine, Inc, disclaims any intention or obligation, except as required by law to update or revise any future productions.
Speaker Change: We're looking statements, whether because of new information future events or otherwise.
Maria: And with that I will turn the call over to Maria <unk>, President and Chief Executive Officer.
Maria: Good afternoon, and thank you for joining us on the call with me today is our chief administrative officer, and Chief Financial Officer, Brad Hale.
Maria: I am pleased with the strategic milestones achieved in the fourth quarter.
Maria: They set the stage to execute on our diversified catalysts and drive accelerated growth in 2025 across multiple sites of care and global markets.
Maria: In 2024, we delivered revenue of $12 9 million, representing 17% year over year growth meaningfully expanded gross margin and further reduce cash for.
Maria: Since the close of the year, we have taken steps to strengthen our financial profile by completing a reorganization to lower our operating costs and raising $60 million to a direct offering to extend our cash runway to the end of 2026.
Maria: Before I provide detail on.
Maria: Our diversification and expansion strategy and the growth catalysts that are coming to fruition in 2025, I will let Brad first review, our 2020 for financials in more detail Bret.
Thank you Maria I'll recap, our financial results for the fourth quarter and full year of 2024.
Maria: Revenue for the quarter ended December 31, 2024 was $2 3 million compared to $2 7 million in the fourth quarter of 2023, we.
Maria: We sold nine units in the fourth quarter of 2024.
Maria: Revenue was due to longer deal timing and processes for U S hospitals, and lower average selling price associated with the heavier mix of international deals in the fourth quarter of 2024 versus the prior year period.
Maria: Our pipeline remains strong, but U S hospital critical care deal sales cycles experienced variability and are getting longer than previously anticipated.
Maria: There are multiple stakeholders involved in the purchasing cycle that falls outside the traditional capital process.
Maria: Also in 2024, we had uneven performance and productivity across sales regions in the U S and in December we took action to upgrade our sales talent, replacing 50% of underperforming region in the United States guilty.
Maria: For the full year 2024, we generated $12 $9 million in revenue compared to $11.01 billion in 2023, representing an increase of 17%.
Maria: Revenue growth in 2024 was driven by organic commercial expansion.
Maria: Organic year over year revenue growth was a healthy 70%, excluding $3 4 million of revenue in 2023 associated with Kings College, London onetime purchase order supported by a grant from the Bill and Melinda Gates Foundation.
Maria: Gross profit for the fourth quarter of 2024 was <unk> 8 million compared to $1.01 million in the fourth quarter of 2023.
Maria: So our gross profit was due to a lower revenue and higher international sales mix in the fourth quarter of 2024.
Maria: For the full year 2024, we have generated $5 9 million and gross profit of 24% to the full year 2023, and our full year gross margin was 46% representing 300 basis points of gross margin expansion over 2023.
Maria: We continue to drive healthy margins at our stage and believe we are well positioned for meaningful margin expansion at scale.
Maria: R&D expenses for the fourth quarter of 2024 were $5 1 million compared to $6.0 million in the fourth quarter of 2023.
Maria: For the full year 2024, R&D expenses were $22 5 million flat compared to the full year 2023, as 2024 was a year of continued innovation investment for hyperglycemia.
Sales general and administrative expenses for the fourth quarter of 2024 were $6 5 million compared to $6 7 million in the fourth quarter of 2023.
For the full year 2024 sales general and administrative expenses were $26 6 million down 12% compared to the full year 2023, as we continue to exercise spending discipline.
Maria: Net loss for the fourth quarter of 2024 was $10 4 million equating to a net loss of <unk> 14 per share as compared to a net loss of $10 7 million or a net loss of <unk> 15 per share for the same period of the prior year.
Maria: For the full year 2024, net loss was $40 7 million equating to a net loss of <unk> 56 per share as compared to a net loss of $44 2 million or a net loss of <unk> 62 per share for the same period of the prior year.
Maria: Our net cash burn excluding financing in the fourth quarter of 2024 was $8 2 million and as of December 31, 2024, we had $37 6 million in cash and cash equivalents on our balance sheet.
For the full year 2024, our net cash burn excluding financing was $38 4 million down 9% from $42 3 million in 2023.
Maria: Reducing our cash burn was a significant focus of ours in 2024, and we are pleased with the execution on the spreads.
Maria: We will continue to prioritize spending discipline and optimize operating leverage in 2025, which I will discuss in the context of our guidance framework shortly.
Maria: Our business fundamentals remained strong with healthy year over year organic revenue growth.
Maria: <unk> margin expansion reduced opex spending and reduce cash burn.
Maria: I will now turn the call back to Maria to provide a business update before I cover financial guidance.
Maria: Thank you Brett 2024 was a year of significant progress.
Maria: We set course and began to execute on our diversification and expansion strategy and we are transforming our business into a true commercial stage company in 2025, realizing the operating leverage from our business fundamentals. Please.
Maria: Multiple growth opportunities as we expand selling our subsystem into the office setting multiple call points in the hospital and international markets.
Maria: Since the initial FDA clearance in 2020, we have been improving the image quality of our unique portable AI powered MRI to drive clinical utility and mainstream adoption.
Maria: In 2025, we plan to obtain clearance and launch two system software releases, the 10th and 11th generation.
Maria: These next generation releases will bring a step function image quality improvement and the feedback from Kols involved in our image development process continues to be extremely positive.
Fair assessment is that the images from our next generation system. Unlike those obtained from conventional one five Tesla MRI systems.
Maria: This high level of image quality will be core to all of our expansion initiatives.
Maria: We anticipate the first of these technology updates to be launched by mid 2020 highs.
Maria: We believe this level of image quality, we make adoption affordable brain MRI quicker for new users and enabling a short term learning curves and accelerating market uptake of our technology.
Our growth going forward will be driven by expansion into multiple sites of care and international geographies.
Maria: Based on the opportunities for sub systems at multiple sites of care or total addressable market is in excess of $6 billion for placements in hospital and office settings in the U S market, allowing.
Maria: Our FDA clearance allows the use of the <unk> system for all bringing images of patients of all ages and subsistence scans have the same CPT reimbursement codes as conventional brain MRI.
Maria: I will now cover in greater detail the three expansion vectors of our strategy building an office business.
Maria: Spending to multiple sites inside the hospital and driving adoption in international markets.
Maria: Starting with the office opportunity, we plan to launch the <unk> system E neurology offices by mid 2025.
Maria: We were very pleased to see in November 2024, the interest societal Accreditation Commission IAC, a leading CNS approach accreditation body issue updated MRI standards to include the use of portable point of care Ultra low fuel Britain MRI.
Maria: Offices cannot pursue accreditation through IAC and exams with <unk> systems in those offices will be eligible to be covered.
Maria: MFS.
Maria: Physicians can now obtain diagnostic quality <unk> integration within their offices, providing patients timely and convenient MRI access at the point of care opening up an incremental very exciting and transformative business for sub system placements.
