Spectral AI Q2 2025 Earnings Report

Spectral AI EPS Results

• Actual EPS: -$0.10
• Consensus EPS: -$0.07
• Beat/Miss: Missed by -$0.03
• One Year Ago EPS: N/A

Spectral AI Revenue Results

• Actual Revenue: $5.07 million
• Expected Revenue: $5.44 million
• Beat/Miss: Missed by -$373.00 thousand
• YoY Revenue Growth: N/A

Spectral AI Announcement Details

• Quarter: Q2 2025
• Date: 8/12/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, August 12, 2025
• Conference Call Time: 5:00PM ET

Spectral AI (NASDAQ:MDAI), an artificial intelligence (AI) company, focuses on developing predictive medical diagnostics in the United States. The company develops medical diagnostics for faster and accurate treatment decisions in wound care with applications involving patients with burns and diabetic foot ulcers. Its products include DeepView System, a predictive analytics platform integrated with the predictive AI-Burn, which combines AI algorithms and multispectral imaging (MSI) imaging for an assessment of wound healing potential and offers clinicians an objective and immediate assessment of a wound's healing potential prior to treatment or other medical intervention; and DeepView SnapShot M, a handheld, portable, and wireless diagnostic tool, that provides a potential enhanced and expanded use for the government and emergency care, first responders, and potentially home health care professionals. The company is headquartered in Dallas, Texas.

Spectral AI Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Spectral AI secured up to $15 million in debt financing (initial draw of $8.5 million) and raised $2.7 million in equity, bringing cash on hand to over $10 million with potential access to an additional $6.5 million.
• Positive Sentiment: The company completed its de novo FDA submission for the DeepView burn indication in June, a critical milestone toward U.S. clearance expected in the first half of 2026.
• Negative Sentiment: R&D revenue declined to $5.1 million in Q2 2025 from $7.5 million a year ago, and the company reported a net loss of $7.9 million versus $2.9 million, driven by lower BARDA reimbursements and a $5.4 million increase in warrant liability.
• Positive Sentiment: General and administrative expenses fell to $4.4 million from $5.8 million year-over-year, reflecting continued focus on operating efficiencies ahead of FDA approval.
• Neutral Sentiment: Spectral AI reiterated full-year revenue guidance of approximately $21.5 million, noting that this does not include potential DeepView system sales in the U.K. or Australia.

Presentation

[Operator]

Good afternoon, everyone, and welcome to the Special AI Inc. Q2 twenty twenty five Financial Results Conference Call. All participants will be in a listen only mode. If you need assistance, please say no to a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

[Operator]

To ask a question, you may press star and then one on your touchtone telephones. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Sarah Penergast, Assistant General Counsel. Please go ahead.

[Sara Prendergast, Assistant General Counsel at Spectral MD]

Thank you, Jamie. Good afternoon, everyone, and thank you for joining us for Spectral AI's twenty twenty five second quarter financial results conference call. Our speakers for today will be Doctor. Michael DeMayo, the company's Chairman of the Board and Vincent Capone, the company's Chief Financial Officer. Before we begin, I'd like to remind everyone that during this call, certain statements made are forward looking statements within the meaning of the Safe Harbor provisions of The United States Private Securities Litigation Reform Act of 1995, including statements regarding the company's strategy, plans, objectives, initiatives and financial outlook.

[Sara Prendergast, Assistant General Counsel at Spectral MD]

When used on this call, the words estimates, projected, expects, anticipates, forecasts, plans, intends, believes, seeks, may, will, should, future, propose, and variations of these words or similar expressions or the negative versions of such words or expressions are intended to identify forward looking statements. These forward looking statements are not guarantees of future performance, conditions or results and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside of the company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward looking statements. As such, listeners are cautioned not to place undue reliance on any forward looking statements. Investors should carefully consider the foregoing factors and other risks and uncertainties described in the Risk Factors sections of the company's filings with the SEC, including the registration statement and the other documents filed by the company. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward looking statements.

