Sensus Healthcare, Inc. (NASDAQ:SRTS) Q4 2025 Earnings Call Transcript

Sensus Healthcare, Inc. (NASDAQ:SRTS) Q4 2025 Earnings Call Transcript February 12, 2026

Sensus Healthcare, Inc. misses on earnings expectations. Reported EPS is $-0.19 EPS, expectations were $-0.055.

Operator: Good afternoon and welcome to the Sensus Healthcare, Inc. Fourth Quarter and Full Year 2025 Financial Results Conference Call. All participants will be in listen-only mode. To ask a question, press star then zero on your telephone keypad. After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Tirth Patel, with Alliance Advisors IR. Please go ahead. Good afternoon. This is Tirth Patel with Alliance Advisors IR. Thank you all for joining today’s call to discuss Sensus Healthcare, Inc.’s fourth quarter and full year 2025 financial results. Joining me from Sensus Healthcare, Inc. are Joseph C. Sardano, Chairman and Chief Executive Officer; Michael J. Sardano, President, Chief Commercial Officer and General Counsel; and Javier Rampolla, Chief Financial Officer.

Tirth Patel: As a reminder, some of the matters that will be discussed during today’s call contain forward-looking statements within the meaning of federal securities laws. All statements other than historical facts that address activities Sensus Healthcare, Inc. assumes, plans, expects, believes, intends, or anticipates, or other similar expressions, will, should, or may occur in the future are forward-looking statements. The forward-looking statements are management’s beliefs based upon currently available information as of the date of this conference call, 02/12/2026. Sensus Healthcare, Inc. undertakes no obligation to revise or update any forward-looking statements except as required by law. All forward-looking statements are subject to risks and uncertainties as described in the company’s Forms 10-Ks, 10-Qs, and other SEC filings.

During today’s call, references will be made to certain non-GAAP financial measures. Sensus Healthcare, Inc. believes these measures provide useful information for investors, yet they should not be considered as a substitute for GAAP nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP to GAAP results is included in today’s press release. With that, I would like to turn the call over to Joseph C. Sardano.

Operator: Joseph?

Tirth Patel: Thank you, Tirth, and good afternoon, everyone. Thank you for joining us today.

Joseph C. Sardano: Let me start by providing some context around our end-of-year activities and the wonderful news received from CMS. SRT and IGSRT are noninvasive technology that was exclusively designed, developed, and distributed by Sensus Healthcare, Inc. Our SRT technology has been awarded exclusive and dedicated CPT codes that provide physicians unequivocal and clear reimbursement for treating patients with nonmelanoma skin cancer. Let us be reminded that the American Academy of Dermatology states that one in five people in America will have skin cancer. After 16 years of relentless pursuit, these codes provide Sensus Healthcare, Inc. with a fresh start and a clear path forward for physicians and patients who continuously seek a noninvasive alternative to scarring and the lengthy healing times caused by surgery.

This demand for a nonsurgical choice is clearly becoming an increasingly popular choice of patients as they learn of their treatment options, as the Medicare statistics have indicated over the past several years. We begin in 2026 with new codes, $22,000,000 in cash on hand, zero debt, and a motivated sales force that we intend to expand during the course of Q1. As we continue to educate the physicians on these new reimbursement codes, we feel that adoption will grow steadily and continuously for years to come. You will notice that the 14 units we shipped in the quarter did not include any sales to our very large customer. Although we believe they will continue to contribute to our business in the future, our growth will come from direct sales and shared services with the end users.

We will no longer have to rely on any one entity. We also expect that our international business will continue to grow along with our primary U.S. market. For quite some time, two factors have weighed heavily on our business: customer concentration and the absence of reimbursement codes dedicated specifically to our technology. With CPT codes for our SRT and IGSRT technology to treat nonmelanoma skin cancer now being used, and with a more diversified customer base emerging, both of these factors have been addressed. Turning to our fair deal agreement program, this continues to be an important strategic component of our business. We ended the year with 18 active FDA sites and 10 additional sites pending activation. More importantly, utilization across the program increased substantially year over year.

