Welcome to the IRADIMED CORPORATION Fourth Quarter 2025 Financial Results Conference Call. [Operator Instructions] This call is being recorded today, February 10, 2026, and contains time-sensitive, accurate information that is valid only for today. Earlier, IRadimed released its financial results for the fourth quarter of 2025. A copy of this press release announcing the company's earnings is available under the heading News on the 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 there 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, and may include the company's expected future results. IRadimed reminds you that future results may differ materially from these 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 of the company's most recent report filed with the Securities and Exchange Commission, which may be obtained free from the SEC's website at sec.gov. I want to turn the call over to Roger Susi, President and Chief Executive Officer of IRADIMED CORPORATION. Mr. Susi.

Thank you, and good morning. Thank you all for joining us on today's call. And once again, we have some exciting performance to announce. I'm very proud to report that IRadimed achieved its 18th consecutive quarter of record revenue, with the fourth quarter of 2025 reaching $22.7 million, a 17% increase over the fourth quarter of 2024 and exceeding our prior guidance. For the full year 2025, we delivered record revenues of $83.8 million, which was up 14% year-over-year. Our GAAP diluted earnings per share for the quarter was $0.50, up 25%; and non-GAAP diluted earnings per share was $0.54, up 23%. For the full year, GAAP diluted earnings per share reached $1.75, which was up 17%, and non-GAAP diluted earnings per share was $1.93, up 16%. Gross margins remained strong at approximately 77% for the year and 75% for the Q4. These results are reflective of solid execution across our product lines. MRI-compatible infusion pump systems, while still the legacy 3860 system, grew strongly. Sales of patient vital signs monitoring systems also grew very well. And disposable revenue increased with higher utilization. We also saw a meaningful contribution from the ferromagnetic detection system. Allow me now to recap the expectations for the new 3870 MR IV pump. Recall that in positioning this new product and its pricing, we anticipate 3870 pump deal ASP will increase 10% to 14%. And yes, the 3870 design is much -- is such that we fully expect to penetrate the greenfield opportunities more effectively and also increase utilization among existing customers who may currently only use their older pumps sporadically. But to be very clear, the most significant increase comes from the large replacement opportunity, which is the #1 driver we see and will deliver a significant step change in revenue, continuing to be…

Thank you, Roger, and good morning, everyone. As in the past, our results are reported on a GAAP basis and a non-GAAP basis. You can find a description of our non-GAAP measures in this morning's earnings release and a reconciliation to GAAP on the last page. For the 3 months ended December 31, 2025, revenue was $22.7 million, up 17% from $19.4 million in the fourth quarter of 2024. This growth was driven by strong performance across all of our product lines, with MRI-compatible IV infusion pump systems contributing $9.1 million, up 20% year-over-year, and patient vital signs monitoring systems contributing $7.1 million, up 7.5%. Disposable revenue grew 18% to $4.3 million, reflecting the continued increase in utilization of our devices, while ferromagnetic detection systems also saw solid gains. For the full year 2025, revenue reached $83.8 million, up 14% from $73.2 million in 2024. Domestic sales accounted for 81% of total revenue in the fourth quarter and 84% for the full year, reflecting consistent strong U.S. performance, especially in the domestic pump business. Gross profit for the quarter was $17 million with a margin of 75%. And for the full year, gross profit was $64.3 million with a margin of approximately 77%, consistent with 2024. Operating expenses for the quarter were $9.9 million, and for the full year, $38.2 million, reflecting higher general and administrative expenses to support growth, along with modest increases in sales and marketing and R&D. Income from operations for the quarter was $7.1 million, and for the full year, is $26.1 million. Tax expense for the quarter was $1.3 million, resulting in an effective tax rate of 17.3%. The decrease in the effective tax rate for the quarter was primarily due to a true-up based on our year-end tax provision, with our effective tax rate for the year at 20.7%, lower than our previously estimated 22%. Net income for the quarter was $6.4 million or $0.50 per diluted share, up 25%. Non-GAAP net income was $7 million or $0.54 per diluted share, up 23%. For the full year, net income was $22.5 million or $1.75 per diluted share, up 17%; and non-GAAP, $24.8 million or $1.93 per diluted share, up 16%. We ended the year with cash and cash equivalents of $51.2 million. Cash flow from operations was $5.9 million for the quarter and $24.9 million for the full year. Non-GAAP free cash flow was $5.5 million for the quarter and $16.5 million for the year after capital expenditures primarily related to the new facility. And with that, I will now turn the call over to questions. Operator?

[Operator Instructions] One moment for our first question. And it comes from the line of Frank Takkinen with Lake Street Capital Markets.

Congrats on a solid finish to the year. Roger, I was hoping I could start with just some anecdotal thoughts around the initial market feedback from the pilot in the year. What can you tell us? What has the feedback been? And how has this influenced your decision to scale the 3870 launch in the second quarter here -- or first and second quarter here?

