Hyperfine, Inc. Q2 FY2025 earnings call

Key Points

• Revenue for Q2 2025 was $2.7 million, up 26% sequentially with 8 systems sold, including the first sale of the next-generation Swoop system in a hospital before quarter end and a second next-generation system deal closing on July 1.
• Gross margins expanded by approximately 800 basis points sequentially to 49%.
• Received FDA clearance for two major new technologies, executing ahead of the plan to bring one new product to market every half year.
• Completed the office pilot program, launched the new next-generation Swoop system powered by Optive AI software in the U.S., and Optive AI software was cleared as a standalone software, with rollout to installed base of Swoop systems to improve image quality.
• Next-generation Swoop system and Optive AI software have had a very positive market response. The next-generation Swoop system will be the platform for future growth.
• In the hospital business, focused on launch and commercial sales of the next-generation Swoop system, with MSRP of $550,000 (15% premium to prior version), targeting critical care and emergency rooms, and allocating additional field resources to IDNs.
• In the office business, completed pilot program and commenced full launch, Neurology offices have a compelling opportunity, Neuro PMR study has enrolled 100 patients ahead of expectations.
• In international markets, Optive AI software available in Canada, Australia, New Zealand, expected to launch in Europe by end of 2025, next-generation subsystems expected in international markets by end of 2026, and regulatory approval in India expected by end of 2025.

In the second quarter of 2025, Hyperfine achieved revenue of $2.7 million, which was a 26% sequential increase. The company sold 8 systems. Gross margins expanded by approximately 800 basis points sequentially, reaching 49%. Cash burn was reduced by 19% sequentially, excluding financings.

Financial Guidance

• Full-year 2025 revenue growth is expected to be in the range of 10% to 20% over 2024, with significant step-up in the second half. Anticipate sequential step-up in Q3, with Q3 sequential growth 50% greater than the revenue improvement from Q1 to Q2, and more significant sequential step-up in Q4 and beyond.
• Full-year gross margin expected to be 47% to 50%, midpoint representing a 280 basis point increase year-over-year, with gross margin progression following sales growth.
• Total cash burn expected to be in the range of $27 million to $29 million for full year 2025, representing a 27% decline year-over-year at the midpoint, with second half investments focused on capitalizing on product launches and office full commercial launch.

Q: About the 2025 full-year guidance, keeping the original guidance means a significant step-up in the second half. Could you elaborate on the differences between the low end and high end of the guidance range and how to think about the quarter-over-quarter growth in Q3 and Q4?

A: Brett Hale said that the sequential growth in Q3 is 50% greater than the revenue improvement from Q1 to Q2, and the latter part of the second half of the year will have a higher revenue base than the earlier part, with multiple launches happening simultaneously driving revenue growth.

Q: About the release rhythm of the next-generation Swoop system, how to consider the upgrade cycle, trade-ins versus promoting new system placements, and price points for different accounts?

A: Maria Sainz said that the focus is mainly on the sale of new systems in hospitals for different scenarios, there are multiple pipeline deals in the works, including adult, pediatric, critical care, etc., and Optive AI has a good response in the first-generation system, and the office market may have different technology applications depending on different office types.

Q: About the traction of the office business, can you share the number of placements, pipeline deals or utilization indicators between offices and other care points?

A: Maria Sainz said that there are two different pipelines for hospital and office opportunities, hospital deals have a relatively involved process, office decisions are sometimes faster, and the international market manages the pipeline by country and partner, seeing successful subsequent placements in some European markets.

Q: About the increase in ASP, are there other factors besides the first sale of the next-generation hardware contributing to the increase this quarter?

A: Brett Hale said that in Q2, the increase in ASP is because of a more favorable mix of channels and MSRP increases taken earlier in the year in the U.S. as well as sales of the next-generation technology.

Q: About the availability of the new hardware in the international business, will it affect customers' timelines?

A: Maria Sainz said that the new hardware's new scanner is expected to be available in international markets by the end of 2026, new software is expected to be launched in Europe by the end of 2025, and some flagship institutions may use the new system earlier.

Q: About the special use cases of the Swoop system for patients with implanted neurological devices, does the lower magnetic field strength have an advantage?

A: Maria Sainz said that the Swoop system has an increased safety profile, such as for patients with pacemakers and braces, and the FDA has favorable labeling for the next generation around projectile risk, with improved magnetic field range management.