Repro-Med Systems, Inc. Stock

Thank you. System's second quarter 2026 earnings conference goal. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Louisa Smith.

Thank you. You may begin. Thank you, Operator, and good afternoon, everyone. Joining me on the call today are Adam Calbermatten, President and CEO, and Tom Adams, CFO. Earlier today, KORU released financial results for the second quarter ended June 30, 2026. A copy of the press release is available on the company's website. I encourage listeners to have our press release in front of them, which includes our financial results and commentary on the quarter. Additionally, we will use slides to support further commentary in today's call, which are also available on the investor relations section of our website. During this call, we will make certain forward-looking statements regarding our business plans and other matters.

These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements. During the call, management will also discuss certain non-GAAP financial measures. You will find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures, in our press release, the accompanying investor presentation, and SEC filings. For the benefit of those listening to the replay, this call was held and recorded on Wednesday, August 5th, 2026 at approximately 4.30 Eastern time. Since then, the company may have made additional comments related to the topics discussed.

I'd now like to turn the call over to Adam.

Please go ahead. Thank you, Louisa, and good afternoon, everyone. I'll begin with commentary on this quarter's highlights and strategic progress. Tom will then speak to our financial performance and the current assumptions around guidance before we open the line for questions. This is my first quarter reporting as CEO, and I want to start by saying how excited I am about the company's position and the opportunities that lie ahead for KORU. Today, we are the global leader in large volume subcutaneous infusion devices for drug delivery, serving the at-home infusion needs of roughly 60,000 chronic and recurring Ig patients through our Freedom Infusion System. broad market opportunity for subcutaneous IG administration continues to shift from hospitals to infusion centers and increasingly into the home. Coru continues to be positioned as a direct beneficiary of that shift by providing an easy to use and differentiated way for patients to deliver their therapies outside the clinical setting. My focus as CEO is on extending our leadership position as the broader drug landscape follows this shift towards alternate sites of care focused on subcutaneous infusion versions versus IV.

We are constantly assessing opportunities to bring more drugs onto our label and improve our technology. To achieve this, our fundamental strategy remains focused on scaling our industry leading mechanical platforms while selectively integrating smart capabilities that compliment our core devices. By adding data-driven smart connectivity into our existing infusion systems, as is our intention with this quarter's technology asset acquisition. We aim to provide an enhanced level of support for the patients who want it, while offering valuable data-driven insights to our pharmaceutical and specialty pharmacy partners. This approach allows us to preserve the simple, trusted, mechanical experience that patients rely on while building the foundational capabilities to lead the drug delivery market as it gradually adopts connected health solutions. I'm pleased with our performance in Q2, delivering $12 million in revenue, representing growth of 18% for the quarter and 20% for the first half of the year. This momentum is built on the strong, predictable foundation of our recurring IG patient base, coupled with our proven ability to capture new patient starts and actively expand our market share of both. both in US and internationally across both home and alternate site clinical environments.

Financially, we executed well. We improved gross margin by nearly 200 basis points above our 2026 range. And notably we delivered positive net income for the first time since 2019, a major milestone in KORU's strategic evolution and further evidence of our ability to drive profitable growth. As I step into the CEO role, we are actively building upon this momentum. Our foundational three-pillar strategy remains our central focus, and we are executing against it with a heightened sense of urgency, scale, and vision. Looking at our growth pillars on the domestic side, we grew our core business more than 12% year-over-year, which is heavily supported by patient retention and continued market share gains with new patient starts in a growing population our domestic business continues to remain strong and has been growing at or above expectations and the market quarter after quarter on Restigo we continue to see adoption with new patient starts and are receiving strong feedback from both clinicians and patients We view Resigo as a contributor to our domestic business, but more importantly, as a strategic validation of our platform's capability to deliver innovative non-IG chronic therapies. We are highly encouraged by this ongoing expansion, which further reinforces our ability to successfully diversify our clinical indications and experience. expand our addressable patient footprint. Internationally, we grew the business by 59% year over year.

This strong performance was driven by high volumes of both pumps and consumables, which was fueled by sales to distributors who are supporting the conversion of patients into pre-filled syringe formats. Along with strong momentum from new patients starts within our established international markets. Looking ahead to the back half of this year, we remain highly focused on executing our our international expansion, though we expect our near-term international core growth to moderate as we navigate some specific regional launch dynamics. As we continue to build out our presence in newer pre-filled syringe markets, some markets may take longer to ramp than we initially anticipated. In tender markets, we win the pharma practically overnight, In other markets like the US, where we win every new patient start as our distributors methodically convert from bile to PFS one by one, it may take a little bit more time. In our Q1 call, we noted that our growth rates in these newer regions can be variable as we deepen our local market knowledge and expand our capabilities. It is crucial for the long-term health of the business that we establish the right distribution and reimbursement pathways.

Unlocking this opportunity is simply taking us a little longer than forecasted in our assumptions. While this pacing may impact the international core growth rate in the short term, remain encouraged by the progress in these markets as the foundational pieces fall into place. We also remain confident in the size of the overall international pre-filled syringe market opportunity and are bullish in our long-term ability to capture significant market share internationally. Building the right commercial and regulatory foundation in these new conversion markets takes time, but we are highly disciplined and diligent at the outset so that we are positioned to maintain permanent market leadership in the future. In our PST business, we continue to systematically advance our established programs while initiating early stage discussions with new potential pharmaceutical partners. Because many of these collaborations are designed to navigate the multi-year pharmaceutical development pathway, they serve as the engine for fueling our long-term growth pipeline. Biogen's recent acquisition of Appellus is an example of this.

There may be some challenges to the timing and magnitude of near-term clinical trial activity as they work through standard post-acquisition integration activities, but remain focused on a long-term partnership and supporting their clinical development pipeline as their subcutaneous infusion programs advance. Turning to some strategic updates. We are pleased to announce our acquisition of a connected monitoring technology asset, which we believe will enhance the patient experience, deepen our value proposition, give us a meaningful new capability in generating real-time data insights, and assist us in entering new clinical trials with pharmaceutical partners. Ultimately, the technology will support a better data and clinical experience. to day experience for patients in addition to providing specialty pharmacies and pharmaceutical companies real world evidence across the patient base. Additionally, we believe this will be a key differentiator of the best in class co-room mechanical platform in our PST business where partners will have real time insights into dosing data during clinical trials. This capability will be valuable because precise adherence tracking and real-world data capture are vital for ensuring trial integrity, accelerating regulatory approval timelines, and ultimately generating the robust evidence required to secure favorable payer reimbursement upon commercialization. This is a multi-year bill for us, but we are very excited to have the technology and see it as an important building block for how we position our platform going forward. It reflects the broader approach we intend to take as we keep expanding the KORU platform and remain thoughtful about the right opportunities that have potential to strengthen our market positions.

Turning to an important emerging catalyst for our core SCIG business, I want to highlight the continued industry advancements we are seeing within secondary immunodeficiency, or SID. Today's SID market growth is expanding beyond the broader SCIG market, largely driven by patients who develop immunodeficiencies following treatments with immunodeficiency. immunosuppressive drugs such as chemotherapy or cell therapies for various cancers and autoimmune conditions. To address this growing unmet need, major pharmaceutical players have made SID a clinical priority, with several ongoing pivotal clinical trials expected to reach their endpoints over the next 12 to 18 months. As these trials conclude and SIG manufacturers expand their active marketing efforts to hematologists and oncologists, we anticipate that SID will be a key part of the SID's future. a significant expansion in reimbursement coverage domestically for secondary immunodeficiencies. For KORU, this represents a new incremental high growth patient population. Because our platform is already a trusted standard of care for subcutaneous IgE delivery, we are perfectly positioned to capture this volume and meaningfully broaden our total addressable market with these new indications as they come online. Turning to our regulatory pipeline, I would like to provide an update on our two recent 510k submissions, FESGO and deferoxamine.

First, regarding our broader oncology strategy and our submission for use of the Freedom System with FESGO, we've made a strategic decision to pivot our focus towards alternative molecules for our our initial entry into the US and withdraw our application from the FDA for Fezgo in the US. Following productive conversations with the agency, there are specific considerations with the Fezgo label that are making pursuing other high-volume oncology biologics more favorable to our oncology strategy in the US. Our conviction in the oncology strategy is that we are not going to the oncology market remains unchanged. It's a core strategic priority where we see a large opportunity for COVID. Simultaneously, we continue to advance our international oncology initiatives, including with FESGO, which we view as a highly compelling long-term growth driver, bolstered by the strong insights and positive nursing studies we've already generated in Europe, such as our work in Denmark last year. While we refine our US oncology pathway, our regulatory momentum in other non-IG therapies remains strong. As a reminder, KORU officially submitted a 510K application for the clearance of the Freedom Infusion System with deferoxamine at the end of the first quarter.

That application remains active, and our team is engaged in productive collaboration. collaborative discussions with the FDA as we navigate the standard review process. We're committed to getting deferoxamine on label and believe it will unlock an estimated 200,000 annual U.S. infusions and further solidify our platform's expansion into non-IG therapies. Regarding our new product pipeline, we remain on track with our target for a 510 by the end of next year for our next generation pump, which we're calling Freedom 360. In the second quarter, we completed the final stages of the development process for Freedom 360, which were steps that had represented the greatest area of risk in the development timeline. With that critical milestone now behind us, we are confident in our U.S. submission process. timing. I am proud of the team's execution and the robust growth we demonstrated across the business this quarter. Stepping back, our fundamental strategy remains rooted in our three growth pillars, but as CEO, my mandate is to actively accelerate our execution against them.

I I am more energized by the magnitude of the opportunities ahead of us today than I was on day one. We are successfully transforming KORU from a highly reliable mechanical device manufacturer into a dominant digitally enabled drug delivery platform. Whether it is preparing for our upcoming Freedom360 launch, advancing our international and oncology roadmaps, digital connected health capabilities, we are deliberately widening our competitive moat. We have a clear, disciplined strategy to drive sustainable, profitable growth and deliver significant long-term value to our shareholders and the patients we serve. With that, I'll turn it over to Tom to walk through financials.

Thanks, Adam. During the second quarter, we delivered record quarterly revenues of $12 million, representing 18% growth year over year. Our domestic core revenue was $8 million for the quarter, up 12% year over year. Growth was driven primarily by momentum from new patient starts and continued market share gains, as we once again outpaced the underlying SIG market. International core revenue was 3.5 million for the quarter, up 59% year-over-year, and driven by growth in our established markets and additional volumes, driven by supporting the pre-filled syringe conversion strategy in Europe through distribution channels. PST revenue was $600,000 for the quarter, down 35% year-over-year, driven primarily by lower orders for clinical trials used due to customer order timing. Once again, I'll remind our audience that the PST business will continue to have inherent variability from quarter to quarter based on customer timelines. On gross margin, we delivered 65.1% for the quarter versus 63.5% in the prior year period. 160 basis point increase over the prior year.

The primary drivers of the improvement included productivity and efficiency led reductions in manufacturing costs, along with higher average selling prices and a more favorable customer mix. Also of importance during the quarter, we extended a key supplier contract, and with the signing of this new multi-year agreement, we were able to secure improved pricing, which will continue to improve as our business grows, resulting in continued margin expansion. Turning to cash, we ended the quarter with $8.3 million, reflecting minimal cash usage of $500,000 in the quarter. We were expecting Q2 to be our heaviest usage quarter, but with lower net losses from strong revenues and improved gross margins, along with tighter management of spending, we were able to generate positive cash flow for the quarter. from operations. Additionally, we closed the technology asset acquisition in the second quarter while maintaining minimal cash usage. Based on our current run rate, we believe our current cash is sufficient to support operations for the foreseeable future as we achieve cash flow positivity in the coming quarters. As a reminder, we also have access to our unused $10 million debt facility, which provides additional financial flexibility for incremental opportunities as we execute against our growth plans.

I'd also like to note that we did not draw down on our credit facility to fund the technology acquisition during the quarter. As we review the first half of the year, we see strength across the P&L and balance sheet. We grew revenue by 20%, gross margin tended higher, and we improved by 20 basis points to 63.3%. continue to deliver improved operating leverage against our revenue growth with operating expenses increasing only 9%. We improved net losses by 60% and delivered positive adjusted EBITDA of $900,000. Finally, we have demonstrated improvement in CAS usage by 62% versus a year ago. Having said this, we will continue to invest strategically in areas that improve and grow our business in sales and marketing and research and development, and we will do so while maintaining spending discipline across the business to drive operational leverage. Turning to guidance, in prior commentary, we noted the back half revenue would be weighted more heavily, largely driven by new pre-filled geographies ramping up.

However, as Adam described, we are navigating complexities associated with specific regional launches in non-tender offer markets, in order to ensure we have proper market foundations in place. This deliberate setup in select geographies positions us for a more effective launch but is also resulting in a more moderate ramp in the third and fourth quarters. As a result, we are narrowing our full year revenue guidance to 47 and a half to 48 and a half million. We view this as primarily timing related as the broader pre-fill conversion story across the rest of Europe. continues to move in the right direction. We have updated our internal forecast to assume recognition of the opportunity in certain markets more meaningfully in 2027 versus the second half of 2026. We remain encouraged by the overall market opportunity. It's just that unlocking it is taking a little longer than our guidance assumptions accounted for.

