Profound Medical Reports Q2 2026 Results: Full Earnings Call Transcript

Profound Medical (TSX: PRN ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

6 million and 153% year-over-year growth. Gross margin increased to 78% from 73% year-over-year, while operating expenses decreased by 16% to $13 million. 7 million in the previous year. The company reaffirmed its 2026 revenue guidance of approximately $25 million, representing a 56% growth and expects gross margins to remain above 70%.

Strategically, Profound Medical is focusing on expanding payer coverage and has seen a substantial increase in covered lives for the TULSA procedure, reaching nearly 30 million, not including Medicare. Clinical updates highlighted the TULSA procedure's superior quality of life outcomes, including statistically superior penile length preservation compared to robotic prostatectomy. Operationally, the company is addressing logistics issues to prevent future shipment delays and plans to enhance its operations team. The pipeline for TULSA-PRO and Sonalleve is valued at approximately $70 million, with a strong focus on top-line revenue and gross margin growth.

Management emphasized the growing acceptance of TULSA in the medical community and the potential for future growth driven by expanding reimbursement and clinical evidence. Full Transcript OPERATOR Good day and thank you for standing by. Welcome to Profound Medical Second Quarter 2026 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 your hand is raised. To withdraw your question, please press star 11 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Steven Kilmer, Investor Relations. Steven 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 expressed or implied statements or guidance regarding current or future financial performance and position and expectations regarding the efficacy of Profound technology.

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 Menawat, Profound Chief Executive Officer and Chairman; Dr. Matthew Burtnick, Profound's President; and Tom Tamborino, our Chief Commercial Officer. Also filling in for our CFO due to a scheduling issue is our Corporate Controller, Matthew Sopcich.

With that said, I'll now turn the call over to Matthew. Matthew Sopcich, Corporate Controller Good afternoon everyone and welcome to the second quarter 2026 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 clinical updates. However, before I do, I would like to provide a brief summary of our second quarter 2026 financial results. All of the numbers I will refer to have been rounded so they are approximate. 6 million from recurring revenue and 871,000 from capital equipment sales.

2 million for the same three-month period a year ago. As noted in today's press release, this doesn't fully reflect our sales performance in Q2 2026. 1 million of TULSA product shipments originally anticipated in the final weeks of June were completed in July, affecting the period of revenue recognition. 6 million, representing 153% year-over-year growth.

Gross margin in Q2 2026 was 78% compared to 73% in Q2 2025. We continue to have confidence that the gross margin for our business will remain above our stated goals of over 70% over the long haul. 4 million in the second quarter of 2025. 52 per common share, in the three months ended June 30, 2025.

3 million. As Tom and Arun will discuss later in the call, despite the revenue recognition timing issue in the second quarter, based on record order activity, Profound continues to project total revenue for full year 2026 to be approximately $25 million, which represents 56% growth compared to its prior year revenue. With that, I'll now turn the call over to Matthew Burtnick for an update on clinical and development activities. Dr.

Matthew Burtnick, President Thank you and good afternoon. On past calls, I've highlighted the growing body of clinical evidence supporting the TULSA procedure as a new platform for prostate disease management capable of delivering whole-gland treatment efficacy while preserving quality of life. The CAPTAIN trial has already proven that TULSA delivered statistically superior quality of life outcomes compared to robotic radical prostatectomy, achieving its primary safety endpoint with statistically higher preservation of the composite endpoint of urinary incontinence and erectile function at 6 months.

In addition, patients treated with TULSA experience superior perioperative outcomes including no blood loss, no overnight hospital stay, less pain and faster recovery, along with statistically significantly fewer serious complications and a faster return to normal activities and paid employment. Most recently at SRS, we presented positive incremental data from CAPTAIN demonstrating that whole-gland TULSA provided statistically superior penile length preservation compared to robotic prostatectomy. 65 centimeter reduction in penile length after robotic prostatectomy.

