Hyperfine Stock

Good afternoon and welcome to Hyperfine's second quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. Following management's prepared remarks, we will open the call for questions. As a reminder, this call is being recorded. I would now like to turn the call over to... Campbell from Gilmartin Group for Introductory Disclosures.

Thank you for joining today's call. Earlier today, HyperFind, Inc. released financial results for the quarter ended June 30th, 2026. A copy of the press release is available on the company's website as well as sec.gov. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements. within the meaning of the federal securities laws and made pursuant to the safe harbor provision of the private security litigation reform act of 1995. any statements contained in this call that relate to expectations or predictions of future events results or performance are forward-looking statements all forward-looking statements include without limitation, those related to our operating trends and future financial performance, expense management, market opportunity, commercial and international expansion, regulatory approvals, and product development are based upon our current estimates and various assumptions. that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risk and uncertainties associated with our business, please refer to the risk factors section of our list. latest periodic filing with the Securities and Exchange Commission. This conference call contains time-sensitive information and is accurate only as of today's live broadcast.

Hyperfine Inc. disclaims any intention or obligation except as required by law to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. With that, I I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Good afternoon and thank you for joining us on the call with me today is our chief administrator, Administrative Officer and Chief Financial Officer Brett Hale. The second quarter was another strong quarter for HyperFind as we continue to execute across our commercial, operational, and financial priorities. Second quarter revenue was $3.9 million, our second highest quarter ever, up approximately 45% year over year, bringing our first half revenue to $7.8 million, We sold 12 systems in the quarter, up 50% year over year, with a majority of placements coming from our next generation system and a high percentage of international sales. We also delivered our fourth consecutive quarter of gross margin above 50% and improved our cash burn both year over year and sequentially. Mid last year, we launched our next generation subsystem powered by Optis AI and entered the neurology office market. refer to this next generation version of the subsystem as model 2. At the time of launch, we believed improvements in image quality, expanding clinical utility, a growing body of real-world evidence, and a broader, more diversified commercial strategy could unlock meaningful growth opportunities across hospitals, offices, and international markets. One year later, we have accumulated important proof points supporting that thesis.

We have broadened adoption across sites of care, increased IDN engagement, entered new geographies, expanded our clinical evidence, strengthened our balance sheet, and improved the financial profile of the business. As a result, we are now more focused on translating this stronger foundation into broader commercial scale. With our strong execution in the first half of the year, we are reiterating our full year of 2026 revenue and cash burn guidance and remain confident in our growth, margins, and long-term opportunities. Market demand remains healthy, and we are driving growth across our three verticals. Hospitals, including our growing presence in health systems. neurology offices, and international markets. I will now walk through updates from each of these businesses in more detail. The hospital market remains our largest commercial vertical and an important source of clinical and commercial validation.

Over the past year, the subsystem has moved beyond niche use in critical care toward broader platform utility across critical care, emergency departments, and hospital-based clinics. with emerging use in neurological workflows and mobile deployment models. Hospital programs launched over the last few quarters with the model tool-suit system have reported high utilization, increased the scan volume, and meaningful clinical, workflow, and economic benefits. This broader utility and strong utilization matter because they support repeat deployments, deeper health system engagement, and enterprise level adoption over time. We have made progress with large health systems and IDNs. In recent months, we have sold Model 2 systems to several new health systems, including an initial placement within one of the largest national IDNs in early July, while also expanding beyond the first size within other health systems during the second quarter. As hospitals enter their first full capital planning cycle since the Model 2 launch, our hospital pipeline is increasingly supported by clinical evidence, economic validation, and more strategic IDN-level conversations. Expansion into emergency departments has been a priority in 2026.

Prime data presented at SAEM 2026 meeting provided compelling evidence to support the use of the soup system to triage patients in DED. Prime showed that portable MRI reduced the median order to scan start time in the ED from 7.76 hours for conventional MRI to 1.28 hours with portable MRI. faster access to imaging can help hospitals reduce workflow bottlenecks, support more timely clinical decision making, and integrate MRI more easily into easy workflows where conventional scanner availability can be constrained. These proof points and near-term catalysts give us increasing confidence in hospitals and IVNs as a durable growth engine supported by the success of initial programs, clinical evidence, and economic validation. We are seeing a different but complementary opportunity develop in neurology offices, where SOSU's system can bring imaging closer to patients and reduce friction in the care pathway. Our office market continues to develop into a distinct growth vertical supported by utilization, reference site development, patient preference, and ease of access to imaging. We have now placed the subsystem in over a dozen offices since launch, supporting the office ecosystem. value proposition. Office staff have been able to operate the system without an MR technologist underscoring its ease of use.

Federal offices also report very high scan volume. Also, we continue to see increasing interest from adjacent use cases, including dementia screening applications, as well as from concierge and wellness practice models seeking convenient, closer-to-patient imaging. Our neuro-PMR data supports this opportunity. 92% blinded concordance with conventional MRI identifying pathology, rising to 98% with clinical history, and patients four times more likely to choose portable MRI. Our planned expansion to add contrast to our labeling is expected to be an important catalyst for the office vertical by broadening clinical utility and supporting additional use cases with established reimbursement under dedicated contrast-related CPT codes. These proof points give us increasing confidence that the office market can, over time, become a meaningful second U.S. growth vertical supported by utilization, patient preference, ease of use, and planned contrast labeling expansion. Beyond our U.S. hospital and office opportunities, we're also beginning to build a stronger international foundation. Following CE and UKCA mark approvals earlier in 2026, our Model 2 subsystem is now commercially available in Europe and the UK, and we sold the first two Model 2 systems in the quarter.

We expect to advance the European rollout of the Model 2 system with our distribution partners in the second half of 2026. In France, inclusion of Model 2 in the Uni-Acha procurement listing creates a more efficient purchasing pathway across French public hospitals, And in India, following CDSCO approval of Model 1 late last year, AIM-CU Delhi became our first India deployment serving as a high-profile clinical reference site in the region. These milestones give us increasing confidence in international markets as an emerging growth vertical with regulatory approvals, initial sales, procurement procurement access, and reference sites, creating a stronger foundation for broader execution. We are pleased with our diversified commercial profile and the progress made in each of the verticals. We continue to invest in product and software capabilities that can expand the SWOOP system's clinical utility across existing and new sites of care. Looking ahead, software remains a key driver of the SWOOP system as a continuously improving AI-enabled platform. We expect our next software release later this year, building on our cadence of frequent software-driven enhancements that improve image quality, clinical utility, scan speed, workflow, and user experience.

We're making good progress on a plan to extend labeling to include brain MRI with contrast. Enrollment in contrast PMR is approximately 75% complete, and the study is progressing well. continue to target an FDA submission by year-end 2026 to support an expansion of our labeling to include gadolinium-based contrast agents. In addition, we see early interest in neurosurgical workflows and mobile deployment models, both of which reinforce the broader platform potential of the subsystem beyond traditional fixed-site imaging. In surgery, a newly formed advisory board and the operational team of the National Center operating room pilots are evaluating the potential for portable MRI to support immediate post-procedure assessment, while mobile models could extend access to brain imaging across distributed care settings where conventional MRI availability is limited. These initiatives reinforce our view of the soup system as a scalable, AI-enabled platform with increasing chemical utility and multiple future growth catalysts. With that, I will turn the call over to Barrette to review our financial performance and guidance.

Thank you, Maria. I'll recap our financial results for the second quarter of 2026 before providing an update on our guidance. Revenue for the second quarter of 2026 was 3.9 million, compared to 2.7 million in the second quarter of 2025, representing an increase of 1.2 million, or approximately 45% year over year, and modestly above the first quarter of 2026. First half revenue was $7.8 million compared to $4.8 million in the prior year period, an increase of $3 million, or approximately 62%. In the second quarter, we sold 12 units compared to 8 units in the prior year period, an increase of 50%. half, we sold 22 units compared to 14 units in the prior year period, an increase of approximately 57%. Gross profit for the second quarter of 2026 was $2 million, compared to $1.3 million in the second quarter of 2025. Gross margin was 50.7% compared to 49.3% in the prior year period, representing approximately 150 basis points of gross margin expansion. This is our fourth consecutive quarter with gross margin exceeding 50%, and we believe we are well positioned for meaningful margin expansion over time as we scale.

R&D expenses for the second quarter of 2026 were $3.9 million compared to $4.5 million in the second quarter of 2025, a decrease of approximately 15%. We continue to realize the benefits of the reorganization completed in the first quarter of 2025, while focusing our R&D investment on the highest priority product and software initiatives that support commercial growth. Sales, general, and administrative expenses for the second quarter of 2026 were $6.6 million compared to $6.4 million in the second quarter of 2025, an increase of approximately 3%. We operate with one US sales team covering both the hospital and office market opportunities and are focused on driving sales productivity and operating leverage. Net loss for the second quarter of 2026 was $9.3 million, equating to a net loss of $0.09 per share, compared to a net loss of $9.2 million, or $0.12 per share, in the second quarter of 2025. The second quarter of 2026 net loss included a $0.6 million non-hash loss from the change in fair value of warrant liabilities, No meaningful comparable impact in the second quarter of 2025. Net cash burn excluding financing in the second quarter of 2026 was $7.9 million compared to $8.1 million in the second quarter of 2025, an improvement of $0.3 million or approximately 3%.

First half net cash burn excluding financing was $16.6 million compared to $18.2 million in the prior year period, an improvement of $1.6 million or approximately 9%. We remain focused on reducing cash burn through disciplined spending and improved operating leverage in 2026. As of June 30, 2026, we had $43.5 million in cash and cash equivalents on our balance sheet, an increase of $2.7 million during the quarter. This increase reflected $10.6 million of net proceeds raised through our ATM program at an average price of $1.52 per and for share, strengthening our balance sheet and supporting our cash runway. With a stronger financial position, we remain focused on converting our commercial progress into sustained revenue growth, gross margin expansion, reduced cash burn, and improved operating leverage. As we continue to scale, quarterly revenue may be influenced by placement timing, customer purchasing cycles, and geographic and product mix. Over time, we will continue to measure our progress through install-based expansion, sustained revenue growth, gross margin expansion, and a more scalable commercial model.

Now turning to guidance. We continue to expect full-year 2026 revenue of $20 to $22 million, representing year-over-year growth at the midpoint of approximately 55%. Our confidence in the second half outlook is tied to identifiable drivers, including continued adoption of our Model 2 SWOOP system, hospital and IDN conversion, health system capital planning cycles, office adoption and utilization, international launch execution, clinical and health economic evidence, and product catalyst. We continue to expect gross margin to be in the range of 50 to 55 percent for the year, supported by four consecutive quarters above 50 percent. Three drivers supporting this range are already visible in our results, including increasing scale, a strong value proposition, service revenue growth, and disciplined commercial execution. We continue to expect total cash burn to be in the range of $26 to $28 million for the full year 2026, representing approximately a 10% year-over-year decline at the midpoint, inclusive of our debt service payments. Lastly, we continue to expect our cash runway to extend into 2028, supported by a strengthened balance sheet, improved cash burn, and a commercial plan built on identifiable growth drivers. The debt facility we entered into earlier this year also provides additional financial flexibility.

This positions us to execute against our commercial growth plan while maintaining our disciplined approach to operating expenses and capital deployment.

I will now turn the call back to Maria for closing comments. Before we open the call for questions, I would like to leave you with a few key takeaways. First, hyperfinance financials stronger than it was a year ago, supported by revenue growth, sustained gross margins above 50%, lower cash burn, and a strengthened balance sheet. Second, the launch of the Model 2 system is gaining traction. Over the past year, we have expanded utility and grown adoption across hospitals, offices, and international markets, and strengthened clinical evidence. Third, we are seeing early validation of our enterprise health system strategy through increased IVN engagement and initial large system adoption. Fourth, the office market continues to develop into an attractive growth opportunity supported by utilization, evidence generation, and planned contrast labeling expansion.

And finally, we have multiple catalysts ahead, including Model 2 international rollout execution, the next AI-enabled software release, contrast PMR enrollment completion and FDA submission, and overall broader commercial expansion. I'm proud of what the team has accomplished over the past year, and we remain focused on disciplined execution as we enter the second half of 2026.

Operator? At this time, I would like to remind everyone, in order to ask a question, press start then the number one on your telephone keypad. We request to limit yourselves to one question and one follow-up. We will pause for just a moment to compile the Q&A cluster. Your first question comes from the line of Frank Takinen with Lakes Root Capital Markets. Your line is open.

Hey, this is Nelson Cox on for Frank. Thanks for taking the questions. I wanted to start with guidance a little bit. In the past, you've talked about budgetary cycles for the IDN initiatives and the back half kind of lining up with that. So you have $7.8 million on the board in the first half, and then the guidance assumes around $12 to $14 million in the second half. I guess when you built that, how much assumes second quarter and third, or how much assumes second and third sites at competition? kind of those existing IDNs versus first placements at new ones. I guess, just trying to understand how much of the ramp is repeat, kind of add-on orders that existing.

IDNs versus completely new ones. Thanks. Sure, Nelson. Thanks for the call, for the question. So there is an element, there are several elements built into how we're looking at the second half over the first half and definitely on the hospital side there is subsequent placement in some of the IDNs in which we have opened and Across all hospitals, there is an effect of the budgetary sort of new year starting, the July sort of to June cycle, which wasn't available to us when we introduced model to sort of at the midpoint of last year, but there's also the continued rollout of the office business, as well as other things that we're doing with the new software coming to the market in the second half, some of the pilots we're doing around neurosurgery and mobile. So I would say there are all of those layers that just keep adding to what we have built in the first half. The first half was a significant step up, but we're expecting more of that in the second half. And I think overall we do have these identifiable catalysts. They're not just about the hospital business or just around the IDN.