Also, I will note that while our initial guidance assumes some modest incremental revenue from pending 510K clearances, the update on FESGO, Adam detailed, is not a contributing factor to our updated outlook. Following the signing of an extended supplier contract, we believe that the bottom end of our gross margin guidance has been sufficiently de-risked and there is room for additional upside in the back half of the year. As a result, we are raising gross margin guidance from 61 to 63% to 67 to 68%. 62 to 64%. We're also adjusting our cash guidance to account for the technology acquisition. associated operating costs with a small team of R&D headcount. We now expect that our year-end cash balance will be greater than $7.5 million. We also want to reiterate that we still expect to have positive adjusted EBITDA for the full year. I'll now turn the call back over to Adam for additional comments on our forward momentum.

Adam?.

Thank you, Tom. Before we open the call to questions, I want to reiterate why I'm so energized by the road ahead for KORU. Over the past few years, we have systematically transformed KORU from a single therapy device provider into a true multifaceted technology platform. We have successfully expanded our label with novel therapies like Ristigo, more than double-digitized, our international footprint, engineered next-generation capabilities to capture the market shift to pre-filled syringes, and built a robust pharma services pipeline that embeds us directly into the clinical trials of innovative new drugs. We are operating from a position of strength in a large and rapidly expanding market for subcutaneous drug delivery. Our core business commands a leading share, consistently outpaces underlying market growth, and generates highly durable recurring revenue driven by the 60,000 patients who rely on our system every single day. on this incredibly solid foundation, we have several powerful strategic catalysts on the horizon, expansion across our core IG business in the secondary immunodeficiency market, oncology initiatives, our pharma services expansion, and the integration of our newly acquired connected health technology, all of which that we believe will meaningfully accelerate our growth trajectory, expand our competitive moat, and elevate our platform's value. Each of these initiatives represents a deliberate step in our evolution, reinforcing KORU's position as the definitive standard of care in home and alternate site drug delivery. Our long-term targets remain resolute. 100 million in revenue, gross margins above 65% and EBITDA margins of 20% or greater.

This quarter's milestone of returning to positive net income proves our model works. We intend to keep executing with that same rigorous discipline as we build the definitive standard of care and home infusion. With that, I'd now like to open the call for questions.

Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Frank at Tickenin with Lake Street Capital. Your line is now live.

Great. Thank you for taking the questions and congrats on the solid Q2. I was hoping to start with asking for a little bit more color on the OUS dynamics. What needs to happen in order to unlock some of the non-tender markets? to capture some of the growth you were counting on in 2026. And with any of these initiatives, could they potentially be pulled forward still in 2026 and you're exercising some conservatism, or is this mostly all really going to hit 2027?.

Hi, Frank. It's Adam. Thanks for the question. Appreciate the... I appreciate the... Congrats on the solid quarter. On international, we're still really excited about the opportunity overall. We see this as a major growth driver for KORU moving forward. I think as we look at the back half of the year, it's really about how do we get all of the different elements in place in each of the different regional dynamics there, right? We are working really hard on that. We see it as something that we continue to make very good progress. A lot of the patient starts are kind of warming up here.

And over the next, call it 12 to 18 months, we still see a pretty big opportunity here. It's really about a delay in the timing, but really, really excited about the overall opportunity. some potential upside here. You know, we're going as quick as we can. It's really about getting all of these different dynamics in place in all the different countries there. Tommy, anything else you want to add to that? No, I think you covered that, Adam.

Okay, and then maybe a follow up on the connected monitoring technology acquisition. I'm going to go a little bit deeper into the use case for this when you might, if we're in development stage, this might be if there's still things that need to happen before it's deployed into the field and any other relevant color you would.

be welcoming to provide. Yes, we're super excited about this. This was an acquisition that came up for us. It was something that was opportunistic as we were looking at our mechanical system. We really love the simplicity that the mechanical system provides to patients. It's something that as we looked at where that platform was going to continue to go, we wanted to look at how could we bring additional value. value to those patients. And this was something that as we were looking at those different options, we came across this technology asset and are very, very hopeful for what that could bring down the line. I want to stress that it's a multi-year build here, so it's going to take some time, but it's something that we look at the ability to communicate with patients, collect additional data from the infusion.

We're still in the early stages of looking at that. We just wanted to signal that we did make that acquisition this quarter.

Okay, fair enough. I'll hop back in queue. Thank you. Our next question comes from Chase Knickerbocker with Craig Hallam Capital Group. Your line is now live.

Good afternoon. Thanks for taking the questions. If I just would start on kind of a little bit more detail around kind of the FESCO dynamics. So, can you just kind of give a little bit more detail as far as kind of what the FDA feedback was? And then you kind of mentioned, you know, kind of focusing on other molecules that would potentially be more attractive to get on label. Can you just kind of define kind of what the kind of characteristics of an attractive molecule for you in oncology would be? Thanks.

Hi, Chase. Good to hear from you. I want to start by saying we're still really, really excited about the oncology market opportunity we have here. We see it across a number of different molecules, being about $60 million as we look at that total TAM today. continuing to grow over the next four or five years to upwards of 140 million. As it impacts Feds go here in the recent news in our pivot, we applied to bring Feds go on label at the end of the year last year. We've had a number of ongoing discussions with the FDA. Through those discussions, identified a consideration with the FESGO label, so with the actual drug label, that made pursuing other high volume oncology biologics as a higher attractive opportunity for us. So that's what resulted in us making that decision here to pivot.

In terms of Fesgo, you know, internationally, we still see that as an opportunity that we continue to go forward. But it's really about focusing on those those molecules where we see a more attractive volume and return on our investment for what we're trying to do here. So still really, really excited about oncology and still excited about Fesgo internationally, but in our U.S.

just looking to make a pivot here. Got it. I guess just maybe to follow up on that, any sort of kind of changes in timelines as far as US oncology market entry or kind of changes in go-to-market there? And then just second, as a follow-up, could you just maybe give us an update as it relates to kind of your outlook? If anything's changed as far as how you're thinking about the domestic core business? Maybe just a little bit more detail. Just an update on, you know, you still thinking about kind of 8 to 10% kind of core SCIG market growth in the US and then, you know, call it several hundred basis points about performance for your business.

Thanks. Absolutely. That was a good one, Chase. Let me start with the – The first part of the question, I'll pass the other one to Tom on the domestic side. I think as we're looking at oncology kind of going forward here, we had been planning our entry for later this year as we had approval with Fesco. We were expecting second half. I think it's fair to say that's going to shift a bit now. We're still working. through exactly what that timing's going to look like and announce that, but I can say we are actively in that process. So, you know, we're going to be a little bit delayed. I hope we're going to be able to continue that going at a pretty rapid pace here.

That said, on the domestic SCIG market, we see some healthy growth continuing there. We're continuing to grow above market.

in terms of the details, Tom, if you want to jump in with anything. Yes, thanks. And hi, Chase. Yes, on the U.S. side, our U.S. business is still very strong. We continue to outperform the SCIG market. And, you know, when we think about our guide, you know, Our guide basically continues to have US as a strong market. PST, our clinical trial business, continues to do well. And as we mentioned, this guide is fairly isolated to our international business.

Understood, thanks. Our next question comes from Caitlin Roberts with Canaccord Genuity. Your line is now live.

Great, thanks for taking the questions. I'd love a bit more color on just the OUS dynamics. If you could provide any insight into what percent of the markets you would say are tender versus kind of the one by one work like in the US and just given the market. those dynamics and maybe pursuing those more gradual markets? Will this maybe smooth out the revenue expectations for OUS here?.

Hi, Caitlin. Great question. So when we think about the overall market internationally, specifically Europe, you know, it's primarily a market today that's dominated by electronic pumps. That's the standard of care there. So we're going in and we are following where pre-filled syringes are entering the market. And we're kind of seeing that as fertile ground for us to work on bringing additional value to the patients. It starts with those pre-filled syringes that the patients have a more patient-friendly experience, a simplified experience. And we like to introduce the KORU pump as a way to continue to amplify that simplicity that we can bring. in terms of the markets themselves, what happened over the last, call it three, four quarters, is we were converting one of those markets that was a pharmaceutical tender market that we fast followed really quickly with that pharmaceutical company. As we continue to look at these other countries, they're more what we would refer to as kind of competitive markets, where they're not tender driven markets.

And that means we need to look at how we're managing that channel through the distributors, through the relationships that we have with different home care companies that are training the patients. And how do we make sure that we have those right relationships? So the good news is we do have a lot of those relationships. Now we're in the process of kind of going through new patient starts. The process is that the whole market doesn't convert all at one time. It converts through those new patient starts, very similar to how the U.S. domestic market works in that you kind of get those new patient starts, and then as you continue to convert those patients, the consumables flow through to support them as well once they start on the pumps. Okay. Tom, anything you want to add on that? No, I think we're good, Adam. Thanks.

Great. And then maybe just a question on secondary immunodeficiency. What's the go-to market strategy here and does that differ from just the core FCIG market in the US?.

Absolutely. Yes. So as we think about secondary immunodeficiency, we look at it as work that many of the major pharmaceutical companies are already engaged in. So there's a number of clinical trials ongoing. Those clinical trial endpoints are coming up towards the end of 2027. A lot of those clinical trials are being done. done with existing SCIG drugs that KORU already has on label. So as we think about it, we're trying to stay on top of exactly what those clinical trials are, who are the manufacturers. what is the pathway towards getting approval for different indications in SID, and then what is the channel that we would need to set up to make sure that we can get our products in the hand of those patients. But the good news about all of that is that we have those drugs already on label for many of those that are in those clinical trials today, and as you know, As soon as the pharmaceutical companies wrap up those clinical trial endpoints, we are really excited about the opportunity to serve more patients and bring them on our system.

Great, thank you. Our next question comes from Joseph Downing with Piper Sandler. Your line is now live.

Hey Adam and Tom. Thanks for taking the question. Congrats on the quarter. Just another question on the Fesgo withdrawal here. So obviously it sounds like you're keeping Fesgo alive internationally and just looking at the deck, now it looks like it sizes the opportunity around 600K, annual infusion versus the 1.1 or 1.2 call that previously. I'm just curious, is that Delta simply the U.S. coming out? And can you frame how the international and the economics compare here from whether it's a pricing channel, rich geographies, anything you want to divulge there? Thanks. Thanks.

Hey, Joe, thanks for the question. Yes, you caught the correct drawdown that we had when we pulled out the U.S. market for Fesgo since we are focused now on the international. I would highlight that as we look at our entry, we are still very focused on the U.S. International is one that we are also planning to move forward to. There's some additional work we have to do in terms of real-world evidence in order to bring drugs on label in Europe through the MDR process. So that is going to continue to happen. to take some time. In terms of the economics, everything that we see continue to be very favorable for us in the international markets in Europe as well when it comes to these oncology drugs. reimbursements a little bit different than what we had studied in the U.S., but we're still seeing very, very positive contributions that we can make there, and we continue to see a lot of very strong interest there.

Yes, and I will add on to this one, Adam. Go ahead.

When we think about Fesco, the volume of infusions internationally is much more prevalent than what we see in the U.S. So it's a higher volume in terms of annual infusions all across international markets and European markets, I should say, specifically, versus the United States.

Good point, Tom. Tom Steeleman Good point, Tom. Thanks. I appreciate all the color there. And then, Adam, I just have kind of a bigger picture question for you now that you've been in the seat for a little bit. So given the long-range framework that you inherited, I'm just curious how you're thinking about what it takes to get this business to be kind of a sustainable 20% grower here and how you plan on maybe holding it there for multiple years rather than just a one-off year. And I'm curious specifically if this can be a sustainable 20% grower if the U.S. is kind of in that – low, low double digit mid teens, you know, range. Thanks.

Yes, absolutely. Great, great question. You know, so on our long-term strategy, right, there's really the three growth pillars. It's continuing to grow domestically, defending our share. It's second, growing internationally. And then third, it's really about working with pharma companies and bringing more drugs on label. continue to grow within the IG market. We continue to intend to grow and take more than our fair share there, as we have been doing. We've got a pretty good track record there. To get our growth rates up higher, it's really about bringing new drugs on label and continuing to expand internationally. So when we talk about Fesgo, when we talk about oncology and the broader opportunities it's really about how can we increase our TAM and get those additional drugs on label so that we can we can bump up the markets that we serve get more patients on on our products and then continue to serve those patients over the long term.

Great, that's thorough. Thanks, Adam. Thanks, Tom. We have reached the end of the question and answer session. I'd now like to turn the call back over to management for any closing comments.

Thank you all for joining us this afternoon. Really enjoyed the call here and looking forward to updating you further on our progress in our third quarter call. Have a great evening and rest of your day.

This concludes today's conference. You may disconnect your lines at this time and we thank you for your participation.

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

[Call has ended.]

Greetings, and welcome to the KORU Medical Systems First Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Louisa Smith from Investor Relations.

Thank you, operator, and good afternoon, everyone. Joining me on the call today are Linda Tharby, Chief Executive Officer of KORU Medical Systems; Adam Kalbermatten, President and Chief Commercial Officer; and Tom Adams, Chief Financial Officer.

Earlier today, KORU released financial results for the first quarter ended March 31, 2026. A copy of the press release is available on the company's website. I encourage listeners to have our press release in front of them, which includes our financial results and commentary on the quarter. Additionally, we will use slides to support further commentary in today's call, which are also available on the Investor Relations section of our website.

During this call, we may make certain forward-looking statements regarding our business plans and other matters. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements.

During the call, management will also discuss certain non-GAAP financial measures. You will find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures, in our press release, the accompanying investor presentation, and SEC filings.

For the benefit of those listening to the replay, this call was held and recorded on Wednesday, May 6th, 2026, at approximately 4:30 p.m. Eastern Time. Since then, the company may have made additional comments related to the topics discussed.

I'd now like to turn the call over to Linda Tharby, Chief Executive Officer. Linda, please go ahead.

