Heartflow, Inc.

Good day, everyone, and welcome to HeartFlow 4th 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 participate, you will need to press star 1-1 on your telephone. You will then hear a message advising your hand is raised. To withdraw your question, simply press star 1-1 again. Please note, this conference is being recorded. I would now like to turn the conference over to the Vice President of Investor Relations, Nick Laudico. Please proceed.

Good afternoon, everyone, and welcome to the HeartFlow Fourth Quarter 2025 Earnings Conference Call. Joining me today are John Farquhar, HeartFlow's President and Chief Executive Officer, and Vikram Virghese, our Chief Financial Officer. Today, we will walk you through our Q4 and 2025 performance, share updates on our commercial momentum, innovation pipeline, and clinical programs, and provide financial guidance. A live Q&A session will follow. 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 the 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 securities laws. These statements are based on management's current expectations and beliefs, involve risks and uncertainties, and actual results may differ materially. Please note that both this live call and a digital replay will be available shortly after the call concludes. With that, I will now turn the call over to John Farquhar, CEO.

Thanks, Nick, and good afternoon, everyone, and thank you for joining us. We're pleased to host our fourth quarter call and close out a record year for HeartFlow. We've achieved outstanding financial performance driven by the sustained adoption of our HeartFlow platform and strong execution across our commercial, innovation, and clinical initiatives. Total fourth quarter revenue was $49.1 million, representing more than a 40% year-over-year growth. Global cases grew nearly 53% year-over-year, driven by record installed base growth, consistent FFRCT utilization, and strong CCTA market growth. We also achieved a record non-GAAP gross margin of nearly 80%, reaching our long-term target just over seven months from our IPO. Based on this momentum and our confidence entering the year, we're initiating full-year 2026 revenue guidance in the range of $218 million to $222 million. This represents a year-over-year growth of approximately 24 to 26 percent. Embedded in this outlook is our expectation that full-year 2026 PLAC revenue reaches approximately $15 million to $17 million, reflecting continued progress across reimbursement, installed base expansion, and utilization. From a gross margin perspective, we're initiating full year 2026 non-GAAP gross margin guidance of 80 to 81%, representing approximately 300 to 400 basis points of expansion year over year, driven by continued volume leverage, AI-driven efficiencies, and the increased contribution of higher margin plaque revenue. We're also increasing our midterm non-GAAP gross margin target to 85%, up from our prior target of 80%. This represents sustained volume leverage, increasing plaque revenue contribution, and continued gains in AI-driven efficiencies. Our financial targets reflect the strength of the underlying business, a solid foundation for continued growth, and a high degree of confidence in our ability to execute consistently. Now turning to our strategic pillars. As we look ahead, we remain focused on our three strategic pillars. driving commercial adoption, advancing our plaque innovation pipeline, and extending our clinical leadership. Starting with driving commercial adoption, 2025 was a record year of installed base expansion. We added 340 new accounts, closing the year with 1,465 U.S. accounts, the strongest new account growth in the company's history. FFRCT utilization remains strong and durable. New accounts ramp to steady state within the first year and maintain those order patterns consistently over time. Turning to plaque, we drove strong early momentum in plaque account additions through 2025, closing the year with an installed base of 489 accounts. Feedback from customers has been very positive. They increasingly recognize HeartFlow plaque analysis as the most accurate AI-driven plaque assessment technology available. It remains the only AI-powered plaque solution supported by prospective published clinical evidence demonstrating 95% agreement with the invasive gold standard of IBIS. The reimbursement landscape has also materially strengthened. As of January 1, 2026, the Category 1 CPT code for plaque is officially in effect, formally assigning RVUs and enabling physician reimbursement for the first time ever. And now with Aetna recently joining United Healthcare, Cigna, and Humana in covering our analysis, plaque now has coverage across approximately 75% of US covered lives. These payer wins are a testament to the clinical power of our DECIDE registry. As the largest prospective study of its kind with over 22,000 patients, DECIDE demonstrated that the heart flow plaque analysis changed physician management plans 51% of the time compared to CCTA alone. With respect to plaque adoption trends, we're encouraged by the strong initial plaque volumes so far in the first quarter. We continue to expect plaque revenue will become more meaningful in the second half of the year as newly activated sites scale and physicians build clinical experience. Our conviction is high that plaque will be a strong contributor to both the top line growth and margin expansion this year and beyond. Our second pillar is the continued advancement of our innovation pipeline. We continue to leverage our proprietary database of 160 million annotated CT images for innovation. As you'll remember, in late 2025, we launched our next generation plaque algorithm and evolved an