To some people, and please pardon the pun, that might not sound like a super big deal, but even modest amounts of penile shortening can contribute meaningfully to patients' distress and reduced satisfaction following treatment. This new data points to the greater peace of mind that the TULSA procedure can deliver to patients by gently, safely and precisely ablating prostate tissue while actively protecting surrounding structures such as the prostatic urethra. As we noted before, one of CAPTAIN's primary objectives is to support broader payer coverage.

Randomized controlled trials remain the gold standard for coverage decisions, and CAPTAIN continues to generate evidence demonstrating meaningful quality of life advantages that resonate with both patients and payers. In addition to ongoing CAPTAIN readouts and analyses, the clinical value of TULSA is continuing to become sharper as presentations focus more on what specifically makes TULSA most versatile. Beyond demonstrating overall efficacy and quality of life benefits, ongoing clinical analyses are increasingly helping physicians understand where TULSA's capabilities may be particularly valuable.

Examples include patients with apical cancer where the enhanced visualization of the MR allows urologists to precisely carve out tumor from the boundary of the sphincter muscle that controls continence. These patients almost always end up with urinary incontinence following robotic RP, but whose continence can almost always be saved if treated with TULSA. Secondly, patients with unilateral disease, or cancer on one side of the prostate, and whose nerves that maintain erectile function can be spared by not ablating the benign side of the prostate.

Thirdly, patients where multiparametric MRI provides a clear hot zone that is suspicious of cancer within the prostate and thereby gives surgeons better guidance of what part of the prostate to kill, and patients with very large prostates where TULSA has demonstrated treatment flexibility without the increased side effect burden often associated with other modalities. I'd like to conclude my remarks by reiterating that from gold standard treatment side effects findings to PECS durable five-year outcomes to CAPTAIN's compelling Level 1 data, the clinical foundation supporting TULSA continues to strengthen.

We believe this growing body of evidence increasingly positions TULSA as a differentiated platform capable of delivering whole-gland efficacy, superior quality of life outcomes and expanded reimbursement support. I will now turn the call over to Tom. Helen Thank you. There's no question that momentum in our business is continuing to build.

1 million shift in Q2 orders that were shipped in July and will be recognized in the current quarter. Speaking of temporary interruptions, you may have also noticed that while same-store sequential quarter-over-quarter growth as measured by our new index 20 declined by 12%, it grew 39% in the first half of 2026 over the same period in 2025 and 22% year over year. The sequential change was mainly attributable to five sites not realizing the expected growth due to short-term issues. For example, one of the sites converted from a placement to a capital model in Q2 and paused treatments during the transition.

That site is now back online. Despite these one-time and/or temporary issues, Q2 2026 marked another true commercial inflection point and so far we have seen that momentum continue into Q3. We estimate that our qualified sales pipeline, defined as being within one of the verify, negotiate and contracting stages for TULSA-PRO and Sonalleve, is now approximately $70 million. While we can't predict the extent and/or timing which that qualified sales pipeline will translate into recognized revenue, it has been growing steadily, which certainly bodes well for the future.

We had another monthly record for new orders in July, none of which included any of the shift or rollover from Q2, and SRS 2026 was the most productive medical meeting I have ever been a part of. To put that into perspective, our team's work generated more than 160 qualified leads over the four days of the event, so around four or five new commercial opportunities per hour. Again, it's not possible to predict what number of those will translate into actual sales, but also again, boding well for the future. Three additional tailwinds helping drive our commercial momentum acceleration are higher and expanding reimbursement with respect to Medicare.

A few weeks ago CMS released the current year 2027 Hospital Outpatient Prospective Payment System or OPPS and Ambulatory Surgical Center or ASC Proposed Rules. Under the OPPS proposal, TULSA furthers its favorable reimbursement level relative to other treatment modalities. 9% to $15,494 per procedure. 6% increase for HIFU and Aquablation to $10,797 and $12,300 for robotic RP.