Got it. Very helpful. And then maybe on the office business, as you've gotten a few more quarters of experience with practices and of different sizes, maybe talk about how you're thinking about offering. Is there still going to be an offering for the Model 1 versus the Model 2 with maybe the Model 1 being more of a fit for smaller practitioner practices?.

at maybe a lower price point or how are you thinking about that? So we've mentioned segmentation and clearly the call point has segments and they are very much based on the number of practitioners and with that the volume that they drive. We have seen that our initial adoption, I think we mentioned in the prepared remarks that we are in over a dozen offices since we launched. has translated more into the larger offices that have greater volume, that have been able to support the Model 2 and are very excited about the capabilities of the Model 2 today and into the future. In the last year, we've done a few Model 1 placements, but I would expect that there will be more Model 2 in the offices that have the larger volume and also the opportunity to have contrast in our indications for use in relatively short order. We'll support additional cases in larger offices and the ability for those offices to use the dedicated CPT codes for contrast brain MRIs, which also pay higher. So all of that would create an economic picture for the office.

that one going forward. Very helpful. Congrats on the progress guys, thank you.

Oh, thank you. Your next question comes from the line of U1Z with B-Riley Securities. Your line is open.

Hi, good afternoon. Congrats on the quarter. This is Liwen Wen from B. Reilly for UNZ. So for the 12 commercial systems, so during 2Q, do we have more color on the breakdown between hospitals, neurology office, and international placement? And do we see the neurology office channel become a meaningful contributor? given it's been roughly a year since the Next Generation Soup launch?.

Thanks for the question. This is Brett. I'll address the first part of that question in regards to the 12. Well, the comment on is just much like last quarter. We had a broad distribution from all of our verticals. So we had placements that came from international the office as well as the hospital. So we We had placements that cut across all three. One thing that we highlighted in the prepared remarks is the higher percentage of international mix for this quarter, but we did have a contribution that cut across all of them.

The way we're thinking about each one of them is there's growth opportunities in each one of the segments. So we do see the office being a contributor to the growth in the second half of the year and beyond, given all the catalysts that Maria had mentioned.

Thank you. Thank you. I would now like to turn the call back over to Maria Sainz for closing remarks.

Well, thanks all for joining us today. We look forward to continue to update you in future cycles. Thanks very much and have a great evening.

Ladies and gentlemen, that concludes today's call. Thank you all for joining Humano-Disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Good morning, everyone. Welcome to the Jefferies Healthcare Conference. My name is Chris Thomas with the Jefferies Healthcare Investment Banking team. It is my pleasure to introduce Maria Sainz.

Thank you, and thank you for the opportunity to share the Hyperfine story here this morning. Quickly cover our disclosures and move into how I want to kick off really the presentation this morning, which is what I would call the state of Hyperfine as we advance in our mission to expand MRI with our very novel portable brain MRI technology.

Reporting freshly off of Q1, which was a really strong start for the year for us, about a $4 million quarter and 83% year-on-year growth, strong expansion in gross margin as well. Over 50% reduction in cash flow and really ended up the quarter with a healthy balance sheet north of $40 million. More importantly is really our track record on execution. First, we need to continue to drive sort of the R&D improvements to render the product more and more clinically relevant and valuable. So expanding the clinical utility, reporting on yet another FDA clearance for the latest generation of software.

We're also keen on geographic expansion and happy to report on CE and UKCA approval of our second-generation system with its Optive AI software, as well as a great milestone in getting approval through CDSCO, which is a regulatory body in India. We have also reported on placing the first system there at the flagship institution in New Delhi at AIIMS.

And last but not least, the strengthening of the clinical data that really continues to drive the clinical value and the economic impact of our technology with data readouts on stroke with a SVIN paper, as well as clinical utility in the neurology office space with the NEURO PMR data set.

A very important initiative for us here in 2026 is the journey we've undertaken to get to an expansion of our indications for use to include contrast brain MRI exams. We're right now in the conduct of a small clinical study that will be the basis for FDA submission that will happen later this year, and we are reporting on a really healthy pace of enrollment in that study, which is contrast PMR.

Our outlook for the year guidance is a really significant step-up in revenue, $20 million to $22 million, expansion in gross margin, 50% to 55% reduction in cash burn in '26 to '28 and really with that, a cash outlook and a cash sort of runway through the beginning of 2028. How we really look at our business now today is really a derisked platform. It is the first in its category. It's a very diversified sort of revenue opportunity across 3 business verticals, and I'll cover those in a little bit more detail later in the slides, the U.S. hospital business, the U.S. neurology office business and international markets. It really is the continuation of our R&D execution, as I say, to drive broader and broader utility, clinical utility of our technology, which is now established diagnostic value.

And then I'll also start teasing you all into really what we think we have built here that gives us the right, the opportunity to play in building a business that will be much larger than just portable brain MRI in the relatively short term. So we have not reinvented MRI. What we have transformed is the delivery of MRI using a pretty bold technology, which is a fraction of the field strength of conventional MRI. We operate at 64 millitesla and conventional MRI is either 1.5 or 3 tesla for the most part in the ones that are used for clinical use. From a research perspective, they go up in tesla as well.

What have we done in this transformation? What we have done is really address the bottlenecks that make MRI not as readily, easily, affordably accessible to the global population as a whole. So we have technology that does not require dedicated MR technologists to operate. We have developed technology that does not require dedicated facilities that are shielded and reinforced to operate. We can move it to where the patient needs it, so we can go to the point of care. And with that, we significantly shorten the time, the time to the MRI as well as actually make it very versatile in the sites of care where you can get your MRI.

So this is how we look at our market. We look at our market based on the sites of care where people today do not readily easily get MRI and could and should because that would bring terrific clinical and economic value to the clinicians, the patients and the providers. We are right now calling on the middle of this chart, which is that $6 billion opportunity that is U.S. TAM alone. And that takes into consideration the different call points inside the hospital, critical care units, emergency rooms, neurology departments and neurosurgery and also the neurology offices that are not affiliated with the hospital. That in the U.S. alone is about a $6 billion market.

What's more important is to really think about the conditions for which clinicians use a brain MRI. And those are actually primarily neurodegenerative conditions and on an acute basis, primarily stroke. Those are very, very large TAMs on their own as well. We would argue that not as many patients that suffer strokes are getting treated, we help with the triage of stroke. We would argue that patients do not get triage for dementia early on to be able to affect the course of the disease early on, and we touch on the ability to detect dementia early. So not only is it a very large TAM from a site of care perspective, it's a really compelling TAM when you think about the kind of disease states that our technology is able to influence positively.

So this is what I would like to call the new phase of MRI. It's an MRI on wheels that really moves around the hospital through doors and elevators. There is a joystick that allows it to drive at a decent pace through the hallway. The operation is very, very simple so that any health care professional can use it. The user interface is off of an iPad, and it's pretty much plug and scan. The images immediately come on the iPad, but they also, of course, are seamlessly integrated into the workflow for radiology. So they are uploaded into the PAC system and our equipment will take orders directly from electronic medical records.

So this is really where the transformation has happened. Anyone can use it. It can be used anywhere and the images are pretty much immediate, but they're also seamlessly integrated into the workflow in the hospital setting. So as a company, we've been around for a little over 10 years, and I'm going to talk about 2 phases of our company. The first phase, which was one of really building a solid foundation for the company. And the second one, which is the one that we started about a year ago, and that was when we crossed the chasm in terms of introducing the next-generation scanner and system, which is ready for broad-based adoption and also diversified our business by adding the vertical of the neurology office.

So let me walk you through some of the fundamentals that were built through the first phase of the company. Highly proprietary technology, over 200 patents, also over 200 sites that are actively using our system clinically and on a research basis and about 250,000 images that will come in very important to drive really our ability to help our sequence development with AI and learning from that body of data.

The product category is strong. The labeling -- so first of all, it's a 510(k) product. The labeling is very broad. It is not tied to any condition. It is basically brain imaging for patients of any age and reimbursement is in place. In the outpatient setting, our system and exams performed with our system are reimbursed using the same CPT code 70551 that a conventional MRI for a non-contrast MRI utilizes. So very, very strong fundamentals that way.

We have been on a journey of fast iteration. I would say we're a fast iteration machine. It's all been primarily through software and AI. We are on our 11th and working on our 12th generation of software. We have only had 2 generations of hardware, Model 1 and Model 2.

Moving on to the chasm that we crossed. A year ago, pretty much a year ago, we received FDA clearance for our Model 2 next-generation system, and we also made a conscious effort to really launch into a new business vertical with a neurology office. What is in Model 2? Model 2 has actually taken all of the learnings from our 5 years. Model 1 was first cleared by FDA in 2020 in terms of what the physician expected, what the patient experience, and how to continue to drive clinical utility of our technology, even though we utilize a very low field magnet.

We have not changed the field strength. We're still operating at 64 millitesla. We have now image quality approaching that of conventional MRI. We also have some critical components in the way we've thought about some of our proprietary technology around the electronics and the magnetics in our technology that gives me high confidence that our journey of image improvement and expansion of clinical utility is going to be accelerated through this second-generation platform. It is a more patient-friendly also device as we have slightly changed it so that the patient experience is more open and the patient really feels like they are not in a constrained chamber like they are on the conventional MRI.

And we also took some feedback from clinicians that wanted the device actually to move a little faster through the hallways to go from point of care to point of care and help patients in different locations. So as we look at where we are now with this second generation, we've seen incredible market activation. We have seen radiologists now tell us that we are at that very, very close level to conventional MRI for image quality, which is the best supplement anyone can make because the fact that the technology is portable is cool and it's definitely valuable. But if you do not produce diagnostic quality imaging, it doesn't really matter. And that was incredibly important. The market is telling us that.

We're also seeing the traditional call points, so neurointensivists, stroke neurologists want to actually use it more, and we have data that shows that our utilization at existing accounts has increased very significantly. We're also seeing other use cases come up to us. Neurosurgery, that is not an area where we have traditionally called on, and now there are neurosurgeons wanting to bring this technology because it is possible to bring this technology into the OR without interference for an immediate post-op check, which provides a new potential use case that is very attractive for us.

The fundamentals are strong. I said we have 200 sites by now. We have scalability. We use a contract manufacturer that we have partnered with for the last 10 years that is able to really drive the production of this to the levels that would make this business extraordinarily attractive with pretty much low capital investment and just manpower. And as we have seen the ability to drive phenomenal image quality, that is what has really had us think about where else would we take. So thinking about our technology as a platform play as well.

So image quality. This is where the money is, and this is the proof. This is right one case out of our neuro PMR study where we were comparing our 64 millitesla images with 3 tesla images. We're talking about 40x less strong of a magnet in our case than the conventional. And you see really, really well, even if you are not a trained radiologist, the close proximity of the images between our images and the 3 tesla magnet in detecting the pathology. The results of this study were that we had 98% concordance in the readouts between our ultra-low field system and the conventional systems that were used, which for the most part, were 3 tesla, but there were some that were also 1.5 tesla.

So how do we get there? So we get there a variety of ways, but we also get there with the help of AI, and that's where those 250,000 images come in very valuable and helpful for our development efforts. We get there through sequence development, software development and AI. AI serving two purposes, one that is really important in MRI, which is noise cancellation, denoising of the images so that the artifacts can be removed. And the second one is with processing. We are not creating -- this is not synthetic MRI. It is processing of the images to actually render them more sharp and higher resolution.

And we actually rank really nicely high in the list of FDA publishes of the highest -- the largest number of AI-powered technologies that different manufacturers have gotten cleared through them. So that's sort of a proud record for us being a relatively small company. So over the course of our history, we've really developed this more diversified revenue and growth profile with 3 business verticals. Most of our business started being just a U.S. hospital business, and it was very much actually just intensive care units, making a case that it was significantly better from a risk to the patient, cost to the system, burden to the staff to bring the MRI to the patient and to take those critically ill patients down usually to the basement for a conventional MRI.

As our technology improved in clinical utility, as our sequence development made the technology be used for more things we've seen a progression across multiple sites of care in the hospital. So the hospital went from just critical care to now also neurology clinics as well as emergency rooms, and we have our eyes on neurosurgery, so the ORs and the angio suites, but then we added the opportunity to play internationally. So we started our international business with the help of distributors, and I'll talk about that in a little bit more. And then as I said, a year ago, mid-2025, we introduced our neurology office business, where the value proposition is slightly different as it relates to neurology offices, and I'll cover that in a little bit more detail.

These three business verticals are fueled by the improvements in technology. So they are not only incremental. They don't cannibalize each other, but they also get significantly accelerated with the adoption of the second-generation technology.

So I'm going to start with the hospital. And first and most important since that is our longer-standing business is to talk about really the transformation I have personally witnessed, I have been running the company for 3.5 years and really the feedback from the hospital business, the radiologists, the neurointensivist, the stroke neurologists around our technology. It is in a short summarized way, it's ready for prime time. It is ready for prime time. I have seen our best center we started working with 4 years ago, get to 1,000 cases in 4 years. We have -- the first center started working with the second technology is going to get to 1,000 cases in less than 1 year.

