Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hyperfine Q1 ’25 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Webb Campbell, Investor Relations. Please go ahead.

Thank you for joining today's call. Earlier today, Hyperfine, Inc. Released financial results for the quarter ended March 31, 2025. A copy of the press release is available on the company's website 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 provision of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that relate to expectations or projections 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 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 filing with the Securities and Exchange Commission. This conference call contains time sensitive information and is accurate only as of the live broadcast today, May 13, 2025. Hyperfine 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. In the first quarter, we delivered revenue of $2.1 million with the sale of six systems with a strong average selling price. We also reinforced our financial profile, taking steps to meaningfully reduce cash burn by completing a reorganization, and we further strengthened our balance sheet by raising $6 million through a registered direct offering to extend our cash run rate to the end of 2026. In the first quarter, we experienced some headwinds to revenue associated with the new political environment, which resulted in the loss of several deals at large academic institutions that were funded by grants. The first-half of 2025 marks the end of a time in our company's commercial trajectory where our business relies primarily on U.S. hospital deals. As we have previously indicated, hospitals have proven to have protracted sales cycles and high variability in deal timing. We are committed and excited about Hyperfine’s future with diversified revenue across the three verticals of the hospital, the office setting, and international markets and introducing our significantly improved product performance with our next generation image quality. We still expect this catalyst to change the growth trajectory of Hyperfine starting in the second-half of this year. I will now provide an update on our diversified growth catalyst coming to fruition in 2025. As we progress into the second-half of 2025, our business will be a diversified portfolio with hospital, office and international verticals providing a platform for higher growth and less variability. We have continued to make solid progress towards launch readiness for the office business. Several of the office accounts in the pilot program are now IAC accredited, have started to scan…

Thank you, Maria. I will recap our financial results for the first quarter of 2025 before providing an update on our financial guidance. Revenue for the first quarter of 2025 was $2.1 million. In the first quarter of 2025, we sold six units with a strong average selling price. During the first quarter, we continued to experience longer deal timing and processes for U.S. hospitals and the loss of several deals due to significant reductions and cancellations of grant funding to academic institutions. Our average selling price and pipeline remains strong, but U.S. hospital critical care deal sales cycles continue to experience variability and are longer than in past quarters. Also, during the first quarter, a majority of our United States sales personnel were newly hired. These new members of our sales teams are gaining traction with customers, while training to be prepared to build awareness and visibility of our next generation imaging technology once cleared in launch. Gross profit for the first quarter of 2025 was $0.9 million and gross margin for the first quarter of 2025 was 41.3%, representing a 20 basis point improvement versus the prior year period. We continue to drive healthy margins at our stage and we believe we are well positioned for meaningful margin expansion at scale. R&D expenses for the first quarter of 2025 were $5.0 million, compared to $5.6 million in the first quarter of 2024. Sales, general and administrative expenses for the first quarter of 2025 were $6.7 million, compared to $6.4 million in the first quarter of 2024. Net loss for the first quarter of 2025 was $9.4 million equating to a net loss of $0.12 per share as compared to a net loss of $9.8 million or a net loss of $0.14 per share for the same period of…

Thank you, Brett. As we get closer to mid-2025 my confidence in driving a new office business, expanding in the hospital an into more international markets and bringing forward the highest performing image quality in the Swoop system increases significantly. The team is laser focused on our growth drivers and very excited about the future of our company. With that I want to thank you for your time and open up the line for questions.

[Operator Instructions] Your first question comes from the line of Frank Takkinen with Lake Street. Your line is open.

Hi, thank you for taking the questions. Hi, Maria. Hi, Brett. I was hoping we could start with one on some of the pilot activity ongoing in the office setting. Most curious, I know you touched on a little bit in your prepared remarks, but just most curious about kind of initial feedback and whether or not this has resulted in you kind of changing strategy, changing any timelines to go into these markets? And then I have one follow-up after that. Thanks.

Maria, do you want to take that?

