iRadimed Q2 2025 Earnings Call Transcript

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Provided by Quartr
August 1, 2025

Key Takeaways

  • Positive Sentiment: Following 16 consecutive quarters of record revenues, Q2 generated $20.4 million in revenue (up 14% year-over-year) and GAAP diluted EPS rose 18% to $0.45.
  • Positive Sentiment: The FDA clearance of the new 3,870 MRI IV pump—with an expected ASP ~12% above legacy models—marks a “seminal event” set to drive future growth.
  • Positive Sentiment: IRadimed raised its guidance for Q3 (revenue $20.5–20.9 M; GAAP EPS $0.41–0.45) and full-year 2025 (revenue $80–82.5 M; GAAP EPS $1.60–1.70) and declared a quarterly dividend of $0.17 per share.
  • Positive Sentiment: A strong backlog—5–6 month pump backlog and 4–5 week monitor backlog—coupled with plans to replace over 6,200 units aged 5+ years supports the goal of a $100 M+ revenue run rate in 2026.
  • Negative Sentiment: Short-term operational inefficiencies from a facility transition and ongoing uncertainties around Chinese tariffs may pressure near-term margins and supply-chain costs.
AI Generated. May Contain Errors.
Earnings Conference Call
iRadimed Q2 2025
00:00 / 00:00

There are 5 speakers on the call.

Operator

Welcome to the IRADIMED Corporation Second Quarter of twenty twenty five 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, 08/01/2025, and contains time sensitive, accurate information only today. Earlier, IRADIMED released its financial results for the 2025.

Operator

A copy of this press release announcing the company's earnings is available under the heading News on their website at iradamed.com. A copy of the press release was also furnished to the Securities and Exchange Commission on Form eight ks and can be found at sec.gov. This call is being broadcast live over the Internet on the company's website at iratemed.com, and a replay will be available on the website for the next ninety days. 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 and may include the company's expected future results.

Operator

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 Sousse, President and Chief Executive Officer of IRADIMED Corporation. Mr. Sousse?

Speaker 1

Thank you, operator. Good morning,

Speaker 2

and thank you all for joining us on today's call. I am indeed very pleased to report yet another record quarter, marking our sixteenth consecutive quarter of record revenues. For the 2025, we achieved revenue of $20,400,000 a 14% increase over the same period last year. Gross profit came in at 78% with earnings very strong as well. GAAP diluted earnings per share increasing 18% from 2024.

Speaker 2

Pump shipments led performance in the quarter as our 3,860 MRI IV pump continued to excel in Q2. In addition to the great pump performance, I am also very happy to report that shipments of our MRI patient monitor grew 9% and that bookings in Q2 indicate that our emphasis on monitoring sales for 2025 can be expected to achieve our plans with this product line as well. I'd like to quickly follow-up on comments regarding tariffs and those impacts, which we had discussed at some length during our earnings call of Q1. We can now look back and see that though tariffs had been collected on some of the components we utilized, the actual impact is still very small. We do feel however that as tariffs become stable and finalized, Chinese tariffs and as pre tariff inventories dwindle here within our stocks, we will have a better idea of the measurable tariff impacts to manage and report upon in the future.

Speaker 2

As for doge effects upon various agencies and possible issues secondarily affecting IRADIMIT, such impacts did not materialize. In fact, as announced on May 22, the FDA cleared our new 3,870 IV pump systems for distribution. With this long awaited and hard fought FDA action, the road ahead for IRADIMED is clear and wide. Since the founding of IRADIMED twenty years ago, this clearance and the sales growth that the new pump will ignite will prove to be a seminal event. Reflecting a moment, when I founded IRADIMED frankly, though we had a strong vision that an MRIV pump would be a highly successful niche device, my revenue targets from then now appear overly modest, being in the double digits.

Speaker 2

Now that revenue vision looks to be passing the $100,000,000 revenue run rate as we progress through 2026, I could not be prouder of what we have done with this fascinating MRI niche. Let me share how we envision these next several quarters. Most of you have seen the effect on the sales of our existing legacy pump. The original design core from twenty years ago when we simply discontinued offering service contracts for units seven years and older. This action led a number of customers to replace older three thousand eight and sixty pumps with newer newly manufactured 3,860 pumps.

