Q2 2026 Stereotaxis Inc Earnings Call

August 11, 2026

Speaker #1: Such statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results, performance, or achievements of the company in the future to be materially different from the statements that the company's executives may make today.

Speaker #1: These risks are described in detail in our public filings with the securities and exchange commission, including our latest periodic report on Form 10-K or 10-Q.

Speaker #1: We assume no duty to update this statement. At this time, all participants have been placed on listen-only mode. The floor will be opened for questions and comments following the presentation.

Rachel Smith: The floor will be opened for questions and comments following the presentation. As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to your host, David Fischel, Chairman and CEO of Stereotaxis. Please go ahead.

Speaker #1: As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to your host, David Fischel, Chairman and CEO of Stereotaxis.

Speaker #1: Please go ahead.

Speaker #2: Thank you, operator, and good afternoon, everyone. On our last call, we discussed in detail the structural transformations taking place at Stereotaxis. We had just celebrated a particularly milestone-rich period with regulatory approvals for a new robot, both therapeutic and diagnostic catheters, and a digital surgery system.

David Fischel: Thank you, operator, and good afternoon, everyone. On our last call, we discussed in detail the structural transformations taking place at Stereotaxis. We have just celebrated a particularly milestone-rich period with regulatory approvals for a new robot, both therapeutic and diagnostic catheters, and a digital surgery system. These products individually and collectively as a synergistic ecosystem, create an attractive foundation for us to scale commercialization with reduced barriers to adoption and a much more attractive business model. During the second quarter, Stereotaxis reached an important commercial inflection point as our expanded product offering is now generating accelerating adoption. It is still just the initial green shoots of commercial success, but the early experience and feedback provides confidence in sustained progress. I will discuss on today's call the primary areas of commercial progress, the feedback from the field, and our efforts to accelerate growth.

Speaker #2: These products individually and collectively as a synergistic ecosystem create an attractive foundation for us to scale commercialization with reduced barriers to adoption and a much more attractive business model.

Speaker #2: During the second quarter, Stereotaxis reached an important commercial inflection point as our expanded product offering is now generating accelerating adoption. It is still just the initial green shoots of commercial success, but the early experience and feedback provides confidence in sustained progress.

Speaker #2: I'll discuss on today's call the primary areas of commercial progress, the feedback from the field, and our efforts to accelerate growth. I'll then share some additional updates on the robust pipeline of innovations that we continue to advance and that will drive a second wave of growth over the coming years.

David Fischel: I will then share some additional updates on the robust pipeline of innovations that we continue to advance and that will drive a second wave of growth over the coming years. Kim will then share financial details for the quarter, and we will open the line for questions. A key area of focus in the second quarter was on the launch of MAGiC in the US following FDA approval in the first quarter. While supply-constrained and still just in the early adoption phase, that launch allows us to reach a multiyear high point in recurring revenue, which surpassed $6 million in the quarter, driven by over $1 million in robotic catheter revenue. Our robotic catheter revenue is scaling significantly in both the US and Europe, with nearly 300% sequential growth from the first to the second quarter.

Speaker #2: Kim will then share financial details for the quarter, and we'll open the line for questions. A key area of focus in the second quarter was on the launch of Magic in the US following FDA approval in the first quarter.

Speaker #2: While supply constrained, and still just in the early adoption phase, that launch allows us to reach a multi-year high point in recurring revenue, which surpassed $6 million in the quarter driven by over $1 million in robotic catheter revenue.

Speaker #2: Our robotic catheter revenue is scaling significantly in both the US and Europe with nearly $300% sequential growth from the first to the second quarter.

Speaker #2: We are in the early phase of adoption of Magic, with about a dozen US sites receiving hospital approval to purchase the catheter and beginning procedures in the second quarter.

David Fischel: We are in the early phase of adoption of MAGiC, with about a dozen US sites receiving hospital approval to purchase the catheter and beginning procedures in Q2. Several physicians sent me unprompted feedback as they started to use the catheter. One physician commented, "MAGiC performs so much better than the old ablation catheter. Basically, you can more reliably target tissue and more effectively ablate the target tissue. It fundamentally changes the utility of the Stereotaxis system, more than doubling the value of having a robot." Another physician, upon completing his first 10 procedures, mentioned that he is, "Loving it" and that the catheter is improving his efficiency significantly with a more stable and more powerful catheter delivering rapid, effective ablations. Another physician, after his first day of procedures, mentioned, "Wow, this catheter navigates well. You guys have something special." This feedback is highly encouraging.

Speaker #2: Several physicians sent me unprompted feedback as they started to use the catheter. One physician commented, quote, "Magic performs so much better than the old ablation catheter." Basically, you can more reliably target tissue and more effectively ablate the target tissue.

Speaker #2: It fundamentally changes the utility of the Stereotaxis system, more than doubling the value of having a robot. Another physician, Impront, completing his first 10 procedures, mentioned that he is, quote, "loving it," and that the catheter is improving his efficiency significantly, with a more stable and more powerful catheter delivering rapid, effective ablations.

Speaker #2: Another physician, after his first day of procedures, mentioned, quote: "Wow, this catheter navigates well. You guys have something special." This feedback is highly encouraging.

Speaker #2: We had long known that the perception and value proposition of robotics in EP is only as good as the catheter's available for use with the robot.

David Fischel: We have long known that the perception and value proposition of robotics in EP is only as good as the catheters available for use with the robot. Being tied to a decades-old catheter that did not benefit from continued innovation limited our potential. It is very satisfying to see the innovations we took from concept to commercial reality benefit critical patients with complex arrhythmias and the physicians that treat them. It gives us confidence that our efforts to reestablish Stereotaxis on a healthy foundation and trajectory are off to a good start. We are continuing to methodically work through hospital approvals and initial launches of our robotic catheters across our US and European install base. We expect the vast majority to shift from their historical dependency on J&J to our catheters within the next year.

Speaker #2: Being tied to a decades-old catheter that did not benefit from continued innovation limited our potential. It is very satisfying to see the innovations we took from concept to commercial reality benefit critical patients with complex arrhythmias and the physicians that treat them.

Speaker #2: It gives us confidence that our efforts to reestablish Stereotaxis on a healthy foundation and trajectory are off to a good start. We're continuing to methodically work through hospital approvals and initial launches of our robotic catheters across our U.S. and European install base.

Speaker #2: We expect the vast majority to shift from their historical dependency on J&J to our catheters within the next year. While working through the commercial friction of transitioning each customer, we are putting significant effort into ramping manufacturing of catheters.

David Fischel: While working through the commercial friction of transitioning each customer, we are putting significant effort into ramping manufacturing of catheters. Sales remain supply-constrained as we work to increase output, with catheters still on backlog as we receive more orders from customers than the supply we receive from our contract manufacturer, Osypka. We are seeing methodical progress in increasing supply and are separately reaching key milestones in establishing supply redundancy. These support our expectations of sustained growth in our catheter revenue stream, and we are guiding for an approximate USD 1 million incremental step-up in catheter revenue in each of the next couple quarters, with significantly more opportunity beyond that in 2027. Shifting now to system revenue. There are two primary items to discuss, Synchrony and GenesisX. During Q2, we received FDA clearance for the Synchrony system.

