Good morning, everyone, and welcome to the Petrafin Network third quarter 2025 earnings conference call. My name is Carla, and I will be coordinating your call today. During the presentation, you can register to ask questions by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I would now like to hand you over to the interim chief financial officer, Megan Carlson, to begin. Please go ahead when you're ready.

Good morning, and thank you for joining us. Earlier today, Butterfly released financial results for the third quarter ended September 30, 2025 and provided a business update. The release, which includes a reconciliation of management's use of non-GAAP financial measures compared to the most applicable GAAP measures, is currently available on the Investors section of the company's website at IR.ButterflyNetworks.com. I, Megan Carlson, Interim Chief Financial Officer of Butterfly, alongside Joseph DeVivo, Butterfly's Chairman and Chief Executive Officer, will host this morning's call. During today's call, we will be making certain forward-looking statements. These statements may include, among other things, expectations with respect to financial results, future performance, development and commercialization of products and services, potential regulatory approvals and the size and potential growth of current or future markets for our products and services and changes in the nature of our business these forward-looking statements are based on current information assumptions and expectations that are subject to change and involve a number of known and unknown risks uncertainties and other factors that may cause actual results to differ materially from those contained in the forward-looking statements these and other risks are described in our filings made with the securities and exchange commission you are cautioned not to place undue reliance on these forward-looking statements and the company disclaims any obligation to update such statements as a reminder this call is being webcast live and recorded to access the webcast please visit the events section of our investor website a replay of the event will also be available on this page following the call I would now like to turn the call over to Joe.