During 2025, treatments were up more than eightfold versus 2024, and the number of patients treated increased by more than 250%. While the market was awaiting news from CMS regarding the codes, we responsibly advised our prospects and customers to place a hold on moving forward until the new codes were made public. All of our customers appreciated the honesty of us informing them of these developments. While the broader market was awaiting reimbursement clarity, in several cases FDA placements have served as a bridge to ownership, with customers electing to purchase systems outright once they did the math on purchase economics. International demand was strong in the fourth quarter, as we shipped six systems internationally, including shipments to China.

International sales continue to be attractive from a margin perspective due to lower installation, commissioning, and servicing requirements, and we expect international markets to remain an important part of our growth strategy. Looking ahead, we are encouraged by early activity in the first quarter 2026. Based on our current pipeline and customer engagement, we expect first quarter system shipments to exceed fourth quarter levels, even without any contribution from our historically largest customer. More broadly, 2026 represents a fundamentally different operating environment for Sensus Healthcare, Inc. With reimbursement certainty now established, a more diversified customer base, and expanding international opportunities, our objective is to achieve full-year profitability in 2026.

With that, I will turn the call over to Michael J. Sardano to discuss our strategic initiatives and commercial outlook in more detail. Michael? Thanks, Joe.

Tirth Patel: I will focus on how our commercial model is evolving

Michael J. Sardano: and how these changes position Sensus Healthcare, Inc. for sustained growth in 2026 and beyond. Reimbursement certainty and highly attractive economics have expanded adoption pathways for SRT. Small and mid-sized practices are increasingly evaluating outright purchases and fair market value leases, driven by rapid breakeven, flexible financing structures, and tax considerations. Customers now have multiple ways to adopt our technology. We are able to support fair deal agreements, ownership, renting, or leasing, depending on practice needs. Internationally, momentum continues to build. In addition to ongoing demand in China, we expect more diversification due to the opportunity created by our MDSAP certification.

International markets provide both growth and margin benefits and remain an important component of our long-term strategy. Taken together, these developments position Sensus Healthcare, Inc. to scale more efficiently with improved visibility, stronger economics, and a broader set of monetization levers than at any point in the company’s history. From a commercial perspective, we are taking a deliberate and disciplined approach to scaling our sales organization in 2026. We have already added one new sales representative and plan to hire an additional three to five reps as soon as possible. This expansion is focused on increasing market education and accelerating lead conversions as customers work through the reimbursement framework and evaluate the most attractive acquisition model for their practices.

In parallel, we have refined our trade show and conference strategy for 2026. Compared to prior years, we are placing greater emphasis on select national and regional meetings that consistently generate high-quality leads and decision-maker engagement, while reducing participation in lower-yield events. This more targeted approach allows us to concentrate resources on forums where purchasing decisions are actively being evaluated and where reimbursement clarity is now translating into actionable demand. Overall, due to the new CMS codes, Sensus Healthcare, Inc. is able to make these adjustments that allow for a more focused and efficient commercial model that balances an expanded market presence with operational discipline and positions us to efficiently convert interest into system placements as the year progresses.

I will now turn the call over to Javier for a review of our financial performance. Javier?

Joseph C. Sardano: Thank you, Michael, and good afternoon, everyone. I will review our financial performance for the

Javier Rampolla: fourth quarter and full year ended 12/31/2025, starting with our fourth quarter results. Revenues for the fourth quarter of 2025 were $4,900,000 compared with $31,000,000 in the fourth quarter of 2024. The decrease was primarily driven by a lower number of units sold, reflecting reduced sales to our largest customer, slightly offset by revenue recognized from new placements under our fair deal agreement program. Cost of sales for the fourth quarter were $3,000,000 compared to $6,000,000 in the prior-year quarter. The decrease was primarily related to a lower number of units sold, offset by higher cost of service and costs associated with placements under the FDA program. Gross profit for the fourth quarter was $1,900,000, or 38.8% of revenues, compared with $7,100,000, or 54.2% of revenues, in the fourth quarter of 2024.

