Q1 2025 Nano-X Imaging Ltd Earnings Call
Operator: Good day and thank you for standing by.
Good day, and thank you for standing by welcome to the nano Q ex.
Operator: Welcome to the Nano Q1 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode.
Q1, 2025 earnings conference call at this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automated message advising that your hand is raised to withdraw your question. Please press star one.
Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded.
Speaker Change: One again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Mike Cavanaugh of Investor Relations. Please go ahead.
Mike Cavanaugh: I would now like to hand the conference over to your speaker today, Mike Cavanaugh of Investor Relations. Please go ahead. Good morning and thank you for joining us today. Earlier today, Nano-X Imaging Ltd. released financial results for the quarter ended March 31, 2025. The release is currently available on the Investors section of the company's website.
Mike Cavanaugh: Good morning, and thank you for joining us today.
Mike Cavanaugh: Earlier today, and then ox imaging limited released financial results for the quarter ended March 31 2025.
Mike Cavanaugh: The release is currently available on the investors section of the company's website.
Mike Cavanaugh: With me today are Erez Meltzer, Chief Executive Officer and Acting Chairman, and Ran Daniel, Chief Financial Officer.
Mike Cavanaugh: With me today are Erez, Meltzer, Chief Executive Officer, and acting Chairman and Ron Daniel Chief Financial Officer.
Mike Cavanaugh: Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements regarding the company's financial results, research and development, manufacturing and commercialization activities. Regulatory Process and Clinical Activities, and other matters. These statements are subject to risks, uncertainties, and assumptions that are based on management's current expectations as of today and may not be updated in the future. Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. Factors that may cause such a difference include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission.
Mike Cavanaugh: Before we get started I would like to remind everyone that management will be making statements. During this call that include forward looking statements regarding the company's financial results.
Mike Cavanaugh: Search and development manufacturing.
Mike Cavanaugh: Manufacturing commercialization activities.
Mike Cavanaugh: Regulatory process and clinical activities and other matters.
Mike Cavanaugh: These statements are subject to risks uncertainties and assumptions that are based on management's current expectations as of today and may not be updated in the future.
Mike Cavanaugh: Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date.
Mike Cavanaugh: Factors that may cause such a difference include but are not limited to those described in the company's filings with the Securities and Exchange Commission.
Mike Cavanaugh: We will also refer to certain non-GAAP financial measures to provide additional information to investors. A reconciliation of the non-GAAP-to-GAAP measures is provided with our press release, with the primary differences being non-GAAP net loss attributable to ordinary shares. non-GAAP cost of revenue, non-GAAP gross profit, non-GAAP gross profit margin. gap research and development expenses. Non-Gap Sales and Marketing Expenses. non-GAAP general administrative expenses and non-GAAP gross loss per share.
Mike Cavanaugh: We will also refer to certain non-GAAP financial measures to provide additional information to investors.
Mike Cavanaugh: A reconciliation of the non-GAAP to GAAP measures is provided with our press release with the primary differences being non-GAAP net loss attributable to ordinary shares.
Mike Cavanaugh: non-GAAP cost of revenue.
Mike Cavanaugh: non-GAAP gross profit.
Mike Cavanaugh: non-GAAP gross profit margin non-GAAP research and development expenses.
Mike Cavanaugh: non-GAAP sales and marketing expenses, non-GAAP general administrative expenses and non-GAAP gross loss per share.
Erez Meltzer: With that, I'd now like to turn the call over to Erez Meltzer. Good morning, everyone. Thank you for taking the time to review Nano-X Imaging's Q1 2025 financial results with us today. I'm pleased to report that we have made progress in our mission to improve medical imaging and enhance patient outcomes. At Nano-X, we pride ourselves on our comprehensive end-to-end solution that supports preventive health care and expands access to imaging services.
Mike Cavanaugh: With that I'd now like to turn the call over to Aaron's Meltzer.
Aaron's Meltzer: Good morning, everyone. Thank you for taking the time to review non ops imaging Q1, 2025 financial results with us today.
Speaker Change: I'm pleased to report that we have made progress in our mission to improve medical imaging and enhanced patient outcomes.
Aaron's Meltzer: Economics, we pride ourselves on our comprehensive end to end solution that supports preventive health care and expand access to imaging services.
Erez Meltzer: With that goal in mind, we made two strategic acquisitions in 2021. USA Rod, our teleradiology business, and Zebra Medical Imaging, which is now Nano-X AI, to build out our end-to-end solution around the core Nano-X Arc technology. Integrating AI-Powered Imaging Analysis. and a global teleradiology solution with our groundbreaking Nano-XR technology. takes us one step closer to creating a global connected medical imaging solution with the potential meaningfully expand the delivery of health care. These acquisitions have proven to be good strategic decisions. Since the acquisitions less than four years ago, we have doubled the revenues generated by U.S.
Aaron's Meltzer: With that goal in mind, we made two strategic acquisitions in 2021.
Aaron's Meltzer: USA Rod our Teleradiology business.
Aaron's Meltzer: And separate medical imaging, which is now not oxeiai to build out our end to end solution around the core networks our technology.
Aaron's Meltzer: Integrating AI powered imaging analysis, and the global Teleradiology solution with our groundbreaking <unk> technology.
Aaron's Meltzer: Takes us one step closer to creating a global connected medical imaging solution with the potential meaningfully expand the delivery of health care.
Aaron's Meltzer: These acquisitions have proven to be good strategic decisions.
Aaron's Meltzer: Since the acquisition less than four years ago, we have doubled the revenues generated by U S. Iraq and at the same time Nellix AI is progress from a pre revenue business to one that is now generating growing revenue.
Erez Meltzer: ARAD, and at the same time, Nano-X AI has progressed from a pre-revenue business to one that is now generating growing revenue. To highlight another benefit of our end-to-end solution, most of our Nano-X R customers also use our teleradiology services. And this is not only provides more effective imaging and diagnosis for providers and patients, but also increases revenues per customer and creates value for our shareholders. Nanox AI continues to be a key part of our strategy. driving forward our commitment to integrating artificial intelligence into medical imaging. by leveraging advanced AI capability. We aim to streamline workflows.
Aaron's Meltzer: To highlight another benefit of our end to end solution most of our networks. Our customers also use our teleradiology services and this is not only provides more effective imaging and diagnosis for providers and patients, but also increase the revenues per customer.
Aaron's Meltzer: And creates value for our shareholders.
Aaron's Meltzer: <unk> continues to be a key part of our strategy.
Aaron's Meltzer: Driving forward, our commitment to integrating artificial intelligence into medical imaging.
Aaron's Meltzer: By leveraging advanced AI capabilities.
Aaron's Meltzer: We aim to streamline workflows.
Erez Meltzer: support clinical decision making and improve efficiency across the imaging ecosystem. Our innovative technologies, including Nano-X Arc and our AI solution. are gaining tructions in the market.
Aaron's Meltzer: Support clinical decision, making and improve efficiency across the imaging ecosystem.
Aaron's Meltzer: Our innovative technologies, including <unk> arc, and our AI solutions are gaining traction in the market and we are excited about the future of our company.
Erez Meltzer: and we are excited about the future of our company.
Erez Meltzer: Let's review some operational highlights. Beginning with our commercial efforts, we are employing a multi-per-node strategy. to generate a robust sales pipeline. This is led not only by our direct sales force in the U.S. and in the EU. which calls on imaging providers directly, but also by forming business collaborations, which leverage the marketing. Sturtees of our Medical Imaging Company. We've also begun to engage with distributors worldwide, especially in the EU, which we believe will be an efficient way of potentially penetrating a market comprised of 27 different countries. complementing our efforts to commercialize Nano-X art. We are benefiting from a steady revenue growth driven by our US-Iraq teleradiology business.