The traction around utilization, utility, using it across different sites of care is like anything we have seen. We have been working with hospitals individually for as long as we've been commercial. The talk is now no longer at the individual hospital level. The talk has elevated to the system level and the IDN level. And actually, most -- I think the data shows that about 70% of all hospitals in the U.S. belong to a system or an IDN. We're immediately getting into a conversation about what does IDN system-wide deployment look like. And very often, in the conversations with individual hospitals, we're no longer talking about, let me see, let's buy one and try it out.

We're talking about we need one here, there, there. We need one in critical care for adults. We need one in our kids hospital, and we need one in the emergency room. So we've elevated the conversation to broad-based adoption in as many ways as I can -- as I have witnessed in just the last year since this is capital equipment, so it does take its time, but the market activation is real.

So the opportunity to bring Swoop into a hospital translates into clearly better patient flow. The time and access to MRI moves the patients through much faster, which is economically definitely better for the hospital as well. It is the opportunity to generate more revenue also with the conventional MRI. As I said, the reimbursement is using the same code as we use in -- as they use, sorry, with conventional MRI. And really, this is a very good business for us as we think about where we're going to take things forward.

I want to cover the other 2 businesses as well. The value proposition in the office is slightly different. So neurologists in offices prescribe a very large number of MRIs. They don't perform them, only 90 -- only 10% of neurology offices have MRI on their premises. So this is the opportunity to bring MRI to a portion of the 90% that do not have it. We have worked through a process of enabling offices to get accreditation through one of the accreditation bodies called IAC. Once they get accredited, they can register with CMS and then get reimbursement for the scans.

And we have now proven through a pilot program that they get reimbursement through CMS as well as private payers and many offices are driving some self-pay if they're not fully concierge, partially concierge type of practices. So it really is about diversifying their practice. It's about making the practice more comprehensive. We have conducted a study called NEURO PMR. We compare with conventional MRI. That was the case I showed earlier. And that 98% concordance is an extraordinarily strong showing that was reported in January at the ASN meeting.

So not all offices are made equal. Some look like mini hospitals and some are really a single neurologists operating a practice. So we are doing some market segmentation to understand the different offering between our Model 1, Model 2 and how the dynamics in the office work. We operate both of these 2 verticals through the same sales force in the U.S.

Last but not least, the international vertical, we have been in international markets for more years than we have been truly commercial in international. That was the ability to also build reference sites and strong thought leadership support in international markets through a partnership with King's College in London and there then getting funding from Bill & Melinda Gates Foundation to drive the use of our scanner for pediatric brain development studies.

So we built on that and really appointed a number of distributors in 2024 to get into a more commercial phase. We have been successful with the clearances, and we have also now really mastered the art of getting ourselves to what I'm calling local products. So we need to make sure that we have translations and labeling in all of the local languages to be able to operate. So we are transitioning from something that was more of a research-based international business to commercial. It looks very much like the hospital business in the U.S. Okay?

So from a commercial footprint, as I said, we are distributors -- we operate through distributors outside of the U.S. We operate direct in the U.S. We operate with a single sales force in the U.S. We have about 15 field-based employees. They are not all quota-bearing. So we are still using a relatively small sales team. And with our IDN and multiple placements in a given hospital strategy, we believe we can drive a lot of productivity out of a single team for quite some time.

Clearly, working with an IDN, the first placement is the toughest, the longest, the hardest, the one with the most paperwork. The ones after that, a significantly easier lift as it is primarily piggybacking on all of that paperwork and working on contracts and working off of just funding and PO kind of arrangements. Our business model is capital upfront. So our MSRP in the U.S. is $590,000 for the system. Just in comparison, a 1.5 tesla or 3 tesla capital equipment alone without any buildup is somewhere between $1.5 million and $3.5 million. The first year, the site gets the software, the support and the service included in a 1-year guarantee period. And then contracts are usually 5 years.

So starting years 2 through 5, we charge about 10% to 12% of the capital purchase on an annual basis to actually do the software, the service and the support. We do provide 1 to 2 software versions every year. So that's included in that package of service, software and support. Outside of the U.S., we have a very small team that manages the network of distributors. So our ASP is different as this is sort of a transfer price, the sales price to the distributor network.

So these are our financials. As I said, our guidance for this year, $20 million to $22 million is a dandy step-up, 50% to 55% gross margin for capital equipment in imaging is something that we are very proud of. With scale, we see that expanding to sort of MedTech level gross margin despite the fact that we are capital equipment and imaging. We have been good stewards of capital, and we will continue to bring our cash burn down. And as I said, we have a healthy balance sheet. We did a confidentially privately marketing offering in October and raised $20 million. We put a little bit of debt for the first time in the history of the company in Q1 on the heels of that equity raise in Q4, and we're well capitalized through the beginning of 2028, assuming we don't take any more debt from the facility, which gives us extra flexibility.

Now I'm going to talk a little bit about what else besides portable MRI. And I know I only have 3 minutes, but hopefully, this is good enough to tease people into seeing us through the lens of a much bigger play. So we have not changed MRI. There are 4 fundamental pillars to MRI. The image pipeline, the electronics that you use, the noise cancellation, the denoising and the magnetics. We've taken all of those and really through our proprietary technology and know-how have shrunk them, have miniaturized them to render a technology that has no compromise in image quality, unlocks the access to MRI and has a safety profile that makes it versatile anywhere. That is a huge core technology play and asset that we think can take us many other places.

Starting with adjacencies in the brain space, intraoperative brain MRI, mobile brain MRI unit, but possibly going into other anatomies and other applications. So we have a relatively large radar of opportunities that would all benefit and give us a very proprietary, sometimes first-mover position or if not, the ability to lead in many categories that are on this chart.

For now, our business plan are $20 million to $22 million, a 50% to 55% gross margin and $26 million to $28 million of burn only includes continue to sort of flash out in which of these we're going to be putting additional investment. This would be activity that starts 2027 and beyond, but it has become very clear to us that if we've been able to do it in the brain with a portable system and bring so much clinical value and economic value, we have to be able to do it in any of these applications and just add additional not business verticals, but new businesses to our portfolio.

So in summary, we have a very large TAM. The brain is a really important organ. I know many of us talk about the heart all the time, but I would argue the brain is just as important. And I had the privilege to work on both of those in my career. I think the ability to be in a space where you touch dementia, stroke and can put these systems across multiple types of care is phenomenal. I think our business fundamentals are very strong. We have demonstrated the leadership position. We have the evidence. We have the R&D engine. We have now a diversified business. And we have built even at our scale, a very, very strong business that I'm very excited to take forward.

Thank you very much.

Good afternoon, and welcome to the Hyperfine Quarter 1 2026 Earnings Call. I am Frans, and I'll be the operator assisting you today. [Operator Instructions]

I would now like to turn the call over to Webb Campbell with Gilmartin Group. Please go ahead.

Thank you for joining today's call. Earlier today, Hyperfine Inc. released financial results for the quarter ended March 31, 2026. A copy of the press release is available on the company's website as well as sec.gov.

Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws and made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements.

All forward-looking statements, including, without limitation, those relating to our operating trends and future financial performance, expense management, market opportunity, commercial and international expansion, regulatory approvals and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements.

Accordingly, you should not place undue reliance on these statements. For a list and description of these risks and uncertainties associated with our business, please refer to the Risk Factors section of our latest periodic filings with the Securities and Exchange Commission. This conference call contains time-sensitive information and is accurate only as of today's live broadcast. Hyperfine, Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise.

With that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Good afternoon, and thank you for joining us. On the call with me today is our Chief Administrative Officer and Chief Financial Officer, Brett Hale.

The first quarter was a strong start to 2026 as we executed across our commercial and financial priorities. We delivered revenue of $3.9 million, our second highest quarter ever, up 83% year-over-year. Q1 was our third full quarter selling our next-generation Swoop system in the U.S. market and selling into our new neurology office business. We posted a 51% gross margin and demonstrated operating leverage and spending discipline, closing the quarter with a strong balance sheet.

We also achieved several important milestones. We obtained CE and UKCA marks for the next-generation Swoop system and our advanced DWI Optive AI software. We significantly increased enrollment in our Contrast PMR study and now sit at over 50% of our enrollment goal. We launched our advanced DWI Optive AI software at the 2026 International Stroke Conference supported by a paper published in SVIN, demonstrating the Swoop system's enhanced stroke detection capabilities.

And lastly, we saw compelling data from our NEURO PMR study presented at the American Society of Neuroimaging, highlighting broad clinical utility, high diagnostic value and a strong patient preference with the Swoop system in neurology offices. With our strong execution in the first quarter across revenue, gross margin, cash burn and milestones, we are reiterating our guidance to deliver transformative growth, healthy margin expansion and lower cash burn for Hyperfine in 2026. Commercially, demand for the next-generation Swoop system remains strong, and we continue to diversify revenue across our 3 business verticals: hospitals, including health systems, neurology offices and international markets.

I will now walk through updates from our 3 business verticals in more detail. In our hospital business, we're driving sales of our next-generation Swoop system with high interest from adult and pediatric critical care and emergency departments. We are also leveraging positive clinical and economic impact data from early adopters to expand our footprint and increase utilization across sites of care in the hospital.

Programs launched since the introduction of our next-generation system have demonstrated high utilization and positive clinical and economic outcomes. Strengthening our foothold in the hospital at the International Stroke Conference in February, we launched our advanced DWI Optive AI software, extending our value in stroke workflows to the ED and across hub-and-spoke networks. The advanced DWI Optive AI software is now implemented in most scanners across our installed base.

We continue to advance our health systems and IDN strategy and are seeing repeat sales within IDNs across multiple sites over the last couple of quarters. Our pipeline continues to shift towards multiunit and IDN opportunities. The leverage from selling into IDNs is a key part of our strategy to drive adoption of our technology across hospitals. These strategic accounts represent attractive expansion opportunities that have longer sales cycles with additional system-wide stakeholders and steps in their procurement processes.

In our office business, placements were a solid contributor to our revenue performance this quarter and following strong exposure and market activation work at the American Society of Neuroimaging and Neural Net meetings in Q1 we have had mostly next-generation soups system placements in larger offices. We continue to build a healthy pipeline across practices of varying sizes. Also during the first quarter, data for NEURO PMR was presented at the American Academy of Neuroimaging.

In neurology offices for NEURO PMR, the Swoop system was used for patients across several neurological conditions, including headaches, dementia, multiple sclerosis follow-up and tumor follow-up. The study shows the high diagnostic value of the Swoop system in this setting and the patient experience with the Swoop system was rated very favorably compared to conventional MRI.

Turning to our international business. In Europe, our Optive AI software was launched during the quarter and is seeing strong reception. In India, the first Swoop system is now live in clinical use at a leading KOL center in Delhi through our distribution partner. Additionally, we're very excited to have received CE and UKCA marks for our next-generation Swoop system with the latest version of Optive AI software. We're working to complete all translations and documentation processes to be in a position to launch in Europe in the third quarter. This helps position us for a stronger second half of 2026 in international.

Looking ahead, we remain committed to increasing the clinical value of the Swoop system through technology, innovation and clinical evidence. We plan on introducing the next software upgrade with additional improvements in image quality and clinical capabilities by the end of 2026.

Driven by clinician interest, we are also evaluating and conducting pilot activities in new sites of care for our Swoop system, namely the use of the Swoop system in the operating room or angio suite to support timely scanning of patients following procedures as well as the use of the Swoop system on mobile units for community-based brain screening programs.

Finally, I would like to provide an update on our Contrast PMR study. I'm happy to share that enrollment is progressing well with 3 study sites now active and enrollment over 50% of target. Over the long term, we believe expanding the system indications for use to include contrast is of value in all sites of care as it drives increased clinical utility. Brain scans with contrast represent a meaningful percentage of all brain MRIs.

As a reminder, the Contrast PMR study is a prospective multicenter clinical study designed to evaluate the feasibility and visualization benefits of contrast enhanced ultra-low field portable MRI. We currently expect the study to support a potential FDA submission by the end of 2026 to expand the Swoop system's intended use to include gadolinium-based contrast agents. Also, a contract indication can further support the office opportunity as cases in offices are all elective and use CPT codes for reimbursement. As a reminder, brain MRI exams with contracts are reimbursed using a dedicated CPT code 70553.

I'm very pleased with the strong market traction we continue to generate and the level of image quality the Swoop system provides. I'm proud of the Hyperfine team's execution, not only in the last quarter, but over the last 2 years, delivering numerous milestones to get to this point. We continue to see our business progressively strengthening through the year, and I remain confident in our commercial traction, pipeline and opportunity.

With that, I will turn the call over to Brett to review our financial performance and guidance.

Thank you, Maria. I will recap our financial results for the first quarter of 2026 before providing an update on our guidance. Revenue for the first quarter of 2026 was $3.9 million compared to $2.1 million in the first quarter of 2025, representing an increase of $1.8 million or 83% year-over-year. In the first quarter, we sold 10 units versus 6 units in the prior year period, with contributions across all 3 business verticals. The majority of unit sales were our next-generation system, supporting a strong average selling price.

Gross profit for the first quarter of 2026 was $2.0 million compared to $0.9 million in the first quarter of 2025. Gross margin was 50.7% compared to 41.3% in the prior year period, representing approximately 940 basis points of gross margin expansion. This is the third straight quarter with gross margin exceeding 50%, and we believe we are well positioned for meaningful margin expansion as we scale.

R&D expenses for the first quarter of 2026 were $3.8 million compared to $5.0 million in the first quarter of 2025, a decrease of approximately 24%. We continue to realize the benefits of the reorganization completed in the first quarter of 2025 as we transition to a commercial growth stage organization.