already market leading product into one that's even more precise. Now in 2026, our proprietary database is again unlocking innovation. this time with the launch of PCI Navigator, the first and only AI-driven planning tool to integrate anatomy, plaque burden, and lesion-specific physiology in a single interface. PCI Navigator extends our AI platform deeper into the interventional suite, as interventional cardiologists will be able to plan complex interventions with unprecedented confidence. They can anticipate and plan for lesion complexity, selecting devices more intelligently, thereby enabling them to enter the cath lab with a clear procedural strategy. This is highly analogous to the pre-procedural planning that's already standard for TAVR, mitral, and left atrial appendage. We anticipate PCI Navigator will not only strengthen engagement with interventional cardiologists, but deepen provider support for the heart flow pathway and further increase the stickiness of our AI platform across health systems. We're also pleased to announce that our product development team has executed ahead of schedule. We're pulling forward the PCI Navigator launch to April of 2026. This is earlier than the original plan that we had communicated for the second half of this year. In addition to customer-facing innovation, we're also applying AI in our proprietary database further down the P&L to expand our gross margins. And we're excited to announce a major AI-driven efficiency initiative. HARTFLOW Autonomous Processing. Built on over a decade of proprietary algorithm training, Autonomous Processing transitions our case processing into a highly automated single-step verification model. With Autonomous Processing in place, our algorithms will autonomously manage intake, analysis, and output with the final human-in-the-loop quality check to preserve our gold standard accuracy. This initiative underwrites our confidence in our new mid-term non-GAAP gross margin target of 85%. And it's another proof point of how we convert our database and AI into long-term financial scale. Importantly, the rollout will follow a deliberate phased approach. We'll start the initial rollout later this year, followed by a multi-year expansion beginning in 2027. Our third pillar is clinical leadership, and we continue to make great progress in this area. The goal of our strategy has always been the same, to create a new standard of care. In order to accomplish this, high-quality clinical evidence is paramount. In 2026, we'll accelerate our evidence generation through prospective trials and peer-reviewed publications. Earlier this week, we announced the first patient enrolled in our Navigate PCI registry. This prospective 5,000-patient study is designed to evaluate how PCI Navigator influences clinical strategy, enhances procedural efficiency, and bolsters physician confidence in the cath lab. To our knowledge, this is the industry's first prospective registry that evaluates an AI planning tool for PCI. Now turning the plaque, at the American College of Cardiology meeting later this month, we're presenting real world data from a 15,000 patient registry for Mass General Brigham. This real world evidence demonstrates that the heart flow plaque analysis is the most powerful CT based predictor of MACE. Importantly, it also solidifies our plaque staging system as the most clinically validated system for personalized risk stratification, enabling clinicians to identify high risk individuals beyond conventional metrics. And finally, in the second half of the year, we plan to report one-year outcomes from approximately 13,000 patients within our landmark DECIDE registry. We believe that the addition of longitudinal outcomes data to DECIDE will shift the conversation from clinical utility to clinical impact and meaningfully expand the evidence base for plaque-guided care. Now moving to our expansion into the high-risk asymptomatic population, which we announced earlier this year. From the beginning, we've been methodical in our journey of bringing our technology to more patients, starting in the $5 billion symptomatic patient population, first with FFRCT, and then moving to plaque. We view the high-risk asymptomatic population as the next logical step in this journey. We estimate this market represents an incremental $6 billion opportunity in the US alone, expanding our total market opportunity to $11 billion. Over the next 12 months, we plan to initiate three randomized controlled trials across targeted high-risk asymptomatic subpopulations. Patients with prior heart attack or PCI, patients with coronary calcium, and patients with prior symptoms and documented plaque. Targeting these subpopulations represents a de-risk approach that prioritizes a diagnostic pathway, focusing on patients already in the healthcare system who have known disease. We're excited about these TAM expansion efforts and we'll share more details as the year progresses. It's also worth noting that from a capital allocation standpoint, this is a very efficient approach. We believe we can achieve our clinical objectives with approximately 1,400 total patients combined across all three trials. In closing, we've executed extremely well against our core strategic pillars in 2025. And in 2026, we expect this execution to continue with meaningful catalysts on each pillar on the horizon. Our confidence in our 2026 guidance is high. It's supported by continued growth in our core FFRCT business, a meaningful second half ramp and plaque, strong install-based expansion, and a rapidly growing CCTA market. We look forward to advancing our mission and transforming the standard of care in CAD. I'll now turn the call over to Vikram for his financial review.