These decreases were primarily driven by lower sales, higher cost of servicing systems, and costs associated with the new placements under the FDA program. General and administrative expenses for the fourth quarter were $1,800,000 compared with $2,400,000 in the prior-year quarter. The decrease was primarily due to lower professional fees and compensation costs. Selling and marketing expenses were $400,000 for the fourth quarter, remaining consistent with the prior-year quarter. Research and development expenses for the fourth quarter were $1,900,000 compared with $1,600,000 in the prior-year quarter. The increase was primarily due to higher product development costs related to the next-generation systems. Other income, net, was $200,000, remaining consistent with the prior-year quarter.

Net loss for the fourth quarter of 2025 was $3,200,000, or a loss of $0.19 per share, compared with net income of $1,500,000, or $0.09 per diluted share, for the fourth quarter of 2024. Adjusted EBITDA for the fourth quarter was negative $3,000,000 compared with $1,900,000 in the fourth quarter of 2024. The decline reflects a net loss in the current quarter compared to net income in the prior-year period. Turning to our full-year results. Revenues for 2025 were $27,500,000 compared with $41,800,000 in 2024. The decrease was primarily driven by a lower number of units sold, reflecting reduced sales to our largest customer, slightly offset by revenue recognized from new placements under the FDA program. Cost of sales for the year were $15,600,000 compared with $17,400,000 in 2024.

The decrease was primarily related to lower unit volumes, partially offset by higher cost of service and costs associated with the new placements under the FDA program. Gross profit for 2025 was $11,900,000, or 43.3% of revenues, compared with $24,400,000, or 58.4% of revenues, in the prior year. The decreases were primarily driven by lower sales volumes, higher servicing costs, and FDA program-related expenses. General and administrative expenses for the year were $7,900,000 compared with $7,100,000 in 2024. The increase was primarily due to higher professional fees, insurance costs, and compensation. Selling and marketing expenses for 2025 were $6,500,000 compared with $5,000,000 in 2024. The increase was primarily driven by higher trade show costs and increased payroll expenses associated with higher headcount.

Research and development expenses for the year were $7,800,000 compared with $4,200,000 in 2024. The increase was primarily due to significantly higher costs related to beginning code reimbursement efforts in 2025, as well as increased headcount and higher product development costs related to the next-generation innovation systems. Other income, net, was $700,000 for 2025 compared with $900,000 in 2024, related primarily to interest income. The net loss for 2025 was $7,700,000, or a loss of $0.47 per share, compared with net income in 2024 of $6,600,000, or $0.41 per diluted share. Adjusted EBITDA for 2025 was negative $9,600,000 compared with $8,700,000 in 2024. We ended the year with $22,100,000 in cash and cash equivalents, unchanged from year-end 2024, and no outstanding borrowings under our revolving line of credit.

We are delighted to have such a strong, clean balance sheet as we enter 2026. Prepaid inventory was $1,500,000 at year-end compared with $3,300,000 at 12/31/2024. Inventories totaled $14,600,000 compared with $10,100,000 in the prior year, reflecting inventory build in support of anticipated future demand. And lastly, as Joe mentioned, we expect Q1 revenues to exceed Q4 revenues, and we look to be profitable for full-year 2026. With that, I will turn the call back to Joe.

Joseph C. Sardano: Thank you, Javier and Michael, for those updates. Before we open the call for questions, I want to reiterate that Sensus Healthcare, Inc. is entering 2026 with greater clarity, better control over our business, strong customer economics, and more commercial flexibility than at any point in the company’s history. The new dedicated CPT codes for superficial radiotherapy significantly improve physician reimbursement and support broader adoption of our technology, while benefiting patients with certainty of coverage for noninvasive treatment options. Combined with a more diversified customer base and our expanding international opportunities, we believe Sensus Healthcare, Inc. is well positioned to deliver stronger and more predictable growth and improved operating leverage. We appreciate your continued support, and we look forward to reporting our progress throughout 2026. Thank you for joining us today. We will now open for questions. Operator?