Speaker 2

But now that we have a new state of the art pump with twenty years of technological advancement, we anticipate a huge demand for replacing older 3,860 model pumps starting at the five year old level. For context, in The US market alone, there are over 6,205 plus year old 3,800 and sixty-sixty one pump channels up for replacement. We currently sell approximately a thousand such channels annually into the domestic market. We will target adding to that base of a thousand channels per year another thousand channels through update replacement sales from that 6,200 units that are over five years old. This will be our target in 2026.

Speaker 2

In subsequent years, we expect to increase the drawdown of old pump channels from a thousand to over 2,000 and growing and so on. Again, adding the increased sales for replacements into the current base run rate of a thousand a year and you can understand why I see piercing that 100,000,000 revenue run rate in 2026 and continuing strong growth for years afterwards. To put numbers on this for our domestic opportunity only as we sell two thousand three thousand eight hundred and seventy pump channels annually with a slightly higher ASP we anticipate the 2025 domestic pump device revenue currently expected at $28,000,000 in 2025 will become nearly $50,000,000 Adding in disposables, then international sales, plus the MR monitor business and one can understand my confidence in breaking through this $100,000,000 revenue rank. Now let's discuss our updated financial guidance. For the 2025, we expect revenue of $20,500,000 to $20,900,000 representing 12% to 14% growth over Q3 twenty twenty four, which was $18,300,000 We anticipate, GAAP diluted earnings per share of $0.41 to $0.45 and non GAAP diluted earnings per share of $0.45 to $0.49 reflecting a 10% to 12% growth over Q3 twenty twenty four's $0.4 to $0.43 respectively.

Speaker 2

Tempered by anticipated but short lived operational inefficiencies during our facility transition, which we've just moved into our new building. For the full year 2025, we are raising our guidance to reflect our strong first half performance. We now expect revenues of $80 to $82,500,000 up from our prior range of $78 to $82,000,000 representing 9% to 13% growth over twenty twenty four's $73,200,000 revenues. GAAP diluted earnings per share now expected to be $1.6 to $1.7 up from $1.55 to $1.65 and non GAAP diluted earnings per share is $1.76 to $1.86 up from $1.71 to $1.81 These ranges account for approximately $2,600,000 in stock related compensation expense net of tax for the full year and $600,000 for Q3. We also remain committed to delivering value through our $0.17 per share quarterly dividend declared for Q3 and payable on 08/28/2025.

Speaker 2

Now I'll turn the call over to Jack Glenn, our CFO, to review the quarter's financial results in detail.

Speaker 1

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. For the three months ended 06/30/2025, we reported revenue of $20,400,000 a 14% increase from $17,900,000 in the 2024. This growth was driven by strong performance across all product lines with MRI compatible IV infusion pump systems contributing 8,200,000.0 up 19% year over year, and patient vital signs monitoring systems contributing 5,900,000.0, up 9%.

Speaker 1

Disposables revenue grew 14% to 4,200,000.0, reflecting increased utilization of our devices, while ferromagnetic detection systems and services revenue also saw a solid gain. Domestic sales increased 18% to 18,200,000.0, and international sales decreased 9% to 2,200,000.0. Overall domestic revenue accounted for 89% of total revenue for Q2 twenty twenty five compared to 86% for Q2 twenty twenty four. Gross profit was $16,000,000 up 14% from $14,000,000 in 2024 with a gross margin of 78% consistent with the prior year. The strong margin performance was supported by increased overhead absorption as we built inventory ahead of the new facilities opening.

Speaker 1

Operating expenses for the quarter were $9,200,000 up 9% from $8,400,000 in 2024, driven by higher sales and marketing expenses to support our growth and modest increases in general and administrative costs. Research and development expenses remained steady at approximately $900,000 Income from operations grew 21% to $6,800,000 from $5,600,000 in Q2 twenty twenty four. Tax expense for the quarter was 1,600,000 resulting in an effective tax rate of 21.2%. Net income was $5,800,000 or $0.45 per diluted share, an 18% increase from $4,900,000 or $0.38 per diluted share in 2024. On a non GAAP basis, net income was $6,400,000 or $0.49 per diluted share, up 17% from $0.42 excluding $600,000 of stock based compensation expense net of tax.