[Sara Prendergast, Assistant General Counsel at Spectral MD]

With that said, I would now like to turn the call over to Doctor. Demayo, Spectral AI's Chairman of the Board.

[Michael DiMaio, Chairman of Board at Spectral AI]

Thank you, Sarah, and good afternoon, everyone. We appreciate you joining us today for our second quarter financial results conference call. As part of my mantra to the company's employees, I have discussed the three finance, focus and finish. To these three points, we will firstly address our finance piece as well as in the 2025 as we will discuss further in a minute. Secondly, we are moving forward with our focus on our burn indication and our submission to our de novo application to the FDA, which has occurred in June two months ago.

[Michael DiMaio, Chairman of Board at Spectral AI]

Lastly, finish is what we will continue to focus on as we look to work with our BARDA partners and bring the DeepView system device to the commercial marketplace. We had a strong start to the year with significant accomplishments in our FDA submission being completed in the 2025 and continued operating efficiencies. We also strengthened our financial profile in 2025 and created a cash runway to support our growth initiatives through the foreseeable future. We have had some significant developments in the 2025. First, financing.

[Michael DiMaio, Chairman of Board at Spectral AI]

As previously announced in March 2025, the company successfully completed a debt financing agreement with Avenue Venture Opportunities Fund II, a fund of Avenue Capital Group, of up to $15,000,000 in funding with an initial draw of $8,500,000 U. S. In connection with this debt financing, the company also raised 2,700,000.0 of equity financing from institutional and existing investors. With total cash on hand at the June 2025 of over $10,000,000 potential access to an additional $6,500,000 of debt and a reduced spending rate, Spectral AI has significant financing on hand for the foreseeable future that enables us to continue to work on our product commercialization efforts, including the planned U. S.

[Michael DiMaio, Chairman of Board at Spectral AI]

Launch of our DeepView system. Second, our FDA submission. Our FDA submission in the 2025 was a huge milestone in our company's development. I am very proud of our team for their hard work and dedication in meeting this very important timeline. The submission is a key driver in the evolution of our business, and I'd like to provide further information about this.

[Michael DiMaio, Chairman of Board at Spectral AI]

We had a number of pre submission meetings with the FDA, which also included our BARDA partners funding a majority of this burn indication. Our team delivered the materials that we discussed back and forth with the FDA in the pre submission meetings, and we expect to fully meet the expectation and requirements of the submission. We look forward to further interaction with the FDA on our de novo application in the months ahead. Next, Spectral IP. My last update is about our healthcare intellectual property focused subsidiary, Spectral IP Inc.

[Michael DiMaio, Chairman of Board at Spectral AI]

We are fortunate to have Eric Spangenberg as our largest shareholder who is an expert in this space. He's a well known expert in intellectual property and as CEO of this subsidiary, his primary focus with respect to this entity has been to identify assets for this entity. This entity continues through the SEC registration process for its initial public offering. It is important to note once again that the activities of this IP focused subsidiary require limited management resources and no additional capital from the company. Additionally, no core operating assets of the company will be involved in the subsidiary.

[Michael DiMaio, Chairman of Board at Spectral AI]

I thank you again for your attention to our company. And with that, I will turn things over to our Chief Financial Officer, Vince Capone. Vince?

[Vince Capone, CFO & General Counsel at Spectral AI]

Thank you, Doctor. DeMayo. And again, thank you all for joining us this afternoon. We issued our earnings release earlier this afternoon, which contains additional details of our operating results, and we will be filing our Form 10 Q with the SEC this evening. With that in mind, I will focus my remarks on select highlights and key financial items. Our research and development revenue in the 2025 was reduced to $5,100,000 from $7,500,000 in the second quarter of last year. This reduction reflects our anticipated reduced reimbursements under the BARDA Project BioShield contract, which was awarded to the company in September 2023.

