CapsoVision — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the third quarter of 2026 was $3.6 million, compared to $3.5 million in the third quarter of 2025.
• Gross profit was $1.8 million for the quarter, down from $1.9 million in the prior year period; gross margin decreased to 49% from 54%.
• The decline in gross margin was attributed to higher material costs from increased flash memory prices, a one-time inventory obsolescence charge, and higher stock-based compensation expense.
• Operating expenses decreased to $9.1 million from $9.9 million in the third quarter of 2025.
• Net loss was $7.3 million ($0.15 per share), compared to a net loss of $7.9 million ($0.17 per share) in the third quarter of 2025.
• Cash and cash equivalents totaled $21.8 million as of September 30, 2026, up from $10.1 million as of December 31, 2025.
• Deferred revenue was $146 thousand as of September 30, 2026, compared to $177 thousand as of December 31, 2025.
• For the nine months ended September 30, 2026, net loss was $21.9 million ($0.44 per share) compared to $17.9 million ($1.05 per share) in the prior year period.

Guidance and Future Outlook:

• The Company expects the addition of AI Highlights to accelerate CapsoCam Plus sales growth, with full commercial impact anticipated in 2027.
• FDA 510(k) submission for the second-generation CapsoCam Colon™ remains on track for year-end 2026.
• The Company expects clinical expenses related to the CapsoCam Colon pivotal study to decline following the completion of enrollment and data collection.
• Average selling price remained stable year-over-year in the third quarter of 2026.

Business Segments and Product Lines:

• CapsoCam Plus® was used by more than 184,000 patients worldwide as of September 30, 2026, compared to 151,000 a year earlier.
• Received FDA clearance for AI Highlights™ on September 25, 2026, with a U.S. commercial launch on November 2, 2026.
• AI Highlights™ is an AI-assisted reading tool for CapsoCam Plus® available for adults and pediatric patients aged two and older, supporting review via local computer and cloud-based platforms.
• Completed enrollment and clinical data collection for the second-generation CapsoCam Colon™ study, which includes physician review of capsule videos with and without AI assistance.
• Continued expanding the clinical footprint of the CapsoCam UGI study for pancreatic cancer detection, adding a third active community-based site and initiating contracting discussions with over a dozen larger medical centers.

Market and Competitive Landscape:

• The Company notes competition in the capsule endoscopy market, including from competitors with FDA-cleared AI products.
• The combination of panoramic imaging and FDA-cleared AI-assisted review is positioned as a meaningful differentiator for CapsoCam Plus.
• The CapsoCam Colon™ is designed to address a substantially larger market opportunity for non-invasive colon imaging and polyp detection.

Risks and Challenges:

• Risks include market conditions, competition, financial condition, and the availability of cash and financing.
• Potential risks include failure to receive regulatory clearance or approval, changes in U.S. trade policies, tariffs, or government regulations affecting supply chains, and failure to adapt products for new indications.
• The Company faces risks related to the success of product and clinical development efforts and the ability to translate milestones into broader adoption.

Management Commentary and Tone:

• Johnny Wang, President and CEO, stated that the FDA clearance and launch of AI Highlights marks an important step forward, aiming to reduce reading time, improve detection accuracy, and provide diagnostic confidence.
• Management expressed confidence that completing the colon clinical study brings the Company closer to a planned FDA submission by year-end.
• The Company highlighted the support of existing shareholders through recent financing as a foundation for translating milestones into long-term growth.

Other Key Points:

• Completed an $18 million registered direct offering with existing shareholders in September 2026, generating approximately $17.8 million in net proceeds.
• Raised approximately $1.7 million in net proceeds through the at-the-market (ATM) offering program during the third quarter of 2026.
• Appointed David S. Shields, M.D., to the Board of Directors effective July 1, 2026.
• Inventory increased to $4.7 million as of September 30, 2026, from $3.0 million as of December 31, 2025.
• Total stockholders' equity increased to $26.4 million as of September 30, 2026, from $13.3 million as of December 31, 2025.