Thanks, John, and good afternoon, everyone. Unless otherwise noted, my remarks reference the quarter ended December 31st, 2025. All financial metrics I refer to other than revenue will be non-GAAP, unless otherwise noted, and all growth rates will be year-over-year. Reconciliations to the comparable GAAP measure are in today's earnings release. Total revenue for the fourth quarter was $49.1 million, up 40%. U.S. revenue grew to $44.8 million, up 41%. All U.S. and other revenue grew to $4.3 million. Total global revenue cases for the quarter were 57,776, representing 53% growth, driven by continued strength in our U.S. FFRCT business. We also expanded our install base at a record pace during the year and the fourth quarter, bringing our year-end total to 1,465 accounts. This reflects strong execution by our commercial organization and continued growth in interest around plaque analysis. As a reminder, we provide install-based metrics on an annual basis only. We continue to see strong utilization at both existing and new accounts, in line with historical trends. New accounts continue to ramp to steady state FFRCT utilization in about a year, while existing accounts consistently maintain that utilization. We again saw particular volume strength in the clinic setting, a rapidly growing segment of the market, as well as continued adoption of our volume-based rebate pricing structure. Turning to gross margin. Fourth quarter gross margin reached nearly 80%, compared to 75.3% in the fourth quarter of 2024. The year-over-year margin improvement reflects better-than-expected volume leverage and an increase in AI-driven efficiencies enabled by continuous training on the company's proprietary CCTA database. Operating expenses reflect disciplined growth investments. Fourth quarter SG&A expenses were $34.6 million driven by investments in headcount and the expansion of our TAM sales force to further drive adoption of the HeartFlow platform. Research and development expenses were $17.1 million, driven by investments in technology to advance our innovation pipeline and in clinical research to expand our evidence base. Operating expenses were 105% of revenue versus 114% a year ago. Operating loss was $12.5 million compared to $13.5 million last year, demonstrating improving operating leverage while we continue to invest for growth. Non-GAAP net loss was $9.8 million, or loss of 12 cents per share compared to non-GAAP net loss of $18.6 million, or loss of $3.15 per share in the fourth quarter of 2024. On a GAAP basis, net loss was $24.4 million, or loss of $0.29 per share. The GAAP result includes a $9.3 million non-cash charge from the re-measurement of our common stock warrant liability. driven by higher share price during the quarter. In October of 2025, the warrant to holder net exercised all warrants, so Q4 will be the last quarter with any warrant-free measurement impact. Weighted average basic and diluted shares outstanding were $84.8 million in the quarter. Turning to the balance sheet, we ended the quarter with $280.2 million in cash, cash equivalents, and investments. We continue to have high confidence we have well capitalized to fund operations through profitability while continuing to invest in R&D and commercial expansion. Looking ahead to 2026, I'm pleased to provide our guidance for the full year. We are initiating total revenue guidance for the full year 2026 to be in a range of $218 million to $222 million, representing approximately 24% to 26% growth. This outlook includes PLAC revenues of approximately $15 million to $17 million weighted towards the back half as clinicians build clinical experience. We are also initiating non-GAAP gross margin guidance of 80% to 81%, representing 300 to 400 basis points of expansion. Drivers of our gross margin guide include volume efficiencies, increased AI-driven efficiencies, and high margin PLAC revenues in the second half of the year. The midpoints of our revenue and gross margin guidance imply approximately 31% gross profit growth in 2026. As John mentioned, we are also increasing our midterm non-GAAP gross margin target from 80% to 85%. This reflects high confidence in further AI-driven efficiencies driven by our autonomous processing initiative, scaling PLAC revenues, and continued volume leverage. We also remain on track to achieve cash flow profitability within three years of our IPO. I would now like to turn it back to John for summary closing remarks.

