Profound Medical Corp. Q1 FY2026 earnings call

• Clinical updates: CAPTEN trial showed Tulsa delivered statistically superior quality-of-life outcomes vs radical prostatectomy, achieving primary safety endpoint with higher preservation of urinary continence and erectile function at six months. Tulsa supported by over 70 peer-reviewed publications and 200+ scientific conference presentations, applicable to various prostate conditions. - Business aspects: TELSA technology unique in versatility, 91% of TULSA patient prostates treated as whole-gland or more than 50% ablations. MR compatibility with Tulsa increasing, with expectation of FDA clearance for integration with new interventional MR by year end. TELSA Pro install base was 80 at end of Q1 2026, with six systems shipped but not installed. Projecting total revenue full year 2026 to be approx $25 million, 56% growth from last year, with 2026 gross margin 70% or higher.

For the three-month period ended March 31, 2026, revenue was $5.3 million, with $2.5 million from recurring revenue and $2.9 million from one-time sale of capital equipment. Revenue was up 104% from $2.6 million in the same period a year ago. Gross margin in Q1 2026 was 72% compared to 71% in Q1 2025. Total operating expenses in Q1 2026 were $11.8 million, down 9% from $13 million in Q1 2025. Net loss in Q1 2026 was $7 million or 19 cents per common share compared to a net loss of approximately $10.7 million or 36 cents per common share in Q1 2025. As of March 31, 2026, cash was $50.3 million. Expected full year 2026 gross margin to be 70% or better.

• Projecting total revenue full year 2026 to be approximately $25 million, representing 56% growth compared to last year. - Expecting 2026 gross margin to be 70% or higher. - Goal of achieving 200 Tulsa sites performing an average of at least 50 cases per year to achieve profitability remains achievable.

Q: Congrats on Humana beginning to pay for Tulsa, can you share color on that?

A: It's the combination of all the publications (70 plus) allowing audience with medical directors of private insurers, leveraging data to discuss where Tulsa Pro fits.

Q: For folks that haven't announced formal coverage policies, is same coverage seen?

A: Since Medicare provided coverage in Jan 1, 2025, having discussions with private insurers, patient access team successful with 80% win rate.

Q: On six shipments not installed, when is revenue recognized?

A: Recognize revenue when shipped, but they won't treat patients right away.

Q: What informed the guidance?

A: Business is gelling, providing proper guidance as a starting point, will adjust as go.

Q: Status of pipeline?

A: Pipeline strong, north of triple digits across verify, negotiate, and contracting stages.

Q: On the index, range on annualized procedures in index?

A: 20 sites picked to reflect future install base mix, will provide rolling five quarters to show same store sales trend.

Q: On capital sale model, interest in acquiring capital vs placement/lease?

A: Capital model in line with industry standard, large majority of systems sold in Q1, one on placement model representing 10% of Q1 recurring revenue.

Q: Guidance of $25 million, is 120 installations still target?

A: No change in target installed, 120 still representative, guidance is a starting point.

Q: Reimbursement rate, happy with it relative to Medicare?

A: Generally between 1.5 and 2.5 of Medicare payment, happy with range, Humana is top payer, 80% success rate in appeal process.

Q: Update on being included in guidelines?

A: Tulsa named in NCCN guidelines, expecting other insurance companies to follow based on totality of evidence, anticipate guidelines to recognize Tulsa by name for more population subsets over time.