iRadimed Q4 2024 Earnings Report

iRadimed EPS Results

• Actual EPS: $0.40
• Consensus EPS: $0.45
• Beat/Miss: Missed by -$0.05
• One Year Ago EPS: N/A

iRadimed Revenue Results

• Actual Revenue: $19.39 million
• Expected Revenue: $19.09 million
• Beat/Miss: Beat by +$300.00 thousand
• YoY Revenue Growth: N/A

iRadimed Announcement Details

• Quarter: Q4 2024
• Date: 2/13/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, February 13, 2025
• Conference Call Time: 11:00AM ET

iRadimed (NASDAQ:IRMD) develops, manufactures and markets medical devices designed for use in magnetic resonance imaging (MRI) environments. The company focuses on equipment that enables clinicians to provide continuous care and monitor patients safely while they are undergoing MRI procedures, where conventional medical devices may pose safety or compatibility challenges.

Its product portfolio includes the MRidium MRI-compatible infusion pump systems, which are designed to deliver intravenous medications and fluids during MRI examinations, as well as MRI-compatible patient monitoring systems and related accessories. These products are intended for use in areas such as anesthesia, critical care, emergency medicine and diagnostic imaging.

Founded in 2004 and headquartered in Orlando, Florida, iRadimed serves hospitals, imaging centers and other healthcare providers in the United States and international markets through a combination of direct sales and distributors. The company was founded by Roger Susi, who has served as its president and chief executive officer.

iRadimed Q4 2024 Earnings Call Transcript

Key Takeaways

• Record fourteenth consecutive quarter with Q4 revenue of $19.4 million (up 11% YoY), gross margin of 76.1%, and GAAP diluted EPS rising 11% from Q4 2023.
• FDA review for the new 3,870 MR IV pump is on track—response to FDA questions due in April, with clearance expected mid-2025 and only light revenue in Q4 2025 before a full ramp in 2026.
• Domestic monitor bookings hit a record-tying rate as the sales force shifts incentives toward monitor sales in 2025 without impacting ongoing pump growth.
• 2025 guidance calls for Q1 revenue of $19.2 million–$19.4 million with GAAP EPS of $0.35–$0.39, and full-year revenue of $78 million–$82 million with GAAP EPS of $1.55–$1.65.
• International revenue dropped 24% to $2.9 million in Q4, while domestic sales rose 21% to $16.5 million, pushing domestic mix to 85% of total revenue.

Presentation

[Operator]

Welcome to the IRadimed Corporation Fourth Quarter of 2024 Financial Results Conference Call. Currently, all participants are in a listen-only mode, and at the end of the call, we will conduct a question-and-answer session. This call is being recorded today, February 13, 2025, and contains time-sensitive, accurate information only today. Earlier, IRadimed released its financial results for the fourth quarter of 2024. A copy of this press release announcing the company's earnings is available under the heading News on their website at iradimed.com. A copy of the press release was also furnished to the Securities and Exchange Commission on Form 8-K and can be found at sec.gov. This call is being broadcast live over the internet on the company's website at iradimed.com, and a replay will be available on the website for the next 90 days.

[Operator]

Some of the information in today's session will constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements focus on future performance, results, plans, and events that may include the company's expected future results. IRadimed reminds you that future results may differ materially from these forward-looking statements due to several risk factors. For a description of the relevant risks and uncertainties that may affect the company's business, please see the risk factors section of the company's most recent reports filed with the Securities and Exchange Commission, which may be obtained free from the SEC's website at sec.gov. I would now like to turn the call over to Roger Susi, President and Chief Executive Officer of IRadimed Corporation. Mr. Susi.

[Roger Susi, CEO and President at IRadimed Corporation]

Thank you, and good morning, and thank you all for joining us on today's call. Once again, I am in a fairly unique position to report yet another record quarter, our 14th consecutive quarter. Driving this record quarter is revenue at over $19.4 million. Gross margin came in at 76.1%, with earnings very strong as well, meaning GAAP diluted earnings per share increasing 11% from Q4 2023. For the year, pump sales continued their extraordinarily strong trend. However, I'm also proud to say that the team also has brought in monitor bookings domestically for the quarter at a record-tying rate, and pump sales continue their extraordinarily strong trend as well. This is due to the sales team's focus and continuing customer interest and demand.

