Spectral AI, Inc. Q2 FY2026 earnings call

Regulatory Milestone

• Achieved FDA de novo clearance for the DeepView System for the burn indication in May 2026, a landmark that transitions Spectral AI from a development-stage to commercial-stage organization. This clearance is granted for novel predicate devices with no existing market equivalent, placing DeepView among the less than 2% of all FDA device approvals granted via the de novo pathway, and in the top 15% of Breakthrough Device designated products that have successfully reached commercial authorization.
• DeepView is an AI-driven imaging platform that provides immediate burn wound assessment to eliminate under- and over-treatment, validated by over 340 billion pixels of clinical burn image data. The company holds a large proprietary burn biopsy data library and broad patent portfolio that creates a significant competitive moat.

Commercial Strategy

• The commercial model includes two complementary revenue streams: upfront capital revenue from device purchases/leases at installation, plus recurring annual software and services revenue with a minimum 3-year term, which will grow as the installed base expands. The first 30 U.S. installations are fully funded by non-dilutive BARDA funding under the Project BioShield contract, with deployment targeted to U.S. burn centers, trauma centers, and emergency departments by June 30 2027.
• Added industry veteran Darcy Biko as new Chief Commercial Officer to lead commercial launch execution, align sales, marketing, market access, and reimbursement strategy. The current small sales team will add two additional dedicated members for the initial 30-system rollout, with the CEO also supporting installation efforts.
• For international markets: the company is updating its existing 2024 UKCA approval to match the FDA-cleared device's improved algorithm, hardware, and software, with expanded clearance expected in Q4 2026. Initial international sales will launch in the UK, Australia, or Gulf Cooperation Council countries after clearance. A head, hands, and feet clinical study is underway in the UK to support global label expansion.

Operational and Pipeline Updates

• Domestically, a 12-center U.S. triage and treatment outcome study is scheduled to launch in Q4 2026 to demonstrate that DeepView improves surgical precision, speeds treatment decisions, reduces patient length of stay, and improves overall patient outcomes.
• The company delivered a handheld DeepView prototype to EmTech under an existing Department of Defense contract, and continues development of automated total body burn area calculation functionality to support standardized triage, especially in mass casualty events. The platform is being evaluated for additional future indications including critical limb ischemia, diabetic foot ulcers, and amputation assessment.
• As of Q2 2026, the company is well capitalized: it holds $14 million in cash, has no principal debt payments due until March 2027, and has access to over $60 million in additional non-dilutive BARDA funding, plus an available equity facility with Yorkville if needed.

Spectral AI currently operates as a transitional development-to-commercial company, with all current revenue coming from research and development (R&D) government contracts in Q2 2026. R&D revenue for Q2 2026 was $3.5 million, down from $5.1 million in Q2 2025, an expected decline due to the BARDA program shifting to a cost sharing phase after successful device validation and FDA clearance, and completion of work under the MTEC government contract. Gross margin for Q2 2026 was 31.6% (down from 45.2% in Q2 2025), and 41.8% for the first half of 2026 (down from 46.4% in H1 2025), with the lower margin driven by the BARDA cost sharing structure. Operating expenses for Q2 2026 rose to $5.4 million from $4.4 million in Q2 2025: R&D expenses increased $200,000 to $1.7 million; selling and marketing expenses increased $300,000 to $700,000; general and administrative expenses increased $500,000 to $3.1 million (driven by non-cash stock compensation, with G&A flat year-over-year excluding stock comp). Net loss for Q2 2026 was $4.2 million ($0.13 per share), compared to a net loss of $8 million ($0.31 per share) in Q2 2025, with the improvement driven by a non-cash fair value adjustment to the warrant liability. Adjusted EBITDA for Q2 2026 was negative $3.5 million, compared to negative $1.7 million in Q2 2025. As of June 30 2026, the company held $14 million in cash, with total debt of $14.9 million and 32.2 million shares outstanding.

• Management reaffirmed full-year 2026 revenue guidance of approximately $18.5 million, which incorporates the new BARDA funding awarded in March 2026.
• The 2026 revenue guidance does not include any material revenue contributions from commercial sales of the DeepView system, reflecting the staged launch timeline for the first commercial deployments.

• The company noted that procurement cycles at new hospital and clinical sites, particularly for novel AI medical devices that require review by new AI governance and cybersecurity committees, may extend deployment timelines for commercial installations.
• All forward-looking statements related to commercial launch, revenue, and product expansion are subject to inherent uncertainties, including regulatory approval timelines for international markets, clinical study enrollment and results, and successful clinical adoption of a novel first-of-its-kind technology. Actual results may differ materially from projections, as noted in the company's SEC filings.

Q: What is the size and ramp plan for the sales force for the initial 30-system U.S. rollout? / A: Currently the sales team consists only of the new Chief Commercial Officer and the UK operations head for international sales. The budget allocates for two additional team members to support the rollout, and the CEO will also dedicate time to facilitate installations in Q4 2026. No large sales team expansion is planned for the initial limited deployment.

Q: What is the status of the handheld device prototype delivered to EmTech, and are there opportunities for follow-on government funding? / A: The company completed all contracted work and delivered the prototype to EmTech earlier in summer 2026. EmTech will finalize its 2026-2027 budget allocation in October 2026, and the company sees potential opportunities for both commercial and military applications for the handheld device, driven by current demand for improved battlefield triage capabilities.

Q: What are the main hurdles to DeepView deployment after FDA clearance? / A: The primary hurdle is hospital procurement timelines, especially at new sites without pre-existing clinical relationships. Novel AI medical devices require additional review by new institutional AI and cybersecurity committees, which can extend timelines. The company is confident it will still meet its internal BARDA-mandated rollout timeline.

Q: What is the existing technology landscape in U.S. burn centers, and who is the target customer for DeepView? / A: Nearly all U.S. burn centers either have no dedicated diagnostic imaging technology for burn assessment, or use outdated legacy technology like laser Doppler imaging, which has very low U.S. adoption. DeepView represents a major step forward regardless of existing equipment, and clinicians who participated in the company's large validation study already understand the product's value and are early adopters.