Heartflow, Inc.

Good day, and thank you for standing by. Welcome to the HeartFlow third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Nick Ledeckio, Vice President, Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to the HeartFlow Third Quarter 2025 Earnings Conference Call. Joining me today are John Farquhar, HeartFlow's President and Chief Executive Officer, and Vikram Verghese, our Chief Financial Officer. John and Vikram will provide prepared remarks and then open the line for Q&A. The earnings release accompanying today's discussion is available on our investor relations website at ir.heartflow.com. During this call, we will refer to certain non-GAAP financial measures. Reconciliations to most comparable GAAP figures can be found in today's earnings release. I'd like to remind everyone that certain statements made on this call are forward-looking within the meaning of federal security laws. These statements are based on management's current expectations and beliefs, involve risks and uncertainties, and actual results may differ materially. Important factors that could cause such differences are detailed in our earnings release today, as well as in our filings with the SEC. Please note that both this live call and a digital replay will be available shortly after the call concludes. With that, I'll now turn the call over to John Farquhar, our CEO.

Thanks, Nick, and good afternoon, everyone, and thank you all for joining us. We're very pleased to host our first earnings call as a public company following our August IPO, which generated approximately $332 million in net proceeds. On behalf of the entire HeartFlow team, I want to extend my sincere gratitude to the investors who supported the offering and who share our conviction in the company's mission and long-term opportunity. The third quarter of 2025 was an outstanding one for HeartFlow. Total revenue reached 46.3 million, representing a 41% year-over-year growth rate, driven by strong adoption of the HeartFlow AI platform. Global revenue cases grew 48% year-over-year and 7% sequentially, driven by consistent platform utilization, the continued expansion of our commercial footprint, and strong overall market growth. Given this performance and the visibility we have into the remainder of the year, we're initiating full-year 2025 revenue guidance in the range of $173 million to $173.5 million, representing approximately 37.5% to 38% growth. For those newer to the story, HeartFlow is an artificial intelligence company transforming the detection, diagnosis, and management of coronary artery disease, also known as CAD. which is the world's leading cause of death. CAD occurs when the arteries supplying blood to the heart muscle narrow. Full blockage can cause a heart attack. And unfortunately, a heart attack happens every 40 seconds in this country. And half of these occur with no prior diagnosis. Our AI software platform enables physicians to see the actual disease itself and precisely quantify and measure it, helping physicians find disease earlier and diagnose it more accurately. Our platform is the most widely adopted AI solution for CAD management on the market today. And we're leading the charge to create a new standard of care. To date, we've served more than 500,000 patients worldwide. We're endorsed by both the ACC and AHA medical guidelines. We've been peer reviewed in over 600 clinical publications. And our AI algorithms are powered by the world's largest coronary imaging data set of over 110 million annotated images. To put the magnitude of the problem we're solving in context, each year in the US alone, roughly 8.6 million Americans see their physicians with symptoms of coronary artery disease. This can be chest pain, dizziness, fatigue, or shortness of breath. Most of these patients are still evaluated using traditional stress-based imaging tests that have been around since the 1990s. These tests merely infer the presence of disease through surrogate markers, and unlike our technology, they do not measure the actual disease itself. The result of this is poor accuracy, and it's well documented. Up to 30% of patients with treatable CAD are sent home undiagnosed, while up to 50% of patients sent to the cath lab ultimately don't require an intervention. The impact of this inaccuracy is severe. Unnecessary death and human suffering, inefficient and inconsistent delivery of care, and unnecessary costs to say the least. All of this represents a massive opportunity for HeartFlow to redefine this paradigm by creating a new standard of care. Using a single cardiac CT scan or a CCTA, we apply our AI to create a personalized 3D model of each patient's coronary anatomy and precisely measure the actual disease down to the cubic millimeter. This breakthrough positions HeartFlow as the leader of a large and expanded opportunity. In the U.S. alone, we address a total addressable market of $5 billion, and that market remains deeply underpenetrated. And despite our emerging scale, we're