Thank you, Louisa, and good afternoon, everyone. Before we get into the quarter, I want to briefly acknowledge that this will be my final earnings call as CEO. As we shared last quarter, Adam has been appointed as my successor and will step into the role on July 1st. The transition is well underway and is progressing extremely well. I have great confidence in Adam's leadership and in the continued momentum of the business under his direction.

I'll begin today with some commentary on our performance highlights in the quarter, and then Adam will step in to speak about our broader strategy. Tom will then walk through our financial results before we open the call for questions.

Q1 2026 was a record start to the year. We delivered $11.8 million in revenue, representing 22% growth over the prior year period. This reflects the strength and consistency of a recurring revenue model business built on the foundation of approximately 60,000 patients on the KORU platform.

A few highlights. Domestic core grew 12% year-over-year, driven by new patient diagnosis starts in both legacy KORU accounts as well as competitive conversions, driving outperformance within a strong underlying SCIg market. International core grew 35%, driven by prefilled syringe conversions in Europe and strong distributor orders in a new market to support this growth.

Within our non-Ig pipeline, two of our existing pharma collaborations advanced assets within their Phase III clinical trials, including one for an expanded indication and the other restarting their trials for a new drug application. We executed to plan in submitting our 510(k) application for the use of the Freedom Infusion System with deferoxamine, reflecting further tangible progress in our growing commitment to expand beyond Ig.

From a balance sheet perspective, we used only $100,000 in cash this quarter, ending the period with $8.8 million in cash, reflecting our continued progress towards sustainable profitability. We are reiterating our full-year 2026 guidance for revenue, gross margins, adjusted EBITDA, and cash flow. Overall, this was a very good quarter, delivering strong revenue growth and continued execution against our strategic priorities.

And now I am pleased to turn it over to Adam.

Thank you, Linda. I'm encouraged by what lies ahead for KORU. Before I discuss our strategy more broadly, I'd like to take a moment to reflect on how our recent performance fits into the three-pillar strategy, protecting and growing our domestic core business, international expansion, and enabling more patients by adding more drugs to our Freedom Infusion System.

The three strategic pillars we've been executing against are all moving in the right direction, and they remain central to our focus as I step into my role as CEO. The first pillar is protecting and growing our domestic core business. Our U.S. business continues to outperform the underlying SCIg market, driven by capture of new patient diagnosis starts in both legacy KORU accounts as well as competitive account conversion and further supported by a strong recurring revenue base serving chronic immunodeficient patients.

Regarding the recent clearance for RYSTIGGO on KORU's label, our commercial rollout with this asset is advancing as planned. We are working through clinical evaluations with specialty pharma companies, and we expect the incremental revenue contribution from RYSTIGGO this year to be modest.

Most importantly, however, this rollout represents meaningful progress as an entry point into the ambulatory infusion clinic channel and marks an important expansion of our platform beyond the home setting as RYSTIGGO is administered across both home and ambulatory infusion clinic environments. We believe this positions us well for increasingly meaningful contributions in this channel in the years ahead.

We also want to highlight secondary immunodeficiency or SID as an important emerging opportunity for KORU. Outside the U.S., SID has already become a key priority for major pharma players, and there has been increasing focus on Ig manufacturers translating that success in the U.S. market with several ongoing pivotal trials expected to reach their endpoints in 2027. Should reimbursement coverage expand in this area domestically, it could meaningfully broaden our addressable opportunity in SCIg with another indication.

In terms of current market dynamics, the SID market growth has been tracking ahead of the broader SCIg market, with growth currently being driven primarily by immunologists. However, we anticipate that as the clinical trials conclude, SCIg manufacturers will begin actively marketing to hematologists and oncologists who recognize the unmet need for patients following courses of treatment with immunosuppressive drugs like chemotherapy and ultimately opening up an entirely new and incremental patient population that we believe KORU is well positioned to serve.

The second pillar is international expansion, and this remains one of the most exciting areas of our business. Today, our international growth has been led by SCIg, but consistent with our domestic strategy, we are establishing a footprint designed to support an extension into non-Ig drugs over time.

In the first quarter, we delivered 35% international growth, and we believe we are still in the early stages of a much larger long-term opportunity. With key EU markets coming online in 2026 through the pharmaceutical manufacturer-driven vial to prefilled syringe conversions, there is significant runway for continued market penetration. Our growth rates in these markets will continue to be variable as we continue to deepen our knowledge and expand our capabilities across reimbursement, pharmaceutical and home care partnerships.

Beyond this core SCIg opportunity, we are also actively exploring the expansion of our oncology initiative into international markets, an area we view as a longer-term growth driver for the company and one for which we already have compelling market insight given some of our early hospital work on the KORU value proposition, including last year's Denmark nursing study.

The third pillar is enabling more drugs to reach more patients. Our pipeline continues to advance meaningfully with new drug submissions, Phase III trials with the KORU Freedom Infusion System and multiple new feasibility agreements. We are engaged in active conversations with partners across multiple therapeutic areas, conversations that we believe will translate into tangible opportunities for KORU in the years ahead.

Turning to the pipeline. We now have eight active non-Ig drug opportunities in development, which together represent more than 6 million annual infusions worldwide, a meaningful reflection of the breadth and scale of what we are building. To put that in context, 6 million incremental annual infusions would represent approximately double our current SCIg business revenue, where we estimate we are enabling the delivery of nearly 3 million infusions a year, underscoring the significant long-term growth potential embedded in our pipeline.

I want to highlight two important updates this quarter. As Linda noted earlier, two of our existing non-Ig pharmaceutical collaborations have advanced to Phase III clinical trials, and we remain an infusion device supplier for those trials.

Apellis continues to invest resources in adding new clinical indications for Empaveli, having progressed into Phase III trials for the drug's fourth indication, this one in DGF or delayed graft function. We estimate this unmet need within nephrology represents an additional 25,000 annual infusions across the pediatric patient base.

And second, one of our undisclosed pharmaceutical partners has reinitiated Phase III clinical trials on one of its assets, for which we believe the opportunity to be 500,000 annual infusions.

The progression of both of these drugs in their clinical pipelines represents meaningful signals of forward momentum across our development portfolio and another step forward in potentially recognizing commercial revenue opportunity upon these drugs' commercial launches.

Additionally, we submitted our 510(k) application this quarter for use of the Freedom Infusion System with deferoxamine, for which we estimate that there are approximately 200,000 annual infusions of this drug, another base hit for our non-Ig strategy.

We also made the decision this quarter to remove vancomycin from our active development pipeline. As we reviewed the market opportunity, the current usage we are already seeing and the risk of an infusion to the central artery, we chose to commit our resources to align to our greatest commercial opportunities.

The incremental 2026 revenue associated with vancomycin was expected to be modest, and we remain confident that our current guidance still accurately reflects the strength and trajectory of the business going forward.

Turning to oncology specifically. We continue to have highly constructive discussions with pharmaceutical partners on a range of oncology assets and the opportunity ahead remains strong. We are in active communication with the FDA regarding our Phesgo submission, and we are also in early discussions around an additional high-volume oncology asset that we believe could be significant for us. We look forward to providing further updates as these discussions progress.

The momentum building across our domestic business, international expansion and pipeline reflects progress on our three-pillar strategy. Each pillar is advancing and the compounding effect of that execution is what drives durable long-term value creation. We remain focused on maintaining that discipline as we move into the next phase of KORU's growth.

I'll now turn things over to Tom for a review of our quarterly financial results and 2026 outlook.

Thanks, Adam, and good afternoon, everyone. We are very pleased with another strong quarter with revenue of $11.8 million, which represents 22% year-over-year growth and speaks to the underlying strength of the business.

Breaking down by segment, domestic core grew 12% year-over-year. Growth was driven by higher consumable volumes from new patient starts and market share gains within new and existing accounts against the healthy SCIg market backdrop. International core grew 35% year-over-year, driven by higher pumps and consumables volumes in support of prefilled syringe conversions in the EU market.

We saw strong first quarter distributor orders from one of our new 50 ml prefill markets, where we saw a bolus of pump orders for new patient starts and moving forward, we'll expect to see end user pull-through of our consumables. We remain highly encouraged by the opportunity ahead of us in the EU.

PST revenues grew 166% over the prior year period, driven by higher clinical trial product revenues from our pharma collaborations who are advancing in their clinical trials. As always, this business will remain variable based on milestone and clinical trial timing, but the underlying activity level with pharmaceutical companies remains high.

On gross margin, we delivered 61.5% for the quarter to 62.8% in the prior year period, a 130-basis points reduction year-over-year. The primary drivers of the decrease were higher production costs based on timing of production runs at the end of 2025 that were amortized in Q1 as well as tariff-related charges that did not occur in the prior period.

These were partially offset by favorable geographic sales mix. Adjusting for the 87-basis point tariff impact, gross margins for the quarter would have been 62.4%. Despite the tariff headwinds in the quarter, we remain confident in our full year guidance range of 61% to 63%.

Turning to cash. We ended the quarter with $8.8 million, reflecting minimal cash usage of $100,000 in the quarter. This was driven by 22% revenue growth and continued operating leverage. On a cash flow from operations basis, Q1 was essentially breakeven, a strong result given the normal seasonality patterns of the business. As we've noted before, Q2 is expected to be our heaviest cash usage quarter for the year, driven by the annual one-time cash outlay for last year's performance bonuses paid in April.

We expect positive cash flow in the back half of the year as revenue ramps and planned operating leverage builds. Based on these dynamics, our full year guidance of positive cash flow remains intact. And as a reminder, we also have access to our unused $10 million debt facility, which provides additional financial flexibility for incremental opportunities as we execute against our growth plan.

Looking at the full picture for Q1, revenue grew 22%, gross margin was 61.5% and net losses improved 33% to $800,000 and adjusted EBITDA was minus $10,000, essentially breakeven and a 95% improvement versus the prior year period. Operating expenses increased 11% versus the prior year. We continue to invest strategically in sales and marketing and R&D to support growth while maintaining spending discipline across the business to drive operational leverage.

On guidance, we are reiterating our full year 2026 outlook with revenue of $47.5 million to $50 million, representing growth of 15% to 22%, gross margin of 61% to 63% and positive adjusted EBITDA and positive cash flow for the full year.

Growth momentum in the business continued to advance in the quarter. We are maintaining the current range with the guidance we provided in March. Our Q1 results were benefited from strong PST revenues associated with clinical trial orders. We are also watching how dynamics related to how end user adoption develops behind the strong distributor orders we saw in Q1 in our prefill markets.

Let me walk through each component in further detail. On revenue, the primary growth drivers are continued U.S. and international share gains in SCIg, NRE and clinical trial revenue from ongoing and new collaborations and modest incremental revenue from pending 510 clearances. We continue to expect these drivers to build through the year, taking into account some upticks in initial orders. We expect the back half to be weighted more heavily as recent clearances and new prefilled geographies ramp up and patients are added.

We have also incorporated geopolitical risk associated with the Middle East in our guidance. We continue to expect revenues to ramp in the second half. On gross margin, we are maintaining our full year range of 61% to 63%. We expect pricing and manufacturing efficiencies to support our range through revenue mix variability in new markets and channels could move margin modestly in either direction quarter-to-quarter. We continue to be active and are making progress with cost improvement initiatives through our operational excellence programs to drive margins higher.

On cash, we were disciplined in our usage this quarter. Q2 is expected to be our heaviest usage quarter from our annual one-time prior-year bonus payouts. And moving into the second half, we see operating leverage building through the year with a positive cash flow anticipated in the second half.

I'll now turn the call back over to Adam for additional comments on our forward momentum. Adam?

Thanks, Tom. I want to take a few minutes to talk about what lies ahead. On the domestic side, we now have two new non-Ig drugs on label. RYSTIGGO was cleared earlier this year in January in addition to the earlier Empaveli in the U.S., Aspaveli in the EU approvals starting in 2022, which are now generating broader patient indications.

Our oncology opportunity continues to advance. Our Phesgo 510(k) is currently under active FDA review, and we are also in productive discussions related to another high-volume oncology asset.

On the international side, we achieved EU MDR clearance of our Freedom60 with prefilled syringe compatibility earlier this year and are supporting the EU conversion. We are also actively exploring the expansion of our oncology opportunity into international markets.

Alongside our pipeline and market expansion work, we continue to invest in the next generation of the Freedom platform. We plan to submit a 510(k) and MDR applications for the next-generation Freedom60 pump in 2026, and we are targeting the submission for the flow controller in late '26 or early 2027.

The pharmaceutical pipeline remains strong. We have four new collaborations targeted for this year, two of which have already been in signed. Two existing collaborations have advanced to Phase III clinical trials. And with the deferoxamine 510(k) submitted this quarter, we are steadily building towards a diversified platform spanning multiple therapeutic areas, one that we believe will define the next chapter of recurring revenue growth for KORU.

I want to close with a broader framing of where we are going because I believe the best is genuinely ahead of us. The foundation we have built is differentiated and durable, a growing recurring patient base, a patient-preferred delivery system, deep and expanding pharma partnerships and a platform purpose built to support multiple drug categories across multiple therapeutic areas. That foundation positions KORU for something meaningfully larger than where we are today.

Our long-term targets are clear, and we are executing toward them with discipline, $100 million in revenue, accelerated double-digit revenue growth, gross margins above 65% and EBITDA margins of 20% or greater. Achieving those targets requires continued focus on three things, growing our domestic market share, expanding internationally as we help to enable the pharmaceutical manufacturer vial to prefilled syringe market conversion and adding more drugs on our label. We know what we need to do, and we are doing it.