Speaker #2: Sales remain supply-constrained as we work to increase output, with catheters still on backlog as we receive more orders from customers than the supply we receive from our contract manufacturer of SIPCA.

Speaker #2: We are seeing methodical progress in increasing supply, and our separately reaching key milestones in establishing supply redundancy. These support our expectations of sustained growth in our catheter revenue stream and we're guiding for an approximate $1 million incremental step-up in catheter revenue in each of the next couple quarters with significantly more opportunity beyond that in 2027.

Speaker #2: Shifting now to system revenue. There are two primary items to discuss, synchrony and Genesis X. During the second quarter, we received FDA clearance for the synchrony system.

Speaker #2: As a reminder, Synchrony and Sync are our digital solutions that modernize the interventional surgical suite with enhanced workflow, remote connectivity, and smart AI capabilities.

David Fischel: As a reminder, Synchrony and SynX are our digital solutions that modernize the interventional surgical suite with enhanced workflow, remote connectivity, and smart AI capabilities. Synchrony serves as the cockpit for every robot, but also has an independent, much larger opportunity in non-robotic operating rooms. Shortly after receiving regulatory clearance, we received orders for multiple systems from several hospitals. We shipped the first few systems in Q2, have continued to ship systems in Q3, and there are already several systems in daily clinical use. They are performing well in the field, and we have a pipeline of software feature enhancements over the coming months and years that will continue to expand the value proposition. Without a significant dedicated sales effort, we are seeing organic interest that should support over USD 1 million in Synchrony system revenue each quarter for the next few quarters.

Speaker #2: Synchrony serves as the cockpit for every robot, but also has an independent, much larger opportunity in non-robotic operating rooms. Shortly after receiving regulatory clearance, we received orders for multiple systems from several hospitals.

Speaker #2: We shipped the first few systems in the second quarter, have continued to ship systems in the third quarter, and there are already several systems in daily clinical use.

Speaker #2: They are performing well in the field, and we have a pipeline of software feature enhancements over the coming months and years that will continuously expand the value proposition.

Speaker #2: Without a significant dedicated sales effort, we are seeing organic interest that should support over $1 million in synchrony system revenue each quarter for the next few quarters.

Speaker #2: Most excitingly, there are several hospitals that are planning or considering standardizing their catheter labs on Synchrony and SynCS. While the current contribution of Synchrony is a nice but modest boost to revenue, the market opportunity is large, and we intend to increase the sales effort as our pipeline builds and our manufacturing capacity matures.

David Fischel: Most excitingly, there are several hospitals that are planning or considering standardizing their catheter labs on Synchrony and SynX. While the current contribution of Synchrony is a nice but modest boost to revenue, the market opportunity is large, and we intend to increase the sales effort as our pipeline builds and our manufacturing capacity matures. As these initial installs mature, they will also start to drive service contract and Software-as-a-Service recurring revenue streams. Most impactful to system revenue over the coming few years will be scaling the adoption of our robotic technology. Our robotic technology has significant real-world validation, with over 150,000 patients treated at over 100 leading hospitals globally. That said, we still have just a fraction of a percent market share in our beachhead market of electrophysiology and no presence yet in the larger interventional cardiology and neurointerventional fields.

Speaker #2: As these initial installs mature, they will also start to drive service contract and software-as-a-service recurring revenue streams. Most impactful to system revenue over the coming few years will be scaling the adoption of our robotic technology.

Speaker #2: Our robotic technology has significant real-world validation, with over 150,000 patients treated at more than 100 leading hospitals globally. That said, we still have just a fraction of a percent market share in our beachhead market of electrophysiology, and no presence yet in the larger interventional cardiology and neurointerventional fields.

Speaker #2: There is a market opportunity for many thousands of robotic systems across these markets. Our historical need to construct robotic labs was a major barrier to ever realizing that opportunity.

David Fischel: There is a market opportunity for many thousands of robotic systems across these markets. Our historical need to construct robotic labs was a major barrier to ever realizing that opportunity. GenesisX allows us to start envisioning a realistic way to scale robotic adoption much more significantly. Since we received regulatory clearance for GenesisX, we have been focused on how to ensure GenesisX can be installed alongside standard X-rays from leading manufacturers, removing the historical requirement that our robot only work with a specific modified X-ray. We focused our initial commercial launch on the early adopters who will demonstrate that potential and serve as reference sites for broad compatibility with various X-rays. We are pleased that in addition to the previously announced GenesisX purchase in Europe, we are able to announce our first GenesisX purchase in the US from an academic medical center.

Speaker #2: Genesis X allows us to start envisioning a realistic way to scale robotic adoption much more significantly. Since we received regulatory clearance for Genesis X, we've been focused on how to ensure Genesis X can be installed alongside standard X-rays from leading manufacturers, removing the historical requirement that a robot only work with a specific, modified X-ray.

Speaker #2: We focused our initial commercial launch on the early adopters who will demonstrate that potential and serve as reference sites for broad compatibility with various X-rays.

Speaker #2: We are pleased that, in addition to the previously announced Genesis X purchase in Europe, we are able to announce our first Genesis X purchase in the U.S. from an academic medical center.

Speaker #2: The system is expected to be installed this fall, with a non-modified X-ray from one of the larger X-ray manufacturers. With that installation, we expect to declare formal compatibility with that manufacturer's X-ray.

David Fischel: The system is expected to be installed this fall with a non-modified X-ray from one of the larger X-ray manufacturers. With that installation, we expect to declare formal compatibility with that manufacturer's X-ray. The construction of the new wing of the hospital in Europe, where GenesisX is scheduled to be installed, also seems to be finally back on track, with installation expected prior to year-end. We are continuing to advance several additional GenesisX sale or lease agreements that will further demonstrate the system being used in a variety of lab environments. With demonstration of GenesisX working reliably and compatibly with various X-rays, along with increased availability of MAGiC, we will initiate a more aggressive commercial launch of the technology. These initial green shoots of commercial success demonstrate the opportunity to build a highly successful business with our new product ecosystem.

Speaker #2: The construction of the new wing of the hospital in Europe where Genesis is scheduled to be installed also seems to be finally back on track, with installation expected prior to year-end.

Speaker #2: We're continuing to advance several additional Genesis X sale or lease agreements, that will further demonstrate the system being used in a variety of lab environments.

Speaker #2: With the demonstration of Genesis X working reliably and compatibly with various X-rays, along with increased availability of Magic, we will initiate a more aggressive commercial launch of the technology.

Speaker #2: These initial green shoots of commercial success demonstrate the opportunity to build a highly successful business with our new product ecosystem. A proprietary catheter portfolio with its high margin razor-blade business model has been central to our strategy and is now starting to become a material contributor.