Sales, general and administrative expenses for the first quarter of 2026 were $6.7 million, flat compared to the first quarter of 2025. We continue to operate with one U.S. sales team covering both the hospital and office market opportunities and are focused on driving sales productivity and operating leverage.

Net loss for the first quarter of 2026 was $8.6 million, equating to a net loss of $0.09 per share compared to a net loss of $9.4 million or $0.12 per share in the first quarter of 2025. The first quarter 2026 net loss included a $0.2 million loss from a noncash change in the fair value of warrant liabilities compared to a $1.6 million gain in the first quarter of 2025.

Net cash burn, excluding financing in the first quarter of 2026, was $8.8 million compared to $10.1 million in the first quarter of 2025, an improvement of $1.3 million or approximately 13%. The first quarter is typically our highest cash burn quarter during the year due to several annual onetime payments such as annual bonus and insurance. Reducing our cash burn remains a significant focus, and we will continue to prioritize spending discipline and improve operating leverage in 2026.

As of March 31, 2026, we had $40.8 million in cash and cash equivalents on our balance sheet. This cash balance is inclusive of the $15 million initial tranche under the up to $40 million long-term debt facility put in place during the first quarter. In addition to the $15 million initial tranche, we have the option through the end of 2027 to access additional tranches totaling up to $25 million upon achievement of prescribed commercial targets.

Now turning to guidance. We are pleased to share that we are tracking well to achieve our financial outlook for the year, and we are reiterating those growth and margin plans today. We continue to expect revenue between $20 million and $22 million, representing year-over-year growth at the midpoint of 55%. Our pipeline remains strong across our 3 business verticals, including several multiunit hospital and IDN opportunities and the second half 2026 launch of our next-generation Swoop system in Europe. We continue to expect revenue to progressively strengthen through 2026.

We continue to expect gross margin to be in the range of 50% to 55% for the year. We expect gross margin to improve over the course of the year as sales volumes increase and expect second half gross margin percentages to exceed the first half. We remain optimistic that we can sustain gross margins above 50% as we execute on our growth initiatives.

We continue to expect total cash burn to be in the range of $26 million to $28 million for the full year 2026, representing a 10% year-over-year decline at the midpoint. This cash burn guidance includes our quarterly debt interest payments of approximately $400,000. We will continue to be disciplined with our spending while investing in commercially oriented projects and initiatives.

Lastly, we continue to see a healthy cash runway extending into 2028, reflecting the strength of our balance sheet and our continued focus on operating leverage and disciplined capital management. This cash runway expectation is inclusive of the $15 million initial tranche of debt financing, but exclusive of the additional $25 million of growth capital available under that facility.

We remain committed to spending discipline while investing in our highest priority commercial, clinical and technology initiatives as we scale. We believe we are executing upon an important phase of growth, supported by a strengthened financial profile and a commercial stage operating model. We are positioned as a derisked medical imaging platform with multiple durable growth catalysts across large, underserved sites of care, supported by a compelling value proposition, robust pricing, attractive gross margins and improving sales productivity and operating leverage.

I will now turn the call back to Maria for closing comments.

Thank you, Brett. Before we open the call for your questions, I want to take a brief moment to reflect on our progress. It has been just under 1 year since we received FDA clearance for our next-generation Swoop system and Optive AI software. And in the 3 commercial quarters since, we have meaningfully improved our revenue and margin profile, entered new markets and continue to innovate. I'm proud of what the team has accomplished, and we remain energized by the opportunity ahead as we expand access to brain MRI across hospitals, neurology offices and international markets.

With that, we're happy to open the call to your questions. Operator?

[Operator Instructions] And your first question comes from the line of Frank Takkinen from Lake Street Capital Markets.

This is Nelson Cox on for Frank. Congrats on all the progress. Maybe just starting with the IDNs and the multiunit ordering a bit more. Can you maybe talk a little bit more about the typical decision criteria and time lines you're seeing there? And how many of these IDN conversations are at that standardization stage versus kind of the single site pilots? And then is there some assumption in guidance of the single-site pilots standardizing deeper in 2026? Or how are you -- yes, how is that?

Sure, Nelson. I'll take a crack at it and Brett can add any commentary. So again, remember, we have only had the next-generation subsystem for 3 quarters. So our history with it and the IDN strategy is about 3 quarter deep. I can tell you there is an IDN that has moved from the first to multiple in one site to a second site and to a third site. The rest of the conversations are in the beginning of the first site doing the initial or initial placements before they go system-wide.

We have an appreciation of the process, which is slightly more involved than a single hospital process in that there is either a regional or a divisional or a national sort of level of approvals and procurement steps that need to be fulfilled. And we expect that once we land the first systems, similar to what we have experienced already, it takes implementation plus probably 2, 3 months' worth of data before the rest of the sites that are interested are going to be moving forward with their own procurement processes.

We do have visibility to multiple sites within an IDN. So it's not that we need to start the selling process, but we are not going to be able to start the procurement process with the additional sites within an IDN until the first one goes through that implementation and initial data collection for about, call it, 8 weeks or so by the time this data gets tabulated and shared across the IDN.

Okay. That is helpful. And then maybe -- yes.

I was going to comment on your question about the guidance and what is baked in there. So for our 2026 guidance, it reflects really, as we mentioned in the last call, the 3 initiatives and growth vectors of the business. So the hospital, which includes the IDN, includes the office business, international, all of them are contributing towards the growth that we see in our 2026 guidance. I will highlight that, as Maria mentioned, given when we got clearance for the next-generation system, we see the second half of the year being more lined up for budgetary cycles, especially for these IDN initiatives.

Okay. That's helpful. And then maybe on the office, can you help us think about the profile of your adopters there so far and maybe some encouraging signals you've seen? I know you mentioned a healthy pipeline across varying sizes, but maybe talk about what's resonating within the larger offices more specifically and then whether that -- and how that pipeline in smaller practices maybe varies?

Sure. I'll start with that as well, Nelson. So I think we said in the prepared remarks, we were predominantly placing second-generation system in larger offices. Remember, the larger offices are usually grouped under an organization called NeuroNet, and their meeting annually is in the month of February. So we got some very good leads and interest out of that meeting that translated into deals in the first quarter.

The NEURO PMR data with the multiple sort of utility of the Swoop system resonates very well because at the end of the day, the more utility they see across their patients, the easier it is to justify the investment and see the return on investment with bringing in this as an ancillary business ancillary activity to their practice. By definition, a single practitioner practice has lower volume and often has either a little bit of specialization or a little bit of everything but has less resources.

So I think over time, we're going to see that it is the larger offices that are going to have the volume that makes the investment attractive, the investment actually translate into an attractive return and an attractive additional business. Brett, I don't know if there's anything else you would like to add.

No, I think you covered it well.

Your next question comes from Yuan Zhi from B. Riley Securities.

Maria, can you comment on what you are hearing related to the helium shortage in the U.S. and whether that impacted your interactions with potential customers recently?

Thank you, Yuan. So remember, our system does not need any helium, and it is not something -- and to a certain extent, we always talk about our system being light in terms of maintenance requirements, both from a complexity as well as the cost. So we make sure people understand that our system is helium-free. So I know it has been in the news, but I haven't really heard it very directly from any of our customers.

We often hear our customers talk about some of their challenges with high field. So any customer that may have just one high-field magnet. We often hear the pain point is that they are either replacing it or it's down for maintenance, how our system comes in very handy in those times. But there hasn't been really much of a surge in the noise level around helium availability that I have heard. Brett, I don't know if you have anything else to add.

No, I think you highlighted, I mean, being helium-free, being able to be plugged into a standard wall outlet being portable, no shielding, siding construction. All of those have been kind of elements that we've been highlighting throughout the years. Obviously, in the recent news flow about the helium shortages, that just kind of amplifies that, but it's been part of our overall thesis as we talk to hospitals and sites.

Got it. Got it. And learnings from the recent use case from the recent stroke care seminar, when your team sells Swoop to a new customer, what are the key economics, the numbers that you want to highlight, such as the ROI, the backup options or freeing up capacities? Are those main characters that you want to highlight?

Sure. So I'll start there. So starting with the stroke use case, the most important piece of data that helps our potential customers understand how valuable this is the wait time in stroke suspected patients for an MRI. So there is a bit of a joke that we make around the spreadsheet, which is for these patients that came into an ED with symptoms of stroke, how many hours did it take you to be able to get them into the MRI. And unfortunately, those numbers with high field are ridiculously high, sometimes 60, sometimes 80, sometimes 40 hours.

So the number one is, okay, how much shorter can we make that, and that builds a very strong case for the economics in the ED and the faster triage. That was also what the PRIME study wanted to do out of Yale, which is all comers in the ED, how much faster do you get a patient that MRI that is needed to understand why they are there. We then add to that the use case and the economic value in the ICU, that's all about cost savings.

So then we actually challenge people to run the numbers on how much they spend on tubing, pumps, MRI compatible things that they need to fit a patient so that they can safely go to a high-field MRI. And the shortening of the time to MRI plus the savings on those MRI compatible supplies very quickly build up this case for a 1- to 1.5-year ROI that we have discussed even with our current MSRP of $590,000.

Your next question comes from the line of Marie Thibault from BTIG.

Congrats on the progress here. I wanted to ask quickly about Contrast PMR. Really pleased to hear the progress with the trial there. I wanted to understand what you think the impact of having that gadolinium contrast will be on adoption for the hospital and office channels? And I guess another way of asking it is how often are purchases getting put off because the doctor says they want to wait for the contrast indication?

Great question, Marie. Thank you. So I would say I can't think of any case in a hospital environment where the purchase has been put on hold awaiting contrast. I will definitely say there is a lot of excitement from both sides of care, the office and the hospital for the use because it is a substantial number of scans that they do with and without contrast.

What I am most interested in, and I know we shared with you the recent webinar, there was a question to one of our thought leaders, and it was Dr. Fabrizio from Jefferson Abington. And the question was, do you only use Swoop when the other is not available? Or do you just use Swoop? And I think her answer was, no, we just use it. So I want to drive to a point where they can trust this device to cover most of their cases. And today, they have to do it off-label if they want to use contrast in the hospital environment.

So it increases the utility with the increase of utility is going to make the multiple systems clearly more needed because sharing the systems is going to be more challenging. And it's going to be more a reflex from a workflow where there are fewer cases that they cannot do with our system.

In the office, it clearly also has an economic element where I believe adding the contrast cases at a higher reimbursement rate, which is somewhere between 30% to 50% higher will also change the economic sort of calculation as to how many cases they need to do for how long before this thing turns into a green business for them. Does that make sense?

It does. That's a great amount of detail. I really appreciate it. I'll use my follow-up here to try to dive in a little bit more on what you hinted at in terms of new sites of care in the hospital, things like the operating room and the angio suite. Are there new accessories, new sequences, new indications, anything that you're needing to be able to move into that? And any time lines, even very general might be helpful for us.

Sure. Thank you, and thank you for asking because it is really exciting to see the surge in interest from surgeons and interventionalists in the neuro space to bring the Swoop system into their environment. We will see this year publications and presentations of single cases and small case series from some of these pioneering sites that have already brought it in for what I would call the immediate post procedure imaging of the patients with significant benefit across a number of cases.

We are assembling also an advisory group, and we would like to exit this year with a plan that really answers the first part of your question, which is exactly, is it all in the software? Is it probably -- is it in the coil, which is just a piece of the hardware? Or does it take more? Think about sort of the cranial access, if that needs to be happening while the patients are in the scanner, there may be some adjustment to the coil. That's only one component. So that's not quite an accessory. It's a modification of the hardware. But it is going to be the result of the exposure of these initial cases, case series as well as the work we're going to do with our initial advisers that will form really a plan for us by the end of this year.

And I think there are cases where the surgeon is already driving the purchase in a hospital for that immediate safe postoperative scanning in the OR. If we want this to be more incremental, it's probably going to take us thinking about how there could be something on the either preoperative or intraoperative and that definitely will take a little bit more work. And I will know more probably in the next couple of quarters.

There are no further questions at this time. And I would now like to turn the call back over to Maria Sainz for the closing remarks. Please go ahead.

Thanks, everyone, for joining us today. We look forward to continuing to update you on our future progress, and have a great rest of your day.

Ladies and gentlemen, thank you all for joining, and that concludes today's conference call. All participants may now disconnect. Thank you.

Hello, and welcome to the Hyperfine Q4 '25 Earnings Call. [Operator Instructions] Now I would like to turn the call over to Webb Campbell. Webb, you may begin.

Thank you for joining today's call. Earlier today, Hyperfine Inc. released financial results for the quarter ending December 31, 2025. A copy of the press release is available on the company's website as well as sec.gov.

Before we begin, I'd like to remind that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. All forward-looking statements, including, without limitation, those relating to our operating trends and future financial performance, expense management, expectations for hiring, training and adoption, growth in our organization, market opportunity, commercial and international expansion, regulatory approvals and product development are based upon current expectations and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of these risks and uncertainties associated with our business, please refer to the Risk Factors section of our latest periodic filing with the Securities and Exchange Commission.

This conference call contains time-sensitive information and is accurate only as of the live broadcast today, March 18, 2026. Hyperfine Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise.

With that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Good afternoon, and thank you for joining us. On the call with me today is our Chief Administrative Officer and Chief Financial Officer, Brett Hale.

