Profound Medical Corp. Q2 FY2026 earnings call

• Clinical Development and Evidence

  • The CAPTAIN randomized controlled trial for TULSA has previously demonstrated statistically superior quality of life outcomes (better urinary incontinence and erectile function preservation) compared to robotic radical prostatectomy (RP), with improved perioperative outcomes including no blood loss, no overnight hospital stay, fewer serious complications, and faster recovery.
  • New CAPTAIN data presented at SRS 2026 shows TULSA delivers no median change in penile length 1 month post-procedure, compared to a median 0.65-centimeter reduction with robotic RP, an outcome that meaningfully improves patient satisfaction and quality of life. 12-month biopsy and MRI cancer control data for the CAPTAIN trial is expected to be released in Q4 2026.
  • Growing clinical analysis highlights TULSA's unique advantages for high-need patient subgroups: apical prostate cancer (preserves continence that is often lost with robotic RP), unilateral disease (spares erectile function nerves), MRI-identified focal cancer hotspots, and very large prostates (no increased side effect burden compared to other modalities).

• Commercial Operations

  • Q2 2026 revenue grew 12% year-over-year, and would have grown 153% year-over-year excluding the delayed $3.1 million shipment. Record new orders were recorded in July 2026, with no overlap from the delayed Q2 shipment.
  • The Index 20 same-store sequential utilization growth declined 12% quarter-over-quarter due to temporary issues at 5 sites (including one site that paused treatments during conversion from a placement to capital ownership model), but grew 22% year-over-year and 39% in the first half of 2026 compared to the first half of 2025. The affected site is now back online.
  • The SRS 2026 medical conference generated over 160 qualified leads, ~4-5 new opportunities per hour, with some leads already progressing to the negotiation and contracting stage.
  • ProFound is a founding member of the new Society of Incisionless Surgery, advancing the adoption of incisionless prostate treatment. TULSA PRO installed base reached 84 units as of the end of Q2 2026.

• Reimbursement Expansion

  • The 2027 CMS Hospital Outpatient Prospective Payment System (OPPS) proposed rule increases TULSA reimbursement by 14.9% to $15.5 thousand per procedure, resulting in a 44% ($4.7 thousand) premium over HIFU and Aquablation, and a 26% ($3.19 thousand) premium over robotic RP, improving hospital profitability for TULSA procedures.
  • TULSA coverage expanded by 18.3 million covered lives in Q2 2026, adding to the 8.5 million covered lives added in Q1 2026. Two large employer-owned health plans (Johns Hopkins and Prime Healthcare, covering over 105 thousand total lives) recently added TULSA coverage, the first employer plans to do so. Total private/Medicaid covered lives now stand at ~30 million, with Medicare coverage additional to this total.

• Technology and Strategic Progress

  • TULSA is the only MRI-guided, autonomous robotic prostate treatment platform, with flexibility for whole-gland, subtotal, or focal ablation, and consistent personalized treatment based on patient anatomy. TULSA is currently compatible with ~5,000 installed MRI units in the U.S., with growing global adoption.
  • ProFound is on track to receive FDA clearance for TULSA integration with the smaller, lower-cost Siemens Free.Max interventional MRI by early 2027, which will enable easier deployment of interventional MR suites and drive future growth.
  • ProFound is collaborating with Illuccix Pharmaceuticals to integrate PSMA PET imaging into TULSA PRO treatment planning software, allowing physicians to better tailor ablation extent to individual cancer presentation.

ProFound Medical operates two product segments: TULSA PRO and Sonalleve. For Q2 2026, total company revenue was $2.5 million, consisting of $1.6 million (64% of total revenue) from recurring revenue and $0.871 million (34.8% of total revenue) from capital equipment sales. $3.1 million in TULSA product shipments originally planned for Q2 2026 were completed in July 2026, and will be recognized in Q3 2026. After adjusting for this shipment timing, adjusted Q2 2026 revenue would have been $5.6 million. The aggregate qualified sales pipeline (within verify, negotiate, and contracting stages) for TULSA PRO and Sonalleve totals $70 million, of which approximately 90% ($63 million) is attributable to TULSA PRO and 10% ($7 million) is attributable to Sonalleve. 70% of the pipeline value is from the U.S. market, and 30% is from international markets.

• Full-year 2026 total revenue guidance is maintained at approximately $25 million, representing 56% year-over-year growth from 2025.
• Full-year 2026 gross margin guidance is maintained at 70% or higher, consistent with prior long-term targets.
• Long-term gross margin is expected to remain above 70%.
• Management expects the 60-120 day gap between system shipment and installation will decrease over time, moving closer to a 60-day average as operations scale.

• The timing of revenue recognition is subject to logistics and delivery delays; Q2 2026 experienced a $3.1 million revenue delay due to missed delivery receipt cutoffs for a consolidated shipment from Canada.
• Conversion of the qualified $70 million sales pipeline to actual revenue is not guaranteed, and lead conversion timelines can vary widely (from months to over a year).
• Installation of new TULSA systems depends on hospital scheduling, training, and reimbursement confirmation, which creates a 60-120 day gap between shipment and installation that is largely outside of ProFound's control.
• The proposed 2027 CMS ASC rule would reduce TULSA reimbursement to $6.87 thousand, though ProFound currently has no active ASC sites and is working to correct the underlying cost reporting that led to the proposed reduction.
• Actual clinical and financial results may differ materially from forward-looking statements due to known and unknown risks and uncertainties.

Q: The delayed $3.1 million Q2 shipment — was it both capital and consumables, when did it ship, and how will you avoid this in the future? / A: The entire consolidated shipment was sent in July, and revenue will be recognized in Q3 2026. The delay was caused by missing delivery receipt documentation for the end of the quarter. ProFound has added logistics and operations staff and is in the final stages of hiring an experienced vice president-level operations leader to address this issue as part of scaling the business.

Q: What caused the recent shipment and installation timing gaps, and are these related issues? / A: Q2 revenue recognition delays are a separate logistics issue, which management has already taken steps to resolve. Installation gaps (between shipment and when a site starts treating patients) are a separate issue driven by hospital scheduling, training, and reimbursement setup, which normally takes 60-120 days, down from 6 months historically. Management expects this gap will continue to shrink over time as commercial momentum builds.

Q: What is the breakdown of the $70 million qualified pipeline between TULSA PRO, Sonalleve, and geographies? Why did you switch from reporting pipeline in units to dollars? / A: The pipeline is 90% TULSA PRO and 10% Sonalleve, with 70% of value from the U.S. and 30% from international markets. ProFound switched to dollar-based pipeline reporting to focus on maximizing top-line revenue and gross margin rather than just unit installations, consistent with its goal of reaching profitable growth. The long-term target remains 200 installed TULSA PRO systems treating 10,000 men per year.

Q: How does operating expense scaling look going forward as you add staff to support growth? / A: ProFound's high-margin business model supports leverage as revenue grows, and the company is focused on reaching profitable growth rather than growing at any cost. While there may be quarter-over-quarter volatility in operating expenses as the company adds needed staff to support the growing pipeline, management expects operating expenses will grow roughly in line with revenue over longer time intervals, supporting a trend toward profitability.

Q: When will the 12-month CAPTAIN trial cancer control data be released? / A: Most patient data has been collected, but final data compilation is still ongoing. Management remains on track to release full 12-month biopsy and imaging data in Q4 2026.