Sensus Healthcare Inc (SRTS) Q2 2025 Earnings Call Highlights: Navigating Challenges and ...
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Sensus Healthcare Inc (NASDAQ:SRTS) reported a 27% increase in FDA treatment volume over Q1, indicating improved efficiency and growing patient awareness of SRT as a preferred treatment option.
The company broadened its US commercial footprint by appointing Radiation Oncology Systems as its primary distribution partner for the hospital-based oncology segment, which is expected to accelerate growth.
Sensus Healthcare Inc (NASDAQ:SRTS) achieved MDSAP certification, providing immediate access to markets in Brazil, Canada, Japan, and Australia, enhancing international growth prospects.
The company delivered 19 SRT systems in Q2, including 4 to China, reflecting growing international demand for non-invasive therapeutic solutions.
Sensus Healthcare Inc (NASDAQ:SRTS) is optimistic about the potential increase in reimbursement through a new SRT delivery code, which could significantly enhance its US commercial strategy.
Negative Points
Revenues for Q2 2025 were $7.3 million, down from $9.2 million in Q2 2024, primarily due to fewer capital system sales to a large customer.
Gross profit decreased to $2.9 million in Q2 2025 from $5.4 million in the prior year, with gross margin dropping to 39.7% from 58.7%, driven by lower sales and higher service costs.
The company reported a net loss of $1 million for Q2 2025, compared to a net income of $1.6 million in Q2 2024, reflecting higher operating expenses and lower revenue.
A proposed local coverage determination (LCD) by Medicare could limit reimbursement for ultrasound use with SRT 100 vision systems, causing a temporary stall in domestic sales momentum.
General and administrative expenses increased to $2 million in Q2 2025 from $1.6 million in Q2 2024, due to higher professional fees and compensation.
Q & A Highlights
Warning! GuruFocus has detected 3 Warning Sign with SRTS.
Q: On the proposed CMS reimbursement under the physician fee schedule for next year, it seems the radiation delivery code tripled while the imaging code associated with SRT came down. Is there a connection with the LCD and how CMS sees utilization under the new codes? A: (Michael Sardano, President and General Counsel) The LCD and the proposed physician fee schedule are separate. The LCD targeted ultrasound usage, flagged for overutilization. We believe it won't take effect due to lobbying efforts. The proposed fee schedule is favorable, potentially increasing the delivery code for SRT by over 300%, which we've advocated for since the company's inception.
Q: Did the LCD impact interest on the FDA side or treatment volumes? A: (Michael Sardano, President and General Counsel) Yes, there was a pause due to uncertainty. However, the opposition to ultrasound usage lacks evidence, while we have studies showing its benefits. We believe SRT and ultrasound will remain integral to our offerings.
Q: Is the company still on track to reach 1,000 capital sales from the current 900? A: (Joe Sardano, CEO) We expect to accelerate installations once the reimbursement situation is clarified. The proposed CMS changes could enhance technology adoption and reimbursement, supporting our growth trajectory.
Q: Has a large customer paused purchases due to reimbursement issues, and will they resume once clarified? A: (Joe Sardano, CEO) Yes, customers pause when there's uncertainty. However, they remain committed to IGSRT, and we anticipate a rapid resumption of purchases once clarity is achieved.
Q: Can international sales, like those to China, offset potential domestic sales impacts? A: (Joe Sardano, CEO) Yes, the MDSAP certification allows us to sell all SRT products in more countries, including China, Japan, and Brazil. We expect continued orders from China and new opportunities in other regions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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