Profound Medical targets 70–75% revenue growth in 2025 as TULSA-AI and CAPTAIN trial progress fuel confidence

Earnings Call Insights: Profound Medical Corp. (PROF) Q2 2025

MANAGEMENT VIEW

* CEO Arun Swarup Menawat summarized that "our sales team has been stabilized. That, combined with our large and growing TULSA-PRO pipeline, continues to drive our confidence in our ability to deliver full year revenue growth of approximately 70% to 75% in 2025 over 2024." He highlighted the launch of the TULSA-AI volume reduction module for BPH and emphasized that initial clinical outcomes data from the pivotal CAPTAIN trial would be presented in December, with expectations that published data "will most likely lead to new guidelines from relevant cancer societies that will effectively require that patients be made aware of TULSA as an option along with radical prostatectomy and radiation therapy."
* CFO Rashed Dewan reported, "for the 3-month period ended June 30, 2025, the company received total orders of over $3 million and recorded revenue of $2.2 million with $1.6 million coming from recurring revenue and $650,000 from onetime sale of capital equipment." He added, "gross margin in Q2 2025 was 73% compared to 64% in Q2 2024," while noting operating expenses of $15.4 million. Dewan stated, "overall, the company recorded a second quarter 2025 net loss of $15.7 million or $0.52 per common share." He also confirmed cash of $35.2 million as of June 30, 2025.
* Chief Commercial Officer Thomas Tamberrino acknowledged that "final Q2 revenues were below our expectations. The shortfall was largely due to what we believe are short-term delays in completing a few TULSA-PRO capital sales, and we continue to believe we will be able to deliver 70% to 75% growth in 2025 compared to 2024." He detailed a streamlining of the U.S. sales organization and a focus on refining sales processes to address the transition to a capital model.
* President Mathieu Burtnyk announced completion of the CAPTAIN trial recruitment and the pilot release of the TULSA-AI volume reduction software. He emphasized, "the new software module designed for BPH procedures offers fast intelligent workflows that will provide surgeons with an estimated total procedure time of 60 to 90 minutes regardless of prostate shape or size."

OUTLOOK

* Management reiterated confidence in full-year revenue growth of 70% to 75% for 2025. Menawat stated, "we continue to believe we will be able to deliver full year revenue growth of approximately 70% to 75% in 2025 over 2024."
* The pipeline was described as robust, with nearly 500 TULSA-PRO prospects, over 100 engaged leads, and 80 qualified leads. Tamberrino explained, "reasonable assumptions and basic math drive our confidence that the second half of the year will be significantly and materially better than the first."
* The full commercial launch of the TULSA-AI volume reduction software remains on track for the back half of the year.

FINANCIAL RESULTS

* The company reported revenue of $2.2 million for Q2 2025, including $1.6 million from recurring revenue and $650,000 from capital equipment sales.
* Gross margin in Q2 2025 was 73%.
* Operating expenses totaled $15.4 million.
* Net loss for the quarter was $15.7 million, or $0.52 per share.
* Cash at quarter-end stood at $35.2 million.
* Dewan noted that "total operating expenses in the 2025 second quarter... were $15.4 million compared with $9.3 million in the second quarter of 2024."

Q&A

* John Glenn McAulay, Stifel, asked about revenue ramp and sales mix. Menawat explained the transition from "recurring revenue" to "capital revenue," expecting capital revenue to dominate in upcoming quarters but foreseeing a long-term return to "about 70% recurring revenue and 30% capital revenue."
* McAulay inquired about feedback on CAPTAIN data. Menawat responded that feedback has been "very, very high positive comments," especially from those who "normally don't like to endorse anything."
* Michael W. Freeman, Raymond James, questioned the impact of proposed reimbursement rules for BPH treatments. Burtnyk detailed, "from a TULSA perspective, we actually were impacted the least compared to all these other procedures," highlighting favorable positioning for physician and facility payments.
* Freeman also asked about sales funnel stages and contracting timelines. Tamberrino described ongoing efforts to streamline processes and compress timelines, saying, "it's probably not more than 90 days or 3 to 4 months" for the contracting phase currently.
* Scott McAuley, Paradigm Capital, sought details on active TULSA placements. Menawat reported "about 60 active sites" with "3 at the moment" being installed and confidence in reaching "at least 75 by end of this year."
* Benjamin Charles Haynor, Lake Street Capital, asked about the TULSA-AI BPH module launch and clinical procedure times. Burtnyk stated, "the early data tells us that, yes, we are certainly meeting our objectives of the 60 to 90 minutes. And if anything, it's closer to the 60 than to the 90."

SENTIMENT ANALYSIS

* Analysts' tone was inquisitive and focused on commercial ramp, reimbursement and sales funnel clarity, with occasional probing for more granular data. No overt skepticism or negative sentiment was expressed.
* Management maintained a confident tone during prepared remarks, emphasizing the pipeline, sales organization changes, and upcoming clinical milestones. In Q&A, management provided detailed and transparent responses, occasionally noting challenges but reiterating optimism for second-half improvement.
* Compared to the previous quarter, management's tone remained confident, with slightly more emphasis this quarter on addressing short-term revenue shortfalls and sales process refinements. Analysts' sentiment remained neutral to slightly positive.

QUARTER-OVER-QUARTER COMPARISON

* The company repeated its full-year growth guidance of 70% to 75%.
* Revenue declined sequentially from $2.6 million in Q1 2025 to $2.2 million in Q2 2025, while net loss widened from $10.7 million to $15.7 million.
* Gross margin improved to 73% in Q2 from 71% in Q1.
* Operating expenses increased from $13 million to $15.4 million.
* Management's confidence in pipeline and upcoming launches remained strong, but this quarter's call included more detail on sales process changes and the need to address short-term sales delays. There was a heightened focus on converting a large sales funnel and the expectation of back-end loaded revenue for the year.
* Analysts continued to focus on commercial execution, reimbursement, and clinical adoption, with similar levels of questioning as last quarter.

RISKS AND CONCERNS

* Management cited short-term delays in closing TULSA-PRO capital sales as the primary factor behind lower-than-expected Q2 revenues.
* The transition from a placement to a capital model was acknowledged as a challenge, particularly with bureaucratic hospital procurement cycles.
* Dewan noted that cash burn was expected to be higher in the first half due to increased inventory and sales team adjustments, but anticipated lower burn in the second half as orders are fulfilled.
* The complexity of hospital contracting and the multi-departmental nature of sales processes were highlighted as ongoing challenges.

FINAL TAKEAWAY

Profound Medical Corp. reinforced its outlook for 70% to 75% revenue growth in 2025, driven by a large and advancing TULSA-PRO sales pipeline, the successful completion of the pivotal CAPTAIN trial, and the upcoming commercial launch of the TULSA-AI volume reduction software for BPH. Management emphasized confidence in a stronger second half, highlighted improvements in clinical workflow and reimbursement positioning, and committed to further streamlining sales processes to address short-term revenue delays.

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

MORE ON PROFOUND MEDICAL CORP.

* Profound Medical Corp. (PROF) Q2 2025 Earnings Call Transcript [https://seekingalpha.com/article/4813908-profound-medical-corp-prof-q2-2025-earnings-call-transcript]
* Historical earnings data for Profound Medical Corp. [https://seekingalpha.com/symbol/PRN:CA/earnings]
* Financial information for Profound Medical Corp. [https://seekingalpha.com/symbol/PRN:CA/income-statement]