Maria: We have begun preparing for the office business launch over the last few quarters, we plan to launch through our existing commercial team to leverage their knowledge and our implementation capabilities. One of the pillars of the launch in the office setting is conducting new row PM are a prospective.
Maria: Study to assess different use cases for the soup system in this new setting there.
Maria: There are multiple clinical use cases in the office for the sub system from headaches to all side in our Ccs.
Maria: FICO follow up or multiple sclerosis.
Through EDI neurology practices will participate in the study's principal investigator is Dr. Laszlo mature from the <unk> Institute.
Maria: During the launch preparation we have initiated a pilot program and have had a small number of sites goes through accreditation and the implementation processes.
Maria: We are very encouraged by how seamless the processes are.
Maria: To raise awareness across the neurology community. We recently participated in the American Society of Neuro imaging and the neural net meetings and witnessed firsthand the kols enthusiasm for our technology as a very promising element to enable the building of more <unk>.
Maria: Prehensile practices and expansion of care in their offices.
Maria: Now moving to the hospital opportunity.
Maria: We have been commercializing the <unk> system in the hospital setting and historically, our focus has been in adult and pediatric critical care to bring MRI to patients that cannot safety nor readily be transported to a conventional MRI.
Maria: We have begun to expand to the emergency department as an additional call point in the hospital supported by the clinical work, we have done in stroke MRI availability for the triage of stroke patients in the <unk> is very limited and patients often suffer long waits Dave.
Maria: Data from act from TMR continued to strengthen the evidence supporting the value of AI power part of our MRI in acute ischemic stroke triage.
Action TMR is our perspective international multi site observational study to validate the use of the <unk> system for patients with acute ischemic stroke, where.
Maria: The <unk> system could be used enrolment in the study is complete with 100 patients at four leading institutions in the U S and Europe with data presented at multiple leading conferences, including the 2024 European Society of Neuro radiology and most recently.
Maria: The 2024, Radiological Society of North America, and 2025 International stroke Conference.
Maria: Before I leave our technical progress we remain excited about the potential of our technology in dementia and Alzheimers scare care PMI continues to enroll patients and initial cases were again presented at key Tad during the fourth quarter in Madrid, Spain.
Maria: We're strengthening work in the field of dementia with other kols institutions dementia and Alzheimers disease are also used cases in the office setting.
Maria: Furthermore, we continue to support investigator sponsor studies to augment the data to illustrate the clinical workflow and cost efficiency value of the use of the <unk> system at the different sites of care.
Maria: In 2025, we're also focused on selling into hospital using data related to the very favorable economic impact the use of the <unk> system can have with information collected by two of our key centers.
Speaker Change: Missouri Baptist conducted the lean analysis and documented incremental conventional MRI scans enabled by the use of the soup system in critical care.
Speaker Change: Additionally, a leading center in the northeast has compiled their savings in cost of care associated with the use of the soup system, enabling faster decision, making and discharge as appropriate.
Speaker Change: We believe this real world data can be a strong catalyst for adoption across the hospital setting.
Speaker Change: Last regarding international commercialization 2024 was our first year of commercial focus in international markets. We exited the year with 13 distributors in place covering European middle Eastern and Asian geographies.
Speaker Change: <unk> had initial placements in most markets and witnessed significant interest from clinicians in the markets we have a presence.
Speaker Change: We have recently obtained CE and UK CE approval for our ninth generation of software and now have the soup system in local languages in the major European markets.
Speaker Change: We also anticipate regulatory approval and market entrants in India in the second half of the year.
Speaker Change: I want to wrap my remarks by summarizing our plan to drive business acceleration in growth in 2025 and beyond.
Speaker Change: 2025 will be a tale of two <unk>.
Speaker Change: During 2025, we will launch two new a power software releases with significant improvement in image quality.
Speaker Change: We're starting the year selling mainly in adult and pediatric critical care inside the hospital setting.
Speaker Change: And by the end of the year, we will be actively selling into several sites of care in the hospital.
Speaker Change: To the neurology office setting and in more international markets.
Speaker Change: These opportunities will grow and diversify our revenue and provide the foundation for growth acceleration in the second half of 2025 and beyond.
Speaker Change: I am confident in the opportunity in front of us and the execution and capabilities of our team.
I'll now turn the call over to Brett to review, our 2025 guidance.
Now turning to our financial guidance.
Speaker Change: Gaining with our revenue outlook, we want to start by providing visibility into our expected first half performance for the first half of 2025, we expect revenue to be approximately $6 million.
Speaker Change: We are still experiencing protracted processes with U S hospitals and in early 2025 uncertainty related to funding associated with deals supported by grant funds we.
Speaker Change: We believe we will be able to more precisely forecast our second half of revenue over the coming months as our growth catalysts play out and for the full year, we expect revenue growth to be in the range of 20% to 30% over 2024.
Speaker Change: Looking at gross margin, we are initiating a range of 47% to 52% for the year. We expect the progression of gross margin percentage increased to closely follow our sales growth and we expect the second half gross margin percentages to receive the first half.
Speaker Change: We remain optimistic that we will surpass 50% gross margin comfortably and sustainably as we realized higher volume growth driven by our growth catalyst.
Speaker Change: Lastly, we are initiating total cash burn expectations in the range of $25 million to $27 million for the full year 2025, representing a 32% decline in cash burn at the midpoint.
Speaker Change: We've taken several steps to enhance our financial profile.
Speaker Change: We completed a restructuring at the beginning of the year to reduce operating cost extend cash runway and transition the organization from a development stage to a commercial stage company.
Speaker Change: We recently bolstered our balance sheet with a $6 million financing.
Speaker Change: We will execute upon our plan with strong spending discipline, while maintaining appropriate investments in our growth catalyst.
Speaker Change: We see our cash runway for the business to the end of 2026.
Maria: Before turning the line back to Maria I wanted to touch briefly on the topic of tariffs. We have been closely monitoring recent government commentary and actions and their potential impact for our business.
Maria: Our guidance assumes that our business will not be materially impacted by tariffs.
Maria: We will continue to follow the situation closely and provide updates to the market as needed.
Maria: At this point I'd like to turn the call back to Maria for closing comments.
Maria: Thank you Brett.
Maria: <unk> made solid progress in 2024, driving technical clinical developments and our strategy to support the site of care expansion in 2025 and beyond.
Maria: We have built a very strong foundation for business acceleration over the course of the year ahead, and we're more optimistic about the future of hyperfine than ever.
Maria: That I want to thank you for your time and open up the lines for questions.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad ratio has joined the queue.
Speaker Change: If you would like to withdraw your question simply press Star one again.
Speaker Change: You are called upon to ask a question in a listening via speaker phone and your device. Please pickup your handset to ensure that your phone is not on mute when asking a question again crestar wanted to join the queue.
Speaker Change: And our first question comes from the line of Larry <unk> with Wells Fargo. Your line is open.
Larry: Hi, Maria Hi, Brad the system run on for Larry Thanks for taking the questions.
Larry: I want to say first off congratulations on the announcement this morning, the partnership with <unk>.
Larry: Any additional details that you can share regarding what that collaboration will entail I'm.
