Q3 2025 Stereotaxis Inc Earnings Call
Good afternoon.
Thank you for joining us for the Stereotaxis, Inc. third quarter 2025 earnings conference call. Certain statements during the conference call and the question and answer period to follow may relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievements of the company in the future to be materially different from the statements that the company's executives may make today.
These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10-K or 10-Q.
We assume no duty to update these statements.
At this time, all participants have been placed in listen-only mode. The floor will be open for questions and comments following the presentation. As a reminder, today's call is being recorded.
It is now my pleasure to turn the floor over to your host, David Fischel, Chairman and CEO of Stereotaxis.
Thank you, operator, and good afternoon, everyone.
We are in an exciting period with a lot of progress on multiple fronts.
We've discussed our strategy and efforts more comprehensively on previous calls, so I'll keep today's remarks focused on a few key commercial and innovation updates.
Our commercial activity can be viewed as two primary efforts. First, to scale robotic system sales with continued adoption of Genesis and the initial launch of Genesis X; and second, to build a robust, high-margin recurring revenue business with our portfolio of novel catheters.
These two synergistic elements together support an attractive razor-and-blade business model that can deliver substantial long-term growth.
On the capital side, we were pleased to receive hospital orders for 2 Genesis robots since our last call.
Both orders came from European hospitals, establishing entirely new robotic programs.
We expect both robots to be installed and to begin clinical use in the first half of 2026.
These Genesis orders are reflective of the healthy pipeline and continued interest. We see across our regions, particularly in Europe, where we are slightly ahead in having a more complete product ecosystem, approved and commercialized.
$10 million supports a study baseline of the robotic system, revenue as demonstrated by our results, over the last several quarters.
The launch of Genesis X significantly enhances our system opportunity by removing structural barriers that limited physician interest from translating into tangible adoption.
We’re delighted to announce yesterday the FDA approval for the Genesis X system. This is a landmark approval for Stereotaxis.
There are very few companies that can successfully develop, gain regulatory approvals, and deploy complex surgical robots that operate reliably in daily clinical use.
This is Stereotaxis's second such robot in five years, and it reflects our unique expertise and our capacity and commitment to significant innovation.
We are initiating a limited launch of Genesis act while we wait approval for the magic catheter worked to enhance compatibility of the robot with various X-rays. And refine our supply chain, manufacturing installation, and commercial processes for a full launch.
While we are pleased with the study demand, for Genesis, we expect Genesis X orders to help pay for the Temple of Genesis orders following the full launch.
Turning to our recurring Revenue.
The key driver of growth over the coming years will be our budding portfolio of proprietary catheters.
Stereotaxis' recurring revenue has been predominantly driven by service contracts and a small single-use disposable, with relatively little revenue per procedure.
Catheters are the primary disposable in any procedure, and stereotypes did not previously benefit from this revenue stream.
The dirt of robotically steered catheters reduced interest in our technology and limited our revenue opportunity and razor blade business model.
Over just the past year, we have started to demonstrate the tangible reality and Commercial impact of our catheter portfolio with growing sales of mappa. Catheters, following our acquisition of Apt last year, adoption of the magic ablation catheter in Europe. Following CA Mark in the first quarter and over just the past 2 months adoption of the magic. Sweep high density, mapping catheter in the US following, the FDA approval this summer.
Magic sweep has been a particular recent highlight.
On our last call, we described the importance of high-density mapping in the EP field and how the introduction of robotic HD mapping promises several clinical and workflow benefits.
It is also important to note that Magic Sweep is a stereotactic catheter launched in the U.S. and the first catheter innovation that allows our robot to be used in new ways, enabling clinical care that was previously not possible.
We began the commercial launch of Sweep in late August and have had a very exciting reception to date.
Physicians have shared multiple examples of magic, enabling them to better diagnose the source of arrhythmia safely and efficiently in areas of the heart that were otherwise inaccessible with manual mapping catheters.
The clinical interest in the catheter has translated into a strong commercial storm with over $300,000 in sweep revenue in the first two months of launch.
