Q2 2025 iRadimed Corp Earnings Call
Welcome to the arat corporation. Second quarter of 2025 Financial results conference call. Currently all participants are in a listen-only mode, and at the end of the call, we will conduct a question and answer session. This call is being recorded today, August 1st, 2025, and contains time-sensitive accurate information, only today?
Earlier erat released its Financial results. For the second quarter of 2025, a copy of this press release, announcing the company's earnings is available under the heading news on their website at arat calm, a copy of. The press release was also furnished to the Securities and Exchange Commission on Form 8K. And can be found at sec.gov, this call is being broadcast live over the Internet on the company's website at atom.com and a replay will be available on the website for the next 90 days.
Some of the information in today's session will constitute forward-looking statements within the meeting of the private Securities, litigation Reform, Act of 1995.
For we're looking statements, focus on future performance results plans and events and may include the company's expected future results.
At remind you that future results. May differ materially from these forward-looking statements due to several risk factors.
For a description of the relevant, risks and uncertainties, that make affect the company's business. Please see the risk factor section of the company's most recent reports filed with the Securities and Exchange Commission, which may be obtained free from the sec's website. At sec.gov, I would now like to turn the call over to Roger, Susie, president and chief executive officer of arat Corporation. Mr. Susie
Thank you, operator. Good morning, and thank you all for joining us on today's call.
I am indeed very pleased to report. Yet another record quarter marking our 16th consecutive quarter record revenues.
For the second quarter of 2025, we achieved revenue of 20.4 million a 14% increase over the same period last year.
Gross profit came in at 78%, with earnings very strong as well.
Gap. Diluted earnings per share. Increasing 18% from Q2 of 2024.
Pump shipments led performance in the quarter as our 3860 MRI IV pump continued to excel into Q2 2022.
In addition to the great pump performance, I am also very happy to report that shipments of our mrr patient monitor grew 9% and that bookings in Q2 indicate that our efforts.
sales for
2025 can be expected to achieve our plans with this product line as well.
I'd like to quickly follow up on comments regarding tariffs and Doge impacts, which we had discussed at some length during our earnings call of q1.
We can now look back and see that the tariffs had been collected on some of the components we utilized, the actual impact is still very small. We do feel however, that as tariffs become stable and finalized, especially Chinese tariffs and, as per tariff, uh, inventories dwindle here at the
Within our stocks, we will have a better idea of the measurable tariff impacts to manage and Report upon in the future.
As announced on May 22nd.
The FDA cleared, our new 3870 IV pump systems for distribution.
With this long-awaited and hard-fought FDA action, the road ahead for iRadimed is clear and wide.
since the founding of a radmed 20 years ago,
this clearance in the sales growth that the new pump will ignite will prove to be a seminal event.
Reflecting a moment when I found out about frankly.
Though, we had a strong Vision that an MRI pop would be a highly successful Niche device.
My Revenue targets.
From them now appear overly modest.
Being in the double digits.
Now that Revenue Vision looks to be passing the 100 million Revenue run rate as we progress through 2026.
I cannot be proud of what we have done with this fascinating MRI niche.
Let me share how we envision these next several quarters. Uh, most of you have seen the effect on the sales of our existing legacy pump—the original design core from 20 years ago. When we simply discontinued offering service contracts for units 7 years and older.
This action led a number of customers to replace older 3860 pops with newer, newly manufactured, 3860 pumps. But now that we have a new state-of-the-art pump with 20 years of technological advancement, we anticipate a huge demand for replacing older, 3860 model pumps, uh, starting at the 5-year old level,
For context in the US market alone, there are over 6,200 5 plus year old 386061 pump channels up for replacement.
We currently sell.
Approximately a thousand such channels annually into the domestic Market.
We will Target adding to that base of a thousand channels per year. Another thousand channels through update replacement sales from that third 6,200 units that are over 5 years old.
This will be our target in 2026.
In subsequent years, we expect to increase the draw down of old pump channels from 1,000 to over 2,000 and growing and so on,
Again, adding The increased sales for Replacements into the current uh, Bass Run rate of a thousand a year and you can understand why I see piercing that 100 million Revenue run rate in 2026 and continuing strong growth for years afterwards.
