Q3 2025 IRadimed Corp Earnings Call
Welcome to the I RADIMED Corporation Third Quarter 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, November 3, 2025, and contains time-sensitive, accurate information that is valid only for today.
I Ready. Med released its Financial results for the third quarter of 2025, a copy of this press release, announcing the company's earnings is available under the heading news on their website at irid med.com. A copy of the press release was also furnished to the Securities and Exchange Commission on Form 8K and can be found at sec.gov
This call is being broadcast live on the company's website at iRadimed.com, and a replay will be available for the next 90 days.
Some of the information in today's session will.
Will constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements, focus on future performance results, plans and events. That may include the company's expected future results. I read. Med remind you that future results. May differ materially from those forward-looking statements. Due to several risk factors for a description of the relevant, risks and uncertainties, that may affect the company's business. Please see the risk factor section in the company's most recent reports filed with the Securities and Exchange Commission, which may be attained 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 of, I Ready Med Corporation, Mr. Susie
Thank you, Operator. Good morning, and thank you all for joining us on today's call.
I am indeed very proud to report that IRadimed achieved its 17th consecutive quarter of record revenue, with a recent third quarter passing the 2024 third quarter by 16%.
In the third quarter of 2025, we achieved revenue of $21.2 million.
4.
Pump shipments again led performance in the quarter, as our 3860 MRI pump group increased another 20% year-over-year and 23%.
Our MRR monitor sales have also continued to impress. I am also pleased to report that shipments of our MRI patient monitor grew by 16%, clearly showing that our emphasis on monitoring sales for 2025 is proving successful.
Next, I want to touch on the plan rollout and commercial launch of the new 3870 MRI IV pump system, which was cleared in '22.
Let's recap what I've had been saying about the number 1 growth driver for the new 3870 pump but first, yes, we anticipate a pricing increase of 10 to 14% And yes the 3870 design is such that we fully expect to penetrate the Greenfield opportunity more effectively and also Drive increased utilization uh among some of the existing customers who only use their older pumps. Rather sporadically,
But the most significant increases come from the large replacement opportunity, which is the number one driver. We see step changes in pump revenue, and it will continue to be our key growth driver in the pump area for several years to come.
It is very telling that even the old 3860 model delivered 20% growth. In the third quarter. This driven mainly by limiting again, our extended maintenance offering to pumps under 7 years old.
To 2 pumps rather under 7 years old, which has brought in replacement orders for about a third of the pumps in that 7 and up age group.
With the new state-of-the-art 3870 pump heavy, 20 years of technological advancement over the Aging 3860. We anticipate a significant demand to replace the very large pool of older 3860 model, pumps, starting now at the 5-year and older level.
Consider that in the US market alone. There are approximately 63005 plus year old or older 38606061 pump channels up for replacement.
And we currently sell, approximately a thousand such channels annually in the domestic Market.
We will Target adding another thousand channels per year in sales through replacement sales.
Out of that, existing 6300 units that are over 5 years uh, that are over. Uh,
5 years old.
Uh, this will be our Target starting in Q2 and throughout the rest of 2026. And as you can see replacing a thousand channels per year leaves, many thousands more to replace in the years to come
what numbers to this opportunity for our domestic business. Only selling north of 23870 pump channels annually at the slightly higher anticipated ASP uh we would be approaching nearly a 50 million Revenue run rate for pumps.
Adding disposables and maintenance International sales and the Mr. Monitoring business, 1 can understand our confidence in breaking into the 100 plus million Revenue ranks.
I'd like to provide our thoughts on the timing of the rollout of the 3870 in December. We will deliver an initial order of 233,870 systems, for which we will provide an extraordinary level of support, as well as a very high level of clinical support and monitoring of the use of the pumps through January and February to review and adjust planning based on user input.
The full sales team roll out in the US will begin after the national sales meeting in the third week of January.
Give them a time required for our hospital customers to have approved funding and issue orders. We expect bookings to build beginning in Q2 and wrap significantly in the second half of the year.
We expect to maintain quarterly revenue in the first half of 2026 through the increase in MRI monitoring business.
And our 3860 pump backlog.
Now, let's discuss our updated Financial guidance.
For the fourth quarter 2025.
Gap. Polluted Epps at 47 to 50 cents for the full year 2025. We are raising our guidance to 82 and a half million to 83, and a half million up from our prior range of 80 million to 82 and a half.
Gap, diluted earnings per share is now expected to be.
$1.68 to $172 up from 160 to 170 and non-gaap diluted earnings per. Share is expected as 184 to 188 up from the dollar 76 to Dollar 86.
We also remain committed to delivering value through our 17 cents per share quarterly delivery.
Declared to Q4 and payable on November 5.
I'll turn over the call to Jack Glenn, our CFO, now to review the quarter's financial results. Jack.
Thank you, Roger, and good morning, everyone.
As in the past, our results are reported on a gap basis and 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 gaap measure on the last page of today's release.