Fourth quarter revenue of over $5 million demonstrated our very strong performance with the next-generation Swoop system for the second straight quarter. The mid-2025 introduction of our second-generation Swoop scanner, the Optive AI software and the addition of a new market with our launch into the neurology office setting mark a turning point in the adoption of portable brain MRI, the potential of ultra-low field MRI and the future of our company. We have now demonstrated that we hold a highly proprietary and differentiated technological position in our ability to produce diagnostic quality images with an ultra-low field magnet, making Hyperfine's technology, safe, acceptable and deployable across the continuum of preventatives, acute and chronic brain health settings. In 2025, we validated that the Swoop system offers unequivocal clinical and economic value to clinicians and providers ready for mainstream adoption and scale across a growing number of sites of care inside and outside the hospital.

I want to start by summarizing some of the key highlights from the last several months to illustrate why I feel very optimistic about the future of the Swoop system for brain health and Hyperfine's unique position with ultra-low field MRI long term. From a market perspective, the feedback on Swoop's image quality with Optive AI software continues to be outstanding from the neurology, neurosurgery and radiology communities, leading to deal activation, reactivation, larger deals and interest from IDNs and health systems. The FDA clearance in December 2025 of our first update after the release of Optive AI software represents the 11th generation of soft -- Swoop software releases and confirms our commitment to continuous image quality advances with ultra-low field MRI. This latest Swoop software incorporates features in our diffusion-weighted imaging to further refine the value of the Swoop system in stroke workflows. The recently published [ SVIN ] stroke publication and the new PMR presentation validate the clinical diagnostic utility of the Swoop system for stroke triage and for patient care in neurology offices, respectively. The publication of the health economic impact data has an incredibly important element to our selling approach. We now have published evidence to support the cost savings in medical supplies, staff usage and the significant improvement in patient progress when using the Swoop system.

Finally, the approval of the first generation Swoop system in India opens a new large geographic expansion opportunity for Hyperfine. Throughout 2025, we executed on our operational milestones across innovation, clinical and economic evidence generation and site of care and geographic expansion. We delivered strong revenue growth in the second half of the year. And importantly, we see market activation momentum continuing as we progress through 2026. This transformation was achieved in the context of a continued reduction in cash burn and gross margin expansion, demonstrating the scalability and leverage of our business model. We ended the year with a healthy balance sheet, and with the growth capital added from our recent financings, we're well positioned for sustained growth and investment in our technology, current market and potential future expansion opportunities into 2028.

Over the past 6 years, we have maintained an unwavering commitment to continuous innovation and market development, transforming our original concept for an ultra-low field portable brain MRI system into a highly differentiated and clinically relevant platform, ready for broad adoption to help address the real limitations related to brain imaging. The next-generation Swoop system with Optive AI software represents the culmination of phenomenal innovations in electronics, physics and AI to make image quality at 64 millitesla approach that of high-field MRI. Looking ahead, these advancements represent a new beginning and a stronger platform to further increase clinical capabilities and expand into additional use cases across sites of care. We received FDA clearance for the next upgrade to the Optive AI software last December. Its latest software focuses on advanced multidirectional diffusion-weighted imaging to enhance stroke detection. Going forward, you can continue to expect a cadence of 1 to 2 software releases per year as we expand upon our leadership in the AI-enabled ultra-low field MR imaging space. We have now sold over a dozen next-generation systems since June and have launched incredibly busy and successful Swoop programs across critical care emergency departments and neurology offices.

Exiting 2025, our primary call points are adult and pediatric critical care, emergency departments and neurology clinics and offices. More recently, we have actively begun pilot efforts in the neurosurgical and neurointerventional settings as well as in mobile units for dementia screening research. We will continue to lean on our strength, not only in continuous innovation, but also in clinical data generation to support a growing number of use cases and wide spread prevention. A good example of this is our contrast PMR study, a prospective multicenter clinical study to evaluate the feasibility and visualization benefit of contrast-enhanced ultra-low field portable MRI. I'm pleased to share that we are approximately 20% towards our enrollment goal. The study is designed to support a future FDA submission late 2026 to expand the Swoop systems intended use to include gadolinium-based contrast agents potentially unlocking new applications as we focus broadly on neurodegenerative diseases and surgical use. Brain scans with contrast will potentially broaden the use of the Swoop system across office and hospital settings. In outpatient care, scans with contracts are reimbursed using a dedicated CPT code 70553.

Turning to our clinical work in the ED. We are seeing significant traction with accounts interesting -- interested in deploying the Swoop system in the ED for faster stroke triage using MRI. The excessive wait time for MRI in the ED is a costly and widespread patient care issue across hospitals of all sizes.

Beyond the recently published SVIN paper, the PRIME study being led by the Yale School of Medicine, it's an additional project to validate the Swoop system utility, enabling faster triage of all comer patients in the ED. As a reminder, this study evaluates the potential of AI-powered portable MRI for broad patient triage in ED. I'm happy to share Yale's have completed enrollment ahead of schedule and expect to share an update on the findings later this year.

The compelling image quality of the next-generation Swoop system with Optive AI software is activating our hospital pipeline to levels we have not experienced before, driven by interest from both clinical and administrative stakeholders and evolving deal discussions to multiple placements as well as first and subsequent deals at IDNs across the U.S. These larger, more strategic deals are very encouraging for the future growth of our business. Although larger deals have increased administrative processes are now more dependent on budget cycles, creating some potential for quarterly lumpiness and variability. With the recently published health economic impact data analysis as a reference, hospitals evaluating the Swoop system are now modeling 1- to 1.5-year return on investment time lines, substantially better than the 3- to 4 years typical for capital equipment. The recent publication summarizes the data compiled at Jefferson Abington across 143 scans related to their savings in cost of care, driven by reduction in supplies, faster clinical decision making, accelerated patient discharge and freed-up capacity on conventional scanners for elective procedures. These real world peer reviewed health economic data have become powerful catalysts for deals and elevating conversations to C-suite decision makers. With our device MSRP of $590,000 for our next-generation system, we can capture significant value while delivering strong ROI for our customers.

The neurology office represents an additional growth vector for our business. Neurologists prescribe a high volumes of MRIs, yet only approximately 10% of private neurology practices have MRI imaging on-site, which creates an enormous addressable market opportunity with minimal incumbent competition. Our full commercial in to this market in Q3 has progressed rapidly through Q4. Our pilot program in the first half of 2025 come from the process through accreditation, training and reimbursement to scale portable brain MRI as an ancillary business in the office setting. We have proven that physicians can obtain diagnostic quality, MR brain images within their offices, providing patients with timely and convenient access at the point of care. In January 2026, data from our office study, NEURO-PMR, was presented at the American Society of Neuroimaging. In this study, patients receive brain imaging on both the portable Swoop system and conventional high-field MRI. In the study, portable MRI demonstrated 92% concordance with a standard MRI in identifying the presence or absence of intracranial pathology during a blinded review by independent neuroradiologist. In unblinded paired initial reviews incorporating clinical history, concordance increased to 98% as assessed by a neurologist and neuro imager. Furthermore, patients expressed a strong preference for portable MRI, reporting that they were 4x more likely to see portable MRI over standard MRI. Across all experience measures, including comfort, anxiety, claustrophobia, noise and overall satisfaction, portable MRI was rated superior to standard MRI. Trained clinical staff successfully operated the system within neurology offices without the need for MR technologies, highlighting its safe and straightforward operation. In Q4, we accelerated our selling efforts across both single and multi-clinician practices, building robust pipelines of both our first and next-generation Swoop systems. We deployed a segmentation pricing strategy, offering different configurations to serve practices of varying sizes and profiles. We're also leveraging our NeuroNet partnership to promote adoption across their network of neurology practices. The Optive market is still in its early days, yet reception has been robust and has been further fueled by the presentation of data from NEURO PMR.

Turning to our international business, where we have made significant progress in the quarter. We have launched Optive AI software in 10 different European languages, with the software now available in the international markets we serve. We're going through the European regulatory process to bring the next-generation Swoop scanner to the U.K. and CE markets before the end of this year. Additionally, in late 2025, we also received regulatory approval in India, unlocking a key new market. With our local partner, we are planning to launch, engaging top KOLs in the country to help drive awareness and adoption. In accordance, we expect placements in India to scale at a measured pace throughout the year.

Market feedback on the Swoop system with Optive AI software remains consistently very positive. I firmly believe the Swoop system today is ready for broad adoption our image quality positions us well to continue to broaden and deepen use cases. We have 3 diverse and differentiated business opportunities to drive growth in the near future through placements across the hospital, neurology offices and international markets.

I will now turn the call over to Brett to review our financial performance and 2026 guidance.

Thank you, Maria. Before I recap our financial results for the fourth quarter and full year of 2025 and our expectations for 2026, I want to touch on our recently strengthened capital position. Last October, on the heels of our first full quarter of our next-generation Swoop system launch, we strengthened our balance sheet by raising over $20 million in equity, welcoming multiple quality investors to the story. More recently, building on our business momentum and to complement this equity, we raised $15 million as an initial tranche under and up to $40 million long-term debt facility. The initial tranche extends our cash runway into 2028, and the broader ability provides growth capital and significant financing flexibility for the commercial phase of our company. We are adding this nondilutive capital on attractive terms and have sized the upfront tranche to extend our cash runway while continuing to responsibly reduce our cash burn. For purposes of modeling, we expect quarterly interest payments to be approximately $400,000, and these payments are contemplated in our cash burn guidance.

Now turning to our Q4 and full year 2025 results. Revenue for the quarter ended December 31, 2025, was $5.3 million, up 128% compared to $2.3 million in the quarter of 2024. We sold 16 units net in the fourth quarter of 2025 versus 9 units in the fourth quarter of 2024. We saw demand across all businesses with placements in hospitals, neurology offices and in international markets. This quarter, some hospitals elected to grow with our technology through a [ forecharge ] technology upgrade comprised of multiple unit placements. For the full year 2025, we generated $13.6 million in revenue, up 5% compared to $12.9 million in 2024. As anticipated, 2025 was a tale of 2 halves, with significant growth in the second half due to multiple midyear product launches, generating $8.7 million in revenue in the second half compared to $4.8 million in the first half of 2025.

Gross profit for the fourth quarter of 2025 was $2.7 million, up 226% compared to the fourth quarter of 2024. Gross margin was 50.9%, our second straight sequential quarter above 50% and representing 1,530 basis points of gross margin expansion over the fourth quarter of 2024.

For the full year 2025, we generated $6.8 million in gross profit, up 15% compared to the full year 2024. And our full year gross margin was 49.8%, representing 410 basis points of gross margin expansion over 2024. We continue to drive healthy margins for our stage and believe we are well positioned for meaningful margin expansion as we scale.

R&D expenses for the fourth quarter of 2025 were $3.8 million compared to $5.1 million in the fourth quarter of 2024, a decline of 25%. For the full year 2025, R&D expenses were $17.5 million compared to $22.5 million for the full year 2024, a decline of 22%. We continue to realize the reorganization -- the benefits of the reorganization we completed in the first quarter of 2025 as we transition to a commercial growth stage organization.

Sales, general and administrative expenses for the fourth quarter of 2025 were $6.5 million, flat compared to the fourth quarter of 2024. For the year 2025, sales, general and administrative expenses were $26.4 million as compared to $26.6 million for the full year 2024. We continue to exercise spending discipline and realized sales productivity and operating leverage in the business.

Net loss for the fourth quarter of 2025 was $5.9 million, equating to a net loss of $0.06 per share as compared to a net loss of $10.4 million or a net loss of $0.14 per share for the same period of the prior year. For the full year 2025, net loss was $35.6 million, equating to a net loss of $0.43 per share as compared to a loss of $40.7 million or a net loss of $0.56 per share for the same period of the prior year.

The fourth quarter of 2025 and the full year of 2025 net losses includes a noncash change in fair value of warrant liabilities, recorded as a gain of $1.5 million and $800,000, respectively.

Our net cash burn, excluding financing in the fourth quarter of 2025 was $5.7 million, down 30% from $8.2 million in the fourth quarter of 2024. For the full year 2025, our net cash burn, excluding financing, was $29.9 million, down 22% from $38.4 million in 2024. Reducing our cash burn was a significant focus of ours in 2025, and we are pleased with the execution on this front. We will continue to prioritize spending discipline and optimize our operating leverage in 2026, which I'll discuss in the context of our guidance framework shortly.

As of December 31, 2025, we have $35.1 million in cash and cash equivalents on our balance sheet. This is inclusive of the $18.4 million in net proceeds raised from our October equity financing and subsequent green [indiscernible] but it is not inclusive of the $15 million initial change from our new long-term debt facility. In addition to the $15 million of initial funding, we have the option through the end of 2027 to access additional tranches totaling up to $25 million upon achievement of prescribed commercial targets. This additional $25 million of growth capital is not included in our cash runway expectations.

Now turning to our financial guidance. Beginning with our revenue outlook. For the full year 2026, we expect revenue between $20 million to $22 million, representing year-over-year growth at the midpoint of 55%. Given the strength of our fourth quarter finish, which includes a multiunit system-wide upgrade, we expect a typical step down in capital revenue from year-end levels. Our pipeline remains strong across our 3 business verticals, including several multi hospital and IDN opportunities. While these deals will serve as meaningful drivers of our long-term growth and sales product, they typically progress over multiple quarters. We also anticipate commencing the launch of next-generation Swoop scanner in international markets in the second half of the year. As a result, we expect revenue to progressively strengthen through the quarters in 2026.

