Q4 2025 Profound Medical Corp Earnings Call

March 5, 2026

Operator: Good day. Thank you for standing by. Welcome to the Profound Medical Q4 2025 Financial Results 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 this session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one 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, Stephen Kilmer, Investor Relations. Sir, please go ahead.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star 11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

Speaker #1: I would now like to hand the conference over to your speaker today, Stephen Kilmer, Investor Relations. Sir, please go ahead.

Speaker #2: Thank you, and good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of applicable securities laws in the United States and Canada.

Stephen Kilmer: Thank you and good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of applicable securities laws in the United States and Canada. All forward-looking statements are based on Profound's current beliefs, assumptions, and expectations and relate to, among other things, any expressed or implied statements or guidance regarding current or future financial performance and position and expectations regarding the efficacy of Profound's technology. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call.

Speaker #2: All forward-looking statements are based on Profound's current beliefs, assumptions, and expectations, and relate to, among other things, any express or implied statements or guidance regarding current or future financial performance and position, and expectations regarding the efficacy of Profound's technology.

Speaker #2: Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements.

Speaker #2: No forward-looking statement can be guaranteed. Listeners are cautioned not to place undue reliance on these. Profound undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information or otherwise, other than as required by law.

Stephen Kilmer: Profound undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law. Representing the company today are Dr. Arun Menawat, Profound's Chief Executive Officer, Rashed Dewan, the company's Chief Financial Officer, Dr. Mathieu Burtnyk, Profound's President, and Tom Tamberrino, our Chief Commercial Officer. Please note that our prepared remarks today will be a little longer than normal as we present to you the dynamics of the market and our strategies to create a profitable growth company. With that said, I'll now turn the call over to Rashed.

Speaker #2: Representing the company today are Dr. Arun Menawat, Profound's Chief Executive Officer; Rashed Dewan, the company's Chief Financial Officer; Dr. Mathieu Burtnyk, Profound's President; and Tom Tamberrino, our Chief Commercial Officer.

Speaker #2: Please note that our prepared remarks today will be a little longer than normal, as we present to you the dynamics of the market and our strategies to create a profitable growth company.

Speaker #2: With that said, I'm now turning the call over to Rashed.

Speaker #3: Good afternoon, everyone, and welcome to our fourth quarter and full year 2025 conference call. On behalf of the management team and everyone at Profound, I would like to thank you for your ongoing interest in our company.

Rashed Dewan: Good afternoon, everyone, and welcome to our Q4 and full year 2025 Conference Call. On behalf of the management team and everyone at Profound, I would like to thank you for your ongoing interest in our company. For those of you who are shareholders, we appreciate your continued interest and support. I will turn the call over to Mathieu in a moment to provide commercial updates. However, before I do, I would like to provide a brief summary of our Q4 2025 financial results. To streamline things, all of the numbers I will refer to have been rounded, so they are approximate. For the three-month period ended 31 December 2025, the company recorded revenue of $6 million, with $2.3 million from recurring revenue and $3.7 million from one-time sale of capital equipment.

Speaker #3: For those of you who are shareholders, we appreciate your continued interest and support. I will turn the call over to Mathieu in a moment to provide commercial updates.

Speaker #3: However, before I do, I would like a summary of our fourth quarter 2025 financial results. To streamline things, all of the numbers I will refer to have been rounded.

Speaker #3: So, they are approximate. For the three-month period ended December 31, 2025, the company recorded revenue of $6 million, with $2.3 million from recurring revenue and $3.7 million from one-time sales of capital equipment.

Rashed Dewan: Q4 2025 revenue was up 43% from $4.2 million for the same 3-month period a year ago. Gross margin in Q4 2025 was 67% compared to 71% in Q4 2024. The lower than usual Q4 2025 gross margin was primarily due to product mix and new market introductory prices with international distributors in Saudi Arabia and Australia. Total operating expenses in the 2025 Q4, which consist of R&D and SG&A expenses.

Speaker #3: Fourth-quarter 2025 revenue was up 43%, from $4.2 million for the same three-month period a year ago. Gross margin in Q4 2025 was 67%, compared to 71% in Q4 2024.

Speaker #3: The lower-than-usual fourth quarter 2025 gross margin was primarily due to product mix and new market introductory prices with international distributors in Saudi Arabia and Australia.

Speaker #3: Total operating expenses in the 2025 fourth quarter which consist of R&D and SG&A expenses were $11.4 million, compared with $11.3 million in the fourth quarter of 2024.

Arun Menawat: Were $11.4 million compared with $11.3 million in Q4 2024. Overall, the company recorded a Q4 2025 net loss of $8.2 million, or $0.27 per common share, compared to a net loss of approximately $4.9 million or $0.20 per common share in the 3 months ended 31 December 2024. As of 31 December 2025, Profound had cash of $59.7 million. As Arun will discuss later in the call, we believe that we are now on a path to profitable growth. In keeping with that, we expect our cash burn to decline and eventually turn cash flow positive as our revenues continue to grow and our margin remains high. With that, I will now turn the call over to Mathieu for an update on clinical and development activities.

Speaker #3: Overall, the company recorded a fourth quarter 2025 net loss of $8.2 million, or $0.27 per common share, compared to a net loss of approximately $4.9 million, or $0.20 per common share, in the three months ended December 31, 2024.

Speaker #3: As of December 31, 2025, Profound had cash of $59.7 million. As Arun will discuss later in the call, we believe that we are now on a path to profitable growth.

Speaker #3: In keeping with that, we expect our cash burn to decline and eventually turn cash flow positive, as our revenues continue to grow and our margin remains high.

Speaker #3: With that, I will now turn the call over to Mathieu for an update on clinical and development activities.

Operator: Pardon me, Matthew, your line might be muted.

Speaker #4: Pardon me, Mathieu, your line might be muted.

Arun Menawat: I'll go ahead and cover Mathieu's part. I don't hear Mathieu's voice. I know he was having some phone difficulty. Again, I'm sorry. Let me cover Mathieu's part here. Again, Rashed, thank you. Last year, we completed recruitment in CAPTAIN, the first multicenter randomized controlled trial directly comparing a new technology to robotic radical prostatectomy for men with localized prostate cancer. CAPTAIN completes the foundational pillars of clinical evidence validating TULSA as a new platform for prostate disease management. From gold standard treatment, treat and resect data to TACT durable five-year outcomes, CAPTAIN now positions us to demonstrate with statistical rigor TULSA's superior quality of life profile while delivering whole gland treatment efficacy. I'm sorry. CAPTAIN was designed by world-leading experts in prostate cancer clinical trials.

Speaker #3: I will go ahead and cover Mathieu's part. I don't hear Mathieu's voice. I know he was having some phone difficulty. Again, I'm sorry. Let me cover Mathieu's part here.

Speaker #3: So again, Rashed, thank you. Last year, we completed recruitment in Captain the first multi-center randomized controlled trial directly comparing a new technology to robotic radical prostatectomy for men with localized prostate cancer.

Speaker #3: Captain completes the foundational pillars of clinical evidence validating TULSA as the new platform for prostate disease management. From goal-centered treatment, treat and resect data, to tax-durable five-year outcomes, Captain now positions us to demonstrate with statistical rigor TULSA's superior quality of life profile while delivering whole-gland treatment efficacy.

Speaker #3: Captain was designed for world-leading—I'm sorry—Captain was designed by world-leading experts in prostate cancer clinical trials. They built a practical study that ensured successful enrollment and, more importantly, a scientifically robust protocol with endpoints that matter to patients, clinicians, and payers.

Arun Menawat: They built a practical study that ensured successful enrollment and more importantly, a scientifically robust protocol with endpoints that matter to patients, clinicians, and payers. Let me repeat that point. CAPTAIN's endpoints are those that matter to the patients, the clinicians, and the payers. Patients were randomized two to one using an intelligent stratification algorithm, resulting in highly balanced arms, a cornerstone of credible randomized trials. Balanced arms allow us to make definitive comparative conclusions about safety and efficacy. Critically, CAPTAIN measures efficacy in a meaningful way, determining whether clinical significant cancer remains after treatment. Patients and their oncologists want to know whether cancer has been killed and eliminated, not merely whether it had progressed. As discussed last quarter, completing treatments in CAPTAIN locks in the timeline for data readouts, including the imminent release of primary safety and quality of life endpoints.

Speaker #3: Let me repeat that point. Captivating endpoints are those that matter to the patients, the clinicians, and the payers. Patients were randomized two-to-one using an intelligent stratification algorithm, resulting in highly balanced arms.

Speaker #3: A cornerstone of credible randomized trials, balanced arms allow us to make definitive comparative conclusions about safety and efficacy. And critically, CAPTAIN measures efficacy in a meaningful way, determining whether clinically significant cancer remains after treatment.

Speaker #3: Patients and their oncologists want to know whether cancer has been killed and eliminated, not merely whether it had progressed. As discussed last quarter, completing treatments in Captain locks in the timeline for data readouts.

Arun Menawat: Patients and their oncologists want to know whether cancer has been killed and eliminated, not merely whether it had progressed. As discussed last quarter, completing treatments in CAPTAIN locks in the timeline for data readouts, including the imminent release of primary safety and quality of life endpoints.

Speaker #3: Including the imminent release of preliminary primary safety and quality of life endpoints. Last year, we shared initial perioperative outcomes showing faster recoveries after TULSA.

Arun Menawat: Last year, we shared initial perioperative outcomes showing faster recoveries after TULSA than robotic prostatectomy, with zero blood loss or overnight hospitalization, reduced pain, and earlier return to daily function and overall health. These advantages echo the same drivers that fueled early adoption of robotic surgery.

Speaker #3: Then robotic prostatectomy with zero blood loss, or overnight hospitalization, reduced pain, and earlier return to daily function and overall health. These advantages echo the same drivers that fueled early adoption of robotic surgery.

Mathieu Burtnyk: Thanks, Arun, for taking over. I can jump back in if you want.

Speaker #2: Thanks, Arun, for taking over. I can jump back in if you want.

Speaker #3: Okay. Go ahead.

Arun Menawat: Okay, go ahead.

Mathieu Burtnyk: Okay, I'll go ahead. Ahead of schedule, we will present the first clinical outcomes from CAPTAIN next week at the meeting of the European Association of Urology in London, UK. EAU is the premier academic urology meeting, and we are pleased that our data have been selected for inclusion in the late-breaking and high-impact session. The presentation will be delivered by Dr. Laurence Klotz on Friday, March 13th, between 1:00PM and 3:00PM Greenwich Mean Time, which is 8:00AM to 10:00AM Eastern Time. These data include complete 90-day perioperative results and the 6-month primary safety and quality of life endpoints. 6-month quality of life outcomes are an increasingly important and modern endpoint. They reflect meaningful patient recovery and provide a more relevant early indicator of functional preservation.

Speaker #2: Okay, I'll go ahead. So, ahead of schedule, we will present the first clinical outcomes from CAPTAIN next week at the meeting of the European Association of Urology in London, UK.

Speaker #2: EAU is the premier academic urology meeting, and we were pleased that our data had been selected for inclusion in the late-breaking and high-impact session.