For the three months ended September 30, 2025, we reported revenue of $21.2 million, a 16% increase from $18.3 million in the third quarter of 2024.
This growth was driven by strong performance across our product lines with MRI compatible IV, infusion pump systems, contributing 8.3 million up, 20% year-over-year and patient. Vital Signs monitoring systems. Contributing 6.9 million up 16%.
Disposable Revenue, grew 12%, to 4.1 million reflecting increased utilization of our devices. While Pharaoh detection systems also saw solid gains.
Domestic sales increased 19% to $18.1 million, while international sales remained consistent at $3.1 million.
Overall domestic revenue accounted for 85% of total revenue for Q3 2025, compared to 83% for Q3 2024.
Growth profit was 16.4 million up to 16% from 14.1 million in Q3 2024, with a gross margin of 78%, compared to 77% in Q3 of 2024.
The strong margin performance was especially noteworthy, as we move manufacturing operations into the new facility at the beginning of the quarter.
And stayed on track with our shipment and cost of goods sold targets.
Operating expenses for the quarter were $9.7 million, up 15% from $8.4 million in Q3 of 2024. This increase was driven by higher sales and marketing expenses to support our growth, along with modest increases in general administrative costs and research and development expenses.
The increase in sales and marketing expenses was primarily due to higher sales commissions for our direct sales force in the U.S., as they exceeded their bookings plan in the quarter.
Income from operations grew 17% to $6.8 million from $5.8 million in Q3 of 2024.
Tax expense for the quarter was 1.7 million resulting in an effective tax rate of 23.6%.
The increase in the effective tax rate was primarily due to a catch up in the quarter with our projected effective tax rate for the year. Now, estimated at 22%
Net income was $5.6 million or 43 cents per diluted share, a 12% increase from $5 million for 40 cents per diluted share in Q3 of 2024.
On a non-GAAP basis, net income was $6.1 million, or 47 cents per diluted share, up 9% from 43 cents. This excludes a half million dollars of stock-based compensation expense, net of tax.
Now, turning to our balance sheet, we ended the quarter with cash and cash equivalents of $56.5 million, up from $52.2 million at year-end 2024.
Cash flow from operations was a strong 7 million for the quarter and 19 million year to date.
Free cash flow, a non-GAAP measure, was $5.7 million for the quarter and $11 million year to date, reflecting capital expenditures of $8 million year to date, primarily related to the new facility.
Final payments totaling approximately $1.3 million for the facility were made in the third quarter, bringing the total construction cost to approximately $13.3 million.
And with that, I will now turn the call over to the operator for questions.
Our first question is going to come from the line of freight teaden with Lake Street Capital markets. Your line is open, please go ahead.
Great. Thanks. Again, the questions, congrats on the salt quarter on progress. I was hoping I could start with some more color around the kind of bridge to a $50 million run rate in pumps. I appreciate the timing you laid out related to sales meetings launching after that in January and then ramping the backlog kind of Q2 through mid-2026. When should we expect that to flow through to revenue to that $50 million rate? Can we see that in late 2026, or is that more of a 2027 event?
Oh, we should—yeah, the front; it’s Roger. Maybe I’ll pick it up first and let Jack jump in if he has some more color for you. As I said, you know, most of that—given that we start.
you know, pounding the pavement, shall we say to sell the 3870 here and
You know, mid mid, mid June, mid January, the early, you know, early part. But, you know, by the time they get out there, you're basically uh, you know, half of 21 and as and as I mentioned, you know, orders don't just immediately get turned around even even from people that are we think are pretty well, pent up with desire to get, uh, you know, a new pump. Now after all these 20 years with 38,
60. So, yeah, the story is in the back, half of 2026 for Revenue, you know, we anticipate bookings and so forth. You'll, we'll be able to report on, in the, in the first half, certainly. But, uh, the real Revenue will will start to ramp up in the, uh, third and fourth quarter. And so, yeah, that, by that fourth quarter, we we, we think it'll be pretty clear that we're
We're we're doubling the uh the the number of pump channels that were booking certainly and uh and uh and the revenue should start to reflect that as well.
Got it. That's a total and then I wanted to follow up on on 1, comment in the press release. I think it was along the lines of despite some inefficiencies with the transition. We maintained a 78% gross margin quite honestly. I, I figured that would be followed with uh, our gross margin was negatively impacted and and Below expectations, but that was still above expectations. It just maybe kind of hinting at the fact that you can get even better gross margins out of this product potentially into the 80%, or, or should we kind of read through on that inefficiencies and how that impacted the quarter?
Well, I think it shows that we did a great job, you know.
Transitioning, moving the entire operation across Orlando, essentially, and getting it plugged in and running again. Um,
That we didn't have any glitch, negatively impacting, you know, revenues and subsequently uh, you know, cost of goods and but uh I think the real impact there is that the the revenue that stuff that we did ship out by and large in Q3 was heavily domestic. And so that that is is probably what accounts for that 1% boost.