Looking at gross margin. We are initiating a range of 50% to 55% for the year. We expect the progression of gross margin percentage increase to closely follow our sales growth, and we expect second half gross margin percentages to exceed the first half. We remain optimistic that we will continue the trend of surpassing 50% gross margin comfortably and sustainably as we realize higher volumes driven by our growth catalyst.

Lastly, we are initiating total cash burn expectations in the range of $26 million to $28 million for the full year 2026, representing a 10% year-over-year decline in cash burn at the midpoint. This cash burn expectation includes debt servicing mentioned previously. From a spending perspective, we will continue to be disciplined with our spending while investing in commercially oriented projects, and will continue to operate with 1 U.S. sales team, covering both the hospital and office market opportunities and through distributors internationally. As mentioned earlier, with the initial incremental growth capital raised in March, we now see a cash runway for the business extending into 2028. We believe we are entering an important phase of growth, having strengthened our financial profile and position the business as a high-growth, derisked medical imaging platform with multiple durable catalysts across large, underserved sites of care. We have successfully transitioned to a commercial-stage business, supported by a compelling value proposition, robust pricing, attractive gross margins and increasing sales productivity and operating leverage.

I would now like to turn the call back to Maria for closing comments.

Thank you, Brett. Before we open the call to your questions, I want to briefly share a call I just had with 1 of our customer sites. This is 1 of our first programs that launched with our next-generation Swoop scanner. They purchased 2 units in the third quarter of 2025 and have been using the Swoop system since late Q3 across typical care, emergency department and most recently, in a hub and spoke model with a satellite there -- site. To date, they have performed over 200 Swoop system scans, reporting a high degree of satisfaction and great clinical and economic impact for the patients they care for and their workflow. On that very positive note, we can now turn to your questions. Operator?

[Operator Instructions] And our first question comes from the line of Frank Takkinen with Lake Street Capital Markets.

Congratulations on all the progress. I was hoping to start with 1 on the key assumptions surrounding 2026 guidance. What can you tell us you're assuming in that guide as it relates to U.S., OUS, anything, any color around multisystem unit ordering? I'm assuming there's a price component in there given the MSRP you quoted throughout the call? And then anything else we should consider as we're thinking about how you built the guide for 2026?

Thanks, Frank. This is Brett. I'll take that one. So yes, the way we built 2026 is really tied to the growth catalyst of the business. I think you commented on a couple of them. We have 3 business verticals that comprise the revenue stream that we've modeled out and are predicated in our guidance. So in the hospital side of the business, you're right, the multiunit systems and the IDNs will play out over time. I think as we mentioned, those take several quarters. So as the year progresses, we'll see more and more of those in our financial numbers. The office business, which we launched in the middle of last year, we'll continue to see traction on that in regards to the neuron meds -- excuse me, NEURO-PMR data as well as the penetration into that space. And then international, we commented in there that we've got a second-generation scanner that we expect in the second half of the year. So really taking all those pieces together, we see a progressive strengthening of the top line throughout the balance of 2026. Bigger deals, obviously, are tied to budgetary processes. And so those will probably play out more in the second half of the year, but we will see a progression of the top line starting in the beginning of the year and then continue to strengthen throughout the year.

And maybe on pricing -- and Frank, we did comment on the MSRP at $590,000, so that is something that changed. So we increased it from $550,000, which was the pricing at the launch of our Model 2 and moved it to $590,000 at the beginning of the year. That is primarily in our U.S. hospital business. We also commented on the fact that we are doing price segmentation in using both Model 1 and Model 2 in the office because not all offices are made equal, some are single practitioner, relatively small, and the volume doesn't support the Model 2. So we're using Model 1 at a different price point in the office setting. And last but not least, of course, internationally, since we operate and transact through distributors, we're doing that at distributor pricing. So not different than -- previously, we do have the blended combination of all of those that ends up being our ASP. But we can receive the health and the improvement just because there is 1 of the business verticals, which is a U.S. hospital, that is predominantly Model 2, and is enjoying sort of the advantages of the price increase. The reason for mentioning also $590,000 in the prepared remarks was that when you run really the ROI calculation, given the quick impact data that was recently published with any hospital, even at a $590,000 pricing, you do get to that 1- to 1.5 year ROI, which makes it incredibly compelling from an administrative standpoint.

Very helpful color. I was hoping on the second one, I could ask a little bit more about the pipeline. I think in the Q3 call, you've referenced the Hyperfine time being at its strongest and most diversified following a really strong Q4, would you say that, that comment still holds true? Or are you still in the camp of building up the funnel in the front half of the year?

So the comment around the pipeline continuing to be the strongest we have ever seen is very true. It is also very true that it is comprised of more multiple deals and more IDN deals. We have several deals with big IDNs in progress. It is also true that those deals are a little bit more now mainstream procurement, and in some cases, dependent on budget year. So remember, we were really stealth with the -- before the introduction of Model 2. So when it launched in June of last year, truly the very first budget year that we are able to take advantage of is the 1 that kicks in July 1 for more -- for a lot of the hospitals. So I think we've commented that some of these bigger, more strategic multiple deals are actually a little heavier in process and may create some variability. There is something also that happened in Q4, which is a -- for revenue upgrade of an institution where we have multiple systems and they wanted to standardize and move their installed base to Model 2. That is probably a onetime event as it relates to Q4, that I'm not seening in sort of the forecast for every quarter going forward. So hopefully, that gives you color around how we're looking at the pipeline, incredibly robust and totally full with very big IDN names, multi-deals, but those come with a little bit more process and the budget year being more naturally that July to the end of the year is something that may create this sort of progressive strengthening of our revenue line over the course of the year.

Very helpful. If I could sneak 1 in. When you speak about the multiunit orders, my assumption for Q4 is maybe that was single-digit but multiunit. Is there -- one is maybe that's accurate, if you care to comment on that? And then two, as you look at some of the multiunit deals in the pipeline, is there a potential for double-digit multi-unit deals?

Double-digit number of deals or numbers number of units?

Number of units.

I think I understand your question, Frank. When you talk about multiunit, you can think about things 2 ways. One is an individual hospital where there is multiple placement opportunities. So for example, someone might want to have it for both critical care and the emergency department and maybe pediatric and adult in the case for critical care. So you might have 3 or 4 placement opportunities in an individual hospital. And then when you talk about an IDN, IDNs obviously are multiple hospitals. The deals will likely not be all the hospitals at once, but it will probably start at 1 of the hospitals, but then we'll go across the IDN network where they will want to standardize care. So over time, that could be, but really in an individual quarter, we're talking about single digits at an individual transaction level.

And your next question comes from the line of Yuan Zhi with B. Riley Securities.

Congrats on a strong 2026 guidance. Maria, the business had its up and down over the past couple of years. I think it will be very helpful to investors if you can provide a quick review, especially what we have learned that can be used for the current business momentum.

Sure. Thank you, Yuan. So I think we have defined our technology as portable brain MRI, but the real product that we offer is high-quality imaging that is accessible, affordable and easy to get. And I don't believe in the last few years, we were there until the introduction of both the Model 2 as well as the Optive AI software. So I have personally witness an increasingly sharp change towards endorsement and approval of our technology and interest in on our technology as we have brought up substantially the image quality, all the way to what we have now said, which is very, very close to high-field MRI. So the clinical value has now been totally transformed into something that is a very useful tool. I know I commented on a small anecdote on one important new account with Model 2, but the reality is they're using it all the time as a go-to tool for the triage of their patients with suspected stroke symptoms, and they're doing it as a [indiscernible] institution as well as they're doing it in their ED. And they are able to make clinical decisions every day. Our technology wasn't there when we started. We were portable, we were low field, but our imaging was not at the level of clinical decision-making. So I have a totally different appreciation for the opportunity now that we have established that base of clinical utility. And I have also witnessed because of this high level of image quality now and interest to take our unit, to take our technology into even more use cases and sites of care than we have planned thus far. I know I've mentioned mobile. I know I've mentioned surgical, but those are places where we are being pushed, where we are being asked to play because the technology now offers that great combination of high clinical value with that access, affordability, ease-of-use component, safety component pretty much anywhere. Does that make sense? I really think we're leaving behind a development phase of getting to that level of clinical utility as we have refined and improve really the image quality.

Got it. Yes, that's very helpful. And maybe 1 question for Brett. I noticed the service revenue is lower in fourth quarter. As we imagine you have more devices in store, the service revenue should grow year-over-year. So can you please provide some additional color on that?

Yes. Thank you, Yuan. Yes. So you would expect service revenue to progress over time, and that is the term trajectory of that line item. In Q4, we mentioned we had done some [ forecharge ] technology upgrades. And as part of that, we had to go through an accounting contract assessment and that -- there's some adjustments in the service line item related to that. But going forward, you would expect that trajectory to be what you had articulated.

There's no further questions at this time. I will now turn the call back over to Maria Sainz for closing remarks. Maria?

Sure. Thanks, everyone, for joining us today. We look forward to keeping you updated in the next several weeks. Thanks, everyone, and have a great rest of your day.

That concludes today's call. You may now disconnect.

Good morning, everyone. Welcome to day 3. I'm Jason Bednar. I cover med tech here at Piper. Our next presentation this afternoon is with Hyperfine. It's a pleasure to have with us today CEO, Maria Sainz; and CFO, Brett Hale. Glad to have you both here with us today. I'll turn it over to Maria to -- for your presentation. And if we have time at the end, we can take some questions.

Thanks, Jason. Good morning, and thanks for the opportunity to share Hyperfine here this morning. These are our disclosures. So Hyperfine has the first FDA-cleared portable brain MRI. We enable MRI for the brain in sites of care where traditionally you don't have access to MRI, a critical care unit, an emergency room, an operating theater. And we actually have an incredibly compelling both clinical as well as economic proposition for the adoption of our technology.

The market opportunity is incredibly large. Call points today, we estimate are about a $6 billion market opportunity, and our fundamentals are very strong, attractive growth rates, attractive gross margins, tremendous spending discipline and the opportunity to drive operating leverage.

Our growth strategy was recently derisked with the introduction after FDA clearance of our next-generation Swoop scanner with the latest software, which we have branded Optive AI, which provides the best ever image quality at 64 millitesla, which is ultra-low-field magnetic field. Today, we're focused on the brain, but with time and our proprietary position, we have the right to drive additional indications in other anatomies or complementary services.

So our vision is not to compete, not to replace conventional MRI, rather to change the paradigm for MRI by bringing it into a form factor that allows it to be accessible and affordable in very different ways. Our system does not need shielded facilities, reinforced floors, dedicated operators. We bring it to the patient. We do not have the patient incur any kind of risk or cost or burden to go to the MRI when appropriate, such as critical care patients.

So as I said, our market opportunity today is about $6 billion when you take into consideration all the call points that we are targeting today, which are both inside the hospital, multiple sites of care inside the hospital, the neurology office setting as well as our international markets. Our vision with time is to turn our technology into a tool that would allow for prevention of brain conditions by being closer to community settings and primary care settings. That would, of course, drive the market opportunity and the total addressable market north of $15 billion.

This is the new phase of MRI when people use our Swoop scanner, our Swoop system. As I said before, it is ultra-low-field magnetic field. We operate at 64 millitesla. For anyone familiar with the larger scanners, the lowest field strength of a conventional MRI is 1.5. That allows us to make it a small footprint and portable, drive around the hospital through standard doors, elevators and hallways. It allows -- the operation is very intuitive out of an iPad interface and a clinician can very quickly get access to the images, although, of course, the images also go into the PACS system and at the point of care, be able to have a first assessment, the first triage of the images to take care of their patients.

So in our journey, we are building a new market segment. Ultra-low-field and portable MRI has not existed before Hyperfine and before the Swoop system. I'm very pleased to report that I believe we have built a terrifically strong foundation for our business over this first phase that any medical device business undergoes, which is that development, clinical and early commercial stage. We definitely have a first-mover advantage, over 200 patents issued, very proprietary position. We were the first FDA cleared.

The first clearance happened in 2020. We have over 190 installed units on a global basis, and we have amassed over 250,000 images, which you will understand create a very important competitive advantage as it relates to our ability to embed AI into our system and into our image quality going forward.

Our clearance with the FDA is very broad. It's any brain imaging for patients of any age. The scans performed with our scanner are reimbursed under the same reimbursement code as conventional MRI, and we have a lot of data, not only clinical, but also economic as to how this impacts positively workflow and health care costs.

We've been a very prolific engine of innovation and iteration over the first 5 years in the market. We are on our second generation of hardware, but we're on our 11th generation of software. And there is a lot of clinical evidence that has been brought to bear across different sites of care, different neurological conditions, over 80 peer-reviewed publications and over 215 presentations.

I mentioned our growth strategy has been recently derisked with the introduction of what you see in the middle of the slide, which is our next-generation Swoop system, which operates on Optive AI software. We have been working on our strategy of actually expanding across sites of care. And that, coupled with the technology allows us now to execute on this commercial expansion strategy going inside the hospital deeper, going outside the hospital into office environment and also expanding further international.

So this generation was cleared by FDA at the very end of May. We announced it on June 2. We launched it in Q3. I have sort of the 100-day proof points of what we've been able to accomplish with it. And I'm pleased to report we've already placed next-generation Swoop systems on all the sites of care in which we call, the neurology office and inside the hospital, pediatric and adult critical care units as well as emergency rooms. As we mentioned, our commercial expansion drives across 3 verticals, which is how we actually structure our business, the hospital vertical, the office vertical as well as our international vertical.