Larry: From the press release, it did sound like there could be some R&D products in the works so.
Larry: If that is the case what are the timelines there.
Larry: And then as well as you know if there are any financial implications associated with the partnership.
Larry: Oh, hi, Thanks for the question. It is an initiative related to our future technology and there's really nothing further that we're gonna be commenting at this stage. So we're going to leave it at what what was out this morning.
Larry: Okay fair enough.
Larry: And maybe just turning to 2025.
Larry: How are you thinking about capital trends.
Larry: In the year, particularly given there does seem to be some concerns around potential recessionary headwinds.
Larry: And you know are there any offsets that we should be considering in the year I know office you know the in office expansion is one.
Larry: Sure so.
Speaker Change: I think as we think our business, we really think about the office separate from our hospital business and I think Brad was right in commenting that we have seen more protracted and complexity in the processes for hospitals to go through capital allocation and finalizing.
Speaker Change: The the purchase of something in the neighborhood of 400 to $500.500 million. So I would say there is a little bit.
Speaker Change: Of tempered enthusiasm about how quickly hospitals are going to be moving through the capital process I wanted to say that although I would say that our processes are now longer that I have even commented in the past in the hospital setting. We also have a lot of things in the pipeline that will be moving through.
Speaker Change: Throughout the year I think there is a difference in the office setting.
Speaker Change: There you see a very reduced number of decision makers and there is really more of a business case built up to whether this makes sense or not show. It was critically important for us to be able to have the accreditation from CMS accredited body. So that we can run sort of.
Speaker Change: A little bit of a pro forma as to what this could look like for them in the office and I think it is less tied to capital allocation. It is more tied to dusty make financial and clinical sense for the practice I'm running I think we commented in the prepared remarks that we're really making a straw.
Speaker Change: <unk>.
Speaker Change: Push to talk economic benefit coupled with clinical benefit in our selling process for both the hospital environment and the clinic environment, because we definitely understand that people want to make sure that there is ultimately sort of an ROI thinking around.
Speaker Change: Buying any of these devices, the one area, where I would say there is a little bit more.
Speaker Change: Hmm, maybe pause at this point is any kind of systems that we're going to be funded with grant funding.
Speaker Change: And that is.
Speaker Change: A number of our system, sometimes has been funded through grant funding that has more uncertainty in our self the last 10 weeks or so.
Speaker Change: Okay perfect that's helpful.
Speaker Change: And maybe just.
Speaker Change: My final question here, you know how should we be thinking about contribution.
Speaker Change: You know the U S versus international given that you are scaling pretty meaningfully in both geographies and <unk>.
Speaker Change: How should we think about the durability of your Asps in 2025 out some scope scale both of those geographies.
Speaker Change: So I'll make a comment about asp's and I will let right.
Speaker Change: <unk> comment as well.
Speaker Change: As you know we have been increasing the selling price of our device in the markets, where we sell directly so that is primarily the U S. The difference in Asp's of course, because we do sell through third party distributors outside of the U S.
Speaker Change: We have raised the the selling price of the system as of the beginning of this year and we believe again that the actual price. The MSRP is not the reason why people are not buying or not buying faster.
Speaker Change: That said makes this quarter ultimately create some degree of variability quarter to quarter as we think about really the mix between the U S N and O U S. I would say at least at this point, we expect in the second half of the year both to have significant ramp.
Speaker Change: I don't know if youre going to try values a lot more color on.
Speaker Change: How to think about the mix specifically are.
And in that in the coming quarters, but Bret feel free to add any commentary here.
Speaker Change: Yes, I would comment that I think Maria comment that we have several growth vectors that will be in our numbers in 2020, specifically in the second half we'll have the office setting we'll have multiple call points in the hospital and then we'll have continued expansion internationally I think individual quarters, there could be variability you guys have seen historically.
Speaker Change: Where we've had quarters, where we have heavier international mix theres been kind of an effective ASP and there's been quarters, where we have a more domestic mix, where theres been higher asps I would expect that our pricing will be between those two acres, but as Maria indicated pricing.
Speaker Change: Increase has been something that we've looked at.
Speaker Change: Here for the value proposition as well as just thinking about gross margin expansion.
Speaker Change: Got it very helpful. Thank you.
Speaker Change: Thank you.
Our next question comes from the line of <unk> with B Riley Your line is open.
Hi, Thanks, This is Brian calling on for you on.
Speaker Change: Yeah, congratulations on the Indian announcement.
Speaker Change: Wondering if you can provide some color on how it benefits are in the U M hyperplane separately.
Speaker Change: You're doing something like access to have claims data sets and is there any specific deliverable, we should be looking for there.
Brian: Hi, Brian.
Speaker Change: I'm going to say well, what I said, a few minutes ago. It really is about our and initiative that relates to future technology and at this stage, we're not going to provide any additional commentary.
Speaker Change: We have been developing and as I had mentioned in the prepared remarks, we're incredibly oh.
Speaker Change: Tuesday, as sick and I'm excited about the two new technology upgrades that are going to come to the market in 2025 I'd be happy to share with all of you that we do have a filing we have D. A already for one of those technology releases that we expect in the middle part.
Speaker Change: The year that related to the news. This morning as I said, it's it's a it relates to our future technology and and there is nothing else that we share for now.
Speaker Change: Gotcha.
Speaker Change: So maybe I can ask about the expansion efforts into the neurology ups because I know that the launches are scheduled for mid year, but I'm wondering if any inroads have been made at this point.
Speaker Change: If you're getting any feedback from them.
Speaker Change: The cause of what you've already been talking to.
Speaker Change: Sure. So definitely so we've been in pilot mode.
Speaker Change: And there's a number of initiatives that have been brought through that pilot mode, but we have had the opportunity to work with less than a handful of offices through the process through application into IAC for accreditation store understanding how that application translates into receiving X.
Speaker Change: Reputation what are the expected timelines, how that then translates into being Brexit strict with CMS to be reimbursed by CMS for the exams and and also understanding the use case I believe in the prepared remarks, I mentioned neuro PMO, which is a a study that we have.
Speaker Change: We're going to do in relatively short order with two very large large offices to really validate and understand the use case in the office because it goes the spectrum from looking at headaches and what could be the underlying disease that that causes the headaches too.
You can follow up with dementia Alzheimers multiple sclerosis. So we wanted to make sure that we understand very well how the suit, placing all of those different types of patients.
Speaker Change: Happy to report that through the pilot sites that have gone through the process. The process has been relatively seamless probably.
Speaker Change: You get things done in short months not quarters.
Speaker Change: We have also seen the ability for some of these decision makers in the offices, who are very often both the clinical and the administrative decision makers.
Speaker Change: Sometimes and then have one sometimes it's just a very small group to be able to reach decisions very quickly in Europe <unk> done with two very high profiling centers that then to Institute in Buffalo, New York has had very large conglomerate of neurology offices and.
Speaker Change: Texas Neurology is the other one which is a very large single practice in our in the Dallas area. We're very excited by how they see this really augment their offering are there clinical reach their ability to build an office practice that has more than.
