[Management View]
Sensus Healthcare reported a decline in system sales to 16 units in Q3 2025, with gross profit and margin also decreasing. The company highlighted the approval of new CPT codes for superficial radiotherapy (SRT), which increased reimbursement rates by over 300%. Management emphasized ongoing FDA program momentum and international expansion efforts, with shipments to China and a focus on reaching 1,000 systems globally by 2026.

[Outlook]
The company expects the new reimbursement codes to stimulate system sales and utilization across existing and pending accounts. Sensus is investing in R&D for the Sentinel 2.0 platform, with initial enhancements expected in 2026. International market penetration is underway, with a target of up to 20% of revenue from international markets over the next 12-24 months.

[Financial Performance]
Revenue for Q3 2025 decreased to $6.9 million from $8.8 million in Q3 2024, primarily due to fewer units sold to a major customer. Gross margin dropped to 39.1% from 59.1% in the previous year. The company reported a net loss of $900,000 compared to a net income of $1.2 million in Q3 2024. Adjusted EBITDA was negative $2.4 million, down from positive $1.6 million a year ago.

[Q&A Highlights]
Question 1: What has been the impact of LCD reimbursement on your ultrasound-guided SRT system this quarter, and what are the utilization trend metrics?
Answer: The reduction in ultrasound utilization by CMS was offset by a 300% increase in fractionation reimbursement codes. Utilization increased by 20% from Q2 to Q3 2025, with a 152% year-to-date increase.

Question 2: As we move into Q4, what factors might accelerate placements in the US outside of the large customer?
Answer: There is pent-up demand due to previous order halts. With guaranteed reimbursement codes starting January 1, there is expected aggressive marketing and customer interest, potentially leading to breakeven or profitability in Q4.

Question 3: Will there be a shift between SRT 100 and SRT 100 Vision due to reimbursement changes?
Answer: There may be an uptick in SRT 100 sales, but the Sentinel 2.0 program will provide Vision-level capabilities to SRT 100 users, maintaining the Vision product's market sustainability.

Question 4: How will the new CPT codes impact utilization and purchasing behavior?
Answer: The new codes will likely increase sales of the lower-cost SRT 100 unit. The FDA program remains viable, and the codes ensure strong ROI for equipment, benefiting both FDA and direct purchase models.

Question 5: What is the anticipated ramp for international sales, and how should margins be modeled?
Answer: International sales are expected to gradually increase, with a target of 20% of total revenue from international markets within 12-24 months. The Vision product is gaining traction internationally, particularly in Asia.

[Sentiment Analysis]
Analysts expressed interest in the impact of new reimbursement codes and international expansion. Management was optimistic about future growth, emphasizing strategic positioning and market opportunities.

[Quarterly Comparison]
| Metric | Q3 2025 | Q3 2024 |
|-------------------------|---------|---------|
| Revenue | $6.9M | $8.8M |
| Gross Margin | 39.1% | 59.1% |
| Net Income (Loss) | -$900K | $1.2M |
| Adjusted EBITDA | -$2.4M | $1.6M |
| Units Sold | 16 | 27 |

[Risks and Concerns]
The company faces risks from revenue decline due to reduced sales to major customers and gross margin compression. Operating expenses have increased, driven by higher selling, marketing, and R&D costs.

[Final Takeaway]
Sensus Healthcare is navigating a challenging financial landscape with strategic initiatives focused on leveraging new reimbursement codes and expanding internationally. The approval of dedicated CPT codes for SRT is a significant milestone, expected to drive future sales and utilization. Despite current financial setbacks, the company is well-positioned for growth, supported by a strong cash position and no debt. The ongoing development of the Sentinel platform and international market penetration are key components of Sensus's long-term strategy.