Aaron's Meltzer: Let's review some operational highlights.
Aaron's Meltzer: Beginning with our commercial efforts, we are employing a multi per node strategy.
Aaron's Meltzer: To generate a robust sales pipeline.
Aaron's Meltzer: This is led not only by our direct sales force in the U S and EU.
Aaron's Meltzer: <unk>.
Aaron's Meltzer: Which calls on imaging providers directly.
Aaron's Meltzer: But also by forming business collaborations, which leverage the marketing expertise of our medical imaging companies.
Aaron's Meltzer: We've also begun to engage with distributors worldwide, especially in the EU, which we believe will be an efficient way of potentially penetrating a market comprised of 27 different countries.
Aaron's Meltzer: Supplementing our efforts to commercialize Nymex heart.
Aaron's Meltzer: We are benefiting from a steady revenue growth driven by our U S Teleradiology business.
Erez Meltzer: and growing revenues from the sales of AI solutions. We are also supporting these marketing initiatives. with Marketing Campaigns, and I'll touch. on these aspects of our commercial plan today. And we've seen an increase in the number of scans performed by our systems, both in the U.S. and worldwide. And we're beginning to see initial revenue streams for Nano-X R customers reflecting. that we are gaining tractions with our Nano-X Arc systems and customers can see the value in using the system. Our sales pipeline has doubled since January 2025. And our sales team, as of today's call, is handling over 1,000 leads.
Aaron's Meltzer: And growing revenues from the sales of AI solutions.
Aaron's Meltzer: We are also supporting these marketing initiatives.
Aaron's Meltzer: With marketing campaigns and.
Aaron's Meltzer: And I'll touch.
Aaron's Meltzer: These aspects of our commercial plan to date.
Aaron's Meltzer: And we've seen an increase in the number of scans performed.
Aaron's Meltzer: Our systems, both in the U S and worldwide.
Aaron's Meltzer: And we're beginning to see initial revenue streams for our customers.
Aaron's Meltzer: <unk>.
Aaron's Meltzer: That we are gaining traction with our <unk> arc system and customers can see the value in using the system.
Aaron's Meltzer: Our sales pipeline has doubled since January 2025.
Aaron's Meltzer: And our sales team as of today's call is handling over 1000 leads.
Erez Meltzer: Our growing pipeline primarily consists of standalone multi-specialty small and medium-sized health clinics, not only from the U.S., but also from countries around the world, such as Peru, France, Azerbaijan, Hungary, and Poland, and various countries in the EU. Since its commercial deployment at the beginning of this year, there are now over 60 units that are in various stages of implementation and execution of the deployment plan for commercial, demo, and clinical use. For the operational units, we are achieving an average target of seven scans per day.
Aaron's Meltzer: Our growing pipeline, primarily consist of standalone multi specialty small and medium sized health clinics not only from the U S. But also from countries around the world such as Peru, France is our big John I'm, very and Poland and various countries in the EU.
Aaron's Meltzer: Since its commercial deployment at the beginning of this year. There are now over 60 units that are in various stages of implementation and execution of the deployment plans for a commercial demo and clinical use.
Aaron's Meltzer: For the operational units, we are achieving an average target of seven <unk> per day.
Erez Meltzer: As we grow, we intend to share more information as our business evolves. And with a promise previously made to provide more details, we will do so today. We are targeting over 100 Arc systems in various stages of deployments by the end of 2025 worldwide.
Aaron's Meltzer: As we grow we intend to share more information as our business evolves.
Aaron's Meltzer: And with a promised previously made to provide more details we will do so to date.
Aaron's Meltzer: We are targeting over 100 Rx systems in various stages of deployment by the end of 2025 worldwide.
Erez Meltzer: We are happy to now be in a position to share guidance on our commercial progress. But as we are all aware, recent market uncertainties could make our guidance subject to change as the year progresses. Introducing new and innovative technology in the U.S. market is always challenging. However, we are encouraged by the growing base of early adopters that have ordered and are using the Nano-X Arc. Furthermore, the nature of our sales process is clinical, meaning that we dedicated time and resources to our prospective customers to educate them on the benefits of the Nano-X Arc, to their practices, how to use it, and why they should use it, all of which takes time.
Aaron's Meltzer: We are happy to now be in a position to share guidance on our commercial progress.
Aaron's Meltzer: But as we are all aware recent market uncertainties could make our guidance subject to change as the year progresses.
Aaron's Meltzer: Introducing new and innovative technology in the U S market is always challenging. However, we are encouraged by the growing base of early adopters that have ordered and are using dynamics are Furthermore, the nature of our sales process is clinical meaning that we did.
Aaron's Meltzer: Dedicated time and resources to our prospective customers to educate them on the benefits of dynamics art to their practices how to use it.
Aaron's Meltzer: And why they should use it all of which takes time.
Erez Meltzer: The U.S. deployment of NanoX Arc is progressing, and we are preparing to ship the first systems to Puerto Rico. From the beginning of the year, we continue to strengthen our sales team with representatives now covering the west, east, and mid-coast regions. Additionally, we continue to expand our clinical team. by structuring a continuous professional group along with continual enhancement to our operational team and an efficient interface with our local services partners. As we continue our accelerated U.S. commercializations, we provide all the necessary resources to our sales and services personnel in the U.S. to support our expanding client base.
Aaron's Meltzer: Okay.
Aaron's Meltzer: The U S deployment of Amdocs arc is progressing and we are preparing to ship the first systems to Puerto Rico.
Aaron's Meltzer: From the beginning of the year, we continue to strengthen our sales team.
Aaron's Meltzer: With representatives now covering the west East and mid coast regions.
Aaron's Meltzer: Additionally, we continue to expand our clinical team.
Aaron's Meltzer: By structuring a continuous professional group along with continued enhancement to our operational team and an efficient interface with our local services partner.
Aaron's Meltzer: As we continue our accelerated viewers commercialization, we provide all the necessary resources to our sales and services personnel in the U S to support our expanding client base.
Erez Meltzer: along with various channel partners, our team on the ground. will be critical to our accelerating rollout. And we will steadily, but clearly, continue to add to this. We are making hiring decisions wisely with 22 U.S. personnel on the ground.
Aaron's Meltzer: Along with various channel partners our team on the ground.
Aaron's Meltzer: We will be critical to our accelerating grow out and we will steadily but clearly continued to add to this team.
Aaron's Meltzer: We are making hiring decisions wisely with 22 U S personnel on the ground. We are moving ahead towards our target of 30 to 40 sales service marketing and support personnel.
Erez Meltzer: We are moving ahead towards our target of 30 to 40 sales, service, marketing, and support personnel in place by the end of 2025, depending on needs and progress.
Aaron's Meltzer: In place by the end of 2025, depending on needs in progress.
Erez Meltzer: Now let's move on to some specific U.S. market commercial accomplishments and updates. We have made notable progress in forming solid distributor partnerships while continuing to pursue commercialization options. Beyond the engagement we announced last quarter with Advanced Southern Imaging, known as ASI, We have expended a third-party service and support agreement with Swiss Re in Bridgewater, New Jersey. Sri Sway is one of the foremost experts in digital radiography from sales, through installation, set-up training, and service. This relationship is off to a good start, and in addition to the support and services agreement, we enter into a non-exclusive distribution agreement for the sales of our system and services to government, official public health authorities, and medical institutions in the Furthermore, we are in negotiation with additional leading national distributors.
Aaron's Meltzer: Now, let's move on to some specific U S market commercial accomplishments and updates.
Aaron's Meltzer: We have made notable progress in informing solid distributor partnerships will continue to pursue commercialization options.
Aaron's Meltzer: Beyond the engagement, we announced last quarter with advanced southern imaging known as ASI.
