Spectral AI Q1 Earnings Call Highlights

Key Points

• Spectral AI said it remains on track for FDA clearance of its DeepView burn assessment system, with a response expected by the end of Q2 2026 and a goal of commercializing in late 2026 if approved.
• The company received $31.7 million in BARDA funding, which will support product development and deployment, but management said most of the revenue recognition is expected in 2027 rather than 2026.
• First-quarter R&D revenue fell to $4.0 million from $6.7 million a year earlier as base BARDA contract work ended, though that was partly offset by other government contract activity and an improved gross margin of 50.8%.

Spectral AI NASDAQ: MDAI said it remains on track toward potential U.S. regulatory clearance and commercialization of its DeepView system for burn assessment, while reporting lower first-quarter research and development revenue tied to the completion of work under a federal contract.

On the company’s first-quarter 2026 earnings call, Chief Executive Officer Vincent Capone said the period was defined by “progress and preparation,” citing ongoing discussions with the U.S. Food and Drug Administration, expanded government funding and steps toward building a commercial infrastructure.

Spectral AI submitted its De Novo application to the FDA in June 2025 for the DeepView system. Capone said the company has responded to additional information requests and “maintained an active dialogue” with the agency. The company continues to expect a response before the end of the second quarter of 2026.

“I think that we're in as good a position as we can be, and I think our timeline has remained solid,” Capone said during the question-and-answer portion of the call.

DeepView commercialization remains targeted for 2026

Capone said Spectral AI hopes to move quickly to commercialize DeepView by the end of 2026 if it receives FDA clearance. The company is also working with Deloitte Consulting to finalize its commercialization strategy and is continuing a search for a chief commercial officer.

The company is preparing an outcome study intended to evaluate the benefits of DeepView across clinician workflows and the patient care journey. Capone said the study is expected to include approximately 240 patients across 12 clinical sites.

The study is designed to show how DeepView’s wound assessment can support surgical precision and improve the timing of treatment decisions, with the goal of demonstrating an impact on overall patient care and length of hospital stay.

Spectral AI also plans to pursue international sales. Capone said that, following FDA clearance, the company expects to update its UKCA burn assessment approval, which it secured in 2024, to reflect the improved algorithm, hardware and software included in the FDA-submitted DeepView system. The company continues to expect initial sales in late 2026, pending expanded UKCA labeling, in the U.K., Australia or Gulf Cooperation Council countries.

BARDA funding supports development and deployment plans

In March 2026, Spectral AI announced $31.7 million in advanced funding from the Biomedical Advanced Research and Development Authority, or BARDA. Capone said the award included a no-cost extension of the base phase of the company’s contract and the immediate acceleration of the second phase.

The funding is expected to support additional feature design and aspects of the DeepView system, as well as the procurement of up to 30 devices for burn centers, Level 1 trauma centers and emergency departments.

Asked about the expected cadence of the BARDA funding, Capone said some of the $31.7 million would be recognized in 2026, with most expected in 2027 and a smaller component potentially remaining in 2028. He said the revenue recognition timing is why the company does not expect to see much of the funding reflected in 2026 revenue.

Spectral AI reiterated its 2026 revenue guidance of approximately $18.5 million, which includes the effect of the accelerated BARDA funding. Capone said the guidance does not include any significant contribution from DeepView system sales.

First-quarter revenue declines as base BARDA work completes

Chief Financial Officer David McGuire, who recently joined Spectral AI, said R&D revenue for the first quarter of 2026 was $4.0 million, compared with $6.7 million in the prior-year period. He said the decline was expected and was primarily driven by completion of work under the base phase of the company’s Project BioShield contract with BARDA.

That decline was partially offset by increased activity under other U.S. government contracts, including work on the company’s handheld device.

Gross margin improved by 360 basis points to 50.8%, which McGuire attributed largely to a higher concentration of direct labor as a component of overall revenue. General and administrative expenses were $4.0 million, down slightly from $4.1 million a year earlier, reflecting cost discipline partially offset by higher public company infrastructure costs.

Other expense was $1.5 million in the quarter, compared with other income of $3.9 million in the prior-year period. McGuire said the change was primarily driven by non-cash fair value adjustments related to the company’s warrant liability.

Spectral AI reported a net loss of $3.4 million, or $0.11 per diluted share, compared with net income of $2.9 million, or $0.11 per diluted share, in the prior-year period. McGuire said that excluding the warrant fair value adjustments in both periods, underlying operating performance was generally in line with expectations.

As of March 31, 2026, Spectral AI had $11.7 million in cash, compared with $15.4 million at Dec. 31, 2025. McGuire said cash usage reflected continued investment in R&D and commercialization initiatives. Total debt was $8.5 million, and the company had 31.8 million shares outstanding.

Handheld device prototype delivered to MTEC

Capone also provided an update on Spectral AI’s handheld device, which is being developed as part of a Department of Defense contract through the Medical Technology Enterprise Consortium, or MTEC. He said the company delivered a fully functioning prototype to MTEC last week, ahead of its previously stated expectation of delivery by the end of the second quarter.

The company hopes to be asked to bid on Phase III of that contract later this year. Capone said Spectral AI would anticipate pursuing 510(k) approval of the handheld device using the cart-based DeepView system as its predicate.

In response to an analyst question, Capone said Spectral AI does not expect to learn whether it will be selected to participate in Phase III until very late in 2026, with a decision time point believed to be December 2026. As a result, he said the company does not expect revenue from that phase in 2026, with potential revenue in 2027 and 2028 if selected.

Company highlights burn care conference feedback

Capone said Spectral AI had a strong presence at the American Burn Association annual meeting in Orlando in April, where the DeepView system was featured in podium and poster presentations. He said Dr. Christopher Lewis presented an overview of the technology, including real-world experience and results, at the ABA Innovation Theater.

During the Q&A, Capone said the meeting gave clinicians and other stakeholders an opportunity to see the device in person. He said the company was pleased with the “wait list” of potential installations that emerged from the conference.

Spectral AI also discussed work on a Total Body Surface Area, or TBSA, tool included in its FDA-submitted device. Capone said the company is working on an advanced version internally referred to as “TBSA 2,” which he said should be available in 2027. He said further regulatory requirements for the upgraded tool should be “no more complicated” than a 510(k), and may not rise to that level, provided the TBSA component is approved as part of the De Novo application.

Capone closed the call by thanking investors and reiterating management’s optimism about the company’s next phase as it seeks to move from development toward commercialization.

About Spectral AI NASDAQ: MDAI

Spectral AI, Inc NASDAQ: MDAI is a technology company focused on delivering advanced analytics and insights through the application of machine learning to multi-spectral and hyperspectral data. Its core platform ingests imagery from satellites, aerial drones and ground-based sensors, applying proprietary algorithms to identify patterns and anomalies invisible to the naked eye. The company's solutions are designed to help clients make more informed decisions in areas such as agriculture, environmental monitoring, infrastructure inspection and resource exploration.

The company offers a cloud-native software-as-a-service (SaaS) platform that enables users to visualize and analyze large volumes of spectral data via customizable dashboards.

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