Thank you, Vikram, and thank you all for joining us today. We appreciate your continued interest and your support as we work to advance the HeartFlow AI platform as a new standard of care for detecting, diagnosing, managing, and treating coronary artery disease. We're excited about the progress we've made in a record 2025, and we look forward to a milestone year in 2026. With that, I'll turn the call over to the operator for Q&A. Operator?

Thank you so much. And as a reminder, to ask a question, press star 11 on your telephone and wait for your name to be announced. To remove yourself, press star 11 again. One moment while we compile the Q&A roster. Our first question, standby, comes from Robbie Marcus with JPM. Please proceed.

Great. Thanks for taking the questions. Congrats on a good closing quarter. Two questions from me. I wanted to start first with 2026 guidance came in above the street, and I believe that plaque number is also above where consensus sits. Love to just hear the confidence in the building blocks, particularly any extra commentary you have on PLAC so far in first quarter and feedback on the launch and the assumptions underpinning FFRCT, and then I have a follow-up.

Yeah, sure. Thanks, Robbie. Great to hear your voice. So, yeah, so thinking about 26, I mean, I'll start by saying I've never been more confident in in this business and what we're setting up to deliver here. I think there is fundamental demand out there, and I could not be happier with our team's track record of execution, and I want to compliment the team for continuing to deliver. The way I would kind of categorize this guide is I'd put it as a healthy starting point, and we've talked about our you know, our guidance philosophy previously, uh, we want to provide very high conviction guides, uh, that set us up well, uh, you know, for quarters down the road. Okay. So that's a high level. Um, you know, first, uh, around FFRCT, uh, and the base business, uh, I've got, uh, great confidence here. Okay. Um, and there's really kind of three drivers, uh, underwriting it. You know, we have, um, We have proven our ability to go out into the market and sign up new accounts. We just did the biggest year ever. We did 340 last year, as you're aware of. And I think our go-to-market model has proven our ability to go get it. And that number, incidentally, grows. The number of accounts we can go get grows by about 300 every year. So, one, we can go get the account. Two, once they're in, we've got very predictable... performance relative to utilization. We see physicians ramping and using our FFRCT technology very predictably. So they become healthy in that regard. And then lastly, there's this kind of underlying factor out there relative to CCTA in and of itself. And that, I like to think of that, that genie is not going to get put back in the bottle. CCTA as a frontline test for diagnosing coronary artery disease is in the guidelines, not just in the U.S., but around the world. And I think we're on the right side of history here, and that's going to continue to sort of fuel growth moving forward. So that's the core business. And then what makes 26 really exciting is plaque. And I think we did a great job last year. We signed up close to 500 accounts by the end of 25. We're well into Q1 here right now, and we've had some strong activations that have continued. I have visibility, obviously, into the funnel. So I've got high confidence that by the end of this year, we'll be in 1,000 accounts. And again, just as frame of reference, it took us eight years to get into 1,000 accounts with our FFRCT business. We'll do it in less than two with FLAC. And then the accounts that are live now, the early trends are very positive relative to volume. So I'm very happy about that. Now I will say I don't think this is going to be a light switch moment. I still think, as Vikram mentioned, the material volume is going to come in the back half. We've got some catalysts out there. We've got the one-year decide data reading out in the second half of this year. Physicians really need to experience it. experience outcomes with their individual patients to get into a more kind of higher utilization rate. But all that being said, very confident. And again, I'd say this is a high conviction forecast that we're giving you.