[Roger Susi, CEO and President at IRadimed Corporation]

Jack Glenn, our CFO, shall provide more details on revenue and earnings comps in a bit, while I would like to discuss the new pumps' progress through FDA clearance. As previously discussed, we received an additional information letter from the FDA shortly after the submission was made in early September. We've engaged with the agency twice via SIR meetings to clarify certain items in this AI additional information letter. Our teams have been pushing very hard, gathering data and writing the formal responses. With that, we plan to have this response back to the FDA the first week of April. From there, we would expect a few possible follow-up questions to come in May, with our final responses shortly there after. Given the turmoil with various agencies and the current administration, it's anyone's guess if the FDA may be operating more slowly than usual.

[Roger Susi, CEO and President at IRadimed Corporation]

However, we do not see any strong sign as of yet, and so we will expect clearance, as previously stated, mid-summer. To reiterate what I mentioned, this new device, the 3870 MR IV pump, will be a 2026 story. Clearance in mid-2025 means that we expect only light revenue from the new device in the fourth quarter of 2025, as the sell and shipment cycle is measured in months, not days. However, as witnessed by the strong sales of replacing the older IV pump after we discontinued offering our extended maintenance on pumps seven years and older, the new 3870 pump sales are expected to dwarf sales of this older model as the quarters progress through 2026 and into 2027 and beyond. Finally, with regard to our new facility, it's now under construction.

[Roger Susi, CEO and President at IRadimed Corporation]

Progress has been steady and to plan with only minor material supply disturbances, which the general contractor has managed to mitigate well. Interior walls are up, electrical and plumbing are well past halfway, and with the installation of the glass going in very soon, the building will be totally dried in and ready for the interior final trim. We remain confident in a June final Certificate of Occupancy and commencements of our move shortly thereafter. I'd now like to provide a bit of what we expect to see in Q1 2025. For this first quarter of 2025 financial guidance, we expect revenue of $19.2 to $19.4 million, with a GAAP-diluted earnings per share of $0.35-$0.39, non-GAAP-diluted earnings per share of $0.39-$0.43.

[Roger Susi, CEO and President at IRadimed Corporation]

We look forward to reporting revenue of $78-$82 million for the full year, and we would expect GAAP-diluted earnings per share of $1.55-$1.65, with non-GAAP-diluted earnings per share of $1.71-$1.81. With that, I'll turn the call over to Jack Glenn, our CFO, to review the quarter's financial results.

[Jack Glenn, CFO at IRadimed Corporation]

Thank you, Roger, and good morning, everyone. As in the past, our results are reported on a GAAP basis and a non-GAAP basis. You can find a description of our non-GAAP operating measures in this morning's earnings release and a reconciliation of these non-GAAP measures to the GAAP measure on the last page of today's release. As we reported earlier this morning, revenue in the fourth quarter of 2024 was $19.4 million, an increase of 11% compared to the fourth quarter of 2023. For fiscal year 2024, revenue increased 12% to $73.2 million.

[Jack Glenn, CFO at IRadimed Corporation]

The increase for the quarter and the year was due to the sustained strong demand for our IV pump, as our end-of-life replacement program continues to drive exceptional growth for our pumps. Domestic sales increased 21% to $16.5 million, and international sales decreased 24% to $2.9 million. Overall, domestic revenue accounted for approximately 85% of total revenue for Q4 2024, compared to 78% for Q4 of 2023. Device revenue increased 12% to $14.3 million in the fourth quarter and 13% to $52 million in fiscal 2024, again driven by a 34% and 36% increase in pump revenue, respectively. Revenue from disposables and services increased 9% for both the fourth quarter of 2024 and fiscal 2024. The gross margin was 76.1% for the fourth quarter of 2024, slightly below the 76.9% for the 2023 quarter. The gross margin for fiscal 2024 increased to 76.9% compared to 76.5% for fiscal 2023.