The first quarter results are a tangible demonstration that we are on the right path. The pipeline is advancing. The platform is expanding, and the team is executing against the strategy in an exceptional way. As I step into the role of CEO, I do so with a deep sense of responsibility and an equally deep sense of confidence in what this capable company is able to achieve. KORU's most significant chapter of growth is ahead of us, and I cannot be more energized about what that means coming next.

With that, I'll turn it back to Linda for closing remarks.

Thank you, Adam. Q1 sets the tone for 2026, underscoring the results we've been working hard to deliver and is a reflection of how far this organization has come.

As I step back from my role at KORU, I leave with real confidence in Adam's leadership, in the strategy and in this team's ability to execute against it. The strategic pillars are in place, the pipeline is advancing and the commercial momentum is there. I have no doubt that the path to $100 million in revenue, margins above 65% and EBITDA of 20% or greater is within reach. It has been a privilege to lead this company and to work alongside such a talented and dedicated group of people.

I want to express my sincere gratitude to our employees, our customers, our partners and our shareholders. To the entire KORU team, thank you. What we have built together and what you will continue to build is something I am incredibly proud of. I remain fully supportive during the transition, and I'm confident the company's best days are ahead.

Operator, please open the line for questions.

[Operator Instructions] Our first question will hear from Caitlin Roberts with Canaccord Genuity.

Linda, again, congratulations on the next chapter of your journey. Just to start off, maybe just the rationale for keeping top line guidance the same despite the beat this quarter. And if you could give us some insight into the maybe updated cadence for the year.

Thank you, Caitlin, for your wishes. And yes, we are very excited that we have a strong quarter behind us and good momentum heading into the year. I will let Adam comment on the guidance for the year.

Caitlin, thanks for the question. As Linda was mentioning, we're really, really happy with the strong start to the year in Q1. We have a lot of momentum. We're continuing to outperform the market and international growth remains strong. In addition, we're finding a lot of new opportunities.

One of the things is we're going after bigger opportunities, we are seeing that there's some more variability there, really around the vial to prefill syringe conversions in Europe and how we're going about entering each of those markets. We continue to see a lot of really good momentum there. But at the moment, we're pretty confident in our guidance, and we're just not looking to make any changes on that at the moment until the year plays out a little bit further.

I was just going to hand it to Tom for the cadence question, Caitlin.

Caitlin, you can think of our -- in terms of our guidance, you can think of the pattern, specifically in Europe. similar to last year, where we have initial markets that are ordering pumps, if you will, to start their initial adoption. We expect to see that adoption play through in Q2. And then after that happens, we expect to see strength in the back half of the year. So very similar to what we saw last year in the case of the European and the international markets.

Understood. And then just thinking about adding new drugs to the core revenues, how much of your core mix is Empaveli and Aspaveli today? And do you have any expectations for non-Ig mix this year over the next few years?

Yes. Maybe just -- I'll start and then hand it to Adam for more specifics. So broadly, we don't comment on any specific drugs contribution. But what we have said is that all of the new drugs we're adding, we expect to add between $0.5 million and $1 million in 2026 via those new label additions.

With that, I'll turn it to Adam.

Yes. So, as we are thinking about non-Ig drugs, I mean, one of the recent ones we had approval on is with RYSTIGGO, and we're seeing some really good traction on that so far. Between RYSTIGGO and some of the other drugs outside Ig, we're continuing to look at anywhere between $0.5 million and $1 million overall is what we're targeting to plan. We're tracking really well against that overall, throughout the first quarter and looking forward to continuing to execute that plan as we get to the rest of the year.

Tom, anything else you want to add to that?

No, I think you guys hit it pretty well.

Next, we'll move to Frank Takkinen with Lake Street Capital Markets.

Wishing you the best in retirement, Linda. I look forward to keeping in touch. I was hoping to start with some additional color on oncology conversations. I think Adam twice in the prepared remarks, you referenced kind of the what's up beyond Phesgo and large volume oncology infusions. Can you just maybe speak a little bit more about that? When could we see the second oncology? I know we're still waiting for the first, but when could we see the second oncology and maybe magnitude of size would be helpful color as well.

Frank, great question. You picked up on that earlier. So, we're really excited about the oncology opportunity, right? Just to kind of frame that out at a higher level. We're seeing it today as almost a $40 million market opportunity growing over the next five years to over $120 million. Putting that in perspective, that's roughly 4 million units today, growing to over 10 million units.

We did file for Phesgo at the end of last year. We are in active discussions with the FDA. So, we still continue to be really excited about that. We continue to expand into other areas where we have some other potential drugs that we're looking to bring on label. So, we do have some active discussions ongoing now.

As we see it continuing to go forward, we're hoping that towards the end of this year, hopefully, in the next quarter, we have an update on where we are with Phesgo moving forward. But at a high level, still really, really excited about where this is going and what it can do for us. Phesgo alone is approximately 1.1 million, 1.2 million units a year. So, we see that as being something that would be really, really great entering into these infusion clinics.

Got it. That's helpful color. And then I was hoping to follow up on the distributor. I think last year, we saw this play out. And obviously, there was extreme growth from the geography launch with prefilled last year. But we had a distributor order come in, and I think there was a concern that, that was going to be the big order of the year. And then what we actually saw was orders increasing in magnitude of size throughout the year. Is there a chance that, that dynamic could actually happen again as this geography is just getting up and running on prefilled?

Yes, Frank, thanks for the question. Yes, similar to last year, you are correct. We did see some nice orders in the first quarter of 2025. Then we saw a little bit of a lag after that in this particular market. And as I mentioned, as adoption and rollout happen, that took about a quarter. And then you're right, we saw the ramp-up really start to pick up in the second half of the year, particularly in our international business. So, we do expect a similar pattern. We entered the next phase of a launch in a particular market. And so, we see a similar pattern rolling out here in 2026.

And next, we'll move to Jason...

Can you hear me okay?

We can hear you, Jason.

Great. Linda, I will add to the well wishes here. Have been great working with you and wish you all the best.

Adam, I want to follow up on, I think, Caitlin's question earlier on the revenue side. So, I think the midpoint of the guide, I mean I appreciate it's early in the year, still you left it unchanged, but it does imply a little bit of a decel from the revenue growth rate we saw in the first quarter. I think midpoint something like mid-teens implied over the balance of the year.

So, what decels from here? Is it the U.S. that decels in the growth? Is it international that decel in the growth? And then also within the whole answer, if you could, I think I heard you're building a little bit of cushion or uncertainty around the Middle East. So, if you can maybe quantify or size that for us, it would be helpful.

And then also within the whole answer, if you could, I think I heard you're building a little bit of cushion or uncertainty around the Middle East. So, if you can maybe quantify or size that for us, it would be helpful.

Yes. Absolutely. I heard a few things in there. So let me start, and then maybe I'll pass it to Tom. In terms of where we've started the year, we're feeling really, really good about everything ongoing, both domestically and internationally.

As we look at international markets and where we see some of the high growth coming, it's really country by country and figuring out the pieces of the puzzle in each of these countries, how the health care systems work. As we're going forward, we're planning to do a lot of blocking and tackling. And depending on how that uptake continues to go, it's going to go at different speeds in different markets.

Compared to last year, when we converted the large international market, it's a little bit of a different approach, where it wasn't a pharma-driven tender. It's more of "How do we go out and actively convert those markets on our own?" And we're working with partners to do that, but it's a little bit of a different approach than last year. So, we want to continue to see how that plays out over the second quarter with the balance of the year. But overall, we're still seeing very positive momentum, very, very happy with how we started the year, and we're encouraged that we're on track and continuing to move forward in a very positive fashion.

But Tom, maybe you want to take that second part of the question.

Yes. I'll just reiterate some of what Adam said. And the fact of the matter is that we are still largely a distributor market in our international business. And with that, you do get distributor orders that are ramping up for launches. So, we did see some of that in Q1. So, we know that some of that has to play out. We know that we need to see that patient conversion happens. And then we typically see it backed up by orders after that conversion starts to pull through.

So, we did see some of that in Q1. And then again, the type of market is different. The tender markets are generally faster because the pharmaceutical is the financial backer of the tender markets, and the reimbursement markets are generally a little slower. So, we're taking all those dynamics into effect with our phasing in our quarters. But I will say we start off pretty strong with our Q1 results.

He also asked about the timing of the phasing for the Middle East and the comment there. Tom, if you can comment on that.

Yes. So, in terms of the Middle East, if you all remember last year, we started up a distributor in the Middle East. We have one large one that dominates it for us. And we saw some strength, we are just cautious this year, just due to the geopolitical risk. We don't see the strength in the orders so far this year. So, we're just putting some caution around that Middle East distributor. Not a meaningful part of our business, but one that we're just making sure that we're cautious with, given the risk in the region.

Okay. All right. That's helpful. And then just as a follow-up, I mean, actually kind of dovetailing off of that, the Middle East point. Now a lot of companies are dealing with fuel surcharges, freight increases as they source product, just given where oil is. So, I don't know if you're seeing that. Maybe you can speak to that a little bit, just how you're handling that in terms of are there mitigation actions underway if you are seeing that in your sourcing? And then also, are you passing along any fuel surcharges or price increases to your customers?

Yes. Thanks, Jason. We're watching that situation closely, specifically with oil prices with respect to our supply chain. We do procure plastics from different parts of Asia, et cetera. So, we are watching it. So far, we haven't seen any impacts that are material to our business. But we will continue to monitor the situation. We know this conflict started in Q1. So, we think there will be some time before it really hits. But for now, we don't see any meaningful impacts.

Congrats, Linda.

Thank you, Jason. Pleasure to work with you as well.

And next, we'll move to Chase Knickerbocker with Craig-Hallum Capital Group.

So, just first for me, if you could give us a quick update on kind of what you saw from an SCIg volume growth in the market in Q1?

And then, just secondly, another one on international. If we kind of look at where the strength came from in Q1, maybe talk us through kind of how many geographies this reflects, as far as prefilled conversions? How many times has it occurred now? Is it one or two geographies that we may be sold into ahead of those conversions that kind of led to a little bit of a stocking benefit in Q1? Maybe just kind of some additional thoughts on those fronts.

Chase, I'll start with your question. You had a few in there. On the international market side, we are seeing strong growth across a few different specific markets. In the past, we've mentioned five specific countries where we saw a large volume of prefilled syringes entering the market, and we are working in all of those markets.

They continue to go through what I would describe as the initial conversions and continue to progress with those new patient starts and conversions. Each of them is a little bit different depending on how the pharmaceutical partners are introducing them, but we're following closely behind in all of them. So, we're making progress across the board. I think you were specifically asking if we're one or two. We are tracking in all five of those that we previously mentioned.

In terms of volume growth, Tom, I don't know if you want to take that one on the numbers side of things and what we're seeing so far.

I think it was for SCIg growth.

Yes. On the SCIg side, we did see a strong -- in the U.S. market, we saw strong growth. In terms of the market, we did outpace the market. Our third-party marketing source had a number of around 8%, and we outpaced that with our performance. We see strength in the U.S. business. We expect that strength to continue, and we expect to continue to grow sequentially in our U.S. business. So, we left the quarter feeling very good about the future strength in that business.

Got it. And then maybe just on the 510(k) submission for the next-gen pump. Can you just give us an idea of kind of what's left to do to enable that submission? And if we should think about the kind of timing on MDRs, kind of similar to 510(k), will those happen pretty concurrently?

We're really excited about our Freedom360 pump. That's the new pump that we have under development right now, which is looking to accommodate all sizes of prefilled syringes in one device. So, this is super exciting as the market continues to progress from vials to prefilled syringes across the different geographies.

In terms of where we are right now, we are at the end of our development process. We're actually in the middle of going through some final checks on that development side, called design verification testing. As we get to the second half of this year, we are looking to submit our regulatory filings in both the U.S. and Europe. So, we're super excited about how this is continuing to progress.

We've had a number of different industry meetings and specific pharmaceutical partner meetings where we've been discussing the pump across the board. We're getting very positive feedback. So, a lot of excitement is building here. And we're kind of at the 10-yard line looking to drive this one across the goal line pretty soon here towards the end of the year.

There are no further questions at this time. I would like to turn the floor back to Linda Tharby for any additional or closing remarks.

Great. So, thank you for your questions. I'm extremely proud of the strong track record of the company over the last five years, which reflects the strong team that I am leaving behind here at KORU. I want to thank Adam, who is knee-deep in this transition and is going extremely well. So, with the strategic momentum that we have ahead of us, I really think the company is well-positioned as we move forward. So, thanks to everyone for all the support.

Operator, you can close the call.

Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time.

Greetings, and welcome to the KORU Medical Systems Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce Louisa Smith, Investor Relations. Please go ahead.

Thank you, operator, and good afternoon, everyone. Joining me on the call today are Linda Tharby, President and CEO of KORU Medical Systems; Tom Adams, Chief Financial Officer; and Adam Kalbermatten, Chief Commercial Officer. .

Earlier today, KORU released financial results for the fourth quarter and full year ended December 31, 2025. A copy of the press release is available on the company's website. I encourage listeners to have our press release in front of them, which includes our financial results and commentary on the quarter.

Additionally, we will use slides to support further commentary in today's call, which are also available on the Investor Relations section of our website.

During this call, we will make certain forward-looking statements regarding our business plans and other matters. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC.

We assume no obligation to update any forward-looking statements. During the call, management will also discuss certain non-GAAP financial measures. You will find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures in our press release, the accompanying investor presentation and SEC filings. For the benefit of those listening to the replay, this call was held and recorded on Thursday, March 12, 2026, at approximately 4:30 p.m. Eastern Time.