[Vince Capone, CFO & General Counsel at Spectral AI]

In the 2025, we also incurred less clinical trial and other reimbursed costs from the prior year's quarter. Gross margin decreased slightly to 45.2% from 46.6% in the second quarter of last year due to a lower percentage of reimbursed expenses under the Project BioShield BARDA contract as well. General and administrative expenses for the 2025 were significantly reduced from $5,800,000 in the 2024 to 4,400,000.0 The reduction in general and administrative expenses primarily relates to our continued focus on operating efficiencies and our overall corporate focus on the completion of our de novo submission to the FDA. The company reported a net loss in the 2025 of $7,900,000 as compared to a net loss of $2,900,000 in the 2024 as the company recorded an increase in the fair value of its publicly traded warrant liability of $5,400,000 Even with the larger warrant liability for the six month period ended sixthirtytwenty twenty five, the company reported a net loss of $5,100,000 as compared to a net loss of $6,100,000 for the first six months of last year, a reduction of over $1,000,000 from the prior period. At 06/30/2025, we had 25,737,820 shares outstanding.

[Vince Capone, CFO & General Counsel at Spectral AI]

Moving to the balance sheet. As of 06/30/2025, cash and cash equivalents totaled $10,500,000 up from $5,200,000 on 12/31/2024. This is primarily due to the company completing its financing as earlier discussed. Please note that that financing also includes a second tranche, which would provide the company with an additional $6,500,000 of debt and an attendant equity raise of $7,000,000 upon FDA approval of our de novo application. With our reduced spending levels, we believe this funding is sufficient to provide the company with the necessary capital to get us through the foreseeable future.

[Vince Capone, CFO & General Counsel at Spectral AI]

For 2025, we are reiterating revenue guidance of approximately $21,500,000 Our revenue guidance does not include any contributions from sales of the Deep View system for the burn indication in either The United Kingdom or Australia, which, if any, are not expected to be material for 2025. Thank you for your time and attention today. And with that, operator, let's open the call for questions from any participants.

[Operator]

Ladies and gentlemen, at this time, we'll begin that question and answer session. To join the question queue, you may press star and then one using a touch tone telephone. If you are using a speaker phone, we do ask you please pick up the handset prior to pressing the keys to ensure the best sound quality. To withdraw your questions, you may press star and 2. And our first question today comes from Ryan Zimmerman from BTIG. Please go ahead with your question.

[Ryan Zimmerman, MD & Medical Technology Analyst at BTIG]

Good afternoon. Thanks for taking our questions and appreciate the efficient remarks this afternoon. Maybe we could talk about the submission for Deep View, just how you're thinking about preparing for clearance here in The U. S, what you're doing to potentially start to think about a commercial organization, And any other thoughts you have on timing? I think we had previously expected about maybe first half twenty six for clearance.

[Ryan Zimmerman, MD & Medical Technology Analyst at BTIG]

I just want to make sure that's still within the ballpark of what you guys are thinking. Thanks for taking the question.

[Michael DiMaio, Chairman of Board at Spectral AI]

Hey, Ronnie, thank you. This is Damayo. So I appreciate the question. And to refocus, are, as you said, very proud that we've got this FDA submission in a timely manner. And so to that end, we expect the appropriate time coming back and forth to the FDA.

[Michael DiMaio, Chairman of Board at Spectral AI]

And yes, the first half of next year, we expect clearance of that. There's no guarantee, but we have all indications moving forward. And what we've begun is developing a very thorough commercialization plan. As I keep emphasizing, there's three Fs. The third F is finished.

[Michael DiMaio, Chairman of Board at Spectral AI]

We have spent a lot of energy to get to this point. So now we are turning our attention carefully to the commercialization plan. We are that involves BARDA as well. The contract does involve some participation in BARDA, helping us roll out and in some fashion they will help us quote purchase unquote the initial devices that will be rolled out upon the clearance by the FDA. In addition to that, we are discussing actively the second indication in addition to burns that will be able to have a more widespread use applicability in the medical community.