Yeah, I'll probably add some commentary to that. Again, this is a high confidence baseline that really sets a solid foundation to allow for quarterly progression. Additionally, there's You know, pockets of, you know, incremental pockets of potential upside. I'll start with FFRCT. Again, a high-conviction guide. We've not factored in any utilization tailwinds from the Navigator launch, so that will be upside. The feedback from the physician community has been incredibly positive. Now, focusing on FLAC, and, you know, you had a very specific question there, Robbie. We'll point out that, again, this is highly de-risk. given the early volume data that we're seeing in Q1. If the adoption curve were to steepen more quickly, it provides an additional catalyst for growth. Second, we referenced 1,000 accounts by the end of the year. We've got strong funnel with good visibility, so any outperformance there would also be beyond the range we provided for guidance. So stepping back, the framework here is straightforward. We've been conservative around optionality and realistic around execution assumptions. So the overall skew in our view is to the upside.

Great. Then just as a follow-up, you know, a lot of software companies have come under pressure from fears around AI that they could, you know, do it better and faster. And obviously there's a lot of moats you have with your data and tech and med tech are very different sectors for a reason. I'd love to get just on record your view of your moat around the business versus some of the AI companies that are hitting software and how you've feel your defenses and things you're doing to, you know, stay ahead of all the competition. Appreciate it.

Yeah, sure, Robbie. And I think that question makes a lot of sense given some of the recent, you know, headlines. You know, I'll say, I mean, I would characterize our moat as highly defensible, okay? And I think there's a couple of components that sort of, you know, to make it up here. The first is, I think as everybody's aware, an AI model is only as good as the training set and the data that that model is trained on. And we have, and we're very proud of it, what we believe to be the world's largest proprietary CT database of annotated CT images. We've got over 160 million images This data is effectively ground truth data and it does not exist in the public domain. So there's no large data set out there that somebody very quickly could go acquire and start training a model on. We've been training this model and we've been building this data set for over 10 years. So not only is it very large at 160 million annotated CT images, it's also super diverse. because it's got all sorts of different types of anatomy and types of CT capital feeding into it. The last thing I'll say on it is right now, we're already connected, and this is sort of at the end or the start of this year, we're connected to 60% of the market's CCTAs. So every day as the category grows, we're growing disproportionately with it. So this would be a a very difficult catch-up game if somebody were to try to start a race here. So that's the data that the algorithms are trained on, but that works hand-in-hand with clinical evidence. And we like to say you can't code your way into clinical trust. Clinical trust with a physician comes by delivering high-quality clinical data. And HeartGlo as a company has been investing in this regard for over 10 years. We have over 600 peer-reviewed publications. We've got a couple randomized controlled trials. This is high-quality clinical data, and you can't fast-forward that. There's no way to rush that. And so this is an incredible lead that we have, and we'll continue to invest and build on that. Now, that clinical data works hand-in-hand with the fact that we're MedTech, and in MedTech, You can't have an AI hallucination the way you can in consumer technology. We are a regulated medical device. You need clinical data first to get FDA clearance, but then you need to operate within a regulated quality system. And we have just that, and of course we have our human in the loop that ensures our accuracy remains incredibly high. And then the last thing I'll say is, you know, we are software. And, you know, software is useless if it's not integrated into a doctor's everyday practice. And we are effectively the proven operating system, if you will, in over 15 hospitals and clinics right now. Okay. So we work really hard to integrate in and meet our physicians where they are so we help We help them do their job easier. We don't ask them to adapt and do it with us. That can be a tough road to sort of hoe. Initially, it takes over a year to get into some of these hospitals. But once you're in, we're pretty sticky. And being the kind of operating system of choice, we think is a great advantage for us. And then lastly, underscoring all this, we've got a great, strong global patent portfolio that we think is very defensible as well.

Appreciate it. Thanks a lot.

Thank you. And as a reminder, if you do have a question, simply press star 1-1 to get in the queue. We have a question from the line of William Plovnik with Canaccord Genuity. Please proceed.

Hey, great, thanks for taking my questions, and good evening. I'd like to ask just on the product itself. I mean, you guys are innovating rather quickly, and so you've had significant changes to both FFRCT and PLEC, I think, over the last three to six months. I was wondering if you could just kind of maybe highlight some of those changes and how they've impacted the workflow to help us understand. And then my follow-up is on the PCI Navigator. just initial feedback, future data, product innovations. You know, we saw the first patient go into the registry. Just love to hear more on that. It sounds like, you know, you're using that as one of your competitive modes as well. Thanks.