Since then, the company may have made additional comments related to the topics discussed.

I'd now like to turn the call over to Linda Tharby, President and CEO. Linda, please go ahead.

Good afternoon, everyone, and thanks for joining us today. Before I provide further detail on our fourth quarter and full year performance, I want to take the opportunity to comment on the announcement of my retirement as was press released earlier today. After 5 fulfilling years, I have made the decision to retire and will resign as CEO of KORU Medical effective June 30, This has been one of the most meaningful chapters in my career, and I am proud of what we have built together, including the strength of the business, our growing leadership position in large-volume drug delivery and an exceptional team that will continue to maximize KORU's potential and move the growth strategy forward. My family and I are ready to embrace the next chapter of my life, and I will turn my focus to Board and advisory activity. This transition has been thoughtfully planned by the Board, and I'm very pleased to announce that Adam Kalbermatten, our Chief Commercial Officer, has been selected as my successor. When Adam joined KORU in 2025, it was immediately clear he was a natural fit, not just for the CCO role, but for the potential to lead the company as a whole, Adam brings strategic discipline, commercial leadership and a proven track record of creating shareholder value. He has spent his entire 20-plus year career in drug delivery, spanning large and small med tech companies and including a CEO role, where he led an effective turnaround and growth strategy that resulted in a successful acquisition by Becton, Dickinson. The Board's confidence in Adam is grounded both in him personally and in the strength of the broader team beside him. With over 115 years of combined med tech and pharma experience across the executive leadership team.

KORU has the strategic debt needed to continue to drive our growth potential, As we look ahead, we are committed to a smooth and seamless transition. I will remain on the Board and continue to serve in an advisory capacity through the end of 2026. Adam will be appointed President effective March 15 and will assume the role of CEO on July 1. Many of you have had the opportunity to meet Adam at investor conferences and industry events over the past year, and I look forward to partnering with him through this transition period. I want to thank my family for their support throughout my career. The Board for the partnership and guidance, our shareholders for the trust you have placed in us, our customers for your passion and knowledge and above all, our KORU team for the enthusiasm and dedication they have demonstrated throughout my tenure.

It has been an honor to be part of the KORU team and I'm confident the best chapters of this company are ahead. And now with that out of the way, let's turn to our fourth quarter and full year results.

I'll begin with some commentary on our fourth quarter and full year highlights and strategic progress. Then I will hand the call over to Tom to review our financial results before we open the call for questions.

2025 was a very good year for the organization. We accelerated our revenue growth and made progress in all of our strategic growth pillars, protecting and growing our core domestic business, expanding internationally and enabling more drugs to reach more patients. Revenue of $10.9 million in the fourth quarter marked our third consecutive quarter of greater than 20% revenue growth and we delivered full year revenue of $41.1 million, a 22% increase over the prior year.

This consistent performance reflects the fundamental strength of our business. A few highlights I want to call out. First, both our domestic and international Core businesses continued to outperform the underlying SCIG market. which grew approximately 10% in 2025. In the fourth quarter, domestic and international Core grew 18% and 71%, respectively, driven by a recurring base of approximately 59,000 patients.

We received EU MDR certification for the Freedom60 with prefilled syringe compatibility, marking a critical regulatory milestone that positions us to pursue the ongoing valve to prebuilt strange conversion across Europe. We also received 510(k) clearance for RYSTIGGO in January, which marks the ninth drug cleared on the Freedom Infusion System and our second non-IG clearance. This is a step in our strategy to expand our platform beyond IG and it opens a meaningful new channel for us in the infusion clinic setting.

I'll speak to further details on the RYSTIGGO opportunity in a subsequent slide. We are also announcing two new pharma collaborations as we continue to expand our development pipeline into two new therapeutic areas, a Phase III nephrology molecule and a Phase I multi-indication drug. We ended the year with $8.9 million in cash and achieved positive cash flow from operations, continuing the progress we've made towards sustained profitability.

Building on that momentum, we are initiating 2026 revenue guidance of $47.5 million to $50 million, representing growth of 15% to 22%, and positive adjusted EBITDA and cash flow positive for the full year. Tom will provide additional color on our guidance and underlying assumptions. Now moving to a few comments on our strategy. Health care continues to move from the hospitals to infusion centers to the home and large volume subcutaneous infusion is a direct beneficiary of that shift.

In our core SCIG business, we operate in a greater than $450 million global market, where penetration versus IVIG remains below 20% in the U.S. and external forecast project continued 8% to 10% growth over the next 5 years. We have 7 launched SCIg drugs from the major IG pharma manufacturers on our label and drug manufacturers are actively innovating their IG portfolios, all of which create opportunities for increased subcutaneous penetration and for KORU to capture additional global share.

Outside of SCIg there are more than 95 new drugs in development with volumes greater than 10 ml across multiple indications. IG was the first mover in large volume subcutaneous delivery, and there is significant investment going into subcu formulations across broader therapeutic areas.

A large part of our strategy is enabling the administration of those drugs on our system. Turning to our domestic business. I want to highlight a few key areas, our growing recurring revenue base and the expansion into new therapeutic areas. We have grown our recurring global patient base by approximately 20% to 59,000 global chronic SCIg patients on the KORU Freedom System. The global SCIg market saw healthy growth of approximately 10% this year and industry projections are for 8% to 10% growth in the coming 5 years. With our growth of over 20% this year, we are growing our global SCIg leadership position and will continue to expand through our new product development efforts and key accounts and pharma collaborations.

We are also beginning to diversify our business. The clearance of RYSTIGGO, a non-IG drug enables our entry into the infusion clinic channel. With our filing of the 510(k) for [ ESCO ] in the fourth quarter of 2025, we are also anticipating entry into the oncology market in the second half of 2026. We are also closely watching the evolving clinical activity around secondary immunodeficiency or SID. Outside the U.S., SID has been a key focus in many of the large pharma players and there are several ongoing pharma trials that are expected to complete in 2027.

Increases in SID are being driven by an aging population, higher prevalence of chronic illnesses and increased use of immunosuppressive treatments, such as CAR T cell therapy. As reimbursement coverage expands in this area, it could meaningfully broaden our U.S. opportunity.

Moving to international. This business was one of our largest growth drivers in 2025 with growth of 80%, and we see even greater potential ahead. The overall European SCIg pump and consumables market is valued at approximately $50 million, and we grew our share from approximately 10% in 2024 to 20% in 2025. We remain well positioned to continue expanding our presence in the market and capturing additional growth opportunities. We expect most of our growth to come from the continued shift across large pharma from vial-based delivery to prefilled syringes. The shift from vials to prefilled syringes simplifies the administration process significantly with up to 80% reduction in drug preparation tasks. This last quarter, we received our MDR certification in the EU for our KOROFreEDM 60 system. Combined with the earlier FreedomEdge MDR clearance, we now have 2 clear pumps for prefill administration. Our system was preferred by over 75% of patients due to its ease of use. That's a meaningful improvement in the day-to-day experience for patients managing a chronic condition at home. Overall, the European opportunity is significant, and we believe we are only beginning to capture it.

With 2 MDRcared pumps, a system that is patient preferred and pharma driving a broad shift to prefilled syringes, we are well positioned to continue taking share. With a roughly $50 million addressable market in Europe alone, we see a significant opportunity ahead. And now let me turn to our pipeline. Beyond IG, the new drug pipeline now has 9 active opportunities. that combined represent more than 7 million annual infusions worldwide. Within the next year, we anticipate having 3 commercial stage assets on our label, vancomycin, deparoxamine and the peso oncology opportunity. Together, these represent approximately 2.2 million estimated annual level infusion.

Two of those 9 opportunities are new this last quarter. a Phase III nephrology drug and a Phase I multi-indication drug. We are working with our pharmaceutical partners to help advance the delivery of these molecules. Once launched, they are expected to represent combined commercial opportunity of approximately 3 million annual infusions.

We now have 9 subcutaneous drugs cleared for use with the FREEDOM Infusion System. IG representing approximately 5.4 million annual infusions and non-IG representing approximately 250,000 infusions. On the IG side, our 6 active collaborations with the major IG manufacturers, span new device formats and expanded indications. Work that directly supports continued share gains and geographic expansion as those programs move towards launch.

When you step back and look at the full picture, 9 subcutaneous drugs on label with low penetration, 9 drugs in active development with KORU and more than 95 large-volume subcutaneous drugs still in development across the pharma landscape. The runway here is substantial.

And now let me spend a moment on RYSTIGGO, for which we received 510(k) clearance on our Freedom Infusion system in January. RYSTIGGO Go is indicated for generalized myasthenia gravis, the chronic autoimmune disease that causes muscle weakness affecting a patient's ability to control voluntary movements, including swallowing and breathing.

In the U.S., this represents a patient population of approximately 60,000 patients. UCB launched the drug in July 2023 and currently publicly reports having reached more than 2,400 GMG patients globally at the end of 2025. We project our total U.S. market opportunity to be about 20,000 infusions in '25, growing to over 100,000 infusions in 2030. It's worth noting that RYSTIGGO has already been used off-label with the freedom infusion system.

So this clearance enables us to go after further share. Additionally, this clearance marks our first collaboration with UCB and enables our entry into the infusion clinic channel, which opens a new commercial pathway for KORU beyond the home.

I'm extremely proud of the team's execution and the strong momentum we built. The strong patient growth in our U.S. and international markets and meaningful pipeline progress across both IG and non-IG opportunities, we're well positioned heading into 2026.

I'll now turn the call over to Tom to review our financial results and guidance for 2026.

Thanks, Linda, and good afternoon, everyone. We are pleased with another strong quarter of revenue where we delivered $10.9 million, representing 23% year-over-year growth. This marks 3 consecutive quarters of greater than 20% revenue growth, a reflection of the momentum we've built across the business.

Breaking down the performance by business. Domestic KORU grew 18% year-over-year, driven by the SCIg market, which grew between 8% to 10% in the quarter. New KORU patient starts and market share gains, resulting in higher pump and consumable volumes.

International KORU grew 71% year-over-year, fueled by new patient starts and increased penetration into established European markets. Prefilled syringe conversions were a significant driver and we expect this to remain a tailwind as additional markets convert.

Our PST business decreased 30% year-over-year. This business is inherently variable given the milestone-based nature of revenue recognition. The decrease reflects timing of contract milestones, but were completed and does not reflect the change in the activity level of our collaboration portfolio, which as Linda just described, continues to grow.

For the full year, we delivered revenue of $41.1 million, representing 22% growth over the $33.6 million we reported in 2024. Domestic Core grew 11% for the full year driven by SCIg market growth and new account share gains that increased consumables and pump volumes. Accounting for the dynamic that occurred with our international distributors going back to the U.S. which we discussed in the third quarter call, underlying growth would have been 14% for the full year. International core grew 80% for the full year, driven by strong SCIG market growth our growing footprint in European markets and entry into several new geographies. Accounting for the international distributor sales dynamic, underlying growth would have been 73% for the full year. Finally, PST declined modestly. Again, due to the project milestone timing, partially offset by higher cynical trial orders versus the prior year.

Moving to gross margin. We had a 30 basis point reduction over the last year's Q4, driven by higher material costs and tariffs that were mostly offset by a stronger customer mix in the U.S. where we have higher average selling prices. We delivered a full year gross margin of 62.3% in line with our expectations at the start of 2025. The year-over-year decrease was driven by higher packaging material costs, tariff-related charges and geographic sales mix from our growing international business. Despite these headwinds, we remain resilient in keeping margins above 50% every quarter and on a full year basis.

Turning to cash. We ended the year with $8.9 million in cash, representing full year cash usage of $700,000. Importantly, we achieved positive cash flow from operations in both the third and fourth quarters and also for the full year.

The key drivers were revenue growth and disciplined spending that enabled a further reduction in net losses. We largely maintain our working capital balance while managing the growth needs of the business, and we continue to invest in capital expenditures to support future new product launches.

Turning to our full year financial highlights. I want to call out two things in particular. First, with 22% revenue growth, operating expenses increased by just 3%, demonstrating the discipline we've maintained and the continued operating leverage we have generated. And second, we delivered positive adjusted EBITDA of $600,000, a 124% improvement versus the prior year, marking 3 consecutive quarters of positive adjusted EBITDA.

Together, this reflects significant P&L improvement as we march towards profitability. Looking ahead to 2026, we are initiating guidance of $47.5 million to $50 million in revenue, representing growth of 15% to 22% and gross margins for the full year of 61% to 63%. We are also targeting positive adjusted EBITDA and positive cash flow for the full year.

On revenue, the primary drivers will be continued U.S. and international share gains in SCIg, NRE revenue from at least 4 new collaborations, 2 already signed and modest incremental revenue from recent or soon to be cleared 510(k) filings.

We have also incorporated some geopolitical risk into our guidance given recent events in the Middle East. As you think about our 2026 revenue cadence, I'd note that first half of 2025 benefited from a meaningful prefilled inventory build in a key EU market, which we do not expect to repeat at the same level in 2026.

Additionally, we would expect revenue to ramp in the back half as we see revenue recognition from recent and pending 510(k) clearances and the introduction of prefilled syringes into new geographies.

On gross margin, we expect pricing and manufacturing efficiencies to support the 61% to 63% range as we enter new markets and channels. The associated revenue mix may move margins slightly in the direction, but we feel confident holding that range overall. We also have plan for start-up costs for the new production line for the next-generation pumps. We are confident that we will continue to offset incremental external pressure on costs with our operational excellence programs.

On profitability, we are guiding to cash flow positive and positive adjusted EBITDA for the full year. Cash usage is expected to mirror the 2025 cadence with operating leverage building throughout the year and positive cash flow anticipated in the second half.

