Profound Medical Corp (PROF) Q3 2024 Earnings Call Highlights: Revenue Surge Amidst Rising Expenses

GuruFocus.com11-09

Revenue: $2.83 million in Q3 2024, a 64% increase from $1.70 million in Q3 2023. Recurring Revenue: $2.65 million in Q3 2024. One-Time Sale of Capital Equipment: $179,000 in Q3 2024. Gross Margin: 64%...

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GuruFocus has detected 2 Warning Signs with PROF.\n\nRelease Date: November 07, 2024\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.\n Positive Points \n\nProfound Medical Corp (NASDAQ:PROF) reported a 64% increase in third-quarter revenue compared to the same period in 2023, reaching $2.83 million.\nThe company achieved a gross margin of 64% in Q3 2024, up from 61% in Q3 2023, indicating improved profitability.\nThe Tulsa procedure is gaining traction as a mainstream treatment option for prostate disease, with strong endorsements from leading physicians.\nCMS has elevated the Tulsa procedure to urology APC level seven, offering higher reimbursement rates than other prostate treatments, which is expected to drive adoption.\nProfound Medical Corp (NASDAQ:PROF) is transitioning to a more traditional medical device business model, which is anticipated to deliver high margins and be economically attractive to users.\n\n Negative Points \n\nProfound Medical Corp (NASDAQ:PROF) recorded a net loss of $9.4 million in Q3 2024, compared to a net loss of $5.6 million in the same period in 2023.\nOperating expenses increased by 42% year-over-year, driven by higher R&D, G&A, and sales and distribution costs.\nThe company faces challenges in reaching its goal of 75 installed systems by year-end due to the transition from a cash pay model to a reimbursement-based model.\nThere is uncertainty in the mix between capital and recurring revenue in the near term, making it difficult to predict financial outcomes.\nProfound Medical Corp (NASDAQ:PROF) needs to expand its sales team significantly to capitalize on the growing pipeline and demand for the Tulsa procedure.\n\n Q & A Highlights \nQ: Can you provide an update on the goal of having 75 systems installed by year-end? A: Arun Menawat, CEO: We have reaffirmed our revenue guidance based on a strong pipeline. However, due to the transition from a cash pay model to a reimbursement model, reaching 75 installations by year-end is optimistic. We expect to achieve this shortly after the year ends.\nQ: How has the response been from the Pro Talk Live event and the recent upgrade to APC level 7? A: Arun Menawat, CEO: The response from the event was strong, with many attendees moving forward with installations. The upgrade to APC level 7 has been positively received, reinforcing the belief that our technology can become mainstream.\nQ: With the upgraded coding, how do you see this impacting physician uptake and revenue growth? A: Arun Menawat, CEO: The alignment of support from physicians, positive patient feedback, and strong CMS reimbursement positions us well for growth. We expect to see increased utilization and are building a sales team to capitalize on this momentum.\nQ: Can you discuss the shift from a pay-per-use model to a traditional capital sales model? A: Arun Menawat, CEO: Initially, the pay-per-use model was suitable due to the unpredictability of utilization. Now, with better predictability and strong reimbursement, sites are interested in purchasing systems outright, which aligns with our goal of increasing utilization and profitability.\nQ: What are your plans for expanding the sales team in light of the reimbursement changes? A: Arun Menawat, CEO: We currently have 13 to 15 salespeople and aim to expand to 40. We plan to add at least five more this year and continue recruiting to support growth and capitalize on the reimbursement changes.\nFor the complete transcript of the earnings call, please refer to the full earnings call transcript.This article first appeared on \nGuruFocus.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2482482092"}