[Jack Glenn, CFO at IRadimed Corporation]

The increase in overhead spending year-over-year primarily was driven by the slight decline in the gross margin for the quarter. Operating expenses were $9 million, or 46% of revenue, compared to $8.3 million, or 47% of revenue, for the fourth quarter of 2023. For 2024, operating expenses were $34 million, or 47% of revenue, compared to $30 million, or 46% of revenue for 2023. The dollar increase in operating expenses for the quarter and the year is primarily due to increased sales and marketing expenses due to higher sales commission expenses. We accrue and pay sales commissions on orders booked, so the higher sales and marketing expenses in the fourth quarter reflect the exceptional bookings for the quarter and a resultant record backlog as we enter 2025.

[Jack Glenn, CFO at IRadimed Corporation]

Operating income was $5.8 million for the quarter and $22 million for fiscal 2024, as we maintained a solid operating margin of 30% for the quarter and the year. We recognize the tax expense of approximately $5 million for fiscal 2024, resulting in an effective tax rate of 20.8% for the year and 18.9% for the fourth quarter. This rate was in line with the 20.9% effective rate in 2023. On a GAAP basis, net income for the quarter was $0.40 per diluted share, compared to $0.36 per diluted share for the 2023 fourth quarter. On a GAAP basis, net income for fiscal 2024 was $1.50 per diluted share, compared to $1.35 per diluted share for fiscal 2023. On a non-GAAP basis, adjusted net income was $0.44 per diluted share for the fourth quarter of 2024, compared to $0.39 per diluted share for the fourth quarter of 2023.

[Jack Glenn, CFO at IRadimed Corporation]

On a non-GAAP basis, adjusted net income was $1.66 per diluted share for fiscal 2024, compared to $1.48 per diluted share in 2023, an increase of 12% year-over-year. Cash from operations was $6 million for the three months ending December 31, 2024, up from $3.9 million for the same period in 2023, as we drove efficiencies in our working capital management, particularly in inventory. For the three months ended December 31, 2024, our free cash flow, a non-GAAP measure, was $2.9 million, down from $3.3 million for the same period in 2023. This decline is related to our ongoing capital expenditures for construction of our new building, which were $2.7 million for the quarter. As Roger noted, we expect to complete the new facility by June and will spend approximately another $5.5 million to complete the project.

[Jack Glenn, CFO at IRadimed Corporation]

With that, I will turn the call over to the operator for questions. Operator.

[Operator]

Thank you. We will now begin our Q&A session. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from the line of Jason Wittes of Roth Capital Partners. Your question, please, Jason.

[Jason Wittes, MD at Roth Capital Partners]

Hi. Thanks for taking the questions and solid quarter here. So in terms of next year, should we assume that the salesforce is going to focus more on the monitor business and we see an uptick there? Or how do you see this 2025, at least on the top line, sort of forming?

[Roger Susi, CEO and President at IRadimed Corporation]

Hey, Jason. Yeah, this is Roger. Good question. I've spoken to it, I guess, the last maybe two quarters here since probably mid-year last year, that 2025 we would indeed be highlighting sales of the monitor as far as how we are going to incentivize the sales team. And so we would expect that the monitor business in 2025 will be significantly impacted. As I mentioned, it started to show already. We had some very strong bookings for the monitor in this fourth quarter. So yeah, 2025, as you put it, is going to have more to come on the monitor.

[Jason Wittes, MD at Roth Capital Partners]

So related to the uptick, has there already been sort of a shift in focus of the salesforce as part of the reason we saw this sort of uptick in monitor business, or is it just sort of?

[Roger Susi, CEO and President at IRadimed Corporation]

Yes, yes. Yeah, I'd say mid-year, slightly past last mid-year, we did some minor tweaks to the goals surrounding the monitor versus the pump, and that's started to show it's borne some fruit already in Q4, and it didn't impact the pump business, so we're pretty happy with that.