Speaker #2: The presentation will be delivered by Dr. Lawrence Klotz on Friday, March 13th, between 1:00 and 3:00 PM Greenwich Mean Time, which is 8:00 to 10:00 AM Eastern Time.

Speaker #2: These data include complete 90-day perioperative results, and the six-month primary safety and quality of life endpoints. Six-month quality of life outcomes are an increasingly important and modern endpoint.

Speaker #2: They reflect meaningful patient recovery and provide a more relevant early indicator of functional preservation. At EAU, we will report six-month urinary incontinence rates, the single most important quality-of-life outcome for patients.

Mathieu Burtnyk: At EAU, we will report six-month urinary incontinence rates, the single most important quality of life outcome for patients, along with 90-day hospital readmissions and time to return to work. At EAU, we will also report positive surgical margin rates in the prostatectomy arm, which we will later compare against TULSA biopsy outcomes in late Q4. CAPTAIN provides the first true apples-to-apples comparison of safety, quality of life, and efficacy, the information required to support a new treatment paradigm. CAPTAIN is the most comprehensive, truly level 1 trial. Let me also take the time to outline the fundamental differences between CAPTAIN and other ongoing studies, namely WATER IV, FARP, and HIFI. First, WATER IV. WATER IV is a multicenter randomized trial comparing Aquablation to radical prostatectomy in men with low and intermediate risk localized prostate cancer.

Speaker #2: Along with 90-day hospital readmissions and time to return to work, at EAU we will also report positive surgical margin rates in the prostatectomy arm, which we will later compare against Tulsa biopsy outcomes in late Q4.

Speaker #2: Captain provides the first true apples-to-apples comparison of safety, quality of life, and efficacy, the information required to support a new treatment paradigm. Captain is the most comprehensive, truly level one trial.

Speaker #2: But let me also take the time to outline the fundamental differences between Captain and other ongoing studies namely Water 4, FART, and Hi-Fi. First, Water 4.

Speaker #2: WATER 4 is a multicenter, randomized trial comparing Aquablation to radical prostatectomy in men with low- and intermediate-risk localized prostate cancer. The inclusion of low-risk patients is a critical distinction because these men harbor minimal disease and are unlikely to progress within the study's follow-up period, limiting any meaningful assessment of cancer control.

Mathieu Burtnyk: The inclusion of low-risk patients is a critical distinction because these men harbor minimal disease and are unlikely to progress within the study's follow-up period, limiting any meaningful assessment of cancer control. Equally important is what the trial measures. WATER IV's primary endpoints are quality of life only. That means that the study is not designed or powered to demonstrate comparative oncologic efficacy. This is particularly notable considering there are no other peer-reviewed data using the Aquablation procedure to eliminate cancer in prostate cancer patients. The trial includes a single cancer-related secondary endpoint assessed only in the Aquablation arm, which is the stable or improved grade group at one year versus baseline. In practice, that means a patient who enters the study with grade group 3, an unfavorable intermediate-risk, clinically significant cancer, will be counted as a success even if the same grade group 3 disease remains after treatment.

Speaker #2: Equally important is what the trial measures. Water 4's primary endpoints are quality of life only. That means that the study is not designed or powered to demonstrate comparative oncologic efficacy.

Speaker #2: This is particularly notable considering there are no other peer-reviewed data using the Aquablation procedure to eliminate cancer and prostate cancer patients. The trial includes a single cancer-related secondary endpoint assessed only in the Aquablation arm which is the stable or improved grade group at one year versus baseline.

Mathieu Burtnyk: The trial includes a single cancer-related secondary endpoint assessed only in the Aquablation arm, which is the stable or improved grade group at one year versus baseline. In practice, that means a patient who enters the study with grade group 3, an unfavorable intermediate-risk, clinically significant cancer, will be counted as a success even if the same grade group 3 disease remains after treatment.

Speaker #2: In practice, that means a patient who enters the study with Grade Group 3, an unfavorable intermediate-risk clinically significant cancer, would be counted as a success even if the same Grade Group 3 disease remains after treatment.

Speaker #2: That is not the same as eliminating cancer or even improving the cancer grade. And is not a randomized head-to-head efficacy readout. Frankly, this is not a level one cancer trial.

Mathieu Burtnyk: That is not the same as eliminating cancer or even improving the cancer grade and is not a randomized head-to-head efficacy readout. Frankly, this is not a level one cancer trial. Next, FARP, the Focal Ablation versus Radical Prostatectomy study. FARP is a single-center European trial which inherently limits generalizability to broad clinical practice, particularly to high-volume US surgeons. While FARP does include a comparative efficacy measure, the bar is not oncologic eradication. Its population, like WATER IV, includes low and intermediate-risk patients with disease localized to one side of the prostate. The focal therapy arm is deemed effective if patients avoid upgrading to grade group four. In other words, men who start with grade group one, two, or three are considered successfully treated as long as they do not progress to grade group four. This is a very different endpoint than killing and eliminating clinically significant cancer.

Speaker #2: Next, FART—the Focal Ablation Versus Radical Prostatectomy study. FART is a single-center European trial, which inherently limits its generalizability to broad clinical practice, particularly for high-volume US surgeons.

Speaker #2: Its population like Water 4 includes low and intermediate risk patients with prostate. While FART does include a comparative efficacy measure, the bar is not oncologic eradication.

Mathieu Burtnyk: The focal therapy arm is deemed effective if patients avoid upgrading to grade group four. In other words, men who start with grade group one, two, or three are considered successfully treated as long as they do not progress to grade group four. This is a very different endpoint than killing and eliminating clinically significant cancer.

Speaker #2: The focal therapy arm is deemed effective if patients avoid upgrading to Grade Group 4. In other words, men who start with Grade Group 1, 2, or 3 are considered successfully treated as long as they do not progress to Grade Group 4.

Speaker #2: This is a very different endpoint than killing and eliminating clinically significant cancer. Even though Tulsa was part of the study and, to the best of our knowledge, the Tulsa arm did better than any other arm, including HIFU, the reason we think it is not the most credible study is the endpoint itself.

Mathieu Burtnyk: Even though TULSA was part of the study, and to the best of our knowledge, the TULSA arm did better than any other arm, including HIFU, the reason we think is the not the most credible study is the endpoint itself. Avoiding upgrade is not the same as proving cancer has been cleared. Patients want to know plainly whether they still have cancer or not. Lastly, HIFI, a large multi-site French comparison of HIFU versus prostatectomy, did not randomize patients and therefore is not considered a level one trial. The result is significant selection bias and unbalanced arms. For example, HIFU patients were on average roughly a decade older than surgery patients. Age differences directly confound the study's primary endpoints of salvage treatment-free survival and erectile function. Older patients are less likely to undergo salvage treatment.

Speaker #2: Avoiding upgrade is not the same as proving cancer has been cleared. Patients want to know plainly whether they still have cancer or not. Lastly, Hi-Fi.

Speaker #2: A large, multi-site French comparison of HIFU versus prostatectomy did not randomize patients and, therefore, is not considered a level one trial. The result is significant selection bias and unbalanced arms.

Speaker #2: For example, HIFU patients were on average roughly a decade older than surgery patients. Age differences directly confound the study's primary endpoints of salvage treatment-free survival and erectile function.

Speaker #2: Older patients are less likely to undergo salvage treatment. Older patients have lower baseline erectile function, which means they have less function to lose after treatment.

Mathieu Burtnyk: Older patients have lower baseline erectile function, which means they have less function to lose after treatment. Without balanced randomization, you cannot make definitive comparative conclusions. Let me conclude. TULSA is solving the debate between focal and whole gland treatment for prostate cancer. CAPTAIN measures efficacy to the same standard as robotic surgery, an essential requirement to establish a new standard of care. TULSA is the only technology capable of whole gland, focal, and customized treatment. Patients often choose focal therapy to preserve quality of life. With TULSA, patients achieve the benefit of focal side effects with the efficacy of whole gland treatment. I will now turn the call over to Tom.

Speaker #2: Without balanced randomization, you cannot make definitive comparative conclusions. Let me conclude. Tulsa is solving the debate between focal and whole gland treatment for prostate cancer.

Speaker #2: CAPTAIN measures efficacy to the same standard as robotic surgery and is an essential requirement to establish a new standard of care. TULSA is the only technology capable of whole gland, focal, and customized treatment.

Speaker #2: Patients often choose focal therapy to preserve quality of life. With TULSA, patients achieve the benefit of focal side effects with the efficacy of whole gland treatment.

Speaker #2: I will now turn the call over to Tom.

Speaker #1: Thank you, Matthew. As Rashed mentioned, we achieved a year-over-year revenue increase of 43%. We had 78 Tulsa pro sites as of December 31st, 2025.

Tom Tamberrino: Thank you, Matthew. As Rashed mentioned, we achieved a year-over-year revenue increase of 43%. We had 78 TULSA-PRO sites as of 31 December 2025. The company's TULSA-PRO qualified sales pipeline is also growing and currently stands at 110 new systems being classified within one of the verify, negotiate, and contracting stages, which are the final three phases of our sales process. Q3 2025 was a true commercial inflection point, and we saw the momentum continue in Q4. We're continuing to see broader adoption of TULSA-PRO across both academic and community hospitals.

Speaker #1: The company's TULSA-PRO qualified sales pipeline is also growing and currently stands at 110 new systems being classified within one of the verify, negotiate, and contracting stages.

Speaker #1: Which are the final three phases of our sales process. Q3, 2025 was a true commercial inflection point and we saw the momentum continue in Q4.

Speaker #1: We're continuing to see broader adoption of Tulsa Pro across both academic and community hospitals. That's largely due to increased awareness of the system's clinical benefits and the establishment of a reimbursement pathway made possible by the Category One CPT codes for the Tulsa procedure.

Tom Tamberrino: That's largely due to increased awareness of the system's clinical benefits and the establishment of a reimbursement pathway made possible by the category one CPT codes for the TULSA procedure. TULSA reimbursement was confirmed again for 2026 at urology level 7, which is appropriate as TULSA utilizes real-time MR, which is crucial to better clinical outcomes. Our team has also initiated engagement with private insurance carriers, we expect coverage decision from carriers in the second half of 2026. Our global commercial leadership team has never been stronger than it is today. This includes sales, marketing, business development, health economics, market access, patient education, patient access, clinical service, and strategic initiatives. We have a world-class team of professionals here in the US and around the world.

Speaker #1: Tulsa reimbursement was confirmed again for 2026 at urology level seven, which is appropriate as Tulsa utilizes real-time MR, which is crucial to better clinical outcomes.

Speaker #1: Our team has also initiated engagement with private insurance carriers and we expect coverage decision from carriers in the second half of 2026. Our global commercial leadership team has never been stronger than it is today.

Speaker #1: This includes sales, marketing, business development, health economics, market access, patient education, patient access, clinical service, and strategic initiatives. We have a world-class team of professionals here in the U.S. and around the world.