So thanks, Megan. Good morning, and thank you for joining us for our third quarter 2025 conference call. We're pleased to report the third quarter 25 results were at the higher end of revenue guidance. We continue to consume less and less cash while driving gross margins higher, excluding our non-cash inventory adjustment that we recorded. Please keep in mind that our third quarter 2025 results compared to last year's third quarter, where we delivered 30% revenue growth on the heels of a very successful IQ3 launch. We were able to keep growing on top of that very strong quarter a year ago. We knew coming into 2025 we would have the anniversary of Big Year and new product launch. In major medical institutions across the United States, there are hundreds of doctors who own a butterfly. To drive enterprise sales, we developed a strategy that builds on the base of individual support and introduces butterfly more holistically through the health system. During the second quarter of this year, we encountered some headwinds in the strategy as hospitals were focused on broader macro issues. Those headwinds remained during the third quarter. Nonetheless, our pipeline opportunities have increased. We believe we're starting to see the cloud lifting. I expect we'll return to the momentum we're used to in 2026 and may even see early signs in the current quarter. When we laid out our five-year plan in March 2024, we introduced multiple growth pillars. One of those was our core business, going deeper into the POCUS category with higher quality imaging and software that meets the needs of hospital systems. We also said we'd expand into entirely new markets and we continue innovating to maintain our differentiated edge. We're seeing that our strategy is working and that our many shots on goal position us for success. We're improving health care economics every day and our intent on bringing this innovation directly into the heart of medical care. While the third quarter is usually our quietest, we kept busy driving progress across the business and continuing to lay the necessary foundation as we mature and scale. An important part of that foundation is ensuring that we remain a trusted partner to our customers and information security plays a big role in that. We've always had a strong security posture and we've even now strengthened that further with ISO 27001 and other international certifications announced earlier this week. Each of these reinforces that Butterfly's cloud is safe, trusted and enterprise ready as we expand globally. Our AI strategy is also proving to be a great accelerator for us and it's really come to life in Q3. A major milestone came in September when the POCUS CARE trial from Rutgers Robert Wood Johnson Medical School, published in JAMA, highlighted the real-world impact of Butterfly's AI Lung Tool, or Auto Beeline Counter, on patient care and hospital efficiency. In this evaluation of over 200 patients, integrating Butterfly's tool into workflows improved clinical management in 35% of the cases, reduced hospital length of stay by 30%, and generated more than $750,000 in direct cost savings. This is exactly the type of clinical and economic validation that fuels our enterprise strategy and shows the power of AI to drive real change in healthcare. And our next-gen enterprise software, Compass AI, is on track to launch before year-end, so we expect to take this type of impact further by making large-scale hospital use even easier and more effective. We've also said time and time again that education is the biggest barrier to mass adoption of point-of-care ultrasound. Butterfly is invested throughout our journey and education from in-person training to advanced AI tools. Butterfly Garden is our ecosystem to deploy AI tools to caregivers, including those who are not classically trained in ultrasound. During the third quarter, Heart Focus from Desky became the first FDA-cleared butterfly partner app to launch in the garden. HeartFocus uses AI to guide echo probe placement, capture quality images, and support faster cardiac scans for any healthcare professional. So we're excited with this launch and now it's bringing action into the vision that we've had. Echocardiograms are done about seven million times a year in the U.S. with a wide range of procedural costs from $250 a study and sometimes well over a thousand dollars out of pocket. That's over 1.7 billion to payers on the lower end. Most of that happens in a facility, and if the cost isn't a barrier, access is. Now anyone with a butterfly can get a heart-focused license. Download the app from the Apple Store, plug in their probe, and perform a limited echo, a scan that's often all you need to get key information fast right at the bedside. It's that easy, and this is why Butterfly Garden is an amplifier. It lets more users practice medicine in ways they couldn't before improving patient access to timely care. We also have Butterfly Scan Lab and our very own AI-powered app that members can use for ultrasound learning at no additional cost. Last October, Kansas City University College of Osteopathic Medicine became the first medical school to use scan lab in an elective course. This week, they joined us for a webinar to share their results, which 95% of students committed to independent scanning, over 7,000 scans were reviewed, and more than 230 faculty hours were saved. This was made possible because they leveraged AI through ScanLab. In fact, the impact and student enthusiasm was so strong as of this fall, KCU expanded to a one-to-one model using our probes and ScanLab across all four years of their curriculum. Continuing on AI, for the last several years, Butterfly has been working with the Gates Foundation and the University of North Carolina on an AI-powered gestational age calculator. In many low- and middle-income countries, women often learn they're pregnant late in their term and may not know the date of conception. Yet gestational age is critical in guiding the care and can be lifesaving for those far from health facilities. This is where the AI steps in. So using a simple set of blind sweeps across the uterus during pregnancy, the tool automatically calculates the age of the baby. No image interpretation or specialized training required. It's a powerful example of technology meeting accessibility and affordability. Since 2022, more than a thousand butterfly devices have been deployed in over a thousand health care providers across sub-Saharan Africa, resulting in about 2 million scans to date. What's exciting is as of Q3, caregivers now in Malawi and Uganda can now use the AI calculator directly in the Butterfly app. No additional hardware needed. And with the tool currently under FDA review, we're looking ahead at bringing it to even more settings. Each of Butterfly's AI initiatives have the opportunity to drive a paradigm shift in how care is delivered and represents exactly what Butterfly stands for, using AI and handheld ultrasound to remove barriers, empower more providers, and help improve outcomes. We've built the framework and the platform, and now AI is unlocking massive leverage and bringing our growth strategy to life. So I'll pause here and turn it over to Megan to review the financial results for the quarter. Megan?