David Fischel: A proprietary catheter portfolio with its high-margin razor blade business model has been central to our strategy and is now starting to become a material contributor. Accessibility of our robotic system, such that we can reasonably scale to selling tens and then hundreds of robots a year is critical if we are to impact medicine in the way we should, and we have now begun that journey and will demonstrate the robot's performance in daily clinical use in the near term. This progress does not come easy, and I want to recognize and congratulate the many Stereotaxis team members who make it possible. There are always hurdles and unforeseen challenges in the effort to pioneer new advanced technologies and to implement them in the complex healthcare market and demanding operating room environment.

Speaker #2: Accessibility of our robotic systems, such that we can reasonably scale to selling tens and then hundreds of robots a year, is critical if we are to impact medicine in the way we should. We have now begun that journey and will demonstrate the robots' performance in daily clinical use in the near term.

Speaker #2: This progress does not come easy, and I want to recognize and congratulate the many stereotaxis team members who make it possible. There are always hurdles and unforeseen challenges in the effort to pioneer new advanced technologies and to implement them in the complex healthcare market and demanding operating room environment.

Speaker #2: As a lean team, working on multiple significant transitions in tandem, there are demonstrating our ability to rise to the challenge, thank you everyone who makes it possible.

David Fischel: As a lean team working on multiple significant transitions in tandem, they are demonstrating our ability to rise to the challenge. Thank you everyone who makes it possible. It is particularly exciting for me that we are driving this operational and commercial progress while not slowing down on a robust innovation effort. There is much going on in the background, and we are energetically nurturing significant opportunities that will blossom over the next few years. Our efforts can be summarized in a few key categories. First, robot accessibility. We are advancing a future generation of the GenesisX robot that will be fully wireless, battery-operated, and mobile. Second, a more robust portfolio of EP catheter innovation. Most imminently here, we expect first human procedures with MAGiC and pulsed field ablation before the end of this year.

Speaker #2: It is particularly exciting for me that we are driving this operational and commercial progress while not slowing down on a robust innovation effort. There is much going on in the background, and we are energetically nurturing significant opportunities that will blossom over the next few years.

Speaker #2: Our efforts can be summarized in a few key categories. First, robot accessibility. We are advancing a future generation of the Genesis X robot that will be fully wireless, battery-operated, and mobile.

Speaker #2: Second, a more robust portfolio of EP catheter innovation. Most imminently here, we expect first human procedures with MAGIC and pulse field ablation before the end of this year.

Speaker #2: Third, a pipeline of robotic systems and interventional devices for the broader interventional cardiology and neurointerventional fields. We are advancing regulatory submissions and reviews for the Imagine family of magnetic guide catheters and guidewires that will be driven by Genesis X.

David Fischel: Third, a pipeline of robotic systems and interventional devices for the broader interventional cardiology and neurointerventional fields. We are advancing regulatory submissions and reviews for the EMAGIN family of magnetic guide catheters and guide wires that will be driven by GenesisX. Even more significantly, we closed the previously announced Robocath acquisition in July and are energetically advancing their fully complementary and separate robotic system for endovascular device navigation with a vision of offering a full ecosystem that enables remote, automated, and fully robotic treatment of stroke and cardiovascular disease. Fourth, AI efforts that will incorporate intelligent decision support features into Synchrony and automation to our robotic platforms. We will discuss these further on future calls and as they mature, but there is still much room to advance our technology in exciting ways that improve and expand our clinical impact and commercial opportunity.

Speaker #2: Even more significantly, we closed the previously announced RoboCath acquisition in July, and we are energetically advancing their fully complementary and separate robotic system for endovascular device navigation, with a vision of offering a full ecosystem that enables remote, automated, and fully robotic treatment of stroke and cardiovascular disease.

Speaker #2: And fourth, AI efforts that will incorporate intelligent decision support features into synchrony and automation of our robotic platforms. We will discuss these further on future calls, and as they mature, but there is still much room to advance our technology in exciting ways that improve and expand our clinical impact and commercial opportunity.

Speaker #2: Our vision for what Stereotaxis can and will accomplish is becoming increasingly clear and tangible. The key puzzle pieces have come together in a remarkable fashion, and we are enthusiastically advancing forward.

David Fischel: Our vision for what Stereotaxis can and will accomplish is becoming increasingly clear and tangible. The key puzzle pieces have come together in a remarkable fashion, and we are enthusiastically advancing forward. Kim will now provide commentary on our financial results, and then I will make a few financial comments as well before opening the call to Q&A. Kim?

Speaker #2: Kim will now provide commentary on our financial results, and then I'll make a few financial comments as well before opening the call to Q&A.

Speaker #2: Kim?

Speaker #1: Thank you, David, and good afternoon, everyone. Revenue for the second quarter of 2026 totaled $7.7 million. Revenue in the quarter declined year over year due to the lack of a robotic system delivery in the quarter but increased sequentially from the first quarter due to significantly higher catheter revenue.

[Company Representative] (Stereotaxis): Thank you, David, and good afternoon, everyone. Revenue for Q2 2026 totaled $7.7 million. Revenue in the quarter declined year over year due to the lack of a robotic system delivery in the quarter, but increased sequentially from Q1 due to significantly higher catheter revenue. System revenue of $1.5 million and recurring revenue of $6.2 million, compared to $3 million and $5.8 million in the prior year's Q2. System revenue in the current quarter includes modest revenue recognition from previously delivered Genesis systems and ancillary equipment, and a notable contribution from the initial launch of Synchrony. Recurring revenue in the quarter reflects the significant increase in revenue from our new portfolio of robotically navigated catheters, up 270% sequentially and 450% year over year, countered by general pressure on procedures as we transition away from Johnson & Johnson and ramp manufacturing of our catheters.

Speaker #1: System revenue of $1.5 million and recurring revenue of $6.2 million compared to $3.0 million and $5.8 million in the prior year's second quarter. System revenue in the current quarter includes modest revenue recognition from previously delivered Genesis systems and ancillary equipment, and a notable contribution from the initial launch of Synchrony.

Speaker #1: Recurring revenue in the quarter reflects a significant increase in revenue from our new portfolio of robotically navigated catheters, up $270% sequentially and $450% year over year.

Speaker #1: Countered by general pressure on procedures, as we transition away from Johnson & Johnson and ramp manufacturing of our catheters. Gross margin for the second quarter of 2026 was $58% of revenue.

Operator: Gross margin for Q2 2026 was 58% of revenue. Recurring revenue gross margin was 66%, and system gross margin was 29%. Gross margins for both recurring revenue and systems are impacted by low manufacturing volumes. While we expect margins to remain at these approximate levels over the next few quarters, we see significant opportunity for margin expansion in 2027 and 2028. Operating expenses in the quarter of $9.1 million included $2.5 million in non-cash charges for stock compensation expense, mark-to-market adjustment for acquisition-related contingent earn-out consideration, and amortization of acquired intangible assets. Excluding these non-cash charges, adjusted operating expenses were $6.6 million, consistent with a year-ago period when adjusting for a one-time employee retention tax credit received in the prior year.

Speaker #1: Recurring revenue gross margin was $66%, and system gross margin was $29%. Gross margins for both recurring revenue and systems are impacted by low manufacturing volumes.