Q&A Session

Operator: We will now begin the question and answer session. To ask a question, press star then one. If you are using a speakerphone, please pick up your handset before pressing the keys. To assemble our roster. The first question comes from Anthony V. Vendetti with Maxim Group. Please go ahead.

Tirth Patel: Good going, Javier? Hey, how are you? Hey, how are you?

Michael J. Sardano: Good. Good. Thanks. So I wanted to talk, so obviously, you know, major positive news with the new schedules. Started 01/01/26. 300% per fraction increase. And you did ship 14, eight in the U.S., six internationally, as you said, none to the largest customer. In your guidance of sequential growth in the first quarter, revenue growth, does that assume nothing from the largest customer? And as you think about 2026, are you expecting any orders from them, or should we look at any orders from the largest customer any quarter in 2026 as upside? Thanks.

Joseph C. Sardano: Thanks, Anthony. It is a good question. And as we put together our model for 2026, based on the new CPT codes, we made sure that we did not include any expectations from our biggest customer because of the fact that they have to really reevaluate their model moving ahead. So we did not know what they were going to do or how they were going to do it, but everything that we are going to be projecting for 2026 excludes them for the moment. And if there is anything that they can contribute, it will only make it better for us. So we are looking forward to 2026. We look forward to working with them in 2026 if the circumstances allow us to work together. But if not, we are very, very comfortable moving ahead with these CPT codes because it is a major, major impact for us.

Michael J. Sardano: Okay. And in terms of

Anthony V. Vendetti: CDI, do you have any update on that and where that is at, and do you expect to get FDA approval for that product sometime in 2026?

Joseph C. Sardano: Yes. TBI has been a long, tenuous program for us, and we are working closely with the FDA and continuing to work through this situation that they seem to lack an understanding. And so I do not know when that is going to happen, but we are going to continue to pursue it wherever we possibly can and see what we might be able to come up with. But it is an interesting dilemma right now for the FDA, and we will continue to pursue.

Tirth Patel: Okay.

Anthony V. Vendetti: And then maybe on the international front, can you talk about the demand outlook internationally and any particular country that would be a positive in 2026 or any concerns internationally in 2026? Yeah, great question, Anthony. I think I will take that one.

Michael J. Sardano: So China has been our bread and butter internationally for years. That still is the case. They are obviously the largest country outside of the United States to purchase something like this. In addition to that, I have seen firsthand Taiwan and how that has been growing. We have four or five installations there now over the last two years. Asia in general continues to adopt SRT technology. I know that South Korea is coming in. Japan eventually will trickle in with our MDSAP certification now. As soon as we get through all of the secondary regulatory hurdles from the MDSAP, you will start to see SRT coming in. But I know that there is tons of demand from Asia due to the keloid market. And additionally, we are holding out hopes for the Middle East as well.

That is starting to trickle in. And then India, and then, of course, South America, Brazil, where we are still working right now on our regulatory, the secondary regulatory, and we expect to get Brazil clearance this year. So we are very excited to finally take a step into South America as well.

Anthony V. Vendetti: Okay. And, yeah, historically, obviously, Brazil is a pretty large market. Okay. Good. Good. I appreciate all that color. I will hop back in the queue. Thanks.

Michael J. Sardano: Thanks, Anthony.

Operator: The next question comes from Benjamin Charles Haynor with Lake Street Capital Markets. Please go ahead.

Joseph C. Sardano: Good afternoon, gentlemen. Thanks for taking the questions. Hey, how are you doing?

Operator: Doing great. Living the dream.

Tirth Patel: So just to start off for me, any more color you can

Operator: kind of add to the reaction that folks have had to reimbursement in terms of what you think it does to system mix, SRT versus IGSRT?