Speaker Change: And what they May now have which would be consoled service consultation services as well as sometimes infusion services and they're thinking about imaging more broadly as the next way of really building a more comprehensive practice.
Speaker Change: The American Society of Neuro imaging is an interesting group that we've now established a relationship with they are neurologists by training, but they did enough additional training to be certified to read imaging. They are a group that has a strong interest in our technology and very often is the.
Speaker Change: Group that it resides in offices and then there is a meeting more of our business meeting for neurology practices, which is neuro net that I also mentioned in the in the upfront remarks, and there was a tremendous amount of interest there. We brought the system were scanned a lot of people and we took a.
Speaker Change: A fair a fair number of very healthy needs to to use as we get ready to launch.
Speaker Change: Great. Thanks for the I appreciate the color.
Speaker Change: Maybe just one more on our customer mix I know you already talked about Oh.
Speaker Change: O U S is going to be something we're just talking about the expansion into.
Speaker Change: The neurology offices, but maybe just something more general about customer mix.
Speaker Change: We evolve.
Speaker Change: Throughout the inflection point you mentioned in your.
Speaker Change: How should we just be thinking about a more generally.
Speaker Change: You expand outside of the critical path.
Speaker Change: So I would I mean, I think Brad said it before there are multiple growth vectors in front of us the neurology office expansion applies only to the U S market. The hospital expansion applies to both international.
Speaker Change: <unk> and <unk>.
Speaker Change: In domestic markets and then incremental geographies of course will be primarily international and we are excited about the opportunity to enter into.
Speaker Change: Into India.
Speaker Change: Some of those expansions have a little bit of a naughty office in the U S. Because we've cleared what I could have called a suite of regulatory we to IAC accreditation, but.
Speaker Change: The the India approval or you seem to have solved the India FDA, so depending on how much of the year, we have access to those opportunities that will dictate sort of a big of a contribution does make for us I think the portfolio of opportunities for us is how we feel.
Speaker Change: Is that the second half of this year is going to be significantly richer than than how we're starting but how each of them is going to play may may be may have some of that variability, we we'd be a little bit more specific around the midyear timeframe as we see how we progress through some of that.
Speaker Change: Go to the opportunity initiatives that we're undertaking right now Brian feel free to add anything else.
Brian: No I think you've covered I think the only thing else I'd add as you know we're thinking about the second half of 2025, we will see a diversified revenue stream. So I think where we've historically been more focused on that critical care will be entering our space, where we will have a kind of a balanced portfolio diversification of revenue streams. So that will result in a kind of a more I think steady predictable.
Speaker Change: <unk> overall results quarter to quarter.
Speaker Change: Got it got it thanks for taking our questions.
Speaker Change: Sure. Thank you.
Young Lee: And our last question comes from the line of young Lee with Jefferies. Your line is open.
Speaker Change: Alright, great. Thanks, so much for taking our questions.
Speaker Change: I guess to start.
Speaker Change: The March 17.
Speaker Change: First half guidance no.
Speaker Change: Was wondering if you can provide any high level color on why Q versus <unk> split.
Fred: Fred do you want to take that one.
Fred: Yes, so I think when we we gave kind of more specific guidance for the first half of the year, given where we are.
Fred: We definitely see the second half of the year being more catalyst rich all the growth drivers of vectors coming into play.
Fred: Ranging from the market expansions the office international as well as the timing of clearances and technology releases that we've talked about being kind of at the core to business acceleration. So that's why we came up with the the first half guidance and we've pointed to what we believe.
Fred: Our expectations are for the full year. So we do have.
Fred: Tale of two half years, where we see significant growth in the second half off of the base of the first half.
Young Lee: But I don't think we're going to get down to the quarter spirit to your very specific point young.
Fred: Okay got it fair enough.
Young Lee: I guess just on the.
Young Lee: Second half ramp.
Young Lee: Pretty big number even though you have a lot of.
Young Lee: Catalyst new initiatives come into play.
Young Lee: But I think you did replace half of your underperforming reps.
Speaker Change: Who are sort of the new reps that you hired her experience are there.
Young Lee: Your level of confidence.
Speaker Change: Those guys have run into them.
Young Lee: Uh huh.
Yes, I'd be happy to take that so.
Young Lee: Earlier in the year in 2024, we started seeing a pretty significant separation in performance across territories, and and and we're starting to see what good looks like and and and there were some territories that were definitely falling behind we took an interim step which was around combining.
Young Lee: Leadership that we had some regional leaders and we thought everyone under one leader probably would make more sense, we still observe that very uneven performance.
Young Lee: And we decided to take action at the end of the year. The reason for that was that we wanted to make sure that we had the new group of people ready to go when we're introducing the new upgrades in the image quality the software on the technology.
Young Lee: So one of the things we did was.
Young Lee: Higher than with a number of skills that we thought were really important around understanding how to build new markets are also some degree of understanding of the brain space. So they they don't all come from the same place. They came from different successful sell for five months I have to say that al.
Young Lee: They might think were employed before so we weren't looking for people that were really just jumping on the first thing that they had but what I'm proudest of is the fact that we put them through a very rigorous training program at the crack of the year when they joined us.
Young Lee: We've been incredibly impressed with what we have seen I have seen some of that firsthand how they have evolved through their training. They shadow some of the experienced people we have on implementation leader on our commercial leader also spending a lot of time with them they have been.
Young Lee: People's accounts, some more experienced people happy with them at their accounts and we think that we have the team that will be ready to really do the good things that we're expecting when we have also the the new res is here and the image quality that is going to be a highly differentiated from anything we've had before.
Speaker Change: Alright, Thank you very much.
Young Lee: Thank you.
Maria: That concludes the question and answer session I would like to turn the call back over to Maria <unk> for closing remarks.
Thank you all for joining us on today's call I believe we are in a transformative year for hyperfine, we we keep everyone updated on the multiple growth catalyst for our business as we progress through 2025. Thank you very much.
Maria: Ladies and gentlemen. This concludes today's conference call you may now disconnect.
Maria: [music].
Maria: [music].
Speaker Change: Ladies and gentlemen, thank you for standing by my name is doesn't mean I will be your conference operator today at this time I would like to welcome everyone to the hyperfine fourth quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.
Maria: After the Speakers' remarks, there will be a question and answer session.
Maria: If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad.
Maria: If you would like to draw your question again press the star one.
Maurice: I would now like to turn the conference over to Maurice about you may begin.
Speaker Change: Thank you for joining today's call.
Maurice: Earlier today Hyperfine, Inc, released financial results for the quarter ended December 31 2024.
Maurice: Copy of the press release is available on the company's website as well as SEC Dot Gov.
Maurice: Before we begin I would like to remind you that management will make statements during this call.
Maurice: Forward looking statements within the meaning of the federal Securities laws, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.
Maurice: Any statements contained in this call that relate to expectations or predictions of future events results or performance are forward looking statements.
Maurice: All forward looking statements, including without limitation, those relating to our operating trends and future financial performance.
Maurice: <unk> management expectations for hiring training and adoption growth and our organization market opportunity.