still in the very early innings, and we have a long runway ahead of us to support sustained and durable growth. Now turning to our technology platform. we have four fully integrated products that together represent the most comprehensive AI-powered platform on the market. Our platform spans the full continuum of coronary artery disease, from detection to diagnosis to management, and ultimately to treatment planning. So whether you're a radiologist detecting and diagnosing disease, a general cardiologist medically managing a patient, or an interventional cardiologist planning treatment for the cath lab, Our platform provides physicians the power of AI in their decision-making and clinically validated insights with the click of a mouse. There's four integrated products to our platform. First, our roadmap analysis. You can think of this as a GPS for a patient's coronary tree. Our AI identifies and color codes troubled areas of disease, quickly informing the radiologist on where to focus. This workflow tool improves the speed at which a radiologist can read a CCTA by 25% and has been shown to improve intra-reader consistency by over 40%. It's a great example of how we're using AI to bring speed and standardization into everyday clinical workflow. Next, our plaque analysis. It's well understood in the clinical community that both the amount of plaque as well as the type of plaque are important predictors of future heart attacks. Our plaque analysis quantifies the total plaque burden and type down to the cubic millimeter with 95% agreement versus IVUS, the invasive gold standard. Knowing this information informs physicians on how to best medically manage their patients. So instead of using broad-based tools like family history, population-based risk scores, or surrogate markers like LDL, we provide precise, clinically validated measurements to physicians. so they in turn can develop personalized medical management plans for their patients. Third, our heart flow FFRCT analysis. While knowing the plaque burden and type relative to medical management is a game changer, it isn't enough when it comes to deciding if an intervention is needed. To accurately make this decision, the physicians need to understand the degree to which the blood flow is impacted across the precise location of the disease. Our FFRCT analysis does just that. We use AI and computational fluid dynamics to measure the blood flow non-invasively with lesion-level precision. It's validated for accuracy against the invasive gold standard of FFR, and our large randomized control trial, the PRECISE-RCT, proved better diagnostic accuracy and better cath lab efficiency against the standard of care. And lastly, our PCI navigator tool. We introduced this at TCT last month to great excitement amongst the interventional cardiology community, and we plan to commercially launch it in 2026. This is an AI-driven planning tool that integrates anatomy, plaque, and physiology, all aligned to optimize potential stem placement. Together, these four fully integrated products represent the most comprehensive AI-powered platform on the market. We're the only company with offerings that span the full CAD continuum. from detection to diagnosis to management, and now to treatment planning. Now turning to our core strategic pillars and our third quarter execution. We have three core strategic pillars. First, driving commercial adoption. Second, advancing our innovation pipeline. And third, extending our clinical leadership. With respect to driving commercial adoption, we've made great progress in the third quarter. We continue to focus our efforts on expanding our installed base of accounts. As a reminder, we target a total account opportunity of about 2,900 U.S. accounts that are currently actively operating coronary CTA programs. This target account pool is growing at about 10% annually. In Q3, we continue to add new accounts into our installed base rapidly through strong efforts from our Territory Sales Managers, or TSM's, which are a dedicated arm of our sales team that focus solely on onboarding new accounts, and we expect to continue to make rapid progress moving forward. Now, once a new account is added into our installed base, a separate arm of our sales team, Territory Account Managers, or PAMs, focus directly on the referring cardiology community. They increase awareness of our technology, and they help educate physicians on the value of the HeartFlow AI platform. Currently, we're expanding our TAM sales force and making great progress with the goal of doubling this team by year-end 2025, which is going to further extend our reach into this important segment. Both of these efforts, expanding our install base and educating the referral community, will pay even greater dividends as we scale our plaque analysis, which we expect to be a major growth driver for us. Now, recently, we've had several notable achievements relative to plaque. On the coding front, CMS announced that the plaque analysis will