EDAP TMS S.A. ((EDAP)) has held its Q4 earnings call. Read on for the main highlights of the call.
The latest earnings call from EDAP TMS S.A. painted a picture of both triumphs and challenges. The company celebrated significant growth in its High-Intensity Focused Ultrasound (HIFU) segment, marked by record sales and positive regulatory developments. Despite these achievements, the company faced hurdles, including an operating loss and a decline in distribution revenue. Overall, the sentiment remained optimistic, with strong expectations for future growth in the HIFU business.
CE Mark for Focal One Robotic HIFU
The Focal One Robotic HIFU system achieved a significant milestone by receiving the CE Mark for the treatment of deep infiltrating endometriosis. This regulatory approval is expected to open new avenues for the technology, enhancing its market presence and adoption.
HIFU Revenue Growth
EDAP TMS reported a 15% year-over-year increase in HIFU revenues in the fourth quarter, contributing to a total worldwide revenue growth of 5.7% over 2023. This growth underscores the strong demand and expanding market for HIFU technologies.
Record Global Sales of Focal One Systems
The company achieved record global sales of 11 Focal One systems in the fourth quarter, with strategic sales in the US and new markets like Turkey and Portugal. This achievement highlights the expanding reach and acceptance of Focal One systems worldwide.
51% Growth in Focal One Procedures
Focal One procedures saw a remarkable growth of approximately 51% in 2024 compared to 2023, indicating strong adoption among urologists and a growing preference for minimally invasive treatment options.
Publication of HIFI Study
The publication of the landmark HIFI study in European Urology showcased Focal One’s excellent oncologic control and better functional outcomes. This study is expected to drive further adoption and confidence in the technology.
Positive Reimbursement Developments
The Centers for Medicare & Medicaid Services (CMS) finalized a 5.4% increase in the Medicare hospital outpatient payment rate for HIFU procedures, effective January 1, 2025. This development is anticipated to positively impact the financial dynamics of HIFU procedures.
Operating Loss
The company reported an operating loss of EUR3.7 million for the fourth quarter of 2024, slightly higher than the EUR3.5 million loss in the same period of 2023. This reflects ongoing challenges in balancing growth with operational costs.
Decline in Distribution Business Revenue
EDAP TMS experienced a decline in its distribution business revenue, which fell to EUR9.1 million in the fourth quarter of 2024 from EUR9.9 million in the previous year. This decrease highlights the challenges faced in non-core business segments.
Potential Impact of US Tariff Policies
The company expressed concerns about potential impacts from US tariff policies. While no material issues have been identified yet, this remains a point of attention for future strategic planning.
Forward-Looking Guidance
Looking ahead, EDAP TMS expects HIFU revenue to increase between 16% and 25% in 2025, driven by the recent CE Mark approval and positive outcomes from the HIFI study. However, the company anticipates a decline in non-core ESWL and distribution business by 20% to 25%. These projections underscore a strategic focus on strengthening the HIFU segment while managing challenges in other areas.
In conclusion, EDAP TMS S.A.’s earnings call highlighted a positive outlook driven by significant achievements in the HIFU segment, despite facing some operational challenges. The company’s strategic focus on expanding its HIFU business and leveraging recent regulatory and study milestones is expected to fuel future growth.