EDAP TMS S.A. ((EDAP)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for EDAP TMS S.A. revealed a generally optimistic sentiment, despite some challenges. The company reported significant growth in its core High-Intensity Focused Ultrasound (HIFU) business, driven by strong adoption and favorable reimbursement developments. However, hurdles such as issues with Medicare Advantage plans and a decline in non-core businesses were also highlighted. Nevertheless, EDAP is making strategic investments and financial moves to support its future growth trajectory.
Strong Growth in HIFU Revenue
EDAP TMS S.A. reported a remarkable 89% year-over-year increase in global HIFU revenues, reaching USD 9.7 million. This growth was largely fueled by the net placement of 12 Focal One systems, marking a 140% increase compared to the second quarter of 2024. This significant uptick underscores the company’s successful expansion efforts in the HIFU market.
Focal One System Expansions
The adoption of Focal One systems saw substantial growth, with placements at renowned facilities such as Cleveland Clinic and major hospital networks like Hackensack Meridian Health and Baptist Health. These expansions highlight the increasing acceptance and integration of Focal One systems in leading healthcare institutions worldwide.
Positive Reimbursement Developments
A notable development in the earnings call was the proposed 5.6% increase in hospital payments for Focal One HIFU procedures by the Centers for Medicare and Medicaid Services in 2026. This proposal, coupled with higher physician fees compared to other prostate ablation methods, is expected to enhance the financial attractiveness of Focal One procedures.
Progress in Endometriosis Treatment
EDAP achieved a milestone by receiving CE marking for the use of HIFU in treating rectal endometriosis. The company has initiated commercialization efforts in Europe, marking a significant step in expanding the clinical applications of its HIFU technology.
Strategic Financing Facility
To support its expansion and new clinical indications, EDAP entered into a letter of intent for a strategic financing facility with the European Investment Bank, amounting to EUR 36 million (USD 42 million). This financing is aimed at bolstering the company’s growth initiatives and further development of the Focal One system.
Challenges with Medicare Advantage Plans
Despite the positive developments, EDAP faces intermittent challenges with certain healthcare plan providers, particularly Medicare Advantage plans, which have impacted the growth and adoption of its HIFU technology.
Decline in Non-core Businesses
The earnings call also highlighted a continued decline in EDAP’s non-core distribution and Extracorporeal Shock Wave Lithotripsy (ESWL) businesses, which fell by 31.2% in the second quarter of 2025 compared to the same period in 2024.
Increased Operating Loss
EDAP reported an operating loss of EUR 11.8 million for the first half of 2025, up from EUR 11 million in the same period in 2024. This increase in operating loss is attributed to the company’s ongoing investments and expansion efforts.
Decrease in Cash Reserves
The company’s cash reserves decreased to EUR 16.3 million at the end of the second quarter of 2025, down from EUR 22.8 million at the end of the first quarter. This decrease is primarily due to cash used in operating activities.
Forward-Looking Guidance
During the earnings call, CEO Ryan Rhodes provided an optimistic outlook for EDAP’s future. The company projects core HIFU business revenue growth of 26% to 34% for 2025, driven by the robust performance of the Focal One HIFU system. Despite challenges with Medicare Advantage plans, the proposed increase in CMS hospital payments for Focal One procedures and strategic financing efforts are expected to support EDAP’s growth and development initiatives.
In summary, EDAP TMS S.A.’s earnings call conveyed a positive sentiment, with significant growth in its core HIFU business and strategic moves to support future expansion. While challenges with Medicare Advantage plans and declines in non-core businesses present hurdles, the company’s strategic investments and favorable reimbursement developments position it well for continued growth.