Tom Tamberrino: It is noteworthy that we have launched a strategic TULSA program team, which will use our organizational leverage to ensure successful TULSA program launches. This team will grow procedural volume thereafter. Our team remains focused on targeting high-volume urology centers and supporting physician training. We're leveraging positive clinical outcomes and patient testimonials to drive engagement and deepen relationships with our customers. Looking ahead, I'm confident in our ability to further accelerate this growth. We're well-positioned to capitalize on the expanding interest in image-guided interventions. We continue to scale our commercial footprint while validating our technology in the prostate care market. As Arun will also highlight, there are a number of important catalysts coming in 2026 that continue to drive our belief that we will reach high double-digit to low triple-digit revenue growth.

Speaker #1: It is noteworthy that we have launched a strategic TULSA program team, which will use our organizational leverage to ensure successful TULSA program launches, and this team will grow procedural volume thereafter.

Speaker #1: Our team remains focused on targeting high-volume urology centers and supporting physician training. We're leveraging positive clinical outcomes and patient testimonials to drive engagement and deepen relationships with our customers.

Speaker #1: Looking ahead, I'm confident in our ability to further accelerate this growth. We're well positioned to capitalize on the expanding interest in image-guided interventions, and we continue to scale our commercial footprint while validating our technology in the prostate care market.

Speaker #1: And as the room will also highlight, there are a number of important catalysts coming in 2026 that continue to drive our belief that we will reach high double-digit to low triple-digit revenue growth.

Tom Tamberrino: Importantly, we believe we are now on a path to not just growth, but profitable growth with this selling approach. The math to achieve this target is simple. With just 200 TULSA programs cases using existing MR installed base. Assuming a conservative 50 TULSA procedures per site per year and a $5,500 recurring revenue to Profound per procedure, we would be at $55 million in procedural revenue. Add on to this $10 million in annual service revenue and another $20 million in new capital sale revenue based on an estimate of 40 new TULSA-PRO systems sold per year at an average sales price of $500,000 per system. Altogether, this would put us around $85 million in annual revenue. With 70%+ gross margin already retrieved, we would be profitable. We're also building strategic partnerships on a global basis.

Speaker #1: Importantly, we believe we are now on a path to not just growth, but profitable growth with this selling approach. The math to achieve this target is simple.

Speaker #1: With just 200 Tulsa program cases, using existing MR installed base. Assuming a conservative 50 Tulsa procedures per site per year and a $5,500 recurring revenue to Profound per procedure, that's $55 million in procedural revenue.

Speaker #1: Add on to this $10 million in annual service revenue and another $20 million in new capital sale revenue based on an estimate of 40 new Tulsa Pro systems sold per year at an average sales price of $500,000 per system Altogether , this would put us around $85 million in annual revenue , with 70% plus gross margin already achieved .

Speaker #1: We would be profitable. We're also building strategic partnerships on a global basis. Recent distribution agreements with our Focal One and TULSA-PRO systems in Saudi Arabia and Genesis Healthcare in Australia and New Zealand have already started to bear fruit, with multiple units sold in Q4 2025.

Tom Tamberrino: Recent distribution agreements with Al Faisaliah Medical Systems in Saudi Arabia and Getz Healthcare in Australia and New Zealand have already started to bear fruit, with multiple systems sold in Q4 2025. Our partnerships with OEMs such as Siemens are also progressing well, and there's more exciting opportunities to come on the partnership front as 2026 progresses. Thank you for your time. I will now turn the call over to Arun.

Speaker #1: Our partnerships with OEMs such as Siemens are also progressing well. And there's more exciting opportunities to come on the partnership front, as 2026 progresses.

Speaker #1: Thank you for your time . I will now turn the call over to Arun .

Speaker #2: Thank you , Tom , and good afternoon . Okay . Prostate cancer treatment has been a bipolar world up till now . Whole gland robotic prostatectomy or radiation therapy are the primary tools for treating prostate cancer today .

Arun Menawat: Thank you, Tom, and good afternoon again. Prostate cancer treatment has been a bipolar world up till now. Whole gland robotic prostatectomy or radiation therapy are the primary tools for treating prostate cancer today. Trying to take some share away from these mainstream whole gland modalities are focal therapy alternatives such as HIFU, cryoablation, and IRE that treat typically less than 35% of the gland by focusing only on the visible cancer within the prostate. TULSA is establishing itself as a third distinct category. TULSA-PRO can treat the whole gland, a small portion of the gland, and everything in between. At the same time, the TULSA procedure provides the best of both worlds. The same good clinical outcomes of whole gland prostate cancer treatment, but with lower side effects of focal gland treatment.

Speaker #2: Trying to take some share away from these mainstream whole-gland modalities are focal therapy alternatives such as HIFU, cryoablation, and IRE that treat typically less than 35% of the gland.

Speaker #2: By focusing only on the visible cancer within the prostate . But Tulsa is establishing itself as a third distinct category . Tulsa Pro can treat the whole gland .

Speaker #2: A small portion of the gland, and everything in between. At the same time, the TULSA procedure provides the best of both worlds.

Speaker #2: The same good clinical outcomes of whole gland prostate cancer treatment . But with lower side effects of focal gland treatment . The fact that the Tulsa procedure is a third category all by itself is an important message , but it can be difficult for urologists and hospitals to understand the differences as they're getting bombarded by the focal messages from multiple companies .

Arun Menawat: The fact that the TULSA procedure is a third category all by itself is an important message. It can be difficult for urologists and hospitals to understand the differences as they're getting bombarded by the focal messages from multiple companies. Difficult, but not impossible. Virtually all surgeons who have used both TULSA-PRO and other technologies have ended up favoring TULSA by far because of its expanded capability to treat the full spectrum of prostate disease while minimizing quality of life side effects like urinary incontinence and erectile dysfunction. Today, we believe that whole gland robotic prostatectomy and radiation therapy have run their course, and alternative focal prostate therapies are not enough. The TULSA-PRO system stands apart in its proven ability to treat the full spectrum of prostate disease, as well as providing better economics to providers and more value to payers.

Speaker #2: Difficult , but not . Virtually all surgeons who have used both Tulsa Pro and other technologies have ended up favoring Tulsa by far because of its expanded capability to treat the full spectrum of prostate disease .

Speaker #2: While minimizing quality of life side effects like urinary incontinence and erectile dysfunction . Today , we believe that whole gland robotic prostatectomy and radiation therapy have run their course and alternative focal prostate therapies are not enough .

Arun Menawat: Today, we believe that whole gland robotic prostatectomy and radiation therapy have run their course, and alternative focal prostate therapies are not enough. The TULSA-PRO system stands apart in its proven ability to treat the full spectrum of prostate disease, as well as providing better economics to providers and more value to payers.

Speaker #2: The Tulsa-Pro system stands apart in its proven ability to treat the full spectrum of prostate disease, as well as providing better economics to providers and more value to payers.

Speaker #2: Tulsa uses real time Mr. imaging that has several significant clinical and economic advantages . First , the real time Mr. Thermometry enables continuous visualization and autonomous autonomous temperature adjustment throughout the procedure .

Arun Menawat: TULSA uses real-time MR imaging that has several significant clinical and economic advantages. First, the real-time MR thermometry enables continuous visualization and autonomous temperature adjustment throughout the procedure. This level of precision allows the physicians to tailor therapy to each patient while minimizing side effects typically associated with robotic surgery or radiation. Second, MR produces standardized 2D cross-sectional images enabling AI analysis, unlike what may be possible using other imaging modalities such as ultrasound. Using this capability, TULSA-PRO incorporates an AI-based treatment plan. Upon one click, the AI software segments the prostate and shows the surgeon a treatment design while keeping the nerve bundle and the sphincter muscle region safely outside the boundaries. Using a digital pen, the surgeon can either accept the AI-generated plan or quickly modify it if necessary, making overall treatment planning fast and reliable.

Speaker #2: This level of precision allows the physicians to tailor therapy to each patient while minimizing side effects. Typically associated with robotic surgery or radiation.

Speaker #2: Second , Mr. produces standardized 2D cross-sectional images enabling AI analysis . Unlike what may be possible using other imaging modalities such as ultrasound .

Speaker #2: Using this capability , Tulsa Pro incorporates an AI based treatment plan upon one click . The AI software segments the prostate and shows the surgeon a treatment design while keeping the nerve bundle and the sphincter muscle region safely outside the boundaries .

Speaker #2: Using a digital pen, the surgeon can either accept the AI-generated plan or quickly modify it if necessary, making overall treatment planning efficient and reliable.

Speaker #2: The Tulsa AI Contouring Assistant is based upon treatment designs by the best-known radiologists, and is proven to be superior to surgeon designs.

Arun Menawat: The Tulsa AI contouring assistant is based upon treatment designs by the best-known radiologists and is proven to be superior to surgeon designs. Third, MR enables real-time temperature monitoring. Using this capability and directional ultrasound from a catheter placed in the urethra, Tulsa Pro gently heats tissue only to kill temperature between 55 to 57 degrees centigrade without boiling or charring the tissue. The net effect is that the whole gland or any surgeon-prescribed region can be treated effectively, and the dead tissue is reabsorbed by the body. In the FDA-registered TACT clinical trial, post-treatment prostate size was measured over time. The data showed that the median reduction in prostate size was 91% by effectively shrinking the prostate around the urinary channel, which is proactively protected during the procedure. Fourth, Tulsa AI enables cleaner margins.

Speaker #2: Third , Mr. enables real time temperature monitoring using this capability and directional ultrasound from a catheter placed in the urethra . Ultra Tulsa Pro gently heats tissue only to kill temperature between 55 to 57°C without boiling or charring .

Speaker #2: The tissue . The net effect is that the whole gland , or any surgeon prescribed region , can be effectively , and the dead tissue is reabsorbed by the body .

Speaker #2: In the FDA registered fact clinical trial post prostate size was measured over time , the data showed that the median reduction in prostate size was 91% by effectively shrinking the prostate around the urinary channel , which is proactively protected during the procedure .

Speaker #2: Fourth, Tulsa AI enables cleaner margins during the Tulsa procedure in real time. It enables the treating surgeons to see the abundance of cancer in the prostate, if necessary.

Arun Menawat: During TULSA procedure, real-time MR enables the treating surgeons to see abundance of cancer in the prostate. If necessary, the surgeon can engage another TULSA AI module, Thermal Boost, to apply additional heat to the region and ensure kill temperatures to the outer margin of the prostate or even slightly beyond the margin. Fifth, not to confuse things, we believe even TULSA partial gland or focal procedures are superior to other focal modalities, which all rely on ultrasound imaging. TULSA procedures are based upon real-time MR diffusion and T2 images. These images, combined together, visualize the abnormal cell regions of the prostate, which may be cancerous. This real-time visualization allows surgeons to define the treatment region to completely include the suspicious zones, thereby increasing the likelihood of a more durable focal/partial gland treatment while maintaining minimal side effects.

Speaker #2: The surgeon can engage another SULSA module, ThermoBoost, to apply additional heat to the region and ensure kill temperatures to the outer margin of the prostate, or even slightly beyond the margin.