We are still in the earliest innings of the launch, with only about a quarter of robotic accounts in the U.S. ordering the catheter to date. As we work through multiple hospital approval processes.
We are excited to see the catheter continue to scale. Its impact in the U.S., as well as gain approval and launch in Europe.
The commercial impact of MAGIC, sweep measured in direct revenue and, as importantly, in the halo effect it creates for robotics in our field, demonstrates the significant impact of innovation.
We have a robust pipeline of innovation efforts that will continue to strengthen our commercial results.
These include multiple products in the late stages of regulatory review, development projects approaching submissions, and earlier stage efforts that haven't yet been disclosed.
They spend on technologies including robotic systems, software solutions, and several EP and vascular capacitors and devices.
I'll add a few brief updates and comments on three specific projects. Most impactful in the short term magic in the U.S.
Most field ablation and the Synchrony Digital Cath Lab system.
Magic is our proprietary robotically navigated ablation catheter that will replace the older J&J catheter used with our robot.
We received CE Mark approval and launched the catheter in Europe earlier this year. We have been working through manufacturing ramp-up and country-by-country commercial processes, and we are working diligently with the FDA to advance our U.S. approval.
Late in the third quarter, we responded fully to a body of questions that represented FDA's outstanding questions upon a comprehensive review of all modules in our submission.
Regular dialogue with the FDA, and we appreciate their collaborative effort during the review.
Pulse Field Ablation (PFA) has had a dramatic impact on the electrophysiology field over the last couple of years, driving billions of dollars in market growth and significant share shift among the large MedTech players.
On previous calls, we described having a few earlier-stage PFA collaborations with different partners, working through the preclinical testing process.
Last month, we were pleased to announce the successful completion of preclinical testing and our entry into a collaboration agreement with CardioFocus to pair their PFA system with our MAGIC catheter.
The agreement provides a framework for how we will advance this first-ever robotic PFA solution. You are first in human clinical study, regulatory approval, and commercialization.
Cardio Focuses, PFA Generator, and our Magic Catheter both already have regulatory approval in Europe, and so the effort to add compatibility to our label is expected to be relatively contained. We are preparing formal regulatory documentation to initiate first-in-human testing.
Expected to perform these procedures in the coming few months and believe it's possible to see Magic approved for PFA use in Europe before the end of next year.
Finally, let me make a brief comment on Synchrony and Syncs, our digital solution that streamlines, modernizes, and introduces secure remote connectivity to the cath lab.
In October, we announced that we obtained CE Mark in Europe and had submitted the technology for FDA approval.
The technology has received less attention than most of our other innovation efforts, but it holds significant promise as an entirely new business pillar.
We have spent over six years and many millions of dollars developing Synchrony and syncs, benefiting from our previous experience with our Odyssey system, but completely re-architecting it with an improved technological foundation.
Synchrony and syncs are central to our digital surgery efforts to modernize the interventional labs with enhanced workflow, remote connectivity, and smart AI capabilities.
The technology improves the robotic cockpit, but we believe all Cat Labs tend to benefit from improved workflow, connectivity, collaboration, and intelligence. We recently had the opportunity to host leading Epps and technology administrators to evaluate the system.
The feedback was very positive, describing it as the most well-designed cast of display technology they have seen. We expect synchrony to contribute at least a couple million dollars of revenue in the first year of launch, and a growing installed base will provide the foundation for an attractive software-as-a-service revenue stream from our sync's connectivity app and future AI features.
It will now provide additional commentary on our financial results, and then I will make a few financial comments as well before opening the call to Q&A. Kim.
Thank you, David, and good afternoon, everyone.
Revenue for this.
The total revenue of $7.5 million consisted of $1.9 million in system revenue and $5.6 million in recurring revenue, compared to $4.4 million and $4.8 million in the prior year’s third quarter.
System revenue reflects partial revenue recognition on 1, Genesis system, and ancillary devices.
Recurring revenue growth over the prior year reflects a full quarter's contribution of Mapp at catheters and initial sales at Stereotaxis's new robotically navigated devices: the Magic Ablation Catheter and the Magic Sleeve High-Density Mapping Catheter.