In the hospital, it's all about expanding across multiple sites of care. We started in critical care, but we're clearly moving into the emergency room and have a lot of interest as of late as well in placements for ORs as well as hospital-based clinics. We are building a brand-new business, which is the neurology office, and it's incremental to our hospital business. And over the last 18 months or so, we've been on a trajectory through third-party distributors to expand internationally.

We have a very, very strong contract manufacturer that allows us to scale very substantially as we grow. And as I said, our financials are solid. Gross margins are very attractive for a company at our stage and compared to other imaging players, growth rates are attractive. Our spending discipline is very strong, and we have the ability to drive operating leverage.

So this is the price like. This is the ability to take 64 millitesla field strength and produce amazing images. This is a case from a study that we have conducted in the office setting, which is called NEURO PMR. And this is a direct comparison in a patient of a 3 Tesla conventional MRI with our little 64-millitesla MRI system. This is what radiologists are in all about. And this is what really gets them to be very, very excited that this is something now that is mainstream for them. This is something they're familiar with. This is something they can read. This is something that seamlessly integrates into their workflow.

So how do we drive a 64-millitesla magnet to produce that level of image quality. There's a lot of effort and time that has gone into sequence development. But as of late, we've definitely taken advantage of AI. We use AI for 2 primary purposes. The first one is to denoise imaging. Because we operate in sites of care where there's a lot of artifacts from other equipment, we really need to make sure that our scanner produces images that are only taking the signals from the brain and not from everything around in a critical care unit in an emergency room.

The second one is really the reconstruction of the images. We do not produce images. This is not synthetic MRI. This is really an AI-based reconstruction of the image that mimics, although cleanly and sharply what linearly we would have done in the good old fashion. It is also great to see that we rank really high in the list that FDA issues of companies with the most clearances on AI-enabled technologies, side-by-side, big, big names, not only in imaging, but across the medical device ecosystem.

So as I mentioned before, our business is structured in 3 verticals: hospital, office and international. The value proposition is strong. If you look at what we can accomplish in the hospital, we can definitely help providers increase revenue and lower cost of taking patients down to the scanner, improve significantly patient progress metrics, improve the utilization of staff and infrastructure. As I said before, we do not need a dedicated facility or building it out in any shielded fashion. We've clearly reduced the wait times to MRI, and we avoid the cost, the burden and the risk of transporting the patients.

We have ROI investments across the office as well as the hospital. And we have a number of studies that have proven really the clinical utility of our system. So if you look at the hospital, ACTION PMR is a study in stroke. PRIME is another study in actually the hospital setting in the ER for all comers presenting with neuro conditions. That one is running at Yale. And PRISM PMR is an OR study where we're looking really at the opportunity to use a dedicated MRI in the OR to quickly triage the completion of an OR case without having to wait for the patient to go out for imaging and then keep the room open for whatever could have happened.

In the office, we're talking about building a new revenue stream for ourselves, but also for the clinicians that usually prescribe the exams, but do not perform them. They have the ability to be more of a one-stop shop where the patient gets in the consult -- in the consult room, the consultation as well as the scan. They are -- clearly, it is a scan modality that patients prefer, and we have data to document that. We have been running a study called NEURO PMR at 2 very, very large neurology practices in the U.S., the DENT Institute in Buffalo, New York and Texas Neurology in Dallas. The case I showed you a few slides earlier came from that data set.

And in international markets, although our business follows more along the lines of our hospital business in the U.S., there is clearly an issue of access to MRI that is more acute outside. There's also a need for remote rural care. We have had a partnership with Bill & Melinda Gates and King's College in London. That has allowed us to have scanners in incredibly remote and low-resource locations, some of which I have personally visited like Bangladesh and some sites in Africa, where you see really the resilience of a scanner like us and the clinical utility it can bring in those low-resource settings. But we have also a lot of interest in doing things in rural America, given the complexity of transportation, the cost of transportation of patients into the hubs.

Because our labeling is very broad, and we can do brain scanning of patients of any age, we really see a very rapid and agile evolution of the clinical use cases from one site of care to the next, and we have definitely seen that accelerate with the image quality that we produce today. So clearly, critical care, both adult and pediatric have been our sort of our niche market for quite some time. The ER is an active market right now. I would call the operating room an emerging new market. The neurology office space is a new market for us in our international expansion. Europe has been the first place where we've gone, but we are actually awaiting India clearance, and that will be a reality in terms of commercial revenue in 2026.

So a quick double-click here. Hospital, nothing that I haven't said before other than, again, the reimbursement is the same as conventional MRI. The code for a brain MRI is 70551. One of the things that is very attractive now is that given the image quality and the interest in our technology, we're seeing not only individual hospitals go for multiple placements, but we are now being asked to be at the table of IDNs and health systems to discuss system-wide deployments.

On the office setting, this is a perfect picture of looking at what nothing too dissimilar to when you visit your dentist, a chair where you can be talking to a physician that turns into a bed and immediately sort of scooches you into the scanner and you get your brain MRI right there because you presented with chronic headaches. This is an opportunity for these neurologists to bring imaging into their practice rather than just prescribe the imaging. And for us, it is an incremental layer of opportunity and business that doesn't cannibalize in any way, shape or fashion our hospital business.

And then for international, again, following more on the hospital business model, we're always a little bit behind in regulatory clearances. So the software with the high-quality image quality, sorry, pun intended, is coming to international markets here this month. We're actually just launching it in Europe next month. We're also doing that in 10 local languages. So we're going to be able to have greater applicability of our technology with the local language beyond the first 5 markets that we introduced with local languages a few months ago. And we expect the next-generation Swoop system there in the second half of the year.

India is a very attractive new market for us. We've been working on regulatory approval with our partner there for a number of quarters now, and we're really at the final stages of that, as I said, would be commercial reality for us in 2026. CDSCO is the FDA equivalent for India. And again, the ability to also have a lot of KOL support internationally through our association with King's College and the work they've done with funding from Bill & Melinda Gates to take really scanning and actually brain imaging for pediatric use primarily into low and middle-income settings.

From a distribution perspective, we are direct commercially in the U.S. I have a team of about 15 customer-facing professionals deployed across the country. They can drive a lot of productivity and depth by going into the same sites of care, so into the same hospital environment and actually driving multiple placements and going from there to IDN discussions that allows the same channel to drive significant growth.

Outside of the U.S., we use distributors. We have about 10 partners and access to north of 10 markets by now. Our business model is CapEx. So we sell the equipment upfront. Our MSRP in the U.S. for the next-gen Swoop system is $550,000. We actually provide a 1-year warranty that covers software upgrades. We do a software upgrade to the tune of 1 to 2 per year and also technical service. And then there is a software and service fee that intervenes years 2 through 5 for about 10% of the purchase price per year.

As I said, very strong contract manufacturer. We use Benchmark International. They're U.S.-based, Nashville and New Hampshire. We could actually expand right there, but they also have a global footprint that would allow us to expand in other jurisdictions. A lot of great proof points where we've been already in the first sort of now maybe 130 days since launch.

So sold in all of the sites of care that we're targeting, seeing terrific market activation. All of that is sort of incredibly nicely stage setting for a very strong commercial outlook 2026 and beyond. We have not only the IDN in the hospital environment opportunity, we're partnering with NeuroNet, which is an equivalent to a health system outside of the hospital in the office setting.

Strong performance in Q3. Our revenue was up 27%. We posted a $3.4 million quarter. We also did incredibly strong on cash burn, down 27% sequential. And that is the beginning of this transformation that we've talked about where 2025 is the tale of 2 halves with a transformative second half as it relates to our financials on the revenue side, on the cash burn side with very, very strong gross margins.

A terrific team. Brett is here. Others are back at home working hard and then leave you with just a few thoughts as a recap. Clearly, a first mover, building a terrific new market opportunity that brings clinical and economic value to patients and providers. AI-enabled technology with incredibly fast iteration and innovation opportunity, broad clearance, existing reimbursement, direct commercial in the U.S., an established distributor partnership network outside of the U.S., derisked growth strategy, as I speak to you today with a cleared and already well-appreciated second-generation technology in the marketplace coming to international markets in a couple of quarters. And today, brain only, but a lot more in the future. Thank you very much.

Good afternoon, and welcome to Hyperfine's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Web Campbell from Gilmartin Group for introductory disclosures.

Thank you for joining today's call. Earlier today, Hyperfine Inc. released financial results for the quarter ended September 30, 2025. A copy of the press release is available on the company's website as well as sec.gov.

Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws. which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained on this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. All forward-looking statements, including, without limitation, those related to our operating trends and future financial performance, expense management, expectations for hiring, training and adoption, growth in our organization, market opportunity, commercial and international expansion, regulatory approvals and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by the forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our latest periodic filings with the Securities and Exchange Commission.

This conference call contains time-sensitive information and is accurate only as of the live broadcast today, November 13, 2025. Hyperfine, Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. With that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Good afternoon, and thank you for joining us. On the call with me today is our Chief Administrative Officer and Chief Financial Officer, Brett Hale.

The third quarter marked an important new beginning for our business. driven by the launches of our next-generation swoop system and the Opti AI software. We delivered revenue of $3.4 million, up 27% sequentially and materially expanded gross margins to a record of nearly 54%, supported by a record average selling price of $361,000. We also drove a meaningful reduction in cash burn, down 27% sequentially, excluding financing. And in October, we strengthened our balance sheet by raising over $20 million to extend our cash runway into the second half of 2027.

We have discussed 2025 as a year of transformation and a tale of 2 halves with the second half of the year's performance driven by the growth catalysts that came to fruition over the last few months, namely the new technology launches as well as the full launch into the new office market. I am pleased to report that after the first 100 days with our next-generation swoops system and the Opti AI software in the market, we have user feedback and proof points to feel confident our technology is now ready for mainstream adoption across the hospital, office and international markets. In addition, we also have capital to support our commercial rollout for the foreseeable future. The third quarter is just the beginning of the next exciting chapter for Hyperfine as we meaningfully accelerate growth, drive commercial adoption, gain operational leverage and improve our financial performance.

Market interest and demand for our next-generation system is very strong. In the third quarter, we focused on deal activation and executed a seamless commercial launch, selling multiple units and building our sales funnel. Taking a step back, our journey to date has been driven by continuous innovation and iteration to deliver portable AI-powered MRI technology ready for mainstream adoption and scale. We launched the first-generation portable brain MRI system in 2020 with a very compelling clinical promise. The 64 milli Tesla magnet strength allowed for safe scanning anywhere and the system was portable. The original image quality was in its infancy.

Over the last 5 years, we have greatly improved image quality, incorporated AI and have listened to our users closely to deliver a next-generation system that is ready for broad adoption. The next-generation system operates on the OPI AI software, which is our 10th generation AI-powered software. In addition to a step function improvement in image quality, additional upgrades include a user and patient-centric design to accommodate a broad patient population, especially beneficial for pediatric, elderly or anxious patients, making MRI more accessible for all. Early users appreciate the system's high level of image quality, functionality and usability. Many users have commented on how closely our OPTI AI image quality resembles that of high-field scanners. Moreover, our office clinical study enrolled in the last few months will give us a robust data set of comparative cases between the subsystem and high field, which I will discuss later in this call.

The proprietary hardware in the new scanner enables us to drive image quality innovation through software updates going forward at a cadence of 1 to 2 releases per year. We're planning our first upgrade to the OPTI AI software to be released in the first quarter of 2026. I am very proud of the AI expertise and leadership we have built at Hyperfine. We continue to be featured prominently on the AI-enabled medical devices list published by the FDA amongst the largest players in health care. Observing clinicians note that the images produced by our next-generation system with Optiv AI approach those of conventional 1.5 Tesla MRI scanners is a testament to the impressive technical lead Hyperfine has developed in ultra-low field MRI.

The radiology community is key to the adoption of our swoop system. This community has provided overwhelmingly positive feedback on our current image quality and is now broadly supportive. This new subsystem paired with Opti AI has triggered an activation of commercial deals markedly different than what we have seen in the past with interest from multiple sites of care inside hospitals down to the most remote community health setting. I will now provide an update on our 3 diversified commercial business verticals, the hospital, the office and our international markets.

Starting with our progress in the U.S. hospital setting. We have placed our new system in all the hospital sites of care we call upon today, including adult critical care, pediatric critical care and the emergency department. The device MSRP of our new subsystem is $550,000, roughly a 15% premium to the prior version. And the next-generation Swoop system hospital placements resulted in a significant average selling price uplift in the third quarter. We have also converted our entire hospital deal pipeline to the next-generation Swoop system.

Compelling clinical utility, strong economic value proposition, multiple sites of care placements and broad health system and IDN engagement are key long-term drivers to our hospital strategy. The clinical interest for the Swoops system in ICUs, ERs, ORs and clinics continues to increase to address the very real issues related to timely access to MRI and patient progress. The economic value proposition associated with the adoption of the swoop system, reducing cost, accelerating patient progress and freeing up conventional MRI scanners for additional elective procedures is compelling to administrators. Hospitals return on investment assessments are showing 1- to 1.5-year breakeven time lines versus 3 to 4 years typical for capital equipment. Although the swoop system is a capital acquisition process in the hospital setting with a strong radiology support, clinical interest and administrative buy-in, we're now seeing higher priority placed on subsystem projects and acceleration of the deals in our pipeline.

Our ability to go deep in the hospital and broad through health systems and integrated delivery networks is beginning to materialize. I am happy to share that in the third quarter, we sold 2 swoop systems into the same hospital network and our pipeline of multiple deals by hospitals is robust. Today, we're actively engaged with several health systems and IDNs to evaluate system-wide deals to standardize care. Generating evidence to further our clinical relevance continues to be an important investment for us. Our work in stroke triage supports expansion into the emergency room with the value proposition of the swoop system being strong given the importance of time to scan and the focus on patient progress in the ER setting.

