Good afternoon. And welcome to Hyperfine's Third Quarter 2024 Earnings Conference Call. Currently, all participants are in listen only mode. We will be facilitating a question-and-answer session towards the end of today’s call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa Bych from Gilmartin Group for introductory disclosures.

Thank you for joining today's call. Earlier today, Hyperfine Inc. released financial results for the quarter ended September 30, 2024. A copy of the press release is available on the company's Web site as well as sec.gov. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or predictions of future events, results or performance, are forward-looking statements. All forward-looking statements, including without limitation, those relating to our operating trends and future financial performance, expense management, expectations for hiring, training and adoption, growth in our organization, market opportunity, commercial and international expansion, regulatory approvals and product development are based upon our current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please refer to the Risk Factors section of our latest periodic filings with the Securities and Exchange Commission. This conference call contains time sensitive information and is accurate only as of the live broadcast today, November 12, 2024. Hyperfine Inc. disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements whether because of new information, future events or otherwise. With that, I will turn the call over to Maria Sainz, President and Chief Executive Officer.

Good afternoon. And thank you for joining us. On the call with me today is our Chief Administrative Officer and Chief Financial Officer, Brett Hale. We delivered another strong quarter with revenue of $3.6 million, representing 56% year-over-year growth, over 270 basis points of sequential gross margin expansion and continued reduction in cash flow. Revenue performance was driven by sales of our Swoop portable imaging systems in both the US and international markets. International contributions to revenue were healthy in the third quarter and we did not experience the extent of seasonality that we had anticipated. Our growth going forward will be driven by expansion into multiple new sites of care and international geography. In the US alone, we have a 6 billion plus total addressable market opportunity for placements in hospitals and office settings. Our expansion is enabled by our technical and clinical development as ever improving image quality and compelling clinical evidence are key catalyst for adoption of these new brain imaging technology. An important development in the third quarter was the progress made on our commitment to further improve image quality to enable faster adoption of our technology. Early in the quarter, we received FDA clearance of our ninth generation AI-powered software. This approval marks an important step forward in the imaging capability of our unique ultra-low field portable brain MRI, reducing acquisition times without compromising image quality, delivering higher overall clinical performance. Shorter scan times makes Swoop system images especially useful in time sensitive medical settings, such as the ICU dealing with critically ill patients with unstable intracranial pressure as well as emergency departments for the triage of stroke where time is [indiscernible] [brief]. Keeping with our steady pace of innovation, we plan to obtain clearance and launch our next generation AI-powered software in the first…

Thank you, Maria. Turning to our financial results for the third quarter of 2024. Revenue for the quarter ended September 30, 2024 was $3.6 million, up 56% compared to the third quarter of 2023. Year-to-date, we've generated $10.6 million in revenue, up 27% from the first nine months of 2023. Gross profit for the third quarter of 2024 was $1.9 million compared to $1.1 million in the third quarter of 2023, resulting in a record gross margin of 52% and our second straight quarter of gross margin percentage of 50% and above. Year-to-date, we've generated $5.1 million in gross profit, up 36% from the first nine months of 2023. And year-to-date gross margin is 48%, representing over 330 basis points of gross margin expanded from the first nine months of 2023. R&D expenses for the third quarter of 2024 were $5.9 million compared to $5.7 million in the third quarter of 2023. Sales, general and administrative expenses for the third quarter of 2024 were $7 million compared to $7.1 million in the third quarter of 2023. Net loss for the third quarter was $10.3 million, equating to a net loss of $0.14 per share as compared to a net loss of $10.8 million or a net loss of $0.15 per share for the same period of the prior year. The improvement in net loss was a result of our strong revenue, expanding gross margin and the spending discipline and cost saving initiatives we have implemented across the business over the past year. Our cash burn for the third quarter of 2024 was $8.9 million and as of September 30, 2024, we have $45.8 million in cash and cash equivalents on our balance sheet. Year-to-date, our cash burn of $30.2 million is down 6% compared to $32 million for the first…

Thank you, Brett. The team made great progress in the third quarter, driving technical and clinical development to drive site of care expansion, all while delivering a strong quarter financially. With line of sight to several meaningful revenue catalysts in 2025, I have never been more optimistic about the business. With that, I want to thank you all for your time and open up the line for questions.

[Operator Instructions] Your first question comes from the line of Larry Biegelsen with Wells Fargo.

This is Simran on for Larry. Congrats on a great quarter. Maybe just starting off on capital trends in the quarter. I don't think I heard in your prepared remarks how many capital placements there were? And just following is there any color you can provide on US or in OUS split as well as any greenfield same store sales?

You didn't hear because we didn't mention it, but we actually placed 13 systems and it was a strong balance between US and OUS placements. As you saw, there's a slight improvement in ASP associated with the strength of the mix. So 13 is the answer to your question, Simran.

And maybe just on guidance. Guidance at the midpoint implies flattish sequential sales in Q4, which is typically your strongest capital quarter. I guess, given all of the momentum you're seeing, why wouldn't you see an acceleration into the quarter and maybe just talk about what gets you to the low and the high end of the range?