Maurice: And international expansion regulatory approvals and product development are based upon our current estimates and various assumptions.
Maurice: Statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.
Maurice: Accordingly, you should not place undue reliance on these statements.
Maurice: For a list and description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our latest periodic filings with the Securities and Exchange Commission.
Maurice: This conference call contains time sensitive information and is accurate only as of the live broadcast today March 17 2025.
Maurice: Hyperfine, Inc, disclaims any intention or obligation except as required by law to update or revise any future productions are forward looking statements, whether because of new information future events or otherwise.
Maurice: And with that I will turn the call over to Maria <unk>, President and Chief Executive Officer.
Maurice: Good afternoon, and thank you for joining us on the call with me today is our chief administrative officer, and Chief Financial Officer, Brad Hale.
Maurice: I am pleased with the strategic milestones achieved in the fourth quarter.
Maurice: They set the stage to execute on our diversified catalysts and drive accelerated growth in 2025 across multiple sites of care and global markets.
Maurice: In 2024, we delivered revenue of $12 9 million, representing 17% year over year growth meaningfully expanded gross margin and further reduce cash burn.
Maurice: Since the close of the year, we have taken steps to strengthen our financial profile.
Maurice: Leaving a reorganization to lower our operating costs embracing $6 million to a direct offering to extend our cash runway to the end of 2026.
Maurice: Before I provide detail on.
Maurice: Our diversification and expansion strategy and the growth catalysts that are coming to fruition in 2025, I will let Brad first review, our 2020 for financials in more detail correct.
Brad Hale: Thank you Maria I'll recap, our financial results for the fourth quarter and full year of 2024.
Revenue for the quarter ended December 31, 2024 was $2 3 million compared to $2 7 million in the fourth quarter of 2023.
Brad Hale: We sold nine units in the fourth quarter of 2024.
Brad Hale: <unk> revenue was due to longer deal timing and processes for U S hospitals, and lower average selling price associated with the heavier mix of international deals in the fourth quarter of 2024 versus the prior year period, our pipeline remains strong, but U S Hospital critical care deal sales cycles experienced.
Brad Hale: Variability and are getting longer than previously anticipated.
There are multiple stakeholders involved in the purchasing cycle that falls outside the traditional capital process.
Brad Hale: Also in 2024, we had uneven performance in productivity across sales regions in the U S. And then December we took action to upgrade our sales talent, replacing 50% underperforming region in the United States guilty.
Brad Hale: For the full year 2024, we generated $12 9 million in revenue compared to $11.01 billion in 2023, representing an increase of 17%.
Brad Hale: Revenue growth in 2024 was driven by organic commercial expansion.
Brad Hale: Organic year over year revenue growth was a healthy 70%, excluding $3 4 million of revenue in 2023 associated with Kings College, London onetime purchase order supported by a grant from the Bill and Melinda Gates Foundation.
Brad Hale: Gross profit for the fourth quarter of 2024 was <unk> 8 million compared to $1.01 million in the fourth quarter of 2023.
Brad Hale: So our gross profit was due to a lower revenue and higher international sales mix in the fourth quarter of 2024.
Brad Hale: For the full year 2024, we have generated $5 9 million and gross profit up 24% to the full year 2023, and our full year gross margin was 46% representing 300 basis points of gross margin expansion over 2023.
Brad Hale: We continue to drive healthy margins at our stage and believe we are well positioned for meaningful margin expansion at scale.
Brad Hale: R&D expenses for the fourth quarter of 2024 were $5 1 million compared to $6.0 million in the fourth quarter of 2023.
For the full year 2024, R&D expenses were $22 5 million flat compared to the full year 2023 is 2024 was a year of continued innovation investment for hyperglycemia.
Brad Hale: Sales general and administrative expenses for the fourth quarter of 2024 were $6 5 million compared to $6 7 million in the fourth quarter of 2023.
Brad Hale: For the full year 2024 sales general and administrative expenses were $26 6 million down 12% compared to the full year 2023, as we continue to exercise spending discipline.
Brad Hale: Net loss for the fourth quarter of 2024 was $10 4 million equating to a net loss of <unk> 14 per share as compared to a net loss of $10 7 million or a net loss of <unk> 15 per share for the same period of the prior year.
Brad Hale: For the full year 2024, net loss was $40 $7 million equating to a net loss of <unk> 56 per share as compared to a net loss of $44 2 million or a net loss of <unk> 62 per share for the same period of the prior year.
Brad Hale: Our net cash burn excluding financing in the fourth quarter of 2024 was $8 2 million and as of December 31, 2024, we had $37 6 million in cash and cash equivalents on our balance sheet.
Brad Hale: For the full year 2024, our net cash burn excluding financing was $38 4 million down 9% from $42 3 million in 2023.
Brad Hale: Reducing our cash burn was a significant focus of ours in 2024, and we are pleased with the execution on the spreads.
Brad Hale: We will continue to prioritize spending discipline and optimize operating leverage in 2025, which I will discuss in the context of our guidance framework shortly.
Brad Hale: Our business fundamentals remained strong with healthy year over year organic revenue growth.
Brad Hale: <unk> margin expansion reduced opex spending and reduced cash burn.
Maria: I will now turn the call back to Maria to provide a business update before I cover financial guidance.
Maria: Thank you Brett.
Maria: 2020 for what's a year of significant progress.
Maria: We set course and began to execute on our diversification and expansion strategy and we are transforming our business into a true commercial stage company in 2025, realizing the operating leverage from our business fundamentals.
Maria: Multiple growth opportunities as we expand selling our scoop system into the office setting multiple call points in the hospital and international markets.
Maria: Since the initial FDA clearance in 2020, we have been improving the image quality of how our unique portable AI powered MRI could drive clinical utility and mainstream adoption.
In 2025, we plan to obtain clearance and launch two stopes system software fajitas, the 10th and 11th generation.
Maria: These next generation releases will bring a step function image quality improvement and the feedback from Kols involved in our development process continues to be extremely positive.
Maria: Fair assessment is that the images from our next generation system. Unlike those obtained from conventional one five Tesla MRI systems.
This high level of image quality will be core to all of our expansion initiatives.
Maria: We anticipate the first of these technology updates to be launched by mid 2025.
Maria: We believe this level of image quality will make adoption affordable brain MRI quicker for new users and navy or short term learning curves and accelerating market uptake of our technology.
Maria: Our growth going forward will be driven by expansion into multiple sites of care and international geographies.
Maria: Based on the opportunities for sub systems at multiple sites of care or total addressable market is in excess of $6 billion for placements in hospital and office settings in the U S market, allowing.
Maria: Our FDA clearance allows the use of the <unk> system for all bring images of patients of all ages and subsistence scans have the same CPT reimbursement codes as conventional brain MRI.
Maria: I will now cover in greater detail the three expansion vectors of our strategy building an office business.
Maria: Spending to multiple sites inside the hospital and driving adoption in international markets.
Maria: Starting with the office opportunity, we plan to launch the <unk> system E neurology offices by mid 2025.