Thank you, Joe. Revenue for the third quarter of 2025 was $21.5 million, reflecting 5% growth over the prior year period, which was primarily driven by higher average selling prices from a larger percentage of IQ3 sales internationally, as well as increases in volume mainly in the U.S. Breaking things down between U.S. and international channels, total international revenue increased 4% over the prior year period to $5.4 million. The increase was driven by price, given the international launch of IQ3 in the third quarter last year. During the third quarter, U.S. revenue was $16.1 million, which was up slightly from the third quarter of the prior year. The slight gain was due to e-com sales, as well as improved performance in our veterinary distribution channel. Breaking our revenue down between product and software and other services, product revenue was $14.6 million, an increase of 8% versus Q3 2024. This increase was largely driven by higher average selling prices in our international markets, as well as increased volume within both e-com and vets. Software and other services revenue was $6.9 million in the third quarter, which was flat to the prior year period. During the period, we saw increased licensing and services revenue from our partnerships offset by lower renewals of individual subscriptions and lower revenue from extended warranties as the standard warranty of our IQ3 probe is longer than our prior models. software and other services mix was 32 percent of revenue which was slightly lower than the third quarter of 2024 the percentage of revenue from software and services has decreased in recent quarters as our product revenue growth outpaced software revenue with the launch of the iq3 in early 2024 as well as our geographic expansion turning now to gross profit gross margin including a non-cash write-off of excess inventory of $17.4 million was negative 17.5 percent compared with 59.5 percent in the prior year. Adjusted gross margin, which excludes the impact of the inventory write-down, increased to 63.9 percent from 60 percent in the prior year period. The increase in adjusted gross margin was driven by an increase in average selling prices as well as a reduction and software amortization costs. To expand on the inventory write-off, during Q3, we recorded a non-cash charge for the write-off of excess quantities of our previous generation chip that are used in the manufacturing of our IQ Plus probes. We originally expected IQ Plus to continue to be a larger portion of our volume. However, the strong market adoption of IQ 3 has outpaced expectations, prompting us to revise our assumptions to reflect a higher proportion of volume attributable to IQ3. In quarter three, for example, IQ3 accounted for approximately 85% of our probe volume and IQplus represented the remaining 15. While IQplus will continue to serve as the lower cost alternative and address targeted use cases, our earlier forecasts assumed a greater share of demand from iq plus we've since refined our forecast to reflect the actual product mix and market trajectory resulting in the write down moving to adjusted ebitda and capital resources for the third quarter of 2025 adjusted ebitda loss was 8.1 million compared with a loss of 8.4 million for the same period in 2024 the improvement in adjusted ebitda was driven by the previously mentioned improvement and adjusted gross profit. These reductions and improvements led to a normalized cash burn of $3.9 million. Cash and cash equivalents, including restricted cash at the end of the quarter, were $148 million, and the trailing 12-month use of cash was $31.5 million. Before turning to guidance, I can update you on some macroeconomic factors. As of this morning, we are on the 31st day of the federal government shutdown. To date, we have not been directly or significantly impacted by this. However, we're keeping our eyes on customers that may be impacted as well as agencies such as the FDA. A shorter-term shutdown is not expected to affect our sales pipeline, but a prolonged closure could delay deal timing for the deals that rely on some degree of government funding. However, this is not currently a significant portion of our pipeline. we're also exposed to the indirect more systemic impacts of a prolonged shutdown such as customer cash flow timing as a result of impact payers as of now we don't see this as a significant risk to our business additionally at this time the fda has paused fee-based submissions during the closure though they'll continue to review in-flight submissions for the time being again a short term shutdown is not expected to impact our submission timeline. However, should it extend significantly, regulatory processing delays could become a factor. We will keep you updated on this matter as it progresses. Next, we continue to see a trend of some of our customers delaying purchase decisions as they navigate macroeconomic factors. And while Q3 is typically our softest quarter of the year contributing to this were purchase delays that impacted our u.s hospital and enterprise channels while timing remains uncertain we have several large deals in our pipeline we expected to close earlier in the year that remain active from an opportunity perspective in addition to unlocking the active pipeline we're working on several deals within our active business and continue to negotiate an agreement with a large insurance company to reduce readmissions As soon as we have updates on these, we'll let you know. When we evaluate our headwinds and opportunities together, we are reaffirming our full-year revenue guidance in a range of $91 to $95 million, which implies $25 to $29 million in revenue for Q4. In order to get to the higher end of the range, we need to close on some of the larger deals that are in our pipeline. Given the visibility we have into the remainder of the year, we are able to tighten our full-year adjusted EBITDA loss guidance to a range of $32 to $35 million, or $9 to $12 million for Q4. We have continued to maintain our disciplined approach to expense control while also investing appropriately beyond our growth areas to enhance our delivery capabilities as additional revenue opportunities crystallized. To summarize, we delivered on the top and bottom line in Q3, And while uncertainties continue to exist around the impact of the government shutdown or the outcome of policy decisions from the administration, we have strengthened the diversification of our business and are excited about the opportunities in front of us. Butterfly is extremely well positioned to meet the needs of our customers as our technology not only enables superior flexibility and strong image quality, but has allowed us to be a much more affordable solution at scale than the current cart-based ultrasound solutions. In addition, our semiconductor development path will continue to improve this price-performance advantage with each subsequent generation. Simply put, we see Butterfly as a long-term winner in ultrasound in any macro environment. With that, I'll turn the call back to Joe.

