iRadimed Corporation

Welcome to the ARADIMED Corporation Fourth Quarter 2025 Financial Results Conference Call. All participants are current in listen-only mode. At the end of the call, we will conduct a question-and-answer session. This call is being recorded today, February 10, 2026, and contains time-sensitive, accurate information that is valid only for today. Earlier, ARADIMED released its financial results for the fourth quarter of 2025. A copy of this press release announcing the company's earnings is available under the heading News on the website at IRDMed.com. A copy of the press release was also furnished to the Securities and Exchange Commission on Form 8K and can be found at SEC.gov. This call is being broadcast live on the company's website at irdmed.com, and a replay will be available there for the next 90 days. Some of the information in today's session will constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements focus on future performance results, plans, and events, and may include the company's expected future results. Aradiomed reminds you that future results may differ materially from these forward-looking statements due to several risk factors. For a description of the relevant risks and uncertainties that may affect the company's business, please see the risk factor section of the company's most recent report filed with the Securities and Exchange Commission, which may be obtained free from the SEC's website at sec.gov. I want to turn the call over to Roger Sussi, President and Chief Executive Officer of Aradimet Corporation. Mr. Sussi.

Thank you, and good morning. Thank you all for joining us on today's call. And once again, we have some exciting performance to announce. I'm very proud to report that AranaMed achieved its 18th consecutive quarter of record revenue, with the fourth quarter of 2025 reaching $22.7 million, a 17% increase over the fourth quarter of 2024 and exceeding our prior guidance. For the full year 2025, we delivered record revenues of $83.8 million, which was up 14% year over year. Our GAAP diluted earnings per share for the quarter was $0.50, up 25%, and non-GAAP diluted earnings per share was $0.54, up 23%. For the full year, GAAP diluted earnings per share reached $1.75, which was up 17%, and non-GAAP diluted earnings per share was $1.93, up 16%. Gross margins remained strong at approximately 77% for the year and 75% for Q4. These results are reflective of solid execution across our product lines. MR compatible infusion pump systems, while still the legacy 3860 system, grew strongly. Sales of patient vital signs monitoring systems also grew very well and disposable revenue increased with higher utilization. We also saw a meaningful contribution from the ferromagnetic detection system. Allow me now to recap the expectations for the new 3870 MR IV pump. Recall that in positioning this new product and its pricing, we anticipate 3870 pump deal ASP will increase 10% to 14%. And yes, the 3870 design is much It is such that we fully expect to penetrate the greenfield opportunities more effectively and also increase utilization among existing customers who may currently only use their older pumps sporadically. But to be very clear, the most significant increase comes from the large replacement opportunity, which is the number one driver we see and will deliver a significant step change in revenue. continuing to be our key growth driver for the next several years. Recall how the older 3860 model delivered approximately 20% growth in fiscal 2025, driven by simply limiting our extended maintenance offering to pumps under seven years old. This minor change generated replacement orders for only a portion of pumps in that age group, but that portion resulted in significant revenue growth from pumps sales in 2025, that being the old pump. The promising news is that there remains a majority of these 7 plus year old pumps to be replaced, plus many more that are 5 years and older. In the US market alone, there are approximately 6,400 5 plus year old 3860, 3861 pump channels that are up for replacement. approximately 1,100 such channels annually into the domestic market. And we'll be targeting adding an additional 1,000 channels per year through replacement sales from those existing 6,400 units that are over five years old. This will be our target starting in June 2 and continuing through the rest of 2026. It's also important to understand that replacing only 1,000 channels per year leaves many thousands more to be replaced over the coming years. For our domestic business only, selling north of 2,038 70 pump channels annually with the higher anticipated ASP, we expect to approach a $50 million annual revenue run rate for pumps. With the addition of disposables and maintenance, international sales, In the MR monitoring business, one can understand our confidence in achieving a $100 million plus revenue run rate during 2026. As planned, in December, we delivered an initial order of 23 3870 systems for which we are providing an extraordinary level of clinical support and monitoring through February and into early March in an... in an effort to make sure that the most stable and highest quality exists in the device before the larger general sales release, which shall start in April. Bearing in mind the time required for our hospital customers to be sold, approve funding, issue orders and such, we expect bookings to build in this Q2 and ramp significantly in the second half of the year. We expect to maintain quarterly revenue in the first half of 2026, driven by growth in MRI monitoring and our 3860 pump backlog, but also anticipate booking strength of the 3870 systems, which will result in those initial shipments in April of approximately 100 to 130 3870 pump channels. I'd like to turn the call over to Jack Glenn, our CFO, to review the quarter's financial results. Thanks, Jack.

Thank you, Roger, and good morning, everyone. As in the past, our results are reported on a GAAP basis and a non-GAAP basis. You can find a description of our non-GAAP measures in this morning's earnings release and a reconciliation to GAAP on the last page. For the three months ended December 31, 2025, revenue was $22.7 million, up 17% from $19.4 million in the fourth quarter of 2024. This growth was driven by strong performance across all of our product lines, with MRI-compatible IV infusion pump systems contributing 9.1 million, up 20% year-over-year, and patient vital signs monitoring systems contributing 7.1 million, up 7.5%. Disposable revenue grew 18% to 4.3 million, reflecting a continued increase in utilization of our devices, while ferromagnetic detection systems also saw solid gains. For the full year 2025, revenue reached $83.8 million, up 14% from $73.2 million in 2024. Domestic sales accounted for 81% of total revenue in the fourth quarter and 84% for the full year, reflecting consistent strong U.S. performance, especially in the domestic pump business. Gross profit for the quarter was $17 million, with a margin of 75%. And for the full year, growth profit was $64.3 million, with a margin of approximately 77%, consistent with 2024. Operating expenses for the quarter were $9.9 million, and for the full year, $38.2 million, reflecting higher general and administrative expenses to support growth, along with modest increases in sales and marketing and R&D. Income from operations for the quarter was $7.1 million, and for the full year, $26.1 million, Tax expense for the quarter was $1.3 million, resulting in an effective tax rate of 17.3%. The decrease in the effective tax rate for the quarter was primarily due to a true-up based on our year-end tax provision, with our effective tax rate for the year at 20.7%, lower than our previously estimated 22%. Net income for the quarter was $6.4 million, or 50 cents per diluted share, up 25%. Non-GAAP net income was $7 million, or $0.54 per diluted share, up 23%. For the full year, net income was $22.5 million, or $1.75 per diluted share, up 17%. And non-GAAP, $24.8 million, or $1.93 per diluted share, up 16%. We ended the year with cash and cash equivalents of $51.2 million. Cash flow from operations was $5.9 million for the quarter and $24.9 million for the full year. Non-GAAP-free cash flow was $5.5 million for the quarter and $16.5 million for the year after capital expenditures primarily related to the new facility. And with that, I will now turn the call over to questions. Operator?