[Jason Wittes, MD at Roth Capital Partners]

Yeah. So then, if I think about on looking at your bottom line assumptions, does R&D come down because you now have submitted for the pump? And also, what do I think about gross margins for 2025?

[Jack Glenn, CFO at IRadimed Corporation]

Jack?

[Jack Glenn, CFO at IRadimed Corporation]

Yeah, Jason, this is Jack. So yeah, from the R&D spend, I would say it's going to be pretty consistent. Maybe a little uptick from where we're at right now, as we might add some headcount in that area into 2025, but fairly consistent. As far as gross margin, I think.

[Jack Glenn, CFO at IRadimed Corporation]

In R&D?

[Jack Glenn, CFO at IRadimed Corporation]

Yeah, in R&D. Yeah. And then as far as the gross margin, I would say that we right now feel it's pretty much going to be in line with where we're at in that 76% to 77% range going into 2025. Always a little dependent upon the mix as far as geographical. As you know, about roughly 20% of the business is international, and we sell at a fairly sizable discount through distribution. But overall, I should say pretty in that range for 2025.

[Jason Wittes, MD at Roth Capital Partners]

Sorry, just to clarify, on a dollar basis or a percentage basis when you say in?

[Jack Glenn, CFO at IRadimed Corporation]

Percentage basis.

[Jason Wittes, MD at Roth Capital Partners]

Or it's consistent?

[Jack Glenn, CFO at IRadimed Corporation]

Yeah. Yeah, pretty consistent in that, like I said.

[Jason Wittes, MD at Roth Capital Partners]

Okay. Got it. And then so I guess that means that you're going to see if I look at the math here in terms of getting to plugging in the numbers you provided for guidance, it sounds like there's going to be some leverage in G&A and S&M. I don't know if you can elaborate any on that and how that might play out this year.

[Jack Glenn, CFO at IRadimed Corporation]

Yeah, I think that we will. Hopefully, that's our plan, is get some leverage in the model in the G&A. Sales and marketing, as I spoke to, is the big piece there is the variable expense, right? The sales commissions. And that was reflected in our Q4. We do accrue for commissions on bookings. And we had, again, a very strong bookings quarter. And you can see the increase in the sales and marketing in Q4. Going forward, I would say that, yeah, we expect it kind of to be in that same range, though, but certainly maybe a little more leverage as we go through the year. Always dependent upon how the performance is to plan, which is if it exceeds that, certainly a good problem to have, right?

[Roger Susi, CEO and President at IRadimed Corporation]

Right. We're trying to this year in getting prepared for having the new pump next year, though we will be also extending, I guess, overextending, for lack of a better word. It would look like overextension in 2025 to get ready for the 2026 launch of the new pump in that we'll be adding some of the support people, the clinical specialists. We'll probably put in some territories, additional territory plug-ins. So yeah, there'll be some cost increases. There aren't directly commissions paid for actual sales made in 2025 as well.

[Jason Wittes, MD at Roth Capital Partners]

Got it. I will jump back in queue. Thank you very much.

[Jack Glenn, CFO at IRadimed Corporation]

Thank you.

[Roger Susi, CEO and President at IRadimed Corporation]

Good to talk.

[Operator]

Our next question, of Frank Takkinen from Lake Street.

[Nelson Cox, Equity Research Associate at Lake Street Capital Markets]

Hey. Hey, Roger and Jack. This is Nelson Cox on for Frank. Thanks for taking the questions. Kind of just following up on that, correct me if I'm wrong. I think the last we had talked, you talked about 35 territories kind of being an optimal number post the new pump approval. And I think that's versus 30 today. Is there any change to the thinking there on how you are thinking about an optimal sales organization kind of post-approval of the new pump?