Speaker #1: While we expect margins to remain at these approximate levels over the next few quarters, we see significant opportunity for margin expansion in 2027 and 2028.

Speaker #1: Operating expenses in the quarter of $9.1 million included $2.5 million in non-cash charges for stock compensation expense, mark-to-market adjustment for acquisition-related contingent earn-out consideration, and amortization of acquired intangible assets.

Speaker #1: Excluding these non-cash charges, adjusted operating expenses were $6.6 million, consistent with a year-ago period when adjusting for a one-time employee retention tax credit received in the prior year.

Speaker #1: Operating loss and net loss in the second quarter of 2026 were $4.6 million and $4.5 million, respectively, compared with $4.0 million and $3.8 million in the previous year.

Operator: Operating loss and net loss in Q2 2026 were $4.6 million and $4.5 million, compared with $4 million and $3.8 million in the previous year. Adjusted operating loss and adjusted net loss for the quarter, excluding non-cash charges, were $2.1 million and $2 million, compared with $1.4 million and $1.3 million in the previous year. Negative free cash flow for Q2 was $3.7 million, consistent with the previous year. At 30 June, Stereotaxis had cash and cash equivalents of $10.5 million and no debt. I will now hand the call back to David.

Speaker #1: Adjusted operating loss and adjusted net loss for the quarter, excluding non-cash charges, were $2.1 million and $2.0 million, compared with $1.4 million and $1.3 million in the previous year.

Speaker #1: Negative free cash flow for the second quarter was $3.7 million, consistent with the previous year. At June 30, Stereotaxis had cash and cash equivalents of $10.5 million and no debt.

Speaker #1: I will now hand the call back to David.

Speaker #2: Thank you, Kim. We expect continued momentum in recurring revenue, driven by increased manufacturing supply and expanded adoption of our robotic catheter portfolio. Recurring revenue is anticipated to grow to approximately $7 million in the third quarter and $8 million in the fourth quarter of this year, with significant room for continued momentum in 2027 and beyond.

David Fischel: Thank you, Kim. We expect continued momentum in recurring revenue driven by increased manufacturing supply and expanded adoption of our robotic catheter portfolio. Recurring revenue is anticipated to grow to approximately $7 million in Q3 and $8 million in Q4 of this year, with significant room for continued momentum in 2027 and beyond. System revenue has been weak in H1 of this year, and we expect the H2 to be stronger with approximately $3 million in each of Q3 and Q4. From a financial perspective, we have maintained a lean operating budget while managing multiple product launches, ramping manufacturing, executing a strategic acquisition, and advancing a continued robust R&D effort. We are sensitive to subjecting investors to dilution and are confident we can advance our strategy on our current budget.

Speaker #2: System revenue has been weak in the first half of this year, and we expect the second half to be stronger with approximately $3 million in each of the third and fourth quarters.

Speaker #2: From a financial perspective, we have maintained a lean operating budget while managing multiple product launches, ramping manufacturing, executing a strategic acquisition, and advancing a continued robust R&D effort.

Speaker #2: We are sensitive to subjecting investors to dilution and are confident we can advance our strategy on our current budget. We are internally modeling to reach cash flow profitability in the first half of 2027.

David Fischel: We are internally modeling to reach cash flow profitability in H1 2027. As our recurring revenue ramps, the majority of incremental revenue flows to operating profit. This revenue ramp can be accomplished with our existing team, and as we reach cash flow profitability, we will reinvest our profits in our commercial organization, supporting accelerated growth. We will now take your questions. Operator, can you please open the line to Q&A?

Speaker #2: As our recurring revenue ramps, the majority of incremental revenue flows to operating profit. This revenue ramp can be accomplished with our existing team and as we reach cash flow profitability, we will reinvest our profits in our commercial organization supporting accelerated growth.

Speaker #2: We will now take your questions, operator, can you please open the line to Q&A?

Speaker #3: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad to join the queue.

Rachel Smith: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star and one on your telephone keypad to join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Just a reminder, we ask that you please limit yourself to one question and one follow-up only. After that, you can just simply join the queue again for more questions. Thank you. Your first question comes from Daniel Stauder from Citizens. Please go ahead.

Speaker #3: If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker #3: And just a reminder, we ask that you please limit yourself to one question and one follow-up only. After that, you can simply join the queue again for more questions.

Speaker #3: Thank you. Your first question comes from Daniel Stotter from Citizens. Please go ahead.

Speaker #2: Yeah, great, thanks for the questions. Just the first one on guidance—I appreciate the level of quarterly detail for recurring revenue and capital. I believe that puts the full year at about $35 million.

Daniel Stauder: Yeah, great. Thanks for the questions. Just the first one on guidance. I appreciate the level of quarterly detail for recurring revenue and capital. I believe that puts the full year at about $35 million. I was hoping you could give us some more color on, one, your visibility, and two, your confidence in terms of hitting these numbers in the back half. More broadly, what is assumed or contemplated in terms of catheter manufacturing improvements, as well as some capital adoption and installation timing as we think about these expectations. Thank you.

Speaker #2: But I was hoping you could give us some more color on, one, your visibility, and two, your confidence in terms of hitting these numbers in the back half. And more broadly, what is assumed or contemplated in terms of catheter manufacturing improvements, as well as some capital adoption and installation timing, as we think about these expectations.

Speaker #2: Thank you.

Speaker #4: Hi Danny, good afternoon. Thanks for the questions. So yeah, we thought that would be kind of a helpful way to share our expectations. The growth in recurring revenue is essentially all driven by adoption of our proprietary catheters of kind of our robotically steered catheters and there's obviously volatility in any given quarter in terms of things like the MAPIT catheters and procedure volume, the third quarter is generally a seasonally weak quarter in terms of procedures just because of summer vacations, particularly in Europe and but also in the US.

David Fischel: Hi, Danny. Good afternoon. Thanks for the questions. We thought that would be a helpful way to share our expectations. The growth in recurring revenue is essentially all driven by adoption of our proprietary catheters, of our robotically steered catheters. There is obviously volatility in any given quarter in terms of things like the MAGiC catheters and procedure volume. The Q3 is generally a seasonally weak quarter in terms of procedures just because of summer vacations, particularly in Europe, but also in the US. Generally, the growth is coming all from adoption of MAGiC Sweep. In Europe, we have other catheters that we are able to also supplement those. That is where all the growth comes from.

Speaker #4: But generally, right, the growth is coming all from adoption of MAGIC, MAGIC Sweep, and in Europe we have kind of other catheters that we're able to also kind of supplement those.

Speaker #4: And so that's where all the growth comes from. We are looking at it both from a demand perspective and from a supply perspective, but in things like the third and fourth quarter to really still driven essentially all by supply.