transition to a Category 1 CPT code on January 1, 2026. This is a major milestone that formally assigns RVUs and, for the first time, enables physician payment in the clinic setting. CMS also finalized a national Medicare payment rate of $1,026 for the clinic setting and proposed to continue the hospital rate at $950. From a coverage perspective, UnitedHealthcare and Cigna recently made policy updates covering heart flow plaque analysis for patients with acute or stable chest pain across all lines of businesses. This brings coverage of heart flow plaque to 57% of U.S. covered lives as of October 1, 2025. Now, as a reminder, we're not forecasting material plaque adoption until we receive 70% of all covered lives. And this is the same coverage inflection point that unlocked broad adoption for our FFRCT analysis. Now to our second core pillar, which is advancing the innovation pipeline. Our unmatched data set of more than 110 million CCT images and our embedded infrastructure that enables bidirectional data sharing with our customers gives us a unique ability to iterate, validate, and deploy new technology rapidly. In Q3, we demonstrated this. We received FDA 510K clearance for our next generation plaque analysis and began the full commercial launch. By retraining algorithms on thousands of new CCTA scans, we achieved a 21% improvement in plaque detection performance versus the first generation model. We also expanded our nomogram to 273,000 patients. This is nine times larger than any other plaque quantification study. In addition to this, we also expanded our platform to interventional cardiology. In TCT 2025, we unveiled our new PCI Navigator tool, which is our CT-guided PCI planning tool, and the feedback from leading interventional cardiologists was overwhelmingly positive. Physicians recognize how CT-guided PCI can improve both efficiency and safety by enabling pre-procedural planning where it traditionally has not existed before. and we're excited to bring them this innovation. Because of its clinical value, PCI Navigator will strengthen our relationships with key customers and further extend our AI technology across the full continuum of CAD care. Our third pillar is extending HeartFlow's clinical leadership. Clinical evidence is the foundation of trust in cardiology. It determines how physicians practice, how payers reimburse, and how quickly new standards of care take hold. This is why we continue to invest deeply in building the data that shapes guidelines, secures reimbursement, and accelerates adoption. Our DECIDE registry is a clear example of this. It's the largest prospective study of its kind, enrolling about 22,000 patients across more than 30 US sites. In July, DECIDE met its primary endpoint, showing that more than half of physicians changed their management decisions after reviewing heart flow plaque analysis compared with CCTA alone. Notably, 30% of patients with no calcified plaque also had management changes, demonstrating the technology's clinical sensitivity. This data is now being used actively in discussions with commercial payers, as well as in our medical education efforts. For PCI Navigator, which I just spoke of, new data continues to validate its potential. The planned calcium study, which was presented at TCT, showed that using the CCTA plus heart flow pathway changed calcium modification strategy in more than half of evaluated lesions. This demonstrates how CT-guided PCI planning can bring new precision to interventional cardiology. In the first half of 2026, we plan to launch the Navigate PCI registry. This is a real-world study that will enroll about 2,500 patients across 30 U.S. sites and will measure how PCI Navigator affects physician competence, procedural planning, and patient outcomes. Now longer term, beyond symptomatic patients, we see a major opportunity to redefine the standard of care for those at risk but without symptoms. Roughly 200 million individuals globally stand to benefit from earlier image-based detection rather than reliance on population-based risk scores alone. Capitalizing on this opportunity aligns perfectly with both our mission as a company, as well as our core competencies. And we look forward to sharing more details of this strategy in future discussions. To close, we're very encouraged by the strength and consistency of our third quarter performance. It reflects the continued momentum of our strategy and the great commitment of our team. We're seeing broad adoption of the Heartflow platform, sustained progress across our innovation pipeline, and growing clinical validation that reinforces our leadership position. Our focus remains clear. Execute with discipline, put patients first in all we do, and continue advancing the field toward a new standard of care for coronary disease. We believe this focus positions us exceptionally well for long-term growth and further impact. With that, I'll hand the call over to Vikram Verghese, our CFO, to review the financial results and outlook.