[Michael DiMaio, Chairman of Board at Spectral AI]

There's also some additional monies in the BARDA contract to help us begin our commercialization plan.

[Ryan Zimmerman, MD & Medical Technology Analyst at BTIG]

Got it. And I know you can't market to any expanded usage right now. I'm just curious, and I appreciate if you don't want to talk too much about this given that you're still exploring it. But where are you seeing utility outside of burns? Is it wound care?

[Ryan Zimmerman, MD & Medical Technology Analyst at BTIG]

Is there other assessments, maybe aesthetic? I'm just trying to kind of think about some of the potential opportunities that may exist out there.

[Michael DiMaio, Chairman of Board at Spectral AI]

Thank you, Ryan. I'll be careful what I say because I don't want to restrict ourselves. If you focus and understand that we are a wound imaging device, check that, and then of course what we are able to differentiate is non healing tissue. In this case with the burns, when you have a non healing area, that tells the burn doctor to remove that and do skin grafting so that area will then have a new skin covering over that. If you can use your thoughts and imagination, there are other wounds that having a device that can differentiate what is not healing versus what is healing or what is not viable from what is viable, you can have a very broad understanding or application that can be pursued.

[Michael DiMaio, Chairman of Board at Spectral AI]

And then lastly, as you have asked Ryan, if you have something, a part of the body, a part of a wound, be they traumatic, be they elective, be they ischemic, be they infected or whatever, then you can also roll these out to companies that might find that useful in their products, be they skin substitutes, be they drugs, etcetera.

[Ryan Zimmerman, MD & Medical Technology Analyst at BTIG]

Thank you, Doctor. Nirmal. Appreciate the color.

[Michael DiMaio, Chairman of Board at Spectral AI]

Thank you, Ryan. Appreciate your question.

[Operator]

Our next question comes from John Vandermosten from Zacks. Please go ahead with your question.

[John Vandermosten, Senior Analyst at Zacks Small Cap Research]

Great. And thank you. Good afternoon, Doctor. DeMio and Vince. When we look at, you mentioned The U.

[John Vandermosten, Senior Analyst at Zacks Small Cap Research]

S, UK and Australia and how we're not going to really see anything from them or very much from them this year. What activities are you taking for deployment in The UK and Australia coming up in coming years?

[Michael DiMaio, Chairman of Board at Spectral AI]

That's a good question. Thanks, John. Working backwards, as you probably know, The UK market is we've already approved there with certain release of it. And you may also know, maybe you don't know, that The U. K.

[Michael DiMaio, Chairman of Board at Spectral AI]

Burn doctors and Eclair have found to be extremely useful, friendly for the care of the burn patients. So I want to emphasize that The U. K. Market is actually a great opening salvo, if you will, to care for burn patients. And we want to use that and leverage that in The US market.

[Michael DiMaio, Chairman of Board at Spectral AI]

And the same is for Australia. So I would say that it's not the sales that we're looking forward to as much, but rather the usage of it and the learning lessons that we can gather from that. In terms of sales, we are thinking about that because you know it's a different market. It's a single payer market for all intents and purposes. And the ability to get what's called the NICE approval, N I C E, is something that's often useful and desired for The U.

[Michael DiMaio, Chairman of Board at Spectral AI]

K. Market to have more widespread applicability. So, we're currently, again to my third F to finish, we're studying how much effort and purpose there is in The UK market, as I repeated earlier, to be able to have that market any information gleaned from that market to be used in The U. S. And then to determine how much time and energy will be useful to be dedicated to The U. K. For more widespread sales.

[John Vandermosten, Senior Analyst at Zacks Small Cap Research]

Okay. And looking at Snapshot M, assuming you get approval for the DPU burn, what does the regulatory pathway look like for that? Because I think you have a little bit easier time of it since you've already got a predicate device.

[Michael DiMaio, Chairman of Board at Spectral AI]

Yes, sir. John, making sure you're calling snapshot, the handheld, is that what you're referring to?