Maria: We were very pleased to see in November 2020 for the inter societal Accreditation Commission.
Maria: A leading CNS approves the accreditation body issue updated MRI standards to include the use of portable point of care Ultra low fuel Britain MRI.
Maria: Offices can now pursue accreditation through IAC and exams with <unk> systems in those offices will be eligible to be covered by CMS.
Maria: Physicians can now obtain diagnostic quality <unk> images within their offices, providing patients timely and convenient MRI access at the point of care opening up an incremental very exciting and transformative business for sub system placements.
Maria: We have begun preparing for the office business launch over the last few quarters, we plan to launch through our existing commercial team to leverage their knowledge and our implementation capabilities. One of the pillars of the long in the office setting is conducting new row PM are a prospective.
Maria: Study to assess different use cases for the <unk> system in this new setting there.
Maria: There are multiple clinical use cases, and DLP for the sub system from headaches to all side in our Ccs.
Maria: If you could follow up or multiple sclerosis.
Speaker Change: Through EDI neurology practices will participate on the study's principal investigator is Dr. Laslo mature from the <unk> instituted.
Speaker Change: During the launch preparation we have initiated a pilot program and have had a small number of sites go through accreditation and the implementation processes.
Speaker Change: We are very encouraged by how seamless the processes are.
Speaker Change: To raise awareness across the neurology community. We recently participated in the American Society of Neuro EOG and the neural net meetings and witnessed firsthand the kols enthusiasm for our technology as a very promising element to enable the building of more calm.
Speaker Change: Prehensile practices and expansion of care in their offices.
Speaker Change: Now moving to the hospital opportunity.
Speaker Change: We have been commercializing the scoop system in the hospital setting and historically, our focus has been in adult and pediatric critical care to bring MRI to patients that cannot safety no readily be transported to a conventional MRI.
Speaker Change: We have begun to expand to the emergency department as an additional call point in the hospital supported by the clinical work, we have done in stroke MRI availability for the triage of stroke patients and <unk> is very limited and patients often suffer long waits.
Speaker Change: From Ashram TMR continued to strengthen the evidence supporting the value of AI powered portable MRI in acute ischemic stroke triage.
Speaker Change: From TMR is our perspective international multi site observational study to validate the use of the <unk> system for patients with acute ischemic stroke, whereas assist system could be used enrolment in the study is complete with 100 patients at four leading institutions in the U S.
Speaker Change: Europe with data presented at multiple leading conferences, including the 2024 European Society of Neuro Radiology and most recently the 2024 Radiological Society of North America, and 2025 International stroke Conference.
Speaker Change: Before I leave our clinical programs, we remain excited about the potential of our technology in dementia and Alzheimers scare.
Speaker Change: <unk> continues to enroll patients and initial cases were again presented at key tab during the fourth quarter in Madrid, Spain.
Speaker Change: We are strengthening work in the field of dementia with other kols institutions dementia and Alzheimers disease are also use cases in the office setting.
Speaker Change: Furthermore, we continue to support investigator sponsored studies to augment the data to illustrate the clinical workflow and cost efficiency value of the use of the soup system at the different sites of care.
Speaker Change: In 2025, we're also focused on selling in the hospital using data related to the very favorable economic impact the use of the <unk> system can have with information collected by two of our key centers.
Speaker Change: Missouri Baptist conducted the lean analysis and documented incremental conventional MRI scans enabled by the use of the soup system in critical care.
Speaker Change: Additionally, a leading center in the northeast has compiled their savings in cost of care associated with the use of the soup system, enabling faster decision, making and discharge as appropriate. We believe this real world data can be a strong catalyst for adoption.
Speaker Change: Across the hospital setting.
Speaker Change: Last regarding international commercialization 2024.
Speaker Change: Our first year of commercial focus in international markets.
Speaker Change: We exited the year with 13 distributors in place covering European Middle Eastern and Asian geographies. We had initial placements in most markets and witnessed significant interest from clinicians in the markets we have a presence.
Speaker Change: We have recently obtained CE and UK CE approval for our ninth generation of software and now have the soup system in local languages in the major European markets. We also anticipate regulatory approval and market entrants in India.
Speaker Change: In the second half of the year.
Speaker Change: I want to wrap my remarks by summarizing our plan to drive business acceleration in growth in 2025 and beyond.
Speaker Change: 125 will be a tale of two halves.
Speaker Change: During 2025, we will launch two new a power software releases with significant improvement in image quality.
Speaker Change: Starting the year selling mainly in adult and pediatric critical care inside the hospital setting.
Speaker Change: And by the end of the year, we will be actively selling into several sites of care in the hospital into the neurology office setting and in more international markets. These opportunities will grow and diversify our revenue and provide the foundation for growth acceleration in the second half of 'twenty.
Speaker Change: 25 and beyond.
Speaker Change: I am confident in the opportunity in front of us.
Speaker Change: And the execution and capabilities of our team.
Speaker Change: I will now turn the call over to Brett to review, our 2025 guidance.
Speaker Change: Now turning to our financial guidance, beginning with our revenue outlook, we want to start by providing visibility into our expected first half performance for the first half of 2025, we expect revenue to be approximately $6 million.
Speaker Change: We are still experiencing protracted processes with U S hospitals and in early 2025 uncertainty related to funding associated with deals supported by grant funds.
We believe we will be able to more precisely forecast our second half of revenue over the coming months as our growth catalysts play out and for the full year, we expect revenue growth to be in the range of 20% to 30% over 2024.
Speaker Change: Looking at gross margin, we are initiating a range of 47% to 52% for the year.
Speaker Change: We expect the progression of gross margin percentage increased to closely follow our sales growth and we expect the second half gross margin percentages to exceed the first half.
Speaker Change: We remain optimistic that we will surpass 50% gross margin comfortably and sustainably as we realized higher volume growth driven by our growth catalyst.
Speaker Change: Lastly, we are initiating total cash burn expectations in the range of $25 million to $27 million for the full year 2025, representing a 32% decline in cash burn at the midpoint.
Speaker Change: We have taken several steps to enhance our financial profile with.
Speaker Change: We completed a restructuring at the beginning of the year to reduce operating cost.
Speaker Change: And cash runway and transition the organization from a development stage to a commercial stage company.
Speaker Change: We recently bolstered our balance sheet with a $6 million financing.
Speaker Change: We will execute upon our plan with strong spending discipline, while maintaining appropriate investments in our growth catalyst.
Speaker Change: We see our cash runway for the business to the end of 2026.
Maria: Before turning the line back to Maria I wanted to touch briefly on the topic of tariffs.
Maria: We have been closely monitoring recent government commentary and actions and their potential impact for our business.
Maria: Our guidance assumes that our business will not be materially impacted by tariffs.
Maria: We will continue to follow the situation closely and provide updates to the market as needed.
Maria: At this point I'd like to turn the call back to Maria for closing comments.
Maria: Thank you Brett.
Maria: <unk> made solid progress in 2024, driving technical clinical developments and our strategy to support the site of care expansion in 2025 and beyond.