Speaker #2: Fifth, not to confuse things, we believe even TULSA partial gland or focal procedures are superior to other focal modalities, which all rely on ultrasound imaging.

Speaker #2: Tulsa procedures are based upon real time Mr. Diffusion and T2 images . These images , combined together , visualize the abnormal cell regions of the prostate , which may be cancerous .

Speaker #2: This real-time visualization allows surgeons to define the treatment region to completely include the suspicious zones, thereby increasing the likelihood of a more durable focal partial gland.

Speaker #2: Treatment . While maintaining minimal side effects . And finally , advanced real time Mr. imaging provides confirmation and precision of cell kill at the end of the procedure .

Arun Menawat: Finally, advanced real-time MR imaging provides confirmation and precision of cell kill at the end of the procedure. No matter what the intent to kill, it in turn improves predictability of outcomes. To summarize, TULSA-PRO solves the debate about whether prostate cancer treatment should be whole gland or focal without compromise. TULSA-PRO can be used to treat the whole gland, a small portion of the gland, or anything in between, in large prostates, small prostates, or even radio recurrent prostates. With the clear benefits of MR imaging and guidance, it is being used successfully to treat low, medium, or high risk cancers as well as salvage cases. Switching briefly to BPH, mainstream treatment with transurethral resection of the prostate or TURP is largely unchanged over the past 100 years.

Speaker #2: No matter what the intent to kill , it's in turn improves predictability of outcomes . To summarize , Tulsa Pro solves the debate about whether prostate cancer treatment should be whole gland or focal without compromise .

Speaker #2: Tulsa Pro can be used to treat the whole gland . A small portion of the gland , or anything in between . In large prostates small prostates , or even radio .

Speaker #2: Recurrent prostates, and with the clear benefit of MR imaging and guidance. And it is being used successfully to treat low, medium, or high-risk cancers, as well as salvage cases.

Speaker #2: Switching briefly to BPH , mainstream treatment with transurethral resection of the prostate or Terp , is largely unchanged over the past 100 years , many alternative treatment methods have emerged that aim to improve the patient experience and reduce the rates of complications , such as bleeding , erectile dysfunction , loss of ejaculation , and the need to stay in the hospital overnight .

Arun Menawat: Many alternative treatment methods have emerged that aim to improve the patient experience and reduce the rates of complications such as bleeding, erectile dysfunction, loss of ejaculation, and the need to stay in the hospital overnight for 1, 2, or more days. As demonstrated in the recently published study from the University of Turku, TULSA offers significant improvements in intentional prostate symptom scores, peak urine volume rates, and discontinuation of BPH medications. That said, while urologists have been treating lots using TULSA-PRO since we received 510(k) clearance in 2019, the technology is only one capable of treating hybrid patients suffering from both prostate cancer and BPH, our BPH patient volumes have been low to date due to the relatively larger treatment duration compared to other modalities. The latest TULSA-AI module, Volume Reduction, is changing the BPH treatment paradigm.

Speaker #2: For one , two or more days . As demonstrated in the recently published study from the University of Turku . Tulsa offers significant improvements in international prostate .

Speaker #2: Some symptom scores , peak urine volume rates and discontinuation of BPH medications That said , while urologists have been treating Luts using Tulsa Pro since we received 510 clearance in 2019 and the technology is only one capable of treating hybrid patients suffering from both prostate cancer and BPH .

Speaker #2: Our BPH patient volumes have been low to date due to the relatively larger treatment duration compared to other modalities. The latest TULSA AI module volume reduction is changing the BPH treatment paradigm.

Speaker #2: Tulsa AI Volume Reduction is designed to maintain all of the many proven advantages of treating cancer with Tulsa . While leveling the playing field on the time it takes for a urologist to plan and complete the procedure by quickly identifying the overgrown region of the BPH , the software streamlines the workflow and reduces procedure times to 60 to 90 minutes .

Arun Menawat: TULSA-AI Volume Reduction is designed to maintain all of the many proven advantages of treating cancer with TULSA while leveling the playing field on the time it takes for a urologist to plan and complete the procedure by quickly identifying the overgrown region of the BPH. The software streamlines the workflow and reduces procedure times to 60 to 90 minutes. Adoption of TULSA-PRO is also making more and more business sense. The economic proposition of an interventional MR has become stronger as of January 2026. CMS has studied reimbursement for prostate biopsy and made the determination that reimbursement for real-time MR in-bore biopsy should be separated from the method which is prevalent today, which uses real-time ultrasound with prior diagnostic MR image registered to it.

Speaker #2: Adoption of Tulsa Pro is also making more and more business sense . The economic proposition of an interventional Mr. has become stronger January 20th .

Speaker #2: as the As of January 2026 , CMS has studied reimbursement for prostate biopsy and made the determination that reimbursement for real time Mr. .

Speaker #2: In more biopsy should be separated from the method , which is prevalent today , which uses real time ultrasound with prior diagnostic . Mr. .

Speaker #2: Image registered to it . This allows the surgeon to visualize the cancerous region through the registered Mr. image . But have the convenience of ultrasound to perform the biopsy .

Arun Menawat: This allows the surgeon to visualize the cancerous region through the registered MR image but have the convenience of ultrasound to perform the biopsy. While this technique is better than one where MR images are not used, clinical data shows that registration of MR images still create an error of about 20%. For that reason, CMS has now provided separate reimbursement for real-time in-bore MR biopsy as it is more accurate but more costly to perform. The reimbursement for a standard MR registered ultrasound image biopsy is about $3,500, whereas reimbursement for the real-time MR biopsy has been set at about $5,500, which is 57% higher. This is a huge change, and the implication is just beginning to get attention.

Speaker #2: While this technique is better than one where Mr. images are not used , clinical data shows that registration of Mr. images still create an error of about 20% .

Speaker #2: For that reason , CMS has now provided separate reimbursement for real time in-bore Mr. . Biopsy is more accurate , but more costly to perform the reimbursement for this a standard Mr. ultrasound image biopsy is about $3,500 , whereas reimbursement for .

Speaker #2: Registered real time Mr. the biopsy has been set at about $5,500 , which is 57% higher . This is a huge change and the implication is just beginning to get attention And comparing Medicare , National average payments , hospital reimbursement for the Tulsa procedure in 2026 is 13,479 , compared to 10,860 for robotic surgery and 9672 for focal therapies like Hi-fu and Cryoablation So now , at the start of 2026 , there is reimbursement for both In-bore Mr. .

Arun Menawat: Comparing Medicare national average payments, hospital reimbursement for the TULSA procedure in 2026 is $13,479, compared to $10,860 for robotic surgery and $9,672 for focal therapies like HIFU and bioablation. Now, at the start of 2026, there is superior reimbursement for both in-bore MR prostate biopsy and the TULSA procedure. Putting all this together, our thesis that the future of prostate disease care will be MR-centered is coming true. There is sufficient clinical evidence that if prostate cancer is visible on an MR, it should be treated immediately, making iMRI in-bore biopsy and diagnostic modality of choice. Typically, there are three to five biopsies procedure performed for each one prostate cancer treatment.

Speaker #2: Prostate biopsy and the TULSA procedure. Putting all this together, our thesis is that the future of prostate disease care will be MR.

Speaker #2: Centered is coming true . This sufficient clinical evidence there is sufficient clinical evidence that if prostate cancer is visible on an Mr. . It should be treated immediately , making imri in-bore biopsy and diagnostic modality of choice .

Speaker #2: Typically , there are 3 to 5 biopsies . Procedure performed for each one . Prostate cancer treatment . And whereas there are about 1 million prostate biopsies done every year , no one single prostate cancer treatment modality is currently used .

Arun Menawat: Whereas there are about 1 million prostate biopsies done every year, no one single prostate cancer treatment modality is currently used for more than 100,000 patients per year. Doing the math, there is currently a clear disconnect between the preferred MR-guided diagnostic approach and mainstream treatment modalities. We believe only TULSA is suited to bridge that gap as we move forward. Our strategy in the near term is to focus on existing MRs and achieve the install base of 200 TULSA-PRO sites. At the same time, we are in the final stages of achieving compatibility with the new Siemens interventional MR, the Free.Max.

Speaker #2: For more than 100,000 patients per year, doing the math, there is currently a clear disconnect between the preferred MR-guided diagnostic approach and mainstream treatment modalities.

Speaker #2: We believe only Tulsa is suited to bridge that gap as we move forward . Our strategy in the near term is to focus on existing EMRs and achieve the installed base of 200 Tulsa Pro sites .

Speaker #2: At the same time , we are in the final stages of achieving compatibility with the new Siemens interventional Mr. . The free Max .

Speaker #2: We believe that as early as later in 2026 , Tulsa plus sites with the free Max Plus Tulsa Pro will be operational , opening the door to the future and interventional Mr. Suite with Elsa .

Arun Menawat: We believe that as early as later in 2026, TULSA plus sites with the Free.Max plus TULSA-PRO will be operational, opening the door to the future, an interventional MR suite with TULSA. These sites will further streamline the patient and staffing workflow, making it easier to further drive adoption. We continue to get confirmation that hospitals that are being paid for all qualified Medicare patients and that they are satisfied with the amount received. In addition, many commercial payers are also now covering the procedure on a case-by-case basis. We are excited by the recent upgrading of our AI-powered software to include simpler patient workflow for patients who suffer from BPH symptoms.

Speaker #2: These sites will further streamline the patient and staffing workflow , making it easier to further drive adoption . We continue to get confirmation that hospitals that are being paid for all qualified Medicare patients , and that they are satisfied with the amount received .

Speaker #2: In addition , many commercial payers are also now covering the procedure on a case by case basis , and we are excited by the recent upgrading of our AI powered software to include simpler patient workflow for patients who suffer from BPH symptoms .

Speaker #2: Having the flexibility to safely , effectively and efficiently treat a variety of patients with prostate cancer , and now with BPH gives our sites the flexibility to stack cases , creating a full Tulsa Procedure day , which leads to efficiency and easier scheduling for the hospital staff .

Arun Menawat: Having the flexibility to safely, effectively, and efficiently treat a variety of patients with prostate cancer and now with BPH, gives our sites the flexibility to stack cases, creating a full TULSA procedure day, which leads to efficiency and easier scheduling for the hospital staff. It also significantly expands our TAM. The economics associated with real-time iMRI procedures in prostate cancer like MR in bore biopsy and TULSA are becoming increasingly compelling. Before my closing remarks, I would like to take a few minutes to talk about our second large opportunity, Sonalleve. This technology, which is currently offered primarily as a one-time capital sale, uses same MR imaging and thermographic technology as TULSA-PRO and combines that with focused ultrasound from outside the body, delivered via a disc to treat disease.

Speaker #2: It also significantly expands our TAM and the economics associated with real-time iMRI procedures in prostate cancer. Like MR in-bore biopsy and TULSA are becoming increasingly compelling.

Speaker #2: Before my closing remarks , I would like to take a few minutes to talk about our second large opportunity Sonally this technology , which is currently offered primarily as a one time capital sale , uses same Mr. imaging and thermographic technology as Tulsa Pro and combines that with focused ultrasound from outside the body , delivers delivered via a disc to treat disease .

