Profound Medical Corp.

Good day, and thank you for standing by. Welcome to the Profound Medical first quarter 2024 financial results conference call. At this time, all participants are in 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 11 on your telephone. You will then hear an automated message advising that your hand has been 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 first speaker, Stephen Kilmer, Investor Relations.

Thank you. Good afternoon, everyone. Let me start by pointing out that this conference call will include forward-looking statements within the meaning of applicable securities laws in the United States and Canada. All forward-looking statements are based on Profound's current beliefs, assumptions, and expectations and relate to, among other things, any express or implied statements or guidance regarding current or future financial performance and position, including the company's year 2024 financial guidance and related assumptions, the expectations regarding the efficacy of Profound's technology in the treatment of prostate cancer, PPH, uterine fibroids, palliative pain treatment, and osteoids, osteoma. and its future revenues financial results. Such statements involve known and unknown risks and uncertainties and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. No forward-looking statement can be guaranteed. Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. Profound undertakes no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future events, or otherwise, other than as required by law. Representing the company today are Dr. Arun Manawat, Profound's Chief Executive Officer, Rashed Duwan, the company's Chief Financial Officer, and Dr. Matthew Burtnick, Profound's Chief Operating Officer. With that said, I'll now turn the call over to Rashed.

Good afternoon, everyone, and welcome to our first quarter 2024 conference call. On behalf of the management team and everyone at Profound, I would like to thank you for your ongoing interest in our company. For those of you who are shareholders, we appreciate your continued interest and support. I will turn the call over to Matthew in a moment to provide updates on Tulsa clinical publications, utilization trends, and the CAPTAN clinical trial. However, before I do, I would like to provide a brief summary of our first quarter 2024 financial results and our revenue guidance for the year. To streamline things, all of the numbers I'll refer to have been rounded, so they are approximate. For the three-month period ended March 31, 2024, the company recorded revenue of $1.91 million, with $1.48 million from recurring revenue. and $428,000 from one-time sale of capital equipment. First quarter 2024 revenues increased 3% from $1.86 million from the same period in 2023. Actual usage during the quarter grew at double digits, but there was a reduction in cost of consumables inventory at some install sites. While we anticipate that user inventory levels will continue to vary throughout the year. We still expect recurring revenue will grow at 60% or more. Gross margin in Q1 2024 was 66% compared to 65% in Q1 2023 and up 53% sequentially from the previous fourth quarter. Similar to recurring revenue, we expect gross margin to vary some quarter over quarter, but just as we delivered about 60% margin in 2023, we expect to deliver that or better in 2024. Total operating expenses in 2024 first quarter, which consists of R&D, G&A, and selling and distribution expenses were $8.8 million, an increase of 9% compared with $8.1 million in the first quarter of 2022. Breaking that down further, expenditures for R&D increased 2% on a year-over-year basis to $3.9 million. G&A expenses increased by 13% to $2.4 million and selling and distribution expenses increased by 15% to $2.4 million. Net finance income for the 2024 first quarter was $1.3 million, compared to $145,000 for the same three-month period of 2023. Overall, the company recorded a first-quarter 2024 net loss of $6.2 million, or $0.26 per common share, down from a net loss of $6.7 million, or $0.32 per common share, in the same three-month period in 2023. As of March 31, 2024, Profound had cash of $41.2 million. Finally, as you may have seen in our press release, We are providing annual revenue guidance for the first time as we believe we now have sufficient visibility into the pace of Tulsa adoption ahead of the start of reimbursement in January. Based on our business planning and budgeting activities, we currently expect total revenue for the full year 2024 to be in the range of $11 million to $12 million, which represents 53% to 67% growth compared to revenue in 2023. With that, I will now turn the call over to Matthew.