Joseph C. Sardano: And then also kind of FDA versus sale versus

Operator: other financing options?

Javier Rampolla: Good question, Ben.

Joseph C. Sardano: I think that we are going to see a couple of tendencies shift here. Number one, the FDA still remains a priority for all of the private equity-backed roll-up groups because that is just the way they would prefer to do business. However, they still are contemplating how they want to get into the market, considering whether it is a fair deal agreement, which is a shared service program, or if they want to enter into some kind of a leasing program, which we will be able to provide them. Clearly, the single customers, the customers that I would say are anywhere between one to 20 centers, the smaller centers, which is, quite frankly, what we had not what our bigger customer was working with, we are seeing a much stronger influence regarding the actual purchase of the equipment or actually going to a lease.

With the reimbursements as they are and with the reimbursements guaranteed as they are, they are not in the tendency of wanting to share revenue. They want it all. And I do not blame them. Especially the bigger users are going to want to keep all the money and be more reluctant to split the volumes with anybody.

Benjamin Charles Haynor: Okay. And then when it comes to the product mix,

Joseph C. Sardano: the product mix, because there is, we still have an opportunity on the ultrasound side, even though there is only one code that reimburses for the ultrasound. But we see more of a tendency to work with the SRT-100 product, and the customer acquiring a handheld ultrasound device to give them the one code that they are going to have reimbursement for. So it is a cost saving for the customer overall. And quite frankly, it is much better margin for us as well.

Javier Rampolla: Okay. Got it. And then just

Joseph C. Sardano: any change to the level of interest that you have seen from the private equity-backed groups just given the more certainty for reimbursement going forward? We have talked to pretty much all of them, and they are very seriously reevaluating how they want to acquire it. And we are seeing more interest in some of the other groups that were not necessarily involved in looking at the device for skin cancer. But now it is hard to say. But quite frankly, on average, the reimbursement that we are getting from the CPT codes that we have been given actually pays more than most, more than

Benjamin Charles Haynor: Yeah.

Michael J. Sardano: The demand across the board, just to add color to Joe, demand across the board is more clear. People have, in general, in the past with gray-area type codes, always been on the fence or not, and then they wait and they wait. Now, it is black and white total. It is just a much easier environment to work with.

Tirth Patel: With black and white coding, and it is just a matter of us getting

Michael J. Sardano: the loudspeaker out there and getting that out there to make sure that everyone understands that going forward. And we have not had enough time to do that yet. It just started 01/01/2026. And Q4, which we are announcing right now, obviously had the leftovers of how we were built in general with the old world. Now it is kind of like a brand-new company again. And we can push from there. We already have the inventory paid for and no debt.

Tirth Patel: Got it. And then on Sentinel 2.0,

Operator: how is that coming along? And then remind me, is that something that you guys are going to keep for yourself with the FDA program or maybe leasing? Or does that get rolled out more broadly?

Joseph C. Sardano: I think we are looking at a more broad rollout for it, and I think that we will see these things rolling out in the near future. So it is exciting for us. It is coming out at the right time, and you will hear more about it in the future.

Javier Rampolla: Got it. And then last one,

Ben Haynor: on service revenue, how do you see that this year? I know that, obviously, the former largest customer has quite a few units out there that will need service at some point. What is the right way to think about that line?

Javier Rampolla: So service revenue still is about 10% of the total revenue for the company.

Ben Haynor: You do not see that

Javier Rampolla: No. No change.

Ben Haynor: Okay, great. Well, thanks very much, gentlemen. Thanks, Ben.

Operator: Those are all the questions we have for today. I would like to turn the conference back over to Joseph C. Sardano for any closing remarks.

Joseph C. Sardano: Well, I would like to thank everyone for joining us today, and we look forward to updating you on our progress in the quarters ahead. If you have additional questions following the call, please feel free to reach out to our Investor Relations team. Thank you again for your time and continued support of Sensus Healthcare, Inc.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.