Yeah, sure. So good to hear your voice, Bill. So on kind of the product innovation piece, you know, last year we introduced our next generation plaque algorithm, okay? And that was, again, we're going into this proprietary database that we have. We're training the algorithms to get smarter and we took what was already a really good plaque algorithm and we enhanced it. From a customer standpoint, there's no changes to the workflow per se. We're always doing behind the scenes work that I don't think is really, it's not material enough for a call such as this to take out steps and improve functionality of our product. Two years ago, a little over two years ago, we launched our new, another example is we launched our new user interface, which incorporated both plaque and FFRCT co-registered with our risk profile, our nomogram information into a singular user interface and now physicians can use that to interrogate the entire coronary tree. This year, And we're really excited. We're launching it actually next month. The team did a good job pulling it forward. We're launching our PCI Navigator, and we're really excited about that. And, you know, we've talked about, you know, the strength of the platform matters, and PCI Navigator expands our platform, okay? And we really think for interventional cardiologists, this can be a pretty attractive tool for their toolkit. And what allows them to do is really plan ahead before a PCI procedure so they can walk into that procedure knowing the right devices to select, the complexity of the anatomy, et cetera. That's very analogous to what they're already doing with TAVR and Mitral, et cetera. Um, so we're excited to that. Um, we haven't, and Vikram can speak to this if there's interest, we haven't necessarily baked in FFRCT upside, uh, as a result of this, but we do think it's possible. We think having a interventional cardiologist who's an important part of the CV ecosystem, if you will, really, um, advocate strongly for CT, uh, you know, CT and heart flow pathway that helps us and certainly using heart flow on every case that comes in, uh, helps us as well. So we're, uh, We're super excited about that. Vikram, I don't know if you want to talk about that.

Yeah, I'll quickly underscore, you know, our current forecast really does not assume any incremental upside from PCI Navigator. To the extent Navigator drives incremental activity, it will really flow through FFRCT volumes as each case is anchored to an FFRCT order. And then, you know, we're highly encouraged by the early feedback we've received on the product and the early potential we see. but we would frame PCI Navigator as a longer duration growth vector for us than a real near-term driver of financial performance. And the last thing, I'll, sorry, go ahead, Bill.

I'll go ahead. I was just going to say, from my understanding, you're not charging for PCI Navigator, and I just wanted to circle up with, you know, just on the consensus on Robbie's question, Q1 consensus, I think it's 46.9 million. That's up 26% year-over-year. You're guiding 24 to 26. How do we think about that first quarter? I mean, you're two weeks away from closing it. Are you extremely comfortable with that current number? Do you think it'll be higher, or how should we think of Q1? Thanks.

Yeah, in terms of phasing, generally, Bill, what I would say is, you know, our full year guide reflects, you know, a midpoint of 25% year-over-year for the first quarter, and this is specific to your comment there. We expect growth in excess of 30% year-over-year, and that bakes in about a sequential improvement of 1% to 2% full cognizance of where we are, you know, relative to the end of the quarter. Moving into Q2, for what it's worth, we typically benefit from a little bit of seasonality, and we expect that pattern to hold true in 2026 as well. And then as plaque starts to really materialize in 2026 towards the back half of the year, you'll see more sequential growth relative to where consensus is at. And again, plaque, you know, should plaque outperform, that's, you know, the principal upside to the back half phasing assumptions.

Thank you. Bill, just to round out your question on innovation a little bit, obviously Navigator is what we're discussing today. I would describe our pipeline of new products as really strong, and we'll have more news in future quarters of other innovations that are coming.

One moment for our next question, please. It comes from Matthew O'Brien with Piper Sandler. Please proceed.

All right. Thanks for taking the questions. Just for starters, on the plaque side, should we continue to assume $350 per case for plaque here in 26? And is there any, you know, upward mobility to that revenue per case going forward?

