What CapsoVision (CV) Said on Its Q3 Earnings Call

Key Points

• Q3 revenue rose 1% to $3.6 million, while net loss narrowed to $7.3 million. Gross margin declined to 49% from 54%, reflecting higher material costs and a one-time inventory charge; the company ended September with $21.8 million in cash and equivalents.
• CapsoVision launched its FDA-cleared AI Highlights software in the U.S. on November 2, aiming to speed review and improve detection with its CapsoCam Plus capsule. It shipped 8,464 capsules in the quarter and added 34 accounts; management expects the launch’s full sales impact in 2027.
• The company completed enrollment and data collection for its second-generation colon capsule study and remains on track to submit it to the FDA before the end of 2026. It is also developing a pancreatic cancer detection program and plans to start an esophageal varices trial in the second half of 2027.

CapsoVision NASDAQ: CV reported modest third-quarter revenue growth as it prepared to introduce its artificial intelligence-assisted small bowel imaging software in the U.S. and complete a regulatory submission for its colon capsule.

Revenue was $3.6 million, up 1% from the third quarter of 2025, while net loss narrowed to $7.3 million, or $0.15 per share, from $7.9 million, or $0.17 per share, a year earlier. Senior Vice President of Finance David Garcia said the company faced a competitive U.S. pricing environment, although its average selling price was stable year over year.

Management expects second-half revenue to exceed first-half revenue and anticipates that sales of CapsoCam Plus will accelerate following the U.S. launch of AI Highlights, with the full impact realized in 2027, Garcia said.

AI launch and customer adoption

AI Highlights received U.S. Food and Drug Administration clearance on September 25 and launched domestically on November 2. The software helps physicians identify images with suspected abnormalities during review of videos captured by the company’s CapsoCam Plus small bowel capsule.

President and CEO Johnny Wang said company testing showed that AI-assisted review could reduce reading time and improve detection accuracy compared with manual review. He said CapsoCam Plus combines four-camera panoramic imaging with AI-assisted review and is cleared for pediatric patients as young as two years old.

Senior Vice President of Sales Doug Atkinson said early customer feedback had been positive, though it was too soon to draw broader conclusions. He described one physician who missed two arteriovenous malformations during a manual review but identified them when reviewing the study with AI assistance.

Atkinson said some large customers and health systems had waited for FDA clearance of AI Highlights before evaluating CapsoCam Plus against competing systems. The company is focusing on physician education, onboarding and customer evaluations, executives said.

CapsoVision shipped 8,464 CapsoCam Plus capsules in the quarter, compared with 8,336 a year earlier. Garcia said the company added 34 accounts: nine hospital systems, four pediatric hospital clinics and 21 adult gastroenterology clinics. Atkinson estimated that approximately 65% of revenue came from GI clinics and 35% from hospital systems.

Colon submission and pipeline

Wang said CapsoVision completed enrollment and data collection for the clinical study supporting its planned FDA submission for the second-generation CapsoCam Colon. Physicians have finished reading capsule videos both with and without AI assistance, and the company remains on track to submit before the end of 2026, he said.

During the question-and-answer session, Wang said the study data had been frozen and a statistician was working on the primary, secondary and exploratory endpoints. He said the data should be available to the company the following month, but that management and legal counsel had not decided whether to release it publicly.

The company estimates an initial U.S. annual addressable market of about $1 billion for patients at higher risk from colonoscopy or those with an incomplete procedure, Wang said. He also described a longer-term market opportunity exceeding $10 billion.

CapsoVision is advancing an early-stage pancreatic cancer detection program using its CapsoCam UGI platform. Wang said two community-based clinical sites were active and that site activation was progressing at more than a dozen large-volume centers with pancreatic cancer expertise. The company also plans to begin an esophageal varices trial in the second half of 2027, he said.

Margins and financing

Third-quarter gross margin fell to 49% from 54% a year earlier. Garcia attributed the decline to higher material costs, including rising flash memory prices, a one-time inventory obsolescence charge and higher stock-based compensation expense.

Operating expenses declined to $9.1 million from $9.9 million. Garcia said costs associated with the completed colon study should decrease, creating an opportunity for further reductions in operating expenses.

CapsoVision ended September with $21.8 million in cash and cash equivalents. That included approximately $17.8 million in net proceeds from an $18 million registered direct offering that closed September 18. The company also sold 276,446 shares through its at-the-market facility during the quarter for $1.7 million in net proceeds.

About CapsoVision (NASDAQ:CV)

CapsoVision develops medical technology for capsule endoscopy, a method of examining the digestive tract using a swallowable camera. Its products are designed to help clinicians visualize the small intestine as part of diagnostic evaluation. The company's CapsoCam Plus system uses a swallowable capsule with multiple cameras to capture panoramic images as it moves through the small intestine. Images are stored in the capsule and later retrieved for review using the company's supporting hardware and software.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.