Sorry, I was talking to myself. I was on mute. Sorry, Frank. Thank you for the question. And I was saying that we have really taken a very methodical approach to working through the pilot phase and make sure that we follow very closely the accounts from how we have pitched to them their interest in the technology to then really understanding the deal cycle, making sure that we are ready to support them and chaperone any activities associated with accreditation, and then even down to implementation. So we have now passed the pilot accounts, gone through all of them are now accredited by IAC. They’re all scanning and they’re all going now through the CMS registration and the motion. And I would say in the training meeting that we had for our sales team, we had one of those pilot neurologists come to speak to them. It is really encouraging to hear how they are thinking about this opportunity in terms of transforming their practice, being able to offer more, being able to be actually a more full service supplier and how easy they report feeling the technology is to operate and to bring on board. So I would say if anything we are feeling more bullish. I am also incredibly encouraged by the two very large neurology practices that are participating in NEURO PMR. The rate at which they are enrolling patients is exceeding our expectations, which is a great testament for their enthusiasm. And also we are seeing a variety of cases that they are willing to use in triaging patients with the Swoop system. So I am feeling that it is really the right thing for us to diversify and there’s an opportunity there that is very substantial and we’re going to be moving into that launch phase here in the next several weeks as we hit the midpoint of the year with the field team now trained.

Got it. That sounds great. Thanks for that. And then just for my follow-up, maybe a two-parter. First, on the grant funded headwind in Q1, is this an instance where if some of those grants start to come back online that business could be recovered? Or are you guys kind of thinking of that as lost business at this point? And then as a second part, just any update on kind of initial receptivity with the international distributors would be great? Thanks.

Sure. So I think given how I think across academic institutions, the tone of clinicians around grant funding confidence is clearly very, very sobering. So we are not expecting that they come back even though some of the institutions that were actually that we were affected by were in the front page of main news streams and they have received some of it back. There is no appetite to do anything eagerly with any grant funding, because there’s no confidence whether that is going to stick. Stay, get retracted. It’s just a very unsettling time in that respect. Definitely, we are moving away from betting on grant funding for deals that may have had that and we are putting all of our efforts on other deals that don’t have grant funding. It is not every deal in the hospital that has grant funding as the source of funding for the acquisition of the equipment. So I don’t think we expect them to come back. The question is, are we able here in the second quarter to deliver the quarter and then make anything up or is it going be more challenging to find deals? As we say, most of it is hospital deals and they have long sales cycle. And then as it relates to international, we continue to see a lot of interest and we are now seeing a lot of the business internationally is very hospital based. So we are seeing our distributors work through the pipeline. We’re seeing the implementations from last year start to generate sort of clinical activity that is encouraging. So we’re starting to go deeper in some countries with our distributors to really, so we’re looking at establishing centers of excellence. We’re looking at establishing networks of users that can actually communicate and maybe not collaborate, but communicate as the pioneers on the use of Swooping in different markets. And in our prepared remarks we stated that we still feel like we will get India clearance from an approval from the CD SCO and we will do market entrance in the second-half.

Great. Thanks for taking the questions.

Thank you, Frank.

Your next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open.

Hi, team. This is Simran on for Larry. Thanks for taking the questions here. Maybe just on guidance, you if I do the math, you took the full-year ’25 outlook down by about $1 million, at the midpoint. It does imply slightly lower second-half sales than before at the midpoint. So, I guess, you did lay out a number of growth catalysts that you expect to come online in the second-half. So, maybe what’s changed in your second-half guidance since you set your initial guidance in mid-March? And can you talk more broadly about your expectations for the selling cycle, the hospital selling cycle and capital environment for the remainder of the year?

Brett, do you want to start? Hi, Simran.

Yes, I’ll take that. So, I think two things on revenue guidance. We, on the first-half, we adjusted it to $5 million to $6 million. As Maria highlighted, predominantly that’s coming from the grant funding related activities that we do not anticipate necessarily coming back. So the first-half we adjusted and then we also adjusted the full-year guidance, which is also incorporate some of that grant funding related revenue that we do not anticipate that we’d be capturing here for fiscal year ‘25. So no major changes in terms of our anticipation for second-half guidance, how we think about the prospects of the business, the growth drivers will all be in place. But given what we saw in Q1 in terms of grant funding, we’ve made adjustments to both the first-half, as well as the full-year guidance.

And I think you had a question regarding the capital cycle. I think that’s I don’t know that we are seeing anything different than what we have been messaging for the last several quarters, which is they are definitely getting longer. I think about 1.5 year ago or so, I was estimating our hospital deals were going to take us about nine months or so. I would say often now they are a one year or 1.5 year in some instances. So we have a really robust pipeline of hospital deals, but they are going to take their time to happen. And I would say it’s probably in that one year to 1.5 year timeframe now as we think about where that stands.

Got it. That’s very helpful. And maybe just a follow-up on the in-office expansion. Have you talked about how many office sites of care are in the launch readiness phase? And can you elaborate on the economics of selling in the office versus the hospital setting in light of today’s macro environment? I know on the previous call you’ve talked about flexible payment models here.