I'll address it, and maybe, Brett, if you want to add anything else. I think for all intents and purposes, maybe let's start by reminding you, we don't really get funded for the placements of our systems by the traditional capital budget. So there's not usually that rush to use the budget or lose it at the end of the year. Often, we actually get access to strategic funds. So we get access to donor funds. There's different mechanisms outside of the traditional capital budgets that end up funding the purchase of our system. So we don't really have that favorable seasonality that other capital equipment sees. And when we look at this quarter, it's actually a slightly shorter in terms of selling days for us in getting all the deal specifics lined up. We feel really strong about the quarter. We think it will be another strong quarter. We've been on quite a nice streak of strength of the quarters. At the midpoint, roughly, we're still talking about 30% year-on-year growth and we see Q4 as a solid quarter to wrap up the year. But we don't see any of that special seasonality that is sometimes associated with folks that are relying on the final breadth of the capital budget.

I would add, in Q3, we didn't see the seasonality that we had talked about in the prior earnings call. One or two deals actually closed ahead of schedule. So on balance when we look at the full year, the $14 million to $14.5 million of revenue range, as Maria indicated, we feel very good about that, 30% roughly year-over-year growth at the midpoint.

And just one last one if I can squeeze in here, on the new software launch in the US. I saw that you guys have moved the full rollout in July. When do you expect all of the US system to add the latest upgrade? And can you talk about the impact you are seeing to the funnel as well as adoption?

So we have been progressively rolling it out. I would say we have a very large number of accounts and we prioritize appropriately to the bigger users. So we see the rollout going as expected, probably the majority of the accounts will be done clearly as we wrap up this year. This software, as you know, has a benefit of having no image quality compromise but a significant gain in the time it takes to acquire the images, and that has been incredibly well received. We have received a lot of very positive feedback on that as it relates to just also managing the time to patient is in the scan and making sure that there is less motion. So we closely track the number of the initial accounts where we release to get us much soft of inside info before we train the full sales force and started the broader rollout. So that process went really well with a very good understanding of the value proposition. I think what I’m most excited, Simran, since you’re talking about software is what we’re working on now which would be real in the first half of the 2025 and that’s the tenth generation of software. And I have to say the team has done a fantastic job really taking these learnings, techniques and our AI techniques up a very significant level and we're getting to image resolution and images that look quite close to what a 1.5 Tesla system is, which to me is really not just a one more software version but really a departure in a very positive way towards a significant sort of level of familiarity with the images that is going to make adoption faster as the radiologists are going to get a lot more comfortable with reading the scans, the exams, the images than maybe in our earlier days of the technology.

Just to clarify, you expect a limited launch of the tenth generation in the first half?

I expect that we would get clearance. And if it is as good as we believe it is from our R&D work and the early validation and the early images we’ll probably go quite quickly into a rollout in the first half.

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

Congrats on this quarter's performance. Since you just attended AIC and CTAD, I'm curious if there is any perception difference between the US based doctors and EU based doctors on the criteria to initial treatment for Alzheimer's, and then any difference on their perception on the MRI scan in follow-up scanning?

Great question, Yuan, and I actually was there at the CTAD myself, so I can report firsthand. I want to say there's a lot of similarities in the fact that everyone agrees that the bottleneck is this MRI monitoring requirements and how inconvenient that is to the patient workflow to how burdensome it is to the care partners and the patients themselves, and a lot of people that are starting programs are already talking about the challenge of really orchestrating all of the different appointments. So I would say that's a global theme. The European community is a little bit up in arms in the fact that their regulators have actually been a lot more conservative. And as you know, there is no CE approval for any of the ATPs, and the UK approval came with a more restricted labeling than the US approval. So there is a lot of enthusiasm and optimism that the regulators will see the light. I think the UK approval was really a beam of bright light in the fact that the world will actually, in Europe, catch up quickly to the US. I think I have to say that our poster was up for three full days and the traffic and the level of interest was significantly higher than I've ever anticipated in some of the US meetings. This is a meeting that is a little unique in that there is no booths and stand. So the session all happened in one big conference room and then there is the poster walk-through for all of the interactions. But we had a lot of people actually come by and they were not only from clinical sites but also from a lot of the pharmaceutical companies that are either commercializing today or developing any of the ATPs or the future therapies. And really for us it was a great understanding also on how Alzheimer's care is organized, which is quite different in Europe than it is here given the social medicine sort of environment there. So probably a little easier to penetrate with more structure in the way that systems work. Hopefully, that addresses your question.

And maybe another question on the EU expansion [indiscernible] your quarterly performance there as well. You mentioned the workflow issues. I'm wondering is the demand of MRI the same between the EU and the US that they have this capacity issue and rather they are reimbursed at similar rate as US?

I think there is -- there are differences. So clearly, the density of MRI per capita is very different even across European countries. Their issue of the wait list in the UK is quite unique to the NHS system. So that's more UK than the rest of Europe. And reimbursement is in the hospital environment, very often covered under DRG equivalent kind of reimbursement but that also may vary by country. I think -- what we see with our system is, as you know, we just got approval of our ninth generation software, the European clinicians have only really had exposure to the eighth, ninth generation software for all intents and purposes since we've recently focused in Europe, and they believe the data is incredibly -- the images are incredibly good and diagnostic quality. Just the month before CTAD, we were at the European Society of Neuroradiology. And actually Glasgow presented stroke data there with incredible value assessment around the time to scan, advantages of using our system and the fact that this was head above -- a head CT, no pun intended, in terms of the triage of stroke. So I think they -- their care delivery across both the stroke, emergency, medicine and neurodegenerative is a little bit different, there is higher appreciation of the value of our technology as it is today, because this is everything they've been exposed to.

There are no further questions at this time. I will now turn the call back over to Maria Sainz, President and CEO, for closing remarks.

Well, thank you very much, all of you for listening in today and for your questions, and we look forward to further updates throughout the quarter and then at the end of Q4. Thank you very much.

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