I'll now turn the call back to Linda for closing remarks.

Thank you, Tom. I want to close with a few thoughts on key milestones in 2026 and our broader market opportunity. .

We started the year off strong. In our Domestic Core, we have gained the UCB RYSTIGGO 510(k) clearance and our Roche Phesgo 510(k) application submitted on time in December, giving us two new non-IG drugs currently moving to commercial potential in 2026.

We also have our next-generation pump, the FREEDOM60 expected to have 510(k) and MDR submissions this year. The Phase II Flow Controller 510(k) submission is projected for a global submission either in late 2026 or early 2027. Internationally, we have achieved MDR clearance of our FreEDOM-60 with prefilled syringe compatibility, and we have now begun to ship that product into the EU market, anticipating prefilled conversions in several EU markets. On our efforts to add new drugs to our label, we have signed 2 of our 4 new collaborations and anticipate 2 additional 510(k) submissions this year for defperoxamine and vancomycin. In closing, I want to step back and frame why we believe KORU is well positioned, not just for 2026, but for the years ahead. This slide references the strong foundation that we have built for our business, some of our recent accomplishments and finally, where we believe we are headed. On the left, you'll note some of the foundational aspects that make KORU an attractive opportunity. We operate in a large and growing market for subcutaneous drug delivery with approximately 95 large volume drugs in development by major pharmaceutical companies. We have a leading position in the U.S. market that is growing 8% to 10%, where we consistently outperform market growth rates.

We have significant momentum with international expansion with much more runway to grow and gain share. Underpinning this is a recurring revenue model across a global base of nearly 60,000 patients. And looking ahead, we have 9 pipeline drug opportunities outside of IG, with RYSTIGGO and our oncology market entry, representing near-term commercial opportunity in 2026.

Moving to the right, the middle box is a reference to our recent accomplishments and performance, where we have demonstrated the ability to consistently grow revenues more than 20%, where we have attractive gross margins, and we have proven the operating efficiency of our business model, delivering a 63% in improvement in cash burn and 124% improvement in adjusted EBITDA for 2025.

On the right are our long-term targets and some of our strategic goals that Adam and team will continue to work towards, $100 million in revenue, accelerated growth rates, gross margins above 65% and an EBITDA margin of 20% or greater.

2025 performance shows that the model is working. 2026 is about continuing to execute against it. Before opening the line for Q&A, I want to again thank the entire KORU team for their continued commitment to our mission. Looking back on my tenure with the organization, the progress we have made together is something I'm immensely proud of. The business is stronger. The strategy is clear. And with that I'm stepping into the CEO role, I have every confidence in what lies ahead.

It has been an honor being part of the KORU team, and I look forward to seeing the next chapter unfold. Operator, please open the line for questions.

[Operator Instructions] Our first question is from Frank Takkinen with Lake Street Capital Markets.

Great. First off, Linda, congratulations on all you have achieved. We're certainly sad to see you go, but look forward to working closer with Adam and the rest of the KORU team, I wish you the absolute best in your next chapter. I was hoping to start with some questions on OUS, maybe two questions. .

First, on FREEDOM60, maybe talk about what this product does for you in that market? How much of the market might this open up? And then two, you've spoken about, I want to say it's the 5 geographies that you plan to enter, how should we think about the cadence of those geographies and the progress so far.

Frank, and thank you. It has been an extreme pleasure working with you and the broader Lake Street team. Clearly, very confident as we think about Adam stepping into roll and the broader team that surrounds him. So on your questions on the FREEDOM60 and the opportunity that lies ahead of us. Maybe I'll just start with the broader opportunity we're going after here is a $50 million total addressable market in Europe. We were very successful in 2025 in moving our share position from a 10% to a 20% share, but obviously, if you position that share closer to our 60% U.S. share, you see the magnitude of the opportunity we have in front of us in Europe. .

So most of that opportunity and share gain in 2025 was driven by a successful prefilled conversion in a major market in Europe, and the pharma partner that we're working with has plans to roll this out in several new markets over the course of the coming year. And the 5 geographies you referred to are not new markets for us, but there are markets we're in today, but with fairly low penetration, and we see the opportunity in prebills to really grow that market significantly.

So what we see today is that we have our second market. We've started our year off strong in '26 with our second market that's really going live now with this prefilled launch, and we expect to see likely a new market being added 1 to 2 every quarter as we move through the year.

I think the last part of the question was just the FREEDOM60 and the new approval. Very excited about that because now we have 2 pumps, both our 60 and our Edge that are both approved. We required some slight modifications to our FREEDOM60 and an update to our IFU, we just received approval on that in the fourth quarter of '26. So great news for us. We've now just started distributing that new product into the market today. And of course, what comes at the back end of the year is our FREEDOM360, which is our pump that will work for all prefills. So hopefully, that got all of those questions.

Perfect. Maybe just for my second one, Tom, a little more composition of the guide would be good color. I heard ramping revenue throughout the year as some of these initiatives progress, but maybe how much contribution from U.S.? How should we think about that growth rate, OUS? And then any cadence and color you'd like to provide would be great, too.

Frank, thanks for the question. Yes. Great. So we're continuing to see momentum coming into Q1 after a record Q4. So that's very strong for us, particularly on the international side. So as mentioned earlier, prefill still is a driver of that market. So we continue to see that progress. I would say from -- on the international side, you will see a step up in the back half of the year, based on what Linda just mentioned in some of those countries going online for prefills.

And then on the U.S. side, I think that's slow and steady. I mean you've seen the last couple of years, a pretty steady growth rate on the U.S. side. And then, of course, as we get further along into the year, you will see more growth from some of those 5 tenant approvals that are upcoming. And then yes, then we'll just continue to grow off there. And then on the [indiscernible] side, you'll see consistent revenue trajectory like you've seen in the last couple of years.

Our next question is from Chase Nickerbacher with Craig Hallum Capital Group.

Just want to echo Frank's comments. Obviously, we wish you the best, Linda and all your future endeavors. I appreciate everything you've done here, which is quite a bit. So -- and obviously, congrats Adam on the new role as well. Maybe just first for me on the domestic side. 18% growth is obviously substantially above the market. Can you give us some sense for what's happening in the market is allowing you to take so much share? And maybe 1 and then 2 on that front, how should we think about the opportunity for further share gains in 2026 after a pretty strong year in '25?

So thanks, Chase, for the well wishes. I appreciate it, and you and the Craig-Hallum team have been great. So first, yes, very proud of the U.S. growth in the fourth quarter. We continue to see new account gains overall on that business. And of course, we had the return happen of the distributor in international that move back to the U.S. So as we projected, all that business is now back, which is tightening. I'll give it to Tom, maybe on add some specifics on the U.S. and what we might see in '26.

Yes. So in '26, as I mentioned, we continue to see a strong SCIg market, and we expect that to continue to grow throughout the course of the year. And then as I just mentioned to Frank, as we continue to receive approvals for new drugs on label throughout the year, we expect some growth off of that as well. So we will continue to see that revenue grow sequentially in the U.S. market. .

Maybe on that front, on the the novel therapies that we're adding, particularly in the second half. Can you give us a sense for kind of the magnitude of impact there? And then just second for you, Tom. If we think about EBITDA in the year, obviously, a little bit kind of open-ended on guidance. Can you give us a sense for how much operating leverage we should kind of expect from you guys in '26? Obviously, low single-digit OpEx growth in '25 was quite a bit of operating leverage. Can you just give us some goalposts as far as what we should be expecting for OpEx growth in '26?

So maybe I'll just start with novel therapies and the overall impact that we're thinking about. And what I would say is we have changed its name to pharmaceutical services and clinical trials. So we're still figuring that out here, but now we're calling that our TSD business. So obviously, in terms of overall revenues, these revenues are milestone-based based upon the overall innovations and clinical trials that we're servicing. So that number I would suggest has always been around where it's been historically. So not to expect anything new there, but obviously, very excited about the two new deals that we signed this past quarter, and maybe I'll turn it over to Adam just to talk a little bit more about that.

Yes. Thanks, Linda. So over the last quarter, we signed two new deals with pharmaceutical companies. One of them is a nephrology drug that's in Phase III. We're really excited about that. The other one is molecule in early Phase I. It's a multi-indication drug. In total, this represents approximately 3 million annual infusions between the two of them. So really excited to add those into our pipeline and get the work going on the feasibility side to keep these moving through the pharmaceutical pipeline and into our future prospects.

Thanks, Adam. And I think before I just turn it over, I think what you were looking for as well here, Chase was the new drugs on label, and what we see in the near term with RYSTIGGO and then the other two drugs vancomycin and deferoxamine. Overall, I think a couple of things. First of all, that many of these drugs are administered in infusion clinics. So that is a new entry point for us, and we've already started to hear some of our customers say, "Hey, can we try these other drugs." So we see that as a broader opportunity, one which I'm not going to put a number on today. But I think the numbers that we've mentioned in the past for these 3 drugs in total, somewhere between $0.5 million upwards of $0.5 million of opportunities. We've got a modest number today knowing that two of those drugs are not approved yet. And so we'll refresh the models as time goes on and we learn more and see how many new accounts we can gain.

I would also say on RYSTIGGO, we already had a large portion of that business off label. So excited for the entry. We're already hard at work there, and we'll have more to report as quarters go on. And Tom, a question on the operating leverage.

Yes. Just on the EBITDA, Chase, we continue -- last year was a great year for us. We had adjusted EBITDA positive. We're excited about that. We're excited to hit cash flow positivity. And as I mentioned in the guidance, we will be positive adjusted EBITDA once again and continuing to grow from there as well as cash flow positive for the full year, not just in operations, but for the full year. So we're excited about that again. We will continue to see leverage because our business model allows it with the way our SG&A is set up in our business.

So we'll get more specific on that as the year funds through, but we expect to continue to progress on those fronts.

Our next question is from Caitlin Roberts with Canaccord Genuity.

Linda, I'm so sad to see you go, but you're truly an inspiration to women and meta-like in the industry. So thank you so much. I guess just starting with RYSTIGGO, how are you thinking about the go-to-market model here in infusion clinics? And how does this really position you to penetrate the oncology opportunity more quickly when cleared?

Right. So first, Caitlin, thank you so much. The Canaccord team has been great. And you personally, right back at you in terms of women and leadership, and thank you to all the men who support us in doing what we do. So getting to the overall RYSTIGGO opportunity and how that entry into infusion clinics, I would say, broadly, what we discussed in the earnings was that RYSTIGGO, we see is about 20,000 infusions in the U.S. here today, going to about 100,000 infusions over the course of the next 5 years and even a bigger opportunity globally, which we're at early stages of looking at today. .

In terms of infusion clinics and our entry strategy, fortunately for us, this channel today is many of the same specialty pharmacies we deal with are dealing with this channel. I'm going to let Adam say a few words in a moment relative to he's thinking about anything broader relative to our infusion clinic entry, but I would certainly say that oncology infusion center, which I understand can be a little confusing, but oncology infusion centers are different than ambulatory infusion centers and sometimes there's an overlap. So we see this as good for our pending oncology opportunity. It gives us a leap and head start and then a broader opportunity once we get approval in oncology. Adam, I don't know if you want to add anything.

Thanks, Linda. Caitlin, I'll start by saying this is our first collaboration with UCB, and it diversifies our revenue beyond just CIG in a meaningful way. On the strategic side, it's significant because as you mentioned, it opens up a new commercial channel for us beyond the home and that's into the infusion clinics. And we see there's a lot more opportunity there in the future beyond RYSTIGGO.

As Linda mentioned, we do have off-label sales there today. We look forward to continuing to grow that now that we have the product on label and we could be promoting it. So I want to highlight UCB's reported just over 65% year-on-year growth in global RYSTIGGO sales. So we see this drug has a lot of momentum, and we're really looking forward to continue helping to bring value there.

So acknowledging, we've had some really great success over the last few years here under Linda's leadership. The strategic priorities don't change. We have a proven strategy really built around 3 pillars: protecting and growing the core domestic business, expanding internationally and enabling more drugs to reach more patients.

So I focus really on accelerating the execution against those pillars. I see it as we have a lot of runway in front of us and my job is to make sure we're running as fast and as efficiently as possible towards those opportunities.

[Operator Instructions] Our next question is from Joseph Downing with Piper Sandler.

Linda, it's Tom. First and foremost, Linda, I wanted to congratulate you on your retirement. It's been a pleasure working with you and wish you all the best in the future. Yes, I just wanted to touch on the guidance range here. So the guidance is pretty much in line with where we expected. Just looking at kind of the high end and low end, how you get to each. Curious if you can walk through that. I'm curious if on the low end is a scenario kind of where the new drug clearances and OUS prefill conversions slip into 2027 a little bit. And then the high end is more of you execute everything on schedule in '26. Just curious if you could walk through a little bit more detail there?

Great. Joe, thank you, and you and your Piper colleagues have been great, and congratulations to you on your recent promotion as well. So referring to the guidance range, I think you had it right. Prefills and the new drugs on label would be -- those are the things that vary. If we get prefilled conversion faster, the markets get going faster. That's a great thing. And also new drugs, we get further traction or we get them on our label sooner, there's another big opportunity.

The other third piece would be a little bit about the Middle East, which we've got a little bit of a factor in here and depending on the timing of that. And then finally, I would just say, oncology is something we do not have today, a big number in here at all, a very small number. So if we get a bigger head start on oncology or we're looking at new drugs now, I think that could be a meaningful area for us as well.

