EDAP TMS SA Q4 FY2024 earnings call

Management Statement and Operational Highlights

• CE Mark for Endometriosis: Focal One Robotic HIFU received CE Mark for treating deep infiltrating endometriosis, a significant regulatory milestone.
• Financial Performance: Fourth quarter 2024 total revenue was EUR20.3 million, up 3.6% YOY, driven by HIFU segment growth. Full-year 2024 revenue set a calendar year record.
• Clinical Developments:
  • HIFI study published in European Urology highlights Focal One’s oncologic control and better functional outcomes vs. radical prostatectomy.
  • PULS trial launched to evaluate Focal One for pancreatic tumors (Phase 1/2).
  • Phase 1/2 study for BPH using Focal One Robotic HIFU underway.
  • Clinical data from endometriosis study showed Focal One HIFU had reduced complications, shorter operating time, and shorter hospital stay vs. surgery.
• Strategic Collaborations: Partnered with Philips DynaCAD and Cortex AI to enhance Focal One’s capabilities for prostate cancer treatment.
• Conference Activities: Active participation in major urology meetings, including EAU, SUO, and upcoming AUA, with significant presence and hands-on simulations.
• Business Strategy: Reducing investments in lower-growth ESWL and distribution businesses to focus on high-growth HIFU segment; appointed new Board members to guide strategic decision-making.

Segment Performance

• HIFU Segment: Fourth quarter 2024 HIFU revenues in US dollars were $9.3 million, increasing 15% year-over-year. Full-year 2024 global HIFU revenue was 15.3% over 2023. In the fourth quarter, HIFU revenue in euros was EUR8.8 million, a 17.9% year-over-year growth. Full-year 2024 total revenue was EUR64.1 million, up 6.1% from 2023.
• ESWL Division: Fourth quarter 2024 revenue was EUR2.4 million, with nominal growth; system sales to conclude in the second half of 2025, with focus on supporting existing customer base.
• Distribution Business: Fourth quarter 2024 revenue was EUR9.1 million, down from EUR9.9 million in 2023 due to product mix changes.

Guidance

• 2025 HIFU revenue expected to grow between 16% and 25% year-over-year.
• Non-core ESWL and distribution business expected to decline between 20% and 25% in 2025.
• Anticipates continued growth in Focal One system sales, procedure volumes, and service revenue driving HIFU growth.

Risks

• Tariff Policies: Potential impact of changing US tariff policies on components and systems, though currently no material issues identified.
• Clinical Trial Uncertainties: Uncertainties in timelines and outcomes for new clinical trials (e.g., pancreatic tumor, BPH) and market adoption for new indications.

Question and Answer Q: Michael Sarcone asked about detail on HIFU sales growth guidance, systems placement, and procedure growth.

A: Ryan Rhodes mentioned continued demand for Focal One, pipeline strength, system sales, procedure growth, and service revenue contributing to growth.

Q: Michael Sarcone asked about non-core ESWL and distribution business intent.

A: Ryan Rhodes said they are redirecting focus, winding down these businesses, with some regional and non-product-specific transitions.

Q: Unidentified Analyst asked about capital equipment purchase patterns in 2025.

A: Ryan Rhodes noted active pipeline accounts growing, sales cycles vary by hospital, but Focal One is a clinically necessary service line.

Q: Unidentified Analyst asked about reimbursement impact.

A: Ryan Rhodes said CMS reimbursement increase helps, and Focal One is in a strong position for reimbursement.

Q: Swayampakula Ramakanth asked about endometriosis commercialization strategy.

A: Ryan Rhodes said they received CE Mark and are working with experts to refine clinical development for a Phase 1 launch.

Q: Swayampakula Ramakanth asked about pancreatic tumor study timeline.

A: Ryan Rhodes said the study is early, with patient recruitment ongoing in France.

Q: Swayampakula Ramakanth asked about HIFU revenue growth guidance and reimbursement impact.

A: Ryan Rhodes said guidance is focused on core business, pipeline strength, and market adoption, with reimbursement helping but guidance based on core business pipeline.