Aaron's Meltzer: We have expanded the third party service and support agreement with Swiss re in Bridgewater, New Jersey.
Aaron's Meltzer: <unk> is one of the foremost experts in digital radiography from sales through installation setup training and service.
Aaron's Meltzer: This relationship is off to a good start and in addition to the support and services agreement, we enter into a non exclusive distribution agreement for the sales of our system and services to government officials public health authorities and medical institutions in the U S.
Aaron's Meltzer: Furthermore, we are in negotiation with additional leading national distributors.
Erez Meltzer: And finally, we are in the finalization stages of a new project around workers' compensation segment. With over 100 million workers estimated to be covered on the workers' compensation in the U.S., this business segment presents a large potential opportunity for Nano-X, helping to promote the recovery of injured workers by providing imaging services to individuals and insurers. The project is structured to build a network of medical imaging centers. starting with two to three proof-of-concept sites with plans to expand from there. Should the POC be completed successfully, the collaboration will kick off its commercial binding level. The engagement relies on attractive terms based on contractual rates of 120.
Aaron's Meltzer: And finally, we are in the Finalization stages of a new project around workers' compensation segments.
Aaron's Meltzer: With over 100 million workers estimated.
Aaron's Meltzer: To be covered under workers' compensation in the U S. This business segment presents a large potential opportunity for non ops, helping to promote the recovery of injured workers Bard, providing imaging services to individuals and insurers.
Aaron's Meltzer: The project is structured to build a network of medical imaging centers.
Aaron's Meltzer: Starting with two to three proof of concept sites with plans to expand from there.
Aaron's Meltzer: With the POC be completed successfully the collaboration will kick off its commercial binding level.
Aaron's Meltzer: The engagement relies on attractive terms.
Aaron's Meltzer: On contractual rates of 120.
Erez Meltzer: to 180 per patient. If achieved, this potential line of business will be part of the Nano-X Services Division, which will oversee the program's development.
Aaron's Meltzer: Two 180 per patient.
Aaron's Meltzer: If achieved this potential line of business will be part of dynamics services Division, which will oversee the program's development.
Erez Meltzer: Turning to our efforts in markets outside of the U.S., we've also made strides in deploying our Nano-X Arc system since our last update call. Our efforts in the EU have been assisted by the recent key milestones of securing the CMR for the Nano-X Arc in February. As of today's call, we are ready to ship NanoSAR and make our first installations in Europe subject to local approvals by country with our distributors. We are working on deploying systems to Greece and Romania, with demo units expected to be shipped to those countries soon. And we are also preparing for demo units to be shipped to Mexico.
Aaron's Meltzer: Turning to our efforts in markets outside of the U S. We have also made strides in deploying our <unk> arc system since our last update call.
Aaron's Meltzer: Our efforts in the EU will have been at.
Aaron's Meltzer: Assisted by the recent key milestones of securing the CE Mark for the <unk> arc in February.
Aaron's Meltzer: As of today's call, we are ready to ship.
Aaron's Meltzer: Arc.
Aaron's Meltzer: And make our first installations in Europe subject to local approvals by country with our distributors.
Aaron's Meltzer: We are working on deploying systems to Greece, and Romania with demo units expected to be shipped to those countries soon.
Aaron's Meltzer: And we are also preparing for a demo units to be shipped to Mexico.
Erez Meltzer: These are necessary steps to create a commercial presence that we can build from in which of these countries, and we will work hard to maintain this momentum.
Aaron's Meltzer: These are necessary step to create a commercial presence that we can build from in which of these countries and we will work hard to maintain this momentum.
Erez Meltzer: Turning to our AI solutions business, we are seeing tremendous momentum. Trial data has shown that our AI solutions provide strong and proven data and customer feedback has been overwhelming. We are seeing strong interest in our solutions as they grow and the sales pipeline expands. I believe that our AI business is also getting an added boost from the secular growth of AI in the broader economy, as well as the excitement surrounding AI in general.
Aaron's Meltzer: Turning to our AI solutions business, we are seeing tremendous momentum.
Aaron's Meltzer: Trial data has shown that our AI solutions provide strong and proven data and customer feedback has been overwhelming.
Aaron's Meltzer: We are seeing strong interest in our solutions as they grow and the sales pipeline expense.
Aaron's Meltzer: I believe that our AI business is also getting an added boost from the secular growth of AI in the broader economy as well as the excitement surrounding AI in general.
Erez Meltzer: On our last call, we announced an agreement with Ezra AI, a health care artificial intelligence company revolutionizing early detection through full-body MRIs and low-dose chest CT screens. This agreement is moving ahead and we expect to expand the use of our AI solutions in dozens of Ezra locations throughout the U.S. Continue with our commercial efforts, we have engaged with new AI marketplaces and are currently in negotiation with several companies. These collaborations will help us expand on a global scale, especially in the US, providing a steady stream of new client referrals. We also have three pilot programs running with similar AI platform companies, and we will provide more details once these pilots are completed.
Aaron's Meltzer: On our last call, we announced an agreement with <unk> AI.
Aaron's Meltzer: Health care artificial intelligence company revolutionizing early detection through a full body MRI and low dose <unk> strengths.
Aaron's Meltzer: This agreement is moving ahead, and we expect to expand the use of our AI solutions in dozens of <unk> locations throughout the U S.
Aaron's Meltzer: Continue with our commercial efforts, we have engaged with new AI marketplaces and are currently in negotiation with several companies. These collaborations will help us expand on a global scale, especially in the U S providing a steady stream of new client referrals.
Aaron's Meltzer: We also have three pilot programs running with similar II plus for our companies and we will provide more details. Once these pilots are completed.
Erez Meltzer: As previously mentioned, we continue to cooperate with various prestigious academic centers that are using our AI solutions, including Oxford University Hospitals, NHS Foundation Trust in the UK, which has published trial data on the health host bone solution, and following that secured a three-year contract for health hosts. We are also working with Duke University Hospital in North Carolina. UVA Health in Virginia. UW Health in Wisconsin. on various AI-related projects.
Aaron's Meltzer: As previously mentioned, we continue to cooperate with various prestigious academic centers that are using our AI solutions, including Oxford University hospitals.
Aaron's Meltzer: Amit Chase Foundation Trust in the UK, which is published trial data on the health outbound solution and following that secured a three year contract for <unk>.
Aaron's Meltzer: We are also working with Duke University Hospital in North Carolina.
Aaron's Meltzer: <unk> health in Virginia.
Aaron's Meltzer: <unk> W housing, Wisconsin.
Aaron's Meltzer: On various AI related projects.
Erez Meltzer: With respect to regulatory, we have also had some notable regulatory success recently. And in April, we were proud to announce that we have received 510K clearance from the FDA for the Nano-X ArcX, our updated multi-source digital tomosynthesis system.
Aaron's Meltzer: With respect to regulatory we have also had some notable regulatory success recently and in April we were proud to announce that we have received five 10-K clearance from the FDA for the <unk> arc ex our updated multi source that you sell tomo synthesis system.
Aaron's Meltzer: <unk>.
Erez Meltzer: Now for an update on our clinical work, which is always going on behind the scenes, and the reason is simple. Clinical validation is one of the key drivers of our future growth. It is imperative to generate fresh clinical data to support the use of a medical device. especially when introducing new technology and to encourage a change to the standard of care. Recognizing this reality, we continue to expand our efforts to implement our clinical trials. with the goal of producing a robust database supporting the use of the Nano-X Arc. Regarding our ongoing multi-site trial, we are working on clinical sites collaboration in two new sites in Europe.
Aaron's Meltzer: Now for an update on our clinical work, which is always going go on behind the scenes and the reason is simple.