Maria: We have built a very strong foundation for business acceleration over the course of the year ahead, and we're more optimistic about the future of hyperfine than ever.
Maria: With that I want to thank you for your time and open up the lines for questions.
Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and would like to ask a question. Please press star one on your telephone keypad ratio has joined the queue. If you would like to withdraw your question simply press Star. One again, if you are called upon to ask a question in a listening via speakerphone and your device.
Speaker Change: Can you speak up your handset to ensure that your phone is not ma'am you have been asking a question again press far wanted to join the queue.
Speaker Change: And our first question comes from the line of Larry <unk> with Wells Fargo. Your line is open.
Speaker Change: Hi, Maria Hi, Brett This system run on for Larry Thanks for taking the questions.
Speaker Change: I wanted to say first off congratulations on the announcement this morning, the partnership with <unk>.
Speaker Change: Any additional details that you can share regarding what that collaboration will entail.
Speaker Change: From the press release, it did sound like there could be some R&D products in the works so.
Speaker Change: If that is the case what are the timelines there.
Speaker Change: And then as well as you know if there are any financial implications associated with the partnership.
Speaker Change: Hi, Thanks for the question.
Speaker Change: It is an initiative related to our future technology and Theres really nothing further that we're going to be commenting at this stage. So we're going to leave it at what what was that.
Speaker Change: This morning.
Speaker Change: Okay fair enough.
Speaker Change: And maybe just turning to 2025.
Speaker Change: How are you thinking about capital trends.
In the year, particularly given there does seem to be some concerns around potential recessionary headwinds.
Speaker Change: And are there any offsets that we should be considering in the year I know office.
Speaker Change: The in office expansion is one.
Speaker Change: Sure so.
Brad Hale: I think as we think our business, we really think about the office separate from our hospital business and I think Brett was right in commenting that we have seen more protracted and complexity in the processes for hospitals to go through capital allocation and finalizing.
Speaker Change: The the.
Speaker Change: The purchase of something in the neighborhood of 400 to 500 500 constant dollars. So I would say there is a little bit.
Speaker Change: Of tempered enthusiasm about how quickly hospitals are going to be moving through the capital process I wanted to say that although I would say that our processes are now longer that I have even commented in the past in the hospital setting. We also have a lot of things in the pipeline that will be moving through.
Speaker Change: Through throughout the year I think there is a difference in the office setting.
Speaker Change: There you see a very reduced number of decision makers and there is really more of a business case built up to whether this makes sense or not so it was critically important for us to be able to have the accreditation from CMS accredited body. So that we can run sort of.
A little bit of a pro forma I'll ask two.
Speaker Change: To what this could look like for them in the office.
Speaker Change: It is less tied to capital allocation. It is more tied to does this make financial and clinical sense for the practice up and running I think we commented in the prepared remarks that we're really making a strong.
Speaker Change: Push.
Speaker Change: To talk economic benefit coupled with clinical benefit in our selling process for both the hospital environment and the clinical environment, because we definitely understand that people want to make sure that there is ultimately sort of on an ROI thinking around buying any of these.
Speaker Change: Devices, the one area, where I would say there is a little bit more.
Speaker Change: Maybe pause at this point is any kind of systems that we're going to be funded with grant funding.
Speaker Change: And that is a.
Speaker Change: A number of our system, sometimes past being funded through grant funding that has more uncertainty.
Speaker Change: The last 10 weeks or so.
Speaker Change: Okay perfect.
Speaker Change: Paul.
And maybe just.
Speaker Change: My final question here.
Speaker Change: How should we be thinking about contribution.
Speaker Change: The U S versus international given that you are scaling pretty meaningfully in both geographies and.
Speaker Change: How should we think about the durability of your Asps in 2025, asking scope scale both of those geographies.
Speaker Change: So I'll make a comment about asp's and I will let right.
Speaker Change: Comment as well.
Speaker Change: As you know we have been increasing the selling price of our device in the markets, where we sell directly so that is primarily the U S. The difference in Asp's of course, because we do sell through third party distributors outside of the U S.
Speaker Change: We have raised the the selling price of the system as of the beginning of this year and we believe again that the actual price. The MSRP is not the reason why people are not buying or not buying faster.
Speaker Change: That said mix is core to ultimately create some degree of variability quarter to quarter as we think about really the mix between the U S N and O U S. I would say at least at this point, we expect in the second half of the year both to have significant ramp.
Speaker Change: I don't know if youre going to provide a lot more color on.
How to think about the mix specifically.
Speaker Change: In the in the coming quarters, but feel free to add any commentary here.
Speaker Change: Yes, I would comment that I think Maria comment that we have several growth vectors that will be in our numbers in 2025, specifically in the second half we will have the office setting we'll have multiple call points in the hospital and then we'll have continued expansion internationally I think individual quarters, there could be variability you guys have seen historically.
Speaker Change: Where we've had quarters, where we have heavier international mix theres been kind of an effect of ASP and there's been quarters, where we have a more domestic mix, where theres been higher asps I would expect that our pricing will be between those two acres quite as Marie indicated pricing increase has been something that we've looked at.
Speaker Change: Here for the value proposition as well as just thinking about gross margin expansion.
Speaker Change: Got it very helpful. Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of <unk> with B Riley Your line is open.
Speaker Change: Okay.
Brian: Hi, Thanks, This is Brian calling on for you on.
Speaker Change: Yes, congratulations on the announcement.
Just wondering if you can provide some color on how it benefits in video and hyperplane separately.
Speaker Change: Youre doing something like access to have claims data sets and is there any specific deliverable, we should be looking for there.
Brian: Hi, Brian.
Brian: I'm going to say, what I said, a few minutes ago. It really is about our new initiatives that relates to future technology and at this stage, we're not going to provide any additional commentary.
Brian: We have been developing and as I had mentioned in the prepared remarks, we're incredibly.
<unk> and I'm excited about the two new technology upgrades that are going to come to the market in 2025 I'd be happy to share with all of you that we do have a filing we have D. A already for one of those technology releases that we expect in the middle <unk>.
Brian: Of the year.
Brian: But related to the news this morning as I said, it's it's.
Brian: It relates to our future technology and and there is nothing else that we share for now.
Gotcha.
Brian: So maybe I can ask about the expansion efforts into the neurology ups, because I know that the launches.
Brian: Script to occur mid year, but I'm wondering if any inroads have been made at this point.
Brian: Yes.
Speaker Change: Youre getting any feedback from.
Brian: The customers you've already been talking to.
Speaker Change: Sure. So definitely so we've been in pilot mode.
And there's a number of initiatives that have been brought through that pilot mode, but we have had the opportunity to work with less than a handful of offices through the process through application into IAC for accreditation store understanding how that application translates into receiving extra.
Mutation what are the expected timelines, how that then translates into being Brexit strip with CMS to be reimbursed by CMS for the exams.
Speaker Change: And also understanding the use case I believe in the prepared remarks, I mentioned neuro PMO, which is a.
Speaker Change: Ah study that we're going to do in relatively short order with two very large large offices to really validate and understand the use case in the office because it goes the spectrum from looking at headaches and what could be the underlying disease that causes the headache.