Speaker 1

Now turning to our balance sheet. We ended the quarter with cash and cash equivalents of $53,000,000 up from $52,200,000 at year end 2024. Cash flow from operations was a strong $7,700,000 for the quarter, up 17 from $6,600,000 in 2024 and $12,000,000 for the first half, up 14% from 10,500,000.0 Free cash flow was $4,900,000 for the quarter and $5,300,000 for the first half, reflecting capital expenditures of $6,700,000 year to date, primarily related to the new facility. We expect final payments of approximately $1,100,000 for the facility in Q3, bringing the total construction cost to approximately $12,600,000 And with that, I will turn the call over to the operator for questions. Operator?

Operator

Thank you. We will now begin the question and answer session. Our first question comes from the line of Frank Takanen from Lake Street Capital Partners.

Speaker 3

Great. Thank you for taking the questions. Congrats on all the progress and congrats on the 3,870 clearance. I was hoping to start with one on kind of current backlog. I saw the comment and heard your positive remarks about a record backlog.

Speaker 3

Can you talk about the composition of that backlog and then kind of marry that into how you expect 3860 sales to trend in front of 3,870 launching?

Speaker 1

Sure. Sure. I can take that one, Frank. Yeah. As we said, was a record backlog as of June 30, and it was composed of both, you know, certainly as we've discussed the pumps, but also very strong monitoring backlog as well.

Speaker 1

And so that certainly gives us, I think, good visibility into the second half of the year, especially with before we commercialize and introduce the 3,870 that we have a strong backlog of $3,008.60 to get us through what we see to, you know, the second half of the year.

Speaker 3

Got it. Okay. That's helpful. And then

Speaker 2

Frank, I think Frank, good hear your voice. Thanks for the question. Maybe that was a two parter. You also want to know how the maybe the '38, 60s, the old pump, the legacy pump orders with Trent. So I mean, they're still trending extraordinarily strong.

Speaker 2

That's why we're so bullish as the year wraps up. We really feel at this point that we're more or less in control of how that'll trail off. So, and that comes to the timing of when we actually unleash our sales team to, go out and, actively in mass, you know, start discussing this new pump. So they're not doing that at this point we don't want them to do that but certainly somewhere in December is where we'll do that and so we think the orders will still for the older pump will still be rather significant quite strong right up until we do start to talk about the $38.70 somewhere in December.

Speaker 3

Got it. Very helpful color. And then Roger, I wanted to follow-up on some of your comments. I appreciate all the color on kind of thirty eight seventy renewal potential. How do you think about the cadence of that ramp to the $50,000,000 of pump revenue?

Speaker 3

I assume it builds over time, but any thoughts around how that kind of scales throughout 2026 would be helpful.

Speaker 2

Yeah. Well, it'll our plan, as we mentioned before, and I think we we went over this on previous calls, is is in q four. We'll sell a few 38 seventies. It'll be insignificant to revenue, but the purpose is not so much to generate revenue. It's to generate a few it's it's basically to generate feedback from a few of our stronger users as to any user suggestions or little tweaks that we might want last minute tweaks put into the product.

Speaker 2

So we plan to start that right around Christmas time New Year's. And of course, then we'll also be fully out showing the 3,870 by that point as well. And so the bookings of the new pump in the first quarter, they won't be all the way ramped up to these numbers I was talking about at that point certainly. They'll be just starting to bring in revenue. As you understand, I think everybody understands this.

Speaker 2

There's a pipeline and an inertia to people writing POs, even though due to this resale of 38 sixties that we've had going on, there will be a number of customers who have the funds budgeted and we'll be switching those to the new pump as we can. But Q1 on pump bookings overall, I expect to be weak. And we'll fill it with the revenue won't be, though, because we have such a huge backlog. So you won't really see it by looking at revenue. But bookings, anticipate in Q1 for pumps should be a little bit weak.

Speaker 2

But then by second quarter, we should be back to pretty strong run rate on booking pumps, which will just accelerate through Q3 and Q4. So that, certainly by the 2026, as I think you could glean from what I was saying earlier, the overall run rate of the business will be towards that $100,000,000 number and passed it.

Speaker 3

Got it. That makes sense. And then just last one for me. Obviously, you have a a very large opportunity to harvest the renewal cycle with the 3870. But curious if you think the functionality and improvements of the 3870 could expand the overall market and demand in the pump area.

