Profound Medical Corp (PROF) Q3 2024 Earnings Call Highlights: Revenue Surge Amidst Rising Expenses

GuruFocus News
4 min read

In This Article:

  • Revenue: $2.83 million in Q3 2024, a 64% increase from $1.70 million in Q3 2023.

  • Recurring Revenue: $2.65 million in Q3 2024.

  • One-Time Sale of Capital Equipment: $179,000 in Q3 2024.

  • Gross Margin: 64% in Q3 2024, up from 61% in Q3 2023.

  • Total Operating Expenses: $10.8 million in Q3 2024, a 42% increase from $7.6 million in Q3 2023.

  • R&D Expenses: $4.2 million, a 22% increase year-over-year.

  • G&A Expenses: $3.7 million, an 84% increase year-over-year.

  • Sales and Distribution Expenses: $2.9 million, a 34% increase year-over-year.

  • Net Finance Expense: $199,000 in Q3 2024, compared to net finance income of $1 million in Q3 2023.

  • Net Loss: $9.4 million or 38 per share in Q3 2024, compared to $5.6 million or 26 per share in Q3 2023.

  • Cash Position: $27.1 million as of September 30, 2024.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Profound Medical Corp (NASDAQ:PROF) reported a 64% increase in third-quarter revenue compared to the same period in 2023, reaching $2.83 million.

  • The company achieved a gross margin of 64% in Q3 2024, up from 61% in Q3 2023, indicating improved profitability.

  • The Tulsa procedure is gaining traction as a mainstream treatment option for prostate disease, with strong endorsements from leading physicians.

  • CMS has elevated the Tulsa procedure to urology APC level seven, offering higher reimbursement rates than other prostate treatments, which is expected to drive adoption.

  • Profound Medical Corp (NASDAQ:PROF) is transitioning to a more traditional medical device business model, which is anticipated to deliver high margins and be economically attractive to users.

Negative Points

  • Profound Medical Corp (NASDAQ:PROF) recorded a net loss of $9.4 million in Q3 2024, compared to a net loss of $5.6 million in the same period in 2023.

  • Operating expenses increased by 42% year-over-year, driven by higher R&D, G&A, and sales and distribution costs.

  • The company faces challenges in reaching its goal of 75 installed systems by year-end due to the transition from a cash pay model to a reimbursement-based model.

  • There is uncertainty in the mix between capital and recurring revenue in the near term, making it difficult to predict financial outcomes.

  • Profound Medical Corp (NASDAQ:PROF) needs to expand its sales team significantly to capitalize on the growing pipeline and demand for the Tulsa procedure.

Q & A Highlights

Q: Can you provide an update on the goal of having 75 systems installed by year-end? A: Arun Menawat, CEO: We have reaffirmed our revenue guidance based on a strong pipeline. However, due to the transition from a cash pay model to a reimbursement model, reaching 75 installations by year-end is optimistic. We expect to achieve this shortly after the year ends.

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