Speaker Change: Two quick.
Speaker Change: I'll follow up with dementia Alzheimers multiple sclerosis. So we wanted to make sure that we understand very well how the suit, placing all of those different types of patients I'm happy to report that through the pilot sites that have gone through the process. The process has been relatively seamless probably.
Speaker Change: Get things done in short months not quarters.
Speaker Change: We have also seen the ability for some of these decision makers in the offices, who are very often both the clinical and the administrative decision makers.
Speaker Change: Sometimes and then have one sometimes just a very small group to be able to reach decisions very quickly on Europe PMI has done with two very high profile centers that then to Institute in Buffalo, New York has had very large conglomerate of neurology offices and.
Speaker Change: Texas Neurology is the other one which is a very large single practice in our in the Dallas area. We're very excited by how they see this really augment their offering their clinical reach their ability to build an office practice that has more than.
Speaker Change: And what they May now have which would be consoled service consultation services as well as sometimes infusion services and they're thinking about imaging more broadly as a <unk>.
Speaker Change: The next way of really building a more comprehensive practice.
Speaker Change: The American Society of Neuro imaging is an interesting group that we've now established a relationship with they are neurologists by training, but they did enough additional training to be certified to read imaging. They are a group that it has a strong interest in our technology and very often is the group.
Speaker Change: That it resides in offices and then there is a meeting more of our business meeting for neurology practices, which is neuro net that I also mentioned in the in the upfront remarks, and there was a tremendous amount of interest there we brought a system with scanned a lot of people and we took.
Speaker Change: A fair a fair number of very healthy needs to to use as we get ready to launch.
Speaker Change: Great. Thanks for the I appreciate the color.
Speaker Change: Maybe just one more on our customer mix I know you already talked about.
Speaker Change: Oh.
Speaker Change: U S is going to be affecting.
Speaker Change: Talk about the expansion into.
Speaker Change: The neurology offices, but maybe just something more general about customer mix.
Speaker Change: As we evolve.
Speaker Change: Throughout that.
Speaker Change: 14 point you mentioned.
Speaker Change: You are.
Speaker Change: How should we just be thinking about a more generally.
Speaker Change: And then outside of the critical path.
Speaker Change: So I would I mean, I think Brad said it before there are multiple growth vectors in front of us.
Speaker Change: The neurology office expansion applies only to the U S market.
The hospital expansion applies to both international and.
Speaker Change: And domestic markets and then incremental geographies of course will be primarily international and we are excited about the opportunity to winter.
Speaker Change: Into India.
Speaker Change: Those expansions have a little bit of not be office in the U S. Because we've cleared what I could have called a suite of regulatory we to IAC accreditation.
Speaker Change: But.
The India approval are you seeing the hands of the India FDA, so depending on how much of the year, we have access to those opportunities that will dictate sort of.
Speaker Change: Big of a contribution does make for US I think the portfolio of opportunities for US is how we feel that the second half of this year is going to be significantly richer than than how we're starting but how each of them is going to play may may be may have some of that variability.
Speaker Change: We will be a little bit more specific around the midyear timeframe as we see how we progress through some of the go to the opportunity initiatives that we're undertaking right now Brian feel free to add anything else.
Speaker Change: No I think you've covered I think the only thing else I would add as we're thinking about the second half of 2025, we will see a diversified revenue stream. So I think where we've historically been more focused on that critical care will be entering our space, where we will have a kind of a balanced portfolio diversification of revenue streams. So that will result in a kind of a more I think steady.
Speaker Change: Predictable overall results quarter to quarter.
Speaker Change: Got it got it thanks for taking our questions.
Speaker Change: Sure. Thank you.
Young Lee: And our last question comes from the line of young Lee with Jefferies. Your line is open.
Young Lee: Alright, great. Thanks, so much for taking my questions.
Young Lee: I guess to start.
Young Lee: The March 17.
Young Lee: Our first half guidance.
Young Lee: Bill.
Young Lee: Was wondering if you can provide any high level.
Bill Gates: Color on <unk> versus <unk> split.
Fred: Fred do you want to take that one.
Fred: Yes, so I think when we we gave kind of more specific guidance for the first half of the year, given where we are.
Fred: We definitely see the second half of the year being more catalyst rich all the growth drivers of vectors coming into play.
Fred: Ranging from the market expansions the office international as well as the timing of clearances and technology releases that we've talked about being kind of at the core to business acceleration. So that's why we came up with the the first half guidance and then we pointed to what we believe.
Fred: Our expectations are for the full year. So we do have.
Fred: Tale of two half years, where we see significant growth in the second half off of the base of the first half.
Young Lee: But I don't think we're going to get down to the quarter or speak to you very specific point young.
Fred: Okay got it fair enough.
Young Lee: I guess just on the.
Young Lee: Second half ramp.
Young Lee: Pretty big number even though you have a lot of <unk>.
Young Lee: Catalyst new initiatives come into play.
Young Lee: But I think you did replace half of your underperforming reps.
Young Lee: Who are sort of the new reps that you hired our experience are there.
Young Lee: Your level of confidence.
Young Lee: Those guys can get up and run into them.
Young Lee: Half.
Young Lee: Yes, I'd be happy to take that so.
Young Lee: Earlier in the year in 2024, we started seeing a pretty significant separation in performance across territories, and and we start to see what good looks like and and.
Young Lee: And there were some territories that were definitely falling behind we took an interim step which was around combining leadership that we had some regional leaders and we found everyone under one leader probably would make more sense, we still observe that very uneven performance.
Young Lee: And we decided to take action at the end of the year. The reason for that was that we wanted to make sure that we had the new group of people ready to go when we're introducing the new upgrades in the image quality the software and the technology. So one of the things we did was.
Young Lee: Hire them with a number of skills that we thought were really important around understanding how to build new markets are also some degree of understanding of the brain space. So they don't all come from the same place they came from different.
Successful sales for five months I have to say that all of them I think were employed before so we went looking for people that were really just jumping on the first thing that they had but what I'm proudest of is the fact that we put them through a very rigorous training program at the crack of the year when they joined us.
Young Lee: I've been incredibly impressed with what we have seen I have seen some of that firsthand how they have evolved through their training. They shadow some of the experienced people we have on implementation leader on our commercial leader also spending a lot of time with them. They have been at other People's accounts, some more experienced people happy with.
Young Lee: At their accounts and we think that we have the teams that will be ready to really do the good things that we're expecting when we have also the the new release this year and the image quality that is going to be a highly differentiated from anything we've had before.
Young Lee: Alright, Thank you very much.
Young Lee: Thank you.
Speaker Change: That concludes the question and answer session I would like to turn the call back over to Maria <unk> for closing remarks.
Speaker Change: Thank you all for joining us on today's call I believe we are in a transformative year for hyperfine, we will keep everyone updated on the multiple growth catalyst for our business as we progress through 2025. Thank you very much.
Speaker Change: Ladies and gentlemen. This concludes today's conference call you may now disconnect.