Yes. So, we haven’t mentioned how many accounts are in the pilot phase. I would say it’s fair to say it’s like a handful. And those are the ones that have gone now through the motions indefinitely in the last several weeks, the accreditation, the starting scan and then the beginning of the process around reimbursement and CMS registration. Again, we have now gone through the drill of implementation. I would say as simple as implementation, which is shipping a device and training on the device is a very, very different experience in the hospital than in the office. In the hospital, the moment we get a PO, usually we ship the device and the hospital has no problem storing a device and implementing it when their teams are all ready and all the connectivity has happened and lots of those things. With the office, they really pick a date, and at that date everything needs to happen. You need to open the crate. You need to put the device into motion. You need to train the team, and it’s sort of one and done. And sometimes we need to do it after hours or over the weekend, because that is the time that they have available. So again, it’s been a handful of accounts with whom we’ve actually learned the whole drill from pitching a deal all the way to implementing and the different steps. In terms of pricing, I think we are continuing to talk about flexibility to accommodate. They definitely have an appetite to pay overtime rather than all at once. Depends on the size of the account. I think we’re doing an economic model to understand whether they are really ready for our device. A lot of it depends on the number of cases that they refer. We talked about the fact that they do 500 on average and urology office refers about 500 to 600 patients a year for MRI. So that definitely is false writing when this makes sense at our price point. But we are seeing variability in the way we’re potentially going to transact with the offices based on their size and their appetite to pay more upfront or pay more over time. Brett, feel free to add any other commentary here.

No, I think that’s fair. I mean, there’s over 2,000 neurology offices and there obviously is segmentation within that size. So, there are some that are more sole proprietary that have a look and feel of what their business looks like versus those that are more than five to 10 practitioners within a setting. So each one of those has a little bit different dynamics. I would say health economics has been something that’s been front and center both in the office setting, as well as what we’re bringing to the hospital setting. So, each one of those has a very compelling use case and then, but does we do allow for some degree of making sure that we can practice where it makes sense for their business model.

Great. Thank you so much.

Thank you. Your next question comes from the line of Yuan Zhi with B. Riley Securities. Your line is open.

Good afternoon. Thank you for taking our questions. Maria, maybe on the tariff. Because of tariffs, can you clarify if some of your international orders are delayed to a later time or they were just canceled?

I can take that. Yes, ahead.

We have -- yes go ahead.

Yes. So I mean, today we haven’t had any impact of any tariff related delays of any of our transactions with our third-party distributors to-date. So that hasn’t come to fruition. We’re in the early stages as you know of international market development, but to-date, no direct tariff impact.

Got it. Maybe a follow-up question there. So based on for the 1Q 2025 product revenue, most of the products from the U.S. market were very minor contribution from international and any reason why?

There’s been a -- any individual quarter there’s been variability as you know in terms of our mix. So for I guess for the first quarter of 2025, I guess I would highlight that we sold six units, the effective ASP was $254,000, which actually was a very strong ASP. But any individual quarter, we can have variability in terms of what the demand and what the sales are. So nothing specific to comment about the mix per se in Q1.

Yep. Got it. And maybe one last question from us. So now we are in May, what is your current visibility for the first-half 2025 and then for the full-year 2025? The other way to think about this is which bucket of orders you think are at risk and which are the buckets of orders you think you have higher confidence.

I think as we think about, I mean as we think about the second-half of this year, that’s when we get into these more balanced portfolio of opportunities. And we have the hospital, we have international, we add to international India, and we have the office. So we are managing sort of the pipeline across all of those buckets to have higher confidence as to how things are going to play out based on different sales cycles and timeframes. So, as I said, the pipeline is very robust. We have also now had a little more run time with the new team, which as we said was close to 50% of an upgrade at the beginning of the year. And we are very impressed by the pipelines that they are driving as well as new individuals as well as the legacy team. So I would say the pipeline looks very robust and we’re starting to build a pipeline for the office for the second-half. Most of what is going to be driving still the business in this second quarter to round up the first-half is going to be hospital. That’s why there is definitely a significant ramp in total business between the two halves, the first and the second.

Yes, got it. Thanks for answering our question.

Thank you.

[Operator Instructions] I will turn the call back over to Maria for closing remarks.

Well, thank you very much for attending today’s call and your questions, and we look forward to updating you at the end of the second quarter. Take good care.

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