FocalTherics — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for Q3 2026 was $9.8 million, a 26% increase year-over-year compared to $7.8 million in Q3 2025.
• Gross margin improved to 51.4% in Q3 2026 from 46.6% in the prior year period, driven by standard cost improvements on the Focal One system and higher average selling prices for systems and Focalpaks.
• Operating expenses were $12.8 million in Q3 2026, up from $10.3 million in Q3 2025, due to increased headcount-related compensation, higher stock-based compensation, and additional sales and marketing expenses.
• Operating loss was $7.8 million in Q3 2026, compared to $6.7 million in Q3 2025.
• Net loss was $4.5 million ($0.10 per share) in Q3 2026, narrowing from a net loss of $5.9 million ($0.16 per share) in Q3 2025.
• The decrease in net loss was primarily attributed to a $2.6 million favorable non-cash impact from the change in fair value of European Investment Bank warrants and a $0.5 million foreign currency exchange gain, partially offset by a $1.1 million higher operating loss and $0.4 million in interest expense on Tranche A and Tranche B drawdowns.
• Cash and cash equivalents totaled $56.3 million as of September 30, 2026.
• Nine months ended September 30, 2026, total revenues were $34.6 million compared to $23.8 million for the same period in 2025.
• Nine months ended September 30, 2026, net loss was $28.0 million ($0.71 per share) compared to $19.8 million ($0.53 per share) in 2025.
• Operating cash flow for the nine months ended September 30, 2026, was $(10.7) million, compared to $(14.0) million in 2025.
• Financing activities generated $50.7 million in cash for the nine months ended September 30, 2026.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance has been narrowed to a range of $50.0 million to $52.0 million, representing 34% to 39% growth over 2025, revised from the prior range of $50.0 million to $54.0 million.
• Management expressed high confidence in the growth strategy and future opportunities as the company closes out the year, citing sustained commercial traction and accelerating technology adoption.

Business Segments and Product Lines:

• The Company sold seven Focal One systems in Q3 2026, a 17% year-over-year increase compared to six systems sold in the same period in 2025.
• The Focal One System installed base expanded to 192 units, comprising 98 in the U.S. and 94 internationally.
• U.S. procedure volume grew 32% year-over-year in Q3 2026, accelerating from 15% growth in Q3 2025.
• Commercial Focal One Endometriosis programs were expanded to three centers in Europe.
• Positive coverage policies were published by major commercial payers for HIFU in recurrent prostate cancer.

Market and Competitive Landscape:

• The Company reported steady commercial momentum with expanding adoption across multiple new regions.
• Additional system sales occurred in the United States, Turkey, Mexico, and France during the quarter.

Risks and Challenges:

• Risks include the clinical status and market acceptance of HIFU devices and the ability to successfully discontinue and wind down lithotripsy and distribution divisions.
• Potential risks involve the worldwide inflationary environment, uncertain economic, political, and financial conditions, geopolitical instability, climate change, and pandemics or other public health crises impacting business operations and demand.

Management Commentary and Tone:

• Ryan Rhodes, CEO, stated that U.S. procedure volumes accelerated year-over-year to 32% for Q3 2026 compared to 15% in 2025.
• Management highlighted "steady commercial momentum" and "accelerating technology adoption" as key drivers for the quarter.
• The tone was confident regarding the growth strategy and the HIFU opportunity.

Other Key Points:

• The press release includes standalone historical financials for the HIFU business.
• A conference call and webcast were scheduled for November 5, 2026, at 4:30 p.m. Eastern Time, hosted by CEO Ryan Rhodes and CFO Ken Mobeck.
• The company is a global leader in robotic focal therapy, developing, manufacturing, and marketing minimally invasive medical devices using proprietary focused ultrasound technology.
• The Focal One Robotic HIFU platform combines advanced imaging, real-time treatment planning, robotic precision, and HIFU technology.