David Fischel: We are looking at it both from a demand perspective and from a supply perspective, but in things like the Q3 and Q4, it is really still driven essentially all by supply. We are still supply-constrained. We have a backlog of catheter orders from customers, from many customers. As we get catheters in from that supply, we are able to ship it very quickly to customers and recognize revenue. That is the main factor in our determination. On the system side of things, it is a mix of both Synchrony and robotic systems. On the Synchrony side, we have received orders that we have not yet filled. We are still receiving orders. I think the general guidance we gave in this call of around $1 million plus of Synchrony system sales per quarter seems very reasonable.

Speaker #4: And so we're still supply constrained. We have a backlog of catheter orders from many customers. As we get catheters in from that supply, we're able to ship them very quickly to customers and recognize revenue.

Speaker #4: And so that's kind of the main factor in our determination. On the system side of things, it's a mix of both Stereotaxis and robotic systems.

Speaker #4: On the synchrony side, we have been receiving, we have received orders that we've not yet filled. We're still receiving orders I think the kind of the general guidance we gave in this call of around, you know, $1 million plus of synchrony system sales per quarter seems very reasonable.

Speaker #4: And that obviously it's a lower ASP product in the, you know, in the near $200,000 range. And so that's something that we're shipping several of them out each quarter.

David Fischel: That obviously it is a lower ASP product in the near $200,000 range, so that is something that we are shipping several of them out each quarter. On the system side, the guidance is predicated on one system revenue recognition in each of the Q3 and Q4. We have, obviously, the GenesisX sale, which we expect to recognize revenue in the Q3 and install shortly thereafter. Then we have still a backlog, and we have additional Genesis orders that can be recognized as they get delivered and installed. So that is where the guidance comes from.

Speaker #4: On the system side, we are kind of the guidance kind of is predicated on one system revenue recognition in each of the third and fourth quarter.

Speaker #4: We have, obviously, the Genesis sale, which we expect to recognize revenue for in the third quarter and install shortly thereafter. But, you know, then we still have a backlog, and we have additional Genesis orders that can be recognized as they get delivered and installed.

Speaker #4: And so that's kind of where the guidance comes from.

Daniel Stauder: I appreciate that, and thanks for the color. Just the next one on cash flow. It is great to get that update, but I was wondering if you could just parse out a little more in terms of granular assumptions in terms of, is there a certain revenue level? Are there any other specific improvements on the operating lines in order to get there? Just wanted to double hit on this and get any more commentary in terms of the cash flow would be great. Thank you.

Speaker #2: I appreciate that and thanks for the color. Just the next one on cash flow. You know, it's great to get that update, but I was wondering if you can just parse out a little bit more in terms of granular assumptions in terms of, you know, is there a certain revenue level?

Speaker #2: Are there any other specific improvements on the operating lines in order to get there? I just want to double-hit on this and get any more commentary, in terms of the cash flow, would be great.

Speaker #2: Thank you.

Speaker #4: Sure. So I'll see if Kim wants to add to anything, but kind of from a very high level, right? We do scenario analyses all the time, with conservative models, base models, to kind of to evaluate the business and how we see it going.

David Fischel: Sure. I will see if Kim wants to add to anything, but from a very high level, we do scenario analyses all the time with conservative models, base models, to evaluate the business and how we see it going. The main drivers of our business right now are the three that were discussed in the prepared remarks. Predominantly, again, the adoption of our robotically steered catheters, and then capital sales both through Synchrony and through GenesisX. When we look at the ramp in catheter adoption, given what we believe we will achieve from a manufacturing perspective and just the existing demand out there for those catheters, given the robotic procedures taking place at this time, I expect that our catheter innovations will improve utilization.

Speaker #4: The main drivers of our business right now are the three that we've discussed in the prepared remarks. Predominantly, again, the adoption of our robotically steered catheters, and then capital sales both through Synchrony and through Genesis X.

Speaker #4: When we look at the ramp in catheter adoption, given what we believe we will achieve from a manufacturing perspective, and just the existing demand out there for those catheters, given the robotic procedures taking place at this time, I expect that our catheter innovations will improve utilization. But even without taking that into account, and with very modest assumptions on the capital side—

David Fischel: Even without taking that into account and with very modest assumptions on the capital side, essentially the same one million a quarter or so of Synchrony and system sales in line with our historical, we get to break even in the H1 of next year and cash flow profitability at that point. So it requires relatively modest assumptions to get to break even. We are obviously staying lean on our operating expenses given that, but that does not mean that we do not continue to invest in the things that are impactful. So we are still advancing a broad R&D pipeline. We are advancing some clinical studies. We are obviously doing all the operating work and commercial work to launch these new products.

Speaker #4: Kind of essentially the same kind of, you know, $1 million a quarter or so of synchrony and, you know, system sales in line with our historical, we get to break even in the first half of next year, and cash flow profitability kind of at that point.

Speaker #4: And so, it requires relatively modest assumptions to get to break even. We are obviously staying lean on our operating expenses, given that, but that doesn't mean that we don't continue to invest in the things that are impactful.

Speaker #4: And so, we're still advancing a broad R&D pipeline, we're advancing some clinical studies, and we're obviously doing all the operating work and commercial work to launch these new products.

Speaker #4: And so we think kind of with that balancing act of how to manage the expenses and then letting the recurring revenue start to kind of incrementally grow with the availability of catheters, we'll be in a break-even position at the beginning, at the early periods of next year.

David Fischel: We think with that balancing act of how to manage the expenses and then letting the recurring revenues start to incrementally grow with the availability of catheters will be in a break-even position at the early periods of next year.

Speaker #2: Great. Thanks so much. And just one quick one and I'll squeeze in on MAGIC catheters. Great to see the progress here on this side of the business.

Daniel Stauder: Great. Thanks so much. Just one quick one, I will squeeze in on MAGiC catheters. Great to see the progress here on this side of the business. I know you mentioned last quarter that some of your customers were seeing revenue per procedure above $5,000, even up to $8,000. I just wanted to ask on these dynamics, are you seeing that to continue in some of the early accounts? Any other trends you are seeing would be fantastic. Thank you.

Speaker #2: I know you mentioned last quarter that some of your customers were seeing, you know, revenue per procedure above $5,000, even up to $8,000. So I just wanted to ask on these dynamics, are you seeing that to continue in some of the early accounts or just, you know, any other trends you're seeing would be fantastic.

Speaker #2: Thank you.

Speaker #4: Sure. So yes, obviously, kind of the baseline when someone is adopting MAGIC is that they're using our QuickCast device. That's the historical disposable device.

David Fischel: Well, yes, obviously, the baseline when someone is adopting MAGiC is that they are using our QuikCAS device. That is the historical disposable device we have been selling for 20 years. Plus now a MAGiC catheter, one of our catheters. They can also then add to that if they want a robotic high-density mapping catheter or other diagnostic catheters that we are now able to supply. In the US, our pricing is extremely consistent across sites, and so that number of in the $5,000 to $8,000 plus range is a very consistent ASP we are receiving per procedure for the disposables used in a procedure. In other geographies, it varies depending on the country. Typically in Europe, it is at lower levels. The levels that you quoted were the levels in the US.