What numbers on this?
For our domestic opportunity, only as we sell 2,038.70. Pump channels annually.
with a slightly higher ASP, we end uh,
We anticipate the 2025 domestic pump device Revenue.
Currently expected at 28 million in 2025 will become nearly 50 million.
Adding in disposables, then International Sales, Plus the Mr. Monitor business, and 1 can understand my confidence. In breaking through this 100 million uh Revenue rank.
Now, let's discuss our updated Financial guidance.
For the third quarter of 2025, we expect revenue of $20.5 million to $20.9 million, representing 12% to 14% growth over Q3 2024.
Which was 18.3 million.
We anticipate uh Gap diluted earnings per share of 41 to 45 cents and non-gaap diluted 90s per share of 45 to 49 cents, reflecting a 10 to 12% growth over Q3 2024 40 Cent to 43 cents.
Tempered by anticipated but short-lived operational, inefficiencies during our facility transition, which we've just moved into our new building.
For the full year. 2025, we are raising our guidance to reflect our strong first half performance. We now expect revenues of 80 to 82.5 million up from our prior range of 78 to 82. Myth representing 9 to 13% growth over 2024, 73.2 million revenues.
Gap diluted earnings per share is now expected to be $1.60 to $1.70, up from $1.55 to $1.65 for non-GAAP diluted earnings per share.
A dollar 76 to a dollar 86 up from $1.71 to $1.81 these ranges account for approximately 2.6 million in stock related compensation expense. Net of tax for the full year and 6 million for Q3.
We also remain committed to delivering value through our 17 cents per share. Quarterly dividend declared for Q3 and payable on August 28th, 2025.
Now, I'll turn the call over to Jack Glenn. Our CFO to review the quarter's Financial results and detail.
Thank you, Roger, and good morning, everyone. As in the past, our results are reported on a GAAP basis and a non-GAAP basis. You can find a description of our non-GAAP operating measures in this morning's earnings release and a reconciliation of these non-GAAP measures to the GAAP measure on the last page of today's release.
For the 3-month ended. June 3020 2025. We reported revenue of 20.4 million. A 14% increase from 17.9 million in the second quarter of 2024.
This growth was driven by strong performance across all product lines, with MRI-compatible IV infusion pump systems contributing $8.2 million, up 19% year-over-year, and patient vital signs monitoring systems contributing $5.9 million, up 9%.
Disposables Revenue grew 14% to 4.2 million reflecting increased utilization of our devices while ferromagnetic detection systems. And services Revenue also saw a solid gains
Domestic sales increased 18% to $18.2 million, while international sales decreased 9% to $2.2 million.
Overall domestic Revenue accounted for 89% of total revenue for Q2 20225 compared to 86% for Q2 2024.
Growth profit was $16 million, up 14% from $14 million in Q2 of 2024, with a gross margin of 78%, consistent with the prior year.
The strong margin performance was supported by increased overhead absorption. As we built inventory ahead of the new facilities opening.
Operating expenses for the quarter, were 9.2 million up, 9% from 8.4 million in Q2 of 2024 driven by higher sales and marketing expenses to support our growth in modest and increases in general, administrative costs.
research and development expenses remain steady at approximately 0.9 million
Income from operations grew 21%, to 6.8 million from 5.6 million in Q2 2024.
Tax expense for the quarter was $1.6 million, resulting in an effective tax rate of 21.2%.
Net income was 5.8 million or 45 cents per diluted. Share an 18% increase from 4.9 million or 38 cents per diluted share in Q2 of 2024.
On a non-GAAP basis, net income was $6.4 million, or 49 cents per diluted share, up 17% from 42 cents, excluding $0.6 million of stock-based compensation expense, net of tax.
now turning to our balance sheet, we ended the quarter with cash and cash equivalents of 53 million up from 52.2 million at year end 2024
Cash flow from operations was a strong 7.7 million for the quarter up, 17% from 6.6 million, in Q2 of 2024 and 12 million for the first half up 14% from 10.5 million.