Speaker #2: There are currently ten devices operational in parts of Europe, China, and Southeast Asia, where over 4,000 women have already been treated with the technology for adenomyosis and uterine fibroid diseases of the uterus that can cause chronic pain and heavy and/or prolonged menstruation.

Arun Menawat: There are currently 10 Sonalleve devices operational in parts of Europe, China, and Southeast Asia, where over 4,000 women have already been treated with the technology for adenomyosis and uterine fibroid diseases of the uterus that can cause chronic pain and heavy M or prolonged menstruation. Treatment with Sonalleve has demonstrated pain and symptom relief without affecting the ovarian reserve and with reports of women preserving their fertility. Sonalleve is also now being used in research and clinical trials in Europe for the ablation of pancreatic cancer tissue and other oncological disease. We are working on an FDA regulatory strategy for the technology and a potential new recurring revenue opportunity on top of the initial capital sale for the device. We'll provide more details on our progress later this year.

Speaker #2: Treatment with Sonalleve has demonstrated symptom relief without affecting the ovarian reserve and with reports of women preserving their fertility. Sonalleve is also now being used in research and clinical trials in Europe for the ablation of pancreatic cancer.

Speaker #2: Tissue and other oncological disease. We are working on an FDA regulatory strategy for the technology and a potential new recurring revenue opportunity.

Speaker #2: On top of the initial capital sale for the device , and will provide more details on our progress later this year To summarize , profound is pioneering .

Arun Menawat: To summarize, Profound is pioneering iMRI procedures which enable precise incision-free therapies that improve clinical confidence, procedural control, and patient outcomes. By leveraging real-time MR guidance, Profound's technologies are designed to replace uncertainty with clarity across treatment planning, delivery, and confirmation. We're the only company that has the technology to kill tissue from the inside of the body via a catheter that is placed via a natural orifice, which is our TULSA technology, or from the outside via a disc, which is the Sonalleve technology. In either product configuration, MR is used to image and measure temperature in real time and enable cell kill with a minimum energy requirement. Our sales team is clearly delivering, and the pipeline, as we define, is now growing over 110 as compared to 97 at the end of 2025.

Speaker #2: I MRI procedures , which enable precise , incision free therapies that improve clinical confidence . Procedural control and patient outcomes by leveraging real time Mr. guidance .

Speaker #2: Profound technology that technologies are designed to replace uncertainty with clarity across treatment planning , delivery and confirmation . Where the only company that has the technology to kill tissue from the inside of the body via a catheter that is placed via a natural orifice , which is our Tulsa technology , or from the outside , we are a disc which is the technology in either product configuration .

Speaker #2: Mr. . Is used to image and measure temperature in real time , and enable cell kill with a minimum energy requirement . Our sales team is clearly delivering and the pipeline as we define , is now growing over 110 as compared to 97 at the end of 2025 .

Speaker #2: Tulsa Pro install base was at 78 at year end , and we expect that to reach approximately 120 by end of 2026 . The new AI volume reduction module to treat patients with BPH symptoms is significantly reducing the procedure time , making it very competitive with other BPH treatment technologies .

Arun Menawat: TULSA-PRO install base was at 78 at year-end, and we expect that to reach approximately 120 by end of 2026. The new AI Volume Reduction module to treat patients with BPH symptoms is significantly reducing the procedure time, making it very competitive with other BPH treatment technologies. This application has the potential to add 400,000 patients to our annual TAM, essentially tripling our previous TAM. Adding the BPH module also enables physicians to create a full TULSA day during which both their prostate cancer and/or BPH patients are treated. From the perspective of ease of scheduling and creating a vibrant TULSA program, this ability is particularly important. Our second technology platform, Sonalleve, is poised to start becoming a more core part of our story in the coming months and quarter, both internationally and in the United States.

Speaker #2: This application has the potential to add 400,000 patients to our annual TAM, essentially tripling our previous TAM. Adding the BPH module also enables physicians to create a full Tulsa Day, during which both their prostate cancer and BPH patients are treated from the perspective of ease of scheduling and creating a vibrant Tulsa program.

Speaker #2: This ability is particularly important . Our second technology platform , Sonyliv , is poised to start becoming a more core part of our story in the coming months , and quarter , both internationally and in the United States .

Speaker #2: And finally , we believe that on the basis of the many catalysts we see ahead , we can reach high double digit to low triple digit revenue growth .

Arun Menawat: Finally, we believe that on the basis of the many catalysts we see ahead, we can reach high double digit to low triple digit revenue growth. This ends our prepared remarks for today. With that, we're happy to take any questions you might have. Operator?

Speaker #2: This ends our prepared remarks for today. With that, we're happy to take any questions you might have. Operator?

Speaker #3: Thank you . As a reminder to ask a question , please press star one one on your telephone and wait for your name to be announced .

Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. One moment while we compile our Q&A roster. Our first question will come from the line of Ben Haynor with Lake Street Capital Markets. Your line is open. Please go ahead.

Speaker #3: To withdraw your question , please press star one one again . One moment while we compile our Q&A roster Our first question will come from the line of Ben Haner with Lake Street Capital Markets .

Speaker #3: Your line is open. Please go ahead.

Speaker #4: Good afternoon , gentlemen . Thanks for taking the questions First of all , for me on the private payers . I appreciate the commentary on getting commercial insurers to pay for it .

Ben Haynor: Good afternoon, gentlemen. Thanks for taking the questions. First off for me on the private payers. I appreciate the commentary on getting commercial insurers to pay for it, you think, in the second half of the year. I was wondering if you can give us any sense of what your customers are seeing now. I know I think on the Q3 call, you had mentioned that commercial insurers were reimbursing roughly $25,000 to 65,000 is the range you had seen. Any commentary on whether you're being successful in getting any commercial rejections overturned, ultimately?

Speaker #4: You think in the second half of the year I was wondering if you can give us any sense of what your customers are seeing now , I know I think on the Q3 , you mentioned that commercial insurers were reimbursing roughly 25,000 to 65,000 .

Speaker #4: Is the range you had seen? And then, any commentary on whether you're being successful in getting any commercial rejections overturned, ultimately?

Arun Menawat: Good afternoon, Ben. Yes. The number of patients who are going through the private is increasing. I would say most of them are between 1.5 to 2.5x of Medicare. We're pretty satisfied and our sites are happy with the numbers. With respect to coverage and reversals from rejections, we're tracking better than 90% at this point. Just recently I saw a very strategic reversal. You know, there are certain independent organizations in the US like Maximus and so on. These companies actually make independent determinations that hospitals use as guides of whether or not a new technology is considered experimental or standard of care. They recently deemed it, our TULSA-AI as standard of care. We're pretty optimistic.

Speaker #2: Good afternoon Ben . Yes . So the number of patients who are going through the private is increasing the typical payments are between , I would say most of them are between 1.5 to 2.5 x of Medicare .

Speaker #2: So we're pretty satisfied . And our sites are happy with the numbers . With respect to Coverage and reversals from rejections . We're tracking better than 90% at this point .

Speaker #2: Just recently , I saw a really very strategic reversal . There are certain independent organizations in the US like Maximus and so on .

Speaker #2: These companies actually make independent determinations that hospitals use as guides for whether or not a new technology is considered experimental or standard of care.

Speaker #2: And they recently deemed it qualifies as standard of care . So we're pretty optimistic , actually . We're very , very satisfied with the the numbers that we're seeing .

Arun Menawat: Actually, we're very satisfied with the numbers that we're seeing, and we're very optimistic to start to see actually converting these rejections into coverage decisions in the second half this year.

Speaker #2: And we're very optimistic. We'll start to see actually converting these rejections into coverage decisions in the second half of this year.

Speaker #4: That's very helpful . Great . And then I apologize if I missed this , but can you maybe comment comment here on the dynamics of the sequential decline you saw in non-capital revenue here

Ben Haynor: That's very helpful. Great. I apologize if I missed this, but can you maybe comment here on the dynamics of the sequential decline you saw in non-capital revenue here?

Arun Menawat: I lost you a little bit. Could you repeat the question?

Speaker #2: You a little bit . Could you repeat the question ?

Speaker #4: Yeah , I was wondering . I apologize if I missed this , but could you maybe comment on the dynamics that you saw in terms of utilization ?

Ben Haynor: Yeah. I apologize if I missed this but, could you maybe comment on the dynamics that you saw in terms of utilization? It looks like there was a sequential decline in non-capital revenue here from Q3 to Q4.

Speaker #4: It looks like there was a sequential decline in in noncapital revenue here from Q3 to Q4

Arun Menawat: I'm sorry, I cannot hear you.

Speaker #2: I'm sorry, I could not hear you.

Ben Haynor: That's okay. Could you comment on the dynamics of utilization from Q3 to Q4 and whether the movement in non-capital revenue sequentially?

Speaker #4: I could you comment on the dynamics of utilization from Q3 to Q4 and whether the movement in non-capital revenue sequentially .

Speaker #2: Yeah , yeah . Got it . Okay . Yeah . No , I think the the number of , you know , I think the trend that we've talked about is pretty much every site is slowly but surely increasing usage and I think last quarter we had a specific number that , that quarter over quarter we were up about 20 plus percent .

Arun Menawat: Yeah. Yeah. Got it. Okay. Yeah. No, I think the number of... You know, I think the trend that we've talked about is pretty much every site is slowly but surely increasing usage. You know, I think last quarter, we had a specific number that quarter-over-quarter, we were up about 20 plus percent. I think that trend continues in terms of procedures. I think as Tom talked about also a little bit in his presentation, I think this year with the new catalysts, I think the CAPTAIN data coming out next Friday, the BPH module now being distributed to our customers, I think that certainly we expect that the rate of usage will increase at a faster pace in 2026.

Speaker #2: I think that that trend continues in terms of procedures . I think as Tom talked about also a little bit in his presentation , that I think this year would the new catalysts , I think the Captain Data coming out next Friday , the BPH module now being distributed through our customers , I think that certainly we expect that the rate of usage will increase at a faster pace in 2026 with respect to your question , if you're asking about the dynamics on the capital , I think we are still in the early innings and capital is harder to predict than recurring revenue is for sure .

Arun Menawat: With respect to your question, if you're asking about the dynamics on the capital, I think we are still in the early innings, and capital is harder to predict than recurring revenue is for sure. We did give a couple of market introductory prices to a couple of sites in Q4, as Rashed mentioned. I think at the moment, you will see the ratio of capital versus recurring in our total product mix, is gonna become a little bit more capital heavy, because we are selling the devices now. As Tom mentioned, the pipeline is pretty strong. Over the long haul, I think that we remain primarily a recurring revenue company. Over 70% of our revenue ultimately will come from recurring revenue.

Speaker #2: And we did give a couple of market introductory prices to a couple of sites in Q4 as Richard mentioned , and I think at the moment you will see the ratio of capital versus recurring in our total product mix is going to become a little bit more capital heavy because we are selling the devices now and and as Tom mentioned , the pipeline is pretty , pretty strong .