Yeah, maybe I'll... I'll say a couple comments on plaque, and then Vikram, you can speak to the specificness of the model. I mean, first thing, Matt, I'll say, I mean, I've said this before, but it's worth saying again. I could not be more excited about what plaque is going to mean full stop. I think it's going to mean a lot for patients, most importantly. But I also think it's going to transform this business. Now, over time, we've got to be a little judicious in how we call it, given we're still in the early innings. And as we monitor patients, uptake every quarter we'll be able to adjust going forward. Part of that uptake, to your question, is pricing, and I'll let Vikram speak to that.

Yeah, happy to, John. So, Matt, relative to your question, given that we have now commercial pairs coming online, Aetna being the latest one that gets us to about 75% covered lives in the U.S., we now have clearer line of sight to pricing improvements over time. Our contracts with our customers have built in mechanisms that enable better pricing with broader coverage. And so consequently, in our 2026 base plan, we have underwritten modest ASP upside in the 26 plan and then more meaningful step ups in future years.

Okay. So a little above 350 to start and then maybe going up more. That's right. 27, 28. Is that fair? Okay. That's right. Got it. And then, Vikram, just sticking with the numbers here a little bit, I wanted to get into gross margin because that was so good, but I'm trying to keep it to two here. Was the FFRCT ACE number per site similar to what you saw in Q3? Because, you know, given the number of hospitals you added, that's really good. And then, you know, I think it's kind of, you know, to the guidance question, If you assume, well, when I'm looking at the FFRCT revenue that's factored in when you think about the plaque growth plus OUS, it's the lowest level that we've seen from you guys or would see from you guys over the last three years. Is there something in there that we should be aware of, again, given all the momentum that we're seeing in the core FFRCT business, or is it just back to kind of what John was saying to start with, like, look, we're trying to be very with how we're guiding early in the year, and then we'll kind of reflect back as things progress.

Thanks. Yeah, thanks for the question, Matt, again. You know, relative to cases per site, we did outperform despite the heavy onboard number. We were about 15% higher on a cases per site basis in 4Q25 relative to where consensus came at. And that's really, you know, driven by the strength of that market shift that's happening here with CCTA ultimately on its way to becoming standard of care. With respect to guidance, you know, I'd say we've, you know, it's part, you know, part law of large numbers, as well as a part guidance philosophy. You know, we're overlapping an exceptionally strong year in 2025. And when you start with that kind of elevated base, the growth rates really start to normalize. And then the second piece, to underscore what John said, this is core to our guidance philosophy. The framework we've put forward for 2026 still assumes very strong underlying demand from a nominal volume perspective with a fair amount of conservatism. So I would really view this guide as an earlier framework that intentionally leads sufficient room for quarterly progression. Got it. Thanks so much.

Thank you. And ladies and gentlemen, as a reminder, if you have a question, press star 11 to get in the queue. We have a question from Larry Bigelson with Wells Fargo. Please proceed.

Hi, this is Nathan Trebek on for Larry. Thanks for taking the question. Can you talk about the utilization that you're seeing for plaque analysis in your FFRCT accounts? How does the utilization compare to FFRCT, and how do you envision utilization trending throughout 26? Thanks.

Yeah, thanks, Nathan. So, again, we're at the early innings, but I think what we're seeing so far is positive, okay? Now, you need to remember the total applicability for plaque is 60% of all patients. We're nowhere near 60% right now because we've just kind of got out the gates here. So over time, there's plenty of upside to ramp, but what we've seen is very positive and I think leads to sort of the bullishness that you're hearing from me today. Relative to FFRCT, FFRCT obviously is a more mature diagnostic. Once an account is up and running, we see FFRCT being utilized pretty close to the full range. So that's the good news, but the full range is about half of what it is on PLAC. So FFRCT is about 30% or 33% full utilization, and we get pretty close to that with most of our accounts. So I think over time, there's certainly an opportunity to see PLAC really in a material way take off here. I think long-term, I've got really high confidence PLAC is going to be a bigger business than FFRCT. I think where we have to sort of wait and see and kind of measure it every week, every month, is what does that ramp look like? And we're in the early innings there, but again, so far, pretty positive.

Okay, thanks for that. Can you talk about how you're helping your accounts to better understand how to utilize plaque analysis and I guess what's next for plaque from a clinical data standpoint?