I appreciate that and for your comments. One more just on Japan. I know it's been kind of a deemphasized piece of the business with all the great stuff going on in some of the other U.S. markets, but just curious like where you're looking at that for 2026 guidance or expectations there just at a higher level. And is there a point there where the pharma-driven prefill opportunity kind of opens up and makes Japan kind of move back up the list? Yes. Just any color there would be helpful.

Yes, I'll start and then turn it over to Adam. So Japan, we see, again, being 1 of the larger IG markets overall, we see that this could be $0.5 million to $1 million total opportunity. We know that today, that's very much a hospital, but moving to the home opportunity and lots of exciting stuff that I'm going to let Adam talk through.

Yes. Thanks, Linda. In Japan, I'll start with good news, right? So both pumps are approved. Consumables are approved as well. So we're pretty well positioned to continue to grow in that market. At the time we're seeing prefilled syringes there as being important, just as we kind of see in these other international markets. So as those prefills continue to grow, we expect that we're going to be growing with them. So it's a pretty exciting opportunity for us.

No further questions at this time. I would like to hand the floor back over to Linda Tharby for any closing remarks.

Right. Thank you, operator. I would just want to say thank you to all of you again. I have so appreciated all of your support your guidance and most of all, your partnership in working with everyone on the call. Thank you all for taking some time with us this afternoon. Incredibly proud I want to say my last thanks to this entire KORU team, to my daughters who actually listened into an earnings call for a change. I told them there were some big news today. So I think they listened in. So thank you to my daughters. Thank you to our Board. Thank you to our investors I'm not on yet.

I am a big investor and will remain so and I look forward to working with all of you as this retirement goes on. But I'm here, as I said, to the end of June, looking forward to supporting Adam and the team and through the end of the year. Have a great rest of your day, and thank you so much.

This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.

Greetings, and welcome to KORU Medical Systems Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to Louisa Smith, Head of Investor Relations.

Thank you, operator, and good afternoon, everyone. Joining me on the call today are Linda Tharby, President and CEO of KORU Medical Systems; and Tom Adams, Chief Financial Officer.

Earlier today, KORU released financial results for the third quarter ended September 30, 2025. A copy of the press release is available on the company's website. I encourage listeners to have our press release in front of them, which includes our financial results and commentary on the quarter. Additionally, we will use slides to support further commentary in today's call, which are also available on the Investor Relations section of our website.

During this call, we will make certain forward-looking statements regarding our business plans and other matters. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially due to risks and uncertainties, including those mentioned in the associated press release and our most recent filings with the SEC. We assume no obligation to update any forward-looking statements.

During the call, management will also discuss certain non-GAAP financial measures. You will find additional disclosures, including reconciliations of these non-GAAP measures with comparable GAAP measures in our press release, the accompanying investor presentation and SEC filings.

For the benefit of those listening to the replay, this call was held and recorded on Wednesday, November 12, 2025, at approximately 4:30 PM Eastern Time. Since then, the company may have made additional comments related to the topics discussed.

I'd now like to turn the call over to Linda Tharby, President and CEO. Linda, please go ahead.

Thank you, Louisa. Good afternoon, everyone, and thank you for joining today's earnings call. I'll begin with some commentary on our third quarter highlights and strategic progress, and then Tom will review our financial results before we open the call for questions.

During the third quarter, we delivered strong results, accelerating revenue growth, outstanding performance in our core immunoglobulin business, new additions to our PST pipeline and continued progress towards sustained profitability.

We achieved our second consecutive quarter with more than $10 million in revenue, representing 27% year-over-year growth. The key growth driver was our core subcutaneous immunoglobulin or SCIg business, which grew 30%, driven by international expansion, continued global share gains and strong underlying patient growth.

While we saw some quarterly shifts in purchasing patterns between domestic and international markets, both underlying businesses remain robust. Tom will provide additional details on the shift in geographic mix.

From a strategic standpoint, we advanced several important initiatives this quarter. We recently announced 2 new PST collaborations, underscoring our commitment to expanding our pipeline, broadening our label and reaching additional patient populations. I'll share more detail on those collaborations during our pipeline discussion.

We also made meaningful progress toward our goal of expanding into oncology infusion centers, successfully completing a U.S.-based oncology study that validated KORU's value proposition in this market. We remain on track for a 510(k) filing by the end of 2025.

On the financial front, we delivered gross profit growth of 21% year-over-year, achieved positive adjusted EBITDA and generated positive cash flow. To reflect our confidence in the business and continued execution, we are raising our full year revenue guidance to $40.5 million to $41 million, representing growth of approximately 20% to 22%, and we are reaffirming our guidance for gross margins and cash flow from operations.

Now turning to our U.S. SCIg business, which represents our largest recurring revenue base. As shown on Slide 4, external forecasts project SCIg market growth of approximately 9% annually over the next 5 years, outpacing the IVIg segment.

This growth outlook is supported by several key factors. First, an increasing number of new patients are being diagnosed and treated with SCIg as their first-line therapy. With approximately 20% market penetration today, SCIg still has significant headroom for expansion in the broader immunoglobulin therapy market.

Second, we're seeing broader diagnosis of Secondary Immunodeficiency or SID, driven by an aging population, higher prevalence of chronic illnesses and increased use of immunosuppressive treatments such as chemotherapy and CAR T-cell therapy. Importantly, we're also seeing growing clinical activity in the SID area, which could ultimately support new reimbursement coverage and add further momentum to SCIg adoption.

Finally, pharma partners continue to invest heavily in the SCIg space through device innovations such as prefilled syringes and a strong pipeline of clinical trials and label expansions. Our leadership position in this category remains very strong. U.S. end user demand and sales to specialty pharmacies are at or above market growth rates, reflecting solid execution and the continued health and momentum of our U.S. SCIg business.

Now turning to international, which continues to be one of the most exciting areas for our accelerated growth potential. Over the past year, we've grown our international market share from roughly 10% to 15% to 20% of the underlying $60 million OUS SCIg market.

We see further growth potential in several key areas. First, the shift to prefilled syringes in Europe. This represented the majority of our growth this quarter. The efforts to convert a market from vials to prefilled syringes using our Freedom Infusion System, including both the pump and consumables have been very successful.

By simplifying administration steps, our system makes it easier for patients to use and for healthcare professionals to train them. Several additional EU countries are planning similar conversions and our innovation pipeline combined with strong alignment with pharma partners positions us well to further penetrate the top European markets.

At the same time, we continue to grow infusion set sales in markets that still primarily use vials. Overall, we feel very confident about our international momentum. We are targeting to accelerate our overall market share from the mid-teens into the 40% range, representing a $10 million to $20 million opportunity over the next several years.

This next slide highlights our progress with Ig pharma partners. Today, we have 7 active collaborations across all 4 major Ig manufacturers, which continue to drive core growth alongside their new drug, device and indication expansion.

Commenting on changes from last quarter, we saw 2 previously announced collaborations push their launch date into 2027. We have updated our pipeline accordingly. Importantly, we don't see this as having any material impact on current projected revenue.

Highlighted in green on the bottom row is our most recent collaboration, which we announced last week. This is particularly exciting because the relationship with this drug manufacturer expands our potential into the broader patient populations for an Ig drug where we currently hold a lower global share position.

Overall, these Ig collaborations are a key driver of both share gains and geographic expansion in the subcutaneous market, reinforcing our strategy of partnering with pharma companies to accelerate adoption and growth.

Turning now to new drugs outside of Ig. We currently have 9 active collaborations with 4 potential new drugs expected to be added to our system by the end of 2026. Recent updates to this pipeline are highlighted in green on the slide. First, a rare disease candidate has been pushed by 1 quarter to Q1 2026 following FDA request for additional testing data. We do not expect this to materially impact our time line or 2026 revenue opportunity.

Second, we are seeing expanded commercial potential for an additional Empaveli indication, a prior clear drug, which we are currently supporting in Phase III trials.

Finally, we recently announced our collaboration with ForCast Ortho, supporting their clinical trials for treatments that address complications from joint replacement surgeries. This marks our first opportunity in the orthopedic space and adds approximately 140,000 potential infusions.

We estimate that the non-Ig drugs in our pipeline with an anticipated launch date between now and 2027 have a commercial potential for KORU of up to $10 million by the end of 2028. With the clinical pipeline of more than 95 drugs exceeding 10 mls across the pharma landscape, we continue to actively pursue additional assets to expand and strengthen our pipeline.

This quarter, we also continued to advance our entry into the oncology infusion space. Currently, there are 7 subcutaneous oncology drugs administered in infusion clinics using manual syringe push, which requires nurses to stand over patients and inject highly viscous drugs over a period of 5 to 10 minutes.

Following our successful EU study, where 97% of nurses preferred the FreedomEdge infusion system over manual syringe administration, we launched a U.S. pilot study in Q2, which concluded in Q3. In total, 5 oncology infusion clinics participated, administering 2 leading oncology drugs. The results were very encouraging. We achieved a 100% success rate in administration and met all safety requirements.

We also observed high satisfaction among nurses and patients with improvements in physical strain and patient comfort using the Freedom System compared to manual syringe push. Importantly, 70% of nurses reported the ability to multi-task, including treating other patients, adding the potential for improved clinic workflow efficiency.

Our value proposition continues to resonate across all sites studied. We are progressing in collaboration with 1 of the 7 oncology drugs and remain on track for a 510(k) submission to the FDA, either in Q4 of this year, subject to federal timing or in Q1 2026, with anticipated commercial market entry in the second half of 2026.

The total addressable market for oncology infusion consumables is significant, projected to grow from approximately $60 million in 2025 to $138 million by 2030. We are being very diligent about our market entry and regulatory strategy, ensuring that when we enter oncology, we do so in a way that supports patients, providers and long-term growth.

Overall, I'm extremely proud of the team's execution and the strong momentum we built across our business during the first 3 quarters. With robust growth in our U.S. and international markets, meaningful pipeline progress and strategic advances across both Ig and non-Ig opportunities, we're well positioned.

With that, I'll turn the call over to Tom to review our financial results and share our updated guidance for 2025.

Thanks, Linda. Starting with revenue. We are pleased to report our second consecutive quarter of revenue above $10 million with 27% year-over-year growth, which is a record high for KORU.

We delivered 30% growth in our overall core business, reflecting the fundamental strength of the underlying demand for our products and KORU's growing market position. The geographic mix this quarter does require some context for which I'll provide some additional commentary.

Our reported domestic revenue declined 5%, while international revenue grew by 230%. There were 3 specific factors that drove this geographic shift in revenue imbalance across our businesses. First, in the domestic core business, as we discussed and anticipated on our previous call, one of our U.S. distributors reduced their on-hand inventory levels this quarter, which temporarily impacted their order volume and moderated our domestic growth.

Second, in the International Core business, we had some outsized stocking orders to support the exceptionally strong demand we're seeing with prefilled conversions in Europe. We're encouraged by this momentum in PFS and believe that it will continue to be a meaningful driver of international growth moving forward.

And third, one of our international distributors sold product to a U.S. distributor, and that transaction had a dual effect. It inflated our international revenue figures while simultaneously reducing our domestic revenue growth. We have since corrected for this dynamic and do not anticipate it occurring again.

Altogether, we estimate that these 3 factors had an underlying impact of approximately $1.2 million between the 2 businesses. The bar chart on the right provides a visual to normalize for the imbalance we saw from these factors in the quarter.

The bottom line here is that our core business is solid, end market demand is robust, we continue to grow our market position and we are really pleased to have posted 30% overall core growth, which underscores the strength of our business on a global scale.

Our Pharma Services and Clinical Trials businesses fluctuated slightly year-over-year due to the inherent nature of revenue recognition timing associated with the staging of work and milestones.

Moving on to gross margin. We continue to consistently deliver margins greater than 60%. This quarter, we reported a gross margin of 60.2%, a decrease of 320 basis points from the prior year period, driven primarily by a combination of higher manufacturing costs and lower yields, geographical customer mix from the strength of our international business and tariff impacts of approximately 50 basis points.

Looking ahead to the fourth quarter, we expect the cost of manufacturing to improve. And as we have indicated throughout the year, we will continue to see a higher mix of growth in our international markets with lower ASPs and a modest tariff impact from our suppliers. We reiterate and expect our full year margin to stay in line with our guidance of 61% to 63% as we have laid out since the start of the year.

We finished this quarter with $8.5 million in cash, representing cash generation of $400,000, which was driven by lower net losses from higher revenues and disciplined operating expense spending. Additionally, our working capital was balanced and we saw lighter investments in manufacturing equipment. Our non-cash items were primarily driven by stock comp expenses and depreciation. We continue to see the benefits of our discipline in our cash flow results.

Our year-to-date financial highlights show that we are progressing towards profitability. Revenue grew 22% to $30.2 million compared to $24.8 million in the prior year first 3 quarters, with a corresponding operating expense increase of 3%, demonstrating our ability to run a disciplined capital allocation process.

Gross margin remains over 60% at 62.1% despite some Q3 headwinds with manufacturing costs and tariff impacts. We cut net losses in half from $4.5 million to $2.2 million, and we have delivered positive adjusted EBITDA this year, showing a 109% improvement. As it relates to the balance sheet, our cash usage has dropped to $1.1 million year-to-date, representing a 60% decrease from last year.

Looking ahead for the full year 2025, we are raising our revenue guidance to $40.5 million to $41 million, representing a 20% to 22% growth, an increase from our prior range of $39.5 million to $40.5 million. This is driven by opportunities for further growth internationally and a strong SCIg market in which we will continue to gain new patient starts.

We are reiterating our gross margins in the range of 61% to 63% as well as reiterating our positive cash flow from operations. We expect to end the year with at least $8.2 million in cash.

