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Welcome to the IRADIMED CORPORATION Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] This call is being recorded today, November 3, 2025, and contains time-sensitive accurate information that is valid only for today. IRADIMED released its financial results for the third quarter of 2025. A copy of this press release announcing the company's earnings is available under the heading News on their website at iradimed.com. A copy of the press release was also furnished to the Securities and Exchange Commission on Form 8-K and can be found at sec.gov. This call is being broadcast live on the company's website at iradimed.com, and a replay will be available for the next 90 days. Some of the information in today's session will constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements focus on future performance, results, plans and events that may include the company's expected future results. IRADIMED reminds you that future results may differ materially from those forward-looking statements due to several risk factors. For a description of the relevant risks and uncertainties that may affect the company's business, please see the Risk Factors section in the company's most recent reports filed with the Securities and Exchange Commission, which may be obtained free from the SEC's website at sec.gov. I would now like to turn the call over to Roger Susi, President and Chief Executive Officer of IRADIMED Corporation. Mr. Susi?

Thank you, operator. Good morning, and thank you all for joining us on today's call. I am indeed very proud to report that IRADIMED achieved its 17th consecutive quarter of record revenue with the recent third quarter surpassing the 2024 third quarter by 16%. In the third quarter of 2025, we achieved revenue of $21.2 million. Our gross profit came in at 78% and earnings remained strong with GAAP diluted earnings per share increasing 8% from Q3 of '24. Pump shipments again led performance in the quarter as our 3860 MRI IV pump grew another 20% year-over-year in Q3. Our MR monitor sales have also continued to impress. I am also pleased to report that shipments of our MRI patient monitor grew by 16%, clearly showing that our emphasis on monitoring sales for 2025 is proving successful. Next, I want to touch on the planned rollout and commercial launch of the new 3870 MRI IV pump system, which was cleared in Q2. Let's recap what I have been saying about the #1 growth driver for the new 3870 pump. But first, yes, we anticipate a price increase of 10% to 14%. And yes, the 3870 design is such that we fully expect to penetrate the greenfield opportunity more effectively and also drive increased utilization among some of the existing customers who only use their older pumps rather sporadically. But most significant increases come from the large replacement opportunity, which is the #1 driver we see step changing the pump revenue and will continue to be our key growth driver in pump area for several years to come. It is very telling that even the old 3860 model delivered 20% growth in the third quarter. This is driven mainly by limiting, again, our extended maintenance offering to pumps under 7 years old -- to 2 pumps rather under 7 years old, which has brought in replacement orders for about 1/3 of the pumps in that 7 and up age group. With the new state-of-the-art 3870 pump having 20 years of technological advancement over the aging 3860, we anticipate a significant demand to replace the very large pool of older 3860 model pumps starting now at the 5-year and older level. Consider that in the U.S. market alone, there are approximately 6,300 5-plus year old or older 3860, [ 61 ] pump channels up for replacement. And we currently sell approximately 1,000 such channels annually in the domestic market. We will target adding another 1,000 channels per year in sales through replacement sales out of that existing 6,300 units that are over 5 years -- that are over 5 years old. This will be our target starting in Q2 and throughout the rest of 2026. And as you can see, replacing 1,000 channels per year leaves many thousands more to replace in the years to come. To put numbers to this opportunity for our domestic business only, selling north of 2,000 3870 pump channels annually at a slightly higher anticipated ASP, we would be approaching nearly a $50 million revenue run rate for pumps. Adding disposables and maintenance, international sales and the MR monitoring business, one can understand our confidence in breaking into the $100-plus million revenue range. I'd like to provide our thoughts as to timing on the rollout of the 3870. In December, we will deliver an initial order of 23 3870 systems, for which we will provide an extraordinarily level -- extraordinary high level of clinical support and monitoring of the use of the pumps through January and February to review and adjust planning based on user input. The full sales team rollout in the U.S. will begin after the national sales meeting in the third week of January. Given the time required for our hospital customers to be sold, approve funding and issue orders, we expect bookings to build beginning in Q2 and ramp significantly in the second half of the year. We expect to maintain quarterly revenue in the first half of 2026 through the increasing MRI monitoring business and our 3860 pump backlog. Now let's discuss our updated financial guidance. For the fourth quarter of 2025, we expect revenue now of $21.4 million to $22.4 million and anticipate GAAP diluted earnings per share of $0.43 to $0.47 and non-GAAP diluted EPS of $0.47 to $0.50. For the full year 2025, we are raising our guidance to $82.5 million to $83.5 million, up from our prior range of $80 million to $82.5 million. GAAP diluted earnings per share is now expected to be $1.68 to $1.72, up from $1.60 to $1.70. And non-GAAP diluted earnings per share is expected is $1.84 to $1.88, up from $1.76 to $1.86. We also remain committed to delivering value through our $0.17 per share quarterly dividend declared for Q4 and payable on November 25. I'll turn over the call to Jack Glenn, our CFO, now, to review the quarter's financial results. Jack?