Gross margin for the third quarter of 2025 was 55% of revenue.
Recurring revenue, gross margin with 67%, and system gross margin was 19%.
Gross margins remain impacted by fixed overhead allocated over low production levels.
operating expenses in the third quarter of 10.7 million included 4.1 million in non-cash charges for stock compensation, expense Mark to Market, adjustments for acquisition related, contingent earnout consideration and amortization of acquired and tangible assets,
Excluding these non-cash charges adjusted operating expenses in the quarter or 6.6 million. A decrease from 7.2 million in the prior year, third quarter primarily due to lower General and administrative expenses.
Operating loss and net loss. In the third quarter of 2025 were 6.6 million and 6.5 million compared to 6.3 million and 6.2 million in the previous year.
Order excluding non-cash charges for $2.5 million and $2.4 million compared with $3.1 million and $3 million in the previous year.
Negative free cash flow for the third quarter was consistent with the previous year at $4.2 million.
At September 30th, Stereotaxis had cash and cash equivalents of $10.5 million and no debt.
Including the $4 million stereo taxes will receive and the upcoming second closing of the registered direct financing announced in July, Stereo Tax would have had $14.5 million in cash with no debt.
I will now hand the call back to David.
Thank you, Kim.
As mentioned in our press release, we expect revenue this quarter to exceed $9 million, with system revenue of approximately $3 million and recurring revenue greater than $6 million.
This will provide results. This will result in over 20% annual revenue growth for the full year 2025 in line with our previous guidance of double-digit annual revenue growth.
While we are not yet providing formal guidance for next year, we want to offer directional color to help with modeling.
we expect sustained growth of both system and recurring Revenue through 2026 with system Revenue, benefiting from our existing, Genesis backlogs, and the launch of Genesis X and recurring Revenue continuing to ramp with increased adoption of magic, magic sweep and mapping catheters
We expect quarterly revenue to surpass an average of $10 million per quarter in 2026.
We continue to advance technologically and commercially, while remaining prudent with expenses. We see significant leverage in our business with increased revenue. We expect to enter 2026 with a healthy balance sheet that allows us to advance our new technologies to market and launch them with a balanced focus on accelerating growth, while also ensuring improved margins, earnings accretion, and achievement of profitability. We'll now take your questions. Operator, can you please open the line to Q&A?
Thank you.
Quick reminder: before we start the Q&A, if you'd like to ask a question, please press star and the number 1 on your telephone keypad.
If you'd like to enjoy our question or your question has already been answered, you may press *1 again.
And we will take our first question from Josh Jennings from TD Cowen.
Please go ahead.
Hi, good afternoon. Thanks for taking the questions, and congratulations on the Genesis tax approval.
I was hoping to ask about Genesis x, a couple questions. Um, I guess, first just maybe an update on, you know, the sales pipeline for Genesis X mostly in Europe now with approval in the US. But they talk about any pent-up demand in the, in the US and just how we should be thinking about the the mix of of orders, uh, going forward. I think you're talking about genus sex outpacing them. But should we think about more genus 6X placements next year? Or we'll also be a healthy amount of Genesis placements in uh, centers old customer accounts that are that are replacing their nyobi systems.
Hi Josh, thanks for the good questions. Um, so Genesis X I'd I'd look at it as additive to Genesis as you see just in the last quarter even with Genesis X being approved in Europe, we continue to see demand for Genesis um from sites that have been engaged with us for longer periods of time in the process that are either replacing existing Labs, or like the 2 hospitals, that are establishing a new robotic programs. They're building, you know, new Wings to the hospital New areas. And um, and the construction process then is in debt, isn't as much of a factor for them. And so we continue to see demand for Genesis
Our robots. And we start to, as we ramp manufacturing and we feel comfortable with the, with the, with the ability to supply the system at higher scale, we will, uh, also be opening up the model to leases and to placements with a with a significant disposable commitments. And, um, and so that's really kind of over the next, uh, few months. Uh, our goal is to to make sure that manufacturing is in place to demonstrate that the system is working reliably in the real world uh in regular clinical use. Um and then to be able to start a full launch. Uh, and we expect, once we start a full launch that the the rate of orders for Genesis X and sales of Genesis X is going to be meaningfully higher than what it's been um, to date with Genesis.
