Stereotaxis Q2 2026 Earnings Call Transcript

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Provided by Quartr
August 11, 2026

Key Takeaways

  • Positive Sentiment: Recurring revenue reached $6.2 million in Q2, driven by the launch of MAGiC and a 270% sequential increase in robotic catheter revenue. Management expects recurring revenue to rise to approximately $7 million in Q3 and $8 million in Q4.
  • Positive Sentiment: MAGiC adoption is expanding, with roughly a dozen U.S. hospitals approved to purchase the catheter and procedure-level disposable revenue generally in the $5,000–$8,000-plus range. Demand currently exceeds supply, but the company expects about $1 million of incremental catheter revenue in each of the next two quarters as manufacturing ramps.
  • Positive Sentiment: Stereotaxis received its first U.S. GenesisX order and expects installation this fall alongside a non-modified X-ray, supporting formal compatibility with that manufacturer. Synchrony also generated initial orders and is expected to contribute more than $1 million of system revenue per quarter in the near term.
  • Negative Sentiment: Q2 revenue was $7.7 million, down year over year because no robotic system was delivered, while the company posted a $4.5 million net loss and $3.7 million of negative free cash flow. Gross margins remained pressured by low manufacturing volumes, and management acknowledged ongoing adoption barriers including catheter supply, GenesisX validation, and X-ray compatibility.
  • Positive Sentiment: Management reiterated its expectation of reaching cash-flow profitability in the first half of 2027 without additional financing, assuming continued catheter adoption and modest system sales. The company also highlighted longer-term growth opportunities from a wireless/mobile robot, pulse-field-ablation catheters, AI-enabled surgery, and the recently completed Robocath acquisition.
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Earnings Conference Call
Stereotaxis Q2 2026
00:00 / 00:00

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Operator

Good afternoon. Thank you for joining us for Stereotaxis Second Quarter 2026 earnings conference call. Certain statements during the conference call and question and answer period to follow may relate to future events, expectations, and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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.

Operator

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. We assume no duty to update this statement. At this time, all participants have been placed on a listen-only mode. 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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'll discuss on today's call the primary areas of commercial progress, the feedback from the field, and our efforts to accelerate growth.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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. 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 U.S. 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 U.S. and Europe, with nearly 300% sequential growth from the first to the second quarter.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

We are in the early phase of adoption of MAGiC, with about a dozen U.S. sites receiving hospital approval to purchase the catheter and beginning procedures in the second quarter. 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. 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, quote, "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, quote, "Wow, this catheter navigates well. You guys have something special." This feedback is highly encouraging.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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 U.S. and European installed base. We expect the vast majority to shift from their historical dependency on J&J to our catheters within the next year.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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 AG. 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 $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 the second quarter, we received FDA clearance for the Synchrony system.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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 the second quarter, have continued to ship systems in the third quarter, 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 $1 million in Synchrony system revenue each quarter for the next few quarters.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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 U.S. from an academic medical center.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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 this 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. 1st, robot accessibility. We are advancing a future generation of the GenesisX robot that will be fully wireless, battery-operated, and mobile. 2nd, a more robust portfolio of EP catheter innovation.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Most imminently here, we expect first human procedures with MAGiC and pulse field ablation before the end of this year. 3rd, 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 the vision of offering a full ecosystem that enables remote, automated, and fully robotic treatment of stroke and cardiovascular disease. 4th, AI efforts that will incorporate intelligent decision support features into Synchrony and automation to our robotic platforms.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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. 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?

Kim Peery
Kim Peery
CFO at Stereotaxis

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. 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 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. 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, countered by general pressure on procedures as we transition away from Johnson & Johnson and ramp manufacturing of our catheters.

Kim Peery
Kim Peery
CFO at Stereotaxis

Gross margin for the second quarter of 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.

Kim Peery
Kim Peery
CFO at Stereotaxis

Operating loss and net loss in the second quarter of 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 the second quarter was $3.7 million, consistent with the previous year. At June 30th, Stereotaxis had cash and cash equivalents of $10.5 million and no debt. I will now hand the call back to David.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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. 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. From a financial perspective, we've 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

We are internally modeling to reach cash flow profitability in the first half of 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'll now take your questions. Operator, can you please open the line to Q&A?

Operator

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 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.

Daniel Stauder
Daniel Stauder
Director at Citizens

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. 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. Thank you.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Hi, Danny. Good afternoon. Thanks for the questions. 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 our robotically steered catheters. There is obviously volatility in any given quarter in terms of things like the MAGiC 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 but also in the U.S. But generally, the growth is coming all from adoption of MAGiC Sweep. In Europe, we have other catheters that we are able to also kind of supplement those. And so that is where all the growth comes from.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

We are looking at it both from a demand perspective and from a supply perspective, but in things like the third and fourth quarter, it is really still driven essentially all by supply. And so 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. And so that is kind of 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

That obviously it's a lower ASP product in the near $200,000 range. That's something that we're shipping several of them out each quarter. On the system side, the guidance is predicated on one system revenue recognition in each of the third and fourth quarter. We have obviously the GenesisX sale, which we expect to recognize revenue in the third quarter 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. That's kind of where the guidance comes from.