Aaron's Meltzer: Clinical validation is one of the key drivers of our future growth.
Aaron's Meltzer: It is imperative to generate fresh clinical data to support the use of a medical device, especially when introducing new technology and to encourage a change to the standard of care.
Aaron's Meltzer: Recognizing this reality, we continue to expand our efforts to implement our clinical trials.
Aaron's Meltzer: With the goal of producing a robust database supporting the use of the <unk> arc.
Aaron's Meltzer: Regarding our ongoing multi site trial, we are working on our clinical sites collaboration in two new sites in Europe.
Erez Meltzer: a leading teaching hospital, as well as a large private hospital. We are excited to welcome these two prominent health care providers into our trial. I can also announce that a Nano-X ArcX system was installed successfully in the Shamir Hospital to be used for a multi-site trial. It is now being used to actively scan patients.
Aaron's Meltzer: A leading teaching hospital as well as the large private hospital. We are excited to welcome. These two prominent healthcare providers into our trial.
Aaron's Meltzer: I can also announce the economics are X system was installed successfully and the Shamir hospital to be used for a multi site trial. It is now being used to actively scan patients.
Erez Meltzer: Finally, USA Rot, our color radiology subsidiary, continues to provide valuable outsourced radiology services to healthcare imaging centers, and most of our Nano-XR customers also utilize this service. We have recently signed an agreement with a large U.S.-based company to provide tele-ideology services for their self-insured. Program. which will further strengthen our position in the market. Our second opinion services is a consumer-oriented platform provided by U.S. Iran. which connects patients with radiologists and other. Sub-specialty Physicians for additional consultation on their medical diagnosis. Second Opinion has integrated all three of Nano-X's AI, FDA-cleared AI solutions, and is now generating revenues and interpreting approximately 20 scans per month.
Aaron's Meltzer: Finally, USA Rod our color radiology subsidiary continues to provide valuable outsourced radiology services to healthcare imaging centers and most of our networks. Our customers also utilize this service.
Aaron's Meltzer: We have recently signed an agreement with a large U S based company to provide color audiology services for their self insurance program.
Aaron's Meltzer: Which will further strengthen our position in the market.
Aaron's Meltzer: Our second opinion services is a consumer oriented platform provided by U S. Iraq.
Aaron's Meltzer: Which connect patients with radiologists and other.
Aaron's Meltzer: Specialty physicians for additional consultation on their medical diagnosis second opinion has integrated all three of Nellix AI FDA cleared AI solutions and is now generating revenues and interpreting approximately <unk> <unk> per month.
Erez Meltzer: We are very active with the ROEM partners, particularly to ensure adequate supply of components for the ARC, but also with the intention of finding additional applications for our Nano-X proprietary technology. One such active engagement is with the U.S. government agency Oak Ridge National Laboratories to develop novel and compact mobile X-ray technology. We began our partnerships in Q2 of last year. and have progress to developing and building prototypes. due to be completed this summer. More good news is from Varix, who recently delivered to Israel several tubes for our next-generation ARC-X. They also passed incoming inspection. and are now being assembled into arcs to complete system-level integration.
Aaron's Meltzer: We are very active with our OEM partners, particularly to ensure adequate supply of components for the art.
Aaron's Meltzer: So with the intention of finding additional applications for our <unk> proprietary technology.
Aaron's Meltzer: One such active engagement with a U S government agency Oakridge National laboratories to develop novel and compact mobile X-ray technologies.
Aaron's Meltzer: We began our partnerships in Q2 of last year.
Aaron's Meltzer: And have progress to developing and building prototypes.
Aaron's Meltzer: Due to be completed this summer.
Aaron's Meltzer: More good news is from Barrick's, who recently delivered <unk> wrote several tubes.
Aaron's Meltzer: Our next generation <unk>.
Aaron's Meltzer: We also passed incoming expect inspections.
Aaron's Meltzer: And are now being assembled into arcs to complete system level integration.
Erez Meltzer: Additionally, we have technical staff, Ed Varek. This month, for validation and training on multisource demonstration units, we are producing for future applications development.
Aaron's Meltzer: Additionally, we have technical staff <unk>.
Aaron's Meltzer: This month for validation and training on multi source demonstration units, we are producing for future applications development.
Erez Meltzer: The Nano-X team is excited to attend the RSNA 2025. which is the annual meeting of the Radiological Society of North America to be held in Chicago from November 30. through December 4th.
Speaker Change: Dynamics team is excited to attend the <unk> 2025.
Speaker Change: Which is the annual meeting of logical society of North America to be held in Chicago from November 30.
Speaker Change: Through December 4th.
Erez Meltzer: We are especially excited for RSNA 2025 as we will be presenting the full Nano-X end-to-end solution at this high-profile industry event for the first time. Our booth will feature the new Nanox ArcX cold tomography system and ArcAI, teleradiology services, and AI solutions. We hope to see some of you there. And we welcome you to stop by the Nano-X booth to meet some members of our team and see the Nano-X solutions for yourself.
Speaker Change: We are especially excited for RSA 2025, as we will be presenting the full amount of end to end solution at this high profile industry event for the first time.
Speaker Change: Our booth will feature the new Nox arc ex coal tomo, Gruffy system, and RPI Teleradiology services and AI solutions.
Speaker Change: We hope to see some of you there and we welcome you to stop by the <unk> Booth to meet some members of our team and see dynamics solutions for yourself.
Ran Daniel: With that, I will close my prepared remarks and turn the call over to Ran Daniel to review our financial... Ran, over to you. Thank you, Erez. We reported a gap net loss for the first quarter of 2025 of $13.2 million, which is the reported period, compared with a net loss of $12.2 million in the first quarter of 2024, which is the comparable period. The increase of $1.0 million was largely due to an increase of $1.1 million in gross. Revenue for the reported period was $2.8 million and gross was $3.0 million on a GAAP basis. Revenue for the comparable period was $2.6 million and gross loss was $2.1 million on a GAFA basis.
Speaker Change: With that I will close my prepared remarks, and turn the call over to ramp Daniel to review our financials.
Speaker Change: Brian over to you.
Brian: Thank you, Eric we reported a GAAP net loss for the first quarter of 2025 of $13.2 million.
Speaker Change: Which is the reported period.
Speaker Change: Paired with a net loss of $12 2 million in the first quarter of 2020 for the comparable period.
Speaker Change: The increase of 1.0 million the loss was largely due to an increase of $1 1 million daus in <unk>.
Speaker Change: Workflow rep.
Speaker Change: Revenue for the reported period was $2 $8 million and workforce.
Speaker Change: $3.0 million on a GAAP basis.
Speaker Change: Revenue for the comparable period one two.
Speaker Change: Two 6 million and gross loss was $2 $1 million on a GAAP or <unk>.
Ran Daniel: Non-GAAP gross loss for the reported period was $0.4 million, as compared to a gross profit of $0.6 million in the comparable period, which represents a gross loss margin of approximately 15% on a non-GAAP basis for the reported period, as compared to a gross profit margin of 22% on a non-GAAP basis in the comparable period. Revenue from the tele-radiology services for the reported period was $2.6 million with a gross profit of $0.4 million on a gas basis, as compared to revenue of $2.4 million with a gross profit of $0.3 million on a gas basis in the comparable period, which represents a gross profit margin of approximately 17% on a gas basis for the reported period, as compared to 14% on a gas basis in the comparable period.
Speaker Change: non-GAAP gross loss for the reported period was <unk> $4 million as compared to a gross profit of <unk> $6 million in the comparable period, which represents a gross margin of approximately 15% on a non-GAAP basis for the reported period as compared to it.
Speaker Change: Gross profit margin of 22% on a non-GAAP basis in the comparable period.