Speaker #2: But over the long haul , I think that we remain primarily a recurring revenue company over 70% of our revenue ultimately will come from recurring revenue .

Speaker #2: But in the next couple of years , as we build this , the install base , I think you'll see that ratio to be closer to , you know , it'll range between 40 to 60% .

Arun Menawat: In the next couple of years as we build this, the install base, I think you'll see that ratio to be closer to, you know, it'll range, you know, between 40% to 60% capital per quarter.

Speaker #2: Capital per quarter

Speaker #4: Okay . Got it . And then just talking about the installs for this year , looking at for 40 or so more units is and that's roughly a third of the pipeline that you have .

Ben Haynor: Okay, got it. Then just talking about the installs for this year and looking at net for, you know, 40 or so more units, and that's roughly a third of the pipeline that you have. Are there any bottlenecks on your end that need to be taken care of in terms of the capacity to install new units? Is there anything that you can improve on your side of things?

Speaker #4: Are there any bottlenecks on your end that need to be taken care of in terms of the capacity to install new units?

Speaker #4: Is there anything that you can improve on on your side of things

Arun Menawat: Ben, we are a growing company. Most certainly Q4 was a very dynamic quarter, because we shipped for the first time systems in double digits. Yes, we are increasing our logistics and operations side. We're actually looking to put a warehouse in the US that would allow us to streamline some of the shipments. We are also putting all the ERP systems to make sure all the scheduling and building of the devices are taking place. Nothing that is anything out of the ordinary that we would not do at this time in our company. Yeah, there is a lot of dynamics along the lines of making sure that as Tom and his team starts to build the top line, that we are able to deliver appropriately.

Speaker #2: Ben , we are growing company , so most certainly Q4 was a very dynamic quarter . And because we shipped for the first time , systems in double digits and yes , we are increasing our logistics and operations side .

Speaker #2: We're actually looking to put a warehouse in the US that would allow us to streamline some of the shipments. We are also putting all the ERP systems in place to make sure all the scheduling and building of the devices are taking place.

Speaker #2: Nothing that is anything out of the ordinary that we would not do at this time in our company . But yeah , there is a lot of dynamics along the lines of making that as Tom and his team starts to build the top line that we are able to deliver appropriately

Speaker #4: Got it That's it for me , gentlemen . Thanks for taking the questions here .

Ben Haynor: Got it. That's it for me, gentlemen. Thanks for taking the questions here.

Speaker #2: Thank you . Ben .

Arun Menawat: Thank you, Ben.

Speaker #3: Thank you . And one moment for our next question Our next question comes from the line of John McCall with Stifel . Your line is open .

Operator: Thank you. One moment for our next question. Our next question comes from the line of John McCauley with Stifel. Your line is open. Please go ahead.

Speaker #3: Please go ahead .

Speaker #5: Hi, Arun. Thanks for taking the question. I want to put a finer point on the recurring revenue question that Ben asked.

John McCauley: Hi, Arun. Thanks for taking the question. Wanna put a finer point on the recurring revenue question that Ben asked. Just as I do the back of the envelope math here, if procedures grew roughly 20% quarter-over-quarter, as you said, total recurring revenue, $2.3 million, it implies that revenue per procedure declined significantly, something like more than 50% quarter-over-quarter. Just wanna understand how much of this is driven by the more capital-focused mix. Was there some kind of one-time conversion or discounting in here? What should we expect go forward on a revenue per procedure basis?

John McAulay: Hi, Arun. Thanks for taking the question. Wanna put a finer point on the recurring revenue question that Ben asked. Just as I do the back of the envelope math here, if procedures grew roughly 20% quarter-over-quarter, as you said, total recurring revenue, $2.3 million, it implies that revenue per procedure declined significantly, something like more than 50% quarter-over-quarter. Just wanna understand how much of this is driven by the more capital-focused mix. Was there some kind of one-time conversion or discounting in here? What should we expect go forward on a revenue per procedure basis?

Speaker #5: So just as I do the back of the envelope math here , if procedures grew roughly 20% quarter over quarter , as you said , total recurring revenue 2.3 million , it implies that revenue per procedure declined significantly , something like more than 50% quarter over quarter .

Speaker #5: So just want to understand how much of this is driven by the more capital focused mix . Was there some kind of one time conversion or discounting in here ?

Speaker #5: And what should we expect ? Going forward on a revenue per the procedure basis ?

Speaker #2: Yeah . So , John , first of all , the 20% was year over year , not quarter over quarter . So that was compared year over year .

Arun Menawat: Yeah. John, first of all, the 20% was year-over-year, not quarter-over-quarter.

John McCauley: Oh, okay.

John McAulay: Oh, okay.

Arun Menawat: that is Yeah, year-over-year. We do look at, you know, inventory, and we do sort of manage it a little bit. I think when you see recurring revenue quarter-over-quarter, it does not necessarily reflect almost exactly to the usage of the product. We do kind of manage that a little bit. Generally, you know, actually, they'll buy in Q3 to use it in Q4. You see that little bit of up and down like that. I would not directly correlate, but if you look at six months over six months, I think it will be relevant instead of quarter, each quarter. There was no discounting at all.

Speaker #2: And we do look at , you know , inventory . And so we do sort of manage it a little bit . So I think when you see recurring revenue quarter over quarter , it does not necessarily reflect almost exactly to the usage of the product .

Speaker #2: And we we do kind of manage that a little bit . Generally , you know , actually they will buy in the third quarter to use it in the fourth quarter .

Speaker #2: So you see that that , that a little bit of up and down like that . So I would not directly correlate . But if you look at six months , over six months , I think it will be relevant instead of quarter each quarter .

Speaker #2: There was no discounting at all. Our price for disposables is $5,500 fixed. And the sites that do not own the equipment are very few.

Arun Menawat: Our price for disposables is $5,500 fixed. The sites that do not own equipment is very few at this point. In those cases, we do have, you know, higher number than $5,500. There's absolutely no discounting on the disposable price.

Speaker #2: At this point . But in those cases , we do have , you know , higher number than 5500 . So there is absolutely no discounting on the the disposable price .

Speaker #5: Understood . That's helpful . And switching gears to 2026 , you talked about high double digit low triple digit growth . Consensus is currently I think at something like 120% , our numbers closer to 100% .

John McCauley: Understood, that's helpful. Switching gears to 2026, you talked about high double digit, low triple digit growth. Consensus is currently, I think it's something like 120%. Our number is closer to 100%. Where would you hope we end up in this range? I mean, if I try to read between the lines here, and I assume a range is 90 to 110, not the specific numbers, it seems like 100% might be a median. Maybe you could just help us out on where you would hope estimates end up for the year ahead.

John McAulay: Understood, that's helpful. Switching gears to 2026, you talked about high double digit, low triple digit growth. Consensus is currently, I think it's something like 120%. Our number is closer to 100%. Where would you hope we end up in this range? I mean, if I try to read between the lines here, and I assume a range is 90 to 110, not the specific numbers, it seems like 100% might be a median. Maybe you could just help us out on where you would hope estimates end up for the year ahead.

Speaker #5: Where did you hope we end up in this range ? I mean , if I try to read between the lines here and I assume a range is 90 to 110 , not specific numbers , it seems like 100% might be a medium , but but maybe you could just help us out on on where you would hope estimates end up for the year ahead .

Speaker #2: Yes. So, while we have not particularly provided official guidance on revenue at the moment, we certainly feel very confident in terms of the number of sites.

Arun Menawat: Yes. Ben, we did not particularly provide official guidance on revenue at the moment. We certainly feel very confident in terms of the number of sites. I think if you, your analysis though, is in the right ballpark, in the sense that, you know, we're looking at at least 42 sites this year, which we have provided. If you look at the math that Tom provided in his presentation, I think you add up all of those, you're sort of going to end up with the range that you just described.

Speaker #2: And I think if you your analysis , though , is in the , in the , in the right ballpark , in the sense that , you know , we're looking at at least 42 sites this year , which we have provided .

Speaker #2: And if you look at the math that Tom provided in his presentation , I think you add up all of those . You're sort of going to end up with the range that you just described

Speaker #5: Understood . That's helpful . I just sneak in one more question . You talked about the dynamic of recurring versus capital mix in the future , and you still believe in that 70 over 30 longer term range .

John McCauley: Understood. That's helpful. If I could just sneak in one more question.

John McAulay: Understood. That's helpful. If I could just sneak in one more question.

Arun Menawat: Yeah.

John McCauley: You talked about the dynamic of recurring versus capital mix in the future, and you still believe in that 70/30 longer term range. In this year ahead, I mean, I'm just looking at the Q4 results. I mean, the mix was something closer to 40% recurring, 60% capital, roughly. I mean, is that the sort of mix we should be thinking about for 2026?

John McAulay: You talked about the dynamic of recurring versus capital mix in the future, and you still believe in that 70/30 longer term range. In this year ahead, I mean, I'm just looking at the Q4 results. I mean, the mix was something closer to 40% recurring, 60% capital, roughly. I mean, is that the sort of mix we should be thinking about for 2026?

Speaker #5: But in this year ahead , I mean , I'm just looking at the fourth quarter results mean the mix was something closer to 40% recurring , 60% capital , roughly .

Speaker #5: I mean , is that the sort of mix we should be thinking about for 2026 ?

Speaker #2: I think so , John . I think that the , you know , the number of sites is going to increase and you can see if we're adding 42 sites that , you know , half $1 million , you can see the number is going to be be dominating .

Arun Menawat: I think so, John. I think that the, you know, the number of sites is gonna increase, and you can see if we're adding 42 sites that, you know, half a million dollars, you can see the number is gonna be dominating. I would say, you know, at least, you know, on average, I would say at least for the first few years, 50/50 or 60/40 is probably reasonable. I want to sort of, don't wanna lose sight of the fact that we are primarily recurring revenue company. I think, you know, we went through a lot of detail today on purpose because it helps you see how TULSA is positioned against everybody, and you can hopefully see how confident we are about our positioning.

Speaker #2: So I would say , you know , at least , you know , on average I would say at least for the first few years , 5050 or 6040 , it's probably reasonable .

Speaker #2: But I want to sort of—I don't want to lose sight of the fact that we are primarily a recurring revenue company.

Speaker #2: And I think , you know , we went through a lot of detail today on purpose because it helps you see how Tulsa is positioned against everybody .

Speaker #2: And you can hopefully see how confident and we are about our positioning . And so part of the reason for that confidence is that when we see Tulsa being placed , our devices are being used and the use is definitely increasing .

Arun Menawat: Part of the reason for that confidence is that when we see, TULSA being placed, our devices are being used, and the use is definitely increasing. I think that long term, that 70/30 mix is a very reasonable thing to expect.

Speaker #2: And so I think that long term , that 70 over 30 mix is a very reasonable thing to expect .

Speaker #5: Thanks for taking the questions .

John McCauley: Thanks for taking the questions.

John McAulay: Thanks for taking the questions.

Speaker #2: Thanks , John .

Arun Menawat: Thanks, John.

Speaker #3: Thank you . And one moment for our next question Our next question will come from the line of Michael Freeman with Raymond James .