So thanks, Megan. As we discuss almost every quarter, we're working on a compelling growth plan that builds first on our market leadership in point-of-care ultrasound. As I mentioned before, it's coming to life through education, cloud compatibility, incredible technology, and accelerated through our leadership in AI. We're also building on our POCUS business with strategic initiatives that we're getting closer to delivering in a meaningful way. We're working every day to transition our home care pilot to a commercial agreement, and the moment we have a significant update, we'll let you know. In parallel, we're engaging with additional national risk-bearing organizations that are receptive to the model we tested earlier in the year. What we've learned is clear that selling probes isn't enough for large at-risk providers. They need scalable models that educate, manage data and competency, and enable growth through new use cases and AI. I believe a meaningful part of Butterfly's future revenue will come from solutions, not just devices. Selling hardware alone is in the past, and pairing it with software, services, and hands-on support is how it will scale. I'm hopeful we'll bring the first of these opportunities across the finish line very soon, signaling the start of a potent next chapter for Butterfly. I'm also happy to share that we've officially completed the development of our P5.1 chip. As discussed during our 2024 investor day, Butterfly's next-gen chip was designed to integrate advanced MEMS capabilities that significantly increased the mechanical pressure associated with imaging, something critics of CMUT technology long claimed couldn't be done. They said our digital approach would never accomplish harmonics like piezo-based handhelds. Well, they were wrong. P5.1 is now entering fab production, and we expect that in the second half of next year, it'll debut in its new form factor. If Butterfly IQ3 established performance parity with other handhelds across key presets, helping fuel our sales growth over the past two years, D5.1 will surpass them entirely with the potential to make piezo handhelds a thing of the past for nearly all use cases. Apple recently launched its 48 megapixel chip, a continued manifestation of Moore's law demonstrating they will never stop innovating. Well, neither will we. Our image quality will continue to make exponential leaps for butterfly. The only question will be, why would anyone buy a PISO handheld anymore? These competitors are loading their devices with more lead crystals, trying to keep up with what Butterfly's all-in-one digital platform already delivers. But PISO is yesterday's technology. Soon, these devices will be in the drawer next to the film cameras. Big PISO may be well-funded, but they failed to invest, test, and now they no longer deserve the market. I'm equally excited to share that with P5.1's release to fab production, we transition into the beginning of our sixth-generation Apollo AI chip development. Apollo AI is designed to deliver not only lightning-fast ultrasound processing, but also a local AI capability at the edge. The upcoming Apollo AI chip introduces a scalable architecture that seamlessly fuses Butterfly's proprietary ultrasound front end with the advanced digital processing, achieving a much smaller chip size and greater power efficiency in order to deliver even better image quality and capability across a broad range of clinical applications. It's intended to support both on-device and edge AI acceleration, providing flexible compute expansion and integration with leading AI platforms. With its intelligent architecture and future-ready design, Apollo AI will serve as the foundation of Butterfly's next wave of innovation, advancing diagnostic imaging performance and enabling a new era of AI-driven medical insight. So finally, Octave. There are several large ultrasound on ship partnership discussions that we are continuing having and while I'm still not at liberty to impact them for you, I hope you can sense my enthusiasm. Progress is happening and the timeline that allows us to share news with you is largely driven by our partners. What I can share is this, if these opportunities play out the way we see them shaping up? Butterfly may over time transition from a POCUS company with an ultrasound chip to an ultrasound chip company with a POCUS business. That's a step change in how our core technology will scale and how our total addressable market will multiply. With POCUS becoming just one of many ways ultrasound on semiconductors can be deployed across some of the largest medical applications in the world. I am looking forward to providing more information as it becomes available and when our partners As I close, it's worth remembering. You know, just a year and a half ago, we set out to transform this business. Today I can see the vision now coming to life. Soon we'll be swimming in a big, beautiful sea of blue ocean. So with that, operator, let's move to Q&A.

Thank you, Joe. We will now begin the question and answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. We will make a quick pause here for the questions to be registered. And our first question comes from the line of Chase Knitbrocker with Craig Halen.