Speaker #4: We've been selling for 20 years. Plus now a MAGIC catheter, one of our catheters. They can also then add to that if they want a robotic high-density mapping catheter or other diagnostic catheters that we are now able to supply.

Speaker #4: And in the US, our pricing is extremely consistent across sites. And so that number of, you know, in the $5,000 to $8,000-plus range, is a very consistent ASP we're receiving per procedure for the disposables used in a procedure.

Speaker #4: In other geographies, it varies. Depending on the country. And so there's a tip and typically in Europe it's lower levels, but that's kind of the level at the levels that you quoted were the levels in the US.

Speaker #2: Great. Thanks for the questions, and congrats on the progress.

Daniel Stauder: Great. Thanks for the questions and congrats on the progress.

Speaker #4: Thank you very much.

David Fischel: Thank you very much.

Speaker #2: Your next question comes from Frank Takinen from Lake Street Capital Markets. Please go ahead.

Rachel Smith: Your next question comes from Frank Takkinen of Lake Street Capital Markets. Please go ahead.

Speaker #5: Hey, this is Nelson Cox. I'm referring—thanks for taking the questions. I wanted to start with the U.S. GenesysX purchase. On the compatibility strategy, once you declare formal compatibility with that first X-ray manufacturer, with the fall install, what's the path to other major OEMs?

Nelson Cox: Hey, this is Nelson Cox on for Frank. Thanks for taking the questions. I wanted to start with the US GenesisX purchase. On the compatibility strategy, once you declare formal compatibility with that first X-ray manufacturer with the fall install, what is the path to other major OEMs? Does each need its own reference installation, or does the first declaration shorten that work for the rest? On the at least five active programs you targeted for this year, is that something we should still be expecting? I think you had commented on maybe one being in the ASC setting, but just curious your thoughts there. Thanks.

Speaker #5: Does each need its own reference installation, or does the first declaration shorten that work for the rest? And then, on the at least five active programs you targeted for this year—is that something we should still be expecting?

Speaker #5: I think you had commented on maybe one being in the ASC setting, but just curious your thoughts there. Thanks.

Speaker #4: Sure. Hi Nelson. Thanks for the questions. So on the X-ray compatibility side, you we need to do the formal testing and there's a few stages of that testing.

David Fischel: Sure. Hi, Nelson. Thanks for the questions. On the X-ray compatibility side, we need to do the formal testing, and there is a few stages of that testing. We have already done various stages of testing with all of the large X-ray manufacturers out there. Initial phases of testing has gone well with all of the different X-ray manufacturers, and that is what gives us confidence in GenesisX being able to serve as a robot that works compatibly, broadly compatible with different X-rays in existing operating rooms. But the last stage of testing is actual formal compatibility testing, where in the clinical environment, we are placing the robot with the X-ray and doing formal compatibility of the two together. Once we do that with X-ray manufacturer A's model A X-ray, then that becomes a compatibility statement that lasts for any of those X-rays. Right?

Speaker #4: And so we've already done various stages of testing with all of the large X-ray manufacturers. Out there, that initial phases of testing has gone well with all of the different X-ray manufacturers and that's what gives us confidence in GenesysX being able to serve as a robot that works compatibly kind of broadly compatible with different X-rays in existing operating rooms.

Speaker #4: But the last stage of testing is actual formal compatibility testing, where, in the clinical environment, we're placing the robot with the X-ray and doing formal compatibility testing of the two together.

Speaker #4: Once we do that with, you know, X-ray manufacturer A's Model A X-ray, then that becomes a compatibility statement that lasts for any of those X-rays, right?

Speaker #4: So then, any other hospital that wants to use GenesysX with that X-ray, we can point to that compatibility statement and give them the confidence that it works together.

David Fischel: Any other hospital that wants to use GenesisX with that X-ray, we can point to that compatibility statement and give them the confidence that it works together. That is really this initial effort with the three, four, five biggest X-ray manufacturers out there, making sure that we have formal compatibility statements with their main X-rays, and that we can prove to the world and prove to our customer base that they are compatible in a regulatory compliant fashion. That is the effort. We have one of them, and that gets a little bit to your second question that, we are still working. Obviously, the site in Italy is a second one that is actually an integrated X-ray that we have had other installs of Genesis in the past with.

Speaker #4: And so that's really kind of this initial effort is with the, you know, three, four, five biggest X-ray manufacturers out there, making sure that kind of we have formal compatibility statements with their main X-rays and that we can kind of prove to the world and prove to our customer base that they are compatible in a regulatory compliant fashion.

Speaker #4: And so that's the effort. We have kind of one of them, and that gets a little bit to your second question. Yeah, we're still working—obviously, the site in Italy is a second one that's actually an integrated X-ray, though we've had other installs of Genesis in the past with.

Speaker #4: So we'll have kind of two X-rays working with GenesysX by the end of this year. One in Europe, one in the US. And we are still working.

David Fischel: We will have two X-rays working with GenesisX by the end of this year, one in Europe, one in the US. We are still working. There is a pipeline of several hospitals, including an ASC, that are working on lease agreements. Those are with actually other X-rays than the first two that I mentioned. We are expecting a few installs by the end of this year. I hope we can get towards five, but we will definitely have two, and hopefully we will have somewhere in between that two and five by the end of this year installed and able to prove working in the real world.

Speaker #4: There's a pipeline of several hospitals, including an ASC, that are working on lease agreements, and those are with actually other X-rays than the first two that I mentioned.

Speaker #4: And so, we are expecting a few installs by the end of this year. I hope we can get towards five, but we'll definitely have two, and hopefully, we'll have somewhere between that—two and five—by the end of this year installed and able to prove kind of working in the real world.

Speaker #2: Okay, very helpful. Thank you. And then, maybe just on recurring gross margins—if I heard correctly, it sounds like the expectation is that it stays maybe around flat with the 66% through the end of the year.

Nelson Cox: Okay. Very helpful, thank you. Then maybe just on recurring gross margins, if I heard correctly, it sounds like the expectation is that stays or maybe around flat with the 66% through the end of the year. Maybe just remind us where you think these recurring margins can go into next year, as much as you can. Thanks.

Speaker #2: Maybe just remind us where you think these recurring margins can go into next year. As much as you can. Thanks.

Speaker #4: Sure. So I would generally point us towards margins in the mid-70s as the robotic catheters become more and more a part of the overall revenue.

David Fischel: Sure. I would generally point us towards margins in the mid-70s as the robotic catheters become more and more a part of the overall revenue, and as we are manufacturing more of them, and so the overhead can be laid out over a bigger base. We should be getting somewhere in the mid-70s, I would say, as a margin that should not be difficult for us to reach.

Speaker #4: And as we are manufacturing more of them and so the overhead can be kind of laid out over a bigger base, we should be getting somewhere in the mid-70s, I'd say, as a kind of a margin that shouldn't be difficult for us to reach.

Speaker #2: All right. Thank you for taking the questions.

Nelson Cox: All right. Thank you for taking the questions.

Speaker #4: Thank you.

David Fischel: Thank you.

Speaker #2: And your next question comes from Joshua Jennings from TD Cohen. Please go ahead.