Speaker Change: Revenue from the Teleradiology services for the reported period was $2 6 million.
Speaker Change: With a gross profit of <unk>.
Speaker Change: $4 million, the mcgough of basically as compared to revenue of $2 $4 million with the gross profit.
Speaker Change: $3 billion on a GAAP basis.
Speaker Change: In the comparable period, which represents a gross profit margin of approximately 17% on a GAAP basis.
Speaker Change: Sure.
Speaker Change: As compared to 14% on a GAAP basis in the comparable period.
Ran Daniel: Non-GAAP gross profit of the company's telebiology services for the reported period was $1.0 million as compared to $0.9 million in the comparable period, which represents a gross profit margin of approximately 39% on a non-GAAP basis for the reported period as compared to 37% on a non-GAAP basis in the comparable period. The increase in the company's revenue and gross profit margin from the telebiology services was mainly attributable to customer retention, increased rates, and increased volume of the company's reading services during the weekdays. During the reported period, the company generated revenue through the sale and deployment of its imaging systems and OEM services, which amounted to $33,000 for the reported period, with a gross loss of $1.2 billion.
Speaker Change: non-GAAP gross profit of the company kind of on the outlook for the reported period.
Speaker Change: 1.0 million.
Speaker Change: As compared to <unk> $9 million in the comparable period, which represent the gross profit margins of approximately 39% on a non-GAAP basis.
Speaker Change: Reported period as compared to 36, 37% on a non-GAAP basis in the comparable period.
Speaker Change: The increase in the company's revenue and gross profit margin from that kind of archaeology.
Speaker Change: Mainly attributable to customer retention increased rate and volume of the companies, we think services during the week.
Speaker Change: During the reported periods the company generated revenue through the sale and deployment with imaging system, and OEM services, which amounted to $33000 for the reported three years with a gross loss of one point.
Ran Daniel: six million dollars on a gap basis and 1.5 million dollars on non-gap basis. compared to a revenue of $47 million. thousand dollars with a gross loss of 0.4 million dollars on a gap basis and 0.3 million dollars on a non-gap basis in the comparable period. The company's revenue from its AI solutions for the reported period was 0.2 million dollars with a gross loss of 1.9 million dollars on a gap basis compared to a revenue of 0.1 million dollars with a gross loss of 2.0 million dollars in comparable period. Non-gap gross loss of the company's AI solutions for the reported period was 0.1 million dollars compared to a gross profit of 29,000 dollars in the comparable period.
Speaker Change: $6 million on a GAAP basis, and $1 5 million adult a non-GAAP basis.
Speaker Change: Impaired to revenue of 47.
Speaker Change: $1000 with the growth of <unk> $4 million on a GAAP basis, and <unk> 3 million and non-GAAP basis in the comparable period.
Speaker Change: Company's revenue from its AI solutions for the reported period was <unk> $2 million with a gross loss of one 9 million.
Speaker Change: On a GAAP basis compared to a revenue of <unk> $1 million with a gross local 2.0 million daus in the comparable period.
Speaker Change: non-GAAP gross loss.
Speaker Change: Of the company's AI solutions for the reported period.
Speaker Change: $1 million compared to a gross profit of $29000 in the comparable period.
Ran Daniel: Research and development expenses net for the reported period were $5.0 million, compared to $5.2 million in the comparable period, reflecting a decrease of $0.2 million. The decrease was mainly due to a decrease of $0.2 million in share-based compensation and a decrease of $0.8 million in expenses related to our research and development activities, which were offset by a decrease of $0.8 million in grants received due to the completion of the NHSN. X project and the commencement of its commercial phase. Sales and marketing expenses for the reported period were $0.9 million compared to $0.8 million in the comparable period.
Speaker Change: Research and development expenses net for the reported period were 5.0 million compared to five $2 million in the comparable period, reflecting the decrease.
Speaker Change: Zero point $2 million.
Speaker Change: The decrease was mainly due to a decrease of zero point $2 million and share based compensation and a decrease of <unk> $8 million in expenses related to our research and development activities, which were offset by a decrease of <unk> $8 million in grants received due to the completion of the NIH.
Speaker Change: Ex <unk> and the commencement of commercial paper.
Speaker Change: Sales and marketing expenses for the reported period.
Speaker Change: Periods were <unk> 9 million compared to zero point $8 million in the comparable period.
Ran Daniel: General and administrative expenses for the reported period were $5.1 million, compared to $5.0 million in the comparable period. The increase of $0.1 million was mainly due to an increase of $0.2 million in salaries and wages, an increase of $0.2 million in our IT expenses, and $0.2 million in our recruiting expenses to our commercialization efforts in the U.S. market. The increase was offset by a decrease of $0.5 million in our legal expenses and a decrease of $0.2 million in our D&O insurance expenses.
Speaker Change: General and administrative expenses for the reported period.
Speaker Change: $5 1 million compared to $5 million in the comparable period. The increase of zero point $1 million was mainly due to an increase of zero point $2 million in salaries and wages and increase of <unk> $2 million in our <unk> expenses and zero point $2 million in our recruiting.
Speaker Change: Expenses to our commercialization efforts in the U S market.
Speaker Change: Greece was offset by a decrease of <unk> $5 million and our legal expenses and adequate.
Speaker Change: Zero point $2 million in our D&O insurance expenses.
Ran Daniel: Turning to our balance sheet, as of March 31st, 2025, we had cash, cash equivalents, restricted deposits, and marketable securities of approximately $72.9 million. And we had $3.1 million in short-term loan from a bank. We ended the quarter with a property and equipment net of $45.3 million. As of March 31, 2025 and December 31, 2024, we had approximately 63.8 million shares outstanding.
Speaker Change: Turning to our balance sheet as of March 31, 2025, we had cash cash equivalents, which victor deposits and marketable securities of approximately $72 9 million.
Speaker Change: And we had three 1 million in short term loan from our bank. We ended the quarter with our property and equipment net of $45 $3 million.
Speaker Change: As of March 31, 2025 and December 31.
Speaker Change: 24, we had approximately 63 8 million shares outstanding.
Erez Meltzer: With that, I will hand the call back over to Erez. Thank you, Ron.
Eric: With that I will hand, the call back over to Eric.
Erez Meltzer: To close our call, I would like to extend our appreciation for your continued support of Nano-X. We understand that our investors are key to the journey that Nano-X is undertaking to transform medical imaging. Like many companies over the past several years, we have experienced challenges. But our belief in the Nano-X vision, as well as the support of our investors, encourage us to keep pushing ahead. We are making steady progress commercializing the Nano-X Arc and Nano-X AI, utilizing multiple different initiatives. and our teleradiology business continue to provide a revenue base to help fund our continued growth.
Eric: Thank you Ron to close our call I would like to extend our appreciation for your continued support of models.
Speaker Change: We understand that our investors are key to the journey that nellix is undertaking to transform medical imaging.
Speaker Change: Like many companies over the past several years, we have experienced challenges.
Speaker Change: But our belief in dynamics vision as well as the support of our investors to encourage us to keep pushing ahead.
Speaker Change: We are making steady progress commercializing dynamics are.
Speaker Change: Alex AI utilizing multiple different initiatives and our Teleradiology business continued to provide a revenue base to help fund our continued growth.
Erez Meltzer: We are also doing much work behind the scenes to support our commercialization through clinical data generation, security more regulatory clearances, and marketing campaigns designed to raise awareness of the Nano-X end-to-end. We are advancing our clinical trials with promising initial results. We continue to increase the number of our commercial collaborations and we are working with our growing customer base to help them integrate the Nano-X Arc into their practice.
Speaker Change: We are also doing much work behind the scenes to support our commercialization through clinical data generation, securing king more regulatory clearances and marketing campaigns designed to raise the awareness of dynamics end to end solution.