Good morning. Thanks for taking the questions. Maybe just first, is there any way you can help us kind of quantify the size of some of these deals that have pushed because of the macro and kind of what you're seeing from an activity perspective in October, as far as it relates to those and the rest of your pipeline, as when we look at kind of guidance, what it implies for Q4, it does imply, you know, a nice step up. And so maybe just speak to kind of your confidence in that pipeline and the activity so far in October.

Well, yeah, we've been seeing through the year deals just simply push, and we just, you know, haven't been able to get them close. So, you know, those can be in a size of 100 to 200 probes. We have some, you know, pretty large medical school deals also. So, it's kind of across the board when it comes to anything over 100 probes. And then just as far as October has... Yeah, regarding my confidence, we really, you know, the beautiful thing is that we're not losing deals. This is not a competitive issue. This is not an issue where, you know, I think people, and especially as we ingratiate ourselves with hostile administrators very much for the first time, there's an inevitability to this. You know, as I said earlier in my comments, doctors are purchasing butterflies on their own, and when we tell administrators how many people in their institution own a butterfly, they're shocked. So, and not only that, but there's such a preponderance of ghost scans, scans that are not being reimbursed because it's not a part of the ecosystem. them. So we definitely feel there's inevitability. And we see a lot of activity and people going into the end of the year. I think when we get into a whole new 2026 budget cycle, I think people will feel more comfortable about spending on brand new projects. And I've been seeing other companies where people say okay well capex is fine that's because it's budgeted capex and they're getting reorders to do a whole new project to carve out time from the uh from the uh from the it department because everyone has some major emr project but to carve out time in the in the it department and carve out time for a big project that that's been just the easiest things from the delay so So, you know, we're definitely seeing that the opportunities are stacking up, which is good. And we're very hopeful. We, you know, we wouldn't guide to the quarter if we didn't feel confident with what we put out there.

And maybe just on the substance of our side of the business, it sounds like there's a little bit of some lower renewal rates. Can you just maybe discuss kind of drivers there and kind of how you think you can kind of improve some of those metrics, you know, particularly with Compass on the horizon here?

Yeah, sure. Thank you for the question. So, we continue to see churn in our individual subscription, as we've seen over those past couple quarters. And also, year to date, we've seen an uptick in our enterprise subscription. In terms of timing of subscription as a percentage of revenue, a lot of it is just that timing because the software and the hardware have different revenue recognition patterns. But as you mentioned, we are very excited about the rollout of Compass AI later in Q4.

Thanks for taking the questions. Thanks, Chase.

And the next question comes from Josh Jennings with TD Cohen.

Hi, good morning. Thanks for taking the questions, Joan, Megan. And I wanted to just follow up on this sales funnel or pipeline and just ask about, maybe remind us of the sales cycle and timing and just how the pipeline is shaping up for 2026 in terms of an outlook for growth. sounds like with some of the delays, with some of the concerns or just tightening of capital spending for new projects, that the sales pipeline may be more full heading into 26 than what you're experiencing heading into 2025. But maybe just help us think through that as well.

Yeah, Josh. Well, clearly, the time to close has extended. So we definitely have a lot of deals that have aged beyond what we would normally have in age. So if anything, we're stacking up more and more deals, but we haven't been closing fast enough. So again, I think that'll lift in 26.

I think there was a bit of a shock to the system in 25, and then people have been mitigating and managing it. but you know whenever we get to the end of the year there are always dollars that people have to spend and we'll be fighting for those dollars thanks john just on the just the robert wood johnson and the cost savings and cost effectiveness i think that cost effectiveness data is is accruing nicely for butterfly iq platform but i mean how powerful can that be in terms of driving stronger interest in closing of deals as we get into 2026 as your team is able to market that Robert Wood Johnson study published in JAMA and others?