Our most recent effort, the PRIME study being led by the Yale School of Medicine, evaluates the potential of AI-powered portable MRI technology to triage a broad diversified set of patients who present to the emergency department. Enrollment in PRIME is going well with over 75 patients enrolled. We have also begun evaluating the use of the Swoop system in the operating room for neurosurgery, which represents a potential additional use case and expansion of our total addressable market. We recently commenced PRISM PMR, a study designed to collect data and optimize the Swoops system's real-world clinical utility in this setting. We have enrolled over 20 cases at this point. Now turning to the office.

In the third quarter, we commenced our full commercial launch of the Swoop system into the neurology office setting. Our completed pilot program in which multiple sites secured IAC accreditation, scanned patients and received payment through the reimbursement process with CMS and private payers validated this opportunity. As I have previously mentioned, neurology offices represent a very compelling opportunity for the swoop system. Neurologists directly impact 100 million patient lives in the United States and order an average of 500 to 600 MRIs annually, but only approximately 10% of private neurology practices have MRI equipment on site. The neurology office call point is large and diversified with practices of many sizes based on number of practitioners and volume of patients.

We're proceeding with selling both the first model swoop system with Optive AI and the next-generation swoop system with Optive AI to provide more pricing flexibility in this setting. To drive the adoption in the office, similar to our strategy in the hospital, we have several clinical studies underway. Our most recent study, Neuro PMR is running the neurology offices to compare portable ultra-low field MRI and conventional 1, 5 and 3 Tesla high-field MRI with respect to pathology findings, clinical utility and patient experience. I'm happy to share that the study has completed enrollment and data is expected in early 2026. Additionally, our Alzheimer's study, CARE PMR continues enrollment with ongoing presentations of the increasing data set at major medical conferences, most recently at AAIC 2025.

Our team has been actively selling into both single and multiple clinician practices, building relationships and pipelines of both first- and next-generation swoops systems as we deploy a strategic segmentation pricing strategy to engage offices of all sizes. Additionally, we have been leveraging our partnership with Neuro Net to promote the swoops system to their network of neurology practices. Our full commercial launch in the office is still in its early days, and I have high optimism for this business vertical and its growth potential.

Finally, turning to our international markets, where we are focused on selling primarily into the hospital setting. During the third quarter, we received CE Mark and U.K. CA Mark approvals for OTI AI software. And we now expect to launch OPTI AI in 10 different European languages by the end of the year. We also expect our next-generation subsystem to be available in Europe and Canada markets by the end of 2026. In the past few weeks, the subsystem was referenced in France's largest public hospital procurement body to facilitate nationwide purchases of portable MRI technology. Our international strategy includes our goal to launch in India, where we continue to anticipate regulatory approval before the end of this year. Looking ahead, we're driving 3 pipelines, one for each of our business verticals. The aggregate Hyperfine pipeline is stronger and more diversified than it has ever been.

In conclusion, I am more optimistic than ever about the path ahead for Hyperfine. We now have a system that is ready for mainstream adoption and a diversified set of revenue-generating opportunities as we sell into hospitals, offices and international markets. With this offering, we will be driving significant growth and financial performance improvement going forward. With that, I will now turn over the call to Brett to review our financial performance and 2025 guidance.

Thank you, Maria. I will recap our financial results for the third quarter of 2025 before providing an update on our financial guidance.

Revenue for the third quarter of 2025 was $3.4 million, up 27% sequentially. In the third quarter of 2025, we sold 8 units, had a strong mix of next-generation Swoop system sales and delivered a record average selling price. Gross profit for the third quarter of 2025 was $1.8 million, and gross margin for the third quarter of 2025 was 53.8%, a record and representing a 450 basis point increase sequentially, driven by the increased average selling price. We continue to drive healthy margins for our stage and believe we are well positioned for meaningful margin expansion at scale.

R&D expenses for the third quarter of 2025 were $4.0 million, a sequential quarterly decrease from $4.5 million in the second quarter of 2025. We continue to realize the benefits of the reorganization completed in the first quarter as we transition to a commercial growth stage organization. Sales, general and administrative expenses for the third quarter of 2025 were $6.7 million as compared to $6.4 million in the second quarter of 2025. Net loss for the third quarter of 2025 was $11.0 million, equating to a net loss of $0.14 per share as compared to a net loss of $9.2 million or a net loss of $0.12 per share in the prior sequential quarter. The third quarter 2025 net loss and the second quarter 2025 net loss included a noncash change in fair value of warrant liabilities of $2.3 million and $0 million, respectively.

For the third quarter of 2025, our net cash burn, excluding financing, was $5.9 million, down 27% sequentially from the prior quarter. Reducing our cash burn remains a significant focus of ours, and we will continue to prioritize spending discipline and optimize our operating leverage while also balancing the needs of our ongoing commercial launch and associated growth trajectory in 2025 and beyond. Our net cash burn, including financing in the third quarter of 2025 was $3.9 million. And as of September 30, 2025, we have $21.6 million in cash and cash equivalents on our balance sheet. This cash balance does not include the $18.4 million in net proceeds raised from our October 16 equity financing and subsequent green shoot that totaled $20.1 million in gross proceeds. We are in a strong capital position to continue fueling our commercial efforts. Now turning to our financial guidance.

We expect revenue in the fourth quarter of 2025 to be approximately $5 million to $6 million. This guidance range equates to a very significant revenue step-up and at the midpoint represents sequential and year-over-year quarterly growth of 60% and 137%, respectively. Accordingly, for the full year 2025, we now expect revenue to be approximately $13 million to $14 million. For the full year 2025, we are now increasing our gross margin range to 49% to 51%, representing a 430 basis point increase in gross margin on a year-over-year basis at the midpoint. We expect the progression of gross margin percentage increase to closely follow our sales growth. We expect gross margins to exceed 50% going forward as we realize higher volumes and average selling prices driven by the execution upon our growth catalyst.

Lastly, we now expect total cash burn to be in the range of $29 million to $31 million for the full year 2025. representing a 22% decline in cash burn on a year-over-year basis at the midpoint. We continue to operate lean with strong spending discipline while making investments in areas such as inventory and commercialization to support our recent launches and capitalize on our strong commercial growth prospects. With our strengthened capital position, we now see our cash runway for the business lasting into the second half of 2027. I would now like to turn the call back to Maria for closing comments.

Thank you, Brett. I'm very proud of the Hyperfine team and the excellent work done to bring to market the Opti AI software and the next-generation subsystem. Medical technology businesses that build new markets often go through this transition from a first-generation pioneering technology to a next-gen ready for broad adoption. That is the transition we are undergoing at Hyperfine. The fundamentals remain strong with broad labeling and existing reimbursement. Our strategy to diversify into multiple sites of care inside and outside the hospital and expand internationally is beginning to yield results. In addition, we now have capital to support our commercial growth for the foreseeable future. Q3 is just the beginning of the next exciting chapter for Hyperfine. With that, we now open the line for questions.

[Operator Instructions] Your first question comes from the line of Frank Takkinen with Lake Street Capital Markets.

Congrats on the progress. I was hoping to talk a little bit more about the composition of the backlog, maybe by setting would help as you're entering some new settings, maybe where have you seen backlog growth -- and then as a second part to that question, just maybe talk about what's really supporting the $5 million to $6 million fourth quarter guidance. Is that record backlog? Is that faster conversion to -- from order to actual shipment and revenue recognition? Any kind of context around that to support the guide would be helpful.

Sure. Frank, -- so our pipeline, I think, it's evolved now with the full launch in the office business to be really 3 pipelines that we are really managing independently. And I would argue that we have the eyes of our sales leaders, but also our strategy leaders by business vertical, very, very intensely involved in it. So we are managing a pipeline only associated with U.S. hospital deals, another on U.S. office deals and the third one, which is our international business. So when you really add those 3 layers, the total continues to be an incredibly robust pipeline that is growing significantly from anything we have seen in previous quarters before we had, again, the new technology on the one hand, but definitely the office business. The 5% to 6% is predicated on what we're seeing in the pipeline, exactly the deals that are there.

We don't comment on intra-quarter sort of numbers. But I would say we are not only seeing more rows in the pipeline, but we are seeing more rows that have more than one unit for some of the accounts that are looking to purchase this quarter and more going deeper into some of the IDNs with going from the first hospital in an IDN to a second hospital in the IDN. -- we're also managing the pipeline by individual sales territory or sales area. So we're also very triangulating to make sure that we have confidence that we are not putting sort of all of the eggs in one basket or one area, and we have a very nicely diversified across geographies and across the 3 verticals.

I would add -- this is Brett. I would add that the fourth quarter is the second quarter of the launch for both the next-generation technology in the hospital as well as in the office setting. So we, I think, commented previously that the first quarter was that first 100 days, and now we're into really that second quarter where we converted the entire pipeline of hospital deals to next-generation technology in Q3. And we're seeing those that they're working through the process, and we anticipate them landing -- a subset of them landing here in Q4. So just kind of the natural order of the launch trajectory, both with the next-generation technology as well as the office setting.

Got it. Really helpful. And then maybe if I could try for 2026, I realize you're only talking about 2025 today, but any directional comments you can speak to on 2026 as we have a confluence of different growth drivers coming together at once?

Appreciate the question, but I'm going to tell you, we're not really going to provide a lot of direction around 2026, a little bit because as Brett just mentioned, we are on quarter 2 of the launch. And a lot of what we're going to use really, I like to think of Q3 as an incredibly important quarter where the first quarter showed sort of the excitement and the feedback on the actual technology and the beginning of that activation. This is the second quarter. A lot of it is going to be the launch pad into 2026. So we really would prefer to reserve the commentary around 2026 until we get into the beginning of 2026 with a closed Q4 as well. Again, it will continue to be composed of the things that I just outlined. So it is the 3 pipelines, and it is -- clearly, time is always a friend because more things get added into the pipeline and the hospital deals, as we know, sometimes take time. So -- but for now, I think we're going to focus more on just what's in -- what's near term Q4 2025.

Your next question comes from the line of Yuan Zhi with B. Riley Securities.

This is Paul on for Yuan. Congratulations on the quarter. I have a couple of questions. First, can you provide an update on the time line and initial trajectory of market penetration in urology office? And when can we see a ramp-up of orders? And the second is for international expansion, does it take similar time or longer time to sign the contract versus those in the U.S.? Based on your current experience, what do you think are the major bottleneck for international expansion?

Great. So I think I'll just maybe repeat the question to make sure we've got that right, is that you're speaking about the penetration, first and foremost, into the neurology office and then the time line on international deals. Did I get that correct?

Yes.

Okay. So great question. So I think in neurology offices, we really have a very active pipeline. We have said -- I think the call point is very, very large. So thinking in terms of percentage penetration is a little bit more challenging because I think what is really, really important to understand is how the offices are really grouped between what I would call the more solo practitioners, a single practitioner versus multiple practitioners. That immediately dictates the size of the practice. And with the size of the practice, there is a very strong correlation to the volume of scans that they are going to do and how they think about the economics of bringing in technology like the swoop system to add on imaging to their offering.

Right now, we have a bit of a segmentation approach where we are using our first model with the latest software with Optiv AI at a price point that offers more flexibility to go into the smaller offices. And we are using, of course, our next generation with the same software, Optive AI for the larger offices. We also have a partnership with Neuro Net, which de facto operates a little bit like an IDN, if you want, of the office space to be able to penetrate that group.

We're also going to be going for the first time to one of the meetings that groups those kinds of offices together, which is a headache meeting, which is happening early December in the U.S. So we're really trying to drive the strategy to go and approach both call points, but we haven't really -- and we're looking at growing on both on the solo practices as well as on the multi-practitioner larger volume practices. But I don't have a good metric of penetration. It will be more about the growth and the adoption. You remember maybe that we conducted a study called Neuro PMR. We conducted it in 2 very, very large practices, the Dent Institute in Buffalo and Texas Neurology in Dallas. We started in April, but we were able to put the new devices into those 2 practices for the study so that the data that comes out, which is now only literally a few -- a couple of months away because it will be early 2026, is with the latest technology, both hardware and software. So that's going to be really exciting.

To your question about international, as I said, international is not about the office. International is about hospitals. So there are some procurement processes. There are some tendering processes. There are some multidimensional processes like in the U.S. One of the big wins this quarter was the French referencing. So this body called Uni HA, which is really a very large catalog procurement process that allows all French hospitals to more swiftly buy through that without a lot of the procurement process kind of time lines. So we think, for instance, in a market like France, we will start seeing a more expedited way of being able to transact with hospitals, but it is still hospitals.

So it's not as swift a decision-making as the office. And for international, it's really important that it really is going to be this quarter when we bring to them the new image quality. although we did get the clearances, both on the CE Mark front and the UKCA front last quarter, there's another work stream that we need to do beyond the regulatory approval, which is produce the software and all the labeling and documentation in local languages. We now have 10 different local languages. So the OCI AI with the new level of image quality will get launched in local languages in 10 of those local languages only here in Q4.

No further questions at this time. I'd like to turn the call back over to Maria Sainz, CEO, for closing remarks.

Thanks, everyone, for joining us in today's call. I'm truly, truly excited about the inflection point in which we are at our company, and I look forward to providing you further updates here in just a few short months. Thanks, everyone.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.