Daniel Stauder
Daniel Stauder
Director at Citizens

No, I appreciate that, and thanks for the color. Just the next one on cash flow. It's great to get that update, but I was wondering if you could just parse out a little bit 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 want to double hit on this and get any more commentary in terms of the cash flow would be great. Thank you.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Sure. I'll see if Kim wants to add to anything, but kind of 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

But even without taking that into account and with very modest assumptions on the capital side, kind of essentially the same $1 million a quarter or so of Synchrony and 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. 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

We're still advancing a broad R&D pipeline. We're advancing some clinical studies. We're obviously doing all the operating work and commercial work to launch these new products. We think with that balancing act of how to manage the expenses and then letting the recurring revenue start to incrementally grow with the availability of catheters, we will be in a break-even position at the early periods of next year.

Daniel Stauder
Daniel Stauder
Director at Citizens

Great. Thanks so much. Just one quick one and 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? Or just any other trends you are seeing would be fantastic. Thank you.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Sure. 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 U.S., our pricing is extremely consistent across sites, and so that number of in the $5,000-$8,000+ 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. But the levels that you quoted were the levels in the U.S.

Daniel Stauder
Daniel Stauder
Director at Citizens

Great. Thanks for the questions and congrats on the progress.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Thank you very much.

Operator

Your next question comes from Frank Takkinen from Lake Street Capital Markets. Please go ahead.

Nelson Cox
Analyst at Lake Street Capital Markets

Hey, this is Nelson Cox on for Frank. Thanks for taking the questions. I wanted to start with the U.S. GenesisX 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? 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Sure. Hi, Nelson. Thanks for the questions. On the X-ray compatibility side, we need to do the formal testing, and there's a few stages of that testing. 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 GenesisX being able to serve as a robot that works compatibly, kind of 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're 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?

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Then 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 kind of this initial effort is with the 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. That is the effort. We have one of them, and that gets a little bit to your second question that, yeah, 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

We will have two X-rays working with GenesisX by the end of this year, one in Europe, one in the U.S. And we are still working. There is 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. 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 kind of working in the real world.

Nelson Cox
Analyst at Lake Street Capital Markets

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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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. 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 would say, as a kind of a margin that should not be difficult for us to reach.

Nelson Cox
Analyst at Lake Street Capital Markets

All right. Thank you for taking the questions.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Thank you.

Operator

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

Joshua Jennings
Joshua Jennings
Managing Director at TD Cowen

Hi. Good afternoon. Thanks, David and Kim. I 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. I am 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Sure. Hey, Josh. Thanks for the question. Let me kind of comment, I guess, qualitatively, it's been 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 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, and let us prove the value once we're already there.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

It definitely has helped us significantly have discussions with many accounts, including some of the most kind of prominent hospitals 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. 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 in communication into conversion of deals has been obviously getting GenesisX actually working in the real world. Let's 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

They can speak to physicians that have used it, and so you have that kind of 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 don't show it, there's always some more of a question mark in customers' minds. 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, 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 supply is the other third kind of barrier. Everyone who adopts GenesisX knows that they need to use MAGiC.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

We're still in the phase of making sure we have enough MAGiC to cover all the existing demand, let alone future demand. I'd say those are the three structural things that we're working on. 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 some of the X-rays, with the MAGiC manufacturing ramp, with demonstrating GenesisX at these first two installs, we should be able to kind of reduce those and allow for kind of a higher momentum of GenesisX commercialization.

Joshua Jennings
Joshua Jennings
Managing Director at TD Cowen

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 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 the EP community's sentiment towards robotics and robotics technology going forward. Thanks.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Sure. At, 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. There was the Society for Cardiac Robotic Navigation, had their symposium in the middle of HRS. It was a huge room. 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've had at an HRS conference for robotics in any of my memory. We do see that increased interest and that also 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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

I think there are many people who are recognizing that. That's why we're able to re-engage with some of these preeminent hospitals in the U.S. that historically we haven't had relationships with and have meaningful conversations and plan for how to work together in much more meaningful ways. I think you'll hopefully see some of that over the coming months as those come to fruition. What I'd say in terms of that 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 for this field and to really realize the full potential.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

A little bit like in my prepared remarks, I think about our room for progress in four big buckets. There's meaningful progress that is being made in each of these four big buckets. The first is just, again, increased accessibility. The easier you make it to adopt something, the better and the more adoption you're 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 Arrow 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'd be able to park the robot in corners of the room, so you could fit it in smaller rooms.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

It would be a 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. 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. Having a continued pipeline of interventional catheters that are robotically steered. Again, a robot is only as good as the catheters it drives. You need to constantly think about how to innovate in that world. The third is. But then again, we have seen that things like the J&J catheter existed for 20 years and had a very long tail. On the one hand, innovation is very important.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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. The third big area is how to make our robot multi-specialty, and that ties in with Robocath and the complementary mechanism of action, and how to really make GenesisX plus minus Robocath a multi-specialty robot. The fourth is what you were saying. How do you bring telerobotics?

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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. But there will be many attractive stepping stones along the path with room for commercial impact along that journey.

Joshua Jennings
Joshua Jennings
Managing Director at TD Cowen

Appreciate that thorough answer. Thanks, David.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

Thanks very much.

Operator

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.

David Fischel
David Fischel
Chairman and CEO at Stereotaxis

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. Thank you.

Operator

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

Executives
    • David Fischel
      David Fischel
      Chairman and CEO
    • Kim Peery
      Kim Peery
      CFO
Analysts
    • Daniel Stauder
      Director at Citizens
    • Nelson Cox
      Analyst at Lake Street Capital Markets
    • Joshua Jennings
      Managing Director at TD Cowen
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