Thank you, Roger, and good morning, everyone. As in the past, our results are reported on a GAAP basis and non-GAAP basis. You can find a description of our non-GAAP operating measures in this morning's earnings release and a reconciliation of these non-GAAP measures to GAAP measure on the last page of today's release. For the 3 months ended September 30, 2025, we reported revenue of $21.2 million, a 16% increase from $18.3 million in the third quarter of 2024. This growth was driven by strong performance across our product lines with MRI compatible IV infusion pump systems contributing $8.3 million, up 20% year-over-year and patient vital signs monitoring systems contributing $6.9 million, up 16%. Disposable revenue grew 12% to $4.1 million, reflecting increased utilization of our devices, while ferromagnetic detection systems also saw solid gains. Domestic sales increased 19% to $18.1 million and international sales remained consistent at $3.1 million. Overall, domestic revenue accounted for 85% of total revenue for Q3 2025 compared to 83% for Q3 2024. Gross profit was $16.4 million, up 16% from $14.1 million in Q3 2024, with a gross margin of 78% compared to 77% in Q3 of 2024. The strong margin performance was especially noteworthy as we moved manufacturing operations into the new facility at the beginning of the quarter and stayed on track with our shipment and cost of goods sold targets. Operating expenses for the quarter were $9.7 million, up 15% from $8.4 million in Q3 of 2024, driven by higher sales and marketing expenses to support our growth and modest increases in general and administrative costs and research and development expenses. The increase in sales and marketing expenses was primarily due to higher sales commissions for our direct sales force in the U.S. as they exceeded their bookings plan in the quarter. Income from operations grew 17% to $6.8 million from $5.8 million in Q3 of 2024. Tax expense for the quarter was $1.7 million, resulting in an effective tax rate of 23.6%. The increase in the effective tax rate was primarily due to a catch-up in the quarter with our projected effective tax rate for the year now estimated at 22%. Net income was $5.6 million or $0.43 per diluted share, a 12% increase from $5 million or $0.40 per diluted share in Q3 of 2024. On a non-GAAP basis, net income was $6.1 million or $0.47 per diluted share, up 9% from $0.43, excluding $0.5 million of stock-based compensation expense net of tax. Now turning to our balance sheet. We ended the quarter with cash and cash equivalents of $56.5 million, up from $52.2 million at year-end 2024. Cash flow from operations was a strong $7 million for the quarter and $19 million year-to-date. Free cash flow, on non-GAAP measure, was $5.7 million for the quarter and $11 million year-to-date, reflecting capital expenditures of $8 million year-to-date, primarily related to the new facility. Final payments totaling approximately $1.3 million for the facility were made in the third quarter, bringing the total construction cost to approximately $13.3 million. And with that, I will now turn the call over for questions. Operator?

[Operator Instructions] Our first question is going to come from the line of Frank Takkinen with Lake Street Capital Markets.

Congrats on the solid quarter and all the progress. I was hoping we could start with some more color around the kind of bridge to $50 million run rate in pumps. I appreciate the timing you laid out related to sales meeting, launching after that in January and then ramping the backlog in Q2 through mid-2026. When should we expect that to flow through to kind of revenue to that $50 million run rate? Can we see that in late '26? Or is that more of a 2027 event?

We should -- yes, Frank, it's Roger. Maybe I'll pick it up first and let Jack jump in if he has some more color for you. As I said, most of that -- given that we start pounding the pavement shall we say, to sell 3870 here in me mid-January, the early part. But by the time they get out there, you're basically half of Q1. And as I mentioned, orders don't just immediately get turned around even from people that are -- we think are pretty well pent up with desire to get a new pump now after at least 20 years of 3860. So yes, the story is in the back half of 2026 for revenue. We anticipate bookings and so forth, that we'll be able to report on in the first half, certainly. But the real revenue will start to ramp up in the third and fourth quarter. And so yes, by that fourth quarter, we think it will be pretty clear that we're doubling the number of pump channels that we're booking certainly and the revenues should start to reflect that as well.

Got it. That's helpful. And then I wanted to follow up on one comment in the press release. I think it was along the lines of despite some inefficiencies with the transition, we maintained a 78% gross margin. Quite honestly, I figured that would be followed with our gross margin was negatively impacted and below expectations, but that was still above expectations. Is it may be kind of hinting at the fact that you can get even better gross margins out of this product potentially into the 80%? Or how should we kind of read through on that inefficiencies and how that impacted the quarter?