[John Vandermosten, Senior Analyst at Zacks Small Cap Research]

Yes, snapshot and the portable one.

[Michael DiMaio, Chairman of Board at Spectral AI]

Yep. So, again, a great question, John. So the answer is we are designing the I'm going call it handheld for simplicity. There's two things happening in that space. Number one, it's being designed with the essential components similar or identical to the what I call the cart based, John, permit me to call it cart based and handheld.

[Michael DiMaio, Chairman of Board at Spectral AI]

And so that have a pathway for a five ten regulatory pathway based upon the CART based clearance. Does that make sense?

[John Vandermosten, Senior Analyst at Zacks Small Cap Research]

Yeah.

[Michael DiMaio, Chairman of Board at Spectral AI]

Yeah. And so the second part I want to tell you is that so far the funding for that has been via a military pathway, DOD, DHA, and now it's called MTEC or the military pathway. What we're going to do as well is create a parallel or similar pathway for a commercial handheld device. So in summary, we will use the card based device as a predicate for the handheld device. And secondly, we're going to use the funding for the military handheld device to be able to craft a handheld commercial device.

[John Vandermosten, Senior Analyst at Zacks Small Cap Research]

Okay, got it. All right, thanks. I'll hop back in queue.

[Michael DiMaio, Chairman of Board at Spectral AI]

Thanks, John. Thanks, John.

[Operator]

And our next question comes from Carl Byrnes from Northland Capital Markets. Please go ahead with your question.

[Carl Byrnes, MD - Senior Research Analyst at Northland Capital Markets]

Thanks for the question and congratulations on your progress. I'm wondering if you can comment on any dialogue you might be having with BARDA with respect to how system rollout might transpire once approved? Call it year one, year two. Anything that you might be able to state there would be very helpful. Thanks.

[Michael DiMaio, Chairman of Board at Spectral AI]

Thanks, Carl, for your question. You've asked the most telling question because as you well know if you read the newspapers, there's a lot of events happening in the DC governmental space. I would be BARDA would not look upon me favorably if I tried to explain, share, guess what's going to happen. I will simply say that there is language in the contract that points towards some methodology of them helping us roll out devices and technology to the community. But Carl, I would be very careful and remiss if I started trying to guess or predict to what Sarah said at the beginning of this call, forward looking statements on how BARDA's going to act.

[Michael DiMaio, Chairman of Board at Spectral AI]

I don't mean to be facetious, Carl, but that would be a very treacherous spot for me to be in.

[Carl Byrnes, MD - Senior Research Analyst at Northland Capital Markets]

I hear you. Thanks so much. And congrats again.

[Michael DiMaio, Chairman of Board at Spectral AI]

Thanks, Carl. Thank you.

[Operator]

And ladies and gentlemen, with that, we'll wrap up today's question and answer session. I'd like to turn the conference call back over to Doctor. DeBio for any closing remarks.

[Michael DiMaio, Chairman of Board at Spectral AI]

Again, to everyone, thank you again for your participation and continued interest in Spectral AI. We are very pleased with the progress we continue to make, and we remain optimistic about our prospects for the future. We have continued to focus on the three principles I mentioned earlier, finance, focus and finish, and we've done very well with the first two Fs and now it's our time to focus on commercialization and indeed we will. We will look please look forward to further announcements on our progress of these goals in the near term. My thanks to everyone and have a good evening.

[Operator]

Ladies and gentlemen, that does conclude today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

Participants

Executives

• Michael DiMaio, Chairman of Board
• Vince Capone, CFO & General Counsel

Analysts

• Sara Prendergast, Assistant General Counsel at Spectral MD
• Ryan Zimmerman, MD & Medical Technology Analyst at BTIG
• John Vandermosten, Senior Analyst at Zacks Small Cap Research
• Carl Byrnes, MD - Senior Research Analyst at Northland Capital Markets