I appreciate that, David, and then just to...
A reminder is, is Genesis X is going to be sold at a price point, that's similar to Genesis, or, or at a, at a premium. And then just as you think about, as we think about the, the high level of color, you provide for 2026 and quarterly average revenues averaging at 10 million plus range. Um are you within that? Are you assuming that Genesis X systems are um
Sold to none accounts or neurovascular endovascular centers in 2026 and or maybe just to help us think about when that could kick in. Thanks for taking all the questions.
Sir. Um, so Genesis X is, uh, is a newer, uh, technology. It's a premium, uh, system. Uh, we expect the system to save AOS, materially on their own expenses. Um, and, uh, and we are pricing the system at a premium to Genesis, and it's in the same ballpark, but at a premium price to Genesis. And so, um, we're comfortable with that decision and we believe the market is, um, is accepting of that as a as a reasonable, uh, appropriate, uh, price. Um, when it goes to your second question, on none applications. We do expect to have our first, uh, at least 1 to, uh, none centers. Next year, that will start using the robot in, uh, in nonexistence, uh, we still do not have approval for, uh, guide catheter or guide wire, and so that is still the guide catheter is in. Uh, it was, was submitted earlier.
This year and um and uh we're still working through the regulatory process there. The guide wire, we expect to submit for regulatory approval uh early next year. And so as those come to Market, I would expect the majority of their use to be in existing robotic accounts. Where every EP department is part of an Interventional Cardiology Department. Uh, there's easy access to the system for Interventional cardiologists, uh, who want to start using the robot and experimenting with it in a range of other procedures, but I, we do also believe that there will be uh, a few sites that do not currently have the robot where none, EP applications are the driver of adoption.
Understood appreciate that. Thanks.
Thank you.
Thank you.
Question come.
From the line of Adam Mater from 5% Handler.
Please go ahead.
Hi, good afternoon. Thank you for taking the questions. Uh, I actually wanted to piggyback off of...
Josh's line of questioning, and you know, maybe starting on the Genesis X approval in the U.S. It sounds like that'll be in a limited launch phase.
Uh, you know, for at least, you know, a couple of months, um, if I'm hearing correctly, but David, are you able to put a finer point on when we should expect that to kind of move to full launch? You know. It it certainly sounds like you're working through supply chain a little bit. Um, you know, understand you're waiting on the magic RF approval in the US. I, I don't know if you can give a timeline update there as well, but just trying to think about when we move from the
Limited launch phase to kind of full, uh, you know, steam ahead and then a follow-up. Thanks.
Uh, previously and so even in very, very recent discussions, there seems to be no impact whatsoever from the shutdown on the FDA's review. And so, I think that's kind of advancing well. We expect overall, um, likely approval in line with what we've described previously. Um, I would think that kind of, as we have that approval, uh, also on the manufacturing side, we continue to grind through the process and to improve it. And so I think, on our last call, we described having produced the first Genesis X commercial system. Um.
In the early summer period, uh We've we've kind of built now, another system and we are kind of ramping the manufacturing and the supply chain overall. Well, and that's just kind of a steady.
Uh, progress there. I'd say that you should expect probably a transition to a full launch of Genesis, uh, sometime in the earlier parts of next year. Uh, at the latest, the natural time to do so would be at, uh, the ERA and HRS conferences, which are in the spring. Uh, that would be kind of the latest natural time to do so.
That's, uh, really helpful color, David. I appreciate all that. And, you know, the second question is around the, uh, the early commentary for 2026, and I was hoping you could give us just a little bit more color. Um, in terms of how you're thinking about the revenue mix. You know, you talked about the average of $10 million per quarter, um, but how that kind of bifurcation...