Rachel Smith: Your next question comes from Joshua Jennings from TD Cowen. Please go ahead.

Speaker #6: Hi, good afternoon. Thanks, David and Kim. Wanted to just check in on the GenesysX sales funnel. Any updates there? I know you mentioned reference to backlog in one of your answers.

Joshua Jennings: Hi, good afternoon. Thanks, Dave and Kim. Wanted to just punch in on the GenesisX sales funnel. Any updates there? I know you referenced a backlog in one of your answers, David. Looking for just any quantitative levels of where the backlog stands now versus maybe this time last year, and then the mix between new greenfield accounts versus replacements.

Speaker #6: David, looking for just any quantitative levels of where the backlog stands now versus maybe this time last year. And then you know with a mix between you know new greenfield accounts versus replacements.

Speaker #4: Sure. So hey Josh, thanks for the question. Let me kind of comment, I guess, qualitatively it's been very, very refreshing having GenesysX available as a system.

David Fischel: Sure. Hey, Josh. Thanks for the question. Let me comment, I guess qualitatively, it has been very, very refreshing having GenesisX available as a system. We are engaging with many hospitals and many accounts where just historically there would be no opportunity or the opportunity would be years in the future, and we can actually have tangible discussions about how to bring a GenesisX system in there, how it can fit without construction, how at certain accounts where there is a questioning over the clinical value and there is interest, but there is also uncertainty. There is the ability to talk about lease agreements and the lack of permanence of the system, and that get your foot in the door, try it, and let us prove the value once we are already there.

Speaker #4: We are engaging with many hospitals and many accounts where just historically there would be no opportunity or the opportunity would be years in the future and we can actually have tangible discussions about how to bring a GenesysX system in there, how it can fit without construction, how you know at certain accounts where there is questioning over the clinical value and there's interest but there's also uncertainty, there's the ability to talk about lease agreements and kind of the lack of permanence of the system and that kind of get your foot in the door try it.

Speaker #4: And kind of in let us prove the value once we're already there. And so definitely has helped us significantly have discussions with many accounts including some of the most kind of prominent hospitals kind of out there where historically before that we just didn't have our foot in the door and we couldn't really advance discussions in a very tangible way.

David Fischel: It definitely has helped us significantly have discussions with many accounts, including some of the most prominent hospitals out there, where historically before that, we just did not have our foot in the door and we could not really advance discussions in a very tangible way. That has been awesome. It has been slow, and the two, I would say, macro challenges in translating that overall interest and communication into conversion of deals has been obviously getting GenesisX actually working in the real world. Let us say a month, a month and a half ago, we announced the launch of a new robotic program in Hungary. We have still hospitals that are more comfortable moving forward with Genesis just because Genesis is a proven robot that has worked reliably in the real world.

Speaker #4: And so that's kind of been awesome. It's been slow and the kind of the two, I'd say, macro challenges in translating that overall interest and communication into conversion of deals has been obviously getting GenesysX actually working in the real world.

Speaker #4: And so let's say a month, a month and a half ago, right, we announced the launch of a new robotic program in Hungary and you know we have still hospitals that are more comfortable moving forward with Genesys just because Genesys is a proven robot that has worked reliably in the real world.

Speaker #4: They can speak to physicians that have used it and kind of and so you have that kind of that certainty that it is a real reliable system for real world use.

David Fischel: They can speak to physicians that have used it, and so you have that certainty that it is a real, reliable system for real-world use. We need to prove the same for GenesisX. I have no doubts that we will prove that, but until you do not show it, there is always some more of a question mark in customers' minds. That is one big thing that we need to do. The compatibility with various X-rays is a barrier because there are some physicians, some hospitals, that are willing to be the first, but the average hospital prefers not to be the first one to prove things like that. Then obviously also MAGiC's supply is the other third barrier. Everyone who adopts GenesisX knows that they need to use MAGiC.

Speaker #4: We need to prove the same for GenesysX. I have no doubts that we will prove that, but until you do show it, there’s always kind of a question mark in customers’ minds.

Speaker #4: And so that's kind of one big thing that we need to do. The compatibility with various X-rays is a barrier, because there are some physicians and some hospitals that are willing to be the first, but the average hospital prefers not to be the first one to prove things like that.

Speaker #4: And then obviously also magic supply is the other third kind of barrier. Everyone who adopts GenesysX knows that they are that they need kind of to use magic.

Speaker #4: We're still in the phase of making sure we have enough Magic to cover all the existing demand, let alone future demand. And so, I'd say those are the three structural things that we're working on.

David Fischel: We are still in the phase of making sure we have enough MAGiC to cover all the existing demand, let alone future demand. I would say those are the three structural things that we are working on. I think we are making good methodical progress on all three of them, and over the next few months should be able to, at least with some of the X-rays, with the MAGiC manufacturing ramp, with demonstrating GenesisX at these first two installs, we should be able to reduce those and allow for a higher momentum of GenesisX commercialization.

Speaker #4: I think we're making good methodical progress on all three of them. And over the next few months, should be able to at least with you know some of the X-rays with the magic manufacturing ramp with demonstrating GenesysX at these first two installs, we should be able to kind of reduce those and allow for kind of a higher momentum of GenesysX commercialization.

Speaker #6: Great. Thank you for that. And just you know you've great download and thorough download again today on the catheter build out. And the pipeline, I just wanted to circle back on just the future of GenesysX.

Joshua Jennings: Great. Thank you for that. Just great download and thorough download again today on the catheter build-out and the pipeline. I just wanted to circle back on just the future of GenesisX. I imagine that your team is not standing still. Can you talk about your ultimate vision as we think a couple of years out, just in how GenesisX could open up or how you could enhance the platform with increased automation, maybe more telerobotic capabilities, and then how that all plays out in terms of potentially widening a competitive mode. It seems as if the electrophysiology community is warming up each quarter, each year to robotics having a bigger role in ablation and maybe other areas in the coming years. Maybe touch on continued advancement of GenesisX capabilities and also just the EP community's sentiment towards robotics and robotics technology going forward. Thanks.

Speaker #6: I know, I imagine that your team is not standing still. I mean, can you talk about your ultimate vision as we think a couple of years out?

Speaker #6: I just mean, how could GenesysX open up, or how could you enhance the platform with increased automation—maybe more telerobotic capabilities—and then how does that all play out in terms of potentially widening a competitive moat?

Speaker #6: It seems as if electrophysiology community is warming up. Each quarter each year to robotics having a bigger role. In ablation and maybe others. Areas.

Speaker #6: But in the coming years. But maybe touch on continued advancement of GenesysX capabilities, and also just the EP community's sentiment towards robotics and robotics technology going forward.

Speaker #6: Thanks.

Speaker #4: Sure. So let's say the Heart Rhythm Society—that's probably what you have in your mind because I remember seeing you there at the Heart Rhythm Society conference this last May, I believe.

