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.