Operator: Thank you. One moment for our next question. Our next question will come from the line of Michael Freeman with Raymond James. Your line is open. Please go ahead.

Speaker #3: Your line is open. Please go ahead.

Speaker #6: Hey . Good evening everybody . Thanks for taking my question . I'm going to I'm going to ask a question on the on the captain trial .

Michael Freeman: Hey, good evening, everybody. Thanks for taking my question. I'm gonna ask a question on the CAPTAIN trial. It's exciting that you're decided to disseminate information on the trial next week. Can you go over the, I guess, the decision-making process for releasing this data early? You know, does getting an early look at this trial compromise the trial at all? Does it remain a level 1 trial? Following up on, as a follow-up question, do you expect the early dissemination of this data to potentially accelerate reimbursement timelines for private payers?

Speaker #6: It's exciting that you're decided to disseminate information on the trial next week . Can you can you go over the I guess , the decision making process for for releasing this data early was does getting an early look at this trial compromise the trial at all ?

Speaker #6: Does it remain a level one trial? And then, following up on—or as a follow-up question—do you expect that early dissemination of this data could potentially accelerate reimbursement timelines for private payers?

Arun Menawat: Yeah. Thank you. That's, and those are important questions actually. Let me answer your second question first. I do expect that the earlier data will certainly gives us more confidence in getting coverage decisions this year. To your first question, a little bit more technical. You know, we are very careful, as you know, on making sure that our data, when we present, that our trials are pristine and done with proper analysis and guidance from leading physicians. As we looked at this, and it just happened in the last couple of days, as we looked at all this, there is precedence and typically used, and the reality is that 6-month data actually is a very important milestone data set.

Speaker #2: So yeah . Thank you . That that's and those are important questions actually . So let me answer your second question first . I do expect that the earlier data will certainly gives us more confidence in getting coverage decisions this year .

Speaker #2: But to your first question , a little bit more technical , you know , we are very careful , as you know , on making sure that our data , when we present that our trials are pristine .

Speaker #2: And then with proper analysis and guidance from leading physicians . So as we looked at this , and it just happened in the last couple of days , as we looked at all this , there is precedence and typically used and the reality is that six month data actually is a very important milestone .

Speaker #2: Data set . In fact , particularly for urinary incontinence . And it's used routinely in BPH trials . For example . And we have , as Matthew described , there , sufficient data already out on the on the robotic prostatectomy or with respect to Margins .

Arun Menawat: In fact, particularly for urinary incontinence, and it's used routinely in BPH trial, for example. And we have, as Matthew described, there's sufficient data already out on the robotic prostatectomy with respect to margins. Which is a sort of indicator of the success of a treatment or not. We're not presenting any data that will be considered out of the ordinary here. These are standard endpoints, and they're measured in a way that are very credible. We are not going to compromise anything. We are running the company, you know, we certainly execute every day, but we are running the company with a very strategic mindset. We're absolutely not gonna compromise anything.

Speaker #2: So, which is a sort of an indicator of the success of a treatment or not. So, we're not presenting any data that will be considered out of the ordinary.

Speaker #2: These are standard endpoints and they're measured in a way that are very credible . So we are not going to compromise anything . We are running the company .

Speaker #2: You know , we're certainly execute every day . But we are running the company with a very strategic mindset . So we're absolutely not going to compromise anything .

Speaker #2: But having said that, I think you will see meaningful standard data that will be credible.

Arun Menawat: Having said that, I think you will see meaningful, standard data that will be credible.

Speaker #6: Okay . All right . Thank you very much for that . Arun . I wonder there was some discussion in the in the remarks about about progress toward cash flow positivity .

Michael Freeman: Okay. All right. Thank you very much for that, Arun. I wonder, there was some discussion in the remarks about progress toward cash flow positivity. I wonder if you could provide a threshold, whether that's scale, or timeline to when you expect Profound to have reached cash flow positivity.

Speaker #6: I wonder if you could provide a threshold, whether that's scale or timeline, to when you expect Profound to have reached cash flow positivity.

Speaker #2: Yeah . So I can , you know , if you look at the data that we have been publishing and if you look at , for example , the first half of this year , our cash burn was just over $10 million each quarter .

Arun Menawat: Yeah. I can... You know, if you look at the data that we have been publishing, and if you look at, for example, the first half of this year, our cash burn was just over $10 million each quarter. If you look at Q3, our cash burn was about $8 million. If you analyze the data in Q4, you will see the cash burn is down to around 6, little bit above, around, little less than $6.5 million. I think you can start to see the trend already, and it is matching with the increase in the revenue. Again, they won't be perfect.

Speaker #2: If you look at third quarter , our cash burn was about $8 million . If you look at if you analyze the data in the fourth quarter , you will see the cash burn is down to around six .

Speaker #2: A little bit above, a little less than $6.5 million. So I think you can start to see the trend already. And it is matching with the increase in the revenue.

Speaker #2: And again , they won't be perfect . It'll be , you know , in some quarters you'll see a little bit up or down because we are adding people and they may be they're not going to be completely synchronized , but I think the reason we are comfortable and confident and presented it is because I think we can start to see the trend .

Arun Menawat: It'll be, you know, in some quarters you'll see a little bit up or down because we are adding people, and they may be, they're not gonna be completely synchronized. I think the reason we are comfortable and confident and presented it is because I think we can start to see the trend. I think if you project your numbers, what as Tom mentioned, the end point is we think that we can be profitable in the range of, you know, $80-85 million revenues. You can see where we are in about $24-25 million revenues with the cash burn. You can see the $80-85 million. I think with the growth rates that you can probably predict from the install base, and it's just expectation, I think you'll be able to get pretty close.

Speaker #2: And I think if you project your numbers , what as Tom mentioned , the end point is we think that we can be profitable in the range of , you know , 80 , 85 million revenues .

Speaker #2: So you can see where we are in about 24 , 25 million revenues with the cash burn . You can see the 80 , 85 million .

Speaker #2: And I think with the with the growth rates that you can probably predict from the install base that I just expectation , I think you will be able to get pretty close .

Speaker #6: Okay . All right . Thanks . I'm going to squeeze a quick one in . You provided good guardrails on on Tulsa install expectations for the year I guess more Granularly looking at the at the first quarter as we're you well progressed in it wonder wonder if you could provide some commentary on the pacing of those installations through the year and how and how first quarter is proceeded

Michael Freeman: Okay. All right. Thanks, Ravin. I'm gonna squeeze a quick one in. You provided good guardrails on TULSA install expectations for the year. I guess more granularly, looking at the first quarter, as we're, you know, well progressed in it, wondering if you could provide some commentary on, I guess, the pacing of those installations through the year and how Q1's proceeded.

Speaker #2: I'm sorry, I couldn't hear everything you said. If you could, please repeat it.

Arun Menawat: I'm sorry. I couldn't hear everything you said. If you could please repeat it.

Michael Freeman: Sure. I was looking for some color on TULSA installation progress during Q1, and also how we might expect pacing of those procedures through the year, given your expectations that you provided earlier in the call.

Speaker #6: Sure . I was looking for some color on Tulsa . Installation progress during the first quarter , and also how we how we might expect pacing of those procedures through the year .

Speaker #6: Given your expectations that you provided earlier in the call ?

Speaker #2: Oh, I see what you mean. So you're looking for granularity on a quarter-over-quarter basis?

Arun Menawat: Oh, I see what you mean. You're looking for granularity quarter-over-quarter basis?

Speaker #6: That's right .

Michael Freeman: That's right.

Speaker #2: So we, you know, we're trying to get through a standardized way of announcing numbers. And we think more standardized is end of the quarter.

Arun Menawat: We, you know, we're trying to get to a standardized way of announcing numbers, and we think more standardized is end of the quarter. Which is why we were at 78. We are higher than that today for sure, than we were at the time. I would say again, I think generally speaking, med tech companies grow, you know, are generally in the second half of the quarter. I would say if you're modeling, I would model it, you know, sort of increasing quarter-over-quarter, and not, you know, linearly every quarter.

Speaker #2: So which is why we were at 78 . We are higher than that today for sure than we were at the time . But I would say again , I think generally speaking , medtech companies go , you know , are generally in the second half of the quarter .

Speaker #2: So I would say if you're modeling , I would model it , you know , sort of increasing quarter over quarter and not , you know , linearly every quarter

Speaker #6: Okay . Thank you very much . I'm going to pass it on .

Michael Freeman: Okay. Thank you very much. I'm gonna pass it on.

Speaker #2: Thank you .

Arun Menawat: Thank you.

Speaker #3: Thank you . And as a reminder , if you would like to ask a question please press star one one on your telephone .

Operator: Thank you. As a reminder, if you would like to ask a question, please press star one one on your telephone. Our next question will come from the line of Scott McCauley with Paradigm Capital. Your line is open. Please go ahead.

Speaker #3: My next question will come from the line of Scott Macaulay with Paradigm Capital . Your line is open . Please go ahead .

Speaker #7: Hi everyone . Good evening . A lot of .

Scott McCauley: Hi, everyone. Good evening. A lot of questions have been.

Scott McAuley: Hi, everyone. Good evening. A lot of questions have been.

Speaker #2: Good evening .

Speaker #7: Sir. Hi, everybody. I've already been covered, but maybe I could just ask on the BPH module. Any granularity on how many of the installations are currently using it?

Arun Menawat: Good evening, Scott.

Scott McCauley: Hi, everybody. Already been covered, but maybe I could just ask on the BPH module, any granularity on how many of the installations are currently using it?

Scott McAuley: Hi, everybody. Already been covered, but maybe I could just ask on the BPH module, any granularity on how many of the installations are currently using it?

Arun Menawat: Good question, actually. I would say there are at least 10 sites that have already started using it. In terms of the forecast, I think the numbers are increasing pretty rapidly. I would say by mid-year, we will have at least 30, 40 sites using it.

Speaker #2: Good question . Actually , I would say there are at least ten sites that have already started using it In terms of the forecast , I think the numbers are increasing pretty rapidly .

Speaker #2: I would say by mid-year we will have at least 3040 sites using it

Scott McCauley: That's great. You know, there was a few announcements around international expansions and agreements. I think, in the margin discussions, there was a comment on some kind of introductory pricing, I believe maybe for international, but I may have misread that. Any kind of progress on the international front for TULSA?

Scott McAuley: That's great. You know, there was a few announcements around international expansions and agreements. I think, in the margin discussions, there was a comment on some kind of introductory pricing, I believe maybe for international, but I may have misread that. Any kind of progress on the international front for TULSA?

Speaker #7: That's great And , you know , there was a few announcements around international expansions and agreements , and I think in the margin discussion , there was a comment on some kind of introductory pricing .

Speaker #7: I believe maybe for international , but I may have misread that . Any kind of progress on on the international front for , for Tulsa ?