Yeah, well, we lean very heavily into education and I think as we talked about before, you know, one important unlock is coverage and, you know, we're making great progress there. That's super easy to measure, so to speak. Medical education is a little more nuanced. In the FFRCT journey, it was a much simpler story. You just needed to prove accuracy versus invasive FFR, and then everybody knew what to do with whatever .7 FFR value. Plaque is much more nuanced, and we are leaning in very heavily to help physicians understand how to use plaque with their specific patients. We do a lot of medical education. I would say moving forward, and we're at AHA just this next week in New Orleans, and far and away, you know, the lion's share of everything we're talking about there will be plaque. In the second half of this year, the big data that we'll share is the one-year data on Decide, where we'll have one-year outcomes there, and that'll be another piece that's really important to bring to our physicians Ultimately, what we're trying to do is shift it from clinical utility. Question number one is first, how do you use it to actual clinical management? And that's the journey that we're on with our physicians right now.

One moment for our next question, please. It comes from the line of Rick Wise with Stifel. Please proceed.

Hi, John and team. This is John on for Rick today. A couple quick questions for me. First, I just wanted to ask about the broader role of CCTA for heart flow and how that's impacted growth today. I remember back in the IPO, you gave a couple metrics about how penetrated and utilized CCTA is for non-invasive coronary tests. I was just hoping for a general update on where CCTA adoption stands, how much are you benefiting from it, and how much more do we have to go in terms of uptake there in your view?

Yeah, sure. Thanks, John. I appreciate the question. So, again, we're trying to create a new standard of care here, and it's well documented that the existing standard of care is suboptimal. Patients are being misdiagnosed, way too many false positives, way too many false negatives. CT plus heart flow addresses that issue, and we're trying to create a new one. The first piece of that is CCTA being adopted. At the end of 2021, CCTA in the US came in as a level 1A test ahead of all other alternatives. We like to say we're on the right side of history here, but we have a lot of upside. It's around 10 to 12%, I think, penetrated. relative to the whole standard of care. So there's lots of ways to go before we get there. But as I said earlier, I don't think the genie is gonna get put back in the bottle there. I think it's just a matter of time between the guidelines, the stronger reimbursement, more and more readers are raising their hand, becoming CTA readers, plaque is coming on board, so that makes utility even that much greater. All of those trends in my mind are durable, and there's a high ceiling for us to aspire to go hit. Now, from what I'm seeing in the data, I'm not seeing anything slowing us down. We're seeing more and more accounts join the category, so to speak. At the start of this year, there's 3,200 accounts with active CTA programs. We expect that number will be 3,500 before the year's out. Right now, the majority of volume coming off a CT scanner is not CCTA. It's for another modality. So more and more accounts can start adding slots to it before they even have to tap into kind of a longer uptick of a capital cycle. So there's lots of tailwinds into this story, and we continue to lean into them.

Thanks. That's helpful.

And I just wanted to also ask about competition quickly here. I'm just curious what you're seeing in terms of win rates or when you're going – head-to-head against peers? Are you getting any pushback on price if they come below you? And just curious about how the broader HeartFlow ecosystem factors into the competitive positioning when you go up against others. Thanks.

Yeah, sure. So first thing I'll say, and I remind the team of this often, our competition is the standard of care, okay? When we wake up every morning, we are trying to convert volume from the existing standard of care into CT plus heart flow. And when we do that, we will be successful and patients will be better off. And we're continuing to focus on changing those practice patterns and bringing physicians into kind of a CT plus heart flow pathway. Now, your question, I think, is more specifically around other AI vendors. This is not a new dynamic. Some of these vendors have been around since 2018, 2017. None of that is slowing us down. I think, if anything, having more competitors or players in the category is actually good for the category. We don't compete on price. We compete on the quality of our data, which we're extremely proud of. We're prospective. We're published. We lean into that. We prove our accuracy. And we compete on the quality of our products. and we continue to improve our product just like we're doing this year and expanding our platform with PCI Navigator. We don't publish win rates and things like that, but I think our results are very positive, and I feel good about the way the team is competing and how we're winning in the market.

That's helpful. Thanks for taking my questions.

And with that, we conclude our Q&A session and conference for today. We want to thank everyone for participating. You may now disconnect.