EDAP TMS (FOCL) Q2 2024 earnings summary

Executive summary

• Achieved record worldwide revenue of EUR 15.8 million in Q2 2024, up 10.6% year-over-year, with strong U.S. Focal One HIFU procedure growth of 63% year-over-year and key placements at major cancer centers.

• HIFI study results presented at major conferences, showing Focal One HIFU is as effective as radical prostatectomy for localized prostate cancer, with better functional outcomes.

• Interim Phase 3 data for endometriosis program showed safety but did not meet the primary endpoint at three months; BPH program received French regulatory approval for Phase 1-2 trial.

• Leadership changes included the resignation of the Board Chairman, new appointments to the Board and commercial leadership, and expansion of senior management to support growth in Europe, Middle East, and Latin America.

• Converted two prior placements into full cash sales, validating the commercial strategy and technology value.

Financial highlights

• Q2 2024 worldwide revenue: EUR 15.8 million, up 10.6% year-over-year; H1 2024 revenue: EUR 30.7 million, up 5.6%.

• Q2 2024 gross profit: EUR 5.9 million; gross margin 37.5% (down from 39.6% year-over-year) due to product mix and higher acquisition costs.

• Q2 2024 operating loss: EUR 6.1 million; net loss: EUR 6.1 million or EUR -0.16 per diluted share.

• Cash and cash equivalents at Q2 end: EUR 30.2 million, down from EUR 43.5 million at 2023 year-end, mainly due to inventory buildup and capital investments.

• H1 2024 gross profit: EUR 12.3 million (margin 40.1%), nearly flat year-over-year; H1 net loss improved to EUR 10.7 million (EUR -0.29/share) from EUR 12.2 million (EUR -0.33/share) in H1 2023.

Outlook and guidance

• Sales pipeline remains strong and is expected to deliver a stronger second half of 2024, with Q3 and Q4 typically being higher volume quarters.

• Anticipates continued strong U.S. procedure growth and further adoption of Focal One, supported by positive clinical data and updated treatment guidelines.

• Expects improved gross margins in the second half as new vendor relationships reduce costs and HIFU volumes increase.

• Awaiting publication of HIFI study in a peer-reviewed journal, which is expected to drive further market adoption and reimbursement opportunities.

• Ongoing clinical programs in endometriosis and BPH are expected to support future growth.