Speaker Change: We are advancing our clinical trials with promising promising initial results.
Speaker Change: We continue to increase the number of our commercial collaborations and we are working with our growing customer base to help them integrate that into.
Speaker Change: Into their practices.
Erez Meltzer: In closing, we remain committed to making medical imaging more accessible and improving patient outcomes through innovative technology.
Speaker Change: In closing, we remain committed to making medical imaging more accessible and improving patient outcomes through innovative technologies and strategic collaborations.
Erez Meltzer: and Strategic Collaboration.
Erez Meltzer: We thank you for joining us today and look forward to providing additional updates on our next call.
Speaker Change: We thank you for joining us today and look forward to providing additional updates on our next call.
Operator: Operator, please open the call for questions. Certainly. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please limit yourself to one question and a follow-up, and please stand by.
Speaker Change: Operator, please open the call for questions.
Speaker Change: Certainly as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please limit yourself to one question and a follow up please standby.
Speaker Change: Okay.
Jeffrey Cohen: And our first question will be coming from Jeffrey Cohen of Ladenburg-Saltman & Company. Your line is open. Good morning, Erez and Ram. Thanks for taking our questions. I wondered, Erez, if you could talk about the fleet by the end of the year where you're speaking of 100 units. Could you give us a sense or flavor for geographies at which point you anticipate placements to occur during this year or already placed? Thank you. Okay. Still the majority of the units will be in the U.S. Based on the progress of the regulation approvals in the countries that we are planning to place ARCs in Europe, it seems that I would say maybe 15 or 15 or 20 percent will be in Europe.
Jeffrey Cohen: And our first question will be coming from Jeffrey Cohen of Ladenburg Thalmann <unk> Company. Your line is open.
Jeffrey Cohen: Good morning, Thanks for taking our questions I wondered.
Speaker Change: Paresh, if you could talk about the fleet.
Jeffrey Cohen: By the end of the year. We are speaking of a 100 units could you give us a sense or flavor for geographies, which port.
Speaker Change: Youre anticipating placements to occur during this year or are already placed.
Jeffrey Cohen: Sure.
Jeffrey Cohen: Okay.
Speaker Change: Yes.
Speaker Change: Still the majority of.
Speaker Change: The units will be in the U S.
Speaker Change: Based on the progress of the regulation approvals in the countries that we are planning to place the Rx in Europe.
Speaker Change: It seems that.
Speaker Change: I'd say maybe <unk>.
Speaker Change: 15, or 16 of our 20% will be in Europe.
Erez Meltzer: And I would say Israel and other, probably 10% will be in other places like Israel, like Africa, like Latin America. It all depends on the progress of the ability to speed up the regulation approvals and the import license in the various countries that we operate.
Speaker Change: And.
Speaker Change: And I would say Israel, another probably 10% will be.
Speaker Change: In other places like Israel.
Speaker Change: Like Africa like Latin America.
Speaker Change: It all depends on the progress of the ability to.
Speaker Change: Speed up.
Speaker Change: The regulation approvals in the imports.
Speaker Change: Since in the various countries that.
Speaker Change: We operate.
Erez Meltzer: So that's, and of course, the other thing which is very important is how fast are we going to be able to install the system that we currently have in the orders, agreements that were signed, the projects that we mentioned. And in a nutshell, I would say that this is a very important element of what I was trying to deliver in this earnings, that the feeling of the building blocks of our future, short-term future, in terms of the ability to generate the ARCs that are going to be installed from the sales team, from the campaigns that we are leading, one of them, each one of these campaigns generate about 1,000 leads, and we're starting the process to implement them, the workers comp portion, the business partners that we work with, and of course, the Europe and the rest of the world that we do the installation.
Speaker Change: So thats.
Speaker Change: And of course, the other thing which is very important is how fast are we going to be able to install the system that where you're currently having.
Speaker Change: Orders.
Speaker Change: Agreements that were signed.
Speaker Change: The projects that we mentioned.
Speaker Change: In a nutshell I would say that this is.
Speaker Change: And a very important.
Speaker Change: Element of Wattup, what I was trying to deliver in this earnings that the ceiling of the building blocks of our.
Speaker Change: Future short short term future in terms of the ability to generate.
Speaker Change: The <unk> that are going to be installed from the sales team.
Speaker Change: The campaigns that we are leading one of them.
Speaker Change: Each one of these campaigns to generate about 1000 leads.
Speaker Change: And we are starting the process to implement them.
Speaker Change: The.
Speaker Change: In workers' comp.
Speaker Change: Portion.
Speaker Change: Business partners.
Speaker Change: We work with and of course, the Europe and the rest of the world that.
Speaker Change: That we do the these installation, but in a nutshell, that's what I gave you.
Erez Meltzer: But in a nutshell, that's what I gave you. Got it.
Jeffrey Cohen: And then as a follow-up, could you talk a little more about the USA RAD second opinion services? Is there a particular list price for that service and is it being reimbursed by the payers out there? Any further comment would be appreciated.
Speaker Change: Got it and then just a follow up could you talk a little more about the <unk>.
Rod: Hey, Rod.
Rod: Opinion services, Mr particular list price.
Speaker Change: Sure rich and it's being reimbursed by the payers out there.
Erez Meltzer: Thank you. Okay, U.S.A. Rod, we are lately, we have achieved, I would say, some peaks or high numbers in terms of the weekly revenues which are being generated or scans that they are reading. In addition, it seems that what we were trying to do, and we have been amazingly successful in implementing the end-to-end solution where U.S. SARAD are doing a lot of the readings of the places that we are installing the arcs. So we are generated from the same unit and the same scan, more revenues to the company. In addition, the workers' comp is going to be based initially, or to begin with, at least based on U.S.
Speaker Change: Further color would be appreciated thank you.
Speaker Change: Okay USA rod.
Speaker Change: Lately, we have achieved.
Speaker Change: I would say some peaks are or high numbers in terms of the weekly revenues, which are being generator or scans that they are reading.
Speaker Change: In addition.
Speaker Change: It seems that.
Speaker Change: Yes.
Speaker Change: What we were trying to do and we have been and.
Speaker Change: Amazingly successful in implementing the end to end solution, where USA route are doing a lot of the readings.
Speaker Change: Of the places that we are installing the arts. So we are generated from the same unit at the same skin more revenues to the company.
Speaker Change: In addition, the workers comp is going to be based initially or to begin with at least based on euro. So Roger a geologist that are going to read and last but not least is what you have asked the second opinion second opinions about $300, it's mostly privates is growing business and.
Erez Meltzer: SARAD radiologists that are going to read. And last but not least is what you have asked is the second opinion. Second opinion is about $300. It's mostly private. It's a growing business. And yeah, so that's... It's a retail model. Yeah, it's more of a retail model. By the way, in addition, you know, by the same token, I would say that it's interesting to see that the part of the increase in revenues or business that we're doing is what we call the B2B2C. So we are serving someone who is serving the consumer or the retail, and this is what we do with Ezra.
Speaker Change: <unk>.
Speaker Change: And.
Speaker Change: Yes, so that's it's a retail model.
Speaker Change: More of a retail model.
Speaker Change: By the way in addition.
Speaker Change: By the same token I would say that it's interesting to see that.
Speaker Change: Part of the.
Speaker Change: The increase in revenues or business that we're doing is what we call. The b to b to C. So we are serving someone who is serving the consumer or the retail and this is what we do with <unk>.
Operator: In Ezra, for example, every reading is about $75 right now, and if we do more applications of AI other than the CCS. It's going to increase above the $100 per scan. As you remember, the worker scump I mentioned... around one. And so basically It's growing, this part of the business. Perfect. Thanks for taking our questions. Good quarter. Thank you. And one moment for our next question.