So, assuming the final rule doesn't change these numbers, starting in January 2027, hospitals will be paid 44%, or $4,697, more per procedure for TULSA than HIFU and Aquablation, and 26%, or $3,194, more for TULSA than robotic RP. Keeping in mind that hospitals can generally perform as many or more TULSA procedures versus those other modalities in a day, our premium there is clearly growing, making our relative profitability for hospitals higher as well. With respect to ASCs, the proposed rule would reduce TULSA to $6,866.

However, we don't currently have any active ASC sites and we believe there may be an opportunity for us to correct the hospital cost reporting that appears to have driven the reduction. On the physician payment schedule side, TULSA is more than holding its ground as well when viewed on an apples-to-apples basis. Adjusting for the fact that TULSA is zero day while competitors are 90 day, physicians will be paid $880 for each TULSA procedure compared to $865 for HIFU, $1,064 for robotic RP, and $539 for Aquablation. 3 million covered lives during the second quarter.

Most of the newly covered lives came through state Medicaid and managed Medicaid and Ambetter programs. 9 million covered lives with Humana. And just today we announced that the Johns Hopkins and the Prime Healthcare employee health plans, together covering more than 105,000 employees, medical staff and family members, have become the first ever employer-owned health plans to list the TULSA procedure as a covered service. And we're just getting started.

Profound Medical will continue to work, collaborating with payers, providers and health systems to expand coverage and streamline patient access pathways for the TULSA procedure. Looking ahead, I'm confident in our ability to further accelerate. We're well positioned to capitalize on the expanding interest in image-guided, incisionless and autonomous robotic surgery. We're anticipating an extended reimbursement premium for TULSA hospitals and physicians, we're growing an already formidable body of clinical evidence demonstrating the superiority of our technology, and we're continuing to scale our commercial footprint both at home and abroad.

Thank you for your time. I'll turn the call over to Arun now. Arun Menawat, CEO Thanks, Helen, and good afternoon, everyone. As I discussed in our Q1 call, the dynamics in the prostate disease treatment space continue to change at a rapid pace.

Full-gland robotic prostatectomy or radiation therapy are the standard of care for treating prostate cancer today, and for BPH, mainstream treatment with transurethral resection of the prostate, or TURP, has largely been unchanged over the past hundred years. It remains our belief that today's standards have plateaued and that we can do better than the clinical outcomes from these standards. Just a few days ago at SRS 2026, we saw firsthand that robotic surgeons are beginning to not only understand the potential of TULSA clinically, but also recognize that TULSA is the only prostate treatment system that is MRI-guided.

TULSA is the only modality that offers the flexibility to treat the prostate gland regionally, meaning with whole or near-gland subtotal or focal ablation. The time for incisionless surgery has come. The most tangible evidence of this is that the new Society of Incisionless Surgery, or SIS, began its activities at SRS 2026 and Profound, HistoSonics and Insightec are among the most prominent founding members of the new society. And TULSA is the only modality that deploys supervised robotic autonomy, meaning it executes predetermined and/or AI-driven tasks independently.

This compares to all competitive so-called master-slave robotic systems that rely entirely on direct, real-time human hand movement and control. Today, so-called autonomous robotics enables surgeons to deliver consistent, highly personalized treatment based on each patient's unique anatomy and disease. In the future it may also give us an even stronger competitive advantage as incisionless surgery advances to its next frontier, including potentially telesurgery. With respect to MRI guidance, I would like to directly address what many of our competitors have tried to use as a knock against TULSA.

While it is true that as we first started commercialization, finding compatible MR available time and convincing urology and radiology to work together to adopt a TULSA program was a hurdle to climb, today TULSA is compatible with an installed base of about 5,000 MRIs in the United States and more worldwide, and that number continues to grow. It is therefore a lot easier to find an MR and justify TULSA, particularly with the economic proposition as its facility fee is already higher than that of any other treatment modality, and based on the proposed rule for 2027, the TULSA premium is only going to get higher.

Our relationship with MR companies also continues to expand as they see interventional MRIs as a growth opportunity for them too. And as we have talked about in the past, MRIs specifically designed for interventional procedures are now becoming commercially available.