Arun Menawat: Yeah, very good question, Scott. In the second half of last year, we also started to get quite a bit of attention in the international markets. You know, historically, we've always talked about, you know, US being our really the only focus. US most certainly is, you know, 90% of our focus today. We felt that it was important that, in fact, the healthcare world is far more global than it might look. Getting incoming calls and getting opinion leaders in international markets, not serving them did not make sense. What Tom and the team have done is we've signed up with a number of distributors, the couple that he mentioned, and the discounts were only to those new distributors to get them going.

Speaker #2: Yeah . Very good question . Scott . So in the second half of last year , we also started to get quite a bit of attention in the international markets .

Speaker #2: And you know , historically , we've always talked about , you know , us being our really , really the only focus and us most certainly is , you know , 90% of our focus today .

Speaker #2: But we felt that it was important that, in fact, the healthcare world is far more global than it might look—getting incoming calls and getting opinion leaders in international markets. Not serving them, but it did not make sense.

Speaker #2: And so what Tom and the team have done is we've signed up with a number of distributors . The couple that he mentioned , and we discounts were only through those new distributors to get them going , but there was no discounting in the US and we don't expect discounting in the future either , which is why Richard was very confident that the 70 plus percent margin that we've maintained for the year and for most of other quarters , that that is very much intact .

Arun Menawat: There was no discounting in the US, and we don't expect discounting in the future either, which is why Rashed was very confident that the 70-plus % margin that we've maintained for the year and for most of other quarters, that is very much intact. Our strategy in the international market is still very careful, but it is through distributors, and we will have, you know, support people and high-level senior people who will manage the distributors, but we don't plan to grow a direct sales team in the international market. That is only for the US. We're seeing for sure very good interest in number of, you know, I think Europe is gonna be slow until there is reimbursement decisions in Europe.

Speaker #2: So our strategy in the international market is still very careful , but it is through distributors and we will have , you know , support people and high level senior people who will manage the distributors .

Speaker #2: But we don't plan to grow a direct sales team in the international markets . That is only for the US . But we're seeing for sure very good interest in a number of of I think Europe is , is is going to be slow because until there is reimbursement decisions in Europe .

Arun Menawat: I think the Asian markets are definitely very, very strong.

Speaker #2: But I think the Asian markets are definitely very , very strong .

Arun Menawat: I think the Asian markets are definitely very, very strong.

Speaker #7: That's great . And down the road , as that international kind of presence and impact grows , is that something you're going to separate out a bit more in terms of , you know , us installations versus global installations and revenue relative to each of those areas ?

Scott McCauley: That's great. Down the road, as that international kind of presence and impact grows, is that something you're gonna?

Scott McAuley: That's great. Down the road, as that international kind of presence and impact grows, is that something you're gonna separate out a bit more in terms of, you know, US installations versus global installations and revenue relative to each of those areas.

Christopher Potter: Separate out a bit more in terms of, you know, US installations versus global installations and revenue relative to each of those areas.

Speaker #2: Yes . Over time we will once they become material , we will

Arun Menawat: Yes. Over time, we will. Once they become material, we will.

Christopher Potter: That's great, everyone. Really appreciate the questions. Thanks.

Speaker #7: That's great . Everyone really appreciate the questions . Thanks .

Scott McAuley: That's great, everyone. Really appreciate the questions. Thanks.

Speaker #2: Thank you . Just one clarification . We do break out the international revenue . So there is a segment reporting . That's where we do break out the revenue source .

Arun Menawat: Thank you.

Rashed Dewan: Just one clarification. We do break out the international revenue, so there is a segment reporting. That's where we do break out the revenue source, where is it coming from.

Speaker #2: Where is this coming from.

Speaker #7: Yeah yeah definitely I think it's more the international revenue specific to Tulsa . But yeah as you said as it becomes more meaningful down the road , maybe be more specific around that

Christopher Potter: Yeah. Yeah, definitely. I think it's more the international revenue specific to TULSA. Yeah, as you said, as it becomes more meaningful down the road, maybe be more specific around that.

Scott McAuley: Yeah. Yeah, definitely. I think it's more the international revenue specific to TULSA. Yeah, as you said, as it becomes more meaningful down the road, maybe be more specific around that.

Speaker #3: Thank you. And one moment for our next question. Our next question comes from the line of Chris Potter with Northern Border Investments.

Operator: Thank you. One moment for our next question. Our next question comes from the line of Christopher Potter with Northern Border Investments. Your line is open. Please go ahead.

Speaker #3: Your line is open. Please go ahead.

Speaker #2: Good afternoon, everyone. Just on the utilization question from your customers' perspective—can you just talk about how many procedures per site they're looking for in terms of it making economic sense for them?

Operator: Good afternoon, everyone. Just on the utilization question. From your customer's perspective, can you just talk about how many procedures per site they're looking for in terms of it making economic sense for them? In other words, I think you're do-.

Christopher Potter: Good afternoon, everyone. Just on the utilization question. From your customer's perspective, can you just talk about how many procedures per site they're looking for in terms of it making economic sense for them? In other words, I think you're do-.

Speaker #2: In other words , I think you're if I'm doing the math and I'm doing the math right , each of you are sites is doing 20 or 25 procedures a year now , which doesn't sound like a whole lot .

Arun Menawat: Sure.

Operator: If I'm doing the math, and if I'm doing the math right, each of your sites is doing 20 or 25 procedures a year now, which doesn't sound like a whole lot. You gave the example of having 200 systems doing 50 procedures a year. Is 50 procedures a year kind of the ideal for your typical customer, or is it higher than that? I would think it would be higher than that.

Christopher Potter: If I'm doing the math, and if I'm doing the math right, each of your sites is doing 20 or 25 procedures a year now, which doesn't sound like a whole lot. You gave the example of having 200 systems doing 50 procedures a year. Is 50 procedures a year kind of the ideal for your typical customer, or is it higher than that? I would think it would be higher than that.

Speaker #2: You gave the example of . Having 200 systems doing 50 procedures a year . Is 50 procedures a year , kind of the ideal for your typical customer , or is it higher than that ?

Speaker #2: I would think it would be higher than that . Yeah . So at the moment , number of these sites are very new and so the size that we , you know , installed in Q4 virtually is not nonexistent in terms of the utilization .

Arun Menawat: Yeah. At the moment, number of these sites are very new. The sites that we, you know, installed in Q4 virtually is not non-existent in terms of the utilization. I think just that math of taking the whole install base, and that is probably, I would say, take 60% of the install base and use that, would give you a better number. Having said that, I think your key question, we think 50 is a very reasonable number. We have sites today that are doing well over 100. We do have some research sites that, you know, acquired the system early on that were doing, you know, maybe 10 procedures per year. Now that there is reimbursement, you know, these are large hospitals that are slow-moving.

Speaker #2: So I think just that mass of taking the whole install base , and that is , is probably , I would say , take 60% of the install base and use that would give you a better number .

Speaker #2: Having said that, I think your key question—we think 50 is a very reasonable number. We have sites today that are doing well over 100.

Speaker #2: We do have some research sites that acquire the system early on that we're doing, you know, maybe ten systems, ten procedures per year.

Speaker #2: And now that there is reimbursement , there , you know , these are large hospitals that are slow moving . They're very slow moving gears .

Arun Menawat: They have very slow moving gears. They are all looking to finally increase, and again, as reimbursement, particularly from private insurance companies kick in, they're gonna start increasing as well. I think to answer your question, do we think that the ultimate number is gonna be better than 50? We do. At the moment, since we are below 50, we think 50 is a good average target to hit. 200 sites is not a very big number. We think we can achieve that also. I think over the long haul, I can certainly tell you if we hit average of 50, we're not gonna be, we're gonna be a bit disappointed.

Speaker #2: So but they are all looking to finally increase . And again , as reimbursement , particularly from private clinic insurance companies , kick in , they're going to start increasing as well .

Speaker #2: So so so I think to answer your question , do we think that the ultimate number is going to be better than 50 ?

Speaker #2: We do. But at the moment, since we are below 50, we think 50 is a good average target to hit. And 200 sites is not a very big number.

Speaker #2: We think we can achieve that . Also . And so I think over the long haul , I can certainly tell you if we hit average of 50 , we're not going to be we're going to be a bit disappointed .

Speaker #2: But I think particularly as I was talking about in the the prepared remarks , you know , I think as they start establishing Tulsa Days with the ability to then treat whole gland and partial gland and BPH altogether , there's enough patient volume now with this model that I think 50 is a very achievable number Thanks , Arun .

Arun Menawat: I think particularly as I was talking about in the prepared remarks, you know, I think as they start establishing TULSA days with the ability to then treat whole gland and partial gland and BPH altogether, there's enough patient volume now with this model that I think 50 is a very achievable number.

Operator: Thanks, Arun. That's helpful. Would you expect that the average utilization per site would increase materially in 2026?

Christopher Potter: Thanks, Arun. That's helpful. Would you expect that the average utilization per site would increase materially in 2026?

Speaker #2: That's helpful . Would you would you expect that the average utilization per site would increase materially and 2026 , I think in the second half of 2026 , I do believe that , yes Thank you .

Arun Menawat: I think in the second half of 2026, I do believe that, yes.

Operator: Thank you.

Christopher Potter: Thank you.

Arun Menawat: You know, one of the things that Tom has talked about is that we, as we update our sales design, and he described it a little bit for you, we are starting to put, to go to the much more of a hunter-farmer model where the farmers are, is a team that we're building that will pay attention to utilization more than before. You know, historically, because we've not had reimbursement, it's not been a big thing, but we've moved our genius team. In the commercial organization, we're building a sales team that is a farmer-based team. I think that team, together, will drive better start up for these new sites and better utilization over time.

Speaker #2: One of the things that Tom has talked about is that we , as we update our sales design and we described it a little bit for you , we are starting to put to go to a much more of a hunter farmer model , where the farmers are is a team that we're building that will pay attention to utilization more than before .

Speaker #2: You know , historically , because we've not had reimbursement . It's not been a big thing , but we've moved our genius team in the commercial organization .

Speaker #2: We're building a sales team that is a farmer-based team. I think that team together will drive better startup for these new sites and better utilization over time. Thanks, Arun.

Operator: Thanks, Arun.

Christopher Potter: Thanks, Arun.

Speaker #2: Perfect . Thank you .

Arun Menawat: Perfect. Thank you.

Speaker #3: Thank you. I am showing no further questions at this time, and I would like to hand the conference back over to Dr. McCowatt for closing remarks.

Operator: Thank you. I'm showing no further questions at this time, I would like to hand the conference back over to Dr. Minowatt for closing remarks.

Speaker #2: Thank you so much for spending the time with us. We really appreciate the attention. We are excited about where we're going, and we look forward to updating you at the end of Q1.

Arun Menawat: Thank you so much for spending the time with us. We really appreciate the attention. We are excited about where we're going, and we look forward to updating you at the end of Q1. Have a good evening.

Speaker #2: Have a good evening .

Speaker #3: This concludes today's conference call. Thank you for participating, and you may all disconnect. Everyone have a great day.

Operator: This concludes today's conference call. Thank you for participating, and you may all disconnect. Everyone, have a great day.

Christopher Potter: Thank you.

Q4 2025 Profound Medical Corp Earnings Call

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