I'll now turn the call over to Linda for some closing commentary on future milestones and our vision for continued growth.

Thank you, Tom. We are making strong strides across our strategic priorities, setting the stage for accelerated revenue growth. In our efforts to expand the number of drugs on our Freedom System, this year-to-date, we have advanced 4 new pharmaceutical collaborations and submitted a 510(k) for our rare disease infusion drug. Upcoming 510(k) filings in early 2026, including opportunities in oncology, position us for meaningful pipeline and commercial growth.

In our international expansion efforts, we launched commercial sales in Japan and rolled out our Phase I flow controller. Growth in our top 10 markets will be further driven by prefilled conversions, expanding our global footprint and patient reach. Our core domestic SCIg franchise continues to outpace the market's 8% to 10% growth.

With key submissions ahead, including the Phase II flow controller and next-gen Ig pump, we are poised to expand our SCIg leadership. Overall, these achievements, combined with upcoming milestones, reinforce our confidence in meeting 2025 financial targets and sustaining long-term momentum.

In summary, I'll leave you with some of the core elements we believe make KORU an attractive opportunity, not only now, but also in the future. Market dynamics continued to support a shift towards subcutaneous delivery, and our technology is well positioned to capture the benefits of that shift.

Each quarter, we make great strides in executing against our plan. We achieved another excellent quarter with revenue expansion exceeding 25%, driven by steady recurring revenue from our core Ig franchise, ongoing patient base expansion with a compelling opportunity for growth acceleration internationally with prefill conversions. Additionally, we have a robust and growing pipeline, including 11 new opportunities to bring new drugs outside of Ig onto our label in the coming years.

And finally, our updated guidance underscores our confidence in continuing to accelerate revenue growth in 2025 and beyond while maintaining a healthy P&L and improving balance sheet to optimize flexibility and support with our growth strategies moving forward.

Before closing, I'd like to thank the entire KORU team for their continued efforts and passionate work to further our mission and treat even more patients worldwide.

Operator, please open the line for questions.

[Operator Instructions] Our first question comes from Frank Takkinen with Lake Street Capital Markets.

Congrats on all the progress. I was hoping to start with the oncology setting. Happy to hear the pilots done and you had some great outcomes there. I think I heard you comment on the nurse feedback has been particularly positive with the ability to service a few patients at once. Maybe a little bit deeper into that would be helpful to understand how that feedback has been.

And then as a second part in the oncology setting, can you maybe talk about the reimbursement model? Any work that needs to be done there or is there currently a structure in place that would be conducive to adoption in that setting?

Thanks, Frank. Obviously, we're very excited about oncology being a major expansion into a new market for KORU. So the clinical study that we did was really based in 5 clinics in the U.S. We had very large centers and much smaller regional centers. So we had good diversity in terms of that. But the outcomes across all the clinics were fairly synonymous. So a glide quickly passed nursing and patient satisfaction, very, very high in the 90%-plus range. Obviously, the safe dosing of all of those drugs.

Your specific question on workflow efficiency was the one that we were really excited about where 70% of nurses reported the ability to multi-task. So right now, they are completely wed to that patient with the manual syringe push administration. So what we were hoping to validate was that by using our pump, the clinic could see improved throughput of patients. And indeed, what we saw was that many nurses were comfortable being able to leave that patient and attend to other patients, do administrative duties, et cetera. So really huge opportunities for these clinics.

On your last part around reimbursement, the great news is we don't have anything to do on the reimbursement front. The reimbursement codes that exist today cover for the administration of these drugs in infusion clinics using a pump. So that reimbursement coverage exists for the products. And so we're very excited about the opportunity.

Charging ahead now to -- we've been doing the work to get the submission completed, provided that everything gets passed. We hope that the FDA will be receiving that submission. We're confident by the end of this year, and we're looking forward to what's ahead for us in the oncology market.

That's great. And then maybe a clarifier on guidance for Q4. Any color you can provide on kind of breakout of revenues per line item would be helpful just given the volatility from the different stocking dynamics and distributor dynamics. And then maybe if I can squeak one more. Any initial thoughts on 2026 would be helpful for us as we're building out our models for that year.

Okay. So maybe I'll start with the remainder of the year this year, and then I'll turn it over to Tom to give you some more specifics.

So overall, if you look at our front half performance for the business, we grew 19% overall for the business with back half growth implied at the midpoint of our guidance at 23%. So that's the first thing is everybody should feel comfortable about the acceleration in revenues between the front and the back half.

As for the split between business and what you can expect given the dynamics of the Q3, I'll let Tom go ahead.

Yes. Thanks, Frank, for the question. If you look at our first half of the year and you look at that split, we split around 70% or so for the U.S. business and around 23% to 24% for the international business. So you can assume that sort of split for the Q4 expectation on revenue.

With the remainder of that obviously being the PST business.

And then regarding 2026 guidance. So first thing I want to say is, obviously, when you post 2 20%-plus quarters in a row, we feel great and excited about the position that we're in. So if you look back over what we've been talking about for pretty much the course of the last year, it's taking the company to this new level of sustainable plus 20% growth. So while I'm not comfortable giving exact guidance for 2026, what I can say is that a number that starts with the 2 is something we're feeling good about at this moment in time.

Obviously, we're looking for those accelerations, which opportunities from prefills, more international expansion, oncology, those new drugs, all of those things, the 20%-plus you're seeing today is being done without those things. So obviously, acceleration, whether that comes in '26, later in '26, early in '27. But that's what I would say that the number of starting in the 2 is what we're comfortable with today given what we know today.

Our next question comes from Caitlin Roberts with Canaccord Genuity.

Congrats on a great quarter. Just starting with the EU, I think you noted that several countries are preparing for the change to PFS. I mean, any more color on the size of those opportunities and potentially the timing of those?

So thank you, Caitlin, and congratulations on the new last name. Thank you, though, for the quarter. We're very excited about the international expansion opportunity. As I mentioned on the call, we see international taking our share position, pretty much doubling it over the next little bit, and we see that as a $10 million to $20 million opportunity overall, most of it being driven by prefills.

We have converted just one large market. And why this opportunity is such a big lift for KORU is that the standard of care in Europe has been electronic pumps. Our studies in head-to-head show a 50% reduction in the number of steps required for patients to use our system versus electronic pumps. And also, it's easier for healthcare professionals to train.

So I'm not going to give details of what the next countries are. But suffice to say that we've only got one down, and we think we have a lot of headroom in front of us with a lot of work to do, but it is a major growth opportunity and we're putting a lot of effort into that today.

That's great. And then obviously, share gains have been a big piece of the SCIg growth for you. But any color on the -- just market growth dynamics at this point in the year, maybe with early flu season starting and how you feel about that going into the end of the year and into 2026?

Yes. So just overall, the -- what we've seen is the underlying rate of patient diagnosis is going up. I would say, we've seen definite acceleration quarter-to-quarter. It's a little early yet. Usually, the diagnosis lags a couple of months by the infection. So while flu season starts, usually, these patients require 4, 5, 6 infections before their PID may be diagnosed. So we'll wait and see. But fingers crossed on that one. We've had a strong year thus far.

I would say, the second dynamic, which I introduced in the call today was we're seeing a lot more SID, Secondary Immunodeficiency with general underlying dynamics like aging populations, et cetera, driving it. But the big one is the cancer treatments. The chemotherapy drugs, the CAR T cell therapies that reduce the immune system by design so that those drugs can work, then the patient needs immunotherapy.

So we see a lot of the Ig manufacturers now starting trials for SID, because currently, that is not reimbursed in the U.S. So we see this as being a potential today that's not built into our numbers. That's probably a story that plays more into 2027 by the time they complete those trials. But we're certainly seeing a lot of off-label use of SID today.

Our next question comes from Joseph Downing with Piper Sandler.

On for Jason today. Just a quick question on gross margin looking to 4Q and then into '26 as well. I know you're probably not too keen on divulging any specifics here. But just directionally, can you provide any commentary on how we should expect gross margin to develop here over the next, call it, 12 to 18 months? I know there's international mix dynamics, some manufacturing efficiencies, tariffs, some pricing, new launches, things like that. But any color there would be really helpful.

Joseph, thanks for the question. Yes. So as we mentioned, just starting with this year, we have seen that geographic mix change. And obviously, the geographic mix change when you think about the ASPs in the different markets as you grow more internationally, you have a lower ASP driven by emerging markets or established markets.

But when you think about that dynamic and you accelerate that into the next 12 to 18 months, we are doing our best to hold our margins. We are always working on our cost and manufacturing with our operational excellence programs to identify opportunities driven by volumes, right, because we're a growing business. So we will continue to work on our margin profile. We have long-range plans to get our margins 65% plus. So that is our strategy and that we will continue to focus on as we grow international.

And maybe just to add on to what Tom said. Obviously, we started the year with the 61% to 63% margin range with a couple of manufacturing issues. The growth in international, which we did not anticipate -- we knew it was going to be good, but as good as it is growing through the year I think, Tom, we're probably doubled that business through the third quarter already.

So the fact that we're able to maintain that original margin gain, also -- sorry, I forgot tariffs as well. Just a huge credit to our operations teams who have really done a great job of bringing back some efficiencies, which is why we're still confident despite those things, holding on to that 61% to 63% and continued march towards that 65% range that we're headed for over the next 3 to 4 years.

Great. I appreciate that, guys. And then one quick one on Japan. Can you just give us any color on maybe like the cadence of the ramp into next year? That would just be helpful for -- as we look at our models here.

Sure. So on Japan, I would say, the great news is we're in the market. We've got sales. I think I said this year; the sales would be somewhere just $300,000 to $500,000. I think we're feeling pretty good about that range. Japan is primarily today an in-hospital system. And so we think it will take a little bit longer for Japan to evolve.

But I would say, the overarching comment on international that has more than made up for that is the strength of the prefills. So we're excited still about Japan. And now I would say it's come -- it's still a growth driver, but it's probably now #3 or #4 on our list versus the broader prefill opportunity is #1 by and large.

Our next question comes from Chase Knickerbocker with Craig-Hallum.

Congrats on the nice quarter here. Maybe just to start on U.S. core. So just to clarify, I guess, a couple of things. So that $1.2 million was basically adjusting for those ordering dynamics from OUS distributor to U.S. distributor. And then that would make U.S. growth, call it, 14% kind of year-over-year if we add that $1.2 million there. And then maybe just give us an update on what SCIg growth was from a market perspective in the third quarter.

So thank you, Chase. Yes, we're excited about the quarter and appreciate the well wishes. The order dynamics, I think Tom laid them out well, and you got it perfectly. It's a combination. The only thing I would correct, yes, it's the $1.2 million that should have been in the U.S. That was a combination of 3 things, right? It was the stocking -- deceleration from one of our major U.S. distributors and then also the order dynamic between the U.S. and OUS.

Regarding the broader SCIg market growth, we don't have the numbers yet for Q3. Those usually lag a couple of months behind for us. But we know that from quarter 1 and quarter 2 that, that number was in that 8% to 9% range overall with acceleration between quarters in the growth levels being driven by PID, just really strong demand and patient growth in PID and then also the SID piece that I mentioned earlier.

Got it. Maybe just -- you noted some stocking related to the prefilled conversion in Europe as well. Can you just maybe speak to whether or not this is a new geography or the same one that we were talking about last quarter?

And then I know you don't want to give specifics as far as the geographies that you expect kind of these rollouts prefilled conversions to take in. But can you maybe just give us your overall thoughts as far as how you see the cadence? Is this going to be something that's a phase-in kind of country by country and it happens over the course of the next 18 to 24 months or just give us your overall thoughts there on the cadence?

Yes. So one thing I should have mentioned on the last call, you said the 14% growth. And I think, yes, that's about right, the number for the U.S. market.

So regarding prefilled syringes and the first country, that country was a country that was dominated by electronic pumps. We had very low share positions in that market with our consumables, and they converted very quickly. They delisted their vials completely in that market and went 100% to prefills. And we were very fortunate to -- they did that pretty rapidly. We still see some upside in that market because the pharma company continues to win new tenders based on their prefills. So that's great news.

Regarding the cadence for prefills, we believe that the manufacturer that we're working with will complete most of the work in the major markets by the end of 2026. They are being quite aggressive as they see it to be a competitive advantage for them today. And what I would say is that the decision-making though is done on a country-by-country basis. So reimbursement is different, how the patient receives the product is different.

So we've got a lot of work to do with each of those country leaders to ensure that we work with them on very specific go-to-market plans to make sure that the patient experience and the health care professional experience is what we all want it to be. So we think most of the opportunity will be over the next 24 months in total for that opportunity.

Got it. Makes sense. Maybe just sneak one last one in, just to kind of check the box. I mean, this dynamic with the OUS distributor to the U.S. distributor, that kind of cross-geography ordering, how are you able to confirm -- I mean, how are you able to make sure it doesn't happen again?

So I'll start and then maybe see if Tom wants to add anything. So we -- and by the way, right, in my career in this space, it's not the first time I've seen something like this happen. Typically, what we do in all of our contracts is we protect any pricing we provide per the market and we require tracings to say where is that product going to.

So that's why we were able to catch it pretty quickly. And so we've since worked with both distributors to ensure that we're now ensuring that product goes to the right markets for which the contracts have been written. So we're confident that it will not happen again, and we were -- we had it corrected within the quarter.

This now concludes our question-and-answer session. I would like to turn the floor back over to Linda for closing comments.

So thank you all for joining us this afternoon. We'll look forward to providing updates on our strategic progress. We've got several upcoming investor events ahead of our fourth quarter call in March. Have a great rest of your evening.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. Please disconnect your lines, and have a wonderful day.