Speaker 2

I haven't really even factored that in. But as you've heard us say over the last few years, you've been on these calls for a while. And those that have been on this call for a while have heard us say that this new pump is twenty year jet it's two decades improved over what we've been selling and so we think and we decided to address one of the Achilles heels of this old pump which was its usability. We made the new pump as we've talked about in the past you know it has a it has a very compared to the old pump, let's call it much more modern, interactive user interface. We have little graphics and animations on it that help lead the user through the use of the pump.

Speaker 2

To some extent we think that is the single largest deterrent that slows down the adoption of the older pump. And so yes, we feel that with the new pump being much more modern and with this much more user friendly help that comes on the screen to guide the users through its use that the Greenfield, those folks that have sat on the fence and not adopted the older pump, we should knock them off at an accelerating rate. I didn't factor that into these numbers I'm talking about. So that is upside.

Speaker 3

Got it. Very helpful. Congrats on all

Speaker 4

the progress. Thanks for taking the questions.

Speaker 2

Thanks, Brian. Thank you.

Operator

You. One moment for our next question. Our next question comes from the line of Jason Witz from Roth.

Speaker 4

Hi, thanks for taking the question and solid quarter here. So first off, on the new pump, is there an ASP increase that we should be factoring in here?

Speaker 2

I missed that. What was the pricing on the new pump? Oh, yeah. I kind of alluded to that in what I said. We anticipate the ASP will be a little bit higher.

Speaker 2

We've had this question a few times in previous calls. And now we're finally, in these last few weeks since we got clearance from FDA, we really put the pencil to the pricing and modeled the pricing. So it looks like it's coming out where it's probably going to be around 12 ish percent more than the ASP of the existing fund.

Speaker 4

Okay. That's that's good to hear. I guess, is there I mean, I I would that be is that possible to put some, upward, pressure on the gross margins is from that pricing? Can we assume that as well? Or is it too early to make that call

Speaker 2

well it's yeah it should be reflected in that and it might actually be reflected a little bit more so even in the gross margin because you know

Speaker 4

I meant gross margins but yes but I'll take I actually operating margins are more important so that's even better to hear thank you and then on the backlog how long does it taking you guys to fulfill your backlog at this point? What is the, I guess, timing from an order to the Gilson backlog to getting fulfilled?

Speaker 2

Well, a little different between the pump and the monitor. The monitor back the monitor backlogs running as I recall about four weeks, five weeks, somewhere in there. A pump backlog is running about five months, five, six months and we're letting that take place. As I mentioned, we anticipate bookings for pumps will be low in Q1 as we transition. But revenue won't be because we've got this huge backlog of these older pumps to deliver.

Speaker 2

Yeah, it's a length of time in the backlog.

Speaker 4

Okay, that's helpful. Then it sounds like customers, there are going be some upgrades from the backlog, but it doesn't sound like per se customers expecting pumps in the next, certainly for the rest of this year are initially going to be motivated to upgrade. They'll be happy getting just a new pump. Is that the right way to think about it? Or do you anticipate there's some upgrades there as well?

Speaker 2

In this year, no. We're only targeting a limited number of facilities, basically three, that we're going to deliver 40 to 50 of the new pumps into the watch.

Speaker 4

And so

Speaker 2

those customers I mentioned before that we wanna just use more as just any things that we need to put finishing touch to that may come up during watching how people actually interact with and use the pump. And that's why we're gonna deliberately have this delay in Q1 is because we're gonna wait for that two, three months of education from what we can learn from initially planting about 40 pumps.

Speaker 4

Okay, great. Guess I'll jump back in queue, thanks for answering the questions.

Speaker 2

At

Operator

this time, I would now like to turn the conference back over to Roger Susi for closing remarks.

Speaker 2

Again, thank you, operator. I'd like to thank those who have written along with us on this MR niche journey, which though always maintaining great revenue growth and margins, at times provide a few white knuckle twists and turns mainly due to the clearance process for this new pump. But it is with very clear vision we now see that road ahead providing us many more years of rewarding growth as we can after nearly twenty years offer our customers a path to move their MR IV solution delivery onto our new exciting pump platform. Thank you.

Operator

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

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