[Roger Susi, CEO and President at IRadimed Corporation]

No, that's where we, that is, still the plan. And of course, it means we'll seed that ground starting a little early. We won't put in 35 in calendar year 2025 on the one hand, but we will be putting in a few extra above our current 20. Where are we at? 28 right now, actually. So that's why we'll have some expense there in preparation for right-sizing the sales team to do the business we anticipate we'll have with the new pump.

[Nelson Cox, Equity Research Associate at Lake Street Capital Markets]

Perfect. And then it sounds like the backlog is providing good visibility and good to see the strength there. Can you maybe just walk us through how you're thinking about backlog as you move through the year? Any commentary on how you're thinking about the overall composition of the backlog possibly changing throughout the year would be helpful. Sounds like monitors maybe take a bigger portion with the focus there on the sales team. But any additional color there would be helpful.

[Jack Glenn, CFO at IRadimed Corporation]

Yeah. This is Jack. Yeah, it is, as we mentioned, a very strong backlog beginning of the year. So that gives us very good visibility, especially into the first half of the year. I would say that the backlog right now is certainly based on the pump bookings is very strong on pump. But also at the same time, though, as Roger mentioned, that we had a very strong bookings as number of units here domestically on the monitoring side. So I think right now it's maybe a little more biased towards the pumps, but certainly our plan, as we've talked about, would be to have the monitors pick up as we go along. But again, it gives us very good visibility, especially for the first half of the year.

[Nelson Cox, Equity Research Associate at Lake Street Capital Markets]

Perfect. And then maybe just one last quick one on the current pump installed base out there. Can you just walk us through, starting in 2026, how many pumps you think you can renew a year with the 3870?

[Roger Susi, CEO and President at IRadimed Corporation]

You mean this replacement business?

[Nelson Cox, Equity Research Associate at Lake Street Capital Markets]

Yeah. Yep.

[Roger Susi, CEO and President at IRadimed Corporation]

Yeah. Well, as we've talked in the past, right, we'll have over 4,000, mid-4,000s of pumps that are older than five years out of our current 3860 model. And we feel that we want to kind of hold the demand to where it's going to be about 800-1,000 replacements of those systems, which ultimately is about 1,600-2,000 pumps, because most of the systems we'd be replacing are twin-channel systems in the U.S. market. So that represents, given that currently today, twin channels, what we're selling now is about 1,200. We're looking at more than doubling the number of pumps we sell.

[Jack Glenn, CFO at IRadimed Corporation]

In 2026.

[Roger Susi, CEO and President at IRadimed Corporation]

2026, yeah.

[Nelson Cox, Equity Research Associate at Lake Street Capital Markets]

Yep. All right. Thank you.

[Roger Susi, CEO and President at IRadimed Corporation]

It's very good.

[Operator]

Thank you. I would now like to turn the conference back to Roger Susi for closing remarks. Sir?

[Roger Susi, CEO and President at IRadimed Corporation]

Good. Well, thanks. Let's see. One last thought I had here is regarding concerns that folks may have over these various tariffs that are being implemented. And I'd like to say that this will mix into probably most every manufacturer in the U.S. has some exposure to that. In our case, we source only three or four rather expensive components from countries that are going to be hit with the tariffs and increasing and/or increased tariffs over what we've already been paying. And of course, there's a larger number of inexpensive components, which we feel the impact from those is very negligible. But still, these larger parts make up less than 3% of our BOM cost, the bill of material cost. So with tariffs as a fraction of that, therefore, do the math, and we wouldn't expect tariffs to affect gross margin materially.

[Roger Susi, CEO and President at IRadimed Corporation]

I just thought I'd speak to that briefly. With that, as always, it has been a great pleasure that we take this opportunity to view IRadimed's progress for y'all. We also proudly state that we expect strong performance as 2025 progresses. With that, thank you.

[Operator]

Thank you. This concludes the call. You may now disconnect.

Participants

Analysts

• Roger Susi, CEO and President at IRadimed Corporation
• Jack Glenn, CFO at IRadimed Corporation
• Jason Wittes, MD at Roth Capital Partners
• Nelson Cox, Equity Research Associate at Lake Street Capital Markets