David Fischel: Sure. At, let's say, the Heart Rhythm Society, that is probably what you have in your mind because I remember seeing you there at the Heart Rhythm Society conference this last May, I believe. There was the Society for Cardiac Robotic Navigation, had their symposium in the middle of HRS. It was a huge room, and I was nervous that it would be relative or at least look very empty, and we ended up having a great showing. It was clearly by far the largest showing we have had at an HRS conference for robotics in any of my memory. We do see that increased interest. That also, I think, the innovations that we have been able to show and the ability to get multiple innovations actually to market and through regulatory approvals.

Speaker #4: There was the society for cardiac robotic navigation had their symposium in the middle of HRS. It was a huge room and I was nervous that it would be relative or at least look very empty and we ended up having a great showing.

Speaker #4: It was clearly by far the largest showing we've had at an HRS conference for robotics that in any of my memory. And so we do see kind of that increased interest and that also kind of I think the innovations that we've been able to show and the ability to get multiple innovations actually to market and through regulatory approvals, I think there are many people who are recognizing that and that's why we're able to re-engage with some of these kind of preeminent hospitals in the US that you know historically we haven't had a relationships with and have meaningful conversations and kind of plan for how to work together in much more meaningful ways.

David Fischel: I think there are many people who are recognizing that, and that is why we are able to re-engage with some of these preeminent hospitals in the US that historically we have not had relationships with and have meaningful conversations and plan for how to work together in much more meaningful ways. I think you will hopefully see some of that over the coming months as those come to fruition. What I would say in terms of that on the one hand, we have done a lot. On the other hand, it feels like we are still in the very beginning of what should be done in terms of robotic innovation for this field and to really realize the full potential. A little bit like in my prepared remarks, I think about our room for progress in four big buckets, and there is meaningful progress that is being made in each of these four big buckets.

Speaker #4: And so I think you'll hopefully see some of that over the coming months as those come to fruition. What I'd kind of say in terms of that kind of we've on the one hand we've done a lot on the other hand it feels like we're still in the very beginning of what should be done in terms of robotic innovation.

Speaker #4: For this field and to really realize the full potential. A little bit like in my prepared remarks, I think about our room for progress in four big buckets.

Speaker #4: And there's meaningful progress that is being made along each of, in each of these four big buckets. The first is, just again, increased accessibility.

David Fischel: The first is just, again, increased accessibility. The easier you make it to adopt something, the better and the more adoption you are going to get. GenesisX was a major step change versus the Genesis and Niobe, but it still has some aspects which require an actual installation and some aspects, some cable routing, some power cables. There are things still to be done there. We are excited by, at EHRA this past year, we did a little demo of a fully wireless, battery-operated, fully mobile system that would help in various ways. In smaller rooms, you would be able to park the robot in corners of the room, so you could fit it in smaller rooms. It would be much easier even install. You would literally roll it off a crate into the room. It is a much more elegant system. There is room for continued innovation there.

Speaker #4: The easier you make it to adopt something, the better you know and the more adoption you're going to get. Genesys X was a major step change versus Genesys and Niobe.

Speaker #4: But it still has some aspects which require kind of an actual installation, and some aspects, you know, cable—some cable routing, some power cables.

Speaker #4: There are just things still to be done there. We are excited because, at ERA this past year, we did a little demo of a fully wireless, battery-operated, fully mobile system.

Speaker #4: That would help in various ways in smaller rooms. You'd be able to park the robot in the corners of the room, so you could fit it in smaller rooms.

Speaker #4: It would be a much easier, even install. You'd literally roll it off a crate into the room, and it's a much more elegant system.

Speaker #4: And so that's kind of there's room for continued innovation there. And as we think about things like neuro or other fields, there's even much more dramatic steps beyond that.

David Fischel: As we think about things like neuro or other fields, there is even much more dramatic steps beyond that. The second big area is the interventional catheters, so having a continued pipeline of interventional catheters that are robotically steered. Again, a robot is only as good as the catheters it drives, so you need to constantly think about how to innovate in that world. The third is. We have seen that things like the J&J catheter existed for 20 years and had a very long tail. So on the one hand, innovation is very important. On the other hand, there is such a value proposition to the robot that even when there was not innovation, you have a fairly sticky business given the value proposition of the robot.

Speaker #4: The second big area is the interventional catheters. And so having kind of a continued pipeline of interventional catheters that are robotically steered. Again, a robot is only as good as the catheter as it drives.

Speaker #4: And so kind of there's a you need to constantly think about how to innovate in that world. The third is but then again we've seen that things like the J&J catheter existed for 20 years and had a very long tail.

Speaker #4: So on the one hand, innovation is very important. On the other hand, there is such a value proposition to the robot that even when there wasn't innovation, you have a fairly sticky business given the value proposition of the robot.

Speaker #4: The third big area is how to make our robot multi-specialty. And that ties in with Robocath and, you know, the complementary mechanism of action and how to really make Genesis X, plus or minus Robocath, a multi-specialty robot.

David Fischel: The third big area is how to make our robot multi-specialty, and that ties in with Robocath and the complementary mechanism of action. Then how to really make GenesisX plus minus Robocath a multi-specialty robot. The fourth is then what you were saying. How do you bring telerobotics, and how do you bring automation? How do you bring augmented intelligence or artificial intelligence into the picture? There I would say we are in our earliest phases, but we have real tangible things there. Synchrony and SynX are approved and in use, and they are definitely a good technology platform now for that whole digital surgery effort. There is a whole pipeline there that, in reality, will take probably 10 years to realize fully the ideas that we have in our mind.

Speaker #4: And then the fourth is kind of what you were saying. How do you bring telerobotics? How do you bring automation? How do you bring augmented intelligence or artificial intelligence into the picture?

Speaker #4: And there are there I'd say we're in our earliest phases, but we have real tangible things there. Synchrony and things are approved and in use.

Speaker #4: And kind of, you know, they're definitely a good technology platform now for that whole digital surgery effort. And there is a whole pipeline there that, in reality, will take probably 10 years to fully realize the ideas that we have in our mind.

Speaker #4: But there will be many attractive stepping stones along the path, with room for commercial impact along that journey.

David Fischel: There will be many attractive stepping stones along the path with room for commercial impact along that journey.

Joshua Jennings: Appreciate that thorough answer. Thanks, David.

Speaker #6: I appreciate that thorough answer. Thanks, David.

Speaker #4: Thank you very much.

David Fischel: Thanks very much.

Speaker #5: If there are no further questions at this time, I would now like to turn the call back over to David Fischel for closing remarks.

Rachel Smith: There are no further questions at this time. I would now like to turn the call back over to David Fischel for the closing remarks. Please go ahead.

Speaker #5: Please go ahead.

Speaker #4: Okay. Thank you for all the questions, everyone, and for your continued support. We'll continue working hard on your behalf and look forward to speaking again soon.

David Fischel: Okay. Thank you for all the questions, everyone, and for your continued support. We will continue working hard on your behalf and look forward to speaking again soon. Thank you.

Speaker #4: Thank you.

Rachel Smith: Ladies and gentlemen, thank you all for joining, and that concludes today's conference call. All participants may now disconnect. Thank you.