Between system revenue and consumable revenue, just any additional thoughts would be much appreciated. Thank you.
Sir. So that's um that's always the the split between system and disposables is uh is always difficult because systems are somewhat lumpy. Like you see in this quarter we're at the low end of of the 2 to 3 million range. That we kind of said we expect every quarter in the fourth quarter will be at the high end of that range. Um, and so it's kind of there's a there's a lumpiness to that that that shifts the percentage distribution between system and recurring Revenue in any given quarter. Generally, if you're modeling, uh, this year's system revenue of about 10 million and, uh, and recurring Revenue in the, in the low mid 20, uh, million range. We expect the recurring revenues to scale relatively, uh, linearly as we, uh, as we get, uh, kind of the, the catheters further, you know, approved and, and then further launched in each geography. Um, I'd expect that to, uh, to kind of to, to continue to just
Scale as we go account by account and gain adoption and and then systems will fluctuate. But generally, you should expect numbers in the clearly in the teens or high teams in terms of the system Revenue amount. And so that probably takes you, where system revenue is going to end up being somewhere between, you know, 30 to 50% of overall Revenue.
Very helpful. I'll jump back in queue. Thank you.
Thank you.
Thank you. All right, the next question comes from the line of Frank talking in from Lakes to Capital Markets.
Please go ahead. Great, great. Thanks for taking the questions, and congrats on the Genesis X approval. I wanted to start with maybe some additional questions around the MAGIC FDA interactions. Can you talk to some of the questions that the FDA had for the Q3 response that you spoke to on the call? Any significant areas outstanding that they're still looking for? And then I realize it just went in at the end of Q3, but any response from them on that?
Sure. So, um, so the FDA, uh, the fda's questions, which we were able to respond to a, at the end of the third quarter, were a comprehensive review, there's many modules uh included in a PMA submission. So you have obviously um pre-clinical testing and clinical data. Uh you have a biocompatibility and stability information, you have packaging information. You have your label. You have a all the technical, uh, testing of the device. So it's really kind of there's there's many, many modules. And to the PMA, many, many kind of sets of data. Uh, there are questions, uh, where explained to us, as the result of their comprehensive review of all the available,
Uh, that they had reviewed, which they viewed as kind of comprehensive, uh, uh, uh, for, for the submission. And then, um, and so there was a range kind of across the different modules. Definitely some on the clinical, uh, data, um, uh, on on
There was nothing, um, nothing, you know, kind of strange or, or particularly, um, uh, Troublesome in in the questions. Uh, so it's, it's still an effort to respond to everything, but we felt kind of good with a, with a tone and the and the content in the questions. We thought good with our responses. And um, and as described in the prepared remarks, we do maintain uh, regular dialogue with FDA on uh, on on, on our submissions but but obviously magic is a is a particularly significant 1 and uh, and the communication since then while nothing, uh, nothing nothing in writing, we feel overall good with them, having received the response and able to review the response fully and access all the documentation that we provided. And so, we see things kind of continue to progress as as would be, uh, wanted
Okay, that's helpful. That's great. And then maybe just one on the Q4 guide. I think originally we were expecting something like $7 million in revenue in the disposables and service line for Q4; I think now that's at $6 million. Um, maybe talk through some of the changes in assumptions for Q4. Now, I realize you said at least $6 million, so at least that door is open for higher than that. But I'm just curious if there are any changes in assumptions.
Sure. Uh, so we provided the original guidance at the beginning of this year.
Uh, we we at the beginning of this year, we didn't know exactly when we would have received FDA approvals, uh, for the various devices or CE marks for the various devices, we've had from the catheter perspective. The the 2 main drivers of recurring Revenue growth, we're going to be magic sweep and magic in both uh, both geographies for both catheters. Uh, so far we've gotten at 2 out of the 4 approaches. Done, we got magic approved in Europe. We got magic sweep approved in the us and we're still working on the 2 other approvals. And and so I think just given given the timing of those approvals and given uh uh, what we've seen to date in the ramp, we're happy with the ramp of the devices. Um, particularly magic sweep, uh, I think it's a, it's um, it's a reflection of the US market environment where there's uh, far fewer, uh, structural barriers, uh, to gaining adoption. Uh, but
So we've been overall very pleased with the Temple of Adoption, but we're still in the earliest innings, and so we think that guidance kind of feels appropriate at this time.