Uh, in the, uh, in the gross, uh, you know, gross margin. So, uh, can it be sustained? Well, you know, as we get quarters where domestic business is, uh, a little bit on the lesser side from international business, that will fluctuate. Probably, by that point.
Okay, that's helpful. I'll stop there. Thanks for the question.
Thank you. And one moment for our next question.
Our next question comes from the line of Kyle Bowers with Roth Capital Partners. Your line is open. Please go ahead.
Great, thanks so much, and congrats on the great results. Maybe we can talk a little bit about inventory levels for 3860 and 3870. Maybe first on 3860, obviously demand is...
Still very strong here. Doesn't sound like any air pockets, which is impressive. Um, is pricing stable on that, um, or are you planning on maybe sort of providing any sort of discounted levels there, as you kind of roll out that inventory and move into 38.70?
oh Kyle, hey nice to uh nice to have you on board here with
With, by the way and uh hope to meet face to face soon.
It's it, takes surprising, maybe, but yeah, that that boost, that that gift that keeps on giving from these old 3860 pump orders is is straight.
At the asps we've always enjoyed. No discounting know, haven't done that.
Great, great to hear. And, uh, maybe on how are you thinking about inventory levels for 3870? Ahead of the launch and start, you know, what are current levels, or do you expect? How do you expect to manage that, etc?
Well, there's lots of money going there. I'll let Jack pick that 1 up.
Sure. So um,
Good to hear from you, Kyle. So yeah, as far as the inventories of the level of the 3860C, certainly we have the inventory from what plan, the inventory for the backlog that we have currently with the 3860, which will be shipping throughout Q1 of next year and into Q2 it looks like. Um, as far as the 3870, we are beginning those buys now. And so you'll see in Q4, they're certainly, we're building up inventory for those 3870s. And now, if you know, would be appropriate to build for Q1 and beyond, and so, you know, certainly we have the working capital from that perspective. No, no issues there.
Okay, I appreciate that. And I don't want to get ahead of myself here since you're just kind of beginning to roll out into the U.S. But can you remind me of the plans to eventually secure entry into international markets for 3870 and how you're thinking about that?
Uh, yeah. Um, it's primarily a regulatory issue. Uh,
You know, there's the new MDR requirements to maintain your CE Mark for European, you know, European community business. Uh, that's a heavy lift. But, uh, our regulatory folks, you know,
They they came off of a long battle with FDA, you know, to clear the 3870. But that was back in may they took a breather but they're they're hot and heavy on obtaining that MDR.
Let's call it a clearance, but it's a registration really CE mark.
And, uh, that that will that's what targeting to be done in Q4. So, uh, international business, will switch over to the 3870 next year. 2020, not 2027, I should say not in 2026. We'll, we'll, uh, we'll just be getting the MDR toe towards the latter, part of 2026 likewise, uh, our other large Market, uh, for pumps is Japan and uh, uh, I'll, I'll be speaking with them. I'm in Japan calling on this call right now.
Speaking to them here, uh in the next day or 2 and working with the Japanese to clear the product here in Japan. Uh we're going to do that simultaneously but it probably still will be somewhere in the fourth quarter by the time. We get that cleared and then we'll switch Jeff Japan over. So both both those large largest International markets, uh, will be a 2027 kick in
Okay, great. I appreciate that. And maybe just one more quick one. I'm glad to hear you're fully moved into the new facility. I think it's 2.5 times the size of the previous facility. Correct me if I'm wrong, but do you have any sense as to what level of sales this could support, or pass me? However you want to frame it.
Well.
you know, uh,
We it is 2 and a half times and the size. That's right. And uh you know we we were doing 20 million a quarter. I the out of that 2 and a half times smaller space,
So, you know, the math of it.
You know, pretty pretty equal. We, we, we don't see any reason why we can't get to 50 million a quarter in, in the, uh, in the new facility and, uh, you know, so yeah, 2 and a half times.
But, unlike the old facility, we're not landlocked where we are.
Uh, as you might recall, uh, you know, Jack mentioned, the cost of construction of the building that we did pay cash and built it with our cash flow. But we also purchased the 26 Acres. The building sits on about 5 of it 5 or 6 of that. So, there's lots of there's lots of space around us. That's ours to, uh, and the way we constructed the building was so we could easily be expanded into that adjacent space that we own. So, uh, uh, you know, we have plenty of space without spending another nickel.
Already owned is, is not not that heavy of a lift. So we we have we have
It, I guess paid forward quite a ways. This Plumbing capacity, physically.
Okay, I appreciate that. Thank you, Roger, and Jack, for taking my question.
Food. Today's question-and-answer session has concluded, and I would now like to turn the conference back over to Roger Susi for closing remarks.
Thank you, operator. And I thank you all once again for joining today's call and look forward to displaying a lot of meds ability to execute once again, as we introduce our new mrr IV pump and capitalize on the huge replacement opportunity throughout 2026 and Beyond.
Thank you.
Thank you. This concludes the call. You may now disconnect. Everyone have a great day.