Sensus Healthcare signals 300%+ SRT code reimbursement increase as Fair Deal Agreement treatments rise 20% amid global expansion

Earnings Call Insights: Sensus Healthcare (SRTS) Q3 2025

MANAGEMENT VIEW

* Joseph Sardano, Co-Founder, Chairman & CEO, highlighted that “CMS published first-ever dedicated CPT codes for superficial radiotherapy in nonmelanoma, skin cancer and keloids. Not only do these codes validate SRT for this indication while providing reimbursement certainty, but they also represent an increase in SRT delivery codes reimbursement per fraction of more than 300% compared with the current codes being used.” He added that this message is “being very well received” and expects “strong interest with demand on the rise.”
* Management reported shipment of 16 SRT systems in the quarter, including 3 to China, bringing the global total to over 900 systems, with the 1,000 milestone targeted for 2026. Fair Deal Agreement (FDA) program treatment volumes increased by 20% from the second quarter and 52% compared to the first quarter, marking the third consecutive quarter of double-digit growth.
* Sardano noted, "We ended the quarter with $24.5 million in cash, up from approximately $22 million at the end of 2024,” and inventory of nearly 100 SRT systems, positioning the company well for anticipated demand.
* Michael Sardano, President, General Counsel, Corporate Secretary & Director, stated, “The goal of our lobbying efforts and the outcome of these new CPT codes is that the gap will now narrow between the office-based reimbursement and hospital outpatient rates. Leveling the playing field with hospital systems significantly strengthens the ROI for using SRT in dermatology offices and could expand adoption.”
* Michael Sardano also discussed ongoing development of the Sentinel software platform and announced the initiation of a multiphase R&D program for Sentinel 2.0, with initial results expected in 2026.
* Javier Rampolla, Chief Financial Officer, reported, “Revenues for the third quarter of 2025 were $6.9 million, compared with $8.8 million for the third quarter of 2024... Gross profit was $2.7 million for the quarter compared with $5.2 million a year ago. Gross margin was 39.1% versus 59.1% in the third quarter of 2024.”

OUTLOOK

* Management expects “strong interest with demand on the rise” for SRT following the new CMS coding changes. The company aims to reach 1,000 global system sales in 2026. No explicit forward-looking revenue or EPS guidance was provided for Q4, but management described pent-up demand and a likelihood to “either hit breakeven or [preprofitable] for the fourth quarter.”
* The expanded R&D program for Sentinel 2.0 is underway, with initial results anticipated in 2026.
* Management anticipates international revenues to reach about 20% of total revenue within 12-24 months, up from the current 5-10% range.

FINANCIAL RESULTS

* Revenues for Q3 2025 were $6.9 million, compared to $8.8 million in Q3 2024. The number of units sold was 16, down from 27 a year ago.
* Gross profit for the quarter was $2.7 million, with gross margin at 39.1%. Operating expenses totaled $5.3 million, with net loss at ($0.9 million), or ($0.06) per share. Adjusted EBITDA was negative $2.4 million.
* Year-to-date revenues reached $22.5 million; year-to-date net loss was ($4.6 million), or ($0.28) per share, with adjusted EBITDA negative $6.7 million.
* Ending cash was $24.5 million, and the company reported no debt.

Q&A

* Anthony Vendetti, Maxim Group: Asked about the impact of LCD reimbursement changes and utilization trends. Joseph Sardano explained, “...the reduction of the utilization of ultrasound by CMS, it does impact us, but it has been made up by the fact that the actual fractionation reimbursement code went up about 300%...we don't lose very much in our FDA program.” Utilization increased 20% quarter-over-quarter and 152% year-to-date.
* Vendetti followed up on pending U.S. placements and business pipeline. Sardano described pent-up demand due to previous order pauses and expects customers to “get in line to purchase and/or to implement the program this year.”
* Benjamin Haynor, Lake Street Capital: Inquired about product mix shift due to new reimbursement codes. Sardano stated, “...rather than having our -- the Vision product decrease, I think we're going to see an uptick in the SRT-100,” with development of Sentinel 2.0 expected to sustain Vision’s role.
* Eduardo Martinez-Montes, H.C. Wainwright: Asked about CPT code impact on utilization and international ramp. Sardano responded that the new reimbursement offsets any ultrasound code impact and expects increased SRT-100 sales. Michael Sardano projected international revenue could reach 20% of total revenue in 12-24 months.

SENTIMENT ANALYSIS

* Analysts expressed cautious optimism, repeatedly probing on the impact of reimbursement changes and pent-up demand, but did not display overt skepticism. Their tone reflected interest in timing and magnitude of future sales.
* Management's prepared remarks were confident and upbeat, especially regarding CMS coding changes and their impact on demand. In Q&A, management maintained a positive, explanatory tone, emphasizing the benefits of new codes and international expansion, using phrases such as “we are confident in our strategy, balance sheet, and utilization momentum.”
* Compared to the previous quarter, management’s sentiment shifted from uncertainty and defensiveness due to LCD proposals to increased confidence following the CMS decision, while analysts maintained a consistent tone of cautious inquiry.

QUARTER-OVER-QUARTER COMPARISON

* Major shift from prior quarter’s uncertainty over LCD and reimbursement, with Q3 reflecting resolution and validation through new CMS codes.
* Q3 saw a significant increase in utilization and clear plans for international expansion, compared to Q2’s focus on paused demand and lobbying efforts.
* Management’s tone in Q3 was notably more confident, while analysts’ questions continued to focus on reimbursement and market momentum.
* Operating results showed lower units sold and revenues versus Q2, but management emphasized improved visibility and future demand.
* Strategic focus evolved from stabilization to driving adoption and scaling internationally, supported by Sentinel software enhancements.

RISKS AND CONCERNS

* Management acknowledged higher costs of servicing systems and increased R&D and lobbying expenses, impacting margins and profitability.
* Analysts raised concerns about the potential impact of reimbursement changes and international market ramp timing.
* Management plans to mitigate risks by leveraging a strong cash position, maintaining inventory, and focusing on cost discipline and working capital efficiency.

FINAL TAKEAWAY

Sensus Healthcare management emphasized that the introduction of dedicated CMS CPT codes for SRT technology marks a pivotal milestone, delivering reimbursement certainty and a substantial increase in delivery code reimbursement. This, combined with a surge in Fair Deal Agreement program utilization, renewed confidence in achieving future sales milestones, and a robust pipeline for international expansion and software innovation, positions the company for long-term growth in the dermatology and radiotherapy markets.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/srts/earnings/transcripts]

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