It's really important for a bunch of different reasons. The first is that it establishes that pulmonary congestion is a very key endpoint for congestive heart failure. So, from a pure clinical standpoint in which whether we go in home, we go in outpatient, or we go in inpatient, using ultrasound and using it as a marker for congestive heart failure progression or lack of progression is really important. Excuse me. I'm dealing with a chest colder um so also um when we you know when we have our enterprise conversations the the primary place that that we start from an economic side is ghost scans you know 35 of the scans in the hospital um are are in point of care ultrasound make it all the way through to reimbursement when they put Compass in place, that goes to 70% to 80%. So, we have that great economic benefit, but that's also something that, you know, they capture that benefit in the first year of putting the software in, and then going forward, excuse me, and then going forward, you know, they can say that, you know, they're anniversarying that benefit, but where's the next benefit? So, the next big economic piece of evidence that we have identifies the fact that by using point of care in the intensive care unit, by every day a doctor just pulling out a probe very quickly, doing a pulmonary scan, and using a pulmonary scan with our AI shows significant economic benefits in the ability of managing patients in the hospital. So, it's not just about early diagnosis. It's about taking care of the patient's wellness this at the moment that the doctor sees that, giving them the tools to see something instead of having to order a scan. So when we sit with administrators now, we have a second big indisputable set of evidence around the economic value of doing this. And when we sit with administrators, it's not necessarily people saying, you know, should we do this?

I think actually with this next piece of economic evidence um you know people believe they need to do this it's when you know when am i going to take on this project when can i stack it in with i.t when should we move forward and so it's just such a wonderful piece of evidence that helps our economic argument when we think about our enterprise law excellent i get to sink in one more um i mean it sounds i know there's no update on the home program today but you did complete a pilot program with a major partner and payer just to make just check the box it's not a matter of of of if but but when it sounds like and and you'll just provide an update when when that uh uh partnership kind of finalizes and but no no diminished kind of optimism or enthusiasm about about that channel and that opportunity is my understanding but just wanted to clarify that well not not certainly about the channel, but until you have ink on something, it's not real.

So, you know, I would have liked to have had it done by now. You know, it'll be done when it's done. I just don't control it.

Understood. Thanks a lot, Joe.

So just as a reminder, Dave, if you'd like to ask a question, is there one on your telephone keypad? Our next question comes from Andrew Bregman with William Blair.

Hi, guys. Good morning. Thanks for taking the questions. Joe, you're very confident on the P5.1 chip and new form factor launching next year. Can you maybe just sort of talk to us about what's needed to get to the point of launch sort of between now and then what you're going to be working on to sort of de-risk that launch? And then when you get there, anything you can share on just sort of the product build ahead of that launch or anything on pricing that you might expect for P5.1? Thanks.

Well, thank you. So, P5.1 will certainly be a highly specialized products. We haven't identified pricing yet. We'll get to that closer. As you saw with IQ3, we've been able to establish a new price watermark. We've been able to improve our overall corporate gross margins. We've been able to maintain not only higher blended ASP, But at that higher ASP, IQ3 has outsold IQ plus to a pretty significant magnitude, more than we expected. So, it's not implausible to think those trends will continue with the next version. Putting a chip in a probe, tuning the chip to our software and AI, getting that probe completely. So every year we launch a new technology or develop it, it's a great coalescing effort for our company because there's not a team in the business that's not touching that new product. So IQ3 was a very successful launch, a very successful effort on getting the technology to market, and I don't think there's any different. The beautiful part of, you know, when we're bringing in new processors is we're not having to reinvent every wheel. We bring a new processor in, we tune all the components and all the software to the edge capability of that processor, and then we roll it out. So, I think the risk to execution on launching the new product is pretty low. I think, you know, there's always risk. They call it research for that purpose. But I think right now we look really good.

That's perfect. Thanks for all that, Keller. And then just on the info security piece, you had the press release out earlier this week and then obviously touched on this call. Maybe just in practical terms, how does this help you win business? And as you sort of think about sort of what you've achieved here, do you think that this is sort of table stakes for the entire market, or is it a sort of meaningful differentiator for Butterfly?

