Sensus Healthcare, Inc. Q2 FY2025 earnings call

• Impact of LCD: Proposed LCD limiting ultrasound reimbursement stalled Q2 domestic sales momentum, but Sensus is lobbying CMS. - Operational progress: Delivered 19 SRT systems (4 to China), signed 5 new FDA contracts, activated 4 sites, FDA treatment volume up 27%. - Partnerships: Appointed Radiation Oncology Systems as primary distribution partner for hospital-based oncology. - R&D: 510(k) resubmission for next-gen TDI platform under FDA review, preparing for commercial deployment. - Awareness: Collaborated on skin cancer awareness month to promote early detection. - Strategy: 3-pronged strategy of increasing patient awareness, growing internationally, and advancing pipeline; Sentinel software for data storage and remote device support; MDSAP certification enabling access to new international markets.

For the second quarter of 2025, revenues were $7.3 million compared to $9.2 million in the second quarter of 2024. Gross profit was $2.9 million in Q2 2025 vs $5.4 million in Q2 2024. Year-to-date 2025 revenues were $15.7 million vs $19.9 million in 2024. Gross profit for the first half of 2025 was $7.3 million, which was 46.5% of revenues. The decline in revenues was primarily due to fewer capital system sales to a large customer, partially offset by growth in recurring revenue from Fair Deal Agreements. Gross margin in Q2 2025 was 39.7% vs 58.7% in Q2 2024, driven by lower sales and higher cost of service.

• Excited about long-term revenue trajectory with potential reimbursement increase from new SRT delivery code. - Anticipate clarification soon on LCD, with potential acceleration of sales once reimbursement is clear. - Believes customer commitment to IGSRT remains strong and will ramp up once clarity is achieved.

• Proposed LCD limiting ultrasound reimbursement poses uncertainty. - Uncertainty in CMS decisions regarding physician fee schedule and LCD could impact sales. - Pause in purchases from large customer due to unclear reimbursement.

Q: On the proposed CMS reimbursement under the physician fee schedule for next year, it does look like the radiation delivery code tripled and the imaging code associated with the image guidance for SRT came down a bit. Is that -- is there any kind of connection there with the LCD and how CMS sees the utilization under the new codes versus how they're currently billed under the -- with the G code for the image guidance?

A: Joseph C. Sardano defers to Michael Sardano who explains LCD was about ultrasound utilization, and proposed physician fee schedule is separate but could even out reimbursement.

Q: Anthony V. Vendetti asks about a large customer pausing purchases, if it's the largest customer, and their status once reimbursement is clarified.

A: Joseph C. Sardano states the large customer is committed to IGSRT, pausing due to uncertainty, but will ramp up once clarity is achieved.

Q: Eduardo Rafael Martinez-Montes asks about ROS distribution efforts and timeline, and MDSAP certification impact.

A: Joseph C. Sardano and Michael Sardano discuss strong partnership with ROS, immediate international expansion plans including trips to Japan and Taiwan, and MDSAP enabling access to new markets.