EDAP TMS SA Q2 FY2025 earnings call

• Focal One HIFU witnessed strong and accelerating demand in Q2. Global HIFU revenues were USD 9.7 million, up 89% year-over-year, with 12 net placements of Focal One systems (a 140% year-over-year growth in system placements). U.S. procedures grew approximately 4.8% year-over-year. - Clinical data from studies like HIFI and FARP are driving awareness for Focal One Robotic HIFU. The HIFI study in European Urology and FARP study at AUA are boosting awareness. - The new Focal One i has been well-received. First delivered in the U.S. in Q2, it has been used in several procedures. Its features are based on customer feedback and future needs of physicians. - Reimbursement for HIFU has improved. CMS proposed higher payments for 2026, and a new CPT code for BPH BPH was established. - EDAP received CE marking for HIFU in rectal endometriosis in March. There's ongoing clinical evidence, and commercialization in Europe is underway. - Research and development efforts continue. In November 2024, EDAP achieved a technical milestone in histotripsy energy delivery. - Entered a letter of intent for a EUR 36 million financing with the European Investment Bank and transitioned to a U.S. domestic filer starting January 1, 2026.

In Q2 2025, global HIFU revenues reached USD 9.7 million, marking an 89% year-over-year increase, driven by 12 net placements of Focal One systems (a 140% year-over-year growth in system placements). Total revenue for Q2 2025 was EUR 16 million, up 1.6% compared to the same period in 2024. The core HIFU business saw a significant rise, with HIFU revenue jumping 76.8% year-over-year to EUR 8.5 million in Q2 2025, contrasted with EUR 4.8 million in Q2 2024. The noncore distribution and ESWL businesses experienced a 31.2% decline in Q2 2025. For the first half of 2025, HIFU revenue stood at EUR 14.7 million, a 38.5% increase compared to the first half of 2024. Gross margin in Q2 2025 was 42.5% versus 37.5% in Q2 2024.

Core HIFU business revenue is expected to grow within the range of 26% to 34% year-over-year. Combined noncore ESWL and distribution business revenue is expected to decline within the range of 25% to 30% year-over-year, revising the earlier guidance where core HIFU was expected to grow between 16% and 25% and noncore between 20% and 25%.

• Intermittent challenges with Medicare Advantage plans in certain markets affecting growth. - Potential impact of U.S. tariff policies, with a forecasted 15% tariff impact for goods transferred between France and the U.S.

Q: Michael Sarcone asked about efforts to improve reimbursement and the revised HIFU growth guide.

A: Ryan Rhodes said they're working closely with market access partners to accelerate pre-authorizations for Focal One procedures, early signs of improvement in approvals are emerging, and clinical evidence from studies like HIFI and FARP helps bolster payer confidence.

Q: Swayampakula Ramakanth inquired about CMS reimbursement calculation, multiunit purchases, BPH, endometriosis trial, and EIB funding.

A: Ryan Rhodes explained CMS considers factors like cost of service, volume, etc. in reimbursement calculation. There's a considerable effort in multiunit sales, with regional integrated hospital systems acquiring second Focal One systems. For BPH, there's an ongoing study in France, and for endometriosis, over 80% of sham arm patients chose treatment after unblinding. Ken Mobeck stated no cash from the EIB is currently on the balance sheet, and funds are targeted for accelerated commercial growth, clinical indications, and new HIFU technologies.

Q: Jason Bednar asked about backlog, U.S. procedure volume, and impact of payer issues.

A: Ryan Rhodes said the backlog is stronger, the pipeline is strong, and commercial teams have been strengthened. There's no impact on capital sales, and reimbursement issues are regionally based and improving as they work through the appeal process with better data and market access efforts.