Well, I think it shows that we did a great job. transition, moving the entire operation across Orlando essentially and getting it plugged in and running again, that we didn't have any glitch negatively impacting revenues and subsequently cost of goods. And -- but I think the real impact there is that the revenue -- the stuff that we didn't ship out by and large, in Q3 was heavily domestic. And so that is probably what accounts for that 1% boost in the gross margin. So can it be sustained? Well, as we get quarters where domestic business is a little bit on the lesser side from international business, that will fluctuate probably by that point.

Our next question comes from the line of Kyle Bauser with ROTH Capital Partners.

Congrats on the great results. Maybe we can talk a little bit about inventory levels for 3860 and 3870. Maybe first on 3860. Obviously, demand is still very strong here. It doesn't sound like any air pockets, which is impressive. Is pricing stable on that? Or are you planning on maybe sort of providing any sort of discounted levels there as you kind of roll out that inventory and move into 3870?

Kyle, nice to have you on board here with us. By the way, and hope to meet face-to-face soon. But to answer your question, the question is simple, no. No. We haven't -- it's surprising maybe, but yes, that boost -- that gift that keeps on giving from these old 3860 pump orders is straight at the ASPs we've always enjoyed, no discounting, no, haven't done that.

Great. Great to hear. And maybe on -- how are you thinking about inventory levels for 3870 ahead of the launch? And what are current levels? Or do you expect -- how do you expect to manage that, et cetera?

Well, there's lots of money going there. I'll let Jack pick that one up.

Sure. So good to hear from you, Kyle. So yes, as far as the inventory levels of 3860, certainly, we have the inventories and we'll plan the inventories for the backlog that we have currently with the 3860, which will be shipping throughout Q1 of next year and end of Q2, it looks like. As far as the 3870, we are beginning those buys now. And so you'll see in Q4, there certainly -- we're building up inventory for those 3870s and now will be appropriate build for Q1 and beyond. And so certainly, we have the working capital from that perspective, no issues there.

Okay. Appreciate that. And I don't want to get ahead of myself here since you're just kind of beginning the rollout into the U.S. But can you remind me plans eventually to secure entry into international markets for 3870 and how you're kind of thinking about that?

Yes. It's primarily a regulatory issue. There's the new MDR requirements to maintain your CE Mark for European community business. That's a heavy lift, but our regulatory folks, they came off of a long battle with FDA, as you know, to clear the 3870, but that was back in May. They took a breather, but they're hot and heavy on obtaining that MDR, let's call it a clearance, but it's a registration where the CE Mark. And that will -- that's what we're targeting to be done in Q4. So international business will switch over to the 3870 next year, 2027, I should say, not in 2026. We'll just be getting the MDR towards the latter part of 2026. Likewise, our other large market for pumps is Japan. And I'll be speaking with them. I'm in Japan calling on this call right now. I'm speaking to them here in the next day or 2 and working with the Japanese to clear the product here in Japan. We're going to do that simultaneously. But it probably still will be somewhere in the fourth quarter by the time we get that cleared. And then we'll switch Japan over. So both those largest international markets will be a 2027 kicked in.

Okay. Great. Appreciate that. And maybe just one more quick one. Glad to hear you're fully moved into the new facility. I think it's 2.5x the size of the previous facility. Correct me if I'm wrong. But any sense as to kind of what level of sales this could support or capacity, however you want to frame it?

Well, it is 2.5x the size. That's right. And we were doing $20 million a quarter out of that 2.5x smaller space. So the math of it's pretty equal. We don't see any reason why we can't get to $50 million a quarter in the new facility. And so yes, 2.5x. But unlike the old facility, we're not landlocked where we are. As you might recall, Jack mentioned the cost of construction of the building that we did pay cash and we built it with our cash flow. But we also purchased the 26 acres. The building sits on about 5 of it, 5 or 6 of that. So there's lots of space around us that's ours to -- and the way we constructed the building was so it could easily be expanded into that adjacent space that we own. So we have plenty of space without spending another nickel on any construction or buying more land. And to expand the production side of the building into the land that we already own is not that heavy of a lift. So we have, I guess, paid forward quite a ways these plenty capacity physically.

Thank you. And this will conclude today's question-and-answer session. And I would now like to turn the conference back over to Roger Susi for closing remarks.

Thank you, operator, and I thank you all once again for joining today's call and look forward to displaying IRADIMED's ability to execute once again as we introduce our new MRI IV pump and capitalize on the huge replacement opportunity throughout 2026 and beyond. Thank you.