Got it. Okay, that's helpful. Thanks for taking the questions.
Thank you, Frank.
Thank you again. If you have any questions, please press star and the number 1 on your telephone keypad.
our next question comes from the line of Kyle Bowser, from Ralph Capital partners,
Please go ahead.
Hi. This is Kevin on for Kyle. Um, thanks for taking our questions, uh, and congrats on the Genesis X. Um, you just kind of starting with the, the success Genesis X, um, and all the new catheters, you know, how should we be thinking about the headcount of the commercial organization? Expanding over the next 20, 12 to 24 months,
Hi. Hi, Kevin. Thanks for the question. And so we've, we've discussed in the past that as we on the clinical side of the business, we have about a, a, a total commercial team of approximately 40, people globally about 20 of them in the US 15 or so, in Europe. And, um, and then a smaller team in Asia. Uh, we've talked about how the clinical team, particularly will see a meaningful growth uh, over the coming uh year or 2. Uh, we we expect as we are scaling uh catheter Revenue. That we will shift more and more to a model where you can have a
We've shipped to a full launch of Genesis X. Um, they are comfortable that we can, uh, scale Genesis X system sales to the, you know, dozen couple dozen, uh, in short order. Uh, then we will, uh, then we will kind of start to invest incrementally in probably a handful or so dedicated, Capital reps that can, um, that can really kind of push that, uh, that that model much further.
Great. Uh, thank you. That's very helpful. And then maybe just kind of focusing in on the disposables business and catheters. Um, I know.
You know, with the launches of magic and, you know, you're working with, um, cardio focus on the PFA and that collaboration there, but longer term. Are there any other, you know, opportunities with the Disposable business, um, and maybe building out this portfolio, um, you know, that you're kind of looking at
Definitely, there's a lot of thought and a lot of, um, energy being spent on the Disposable side of the business. I think that's where obviously most businesses make, most of their money, most of the revenue from
From catheters uh most Medtech companies. And and that's also and that's obviously the higher margin aspect of the business and um and strategically there is also something that our robot has
Been reliable and and kind of special in allowing Physicians to do things that were otherwise impossible. But a robot is only as good as the catheters that can also deliver. And so, a robot by itself without a portfolio of catheters has uh has limited value. And so I think there's a lot of opportunity now that we have um, catheter R&D and Manufacturing, uh, expertise and infrastructure in-house. There's this kind of beautiful breath of, uh, of fresh air in terms of being able to play with ideas and to think about things, um, and much more aggressively than we have in the past. I think that kind of the overall portfolio mix of having a 3 3 main portfolios of Interventional devices and makes a lot of sense for the, uh, for the, for the coming few years. And that is really uh the magic family of catheters which are um robotically steered ablation
Cardiac ablation catheters serve both therapeutic and diagnostic purposes. We are seeing a rise in robotically steered catheters in the cardiac field, which are designed for endovascular applications. Magnetic interventions are among the various interventional guide options that exist, including guide wires, catheters, and micro-catheters, as well as similar devices for vascular navigation. These tools are used to create maps, which can be done with manual diagnostic electrophysiology catheters. I believe we will see continuous innovation in these three categories. Additionally, there is a pipeline of innovations beyond what has been disclosed to date, and we have been working diligently on this. Therefore, I think you're going to see a steady tempo of innovation beyond what we've discussed today.
Appreciate all the color, David. Thank you. I'll hop back in the queue.
Thank you.
Thank you. There are no further questions. I will now turn the call back to Mr. Official for closing remarks.
Okay, thank you for all the questions. We'll work hard on your behalf to finish the year strong and to set things up for a very successful 2026. Thank you very much.
The meeting because now concluded, thank you. All for joining, give me now disconnect.