You know, it's an interesting dynamic because, you know, aside from, you know, one other independent competitor, and I could be wrong maybe by one, but in general, you know, the industry is on-prem. The industry has software that, you know, that they'll connect to a Wi-Fi and they'll push an image into a DICOM, but they're not cloud connected. And so when you're not cloud connected and you're on-prem, you don't really have to worry about security because people don't, you know, can't get into your device. But our competitors have clearly communicated that they really want to follow in our footsteps and finally catch up to where we've been for a while. And so, the industry is going to cloud connectivity on imaging devices. And so, historically, our competitors would use it as a selling disadvantage for Butterfly. They would say, oh, well, you have to connect it to the cloud, so you have to now have all this security concerns, which is kind of garbage because every single hospital has an AWS cloud interface. And so, we have, by being the first company that's mass commercial in the cloud, we've had to kind of set the bar on security and make sure that, you know, we deal with data compartmentalization, we deal with, you know, the HIPAA requirements proper, we deal with all the different multiple layers to ensure that the data is secure. Because remember, we have 25 million images in our cloud growing 30,000 a day, keeping that data secure, making it available to our customers, porting it into their systems for the EMR, for DICOM, for reimbursement is essential. And so, you know, we expect in 2026 that we'll have our high trust certification and FedRAMP, which is the highest certification of any security, basically, you know, worldwide. It's the most complex. And so to have a cloud environment, have that level of security is insane. So it has always been our competitive advantage to have cloud. It's always been our competitive advantage to be there. All others will say bad things about us until they finally get there, and then they'll say how great it is, which I think is absolutely hilarious. But we absolutely believe that cloud is the way to be able to manage large fleets, be able to manage data, push and pull large complex models, create overall connectivity. and we have literally the best cloud security posture in the industry.

That's great, Keller.

Thank you.

Just as another reminder, is Star 1 to ask a question. And our next question comes from Ben Heiner with Lake Street Capital Market.

Good morning, everyone. Thanks for taking the questions. Joe, on the commentary on Apollo AI, it's just curious, say have there been kind of upgrades to the the original design as far as the you know kind of edge ai aspects to it uh beyond what was kind of discussed the uh yesterday last year yes uh any more color there so yeah so we we have um pushed the boundary of apollo to include the ability and to make sure that we are capable to do local AI on the chip.

That is the next biggest trend in AI. Instead of having to calculate and process AI in the cloud and then push the devices, to be able to do it actually on location is the next biggest processing feat, And it creates a significant amount of local benefits in speed and capability. Instead of having to take something, push it in the cloud process and wait for it to come back, by having that processing power to do it dynamically in your hand is a major step up.

So, yes, Apollo has 20 times the processing power of P5.1 and our legacy. and uh and and so we're making sure that that process of power is put to the right use and i guess maybe dovetails a little bit with your last comment regarding the cloud and in terms of you know kind of pushing and pulling models so you would be pushing and pulling the correct model or maybe not the current you know the relevant model uh to the the device you know if you're doing xyz scan well yeah i mean today one of the benefits of today one of the benefits

of our cloud architecture is we do like it does work like an ecosystem you have the device you have the app and then there's this dynamic communication with the cloud and we we kind of purpose data processing where the assets are available um but as ai models get more and more sophisticated it's certainly possible that that becomes more of a lag and and you know you and you want to have greater local control so for the individual device to have that kind of processing power um creates you know a much faster way of of delivering that feedback and that is on literally on the edge of where ai and compute are are going today yeah so specialized models

to push the the device eventually got it and then the more and more yeah so more and more ai capabilities can be processed on the device got it and then um just curious on any updates to with regard to iq station or or the the russ uh situation with the european commission uh iq stations actively in development and when we get you know closer to a date we'll put it out there it's a big part of our excuse me a big part of our future strategy um and regarding ross

standards it's uh on august 1st they closed the book on any type of submissions from ourselves for our competitors. And it's in the midst of a third-party review. That third party is reviewing data and then asking questions as they see necessary. And then hopefully sometime next summer, they'll render their decision or their opinion to the governing body, and then they'll make a decision but it's it's kind of there all the data now is sitting there they're crunching the data and we're in that quiet period unless they ask questions um and we're waiting for waiting for an answer excellent well that's all i have thank you for picking the questions and congrats on the progress thanks ben and that was our final question so i will hand back over to

Joe DeVivo for any final comments.

So everyone, thank you very much for the support. Sorry about my seasonal cough I keep getting. We're thoroughly excited about the progress that we're making and we're thoroughly excited about what's to come. We definitely think we had a slower start to the year, but everything that we're building is very, very, very strong. And I just can't wait to be able to unpack a lot of other things for you as they mature. And also, I'm just very appreciative for Megan Carlson, our interim CFO, for doing just such an expert job in this interim. So thank you, Megan. And thank you, everyone, for your support.

Thank you, everyone. This concludes today's call. You may now disconnect. Have a great rest of your day.