What Stereotaxis (STXS) Said on Its Q3 Earnings Call

Key Points

• Third-quarter revenue rose 20% to $8.9 million, driven by early GenesisX and Synchrony sales, while the net loss remained $6.5 million. Management expects more consistent system sales and recurring revenue, targeting profitability in 2027.
• MAGiC catheter supply constraints continue to limit procedures and sales. Stereotaxis entered Q4 with $1.9 million in unfilled disposable orders and is shifting European sales to alternative catheters while pursuing a more reliable supply.
• The company received $12 million in upfront convertible-note financing, bringing pro forma cash to $16 million, with another $12 million available upon a regulatory milestone. GenesisX has a pipeline of roughly two dozen opportunities, but installations and orders still need to demonstrate market adoption.

Stereotaxis NYSEAMERICAN: STXS reported a 20% increase in third-quarter revenue as early sales of its GenesisX robotic system and Synchrony operating room technology helped offset continuing catheter supply constraints.

Revenue rose to $8.9 million from $7.5 million a year earlier, while the company’s net loss remained at $6.5 million. Chairman and CEO David Fischel said Stereotaxis expects more consistent capital equipment sales and growing recurring revenue in the coming quarters, supporting its goal of reaching profitability in 2027.

That outlook depends in part on addressing a shortage of MAGiC catheters, which has limited procedures and left orders unfilled. The company also announced a convertible note financing that provides $12 million upfront and an optional additional $12 million following a regulatory milestone.

New Systems Drive Revenue Growth

Third-quarter system revenue rose to $3 million from $1.9 million a year earlier. CFO Kim Peery said the results benefited from partial revenue recognition on the first GenesisX system sold in the United States and the first Genesis system sold in China, as well as the first full quarter of Synchrony sales.

Fischel said the company was prepared to install its first U.S. GenesisX system in November, with the first European installation expected soon afterward. Stereotaxis also has visibility to an additional installation in early 2027, he said.

GenesisX is designed for installation in existing operating rooms without construction or the purchase of a specific integrated X-ray system. In August, the company received Food and Drug Administration clearance for an upgraded version compatible with non-modified, non-integrated X-rays. In October, Stereotaxis entered a collaboration with Canon to support compatibility and co-marketing; the first U.S. GenesisX installation will be alongside a Canon X-ray.

Fischel said Stereotaxis has a pipeline of a couple dozen GenesisX opportunities, although he noted that the company must demonstrate the system’s performance in real-world use and convert that interest into orders and installations.

For Synchrony, a digital operating room system, Fischel said near-term sales of approximately $1 million per quarter were a reasonable expectation. He said the pipeline included approximately 50 systems over less than a year, and that sales could eventually reach a couple million dollars in some quarters. Abbott Northwestern Hospital in Minneapolis had ordered five systems and installed four across its cardiology catheterization labs, he said.

Catheter Shortage Remains a Constraint

Recurring revenue increased 6% year over year to $5.9 million, but fell 4% from the second quarter. Peery said growth from the company’s newer robotically navigated catheters was offset by pressure on procedures from MAGiC shortages and the transition away from Johnson & Johnson’s ecosystem.

Fischel said third-quarter robotic catheter revenue rose more than 20% sequentially and more than 400% year over year, but fell short of expectations. Contract manufacturer Osypka did not increase MAGiC shipments from the second quarter, he said.

Stereotaxis entered the fourth quarter with approximately $1.9 million in disposable orders it could not convert to revenue because of supply constraints. To conserve MAGiC supply for the U.S., where it remains the only available catheter for customers, the company has shifted its European commercial efforts to two alternative catheters distributed through exclusive partnerships.

Fischel estimated that about half or slightly more of the opening fourth-quarter backlog would be resolved during the quarter. He said the company expects record recurring revenue in the quarter even without an increase in Osypka shipments, primarily because of the European shift.

The company is also working to establish redundant supply. Fischel said regulatory decisions expected in early 2027 could allow that supply to meet demand, particularly in the U.S. He did not provide a current monthly production figure.

Financing and Profitability Outlook

Stereotaxis ended September with $4 million in cash and cash equivalents. Including the $12 million upfront note proceeds, its pro forma cash balance was $16 million, Peery said. The additional $12 million draw is optional and contingent on a regulatory milestone related to the MAGiC supply constraint, according to Fischel.

The note’s conversion price is at a 30% premium to the recent stock price, and interest is due at its three-year maturity, Fischel said. He said the financing is intended to bridge the company to profitability within the next year.

Third-quarter operating expenses totaled $10.4 million, including $1.3 million in non-cash charges. Adjusted operating expenses rose to $9.1 million from $6.6 million a year earlier, reflecting one-time transaction costs and higher expenses following the Robocath acquisition. Peery said approximately $8 million per quarter was a reasonable model for future adjusted operating expenses, excluding non-cash and one-time items.

Gross margin was 45%, with system margin at 15% and recurring revenue margin at 59%. Peery said margins were likely to remain near those levels in the short term, but saw an opportunity for expansion in 2027 and 2028.

Following the Robocath acquisition, Stereotaxis is working on the next-generation R-Star mechanical robot, including engineering, supply chain development and integration with its software and digital cockpit. Fischel said some innovations in the company’s broader pipeline could have an initial commercial impact in 2027, with all expected to have an impact within two years.

About Stereotaxis (NYSEAMERICAN:STXS)

Stereotaxis, Inc. develops robotic technologies for minimally invasive endovascular procedures, with a primary focus on cardiac electrophysiology. Its systems use magnetic navigation and specialized software to help physicians control guidewires and catheters during procedures such as the treatment of cardiac arrhythmias. The company's product portfolio includes the Genesis Robotic Magnetic Navigation System, which is designed to provide precise catheter movement and navigation within the heart.

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