Good question. Frank, good to talk to you. So yes, well, it's been very positive. So maybe I should give a little more color. We've been showing the pump to more people than just that first taker of the 23 pumps. We actually have orders that we have on the books already, maybe, I don't know, another 15 or 20 pumps that are on order already. So we just launched this to our sales force a week before last, I believe it was. And so up until that time, we had some maybe 3 or 4 specialists in our sales team during November and December even showing the product to some select customers. So the feedback has been pretty tremendous. To go specifically to our, lack of a better word, let's call it beta site. It's not really a beta site, but this first user. They have approved FDA products, so it's not really beta. But we shipped it to them and then hold off, keeping these existing orders that we have already booked, and as I said, holding off launching it to the greater sales team until 2 weeks ago, to learn from that. So that's a user who's been using our 3860, the older pump, for a long while. And I guess, I mean, they're pretty excited with the changes in the new pump. The people we've showed it to, that are familiar with using the old pump, are pretty excited about the new pump, I guess, it's simple enough to say. I had one of our -- an anesthesiologist in here last week from one of our long time large users up in the Boston area, and she's very familiar with using the pump daily in the MRI environment. Very excited. Very excited about the changes. So the product's really sexy. It's very -- it just presses the button. It's quite modernized, right? The old pump was -- the genesis of that design is almost 20 years old. So this represents a big, bold new step, and lots of folks are excited. We're really thinking the demand will be great. And so we just wanted to do this couple-of-months test with this 1 first single large user and make sure we have everything polished up just right, because it's going to hit hard once it starts to ship.

Yes, that's very helpful. Maybe one for Jack on the gross margin profile. How should we think about gross margin scaling? I assume there's a subscale period. And then as that production is ramping and then that improves over time. But maybe any incremental color you could give us on how gross margin should trend throughout the year would be helpful.

Sure. I think that initially in the early part of the year, the first half, it will probably be kind of in line with where we have been. But we anticipate that as we get into the second half of the year on those higher volumes, which we certainly are looking for, along with, as Roger pointed out, the -- what we're looking for is the higher ASP as well, that we would think that we could certainly trend a little bit higher in the second half of the year. Now having said that, I mean, we hit the quarters previously around 78%. That might be kind of in that range certainly, but maybe possibly, as time goes on, a little bit better. But that's certainly our plan.

Got it. That's helpful. And then last one, at the risk of getting over our skis, what's next for the R&D team now that the 3870 is launched and beginning to scale? Is there -- what's the R&D team up to next? And how should we think about that effort?

No rest for us, huh, Frank?

Exactly.

Well, actually, we've been -- we've already started a few months ago working on the facelift, let's call, or next-generation MRI monitor. So yes, the monitor we have now, we launched about, what, 7 years ago. So we plan to have a new, updated monitor on the market in 2028. So we've been working on that a good 6 months already. And that's the next thing on the road map.

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

Roger and Jack, great results. Maybe on disposables and services, they were up very nicely in the quarter, can you talk a little bit about strength here and primary drivers that the growth rate looked outsized compared to in the recent past?

Yes, sure. I can touch on that a little bit. I think on a disposable basis, we've kind of already said that we would think that the growth will be kind of commensurate with the capital side of things, hopefully, right? And so that kind of is reflected in that. The one thing I would point out going forward is we believe that we can hopefully increase that utilization with the 3870. And a lot of that is based on, as what we've talked about, the user interface and so forth. And so hopefully, we can continue to grow it like that, but maybe even a little bit higher as we -- as time goes on, with the 3870.

Okay. Makes sense. And for the 3860, how do inventory levels look? What's the backlog? Do you still kind of feel like it'll be good kind of through Q2? Just wanted to check in on how levels look there.

Yes. I mean from an inventory standpoint, we're managing that 3860 as best we can, right? We don't want to have too much as we make the transition over, but we want to make sure that we can fulfill that backlog as we move forward. So we're monitoring that very closely. I think we're in pretty good shape there. But yes, going forward, certainly -- and we're bringing in that 3870 inventory, and that's reflected in the inventory numbers you see in Q4 as the increase in inventory, as we brought in quite a bit of that 3870 in anticipation of the shipments. But certainly, it's going to be -- the challenge will be as we manage that transition over from the 3860 to 3870, and a lot of that will be in Q2.

Okay. Got it. And then, Roger, following up on Frank's question just about early feedback, has there been any changes or audibles you've had to call, or tweaks? Or has it been pretty smooth and you feel like you kind of understand where the market is at and that the product is ready to go for the full launch?

So we've been -- we anticipate -- I mean that's why we did this like preview launch, is to get -- real users' in-the-trenches feedback and make final tweaks. So we are. We've been making some tweaks here and there and making it just optimal for these -- our target user. That's the point of that -- of this prelaunch.

Got it. And then lastly, can you provide any updates on the regulatory process for 3870 into Europe and Japan? Does this still feel like kind of late '26 events here?

Yes. Yes, that will be -- CE mark in the end of the year. We're working on Japan, but Japan also takes some time. Probably won't be cleared in Japan until next summertime.

Okay.

And not this summer. The following summer. Yes.

Following summer. Right. Got it. Okay. Well, really impressive results, and I appreciate you taking my questions.

Thank you. And this will conclude our Q&A session, and I will pass it back to Roger Susi for closing comments.

Thank you, operator, and thank you all once again for joining today's call. And we look forward to displaying IRadimed's ability to execute launch of our exciting new 3870 MR IV pump systems and to capitalize upon the huge replacement opportunity throughout 2026 and beyond, utilizing the expanded capacity of our beautiful new facility here in Orlando, Florida. So thank you.

This will conclude our call for today. Thank you. You may now disconnect.