Speaker Change: In Israel for example, every reading is about $75.
Speaker Change: Right now and if we do more applications of AI other than the Ccs.
Speaker Change: It's going to increase above the $100 per scan.
Speaker Change: As you remember the workers comp.
Speaker Change: <unk>.
Speaker Change: Around one.
Speaker Change: And.
Speaker Change: So basically.
Speaker Change: It's growing this part of the business.
Speaker Change: Perfect. Thanks for taking our questions good quarter. Thank you.
Speaker Change: And one moment for our next question.
Ross Osborn: Our next question comes from Ross Osborn of Cancer Fitzgerald. Your line is open. Hey guys, thanks for taking our questions. So starting off, you mentioned 60 units in various stages of deployment. How many of these were placed, approved, and operating in the U.S.? And why have we not seen the associated inflection revenue based upon those units being used? So I'll start with the first number. Right now, to your reference of the question, it's more than 20, as some of them are being installed as we speak. Some of them are installed but waiting for approval from regulation or physicists or the building or the city or the state.
Speaker Change: Our next question comes from Ross asked Warren of Cantor Fitzgerald. Your line is open.
Ross Warren: Hey, guys. Thanks for taking our questions.
Ross Warren: Starting off you mentioned 60 units in various stages of deployment. How many of these were placed accrued and operating in the U S and why have we not seen the associated inflection revenue based upon these units.
Ross Warren: Thank you.
Ross Warren: So I'll start with the with the first number.
Ross Warren: Right now to the to your reference so the question is more than 20.
Ross Warren: <unk>.
Ross Warren: Some of them are being installed as we speak.
Ross Warren: Some of them are installed but waiting for.
Ross Warren: For approval from brigade regulation, or a physician or the or.
Ross Warren: Or the building or the city or the.
Erez Meltzer: I think we passed most of the approvals. So. So this is with respect to the numbers.
Ross Warren: The state I think would pass most of most of the.
Ross Warren: Approvals.
Ross Warren: So.
Ross Warren: So this is with respect to the numbers.
Ran Daniel: Ramzi, would you like to address the revenues? Yes. You have to bear in mind that since from the time that we deploy the machine until we generate revenue, there's a few phases that we need to go through with the machine. First of all, it's the registration with the state and all kinds of other permits. Sometimes there's a setup to be made, and more importantly, it's all the process with getting the approved EOB for the procedure itself. But once we get the EOB, as we see in certain places, then the number of the scans increase, and then the revenue generation is swallowing up.
Ross Warren: <unk>.
Ross Warren: I would like to address the revenues yes.
Ross Warren: You have to bear in mind that since that from the time that there is.
Ross Warren: From the time that we deployed machine ancillary.
Ross Warren: General revenue the few phases that we need to go through with the machine Festival that we're just attrition with the states and all the.
Ross Warren: The other permits.
Ross Warren: Sometimes it is set up to be made and more importantly, all the.
Ross Warren: The process, we are getting approved youll be for the procedure itself, but once we get that youll be that will be seen that certain places than the number of the scans increased and then generate that revenue generation needs following up the.
Erez Meltzer: The interesting part, Ross, is that we have indeed mentioned the average of the seven scans per operating day, which was the base of the model, but definitely I would say that we can see that in the segment of the market that we are putting the systems in multi-specialty medical centers, because we can see days with 11 scans per day, even days with 17 scans per day. The workers probably will generate more than seven scans per day. The ramp-up takes time and the reimbursement, although there is a CPT code and all of this, the reimbursement and the EOB sometimes takes time and increases the revenue following after.
Ross Warren: The interesting part that Ross is that.
Ross Warren: We have indeed mentioned.
Ross Warren: The average of the seven says can spur an operating day.
Ross Warren: That which was the base of the model, but definitely.
Ross Warren: I would say that we can see that.
Ross Warren: In the segment of the market that we are putting the systems in their multi specialty medical centers, we can see days with 11 <unk> per day.
Ross Warren: Even days with 17 skins per day.
Ross Warren: The workers comp probably will we will generate more than seven <unk> per day. So.
Ross Warren: The ramp up takes takes time.
Speaker Change: The reimbursement.
Speaker Change: There is a CPT code and all of this the reimbursement in that Youll be sometimes takes time and the.
Speaker Change: The increases the revenue flowing after yes, but once we got that youll be we do see.
Erez Meltzer: But once we get the EOB, we do see a mining inflection point where the operator increased significantly the number of the...
Ross Warren: And mining inflection points, where we.
Ross Warren: The operator increased significantly the number of the skin.
Ran Daniel: Okay, I appreciate the color there. Then moving down the P&L to gross margin. How should we thinking about you guys getting to a breakeven point or turning positive between your three business lines? Okay, so if you look at the 20th, so you can see this, our tele-radiology, and I'm talking about on a non-GAS basis, because you have to, if you look at the face of the PNL, so you look at the measurement, you look at the numbers on a GAS basis, and there's all kinds of amortization of intangible and shared best competition, and all kinds of items that we are actually adding back when we talk about the non-GAS basis.
Ross Warren: Okay understood I appreciate the color there and then moving.
Ross Warren: And down the P&L to gross margin.
Speaker Change: How should we be thinking about you guys getting to a breakeven point or turning positive between your three business lines.
Ross Warren: Okay. So.
Ross Warren: So if.
Ross Warren: If you look at the <unk>. So you can see that our Delaware geology, and I'm talking about on a non-GAAP basis, because you have.
Ross Warren: If you look at the face of the P&L. So you look at the <unk>.
Ross Warren: You look at the numbers on a GAAP basis, and there is all kind of amortization of intangible and sharpness competition in all kind of up.
Ross Warren: Items that we absolutely adding back when we're talking about non-GAAP basis, but even when we talk about non-GAAP basis, you can see that our teleradiology.
Ran Daniel: But even when we talk about non-GAS basis, you can see that our tele-radiology division is already possible, and the gross profit margin varies between 36, 37% to 41, 42%. The AI business should be with the higher gross profit margin, and the ARC division will be somewhere between. Of course, once we transition to the ARCX, where we have the glass tube, or rather the ceramic tube, then you should expect our gross profit margin to increase over there. Since, as we know, the cost of the machine, of the ARCX, is much lower.
Speaker Change: The division is already profitable.
Ross Warren: Gross profit margins vary.
Ross Warren: Between <unk>.
Ross Warren: 70, 677% to $41, 42%.
Ross Warren: The AI business should be with the IR.
Ross Warren: Gross profit margin.
Ross Warren: And there are division will be somewhere between of course once we will.
Ross Warren: His transition from.
Ross Warren: So there are cases, where we have the gloves.
Speaker Change: Roger that.
Speaker Change: The ceramic keep then you should expect our gross profit margin to increase order since as we know the cost of the machine of that the optics is much slower.
Ross Warren: Okay.
Operator: Thanks for taking our questions.
Speaker Change: Thanks for taking my questions.
Scott Henry: and our next question will be coming from Scott Henry of AGP. Scott, your line is open. Thank you. Good morning or afternoon depending where one is. It seems to me in the quarter there's a lot of really strong technological process progress and people that have the machines are using it. But the the quarterly placement level of, you know, 10 to 15 per quarter, it's going to take a while to get to break even.
Speaker Change: And our next question will be coming from Scott Henry of AGP. Scott Your line is open.
Speaker Change: Thank you.
Speaker Change: Morning, or afternoon, depending where everyone is.
Speaker Change: It seems to me in the quarter.
Speaker Change: A lot of really strong technological process progress.
Speaker Change: And people that have the machines are using yet, but this quarter, we placement level.
Speaker Change: 10 to 15.