Free cash flow was 4.9 million for the quarter and 5.3 million for the first half reflecting Capital expenditures of 6.7 million year to date, primarily related to the new facility.
We expect final payments of approximately $1.1 million for the facility in Q3, bringing the total construction cost to approximately $12.6 million.
And with that, I will turn the call over to the operator for questions. Operator.
Thank you. We will now begin the question and answer session as a reminder, to ask a question. Please press star, 1, 1 1 on your telephone, and wait, for your name to be announced.
To withdraw your question, please press star 1 1 1 again.
Please stand by while we compile the Q&A roster.
Our first question comes from the line of Frank Tekken from Lake Street Capital Partners.
Of that backlog, and then kind of marry that into how you expect 3860 sales to trend in front of, uh, 3870 launching.
Sure. Sure. I can take that 1 Franc. Yeah, as we said, it was a record backlog as of June 30th. It was composed of both, you know, certainly as we've discussed, the pumps but also a very strong monitoring backlog as well. And so that certainly gives us, I think, good visibility into the second half of the year, especially with, you know, before we commercialize and introduce the 3870, that we have a strong backlog of 3860 to get us through what we see to, you know, the second half of the year.
Got it. Okay, that's cool. And then
Frank, I think Frank good, good to hear your voice, thanks for the question. Uh, maybe you that was a 2-part or you also wanted to know how the maybe the 3860 is the old pump, the Legacy pump orders with Trent,
So, I mean, there’s still trending.
Extraordinarily strong and that's why we're so bullish as the year wraps up. Um we really we really feel at this point that uh we're we're more or less in control of how that'll Trail off.
so uh and that comes to the timing of when we actually unleash our sales team to, uh,
Uh, go out and and actively in Mass, you know, start discussing this new pump so they're not doing that at this point. We don't want them to do that. But certainly, somewhere in December is where we'll do that. And um,
So we think the orders will still for the older. Pump will still be rather uh significant quite strong right up until we do start to talk about the 3870 somewhere in December.
Got it. Very helpful caller and then Roger. I wanted to follow up on some of your, your comments. I appreciate all the color on. Kind of 38.70 renewal, uh, potential. How do you think about the Cadence of that ramp to the $50 million of pump Revenue? I assume it builds over time. But any thoughts around how that, that kind of scales throughout 2026 would be helpful?
Yeah.
Well, it'll
Our plan is we.
is uh,
is in Q4.
We'll sell a few 3870, it'll be insignificant to revenue, but but the purpose is not it's just so much to generate Revenue. It's the generate a few of uh it's it's basically the generate feedback from a few of our stronger users.
As to, you know, any user suggestions or a little tweaks that we might want to last minute tweaks. Put into the product.
So, we plan to start that? Oh, right around Christmas time. New Year's.
And and of course, then we'll also be fully out showing the 3870 by that point as well. And so uh, uh, you know, the bookings of the new pump uh in in the first quarter, you know, they won't be all the way ramped up to these numbers. I was talking about
certainly, uh,
They'll be just starting to bring in revenue, and as you understand, I think everybody understands there's a pipeline and an inertia to people riding Pose, even though.
Even though due to the this resale of 3860, so we've had going on there will be there will be a number of customers who have the funds budgeted uh and will be switching those to the new pump as we can.
Uh, but but do you want on pump bookings? Overall, I expect to be weak.
And, uh, and we'll fill it with the revenue. It won't be, though, because we have such a huge backlog, so you won't really see it by looking at revenue but bookings. We anticipate in Q1 for pumps should be a little bit weak. But then, by the second quarter, uh, we should be back to a pretty strong run rate on booking pumps, which will just accelerate through Q3 and Q4. So that, uh, certainly by the end of 2026, as I think you could glean from what I was saying earlier, uh,
the, the
The overall run rate of the business will be, you know.
Towards that 100 million dollar, number and passed. It
3870. We could expand the overall market and demand in the pump area.
uh, you know, I have
but as we've heard us say the last few years, you know, you've been on these calls for a while.
Been on this call for a while.