Speaker Change: Per quarter, it's going to take awhile to get to breakeven.
Scott Henry: How should we think about when there may be an inflection point to get to higher placements per quarter? Thank you.
Speaker Change: How should we think about when there may be an inflection point.
Speaker Change: To get to higher placements per quarter. Thank.
Erez Meltzer: I would like to answer your question and by the same token to also to refer to the tale of Ross, to Ross' question. OK, so under all the the fact that, you know, the safe harbor and the and the and the uncertainties in the market and all the results that what is happening right now in the markets, et cetera. We are indicating expectations that U.S. is making money right now. The A.I. is going to break even. Our business is going to break even next year, 2026, and the our business are going to break even in 2027.
Speaker Change: Thank you.
Speaker Change: I would like to answer your question by the same token to also to refer to the tail of Ross.
Speaker Change: To Ross' question, Okay. So under all the the fact that.
Speaker Change: The safe Harbor.
Speaker Change: And the <unk>.
Speaker Change: The uncertainties in the market and all the results that we.
Speaker Change: What is happening right now in the markets et cetera.
Speaker Change: We are indicating expectations Beth.
Speaker Change: <unk> is making.
Speaker Change: <unk> right now.
Speaker Change: AI is going to breakeven our AI business is going to breakeven next year 2026 and <unk>.
Speaker Change: Our business are going to breakeven.
Speaker Change: In 2027.
Erez Meltzer: So that's actually right now the plan, and these are the indications that we expect. We work hard in order to be there.
Speaker Change: So that's that's actually right now the plan that.
Speaker Change: These are the indications that.
Speaker Change: We expect we work hard in order to be there.
Erez Meltzer: In terms of the, you like the word inflection point, I would say that the inflection point will be probably the second half of 2025, where we are going to see a lot of the results. You are right that there are a lot of progress in the technology in this quarter. But if you notice, we made progress in the art. We made progress with the AI customers and revenues. We made progress with the second opinion. We made progress with the tele-ideology. We made progress with the clinical efforts and clinical education and brand awareness. We have made progress with regulatory.
Speaker Change: In terms of the.
Speaker Change: You like the word inflection point I would say that the inflection point will be probably the second half of 2025.
Speaker Change: There we are going to see a lot of the results.
Speaker Change: You're right that there are a lot of progress in the.
Speaker Change: And the technology in this quarter, but if you if you notice.
Speaker Change: We made progress in the art, we made progress with the AI customers and revenues, we made progress with a second opinion, we made progress with a teller ideology, we made progress with our clinical lab.
Speaker Change: The efforts and the clinical education and brand awareness.
Speaker Change: We have made.
Speaker Change: Progress with regulatory we have made progress with cooperation with new market segments with the OEM business with the implementation of the end to end solution and also with what we call the cost of the product so.
Erez Meltzer: We've made progress with cooperation, with new market segments, with the OEM business, with the implementation of the end-to-end solution, and also with what we call the cost of the product. So I think that what this quarter actually shows, first of all, that we are delivering what we promised. But second, we are making progress all the time.
Speaker Change: I think that with this quarter actually shows.
Speaker Change: First of all that we are delivering what we promise.
Speaker Change: But second we are making progress all the time, yet we are think getting medical and nonmedical equipment to the market. It is not an easy one and getting something which is.
Erez Meltzer: Yet, we are saying getting a medical, a new medical equipment to the market is not an easy one. And getting something which is, as you all write, disruptive, changing the standard of care is not an easy one. It requires a lot of education, a lot of efforts in terms of the clinical support, but that's what we are doing.
Speaker Change: As you all right.
Speaker Change: <unk>.
Speaker Change: <unk>.
Speaker Change: The standard of care is not an easy one it requires a lot of education a lot of efforts in terms of the.
Speaker Change: Clinical support but.
Speaker Change: But that's what we are doing and Thats. The reason why we have indicated.
Scott Henry: And that's the reason why we have indicated that in the RS&A this year, we're going to present the new product that we're going to install, the ARC AI or the solution of the AI to the ARC that is going to be built in in the system. The fact that the ARC is going to do a 2D X-ray as well, built in in the system and a lot of other goodies which are part of the ARC-X. Okay, great. Thank you. A lot, a lot in that answer. I appreciate that.
Speaker Change: And the <unk> this year, we're going to present.
Speaker Change: Yes.
Speaker Change: The new product that we're going to be.
Speaker Change: Turing to install.
Speaker Change: The arc.
Speaker Change: Are the solution of the AI to the art that is going to be built in the system. The fact that the arc is going to do to the X-ray as well built in the system and a lot of other goodies, which.
Speaker Change: Our part of the <unk>.
Speaker Change: <unk>.
Speaker Change: Okay, great. Thank you a lot a lot in that answer I appreciate that if I could just double click on one thing you mentioned.
Erez Meltzer: If I could just double click on one thing you mentioned. You said ARK business potentially profitable or cash flow break-even in 2027. Should we be thinking about at a quarterly run rate exiting 2027 as break-even? And I don't know if you want to answer this question or not, but could you get a sense of, you know, what kind of revenue run rate it would take to break-even? We could do the math ourselves, but I thought I would ask. Thank you for taking the question. It really depends on the mixture of the revenue, and this is not really a formal guidance, but we previously, you know, we have spoken, we gave some unit numbers of 1,500 to 2,000 units being deployed in order to get to a break-even point.
Speaker Change: Arc business potentially profitable or cash flow breakeven in 2027.
Speaker Change: Should we be thinking about.
Speaker Change: As a quarterly run rate exiting 2027 is breakeven and I don't know if you.
Speaker Change: You want to answer this question or not but could you give us a sense of what kind of revenue run rate it would take to breakeven, but we could do the math ourselves, but I thought I would ask thank you.
Speaker Change: Related.
Speaker Change: It really depends on the mixture of the revenue and this is not really a formal guidance, but we will.
Speaker Change: The.
Speaker Change: We have spoken we gave some some unit numbers of 15 under 2000 units.
Speaker Change: Deployed in order to get to a breakeven point and of course each.
Ran Daniel: And of course, if we get more attraction from the telebiology business rather than the AI and the ARK, so it comes with low gross profit margin, but we will get more from the hardware and the AI, and we'll see more growth over there. Then the break-even point will be even faster just because it comes with the higher gross profit margin. It really depends on the mix between the CAPEX sales, hybrid sales, and the EMSA sales, which right now I don't think that we are in a position to indicate the mix between these three elements. But the more we get into getting more experience in the market and starting to penetrate to the European market as well as the Latin American market, I think that we will be able to shed some more light and to give some more guidance with respect to what will be the mix of these type of sales.
Speaker Change: We get more attraction from the fed about urology.
Speaker Change: The business rather than <unk>.
Speaker Change: It comes with low gross margin, but we forget muscle in Dallas.
Speaker Change: And we will see more growth over there then the breakeven point will be even faster just because of the discounts with the higher gross profit margin it really depends on the mix between the.
Speaker Change: Capex sales hybrid sales and <unk> sales.
Speaker Change: Which right now I don't think that we are in a position to indicate.
Speaker Change: The mix between the these three elements, but the more we get into getting more experience in the market.
Speaker Change: And starting to penetrate to the European market as well as the Latin America market I think that we will be able to shed some more light and just to give some more guidance with respect to what will be the mix of these.
Speaker Change: Type of sales, but it's definitely definitely depends on the mix.
Operator: But it definitely depends on the mix. Okay, great. Thank you for taking the question. And I'm showing no further questions.
Speaker Change: Okay, great. Thank you for taking the questions.
Speaker Change: Thank you and I'm showing no further questions. This will conclude today's conference call. Thank you for participating you may now disconnect.
Operator: This will conclude today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: [music].