New pomp is 20 year. You know, it's it's 2 decades improved over. What we've been selling.
and so, uh,
we think and we designed it.
To to uh address 1 of the Achilles heels of this old pump.
Which was its usability. We made the new pump as we've talked about in the past. You know, it has a it has a, a very compared to the old pump. Let's call it much more modern and interactive user interface. We have a little graphics and animations on it. That helped lead the user through the use of the pump.
To some extent, we think that is the single largest deterrent that slows down the adoption of the older pump.
And so yes, we we feel that with the new pump.
Being much more modern and with this, with this uh more much more user friendly uh help that comes on the screen to guide the users through its its use, that the Green Field, those that those folks that have sat on the fence and not adopted the older comp.
We should knock them off at a at an accelerating rate. I didn't factor that in to these numbers. I'm talking about.
So, that is upside.
Got it. Very helpful. Congrats on all the progress. Thanks for taking the questions.
Thanks Brian. Thank you.
Thank you. 1 moment for our next question.
Our next question comes from the line of Jason wits from Roth.
Hi. Thanks for taking the question and uh solid quarter here. Um so um first off on the new pump, is there an asp increase? Uh that we should be factoring in here?
I missed that. What is the pricing on the new pump? Oh yeah. I I kind of alluded to that. And what I said, we anticipate, the ASP will be, uh, you know, a little little bit higher. We've had this question a few times in previous calls.
Um, and now we're finally, you know, in these last just these last few weeks, since we got clearance from the FDA, you know, we really put the pencil to the pricing and modeled the pricing. So it looks like it's coming out where it's probably going to be around 12% more than the ASP of the existing pump.
Okay. That's, that's good to hear. Um, I guess is there, I mean, I would that be, is that possible to put some um upward, uh, pressure on the gross margins is from that pricing, can we assume that as well?
Was it too early to make that call?
Even in the gross, March.
Because, you know, I I meant growth margin, but yeah, uh, but I'll take, I actually operating margins will be more important. So that's even better to hear. Thank you.
Um, and then on the backlog, how long does it take you guys to fulfill your backlog at this point? What is the the, um,
I guess, uh, timing from an order to the guilts and backlog to getting fulfilled.
Well, it's a little different.
I, I recall about 4 weeks, 5 weeks, somewhere in there. A pump, backlog is running about 5 months, 5, 6 months. And uh, and uh, and we're letting that take place. Uh, as I mentioned, we anticipate bookings for pumps will be low in q1 as we transition.
But Revenue won't be.
Backlog of these older.
To deliver.
So, uh, yeah. It's a, there's a good length of time in the backlog.
okay, that's helpful and then it sounds like
Customers that are going to be some upgrades from that backlog, but it doesn't sound like, per se, customers. Expecting pumps in the next.
Uh, certainly for the rest of this year, we are initially going to be motivated to upgrade. They'll be happy getting.
Um just a new pump is that is that right? What do you think about it or do you anticipate this some upgrades there as well?
Targeting a limited number of facilities, basically 3, that we're going to deliver 40 to 50 of the new pumps into to watch.
Those countries I mentioned before that we want to just uh use more as uh uh just any any any things that we need to put Finishing Touch to that may come up during, you know, watching how people actually interact with and use the pump.
And that's why we're going to deliberately have this delay in Q1; it's because we're going to wait for that 2 to 3 months of education from what we can learn from initially planting about 40 pumps.
Okay, great. Um, I guess I'll jump back in. Cube, with thanks for answering the questions.
Thank you, talk to you soon.
Thank you at this time. I would now like to turn the conference back over to Roger Susi for closing remarks.
Again, thank you, operator. I'd like to thank those who have written along with us on this Mr. Niche Journey, which though always maintaining great Revenue growth and margins.
At times, there are a few white-knuckle twists and turns, mainly due to the clearance process for this new pump.
But it is with a very clear vision. We now see that the road ahead provides us many more years of rewarding growth as we can, after nearly 20 years, offer our customers a path to move their MRI solution delivery onto our new, exciting pump platform.
Thank you.
Thank you. This concludes the call. You may now disconnect.